Barak Richman: Cost, Medicare, and Alternative Payment Models

The authors, including HSM and Duke University Law School Professor Barak Richman, examined the impact of Alternative Payment Models (APMs) in Fee-for-Service Medicare as a way to reduce expenditures in dealing with the growing Medicare population. They focused on two types of models, one of which included the expansion of the Medicare and Medicaid Shared Savings Program. However, it is not subjected to annual independent evaluations, allows ACOs to only share savings and not losses, finds overall difficulty in assessing physician resource use, and has high variability in per-monthly, per-beneficiary reductions in cost. The second calls for expanding APMs tested by the Center for Medicare and Medicaid Innovation (CMMI). However, the plans tested by the CMMI may take priority over better quality improvement measures. Despite these efforts, quality improvement may be less of a priority since a 2014 survey revealed that 90% of beneficiaries were happy with their providers. Overall, Richman and colleagues conclude that seeing APMs as feasible solutions to the growing cost of Medicare depends upon estimated returns on investments, sustained changes in business strategies, clearly defined methods of measurement, and inclusion of key stakeholders in the reform process.

Read more in “Outlook for Alternative Payment Models in Fee-for-Service Medicare” JAMA

Clough, J.D., Richman, B.D., & Glickman, S.W. (2015). Outlook for Alternative Payment Models in Fee-for-Service Medicare. JAMA, 314, 341-342. DOI: 10.1001/jama.2015.8047