Most Successful Alternative Payment Models, According to CMS



Created by the Affordable Care Act, Centers for Medicare and Medicaid Innovation (CMMI) tests innovative payment and service delivery models to reduce program expenditures while enhancing the quality of care provided. Since its inception in 2010, CMMI has launched more than 50 alternative payment models.  

Recently, CMMI conducted in-depth research into these models to determine which have been most successful. We review those six models below. 

ACO Investment Model 

How it worked: The ACO Investment Model (ACO AIM), operated under the Shared Savings Program (SSP) from 2015 to 2018, provided up-front payments to selected accountable care organizations (ACOs) to invest in infrastructure and staffing. 

Who participated: Newly developed ACOs in rural or low-ACO penetration areas, as well as small ACOs that spread across 38 states. 

Why it worked: Without negatively impacting quality of care, the ACO Investment Model generated some of the largest net savings per beneficiary of any CMMI model to date. Best of all, 80 percent of the participating ACOs had 65 percent of their delivery sites in rural areas. 

Pioneer ACO Model 

How it worked: Implemented between 2012 and 2016, the Pioneer ACO Model was designed for healthcare organizations and providers that were already experienced in coordinating care for patients across care settings. It allowed these provider groups to move more rapidly from a shared savings payment model to a population-based payment model on a track consistent with, but separate from, the Medicare Shared Savings Program. It was designed to work in coordination with private payers by aligning provider incentives.  

Who participated: This model began with 32 ACOs in 2012 and concluded in 2016 with nine participating ACOs. 

Why it worked: While this model launched with 32 participants, most ACOs dropped out of the program for various reasons. The ACOs that continued with the model in its final year generated gross savings of $68 million. In the third year, participating ACOs that showed a specific level of savings over the first two years were eligible to move a large portion of their payments to a population-based model. This reduced healthcare costs and helped transition from a volume-based model to a value-based model. This model was so successful, it inspired the Next Generation ACO Model, which 35 ACOs are now participating in.  

Maryland All-Payer Model 

How it worked: The Maryland All-Payer Model (MDAPM) exempted Maryland hospitals from Medicare’s inpatient and outpatient prospective payment systems and shifted the state’s hospital payment structure to an all-payer annual budget that included inpatient and outpatient services. It tested whether a statewide all-payer system with reimbursements based on populations served and quality of care provided could be an effective model for reducing costs and improving access and quality. The MDAMP concluded in 2018. 

Who participated: All regulated acute hospitals in Maryland. 

Why it worked: This model reduced total per capita hospital spending. Admissions and ED visits trended down for Medicaid beneficiaries and hospitals were given the flexibility to invest in tools and resources to support new population health approaches. Unfortunately, the model had some flaws. Population health metrics didn’t improve and engagement and care for complex patients proved difficult. While there was a 4.1% reduction in total hospital expenditures for Medicare, expanding the model across the country would be costly.  

Medicare Care Choices Model 

How it worked: Medicare beneficiaries were previously required to forego Medicare payments related to their terminal condition in order to receive access to hospice services. In the Medicare Care Choices Model (MCCM), eligible Medicare beneficiaries received supported care services from participating hospices while continuing to receive treatment for their terminal condition through fee-for-service Medicare. MCCM was designed to improve quality of life, care received, and patient/family satisfaction for individuals being treated for terminal conditions. Services covered by this model were available 24 hours a day, 365 days per year.  

Who participated: 82 hospices nationwide participated. 

Why it worked: CMS paid participating hospices between $200-$400 per beneficiary per month. MCCM led to substantial reductions in total Medicare spending for participants during the first three years. Most caregivers reported positive experiences. Caregivers who did not transition to MHB reported lower satisfaction rates. 

Home Health Value-Based Purchasing Model 

How it works: The Home Health Value-Based Purchasing Model (HHVBP) provides financial incentives to home health agencies for quality improvement. Participating Home Health Agencies (HHAs) were measured against other participating HHAs within the same state and received performance scores for individual measures of quality of care. Those measures of quality care are combined into a total performance score to determine payment adjustment relative to the state’s other participating agencies. This model is designed to improve the quality and efficiency of the delivery of home health care services to Medicare beneficiaries. 

Who participates: All Medicare-certified home health agencies in Massachusetts, Maryland, North Carolina, Florida, Washington, Arizona, Iowa, Nebraska, and Tennessee. 

Why it works: The model saved Medicare an average annual savings of $141 million. It also improved the quality of care, without causing adverse effects on patient access. Due to its success, CMS will be expanding the model starting in January 2022.  

Prior Authorization of Repetitive, Scheduled Non-Emergent Ambulance Transport 

How it works: The Prior Authorization of Repetitive, Scheduled Non-Emergent Ambulance Transport (RSNAT) Prior Authorization Model tests whether prior authorization helps reduce expenditures while maintaining or improving access to and quality of care. The prior authorization process is designed to ensure services are provided in compliance with applicable Medicare coverage, coding, and payment rules before services are rendered and claims are paid.  

Who participates: Ambulance Suppliers or Beneficiaries in Delaware, the District of Columbia, Maryland, New Jersey, North Carolina, Pennsylvania, South Carolina, Virginia, and West Virginia. Pre-pandemic, CMS announced that they would scale this model nationwide, but that plan has been paused amidst the public health emergency. 

Why it works: This model has been successful in reducing RSNAT services and total Medicare spending while maintaining the overall quality of and access to care. The model will be expanding to most states, starting Dec. 1, 2021.  

About us 

Healthify, powered by WellSky, is working closely with payers, providers, and community-based organizations to ensure that social needs are addressed through an integrated, interoperable system. To learn more about our services, please contact us for a demo 

Topics: Medicaid funding SDoH funding sdoh

Related posts