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Improving Alternative Payment Models with PTAC
Article

Improving Alternative Payment Models with PTAC

Inform and Improve Alternative Payment Models with PTAC

The Physician-Focused Payment Technical Advisory Committee (PTAC) is a resource for designing alternative payment models (APMs), in addition to being an avenue for thought leadership in innovative alternative payment model approaches, which can be leveraged to inform and improve your APM.

Increasingly, commercial payers are designing and implementing their own alternative payment models. However, the design, implementation, and evaluation of APMs can be challenging, complex, and require a high level of effort. The Center for Medicare and Medicaid Innovation (CMMI) is at the forefront of testing and implementing various types of alternative payment models. Commercial payers can learn from the significant work they have already done in this space to inform and improve their APMs.

PTAC, which was created by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), was designed to engage stakeholders to improve the efficiency and effectiveness of the U.S. health care delivery system. Stakeholders can provide their ideas on innovative approaches and solutions to care delivery, payment, or other policy issues by submitting physician-focused payment (PFPM) model proposals.

Physician-Focused Payment Model Proposal Criteria

As part of the proposal process, PTAC has created ten criteria to evaluate proposals to determine if they recommend the physician-focused payment model for testing and/or small-scale implementation.

  • Scope (High Priority)
  • Quality and Cost (High Priority)
  • Payment Methodology (High Priority)
  • Value over Volume
  • Flexibility
  • Ability to Be Evaluated
  • Integration and Care Coordination
  • Patient Choice
  • Patient Safety
  • Health Information Technology

Evaluate the design of your alternative payment model

How can you design an effective alternative payment model? There are many components to consider when designing an APM, which is why the evaluation criteria developed by PTAC can be beneficial in seeing where there may be gaps in your model. In addition, seeing how your model stacks up against the criteria is a useful exercise to ensure that you are designing an APM that is more likely to meet your objectives.

For instance, scope, quality and cost, and payment methodology are considered high priority criteria by PTAC, meaning that they consider them of great importance in their overall review of physician-focused payment model proposals. Therefore, these components should be important as well when designing your APM. Below, we’ve highlighted some key guidance related to these high-priority criteria that could be used to inform your alternative payment model.

High Priority Criteria

Key Guidance

Scope

  • Expand the scope to either new health care professionals or beneficiaries. Estimate the impact on beneficiaries and providers to understand implementation feasibility and any clinical or financial risks.
  • In general, you do not want to target a narrow set of facilities or institutions; however, should you want to focus on a specific specialty, treatment, or procedure, understand the reasoning and the impact of this narrow focus.
  • Even if you’re not submitting a physician-focused payment model proposal to PTAC, consider the policy direction of CMMI. For example, there has been an increasing focus on health equity and moving towards evidence-based care, especially for conditions or diseases that disproportionately affect racial or ethnic minority communities. Think about how you can incorporate a health equity lens in the scope of your APM and other components of your model.

Quality and Cost

  • Identify and understand your value proposition. How will it improve quality and tie payment to quality? Understand the current barriers to achieving desired value and quality goals and how your alternative payment model would overcome these barriers.
  • Use evidence-based, trackable, quality measures that focus not just on processes but on outcomes. Additionally, quality performance should be explicitly linked to financial performance (e.g., shared savings, incentive payments, etc.). These quality measures must be identified when designing your APM; and have an infrastructure for collecting and analyzing.

Payment Methodology

  • Strong alternative payment models include a change in reimbursement for multiple services rendered, ordered, managed, or coordinated by one more type of clinicians or eligible professionals related to a specific health condition or risk factor, or both.
  • Align your financial incentives to the care model. Specifically, ensure that the appropriate behaviors are being incentivized by your payment model that will directly impact the relevant quality measures in your APM.

Evaluate the impact of your alternative payment model

A crucial component for proposals that are submitted to PTAC is being able to justify and demonstrate the potential impact of an alternative payment model. This can be done by referencing relevant past studies, or by performing data analyses.

Whether you’re in the design, implementation, or evaluation phase, it is essential to determine the impact of your APM to inform continuous improvement. Below are some examples of the types of analyses that are included in proposals to PTAC and should be considered when designing an APM:

  • Estimate beneficiary population eligible to participate
  • Estimate clinical population eligible to participate
  • Estimate potential cost savings from model
  • Estimate potential impact to relevant quality outcomes

Designing and evaluating an alternative payment model is technically complex. RTI Health Advance has experts in the design, implementation, and evaluation of alternative payment models. Regardless of what stage you are in, we can meet you where you are to support your APM needs.

Learn more about our alternative payment model design and adoption solutions.

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