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GAO Report Considers Advantages of Voluntary vs Mandatory Payment Models

January 23, 2019

McDermott+Consulting

On Tuesday, January 22, 2019, the Government Accountability Office (GAO) released Voluntary and Mandatory Episode-Based Payment Models and Their Participants. Using an analysis of Centers for Medicare and Medicaid Services (CMS) data, evaluation reports and interviews with stakeholders, the GAO identified the characteristics of model participants and the advantages to using either voluntary or mandatory participants for episode-based payment models.

Of the six episode-based models examined by the GAO, participation in all but one was voluntary. The GAO found that participants in these models were not representative of average Medicare providers. Participants in these episode-based payment models typically had more beds or larger practices, had higher episode volume, and were more often located in urban areas compared to all providers that participated in traditional Medicare. The GAO concluded that mandatory participation allows Medicare to test with a more diverse group of participants.

In general, stakeholders reported that voluntary models largely benefit providers. For example, these models tend to have more generous terms and providers can choose to participate in only those models where they are likely to be successful. As a result, mandatory models are more likely to give CMS more generalizable evaluation results since participants are more representative of the range of Medicare providers.  Recall that the US Department of Health and Human Services (HHS) Secretary Alex Azar announced the Department’s intent to test additional mandatory models.  We expect these models to be released in 2019.

 


For more information visit the McDermottPlus Payment Innovation Resource Center or contact Sheila Madhani at 202-204-1459 smadhani@mcdermottplus.com or Mara McDermott at 202-204-1462/mmcdermott@mcdermottplus.com.

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