The move to value accelerates in 2021, spurred by lack of fee-for-service payments during pandemic

The move to value accelerates in 2021, spurred by lack of fee-for-service payments during pandemic

One of the surprising outcomes of COVID-19 this past year is how it has helped move healthcare delivery towards value-based care. That is expected to continue and increase in 2021.

During uncertainty, instead of moving back to the security of the old fee-for-service model, providers saw the benefit of moving down the path to value.

As more than one expert has said, if you were counting on fee-for-service to get paid during the pandemic, you weren’t getting paid. If you had a value-based arrangement, you were still getting paid.

Orthopedic procedures were down by 90%, according to Dave Terry, CEO and founder of Archway Health. Oncology was down by 20% because cancer procedures could not be put on hold as orthopedic procedures could. 

Providers in shared value arrangements for orthopedics had a steady cash flow of about $160 per member, per month, according to Terry.

“We’ve seen a lot of providers start to say, ‘How do I tap into that?'” Terry said. “Provider interest is increasing. In 2021, we’re still quite excited about the movement to value-based care. We felt that way pre-COVID; 2020 was a bit of a pause. Going forward, we’re seeing a number of things accelerating movement to value-based care.”

The National Association of ACOs recently praised the work of Congress for  saving value-based payment incentives by including a provision in the COVID-relief bill to encourage continued participation in risk-bearing alternative payment models like accountable care organizations. 

Congress did this by freezing thresholds needed to secure a 5% bonus on annual Medicare payments. A survey earlier this year from NAACOS found that 96% of the 216 ACO respondents would not meet the 2021 thresholds based on their performance in 2020. 


At some point this decade, Medicare spending will top $1 trillion per year. As policymakers look for ways to lower the rate of spending growth, ACOs have become the leading mechanism, according to NAACOS. 


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