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HHS needs to overhaul its approach to value-based payment to ensure widespread practice transformation and rein in Medicare spending, according to a report by the Leonard Davis Institute of Health Economics at the University of Pennsylvania released Wednesday.
Experts said the agency needs a new strategy because providers and payers have been too slow to adopt value-based payment, especially arrangements that require providers to take on significant financial risk. In addition, most existing initiatives don’t systematically lower healthcare spending or improve quality. According to the report, CMS must develop a clear vision for the future of value-based payment, simplify and align its models across payers and mandate participation in advanced payment models whenever possible. The agency should also make it easier for providers to take part in voluntary models, commit to longer-term contracts and make fee-for-service reimbursement less attractive for providers when mandatory participation isn’t possible.