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New HCP-LAN Survey Results Show Increase In Adoption Of Alternative Payment Models

posted by David Allen

on December 15, 2021

We all want health care centered on people that helps them get healthier faster and stay healthier longer. Alternative payment models (APM) that are based on value of care provided rather than volume of services delivered go a long way to achieving that shared goal.

So how are we doing? The Health Care Payment Learning & Action Network (LAN) released today the results of the 2021 Measurement Effort.  Every year, in partnership with AHIP, the LAN conducts a national assessment of the adoption of APMs over time and tracks progress toward the LAN’s goals.  In 2018, the LAN began reporting payment data by line of business—Commercial, Medicaid, Medicare Advantage (MA), and original Medicare.

The 2021 Measurement Effort includes results from the 2019 and 2020 measurement years. AHIP and the LAN permitted this flexibility in reporting due to the COVID-19 public health emergency (PHE) as results are typically released year-over-year.

Some key highlights from the 2021 survey include:

  • In 2019, 38.2% of health care payments, which represented 72.5% of covered lives, flowed through an APM. In 2020, these percentages grew: 40.9% of health care payments, representing 80.2% of covered lives, flowed through an APM, showing increasing adoption despite the pandemic.
  • MA continued to outpace Medicare in dollars flowing through APMs: More than half (58%) of health care payments from MA plans were tied to APMs in 2020, compared to 42.8% in original Medicare.
  • Commercial adoption of APMs increased from 30.1% of payments in 2018 to 35.5% in 2020.
  • Medicaid showed great progress in moving from 23.3% of payments through APMs in 2018 to 35.4% in 2020.
  • Eighty-seven percent of payers believe APM adoption will continue to increase.
  • Over 75% of plans are leveraging value-based provider arrangement to incent the reduction of health disparities.  A majority of these arrangements involve screening for socioeconomic barriers to health, referrals to community-based organizations, and care coordination for services that address socioeconomic barriers to health.

It is clear that we have made progress toward our collective goal. If there were any doubt that value-based care is here to stay, these results demonstrate a sustained commitment by payers and growth in provider adoption. While the gains in risk-based models were more modest or steady, this reflects accommodations payers introduced during the pandemic to bolster provider partners. Many payers also instituted advanced payments to providers to ensure steady cashflow and clinical practice flexibility. As we shift from pandemic to endemic status with COVID-19, payers have confidence this pivotal work will continue to strengthen and grow.

Click here to view the HCP-LAN 2021 Measurement Effort results.