Evolving payment models challenge physician practices: 7 study findings

Written by Shayna Korol | October 24, 2018 | Print  |

As physician payment models become increasingly complex, physician practices have become more risk-averse, according to a study by the Rand Corporation and the American Medical Association.

The study is a follow-up to a 2014 study that evaluated how physician practices responded to alternative payment models. Rand researchers conducted interviews with 84 people from 31 physician practices in six U.S. markets between January and June. When possible, researchers re-interviewed the physicians and practice leaders who participated in the 2014 study.  

Here are seven things to know:

1. Across all the markets studied, respondents perceived an accelerated pace of change in APMs from both private insurers and government programs since 2014. This was at least partially driven by the Medicare Access and CHIP Reauthorization Act of 2015 Quality Payment Program.

2. As in the previous study, many practices — particularly small and independent practices — said they lacked the necessary data management and analysis skills necessary to perform well in APMs. 

3. Study authors found practices were increasingly averse to the financial risks posed by APMs, including penalties for cost of care overrun. Some practices renegotiated payer contracts to reduce excessive downside risk or transfer risk to partners, such as hospitals or device manufacturers. 

4. As in the 2014 study, respondents were generally supportive of APMs that allowed their practices to noticeably improve patient care. They were satisfied with clinical improvements even when financial bonuses did not result.

5. When APMs created new reporting and documentation burdens, however, or did not tangibly improve patient care, physicians were dissatisfied. 

6. Study authors suggest:

  • Allowing practicing physicians and other leaders to help design APMs that encourage meaningful clinical improvement
  • Slowing the pace of payment model change
  • Helping practices invest in data management and analysis and supplying timely performance data to help them succeed in APMs
  • Offering upside-only APMs or helping practices manage downside risk

7. The AMA intends to use these findings to guide efforts to improve APMs and help physician practices succeed in them.

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