News broke this week that Health and Human Services (HHS) has set some clear and, arguably, aggressive goals for shifting the Medicare program, and the health care system at large, from fee-for-service to value or quality-based reimbursement. HHS has termed this effort “Better, Smarter, Healthier,” referring to better care, smarter spending, and healthier people.
HHS Secretary Sylvia Burwell announced on Monday that HHS has set a goal of transforming 30 percent of current fee-for-service Medicare payments to value-based, alternative payment models, such as Accountable Care Organizations, bundled payments or primary care medical homes, by the end of 2016 and tying 50 percent of payments to these alternative payment models by the end of 2018. Currently, 20 percent of Medicare payments are made through alternative payment models.
In addition to the shift to alternative payment models, HHS is also hoping to tie 85 percent of all traditional, fee-for-service payments to its various quality or value-based programs, such as the Hospital Value-Based Purchasing and Hospital Readmissions Reduction Programs by 2016. In explanation of this ambitious effort, HHS stated in one its press releases that, “By setting ambitious, but achievable goals for the adoption of these new payment models we expect that health care providers can move with greater certainty towards these approaches, with proven benefits for patients and families.”
Secretary Burwell also announced the development of a “Health Care Payment Learning and Action Network” which will bring providers, private payers, employers, consumers, states and other groups into the discussion to help implement these alternative payment models in the private sector. The first meeting is set to occur in March 2015 but no specific date or time has been announced.
For more information on these new goals, HHS has provided the following information: