The U.S. Department of Health and Human Services (HHS) on Monday said it would fundamentally reform how it pays providers for treating Medicare patients in the coming years.
The intent, according to HHS officials, is to cut down on the volume of unnecessary procedures while improving patient outcomes.
"Those models will depend on how well providers care for their patients, instead of how much care they provide," HHS Secretary Sylvia Mathews Burwell said at a Monday press conference, the Washington Post reported.
For the first time, she said in a statement, her agency was "setting clear goals--and establishing a clear timeline--for moving from volume to value in Medicare payments. We will use benchmarks and metrics to measure our progress; and hold ourselves accountable for reaching our goals."
UPDATE: Providers react to the HHS' timetable
During a later press conference, Patrick Conway, M.D., deputy administrator for innovation and quality and the chief medical officer for the Centers for Medicare & Medicaid Services, said the agency will tie 30 percent of all fee-for-service payments to providers to quality initiatives through alternative payment models--particularly accountable care organizations (ACOs) and bundled payments--by 2016. It will rise to 50 percent by 2018.
About 20 percent of Medcare FFS payments are through new payment models, according to the HHS statement.
"This is focused on moving our system toward better care," Conway said at the press conference Monday afternoon. He added that the announcement was intended to provide clarity on payment policy to providers, "so they can partner with health plans and move toward a health system that is patient-centered."
Conway noted that the agency intends to accelerate the program through expansion of current payment models, including the Pioneer and other ACO programs, as well as emerging models, such as bundled payments for oncology care.
Medicare is the second-largest spender of U.S. government revenues behind the military, with a budget of around $600 billion a year. And while it spend less on services than private payers, the U.S. still spends twice as much as any other industrialized nation on healthcare delivery, often with quality that suffers in comparison.
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