When Should Medicare Mandate Participation In Alternative Payment Models?

Health Aff (Millwood). 2020 Feb;39(2):305-309. doi: 10.1377/hlthaff.2019.00570.


The Centers for Medicare and Medicaid Services continues to propose and implement alternative payment models (APMs) to shift Medicare payment away from fee-for-service and toward approaches that emphasize health care value. As APMs expand in scope, one critical question is whether they should engage providers on a voluntary or a mandatory basis. Clinicians and policy makers may view the benefits and drawbacks of these two modes of participation differently. In this Analysis we compare the benefits and drawbacks of mandatory and voluntary participation, based on clinical versus policy perspectives, and we argue that both modes are necessary for APMs to achieve the goal of improving value. Policy makers should match the mode of participation and related financial incentives to each clinical scenario in which an APM is implemented. We propose ways to coordinate mandatory and voluntary APMs based on clinical scenarios.

Keywords: Alternative payment models; Bundled Payments for Care Improvement; Bundled charges; Care Coordination; Cost savings; Costs and spending; Fee-for-service; Health care providers; Health policy; Markets; Medicaid services; Medicare; Patient engagement; Payment; Payment models; Quality of care; Value.

MeSH terms

  • Aged
  • Centers for Medicare and Medicaid Services, U.S.
  • Delivery of Health Care
  • Fee-for-Service Plans*
  • Humans
  • Medicare*
  • United States