Practice Economics

HHS: Half of Medicare payments tied to value, quality by 2018


 

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The move to value- and quality-based payments gained impetus as the Department of Health & Human Services called for half of all Medicare payments to be out of fee-for-service by the end of 2018.

“This is the first time in the history of the program that explicit goals for alternative payment models and value-based payment models have been set for Medicare,” HHS Secretary Sylvia Burwell said in an editorial Jan. 26 in the New England Journal of Medicine (doi 10.1056.NEJMp1500445).

Sylvia Burwell Courtesy HHS

Sylvia Burwell

The goal is “to move away from the old way of doing things, which amounted to, ‘the more you do, the more you get paid,’ by linking nearly all pay to quality and value in some way to see that we are spending smarter,” Ms. Burwell said in a blog post on the HHS website.

As interim goals, Ms. Burwell said HHS aims to have 30% of Medicare payments tied to quality or value through alternative payment models by the end of 2016.

Ms. Burwell identified three strategies that the agency will employ. “The first is incentives: a major thrust of our efforts is to create an environment in which hospitals, physicians, and other providers are rewarded for delivering high-quality health care and have the resources and flexibility they need to do so.”

The Affordable Care Act provides a number of alternative payment models – accountable care organizations, patient-centered medical homes, and new models of bundled payments – to get this started.

“Looking ahead, we plan to develop and test new payment models for specialty care, starting with oncology care, and institute payments to providers for care coordination for patients with chronic conditions,” she said.

That emphasis on care coordination, along with population health, is the second focus. HHS plans to invest up to $800 million in providing hands-on support to 150,000 physicians “for developing skills and tools needed to improve care delivery and transition to alternative payment models.”

Finally, the agency seeks to accelerate data availability to help clinical decision making. Ms. Burwell highlighted ongoing efforts, including the federal meaningful use efforts.

The announcement received early support from the National Quality Forum and the American Medical Association.

“In order for payment models based on value to really work, all providers need clear, consistent measures that drive improvements in care and provide meaningful information for patients, while being clinically relevant and actionable for providers,” Dr. Christine Cassel, NQF president and CEO said in a statement. “The health care community needs better measures faster. The more efficient NQF process is key to meeting this challenge.”

AMA President Robert Wah said in a statement that physicians “have many ideas for redesigning and improving the delivery of high-quality patient care in this country. We strongly support reform of the Medicare payment system, including elimination of Medicare’s flawed sustainable growth rate formula, which provides a pathway for physicians to innovate and develop new models of health care delivery for our patients.”

gtwachtman@frontlinemedcom.com

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