HHS Lays Out Path Away From Fee-for-Service Medicare Payment

February 04, 2015 03:11 pm News Staff

HHS is accelerating the pace of change in Medicare physician payment by setting new goals and deadlines for alternative payment models that reward health care professionals for performance instead of volume.

[HHS_Calculator and stethoscope laying on medical bill]

Overall, half of Medicare fee-for-service payments should change to the new models before 2019, according to goals that were laid out during a roundtable discussion(www.youtube.com) the agency hosted on Jan. 26. HHS Secretary Sylvia Burwell announced a detailed timeline for moving toward payment models that encourage care coordination, a concept she termed "volume to value," which the AAFP supports.

"We need to change the way we deliver care, we need to change the way we pay providers, and finally, we need to change the way we distribute information," Burwell said.

HHS wants to convert 30 percent of Medicare fee-for-service payments to alternative payment models such as accountable care organizations (ACOs), patient-centered medical homes or bundled payment arrangements by the end of 2016, according to a news release(www.hhs.gov) about the announcement. By the end of 2018, the agency's goal is that 50 percent of payments will be tied to such models.

Story highlights
  • HHS announced it intends to convert a majority of Medicare payments to performance-based measurements in the next three years.
  • HHS Secretary Sylvia Burwell said the agency wants to support payment models that encourage care coordination.
  • As envisioned, Medicare payments will be divided into four categories, some of which are tied to fee-for-service and some of which are not.

HHS also hopes to tie 85 percent of all traditional Medicare payments to quality or value measurements by 2016 and 90 percent by 2018. Officials acknowledged that the goal is aggressive and might be difficult for small physician practices or large hospitals to implement quickly.

The new goals and deadlines are meant to improve physician payment methods, promote innovation in care delivery, and encourage information sharing among medical professionals and patients to improve decisions about care.

Douglas Henley, M.D., EVP and CEO of the AAFP, participated in the discussion with Burwell and expressed strong support for alternative payment models such as the medical home.

"The current singular focus on fee-for-service payment must end and be replaced with better alternatives such as blended or prospective global payment models which promote value over volume and pay differently and better from primary care," Henley said. "Our work to accelerate the adoption of the patient-centered medical home is all about transforming the delivery of comprehensive primary care to children, adolescents and adults."

According to a CMS fact sheet,(www.cms.gov) the HHS plan divides Medicare payments into four categories: fee-for-service with no connection to quality, fee-for-service tied to quality performance, alternative payment models built on fee-for-service architecture, and population-based payments.

To bolster growth of alternate payment models nationally, HHS is creating a Health Care Payment Learning and Action Network. The agency plans to partner with private insurers, employers, consumers and state Medicaid programs to expand initiatives that support care coordination. The group is scheduled to host its first meeting in March 2015.

Expectations for ACOs and medical homes are high, and their potential for reducing Medicare costs is tracked regularly with reports that detail their number and savings. During the roundtable, Henley specifically noted that medical homes are one of the best examples of improved care delivery.

"The medical home and other advanced primary care practice models are most effective when doctors, nurses, medical assistants, NPs, PAs and many others work in efficient teams and where the patients are an integral member of their team," he said.

Overall, participants at the HHS event were optimistic that establishing clear goals to move to new payment models is a good step toward rewarding performance over volume.

"Maybe a year from now, five years from now or 10 years from now, we can point to this day and say, 'This is when we began to get it right,'" Henley said.