Identifying VBR That Works

By Monica E. Oss, Chief Executive Officer, OPEN MINDS

What models “work” in value-based care? That is a big question—and a new analysis, Analysis Of CMMI Model Costs, Quality Performance, And Transparency, sheds some light. Of the 18 models evaluated by the Center for Medicare and Medicaid Innovation (CMMI), six models resulted in cost savings. They include the Bundled Payments for Care Improvement Advanced (BPCI-A), the Accountable Health Communities Model (AHC), the Pioneer Accountable Care Organization Model (Pioneer ACO), and three state-based all-payer models—the Maryland All-Payer Model; the Maryland Total Cost of Care Model (TCOC); and the Vermont All-Payer Accountable Care Organization Model.

The Bundled Payments for Care Improvement Advanced (BPCI-A) takes all the costs of care provided to a Medicare beneficiary during a clinical episode and “bundles” them into a single payment. The clinical episode is the 90 days of care following discharge from an inpatient stay or when an outpatient procedure is completed. The care provided is under standard fee-for-service payments. But twice a year, a reconciliation of cost and quality happens—and based on the actual costs compared to the target, the provider organization may receive a bonus payment or may owe money to Centers for Medicare and Medicaid Services (CMS). There are eight clinical episode service line groups with 29 clinical episode categories—largely in cardiac, gastrointestinal, and orthopedic conditions. Although quality results were mixed, the model showed statistically significant savings, particularly in later years of implementation, suggesting potential for long-term cost reductions through episode-based payment reforms.

The Accountable Health Communities Model (AHC) was designed to focus on addressing health-related social needs through enhanced clinical-community linkages. In the model, CMS provides funding to “bridge organizations” for screening, referral, and navigation services that help Medicare and Medicaid beneficiaries connect with community-based resources to address health-related social needs (HRSNs). The model does not include bonus payments for the bridge organizations themselves or for the community service provider organizations.

The Pioneer Accountable Care Organization Model (Pioneer ACO) was an ACO model that started with shared savings and moved in the third year to upside and downside risk based on established benchmarks. In order to receive savings or owe losses in a given year, ACO expenditures must be outside a minimum corridor set by the ACO’s minimum savings rate (MSR) and minimum loss rate (MLR). Evaluation findings showed improvement in diabetes and cardiovascular disease quality measures and reduced expenditures. The model was ultimately incorporated into the permanent Medicare Shared Savings Program, though it was not expanded independently.

Three state-based all-payer models also delivered substantial net savings—The Maryland All-Payer Model, the Maryland Total Cost of Care Model (TCOC), and the Vermont All-Payer Accountable Care Organization Model. These models share a focus on aligning payment structures across Medicare, Medicaid, and commercial payers to support population health strategies and curb avoidable utilization. All three emphasized global budgets and performance-based incentives, producing system-wide reductions in hospital admissions, emergency department visits, and readmissions—particularly among vulnerable populations.

This analysis of successful value-based models is important as the field looks to move to more whole person care and move away from fee-for-service reimbursement. There are two themes from in reviewing the successful CMMI models. Models with downside financial risk, like the BPCI-A and the Pioneer ACO, have the potential for success. And models that promote addressing HRSNs appear to have a net positive financial result—even when paying for assessment/navigation organizations and not changing the reimbursement model. For provider organization executives negotiating with health plans, it is important to understand the models that have a high likelihood of financial success.

My colleague OPEN MINDS Chief Strategy Officer Paul Duck, noted that demonstrated success of value-based reimbursement will catch the attention of health plan executives: “The CMMI results reinforce what many of us have seen in the field—value-based care models work when both the provider and the payer ecosystems are aligned. For providers, that means building the infrastructure for data integration, care coordination, and outcome measurement. But equally important, payers must offer shared risk frameworks and innovative funding—like bundled payments, flexible service dollars, or reinvestment pools—to support success.”

Christy Dye, OPEN MINDS Senior Associate, has evaluated many integrated care program models. She found that health care provider organizations who implement whole person care approaches are well positioned for value-based reimbursement: “Organizations adopting whole person care are making investments in technology, reporting, and workflow optimization, which are the same areas that count in value-based care. The pay-off is being first to the contracting table when a health plan is looking for partners that understand how integrated, coordinated care reduces healthcare costs, and already having the internal systems set up to make that happen.”

And OPEN MINDS Vice President, Clinical Excellence & Leadership, Stuart Buttlaire, Ph.D., shared that from his perspective, an integral key to maintaining organizational sustainability when changes and new requirements never stop coming is creating a culture where decision making is supported by data, clinicians feel supported, and consumers actively participate in their treatment. “We want people to improve, and we want to have them contribute actively to the data that tracks progress… When leadership is committed to consumer-focused measurement, consumers can feel and can see that improvement is a consequence of their efforts. The report reinforces that value-based care, when implemented with discipline and accountability, can deliver on its promise. However, it also cautions that vague definitions, weak governance, and poorly designed models are unlikely to produce meaningful cost savings or systemic transformation.”