After more than a decade of debate, litigation, and experimentation, the adoption of value-based care and alternative payment models endures, and 2021 is presenting us with a picture of what more can be done with value-based care and health equity. First, beyond the headlines and political posturing, policymakers and market players have persevered through ongoing partisan political transitions, to the point where broad adoption of value-based case finally feels inevitable and indispensable.
That said, any presidential transition inevitably yields shifts in policy emphasis, funding priorities, and reimbursement models from CMS. In the first six months of the Biden administration, we saw a lowered cap on ACA premiums, an end to the “subsidy cliff,” and a special enrollment period—all of which have contributed to an additional 2.5 million enrollees and counting. While this is a proportional decline in new enrollees compared to 2020, the program is confirmed to have hit a record enrollment volume (though final numbers are not announced). It also represents 25% total program growth as uninsured rates in the US continue to decline. Direct contracting, a program conceived and announced during the Trump administration, launched in 2021 with 53 new entities entering in risk sharing arrangements, providing care for millions across the US, particularly in elder care and community clinics.
Still, there are significant barriers to the reach and impact of value-based programs. They are unevenly deployed, creating disparities in access to care along predictable lines of social stratification. To prevent a recurrence of the inequities that have plagued the US healthcare systems since its inception, HHS secretary Dr. Rachel Levine has made addressing health inequity an administrative priority, placing a temporary hold on new programs to refocus on health equity.
So, how is this explicit emphasis on narrowing the gaps in access and outcomes likely to play out within value-based care? A few relevant areas come to mind:
- Broadband Access as an Enabler of Telehealth
While the efficacy of telehealth during its rapid, COVID-induced expansion has been uneven, there is growing evidence that chronic conditions can be effectively monitored and managed via telehealth. This, among other reasons, is why extending broadband access to underserved areas and populations is a critical plank of the infrastructure bills working their way through Congress; reaching these groups for telehealth is essential to reducing inequity.
- Reimbursement for Addressing Social Determinants of Health
The empirical link between food insecurity, housing insecurity, lack of transportation, etc. and health outcomes has inspired many health systems to provide non-emergency medical transportation, food delivery, access to childcare, and other community support. As the effectiveness of these programs in improving outcomes and reducing cost of care continues, policymakers will likely steer reimbursement toward them under the existing value-based care mechanisms. To that end, the z-codes for documenting SDoH already exist, but they are not yet risk-adjustable (and therefore not reimbursed). We expect this to change in the coming years, enabling a uniform approach to addressing these drivers of inequity.
- Increased Emphasis on Addressing Behavioral Health
If social determinants of health and primary care are pillars of health equity, funding for behavioral health is the third leg on that stool. The link to behavioral health and overall health is undeniable. Fortunately, CMS has already begun adding behavioral health conditions to the risk adjustment models. The pattern of updating potential maximum reimbursement and treatment of those conditions is likely to repeat, creating additional financial breathing room for organizations already providing mental health care for vulnerable populations. This can, in turn lead to:
- Access to, and Tools that Support, Two-Way Risk Adjustment
Many smaller organizations and community clinics on the front line of treating behavioral health lack the the opportunity to assume risk and experience higher reimbursements that actually reflect the care they deliver. In short, their costs can only be controlled so much, and they can’t see the higher max reimbursement to let them start to build up capital for additional investment in solutions like Lumanent that can have a cyclically positive impact on accurate risk capture, and therefore revenue and care. Programs like direct contracting lower the bar, but the full financial impact still sits out of reach. Additional APMs and risk sharing programs will be necessary to tackle this particular front-line inequity, as will the intentional support of organizations like Health Fidelity and its competitors.
The concepts of value-based care and health equity are philosophically inseparable. All the above will impact the way payer and provider organizations structure their risk adjustment programs, further tightening the alignment between reimbursement, cost, and health outcomes. And while HCC-based risk adjustment has its imperfections, its use has proven to be an invaluable tool for driving healthcare market behavior toward a more efficient, effective outcome.
With this new, additional focus on health equity, expect risk adjustment programs to begin capturing, quantifying, and aligning reimbursement with the factors driving a more equitable US healthcare system.