CMMI director finds mixed results for bundled payments, gives high marks to global budgets

Value-based care payment models that focused on a global budget were home runs in a recent Trump administration review, but bundled payment results were more mixed.

Brad Smith, the head of the Center for Medicare & Medicaid Innovation (CMMI) that oversees value-based care payment models, gave during the National Association of Accountable Care Organizations’ fall conference Tuesday details of the agency’s review of the performance of every model.

Some of the winners were ones that had a “clear thesis” about quality and cost improvements, Smith said.

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He pointed to Maryland’s Total Cost of Care model as an example. The model sets a per capita limit on Medicare costs in the state.

“Our belief was that if folks had full global budget for their hospital, and even if that total global budget didn’t increase as fast as they would have [liked] that they would be able to manage it,” Smith said.

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He said the model was able to generate savings, meet different quality metrics and decrease hospitalizations. The Centers for Medicare & Medicaid Services predicts the model could save Medicare $1 billion by the end of 2023.

Another example was the home health value-based purchasing model, which gives incentives to home health agencies for higher quality care.

“We had a number of quality metrics, and what we believed is that those quality metrics and incentivizing them was tied to a decrease in hospitalization and that is exactly what we saw,” Smith said.

But some payment models had more mixed results. He pointed to some models that had “incredible amounts of transformation but maybe not either the quality improvement or savings improvements we were hoping to see at this scale.”

One example was bundle payment models that combine payments for physicians, hospitals and other providers into a single amount reflecting the total cost of care.

Another example is the oncology care model that ties payments for items such as chemotherapy and other cancer treatments to financial and quality measures.

While bundled payments and oncology were able to see improvements, there were concerns about whether the benchmarks and tiered savings were structured well enough to make the models successful from a financial perspective.

“Instead of us being in a place to say ‘hey, we are ready to scale this model nationally,’ we are having to go back and say, ‘we saw a lot of good things but didn’t do it exactly the way we thought,’” Smith said.

This is bad for the provider that is hoping the model becomes more lasting and can scale and be sustainable over time, he added.

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He hopes that CMMI’s new direct contracting model, which starts next April, will help alleviate some of these concerns.

Direct contracting is a set of three different voluntary payment models intended to appeal to a wide range of providers. Some of the models will focus on providers that service Medicare fee-for-service beneficiaries with complex needs or providers that have little experience in Medicare.

The agency aims to do more upfront testing under direct contracting to ensure the financial methodology is sustainable.

“Our hope is that if we can show those savings early on and we don’t have to have direct contracting version 1.0 or 3.0, we can have something that people can count on,” Smith said.

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