For the first time in history, the federal Medicare program has set a timeline for reimbursement change, alerting physicians and other providers about an impending shift to payments based on value, not volume.
In a meeting of stakeholders and a Jan. 26 announcement, federal officials called for increasing fee-for-service or traditional Medicare reimbursements based on “alternative payment models,” as well as the percentage of all reimbursements linked to quality and value.
At first, those alternative payment models will be limited to three:
- Medicare’s current accountable care organizations (ACOs), along with the Pioneer ACO program and Medicare Shared Savings program
- Bundled payments
- Payment models based on patient centered medical homes
The proactive plan calls for 85 percent of traditional Medicare payments to be linked to quality and value by 2016; that jumps to 90 percent by 2018. To help attain the goals, HHS will create a “learning and action network” with participants that include private payers, employers, consumers, providers, states and state Medicaid programs to help grow alternative payment models in their various plans and programs.
“Ultimately, this is about improving the health of each person by making the best use of our resources for patient good,” said Douglas E. Henley, M.D., executive vice president and CEO of the American Academy of Family Physicians, who participated in the Jan. 26 meeting. ”We’re on board, and we’re committed to changing how we pay for and deliver care to achieve better health.”
Today, the Medicare program makes approximately 20 percent of payments through alternative payment models. The newly announced goals represent a 50 percent increase by 2016; fee-for-service payments in 2014 were $362 billion. HHS has already demonstrated savings of $417 million from existing ACO programs.
“Patients benefit when physicians have the flexibility and resources to redesign care, and when payers provide new payment models that can support physician efforts to improve patient care and lower health care costs over the long term,” said AMA President Robert M. Wah, M.D. “We look forward to hearing more details behind the percentages HHS put forward, as well as their plans to reach these percentage targets.”
Learn more on the HHS website.
Read a new Perspectives piece in the New England Journal of Medicine.
See fact sheets about the new Learning and Action Network here AND here.