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CORPORATIONMarkW.Friedberg,PeggyG.Chen,MollySimmons,TisamarieSherry,PeterMendel,LauraRaaen,JamieRyan,PatrickOrr,CarolVargo,LindseyCarlasare,ChristopherBotts,KathleenBlakeEffectsofHealthCarePaymentModelsonPhysicianPracticeintheUnited StatesFOLLOW-UPSTUDYiiiPrefaceIn2014,RANDandtheAmericanMedicalAssociation(AMA)conductedaqualitativeresearchprojectentitled“EffectsofHealthCarePaymentModelsonPhysicianPracticeintheUnitedStates”thatdescribedhowalternativepaymentmodelssuchascapitation,episode-basedandbundledpayment,sharedsavings,andpayforperformanceaffectedmultipleaspectsofphysicianpractice.Since2014,alternativepaymentmodelshaveexpandedtoincludenewprivate,state,andfederalprograms—mostnotablytheMedicareAccessandCHIPReautho-rizationActof2015(MACRA)QualityPaymentProgram.Theprojectwereportonhereupdatesour2014studywithqualitativedatafromphy-sicianpracticeleaders,frontlinephysicians,andotherobserversinthesamesixmarketsweexaminedin2014.Wheneverpossible,were-interviewedthesameindividualswhopartici-patedinthe2014study.Thisallowedustodescribehowtheirexperienceswithpreexistingandnewalternativepaymentmodelshadevolvedoverafour-yearperiod.ThecurrentprojectbeganonOctober 18,2017,andwascompletedonOctober 24,2018.ProjectfindingsareintendedtohelpguideeffortsbytheAMAandotherstakeholderstoimprovecurrentandfuturealternativepaymentprogramsandhelpphysicianpracticessucceedinamorevalue-drivenenvironment.ThisworkwassponsoredbytheAMA.TheopinionsexpressedinthisreportarethoseoftheauthorsandcannotbeinterpretedasAMApolicy.TheresearchwasconductedbyRANDHealth,adivisionoftheRANDCorporation.AprofileofRANDHealth,abstractsofpubli-cations,andorderinginformationcanbefoundat:EffectsofPaymentModelsonPhysicianPractices..................................3Overview.....................................................................................................................3PaymentModelsIncludedintheScan................................................................................3CorePaymentModels..................................................................................................4SupplementaryPaymentModels.....................................................................................4OrganizationalModelsThatCombinePaymentModels......................................................5Approach.....................................................................................................................6Value-BasedPayment:OverallLandscape...........................................................................6Capitation.................................................................................................................6Episode-BasedandBundledPayments.............................................................................8PayforPerformance...................................................................................................11SharedSavingsPrograms/ACOs...................................................................................13Retainer-BasedPayment.............................................................................................16Patient-CenteredMedicalHomes.................................................................................17PolicyChanges...........................................................................................................19TheAffordableCareAct.............................................................................................19TheMACRAQualityPaymentProgram........................................................................19Methods...................................................................................................................23DataCollection...........................................................................................................23Overview................................................................................................................23MarketSelection.......................................................................................................23MarketContext:SampleofInterviewe