Health care payments should encourage improvements in care delivery and ensure patient centered care including care coordination, integration, and prevention and wellness is compensated appropriately.
Reconfiguring payments for health care services to incentivize value will allow providers to invest in practice improvements that optimize the provision of care that is more focused on patient needs.
Shifting from traditional fee for service (FFS) payments to person focused payments (in which all or much of a person’s overall care or care for related conditions is encompassed within a single payment) is a particularly promising approach to creating and sustaining delivery systems that value quality, cost effectiveness, and patient engagement. Such payments can include accountability for the quality of care at the population level, rather than for the volume of particular services. Population-based payments give providers more flexibility to coordinate and manage care for individuals and populations. In combination with substantially reduced incentives to increase volume and increased incentives to provide services that are currently undervalued in FFS, there is a consensus that this flexibility will expedite innovations in care delivery, particularly for individuals with chronic, complex, or costly illnesses.
All alternative payment models (APM) and payment reforms that seek to deliver better care at lower cost share a common pathway for success: providers, payers, and others in the health care system must make fundamental changes in their day-to-day operations that improve quality and reduce the cost of health care. Making operational changes will be viable and attractive only if new alternative payment models and payment reforms are broadly adopted by a critical mass of payers.
Medicare beneficiaries in alternative payment models, such as ACOs, have better control over their health care, and providers have better information about their patients’ medical history and better relationships with their patients’ other providers. Doctors and other clinicians can focus on care coordination to ensure patients, especially those with chronic conditions, get the right care at the right time while avoiding medical errors and duplication. Under alternative payment models, providers have an incentive to coordinate care inside and outside the doctor’s office, by helping patients with their medications, communicating about upcoming appointments and expectations, and talking with the other members of the patient’s care team.
Today, there are 477 Medicare ACOs participating in the Shared Savings Program and the Pioneer ACO Model combined. In 2014, these programs generated a total net savings of $411 million. ACOs represent about three quarters of progress toward the goal announced today. And these gains will continue to increase over the course of the year, with the start of the Comprehensive Care for Joint Replacement model and the Oncology Care Model in 2016.
What resources are available on value-based care and quality payment programs?
CMS offers in-depth information, webinars, and other resources for value-based programs at the Quality Payment Program: Delivery System Reform, Medicare Payment Reform, & MACRA website.
Learn more about Alternative Payment Models and the Merit-Based Incentive Payment System, including program fact sheets and where to find help, at the Quality Payment Program Education & Tools resource library.