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The Value in Health Care Act aims to incentivize providers to participate in value-based care models

The legislation, introduced in July, makes several key changes to Medicare’s Alternative Payment Models program.
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· 3 min read

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In a step forward for the healthcare industry’s push toward value-based care (VBC), on July 27, a bipartisan group of representatives introduced the Value in Health Care Act of 2023—a bill intended to incentivize more providers and healthcare organizations to adopt VBC models.

The legislation builds on the Value in Health Care Act of 2021 and makes a number of changes to Medicare’s alternative payment models (APMs), which were designed to make it easier for providers to participate in payment models that incentivize the quality of care given over the quantity of services provided.

An APM is any payment model that differs from the traditional fee-for-service model, in which providers are paid for each individual service they perform, according to Brent Nicholson, co-founder and chief partner officer at healthcare services company Carrum Health.

“What this really translates to is providers taking more control and ownership of the outcomes, and ultimately, the financial risk associated with the reimbursement for healthcare services,” Nicholson told Healthcare Brew.

Democratic Rep. Suzan DelBene of Washington, one of the legislators who introduced the bill, said in a statement that “physicians and hospitals participating in APMs are leading the changes our healthcare system needs to focus on value instead of volume.”

“The Value in Health Care Act would encourage more providers to join these models and accelerate this change, leading to improved quality of care and health outcomes for seniors,” DelBene said.

The legislation also encourages providers to join accountable care organizations (ACOs), or groups of providers and hospitals that join together to provide quality care while reducing unnecessary healthcare spending. ACOs have saved Medicare $17 billion in the last decade, according to the National Association of Accountable Care Organizations.

Some key changes in the legislation include:

  • Extending by two years a Medicare incentive payment, which was set to expire at the end of 2023, for healthcare organizations to participate in APMs.
  • Giving the Centers for Medicare & Medicaid Services the power to adjust the qualifications healthcare organizations need to meet to receive such incentive payments. The change is intended to encourage rural practices to participate in an APM.
  • Establishing a path for healthcare organizations to take on higher levels of risk in an APM.

The legislation also helps cover the startup costs for providers to switch to a VBC model, which Nicholson said can be very costly.

“The costs mainly come from the infrastructure that the providers have to put together to be able to not only participate but manage and ultimately succeed in these alternative payment models,” he said.

Seventeen healthcare industry trade groups, including the American Hospital Association and American Medical Association, expressed support in a letter sent to Congress, writing that the bill will help “maintain and further strengthen the movement toward high-quality care in which financial performance is linked to the quality of patient care rather than the number of services delivered.”

Navigate the healthcare industry

Healthcare Brew covers pharmaceutical developments, health startups, the latest tech, and how it impacts hospitals and providers to keep administrators and providers informed.