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Hierarchical Payment Models—A Path for Coordinating Population- and Episode-Based Payment Models

January 14, 2022William H. Shrank, MD, MSHS; Michael E. Chernew, PhD; Amol S. Navathe, MD, PhD,JAMA NetworkBundled Payments,Alternative payment models (APMs)

In November 2021, the Centers for Medicare & Medicaid Services (CMS) announced a strategy to achieve near-universal participation in value-based payment models by 2030. Core to this strategy is the goal that every beneficiary should be in a clinical care relationship that has accountability for quality and total cost of care. Achieving this goal will require harmonizing the CMS foundational value-based payment models that focus on accountability across the continuum of care (ie, population-based models) with those that target specific diseases, acute events, or sites of care (ie, episode or bundled payment models).

With more than 20 ongoing value-based payment programs, models often overlap. This creates a complex environment for health care organizations to make decisions about participation, care redesign, and investments. This environment also limits the rigor of model testing. Isolating the effect of a model may be nearly impossible, leading to a situation in which singular models are not deemed successful despite contributing to system-level improvements in quality and cost.

Amidst this complexity, articulating how to coordinate population- and episode-based payments could serve to catalyze reform and focus payment and delivery system innovation, much in the way that then-Secretary Sylvia Mathews Burwell of the US Department of Health and Human Services did for value-based payments in 2015.

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: alternative payment models, APMs, Bundled Payments, CMS, value-based payment

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