As we move into 2023, the impact of the pandemic on marginalized groups continue. The COVID 19-pandemic has exacerbated longstanding racial and ethnic disparities in health care. In terms of national healthcare spending, healthcare inequities make up about $230 billion in annual spending; and that amount could potentially reach $1 trillion by the year 2040 if inequities persist or worsen. In 2021, the Centers for Medicare & Medicaid Services (CMS) announced a new strategic vision to guide the Centers’ model testing and priorities toward a vision of achieving equitable outcomes through high-quality, affordable, person-centered care. But it is important to also highlight what other federal agencies, states, and health plans are doing to address health inequity especially as our healthcare system, as a whole, is moving towards value-based care initiatives.

In our current healthcare landscape, entities from private health plans to state and federal agencies are developing innovative ways to study and improve health disparities. One of the biggest players in our healthcare system to do so is CMS’ Center for Medicare and Medicaid Innovation (CMMI or Center).

This article highlights CMMI’s recent initiatives to address health equity in 2023 and beyond. We then examine how other healthcare entities are also looking to and working towards removing barriers to health equity in the new year.

CMMI’s Key Strategic Objective Updates

In November 2022, CMMI released an update of the Innovation Center Strategy Refresh, CMMI’s new strategy developed to achieve equitable outcomes through high-quality, affordable, and person-centered care, highlighting the following updates:

Drive Accountable Care. In 2021 CMMI set an objective to have 100% of Medicare beneficiaries and a vast majority of Medicaid beneficiaries in accountable care relationships by 2030. This year CMMI announced several models such as the ACO Realizing Equity, Access, and Community Health (REACH) Model and the Enhancing Oncology Model (EOM) to increase access to coordinated care and enhanced services for beneficiaries, marking the first major accomplishments towards this objective. The 2022 update included a 2024 target to reduce disparity between the highest and lowest rates of race and ethnicity categories through accountable care models that provide novel supports and incentives to reach underserved communities.

Advance Health Equity. In accordance with the 2021 aims for the inclusion of health equity considerations in all new models, CMMI implemented sociodemographic data collection and reporting requirements in the EOM and ACO REACH Model. Health equity plans were required to identify and address disparities in access and care for new model participants. Innovative payment incentives and supports for health care providers caring for underserved populations and new approaches to incorporate screening and referrals for social needs have been developed. Moving forward, CMMI has stated its aim to continue to embed health equity in model design, implementation, and evaluation through collaborative efforts with federal partners, incentives, and other resources for model teams and participants.

Support Innovation. In response to the 2021 targets to include patient experience measures and patient-reported outcomes as part of all new models’ performance measurement strategies, CMMI announced a new approach to increase patient-reported outcome measures (PROMs). The Center also began requiring self-reported demographic data in new and redesigned models to support innovations for person-centered care. Future work towards this objective includes implementing enterprise-level tools and resources to accelerate the speed of model development and to support data transparency and consistency.

Address Affordability. In efforts to make progress on the 2030 target to reduce the percentage of beneficiaries that delayed care due to cost, CMMI introduced the Part D Senior Savings Model (PDSS) to reduce the cost of insulin and increase the number of Medicare beneficiaries to be covered by plans participating in the Medicare Advantage Value-Based Insurance Design (VBID) Model. The 2022 update aims to continue to make high-value care more affordable for beneficiaries.

Partner to Achieve System Transformation. Since last year’s objectives, the Health Care Payment Learning and Action Network (LAN) launched the State Transformation Collaboratives (STCs) to shift the health system to one that is value-based and person centered. The LAN also formed the Health Equity Advisory Team (HEAT) to identify and prioritize opportunities to advance health equity through alternative payment models (APMs). Data for ten models in the Chronic Conditions Warehouse Virtual Research Data Center (VRDC) were made available to external researchers, with further efforts to increase data availability underway.

Health Plan Efforts

Health plans and health systems are also working to address health-related social needs (HRSN) and health equity for their members. BlueCross BlueShield (BCBS) of Massachusetts is the first health plan in the state and one of the first health plans in the country to create financial payments models that reward providers for eliminating racial and ethnic inequities in care. This plan includes four health systems in the state that will collaborate with physicians and hospitals via the “Alternative Quality Contract” which replaces the fee-for-service model and instead rewards physician efforts to improve the quality and value of care they deliver. This contract will focus on measuring and rewarding performance on three equity-improvement components: equity, equality, and efficiency. The Vice President of Performance Measurement and Improvement at BCBS suggested that if other health plans are interested in similar efforts, they should start by sharing data with providers on their performance equity and also provide the necessary infrastructure to support these improvements. BCBS gives providers regular reports on their quality measure performance. Last year, they also began stratifying those data by race and ethnicity. BCBS of Massachusetts is not the only health plan to create their own equity-focused model. The executive vice president of Strategy and Health Solutions at BlueCross BlueShield of California stated specifically that, in 2023, they will begin using hybrid care models and collaborating across the healthcare system to increase equitable access to quality, personalized, and convenient experiences.

State Efforts

States are continuing to focus on ways to address health equity, too.  In addition to value-based care models, states have been encouraged by the Biden Administration to use 1115 Demonstration Waivers to address HRSN.1115 waivers provide states with a way to test new approaches to care in Medicaid. The current administration is actively encouraging states to propose new 1115 waivers that expand coverage, reduce health disparities, and/or advance whole person care by address SDOH. Most recently, CMS approved 1115 waivers in Arizona, Arkansas, Massachusetts, and Oregon. All of these waivers include definitive HRSN services for distinct populations and CMS approved these waivers with the expected outcome to “promote coverage, access to and quality of care, improve health outcomes, reduce health disparities, and create long-term, more cost-effective alternatives or supplements to traditional medical services.” For example, despite being partially approved in September 2022, Oregon’s latest 1115 waiver demonstration application still has pending proposals before CMS to eliminate health inequities by 2030. New York’s 1115 waiver demonstration concept papers, released in 2021, propose two new collaborative organizations to drive equity infrastructure and interventions: Social Determinants of Health Networks (SDHNs) and Health Equity Regional Organizations (HEROs).

Federal Agency Initiatives

Along with states, health plans, federal agencies are also creating new initiatives to acknowledge and implement ways to address health equity in their work. In late 2022, the Food and Drug Administration (FDA) released draft guidance on considering health care disparities when reviewing proposed devices. In their draft guidance, the agency acknowledged that there is an urgent public health need for innovative technology to help reduce barriers to achieve health equity and improve health outcomes across diverse populations. Therefore, they will consider whether a device in their Breakthrough Devices Program will also help address healthcare disparities and promote health equity. And within the White House, Biden signed a new Executive Order (EO) that address affordability in health care for 2023. In the EO, the President directs HHS to “consider additional actions to further drive down prescription drug costs.” The director of HHS is charged to leverage CMMI to test models that lower drug costs and promote access to innovative drug therapies for Medicare and Medicaid beneficiaries. These models should test ways that will lead to lower costs for commonly used drugs and support value-based payment initiatives that promote high quality care. This EO comes two months after the Inflation Reduction Act was signed which will lower the cost of prescription drugs for Medicare beneficiaries by establishing a $35 monthly cap on prescription insulin, phase in an annual cap for out of pocket expenses at the pharmacy, and will allow beneficiaries to pay $0 out of pocket for recommended adult vaccines covered under Medicare Part D plans.

With a clear understanding of the racial and ethnic disparities that persist in the accessibility, affordability and quality of health care in the U.S., many entities across the health sector have begun to address health inequities. While the shift towards value-based care and health equity is becoming increasingly evident across the healthcare landscape, further efforts will be necessary to advance change throughout the health system. The Crowell Health Solutions team looks forward to tracking future initiatives to address health equity and integrate value-based care in the healthcare system.