Drug cost concerns feed into docs' aversion to risk in pay models

Physicians are pushing back against federal and private pay models that force them to take on more downside risk, worrying that they will be responsible for costs they can't control, according to a new study.

The American Medical Association and RAND Corp. found that doctors don't want to be penalized for increased patient spending stemming from new, high-priced drugs.

"If I see a patient who needs an expensive drug, I immediately am going to miss my (savings) target," said Dr. Barbara McAneny, president of the American Medical Association. "The targets can't keep up with the cost of drugs, and I can't control the price of the drugs."

Doctors feel ethically obligated to provide the best treatments available to their patients, McAneny said.

Alternative pay models haven't balanced their risks and rewards properly, the study found. One practice told researchers it didn't join an ACO track with downside risk because it could have been penalized up to $17 million if it performed poorly. It only would score $2 million in rewards if it did well in the program.

Physicians aren't adopting alternative pay models at the same clip as they had in the past, according to federal data. In March 2016, the CMS announced that 30% of Medicare fee-for-service payments were tied to value-based payment. By the end of 2017, that figure grew to 38%, according to new federal data released this week.

The CMS has said it wants to increase the number of providers in downside risk arrangements to encourage providers to improve care and lower costs.

But physician practices are so averse to risk that they've started developing strategies to push the obligation to others. One medical practice in Medicare's BPCI Advanced model joined with a device company that is a convener for the program rather than taking on the risk by itself.

"We got what seemed like a reasonable proposal … the device manufacturer said they'll take all the downside risk, and they want a 30% cut of the upside," the practice told researchers. "So, if it's a downside, it's their problem. If it's an upside, it's found money for us."

If the CMS continues to push providers to take on more risk, some practices may decide to not participate in the efforts, according to Dr. Mark Friedberg, senior physician-policy researcher at RAND.

"If they're voluntary, some might just take a pass," Friedberg said.