The Prospects for Value-Based Care After the Demise of the AHCA

Guest post by Ken Perez, vice president of healthcare policy, Omnicell, Inc.

Ken Perez

The recently concluded debate about the American Health Care Act (AHCA), the Republicans’ first attempt at a Patient Protection and Affordable Care Act (ACA) replacement plan, centered largely around issues of insurance coverage and access to care.

The real turning point for the AHCA seemed to be the Congressional Budget Office’s March 13 release of its analysis of the bill, which concluded, among many things, that millions more Americans would be uninsured under the AHCA than under the ACA (14 million in 2018, 21 million in 2020, and 24 million in 2026).

After it became clear that the roughly three-dozen member Republican House Freedom Caucus—which sought a more aggressive piece of legislation that would gut the ACA—would not support the bill, House Speaker Paul Ryan concluded that the Republicans lacked the needed votes. Thus, on March 24, he pulled the AHCA from the floor. Ryan told reporters, “I don’t know what else to say other than Obamacare is the law of the land” and “We’re going to be living with Obamacare for the foreseeable future.”

With the focus mainly on coverage and access issues, a largely unasked question has been, “What will happen to value-based care?” The AHCA did not address this area, though, perhaps the Republicans intended to cover it in phase two or three of their grand plan to repeal and replace the ACA. As originally envisioned by congressional Republicans, phase two will consist of executive branch initiatives (e.g., actions by the Department of Health and Human Services and presidential executive orders), and phase three will include subsequent pieces of legislation addressing other aspects of the ACA.

The fate of value-based care is an important topic because U.S. healthcare costs continue to escalate and outpace general inflation—increasing 5.8 percent and reaching $3.2 trillion in 2015, equal to almost $10,000 per person per year. In addition, the ACA mandated five major healthcare delivery reforms promoting value-based care:

Moreover, the ACA provided funding of $10 billion over 10 years for the Center for Medicare and Medicaid Innovation (CMMI), which was tasked with testing and evaluating various payment and service delivery models involving, in most cases, voluntary provider participation, with only a few models being mandatory.

The Republicans’ inability to pass the AHCA significantly decreases the likelihood of the introduction of similarly ambitious health reform bills in the future.

What is likely? Health and Human Services (HHS) Secretary Tom Price has been generally critical of the CMMI, and he is strongly opposed to mandatory value-based care initiatives. For example, on Sept. 29, 2016, he and 178 of his fellow Republican representatives sent a letter to the Centers for Medicare and Medicaid Services that criticized the CMMI for exceeding its scope of authority, citing specifically two mandatory programs, the Comprehensive Care Joint Replacement (CJR) Model, and the Cardiac Bundled Payment Model. With Price at the helm of HHS, one should expect a material clipping of the wings of the CMMI, especially with regard to these mandatory programs.

That being said, in the wake of the AHCA’s failure, for now it is full steam ahead for the ACA’s five major healthcare delivery reforms, since moderating health spending growth is a key to the sustainability of the healthcare system as a whole.

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