NAACOS 2020: COVID pandemic demonstrates importance of value-based payment models

September 25, 2020

The COVID-19 pandemic has highlighted the need for value-based payment models

The COVID-19 pandemic has highlighted the need to speed health care’s transition to value-based payment models and away from fee-for-service. But doing so will require greater resources and cooperation among payers, government and health care providers, according to a former top government health care official.

Speaking at the second day of the National Association of Accountable Care Organizations’ 2020 virtual fall conference, former CMS Administrator Mark McClellan, M.D., Ph.D. said that value-based payment models have enabled providers to respond better and more rapidly to the COVID-19 crisis than fee-for-service practices.

Citing a CMS study from earlier this year McClellan said, “The farther [health care] organizations were away from fee-for-service heading into the pandemic, the more comprehensive their response has been in areas like availability of personal protective gear and data infrastructure to identify patients at risk.”

Importantly, providers with value-based contracts also were more likely to havetelehealth and remote patient monitoring capabilities that could be easily scaled up to accommodate increased demand resulting from the pandemic.

“There’s a big difference between telehealth visits you’re trying to plug in to fill care gaps in the short term, and expanding a system that’s part of a patient-centered, virtual care management program,” McClellan said.

He noted that CMS and some commercial payers have relaxed their existing fee-for-service payment rules in order to enable broader use of telehealth during the pandemic. “But those are short-term patches, and won’t get us to the models of care that have proven effective during the pandemic,” he added. “Thing like building out data systems and developing community-based models require different kinds of financial support than is available under fee-for-service.”

But despite the stress the pandemic has placed on the nation’s health care system, McClellan said he sees reasons for optimism. One example is the growing awareness among payers of what they need to do to help provider organizations transition to value-based payment models.

Another is the fact that both payers and providers now have nearly a decade’s worth of experience with value-based care models to draw on as they look towards the future. “We’re at a crossroads for the future of health care, and whether we can really step up the reforms needed to move further away from fee-for-service. These won’t be easy to address, but now we have a lot more examples of organizations that have made the shift successfully, and how to work with payers to make it happen.”