Payment & Delivery Models

New bipartisan bill a crucial boost to Medicare value-based care

Kevin B. O'Reilly , Senior News Editor

AMA News Wire

New bipartisan bill a crucial boost to Medicare value-based care

Aug 21, 2023

What’s the news: The AMA is pressing Congress to make key legislative changes that will help facilitate greater physician participation in alternative payment models (APMs), which are intended to accelerate the delivery of high-quality care and generate savings for the Medicare program.

Now a bipartisan group of legislators has introduced H.R. 5013, the Value in Health Care Act. The AMA applauded the bill’s introduction by Reps. Darin LaHood, R-Ill., Suzan DelBene, D-Wash., Brad Wenstrup, R-Ohio, Earl Blumenauer, D-Ore., Larry Bucshon, MD, R-Ind., and Kim Schrier, MD, D-Wash.

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“The movement toward value-based care—designing payment models to support quality and coordination of patient care rather than the number of services delivered—is gaining momentum,” said AMA President  Jesse M. Ehrenfeld, MD, MPH.

“We must build on that progress with more investment in these models and ensure that physicians in all specialties can be active participants” in APMs, he added.

“This crucial bipartisan bill will continue the 5% APM incentive payments for two years and freeze the 50% revenue threshold that physicians in value-based care models must meet to qualify for these bonuses over the same time frame,” said Dr. Ehrenfeld, a senior associate dean, tenured professor of anesthesiology and director of the Advancing a Healthier Wisconsin Endowment at the Medical College of Wisconsin.

The bill would give the Health and Human Services (HHS) secretary the authority to further increase the revenue threshold, but at a pace of no more than 5% in any single year.

“These proposed policies would grant HHS the needed flexibility to adjust the financial risk at a pace that enables more physicians to participate in APMs, while building on the tremendous movement toward value-based care,” said the AMA’s president.

Learn about how you can take part in the fight to fix Medicare on behalf of your patients and practices at the AMA's Fix Medicare Now website.

Leading the charge to reform Medicare pay is the first pillar of the AMA Recovery Plan for America’s Physicians.

The AMA has challenged Congress to work on systemic reforms and make Medicare work better for you and your patients. Our work will continue, fighting tirelessly against future cuts—and against all barriers to patient care.

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Why it’s important: APMs are a key approach to achieving value-based care by providing incentive payments to deliver high-quality and cost-efficient care for a clinical condition, a care episode, or a patient population. To date, however, there are far fewer opportunities for physicians to participate in Medicare APMs than Congress envisioned under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).

Historically, Congress provided 5% APM bonuses, which are paid two years after the conclusion of a specific performance year, for qualifying providers who earn a certain proportion of their revenue or see certain proportion of their patients from these value-based care models.

The Consolidated Appropriations Act, 2023, however, only provided a 3.5% incentive payment for 12 additional months. Absent congressional intervention, the 3.5% incentive payment expires Jan. 1, 2024, and the APM revenue threshold jumps from 50% to a substantially more challenging 75%.

Other key provisions within the Value in Health Care Act include: 

  • Authorizing the Centers for Medicare & Medicaid Services (CMS) to establish lower APM participation thresholds for episode models and other types of APMs that, by definition, involve a lower percentage of a practice’s patient population.
  • Eliminating revenue-based distinctions within Medicare’s Accountable Care Organization (ACO) Program, which affects certain rural and safety net providers’ share in the savings they earn and often forces them to accept greater levels of financial risk at a more rapid pace.
  • Establishing enhanced transparency to ensure that CMS sets appropriate spending benchmarks that don’t penalize ACOs for their own success.
  • Creating a voluntary, full-risk model option for Medicare ACOs.
  • Providing additional technical support, including infrastructure investments, from HHS for ACOs, small practices, physicians, or other providers that serve rural or medically underserved populations. 
  • Requiring the Government Accountability Office to produce a study evaluating potential parity between APMs and Medicare Advantage payment policies, flexibilities and financial benchmarks.  

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The AMA joined 17 other national health care organizations, including the American Academy of Family Physicians, American Academy of Orthopaedic Surgeons, American College of Physicians, National Association of ACOs, and Medical Group Management Association, as cosigners of a letter (PDF) in support of H.R. 5013.   

“In the last decade, some APMs have generated billions of dollars in savings for taxpayers all while maintaining quality of care for patients,” notes the letter from the AMA and others.

The growth of APMs may have slowed the overall rate of growth of health care spending, which was 9% lower than original projections. The letter also commends the bill for providing a “multiyear commitment to reforming care delivery,” allowing more time to shift away from the one-size-fits-all approach and encourage APM participation by more specialty practices, as well as those in rural areas and areas underserved by limited access to health care.

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Learn more: The AMA has declared Medicare physician payment reform to be an urgent advocacy and legislative priority. To help physician advocates and lawmakers get a stronger grasp on the complicated terrain of Medicare physician payment reform, the AMA has developed an explainer on advancing value-based care with APMs (PDF).

Visit AMA Advocacy in Action to find out what’s at stake in reforming Medicare payment and other advocacy priorities the AMA is actively working on.