The federal government is aiming to reform the way Medicare doctors are paid in order to cut waste and improve care.
By the end of next year, the aim is to base nearly one-third of Medicare payments to doctors on the quality — not just quantity — of care they provide, by using different payment models, the Department of Health and Human Services announced Monday. The agency wants to hit 50 percent by the end of 2018.
Last year, about 20 percent of Medicare payments were tied to alternative payment models — a big increase over virtually none in 2011, HHS officials said.
It’s long been a goal of HHS to revamp the way Medicare doctors are paid, as the traditional fee-for-service model is often criticized for leading to duplicative, wasteful or unnecessary treatments and lack of coordination among all of a patient’s doctors.
There are several different ways the agency has experimented with paying providers, through models known as accountable care organizations, bundled payments or medical homes.
Officials estimate that more than $120 billion will be awarded through alternative payment models in 2016, if it reaches the 30 percent goal. Last year, the federal government paid doctors $360 billion through Medicare’s doctor and hospital programs.
Members of Congress have also come up with a plan to revamp Medicare payments through bipartisan, bicameral legislation announced last year to do away with a faulty payment formula.
They’re still at odds over how to pay for the legislation, which hasn’t been passed by either the House or the Senate. HHS officials said they’re moving ahead with their own quality reforms, but will work with Congress if the plan ever becomes laws.
“If there’s new legislation, we welcome the chance to work with Congress on both sides of the aisle,” said a senior HHS official.
Medical associations and health advocates including the Federation of American Hospitals and the National Partnership for Women and Families lauded the announcement.
“This strategy is not just about lowering costs; it will change how care is delivered and help providers and patients work together to achieve the triple aim of better care, better health, and lower costs,” said Debra Ness, president of the National Partnership for Women and Families.
But while Republicans also agree that Medicare payments need to be reformed, some on the Right said the administration is moving forward without sufficient evidence that its alternative payment models really work.
“In its desire to trump Congress with executive action CMS has set ambitious goals with no evidence that these particular alternatives will be effective at reducing costs or improving care,” said former Congressional Budget Office Director Doug Holtz-Eakin, president of the conservative American Action Forum.
“CMS should ensure this shift will work before imposing a massive regulatory overhaul for its own sake.”
