What do payers think about the future of APM adoption?

For more than a decade, there has been a low hum in the background of every healthcare stakeholder’s mind tied to value-based care (VBC). While this low hum has turned into a blasting horn for many who have chosen to dive into the deep end, for others this low hum has remained. 

Consider the 2023 MGMA DataDive Practice Operations data report released earlier this year, for example: Recovering from the impacts of the pandemic years and the subsequent strain of staffing shortages from the Great Resignation, medical group practices did not surge ahead significantly into value-based care arrangements, as reflected in 2022 medical revenues reported in the latest MGMA DataDive Cost and Revenue data set: 

• Surgical and nonsurgical specialties reported only slight upticks in their relative share of incentive-based revenue, defined as payments received from insurance companies and government agencies for incentive-based activities including pay-for-performance, risk-sharing, shared savings, quality and technology. 
• While primary care practices continue to have the largest share of incentive-based revenue compared to their nonsurgical and surgical practice counterparts, those levels of revenue in 2022 were half of what they reported in 2021, signaling a higher emphasis on traditional FFS performance. 

This mostly stagnant trend around incentive-based revenue aligns with a similarly slow adoption of quality performance metrics as a part of physician compensation plans, as revealed in MGMA Stat polling in May 2023: Less than half (47%) of medical groups include quality metrics in physician comp plans. Additionally, nearly eight in 10 (79%) medical groups report that they don’t think Medicare currently offers an Advanced APM (Alternative Payment Model) that is clinically relevant to the practice, per a July 2023 MGMA Stat poll. 

The slow trend toward adoption of value-based care comes as payers evaluate the current state of payment models, with more than eight in 10 (83%) of surveyed payers thinking that APM activity will increase, with none of them expecting it to decrease and another 13% thinking it will stay the same, per the 2022 Health Care Payment Learning and Action Network’s (HCP-LAN) APM Measurement report. 

Operationalizing new care models and building performance to effectively take on financial risk as part of APMs will be crucial parts of medical group practices’ embrace of value. At the 2023 Leaders Conference in Nashville, attendees heard from Justin Chamblee, CPA, executive vice president, Coker Group, and Jon Morris, JD, MBA, vice president, Trinity Health IHA Medical Group, on these pressures and what is needed to get provider organizations ready — by analyzing the physician enterprise and considering key changes for performance improvement that enable the adoption of true VBC.