Majority Back Medicare Timeline for Value-Based Reimbursement

Thursday, January 29th, 2015
This post was written by Patricia Donovan

For the first time in Medicare history, HHS has set explicit goals for alternative payment models and value-based payments.

The healthcare industry took notice earlier this week of Medicare’s ambitious timeline for moving Medicare payments from volume- to value-based models—an agenda validated by the majority of respondents to HIN’s eleventh annual Healthcare Trends and Forecasts survey.

Ninety-two percent of respondents to the December 2014 survey endorsed healthcare’s transition to rewarding healthcare value and quality over volume of services, noting the trend has boosted accountability and revenues.

In a related data point, 26 percent view the adoption of value-based reimbursement and rewards as the most promising area of healthcare.

The HHS timeline will tie 30 percent of traditional or fee-for-service (FFS) Medicare payments to quality or value through alternative payment models by the end of 2016. Alternative payment formulas include accountable care organizations (ACOs), patient-centered medical homes (PCMHs), and bundled payment arrangements for episodes of care, which CMS has tested in a range of pilots in recent years.

The HHS said it will tie 50 percent of payments to these models by the end of 2018. In 2011, Medicare made almost no payments to providers through alternative payment models, but today such payments represent approximately 20 percent of Medicare payments.

With views toward value-based reimbursement mostly favorable, 2015 Trends survey respondents shared some spoils of a value-over-volume approach:

  • „„“Higher levels of accountability in order to be well positioned to execute in a value environment.”
  • „„“As a high quality provider, shift to rewarding this behavior has increased revenue.”
  • „„“Not as much direct impact as implied and perceived focus on quality and reporting.”
  • „„“We built a provider network upon this principle.”

In other trends documented by the survey, declining reimbursement and cost constraints posed considerable challenges for respondents in the last 12 months, while interventions to tighten transitions in care, reduce hospital readmissions and integrate care via the patient-centered medical home (PCMH) model—all value-based initiatives—were among business successes recounted by this year’s participants.

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