HHS Releases Value-Base Transition Timeline
By Christine Kern, contributing writer
HHS sets a goal of 50 percent of ACO and 90 percent of Medicare payments to be value-based by 2018.
Health and Human Services Secretary Sylvia M. Burwell has announced measurable goals and a timeline to transition the Medicare program in particular and the healthcare system in general from quantity-based payments to value-based models by 2018. This marks the first time that HHS has set explicit goals for alternative payment models and/or value-based payments since the creation of Medicare.
Currently, a majority of healthcare providers receive a payment for each individual service – such as a physician visit, surgery, or blood test – regardless of their impact on the patient. In other words, providers are paid based on the volume of care, rather than the value of care provided to patients. The new initiative would emphasize the process of paying providers for what works.
As part of the plan for transition, HHS has established goal figures of “tying 30 percent of traditional, or fee-for-service, Medicare payments to quality or value through alternative payment models, such as Accountable Care Organizations (ACOs) or bundled payment arrangements by the end of 2016, and tying 50 percent of payments to these models by the end of 2018. HHS also set a goal of tying 85 percent of all traditional Medicare payments to quality or value by 2016 and 90 percent by 2018 through programs such as the Hospital Value Based Purchasing and the Hospital Readmissions Reduction Programs.”
HHS has also created a healthcare Payment Learning and Action Network designed to allow private payers, employers, consumers, providers, states, state Medicaid programs, and other partners to work with HHS to expand alternative payment models into their programs. The Network will hold its first meeting in March 2015, and more details will be announced in the near future.
“Whether you are a patient, a provider, a business, a health plan, or a taxpayer, it is in our common interest to build a healthcare system that delivers better care, spends healthcare dollars more wisely and results in healthier people. Today’s announcement is about improving the quality of care we receive when we are sick, while at the same time spending our healthcare dollars more wisely,” Secretary Burwell said in the release. “We believe these goals can drive transformative change, help us manage and track progress, and create accountability for measurable improvement.”
Debra Ness, president of the National Partnership for Women and Families, a consumer advocacy organization, told The Washington Post that these payment models will force health-care providers to better coordinate care. “We're not just talking about payment that lowers costs,” she said. “The payment changes are designed to change the way that we deliver care in ways that will make that care work better for patients and families.”
The private sector had already begun to invest in this shift to value-based before the implementation of the ACA. About 20 percent of provider payments by Blue Cross insurers are through contracts that try to prioritize quality over quantity, their trade association reported last summer. And, according to The Washington Post, 28 percent of Aetna’s reimbursements are currently in valued-based contracts, a rate that is anticipated to jump to 75 percent by 2020.