Social Risk Factors Absent in Medicare Value-Based Programs

Risk factors such as ethnicity, income, and education can potentially impact value-based payments.

Researchers in a recent study caution that although value-based payment programs in Medicare could start accounting for social risk factors, both advantages and disadvantages should be considered prior to changing these programs.

This is the third report from the National Academies of Sciences, Engineering, and Medicine regarding how social risk factors can affect health outcomes of Medicare beneficiaries, and how to accommodate the factors in value-based payment programs. Current legislation requires that the US Centers for Medicare and Medicaid Services (CMS) create value-based payment programs, and move away from traditional fee-for-service payments.

The goal for value-based payments is to provide incentives for healthcare providers to deliver the best quality of care for each patient. But, there are concerns that these new payment programs do not fully estimate the quality of care provided in socially at-risk populations, according to the study.

Patients in these populations may need additional resources to obtain the same optimal health outcomes as patients in other populations, and healthcare providers in at-risk populations also tend to receive less funding compared with providers who care for patients with commercial insurance, according to the study. The researchers found that current quality measures also do not account for these discrepancies, and providers in at-risk populations may not benefit from new payment models.

They find that some risk factors, such as income, education, and race, could be easily accounted for in programs. Certain risk factors, such as wealth, sexual orientation, social support, and environmental measures of residential and community context, could present a practical challenge for payment programs, the researchers wrote.

The researchers created 4 policy goals accounting for social risk factors:

  • public reporting that will provide transparency to consumers, providers, payers, and regulators
  • incorporate social risk factors into performance measure scores to provide accurate measurements of performance
  • direct adjustment of payments to use measures of social risk factors in payment, but by itself does not affect performance measure scores
  • restructuring the value-based payment design

Reporting and accounting in performance measures and payment are needed to achieve these goals, the researchers noted.

Since the CMS does not currently account for risk factors, these payment models could potentially be underpaying providers in at-risk populations, underinvesting in care, and causing providers to be less likely to care for some patients.

But, these new considerations could potentially reduce incentives for other populations. Monitoring adverse effects for both populations could potentially reduce any unintended consequences, the study concluded.

"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."