JAMA: A Wider Adoption of Value-Based Care at Nursing Homes Is Stymied by Operational, Financial Challenges

Operational and financial challenges can make it difficult for nursing homes and other health care facilities to transition to the federal government’s Value-Based Program (VBP), which ties payment to quality and outcomes.

An editorial published in JAMA Internal Medicine Monday expresses the need for more data and improved measurement of outcomes, better methods of financial management, and an easier and less expensive administrative process of enabling stakeholders, especially physician-owned practices, to get involved in VBP.

The Centers for Medicare & Medicaid Services (CMS) announced in 2021 its goal to use VBP for all Medicare beneficiaries’ health care by 2030. Since then commercial insurers have aligned their contracts to VBP.


“Paying for value rather than more health care is without any question a wise approach. VBP fits with the intrinsic motivation of doing good,” write the researchers associated with the University of Pennsylvania. “Yet, achieving this is difficult due to operational and financial challenges inherently associated with the transition to VBP. A more efficient, economical method of assessing the underlying risk of a population and measuring the value and quality of care is needed.”

The researchers note that VBP has demonstrated success in changing clinical practice and generating savings in the three years of its existence. For example, in this time Medicare’s Comprehensive Care for Joint Replacement (CJR) bundled payment program for hip and knee replacement surgery reduced expensive post-acute care, such as skilled nursing stays, and incentivized lower-cost implant use and other hospital efficiencies. Assessments of this program showed net savings of 2%, or $61.6 million, which works out to about $536 per episode during the last three years.

That said, among the challenges posed to VBP’s more widespread adoption are operational inefficiencies, the researchers said. A recent Congressional Budget Office report estimated that payment models tested by the CMS Innovation Center delivered minimal savings, costing an additional $5.4 billion after including the Center’s operational expenses, they noted.


Clearly, VBP models need to be modified for better adoption.

“Current processes cannot adequately calculate attributed patients needed and the precise threshold of visits required to cover costs, what workflow changes will reduce utilization, and how to measure averted utilization and generated savings,” the researchers concluded.

Other changes they recommend include removing or reducing the need for administrative spending of expensive management services organizations as intermediaries to provide comprehensive data, analytic insights, and financial management, they said.

Instead, they suggest that CMS should take on some of that responsibility.

“CMS makes the necessary raw data available to clinicians, but processing and analyzing them requires significant expertise. Therefore, CMS should facilitate the development and adoption of low-cost solutions by supporting integration with open-source packages and requiring commercial payers to adhere to the same standard data formats,” the researchers said.

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