The Federal Government unveiled plans to accelerate the move toward value-based payments for Medicare patients and those covered under government-run healthcare plans, according to a HHS report.
Here are eight key concepts from the report:
1. Payments are shifting from traditional fee-for-service to outcomes-based payment models. The U.S. Health and Human Services Department is allocating a higher percentage of traditional Medicare dollars to alternative payment models emphasizing outcomes.
2. Some see this as a "win" for physicians, as the program would eliminate the flawed sustainable growth rate formula. The American Medical Association Peresident Robert M. Wah, MD, said the change "provides a pathway for physicians to innovate and develop new methods of healthcare delivery for patients."
3. HHS set the goal of tying 30 percent of the traditional fee-for-service Medicare payments to value-based payments, including accountable care organizations or bundled payments by the end of 2016 and 50 percent by 2018. These payment methods pay a lump sum to healthcare providers, placing more risk upon the providers. Bundling service payments have traditionally lowered the amount physicians are paid.
4. The department also set the goal of tying 85 percent of the traditional Medicare payments to quality or value through programs like the Hospital Value Based Purchasing and Hospital Readmissions Reduction Programs by 2016. By 2018, the goal is to tie 90 percent of traditional Medicare payments to quality or value through these programs.
5. The department is creating the "Health Care Payment Learning and Action Network" to aid private payers, employers and consumers, among others, to learn more about alternative payment models and integrating them into their programs.
6. HHS has seen cost savings of around $417 million to Medicare due to current alternative payment programs including ACOs. The department expects a continued slowdown in healthcare spending due to these initiatives as well as others to reduce hospital readmissions.
7. There is bipartisan support for moving away from fee-for-service toward alternative payment models, according to Health Innovation Director and Executive Director of the CEO Council on Health and Innovation at the Bipartisan Policy Center Janet Marchibroda.
8. The new payments provide financial incentive to coordinate care and eliminate duplicative or unnecessary X-rays, screenings and tests.
Earlier this year, John Finkenberg, MD, an orthopedic surgeon at Alvarado/Helix Orthopedics and Sports Medicine in California and North American Spine Society Advocacy Chair expressed concern about the rising support for global payment initiatives.
"We understand Congress is trying to decrease costs for surgical procedures with global payments, and that's one way to do it, but our concern is as healthcare changes the patients will have significant copay and deductible increases," says Dr. Finkenberg. "When patients have to pay a higher amount, they could delay care. Additionally, physicians are penalized if patients have bad outcomes. But human nature will sometimes lead to poor follow-up from the patients and punishing physicians for the patients' bad decisions."