Social Risk Factors and Medicare's Value-Based Purchasing Programs

Background: Request from Congress for a Study of Social Risk Factors and Medicare’s Value-based Purchasing Programs

There is growing recognition that social risk factors – such as poverty, minority race and/or ethnicity, social isolation, and limited community resources – play a major role in health, and significant gaps remain in health and in life expectancy based on poverty, race, ethnicity, and community environment. At the same time, the health care system is moving towards value-based or alternative payment models, which tie payment to the quality and efficiency of health care delivered. These models are in place in nearly all Medicare settings, including in hospitals, outpatient settings, and post-acute facilities.

In order to align Medicare payments and ensure value-based purchasing programs achieve their intended goals, the relationships between social risk and performance on these programs need to be better understood. The Improving Medicare Post-Acute Care Transformation Act of 2014 or the IMPACT Act (P.L. 113-185), requires the Secretary, acting through the Assistant Secretary for Planning and Evaluation (ASPE), to conduct research on issues related to social risk in Medicare’s value-based payment programs.

  • The second Report to Congress was released in May 2020 and expands empirical analyses conducted in the first Report by also using non-Medicare datasets to measure social risk. This Report includes recommendations for HHS to develop a comprehensive approach to move towards programs that incentivize providers and plans to improve health outcomes by rewarding and supporting better outcomes for beneficiaries with social risk factors.

  • The first Report to Congress was released December 2016. It examines the effect of individuals’ social risk factors on quality measures, resource use, and other measures under the Medicare program, as well as analyses of the effects of Medicare’s current value-based payment programs on providers serving socially at-risk beneficiaries and simulations of potential policy options to address these issues. Empirical analyses for this Report used existing Medicare data.

  • The IMPACT Act also requires qualitative research to inform and contextualize the quantitative analyses conducted for the two Reports to Congress. ASPE commissioned a series of consensus reports from the National Academies of Science, Engineering, and Medicine (NASEM) to develop a conceptual framework for measuring and evaluating social risk in relation to Medicare payment and quality programs; identify practices that show promise for improving care for socially at-risk populations; provide guidance on methods; and identify data sources and evaluate strategies to collect data on social risk factor indicators.