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Obama Administration Sets Value-Based Reimbursement Goals

January 26, 2015
by Gabriel Perna
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The Department of Health and Human Services (HHS) wants 30 percent of traditional Medicare fee-for-service payments tied to a quality-driven, alternative payment model, such as an Accountable Care Organization (ACOs), by the end of next year.
 
That's not all. By the end of 2018, HHS has set a goal of 50 percent of those traditional fee-for-service Medicare payments to be tied to quality-driven, value-based reimbursement model. The goals for all traditional Medicare payments are even higher. By 2016, it aims to have 85 percent of all traditional Medicare payments tied to quality or value and 90 percent by 2018. It aims to do this through programs such as the Hospital Value Based Purchasing and the Hospital Readmissions Reduction Programs.
 
The announcement is the first time the Obama administration has publicly set explicit goals for value-based payment and alternative reimbursement models. It was announced a meeting with HHS Secretary Sylvia M. Burwell and a number of healthcare industry stakeholders.
 
"Today’s announcement is about improving the quality of care we receive when we are sick, while at the same time spending our health care dollars more wisely,” Secretary Burwell said in a statement. “We believe these goals can drive transformative change, help us manage and track progress, and create accountability for measurable improvement.” 
 
To assist providers down this path, HHS is creating the Health Care Payment Learning and Action Network.  Through this network, the government promises to work with private payers, employers, consumers, providers, states and state Medicaid programs, and other partners to expand alternative payment models into their programs.  The first meeting will be held in March.
 
If Medicare is going to reach its lofty goals, it has some work to do. Twenty percent of Medicare payments are done through alternative reimbursement models, such as in an ACO. The goals announced this week represent a 50 percent increase by 2016. 
 
One industry stakeholder in favor of these changes is Premier Inc., a Charlotte-based group purchasing organization. In a statement, Blair Childs, Premier senior vice president of public affairs, said HHS should be commended for its dedication to value-based reimbursement. 
 
"We particularly applaud HHS’s determination to advance reforms that will incent quality and cost-effective care, while removing many of the antiquated impediments to change.  Without important changes to the rules governing ACOs and the bundled payment program, providers will avoid taking the risks necessary for these programs to succeed.  We also commend HHS for its thoughtful work to provide access to necessary data that enables informed decisions on how to improve quality and cost of care, and we urge other payers to do the same," Childs said. 
 

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