Health Information Management

Medicare unveils alternative payment models

APCs Insider, January 30, 2015

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Federal officials announced an accelerated effort to use payment reform to shift Medicare and the broader healthcare industry away from the fee-for-service model.
 
During a gathering in the nation's capital January 26, nearly two dozen healthcare industry stakeholders, including providers, commercial payers, and Department of Health and Human Services Secretary Sylvia Burwell, announced plans to ramp up Medicare payment reforms featuring alternative payment models (APM) and value-based payments.
 
In a statement released January 26, HHS officials said the payment reform initiative includes creation of a "learning and action network" to promote the development and promulgation of value-based payment models. The network will hold its first meeting in March.
 
Three-year timeline
In a January 26 conference call with members of the media, senior HHS officials highlighted a three-year payment reform timeline, which calls for boosting the percentage of fee-for-service Medicare reimbursements based on APMs and increasing the percentage of all reimbursements linked to quality and value.
 
In the early phase of the payment reform initiative's implementation, APMs will be limited to three pathways: Medicare's existing accountable care organization efforts, the Pioneer ACO program, and the Medicare Shared Savings Program; bundled payments; and payment models tied to patient-centered medical homes.
 
HHS officials said efforts are already under way to develop and implement more ambitious value-based payment models, including episode-of-care payment for chronic illnesses and oncology care that will require providers to shoulder a significant level of cost risk.
 
The reform initiative calls for Medicare fee-for-service payments through APMs to rise from the current 20% level to 30% by the end of 2016. The percentage is slated to rise to 50% by the end of 2018.
 
It additionally calls for the percentage of Medicare payments that are linked to quality and value to reach 85% by 2016 and 90% by 2018. Existing Medicare quality and value linked payment programs include the Hospital Value-Based Purchasing (VBP) program and the Hospital Readmission Reduction Program (HRRP).
 
This article originally appeared on the HealthLeaders Media website. Click here to read more.  



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