CMS has called for multi-payer alignment in value-based care arrangements, which are run by the state healthcare programs in a new letter addressed to the Medicare directors.

In the September 15th letter, providers guidance to the Medicaid leaders on the ways to advance value-based payment, a key driver of value-based care as mentioned by the CMS, by identifying appropriate alternative payment models and aligning financial incentives across payers.

CMS Administrator Seema Verma said, the Trump Administration has since long worked to accelerate the move to value-based care. But for these, efforts have been piecemeal for too long.

She added, the healthcare providers require Medicare, Medicaid and private insurance payers to work in tandem with one another. She called upon the state partners to utilize the guidance to create a plan to improve quality for their Medicaid beneficiaries by encouraging value-based care in their programs.

Many states have already registered a progress by moving towards value-based payment, which is a key driver of value-based care. Fee-for-service incents higher volume and more spending, instead of accountability for costs and outcomes, mentioned the CMS in the guidance.

But Medicaid made more fee-for-service payments to healthcare providers in 2018 as compared to any other payer as mentioned in the latest data from the Health Care Payment Learning & Action Network.

Also, Medicaid had the least amount of payments via an alternative payment model this year.

CMS mentioned in the letter that states have an opportunity to learn from Medicare and private payers while implementing VBC and need to strongly consider aligning payment incentives and performance measures across their healthcare systems in order to reduce the burden on providers participating in multiple programs.

It continued to say that alignment may also lead to an improvement in the healthcare experience for individuals across their states, which will include those covered under Medicaid, Medicare and commercial insurance products.  

This guidance also mentions other considerations for state Medicaid directors, which include delivery system readiness, the scope of financial risk to providers and stakeholder engagement.

It elaborates ways for Medicaid programs to implement value-based care models like bundled and capitation, using Medicaid managed care organizations or direct reimbursement to providers.

Though, a multi-payer alignment will be able to push forward sustainable value-based care models, emphasized CMS.

The agency stated in the guidance that multi-payer participation magnifies the impact of new innovative models. It also drives care transformation across the healthcare system. States while designing their programs, need to consider, aligning the incentives employed in their Medicaid program with those developed by the Innovation Center, and those available in other public and private programs.

The alignment of quality metrics, financial incentives and other model components across various payers can help the transition to value-based care by simplifying the shift in payments and reducing the administrative burden while implementing more complex payment models.