By Arthur J. Fried.

In what is being called an historic announcement, Department of Health and Human Services Secretary Sylvia Mathews Burwell announced on Monday the setting of clear goals and timeframes for moving Medicare from volume to value payments.  The stated goals are to tie 30% of all Medicare provider payments to quality and cost of care by 2016, moving to 50% by 2018.   Nearly all fee-for-service payments will be aligned with quality and value – 85% by 2016 and 90% in 2018.  This transformation will be achieved by the expansion of mechanisms already in use – Accountable Care Organizations, Patient Centered Medical Homes, and Bundled Payments.  Like the Affordable Care Act itself, HHS believes that its initiative will unleash an even stronger movement in the private sector towards alternative payment methodologies, and is establishing the "Health Care Payment Learning & Action Network" to promote this public-private partnership, to be kicked-off in March.

While some reports regarding these approaches have shown mixed results, Secretary Burwell cited data showing savings of $116 billion from previous trends, and anticipates even further inroads into the cost curve with Monday's announcement.  Various national provider associations were supportive of the initiative. Others noted, however, that physicians need flexibility in the way payments are administered and that continued reductions in payments to hospitals could impair their ability to invest in delivery reforms.  Some urged HHS to recognize the value of new treatment and pharmacological advances in the developing payment methodologies.

Whatever the outcome of these initiatives, this announcement signals that government payment policies will continue to strongly influence the transformation of the American health care system for the foreseeable future. Indeed, almost immediately, several large hospital systems and payors likewise announced significant goals for quality and cost incentives in their contracts.

Back to Health Law Advisor Blog

Search This Blog

Blog Editors

Related Services

Topics

Archives

Jump to Page

Subscribe

Sign up to receive an email notification when new Health Law Advisor posts are published:

Privacy Preference Center

When you visit any website, it may store or retrieve information on your browser, mostly in the form of cookies. This information might be about you, your preferences or your device and is mostly used to make the site work as you expect it to. The information does not usually directly identify you, but it can give you a more personalized web experience. Because we respect your right to privacy, you can choose not to allow some types of cookies. Click on the different category headings to find out more and change our default settings. However, blocking some types of cookies may impact your experience of the site and the services we are able to offer.

Strictly Necessary Cookies

These cookies are necessary for the website to function and cannot be switched off in our systems. They are usually only set in response to actions made by you which amount to a request for services, such as setting your privacy preferences, logging in or filling in forms. You can set your browser to block or alert you about these cookies, but some parts of the site will not then work. These cookies do not store any personally identifiable information.

Performance Cookies

These cookies allow us to count visits and traffic sources so we can measure and improve the performance of our site. They help us to know which pages are the most and least popular and see how visitors move around the site. All information these cookies collect is aggregated and therefore anonymous. If you do not allow these cookies we will not know when you have visited our site, and will not be able to monitor its performance.