Nav: Home

Possible to account for disadvantaged populations in Medicare's payment programs

July 13, 2016

WASHINGTON - A new report from the National Academies of Sciences, Engineering, and Medicine says that Medicare's value-based payment programs could take into account social risk factors - such as low socio-economic position, residence in disadvantaged neighborhoods, or race and ethnicity - but any proposal to do so will entail both advantages and disadvantages that need to be carefully considered. This is the third report in a series of five that addresses social risk factors that affect the health care outcomes of Medicare beneficiaries and ways to account for them in Medicare payment programs. It was outside the study's statement of task to recommend whether social risk factors should be accounted for in value-based payment or how.

The Patient Protection and Affordable Care Act of 2010 and subsequent legislation require the Centers for Medicare & Medicaid Services (CMS) to implement value-based payment programs. Although CMS payment models cover a spectrum of approaches, the agency is moving steadily from paying for volume, such as fee-for-service payments, to paying for quality, outcomes, and costs, such as in value-based payment programs. Essentially, value-based payment aims to align payment and care delivery goals to improve health care quality and outcomes, while also controlling costs.

Nevertheless, concerns have been raised that Medicare payment programs that do not account for social risk factors, particularly value-based payment programs, may underestimate the quality of care provided by health systems that disproportionately serve socially at-risk populations. Patients with social risk factors may require more resources and care to achieve the same health outcomes as advantaged patients. At the same time, health care providers serving more vulnerable populations historically have been less well-funded than providers who care for larger proportions of patients with commercial insurance. Because current Medicare quality measurement and payment programs do not account for these differences, providers serving vulnerable populations may be more likely to fare poorly on quality rankings and receive penalties under value-based payment. This dynamic, in turn, may potentially increase disparities.

The committee that carried out the study and wrote the report developed five criteria to help CMS determine which social risk factors should be accounted for in Medicare value-based payment programs. It then applied the criteria to various social risk factors and determined that in the short term, CMS could account for several social risk factors in Medicare value-based payment programs, including: income, education, and dual eligibility; race, ethnicity, language, and nativity; marital/partnership status and living alone; and neighborhood deprivation, urbanicity, and housing. The committee noted that some additional social risk factors present practical challenges for use in Medicare value-based payment programs but are still worthy of consideration for inclusion in the longer term. These factors include wealth, gender identity and sexual orientation, emotional and instrumental social support, and environmental measures of residential and community context.

The committee found that CMS payment programs, which currently do not account for social risk factors, have several disadvantages, including giving providers and insurers the incentive to avoid serving patients with social risk factors, underpaying providers who disproportionately serve socially at-risk populations, and underinvesting in the delivery of quality care. While accounting for social risk factors in valued-based payment programs would likely diminish these harms, it could also potentially introduce new ones, such as reducing incentives to improve care for patients from vulnerable populations. Thus, the committee concluded that it is important to minimize potential harms to patients with social risk factors, including monitoring the effect of any specific approach for any unintended adverse effects.

To address the committee's four policy goals of reducing disparities in health care access, quality, and outcomes; improving quality and efficient care delivery for all patients; fair and accurate public reporting; and compensating providers fairly, the committee identified four categories encompassing 10 methods on how to account for social risk factors in Medicare value-based payment programs. Those categories are:
  • stratified public reporting, which seeks to make quality of care for socially at-risk and other patients visible to consumers, providers, payers, and regulators;
  • adjustment of performance measure scores, which accounts for social risk factors statistically, in an effort to more accurately measure true performance;
  • direct adjustment of payments, which explicitly uses measures of social risk factors in payment but by itself does not affect performance measure scores; and
  • restructuring payment incentive design, which implicitly accounts for social risk factors in payment.

The committee concluded that a combination of reporting and accounting in both performance measures and payment are needed to achieve its four policy goals. Considerations around the trade-offs of various methods are different for cost-related performance and quality performance, and strategies to account for social risk factors for measures of cost and efficiency may differ from strategies to measure good outcomes and improvements in care quality. Lower cost is not always better, for example, when it reflects unmet needs, but high quality is always better.

"Accounting for social risk factors in Medicare payments is not intended to obscure disparities that exist, but rather bring disparities to light," said Donald Steinwachs, committee chair and professor at Johns Hopkins Bloomberg School of Public Health in Baltimore. "Payment systems should include sufficient incentives for quality improvement for both socially at-risk populations and to patients overall."
-end-
The study was sponsored by the U.S. Department of Health and Human Services. The National Academies of Sciences, Engineering, and Medicine are private, nonprofit institutions that provide independent, objective analysis and advice to the nation to solve complex problems and inform public policy decisions related to science, technology, and medicine. The Academies operate under an 1863 congressional charter to the National Academy of Sciences, signed by President Lincoln. For more information, visit http://national-academies.org. A roster follows.

Social Media:
#NASEMmedicare
@theNASEM

Additional Resources:
Download Report (active at 11 a.m. EDT on July 13)
Project Page

Contacts:
Jennifer Walsh, Senior Media Relations Officer
Emily Raschke, Media Relations Assistant
Office of News and Public Information
202-334-2138; e-mail news@nas.edu
Newsroom

Copies of Accounting for Social Risk Factors in Medicare Payment: Criteria, Factors, and Methods are available from the National Academies Press on the Internet at http://www.nap.edu or by calling 202-334-3313 or 1-800-624-6242. Reporters may obtain a copy from the Office of News and Public Information (contacts listed above).

THE NATIONAL ACADEMIES OF SCIENCES, ENGINEERING, AND MEDICINE
Health and Medicine Division
Board on Population Health and Public Health Practice
Board on Health Care Services

Committee on Accounting for Socioeconomic Status in Medicare Payment Programs

Donald M. Steinwachs, Ph.D.* (chair)
Professor
Center for Health Services and Outcomes Research
Department of Health Policy and Management
Johns Hopkins Bloomberg School of Public Health
Baltimore

John Z. Ayanian, M.D., M.P.P.*
Director
Institute for Healthcare Policy and Innovation
University of Michigan
Ann Arbor

Charles Baumgart, M.D.
Senior Medical Director
xG Health Solutions Inc.
Broomfield, Colo.

Melinda J. Buntin, Ph.D.
Professor and Chair
Department of Health Policy
Vanderbilt University School of Medicine
Nashville

Ana V. Diez Roux, M.D., Ph.D.*
Dean and Distinguished Professor of Epidemiology
Dornsife School of Public Health
Drexel University
Philadelphia

Marc N. Elliott, Ph.D.
Senior Principal Researcher
The RAND Corp.
Santa Monica, Calif.

Jose J. Escarce, M.D., Ph.D.*
Professor
Division of General Internal Medicine and Health Services Research
School of Medicine
University of California
Los Angeles

Robert L. Ferrer, M.D., M.P.H.
Dr. John M. Smith Jr. Professor
Department of Family and Community Medicine
University of Texas Health Science Center
San Antonio

Darrell J. Gaskin, Ph.D.
Director
Center for Health Disparities
Department of Health Policy and Management
Johns Hopkins Bloomberg School of Public Health
Baltimore

Mark D. Hayward, Ph.D.
Professor and Director
Population Research Center
Department of Sociology
University of Texas
Austin

James S. Jackson, Ph.D.*
Daniel Katz Distinguished University Professor
Institute for Social Research
University of Michigan
Ann Arbor

Daniel Polsky, Ph.D.
Executive Director
Leonard Davis Institute of Health Economics
University of Pennsylvania
Philadelphia

Meredith Rosenthal, Ph.D.*
Professor of Health Economics and Policy and Associate Dean for Diversity
Harvard School of Public Health
Boston

Anthony Shih, M.D.
Professor of Health Economics and Policy
Harvard T.H. Chan School of Public Health
Boston

STAFF

Kathleen Stratton, Ph.D.
Study Director

*Member, National Academy of Medicine

National Academies of Sciences, Engineering, and Medicine

Related Medicare Articles:

Medicare coverage varies for transgender hormone therapies
A new study has shown substantial variability in access to guideline-recommended hormone therapies for older transgender individuals insured through Medicare.
Medicare changes may increase access to TAVR
The number of hospitals providing TAVR could double with changes to Medicare requirements.
Inequitable medicare reimbursements threaten care of most vulnerable
Hospitals, doctors and Medicare Advantage insurance plans that care for some of the most vulnerable patients are not reimbursed fairly by Medicare, according to recent findings in JAMA.
Medicare may overpay for many surgical procedures
For most surgical procedures, Medicare provides physicians a single bundled payment that covers both the procedure and related postoperative care over a period of up to 90 days.
Only 1 in 4 Medicare patients participate in cardiac rehabilitation
Only about 24% of Medicare patients who could receive outpatient cardiac rehabilitation participate in the program.
How common is food insecurity among Medicare enrollees? 
Nearly 1 in 10 Medicare enrollees age 65 and over and 4 in 10 enrollees younger than 65 with long-term disabilities experience food insecurity.
Medicare for All unlikely to cause surge in hospital use: Harvard study
Despite some analysts' claims that Medicare for All would cause a sharp increase in health care utilization, a new study finds the two biggest coverage expansions in US history -- Medicare and the ACA -- caused no net increase in hospital use.
Critical heart drug too pricey for some Medicare patients
An effective drug to treat chronic heart failure may cost too much for senior citizens with a standard Medicare Part D drug plan, said a study co-authored by a John A.
Research suggests strategy for more equitable Medicare reimbursement
Those who were enrolled in both Medicare and Medicaid were sicker, had more cognitive impairments and difficulty functioning, and needed more social support than those who were not enrolled in both government programs, Saint Louis University research found.
BU finds Medicare Advantage networks are broad and getting broader
A new study led by Boston University School of Public Health (BUSPH) researchers finds that networks in Medicare Advantage -- a private plan alternative to traditional Medicare -- are relatively broad and may be getting broader.
More Medicare News and Medicare Current Events

Trending Science News

Current Coronavirus (COVID-19) News

Top Science Podcasts

We have hand picked the top science podcasts of 2020.
Now Playing: TED Radio Hour

Clint Smith
The killing of George Floyd by a police officer has sparked massive protests nationwide. This hour, writer and scholar Clint Smith reflects on this moment, through conversation, letters, and poetry.
Now Playing: Science for the People

#562 Superbug to Bedside
By now we're all good and scared about antibiotic resistance, one of the many things coming to get us all. But there's good news, sort of. News antibiotics are coming out! How do they get tested? What does that kind of a trial look like and how does it happen? Host Bethany Brookeshire talks with Matt McCarthy, author of "Superbugs: The Race to Stop an Epidemic", about the ins and outs of testing a new antibiotic in the hospital.
Now Playing: Radiolab

Dispatch 6: Strange Times
Covid has disrupted the most basic routines of our days and nights. But in the middle of a conversation about how to fight the virus, we find a place impervious to the stalled plans and frenetic demands of the outside world. It's a very different kind of front line, where urgent work means moving slow, and time is marked out in tiny pre-planned steps. Then, on a walk through the woods, we consider how the tempo of our lives affects our minds and discover how the beats of biology shape our bodies. This episode was produced with help from Molly Webster and Tracie Hunte. Support Radiolab today at Radiolab.org/donate.