Purva Rawal, Annie Cloke, Lu Zawistowich

As the Center for Medicare and Medicaid Innovation (Innovation Center) enters its second decade, a confluence of factors has opened a window of opportunity to move beyond simply testing new models to transforming our health system into one that is more resilient for patients and providers. In this moment, achieving measurable and sustainable savings without compromising quality will require policy makers to operationalize the long-discussed goal of patient-centeredness.

Here, we offer the following three ways that policy makers and practitioners can integrate patient-centered elements into alternative payment models (APMs):

  • Emphasize access to community- and home-based care options to meet patients where they are;
  • Build capacity to address patient needs holistically to impact social determinants of health (SDoH) and advance health equity; and
  • Increase points of communication between providers and patients to strengthen care.

The Changing Value Landscape

A number of recent political and policy developments are converging to create the imperative for a paradigm shift in how—and for whom—APMs are designed, implemented, and tested.

First, the COVID-19 pandemic has illustrated the stark shortcomings of the fee-for-service delivery system. For instance, physician practices saw almost a 60 percent reduction in patient visits in the immediate weeks after the public health emergency, placing many practices at serious financial risk and abruptly disrupting patient access. Last spring, 35 percent of primary care practices responding to a weekly survey indicated they had furloughed staff, and 6 percent had closed altogether—leading to reductions in visits for unmet chronic conditions, immunizations, and screenings for cancer and other conditions.

Second, the Medicare Payment and Advisory Commission (MedPAC) is examining how value-based payment can be strengthened and expanded to control Medicare costs while maintaining or improving quality for beneficiaries. In its June 2021 report, the Commission recommended that the Department of Health and Human Services adopt “a more harmonized portfolio” of fewer APMs that can reduce spending and improve quality. MedPAC’s deliberations have helped frame the debate on the Innovation Center’s priority and approach in its second decade.

Third, the Biden administration has started to outline its vision to catalyze broad health system transformation through payment and delivery reform models and to address major health policy priorities such as health equity, drug pricing, and strengthening home- and community-based services (HCBS) to meet the needs of an aging population. The Innovation Center also recently noted that as it undertakes a strategic review of its portfolio, it is focused on putting patients—and not provider payment—at the center of the health system and ensuring patients are in meaningful care relationships.

Together, all of these developments are creating opportunities for payment and delivery model design to be driven by the needs and preferences of patients.

Integrating Patient-Centered Elements Into Models Should Be Core To The New Vision

While APMs often focus on changes to payment systems, these changes are not enough to ensure the delivery of patient-centered care—defined by the Health Care Learning and Payment Action Network (HCPLAN),  a group of public and private health care stakeholders committed to accelerating adoption of APMs, as “care in which patients and their care teams form partnerships around high-quality, accessible care, which is both evidence-based and delivered in an efficient manner, and in which patients’ and caregivers’ individual preferences, needs, and values are paramount.”

Below, we have identified three concrete ways the Innovation Center and payers can implement the elusive goal of patient-centeredness in APMs. Achieving this goal is a necessary ingredient for long-term and sustainable system transformation and should be core to any evolving vision for value-based payment, especially as cost and access pressures from an aging population increase.

Increase Access To Community- And Home-Based Care Options

The COVID-19 pandemic has clearly illustrated the need and desire for patients to have greater access to community- and home-based care options. Even before the pandemic, trends such as the drive toward person-centered care and the aging of the baby boomer population were beginning to put pressure on the health care delivery system to provide more and improved home- and community-based care options. The pandemic has intensified and accelerated those pressures, while putting new stressors on care delivery in settings such as hospitals, clinics, and nursing homes.

Policy makers and providers should use APMs that provide population-based or capitated payments to support the flexible delivery of care where patients may need it most. These could allow or call for participants to include a continuum of home-based services such as primary care at home, HCBS, and hospital-at-home programs. COVID-19 has especially shown how these options can meet patients where they are. And as an aging population continues to apply pressure on the Medicare program, such services can help control costs and provide beneficiary choice.

Home-Based Primary Care

Home-based primary care programs can provide clinically appropriate comprehensive primary care services in a patient’s home and often aim to delay the need for institutional care. The Innovation Center’s Independence at Home model is a leading example of a home-based primary care model for beneficiaries with chronic conditions. The model allows primary care teams, which could include physician assistants, pharmacists, and social workers, to provide comprehensive, home-based primary care that meets the unique needs of Medicare beneficiaries with a chronic illness. A five-year evaluation found that the program reduced total Medicare expenditures, but the decrease was not statistically significant. However, an estimated 93 percent of beneficiaries and caregivers reported being satisfied or very satisfied with the quality of care they received in the program—and the majority of beneficiaries and caregivers preferred receiving care in the home. Even though the evaluation did not demonstrate net savings for CMS, the perspective of patients and caregivers is important and can be integrated into other models.

Hospital-At-Home Programs

Hospital-at-home programs deliver clinically appropriate hospital-level care in home settings to reduce exposure to some of the risks of inpatient care, especially for medically frail patients or those with cognitive impairments, such as infections or functional declines. The model has been receiving more attention in the US as providers assume financial risk for total cost of care—and more recently as a result of the COVID-19 pandemic when hospitals struggled with surges of cases and limited capacity. A growing number of studies indicate that hospital-at-home programs can be effective and lower cost than traditional patient care. Recognizing the promise of these types of programs, CMS launched the Acute Hospital Care at Home Program in November 2020.

Home- And Community-Based Services

HCBS include a broad range of services that help individuals meet daily self-care and independent living needs, which will be increasingly important as the US population ages. In the past, Medicaid has spent more on institutional care than on any other kind of long-term services and supports (LTSS). But since 2013, more than 50 percent of LTSS spending has gone toward HCBS, signaling a growing need and preference for these services. However, it is up to states whether, and to what extent, their Medicaid programs cover HCBS. In FY 2018, more than 75 percent of states reported a waiting list for HCSB services—totaling 820,000 beneficiaries nationally, waiting an average of 39 months. During the COVID-19 pandemic, many states took steps to temporarily expand eligibility and enrollment in HCBS.

Address The Impact Of Social Determinants Of Health

Addressing patients’ social needs requires building relationships between clinical and community service providers. Lessons learned from the Innovation Center’s Accountable Health Communities (AHC) model, for example, could be applied in ways that help APMs advance health equity more broadly. The AHC sought to test whether providing screening, referral, and community navigation services could reduce medical service use and costs. In the evaluation of the first three years of the model, providers identified at-risk beneficiaries and showed a 9 percent reduction in emergency department visits among participants relative to a control group. To be sure, savings have not been realized and resolution of health-related social needs was documented in only approximately 15 percent of cases. Yet, screening and linkage to community-based providers remain a promising technique; APMs could learn from the model’s experiences determining the best timing, location, training, and process for administering a screener to maximize patient participation.

Conducting SDoH screenings and linking health care and community-based providers will also require the right payment mechanisms. Again, population-based or capitated payments can better support providers to make meaningful connections between patients and non-health-related service needs. APMs could also account for SDoH in risk-adjustment methodologies or provide a small payment to providers that serve high proportions of beneficiaries with social needs. CMS recently proposed the first changes to an Innovation Center model to directly address socioeconomic disparities and health equity issues. Specifically, CMS proposed adjustments to the payment structure in the End-Stage Renal Disease (ESRD) Treatment Choices model to provide incentives to ensure access to services for dual-eligible or low-income subsidy patients, given the link between socioeconomic factors and ESRD. Medicaid programs in Massachusetts and Minnesota have incorporated social risk factors into their risk-adjustment payments. In Minnesota, providers participating in a Medicaid accountable care organization (ACO)-like model receive population-based payments that are adjusted for both medical and social risk factors, the latter of which are collected from administrative and claims data. Massachusetts incorporates social risk factors obtained from administrative, claims, and survey data into its risk-adjusted payments to Medicaid managed care organizations and ACOs. These methodologies could be examined and more broadly applied to Medicare and commercial APMs. The goal should be to ensure that payment mechanisms are aligned with and support patient-centered care delivery.

Models should also include screening tools that can be used to assess patient needs, such as the recently released AHC Health-Related Social Needs tool. Population-based, ACO-like models can also be required to build partnerships with community-based and social service organizations that can help meet housing, food, and transportation, and other beneficiary needs.

Strengthen Patient-Provider Communication

The COVID-19 pandemic disrupted traditional communication points between patients and providers. This break highlighted the need for health systems to facilitate communication outside of office-based visits and to do so more quickly. APMs can be designed to support longitudinal care relationships that meet changing patient health needs and support long-term behavioral change in everything from payment to care delivery and infrastructure/information technology. For example:


According to a recent analysis by the Henry J. Kaiser Family Foundation, those Medicare beneficiaries who are dual eligible, have lower incomes, and are minorities, reported using telehealth during the pandemic in higher proportions, indicating that it may be an important mechanism for increasing access to care and advancing equity.

Health Information Technology

Accessible health information technology (HIT) is necessary to allow patients and caregivers to communicate with their providers and to manage their care. The HCPLAN also noted HIT’s importance for care coordination and fostering an ongoing provider-patient relationship.

Remote Patient Monitoring

Remote patient monitoring (RPM) facilitates care management and patient engagement at home, allowing providers and patients to make treatment adjustments as needed between in-person visits. Recognizing the importance of RPM, in response to the COVID-19 public health emergency, CMS waived certain Medicare RPM requirements to allow providers to deliver RPM services to first-time patients. CMS also recently approved new codes allowing providers to bill for RPM in the FY 2021 Medicare physician fee schedule.

Shared Decision Making

APMs can provide the care delivery and payment infrastructure needed to support shared decision making (SDM) between patients and providers. The National Patient Advocate Foundation (NPAF) considers SDM to be a “key component of person-centered health care,” pointing to a recent NPAF survey in which 55 percent of respondents said they wanted to be partners in decision making with providers. Likewise the Patient-Centered Outcomes Research Institute (PCORI) has also found that SDM can increase patient satisfaction, impact the care patients receive, and improve patient outcomes.

Keeping Patients Front And Center From APM Design To Evaluation

CMS and stakeholders have an opportunity to shift the paradigm for APM development and evaluation. This entails starting with patients and their needs; pursuing opportunities to engage patients, families, and caregivers; measuring those outcomes that matter most to advancing quality, access, and equity; and, ensuring that the patient remains at the center of all elements of APM development and evaluation.