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AMA–RAND Report Outlines Persistent Challenges With APMs


A report from RAND Corporation and the American Medical Association (AMA) describes how alternative payment models (APMs) are affecting multiple aspects of physician practice and offers guidance for efforts to improve APMs and help practices succeed in them.

As the pace of change to alternative payment models (APMs) has increased over the past 4 years, so too has the complexity of APMs and the associated challenges for physician practices trying to improve quality and efficiency of care, according to a new report from RAND Corporation and the American Medical Association (AMA).

The new report is an update to a 2014 report by the 2 organizations that described how APMs were affecting multiple aspects of physician practice. The report gathered data from interviews with physician practice leaders, frontline physicians, and other observers in the same 6 markets observed in 2014.

Between the 2014 report and the newly released report, there were some persistent challenges, such as the increased importance of data and data analysis, the interactions between multiple payment models, and operational errors that can have financial consequences for practices. Another persistent finding was that practices have needed to implement new capabilities and models of care, make new investments in data and analytics, and offer internal incentives (both financial and nonfinancial) for physicians.

“The complexity and pace of change in how physicians are paid for their services has required practices to spend substantial resources just to keep up with program details,” Mark W. Friedberg, MD, the study’s lead author and a senior physician policy researcher at RAND, said in a statement. “While the practices in our sample generally voiced support for the goals of alternative payment models, these implementation challenges could make it difficult to achieve them.”

Among the new findings was that the pace of change has accelerated, partially driven by the Medicare Access and CHIP Reauthorization Act’s Quality Payment Program. Interviewees also highlighted the increasing complexity of APMs since 2014 with an increasing number of performance measures and interactions between different payment models.

According to the report, practices across the board reported they had to make significant investments—by hiring consultants or building internal capabilities—in order to understand complex new payment models.

Another new finding was that interviewees reported more risk aversion, despite enthusiasm for APMs. Practices that had already experienced losses in APMs or that were less experienced in managing risk were more likely to be risk averse.

The report offers some guidance for efforts to improve APMs and help practices succeed in them.

  • Simplifying APMs might help practices understand them better, which will mean better performance.
  • A slower, more predictable pace of change, as opposed to the accelerated pace of the last few years, with longer-term contracts.
  • Help for practices to invest in data management and analysis, which are critical for success in APMs.
  • Continued access to upside-only APMs to improve APM uptake, especially in practices with limited experience or that are very risk averse.
  • New APMs designed with practicing physicians and other practice leaders aimed at improving physician engagement.

“Today’s report is a call to action to align multiple payers and payment models with consistent measures aimed at improving patient care,” said AMA President Barbara L. McAneny, MD. “It is clear the long-term sustainability of payment reform hinges on value-based payment models that must be operationally and financially sound, sustainable over time, aligned across payers, and must work for physician practices and patients.”

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