Survey: By 2019, 60% of Medicare Revenues will be Tied to Risk | Healthcare Informatics Magazine | Health IT | Information Technology Skip to content Skip to navigation

Survey: By 2019, 60% of Medicare Revenues will be Tied to Risk

December 13, 2017
by Rajiv Leventhal
| Reprints

Medical groups and health systems that are members of AMGA (the American Medical Group Association) expect that nearly 60 percent of their revenues from Medicare will be from risk-based products by 2019, according to the results from a recent survey.

The findings stem from AMGA’s third annual risk survey, which examined how and when AMGA members are transitioning from reimbursements based on volume to payment models based on value. The survey, which included complete answers from 74 of the association’s member groups, also identified impediments to taking financial risk in insurance contracts.

The survey findings, detailed in a white paper, indicated that by 2019, AMGA members expect their revenues from Medicare Advantage to equal the payments from fee-for-service Medicare. Overall, if Medicare Advantage, bundled payments, Medicaid managed care organizations, and Medicare accountable care organizations (ACOs) are factored together, alternatives to Medicare fee-for-service (FFS) are predicted to account for 59 percent of AMGA member’s revenues by 2019, compared to 53 percent in 2017.

Although Medicare Advantage plans largely remain fee-for-service-based, AMGA members reported they consider the program to be a strategic priority and to serve as a gateway to more sophisticated risk models. “Medicare Advantage is an increasingly popular option for beneficiaries,” Jerry Penso, M.D., AMGA president and CEO, said in a statement. “The program also represents an option for quite a few AMGA members to begin taking on financial risk, given the limited availability of other risk products.”

However, AMGA’s 2017 risk survey found that several, significant impediments to taking on risk remain. Like in previous surveys, AMGA members reported that data sharing issues, inadequate infrastructure, limited access to capital, and a lack of commercial risk products in their market present barriers to their taking on financial risk.

“AMGA calls on Congress and HHS to address impediments to taking risk and to create incentives for other industry players to engage in the risk market,” said Chester A. Speed, AMGA’s vice president, public policy.

Nonetheless, the transition to value is continuing. For example, survey respondents confirmed that they continue to move away from FFS payments to some sort of risk-based payment model. Medicare FFS payments are expected to decrease by 17 percent by 2019, while commercial FFS payments will decline by 11 percent.

The commercial risk market, however, continues to lag behind federal programs, according to the research. For example, 56 percent of respondents said they have little to no access to commercial risk products in their local markets. While more members have access to commercial products than reported in earlier surveys, commercial payers still largely are not offering risk-based products. 

The survey also noted that the respondents are moving to risk largely without the active participation of key players in the healthcare system. The white paper recommends that federal policymakers address longstanding impediments to risk and create incentives for other parts of the industry to enter into value arrangements.

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