Getting Incentives Right in Payment Reform: Thinking Beyond Financial Risk
Authors: Vinay K. Rathi, J. Michael McWilliams, Eric T. Roberts
Journal: Annals of Internal Medicine (2020)

Ideas and Opinions17 March 2020Getting Incentives Right in Payment Reform: Thinking Beyond Financial RiskVinay K. Rathi, MD, J. Michael McWilliams, MD, PhD, and Eric T. Roberts, PhDVinay K. Rathi, MDMassachusetts Eye and Ear Infirmary and Harvard Business School, Boston, Massachusetts (V.K.R.), J. Michael McWilliams, MD, PhDHarvard Medical School and Brigham and Women's Hospital, Boston, Massachusetts (J.M.M.), and Eric T. Roberts, PhDUniversity of Pittsburgh Graduate School of Public Health, Pittsburgh, Pennsylvania (E.T.R.)Author, Article, and Disclosure Informationhttps://doi.org/10.7326/M19-3178 SectionsAboutFull TextPDF ToolsAdd to favoritesDownload CitationsTrack CitationsPermissions ShareFacebookTwitterLinkedInRedditEmail Successful payment reform requires strong incentives for provider organizations to limit health care spending. Global budget payment models, the most prominent of which is the accountable care organization (ACO) model, seek to limit spending through risk contracts in which provider organizations share savings or losses when spending is below or above a budget or "benchmark." Much of the debate over how to strengthen these models has focused on specific terms of the payment contract. For example, under recent rule changes announced by the Centers for Medicare & Medicaid Services, ACOs in the Medicare Shared Savings Program (MSSP)—the largest federal ACO ...References1. Centers for Medicare & Medicaid Services. CMS finalizes "Pathways to Success," an overhaul of Medicare's national ACO program [news release]. 21 December 2018. Accessed at www.cms.gov/newsroom/press-releases/cms-finalizes-pathways-success-overhaul-medicares-national-aco-program on 28 November 2019. Google Scholar2. McWilliams JM, Hatfield LA, Landon BE, et al. Medicare spending after 3 years of the Medicare shared savings program. N Engl J Med. 2018;379:1139-49. [PMID: 30183495] doi:10.1056/NEJMsa1803388 CrossrefMedlineGoogle Scholar3. Roberts RR, Frutos PW, Ciavarella GG, et al. Distribution of variable vs fixed costs of hospital care. JAMA. 1999;281:644-9. [PMID: 10029127] CrossrefMedlineGoogle Scholar4. Bleser WK, Saunders RS, Muhlestein D, et al. Following Medicare's ACO program overhaul, most ACOs stay—but physician-led ACOs leave at a higher rate. Health Affairs Blog. 15 March 2019. Accessed at www.healthaffairs.org/do/10.1377/hblog20190311.776139/full on 15 March 2019. Google Scholar5. Chernew ME, de Loera-Brust A, Rathi VK, et al. MSSP participation following recent rule changes: what does it tell us? Health Affairs Blog. 22 November 2019. Accessed at www.healthaffairs.org/do/10.1377/hblog20191120.903566/full on 6 December 2019. Google Scholar6. Kanter GP, Pauly MV. Coordination of care or conflict of interest? Exempting ACOs from the Stark Law. N Engl J Med. 2019;380:410-1. [PMID: 30699326] doi:10.1056/NEJMp1811304 CrossrefMedlineGoogle Scholar7. U.S. Department of Health and Human Services. HHS proposes stark law and anti-kickback statute reforms to support value-based and coordinated care [news release]. 9 October 2019. Accessed at www.hhs.gov/about/news/2019/10/09/hhs-proposes-stark-law-anti-kickback-statute-reforms.html on 14 December 2019. Google Scholar8. LaPointe J. Site-neutral payments for hospital clinic visits starting in 2019. RevCycleIntelligence.com. 2 November 2018. Accessed at https://revcycleintelligence.com/news/site-neutral-payments-for-hospital-clinic-visits-starting-in-2019 on 20 March 2019. Google Scholar Author, Article, and Disclosure InformationAffiliations: Massachusetts Eye and Ear Infirmary and Harvard Business School, Boston, Massachusetts (V.K.R.)Harvard Medical School and Brigham and Women's Hospital, Boston, Massachusetts (J.M.M.)University of Pittsburgh Graduate School of Public Health, Pittsburgh, Pennsylvania (E.T.R.)Note: The authors assume full responsibility for the accuracy and completeness of the ideas presented.Disclaimer: The content is solely the responsibility of the authors and does not necessarily represent the official views of Arnold Ventures, the National Institute on Aging, or the Agency for Healthcare Research and Quality.Financial Support: Dr. McWilliams is supported by grants from Arnold Ventures and the National Institute on Aging of the National Institutes of Health (P01 AG032952). Dr. Roberts is supported by a mentored research scientist development award from the Agency for Healthcare Research and Quality (K01HS026727).Disclosures: Disclosures can be viewed at www.acponline.org/authors/icmje/ConflictOfInterestForms.do?msNum=M19-3178.Corresponding Author: Eric T. Roberts, PhD, Department of Health Policy and Management, University of Pittsburgh Graduate School of Public Health, 130 De Soto Street, Room A653, Pittsburgh, PA 15261; e-mail, eric.[email protected]edu.Current Author Addresses: Dr. Rathi: Department of Otolaryngology–Head and Neck Surgery, Massachusetts Eye and Ear, 243 Charles Street, Boston, MA 02114.Dr. McWilliams: Department of Health Care Policy, Harvard Medical School, 180 Longwood Avenue, Boston, MA 02115.Dr. Roberts: Department of Health Policy and Management, University of Pittsburgh Graduate School of Public Health, 130 De Soto Street, Room A653, Pittsburgh, PA 15261.Author Contributions: Conception and design: V.K. Rathi, J.M. McWilliams, E.T. Roberts.Drafting of the article: V.K. Rathi, J.M. McWilliams, E.T. Roberts.Critical revision for important intellectual content: V.K. Rathi, J.M. McWilliams, E.T. Roberts.Final approval of the article: V.K. Rathi, J.M. McWilliams, E.T. Roberts.Obtaining of funding: J.M. McWilliams.Administrative, technical, or logistic support: E.T. Roberts.This article was published at Annals.org on 18 February 2020. PreviousarticleNextarticle Advertisement FiguresReferencesRelatedDetails Metrics Cited byPreserving and Promoting Competition in the Post–Coronavirus Disease 2019 Healthcare Delivery System 17 March 2020Volume 172, Issue 6Page: 423-424KeywordsAccountable care organizationsHealth careHealth care providersHealth services researchHospitalizationsMedicareMotivationPrevention, policy, and public healthPublic policyResearch quality assessment ePublished: 18 February 2020 Issue Published: 17 March 2020 Copyright & PermissionsCopyright © 2020 by American College of Physicians. 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