A Payment Reform Conundrum: Reconciling Conflicting Policy Goals

In early 2015, the Secretary of the Department of Health and Human Services (HHS), Sylvia Burwell, announced goals for shifting Medicare payment from fee-for-service (FFS) to alternative payment models (APMs). Qualifying APMs include, among others, accountable care organizations (ACOs), medical homes, and episode-based bundled payments. Congress, by large bipartisan majorities, endorsed payment reform in the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), which establishes incentives for physicians to join new payment models. Many private purchasers, insurers, and providers are likewise committed to payment reform. So far, the gains from alternative payment models have not been large. In 2014, 27 percent of ACOs in the Medicare Shared Savings Program shared savings, and the factor most strongly associated with success was having a history of high costs (and thus a more lenient financial benchmark). Slightly more than half of Pioneer ACOs shared savings, which may be attributable to stronger financial incentives or their greater experience with managed care (or some combination of the two). Despite these results, there are reasons to be hopeful. ACOs appear to be improving quality, and they seem to become more effective with experience. The relative success of the Pioneer model may indicate that stronger incentives could spark better performance in reducing costs. Most importantly, the Centers for Medicare and Medicaid Services (CMS), private payers, and provider...
Source: Health Affairs Blog - Category: Health Management Authors: Tags: Costs and Spending Featured Hospitals Insurance and Coverage Medicare Organization and Delivery Payment Policy Population Health Quality ACOs Alternative Payment Models MACRA Medicare Advantage Source Type: blogs