Measuring Progress: Adoption of Alternative Payment Models in Commercial, Medicaid, Medicare Advantage, and Fee-for-Service Medicare Programs

Report: Released October 22, 2018

The LAN was launched in March 2015 to accelerate the adoption of alternative payment models (APM) and drive alignment in payment reform approaches across the public and private sectors. These payment models have the potential to realign treatment and payment incentives to improve health care quality while containing cost. Through the LAN’s collaborative structure, more than 7,100 participants are taking action towards APM adoption and implementation. The LAN has adopted the goal of tying 50% of U.S. health care payments to APMs by the end of 2018. In 2016, the LAN embarked on its first national APM Measurement Effort to assess the adoption of APMs and the progress toward the LAN’s goals. The 2018 LAN APM Measurement Effort marks the third year of this initiative.

The 2018 HCP-LAN APM Measurement Effort includes data from the HCP-LAN survey, surveys fielded by America’s Health Insurance Plans (AHIP) and the Blue Cross Blue Shield Association (BCBSA), and Medicare FFS. Conducted from May to July 2018, the survey process collected data from 65 participants, accounting for nearly 226.3 million Americans, or 77%, of the covered U.S. population. The data reflects payment activity in calendar year 2017.

Health plans, states, and Medicare FFS reported the total dollars paid to providers according to the HCP-LAN’s Refreshed APM Framework, which offers a common approach to classifying payment by category and subcategory. With this data, the HCP-LAN analyzed aggregate results by category and subcategory as well as by line of business: commercial, Medicare Advantage, Medicaid, and Medicare FFS.

The results show progress, with 34% of total U.S. health care payments tied to alternative payment models (APMs) in 2017, a steady increase from 23% two years ago.

The HCP-LAN APM Measurement Effort revealed the following for 2017 payments:

  • 41% of health care dollars in Category 1 (e.g., traditional FFS or other legacy payments not linked to quality)
  • 25% of health care dollars in Category 2 (e.g., pay-for-performance or care coordination fees)
  • 34% of health care dollars in a composite of Categories 3 and 4 (e.g., shared savings, shared risk, bundled payment, or population-based payments)

These results highlight a continued move away from a fee-for-service system that reimburses only on volume, and towards patient- and value-centered APMs.

Publication Info

Publication date: October 22, 2018
27 pages

Suggested Citation: Health Care Payment Learning & Action Network. Measuring Progress: Adoption of Alternative Payment Models in Commercial, Medicaid, Medicare Advantage, and Medicare Fee-for-Service Programs. October 22, 2018

The HCP-LAN invited health plans across market segments, as well as managed Medicaid FFS states, to quantify the volume of health plan in- and out-of-network spending that flows through APMs, including key areas of available pharmacy and behavioral health spending, if such data were available. Each of the questions in the survey corresponded to the categories and subcategories of the HCP-LAN’s Refreshed APM Framework, using the LAN survey tool, definitions, and methodology.

In this year’s effort, 61 health plans, three Medicaid FFS states, and Medicare FFS participated; the measurement results were based on data combined across the LAN survey, the BCBSA survey, the AHIP survey, and Medicare FFS. Health plans, states, and Medicare FFS reported the total dollars paid to providers according to the HCP-LAN’s Refreshed APM Framework using the same survey questions and definitions. With this data, the LAN calculated aggregate results at the category and subcategory level as well as across lines of business.

For more information on the methodology, please read the Methodology and Results Report above and view the video below.

View the interactive page that helps explain the numbers!

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