Medicare Reaches Key Payment Benchmark

The Department of Health and Human Services (HHS) recently announced that it reached an important benchmark to tie 30 percent of Medicare payments to the quality of care delivered instead of the quantity of services provided. According to HHS, as a result “…over 10 million Medicare patients are getting improved quality of care by having more time with their doctors and better coordinated care.”

Through tools established by the Affordable Care Act (ACA), such as the Center for Medicare and Medicaid Innovation, various alternative payment models are currently being tested to give Medicare the ability to pay providers for high value care—meaning better quality care at a lower cost. Examples of these models include Accountable Care Organization (ACOs), advanced primary medical homes, and more recent models that bundle payments for “episodes of care.”

Prior to the ACA, Medicare paid next to nothing through alternative payment models, and in 2015 HHS set a goal to shift 30 percent of Medicare payments to the new models. According to HHS, as of January 2016, $117 billion out of $380 billion spent in the Medicare fee-for-services program are issued through alternative payment models.

“We reached this goal in partnership with the thousands of providers who collaborated with us in innovation,” said Dr. Patrick Conway, Deputy Administrator for Innovation & Quality and CMS Chief Medical Officer. “It’s in our common interest—as patients, providers, businesses, health plans, taxpayers—to build a health care delivery system that delivers better care; spends health care dollars more wisely; and makes individuals and communities healthier.”