An estimated 30 percent of Medicare payments are now associated with alternative payment models that focus on quality of care as an alternative to the quantity of services. The HHS announcement that Medicare reached the 30 percent threshold comes almost a year ahead of the agency’s planned schedule. HHS credits the success to tools developed under the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), like the Medicare Shared Savings Program and the Center for Medicare and Medicaid Innovation.
Timeline. In January 2015, HHS announced a timetable for its plan to shift Medicare payments away from traditional fee-for-service (FFS) and towards alternative models like accountable care organizations (ACOs), advanced primary care medical homes, and bundled payments for episodes of care. Initially, the agency set the end of 2016 as the target date for reaching 30 percent of Medicare payments through alternative payment models. HHS was able to meet its goal much sooner, in part, due to increased participation in already existing models, including the addition of 121 new ACOs.
Models. CMS identified ten models as they key contributors to the goal of transitioning away from FFS and towards value. Those models include the Medicare Shared Savings Program (MSSP), which the ACA created to allow groups of doctors, hospitals, and other health care providers to come together voluntarily to provide coordinated care. The Pioneer ACOs and the Next Generation ACOs take the MSSPs ideas one-step further, allowing ACOs with more established coordination structures to improve quality and assume more financial risk. The other models, the Comprehensive End Stage Renal Disease (ESRD) Care Model, Comprehensive Primary Care Model, Multi-Payer Advanced Primary Care Practice, End Stage Renal Disease Prospective Payment System, Maryland All-Payer Model, Medicare Care Choices Model, and the Bundled Payment Care Improvement also drive value through provider and payer partnerships.
Why. The milestone is important because the alternative payment models force providers to be aware of the total costs of treating patients over an extended period of time. The result, according to CMS, is that providers become more accessible to patients through quicker follow-ups, more comprehensive office hours, and better transitions from doctor to doctor and facility to facility. The coordination is having an impact. For example, from 2010 to 2014 there was a 17 percent reduction in hospital-acquired conditions. Additionally, between 2010 and 2015, an estimated 565,000 readmissions were prevented compared to pre-ACA readmission rates. The models have brought financial success as well, with ACOs saving Medicare $411 million in 2014.
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