Report weighs pros and cons of considering social-risk factors for value-based purchasing

Social risk factors could be taken into account in Medicare's value-based payment program, according to the National Academies of Sciences, Engineering, and Medicine.

In a report released on Wednesday, the Academies suggested several factors — including income, education, living conditions and race — could all be considered determinants for Medicare's senior care funding. The report is the third of five reports aimed at defining social risk factors that affect the healthcare of Medicare beneficiaries and how to account for them in Medicare's payment program.

The Centers for Medicare & Medicaid Services currently does not account for risk factors in its value-based payment programs.

The report comes amid concerns that the exclusion of social risk factors in the payment programs may lead providers to avoid serving certain at-risk populations. Under the current system, providers could receive lower quality ratings for using more resources on at-risk individuals, and therefore incur penalties.

To help decrease and prevent future disparities, the report's committee outlined four policy goals to encourage care of at risk individuals in value-based pay programs:

  • Stratified public reporting, which would make consumers, providers, payers and regulators more aware of quality of care for socially at-risk and other patients;

  • Adjustment of performance measure scores that account for social risk factors statistically;

  • Direct adjustment of payments because it's used to measure factors for payment without affecting performance measure scores; and

  • Restructuring payment incentive design, which implicitly accounts for social risk factors in payment.

“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 chairman 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.”

In order for at-risk patients to receive the care they need, the committee inferred the cost controlling parameters of the value-based payment program would need to be altered. They concluded lower treatment costs are not effective when patients' needs go unmet.