It was almost a year ago that — for the first time in the history of the Medicare program — goals and a timeline for shifting Medicare payments from volume to value were announced by the U.S. Department of Health and Human Services. Since then, we’ve seen the reality that the transition is coming, and faster than many anticipated. Here are just a few examples:
- The 2016 Medicare physician fee schedule rewards physicians for providing high quality care, as evidenced by the creation of the home health value-based purchasing model, replacement of the SGR update formula for physician services with one that supports patient- and family-centered care, and reimbursement for advance care planning.
- The Pennsylvania Department of Health said it wants insurance companies to pay physicians and hospitals based on how effectively they treat patients and the quality of care provided, not just on the number of patients they see. Learn more.
- The Centers for Medicare and Medicaid Services (CMS) Innovation Center is testing a variety of models that build on its measurable goals and timeline to move the Medicare program, and the health care system at large, toward paying providers based on the quality, rather than the quantity of care they give patients. Some examples include:
- Bundled Payment for Care Improvement — This initiative had, as of Oct. 1, 2015, more than 1,600 hospitals, physician groups, post-acute care facilities, and other providers, including 133 in Pennsylvania, taking on the challenge of managing patients care for an entire episode of care, improving quality, and spending dollars more wisely.
- Comprehensive Primary Care Initiative and Independence at Home Demonstration —Models demonstrating the ability of redesigned primary care to improve quality and patient experience while lowering costs.
Comprehensive Care for Joint Replacement Model — A bundled payment model for hip and knee replacements for Medicare beneficiaries set to begin in April 2016 with the goal of giving hospitals a financial incentive to work with physicians, home health agencies, skilled nursing facilities, and other providers to ensure beneficiaries get the coordinated care they need.
- The Health Care Learning and Action Network (LAN) was established this year as a collaborative network of public and private stakeholders. The purpose of the LAN is to align payers and CMS in moving payment from fee-for-service (FFS) methods to FFS linked quality. The LAN will assist in setting the foundation for long-term transformation within the U.S. health care system. A draft whitepaper has been released which proposes an alternative payment model (APM) framework and delineates and describes principles upon which the APM framework is based.
- CMS’ State Innovation Models (SIM) initiative has 38 states and territories, including Pennsylvania, engaging at the state and the local level to achieve better care, smarter spending, and healthier people. In Round One of the SIM Initiative, nearly $300 million was awarded to 25 states, including Pennsylvania, to design or test innovative health care payment and service delivery models in the form of Model Design, Model Pre-Test, and Model Test grants. Pennsylvania received a grant for model design. In Round Two, the SIM initiative is providing over $660 million to 32 awardees (including 28 states, three territories, and the District of Columbia). Pennsylvania also received a model design grant in Round Two. Model Design grants were awarded to states/entities that are designing plans and strategies for statewide innovation. The Pennsylvania Medical Society has a seat on the Steering Committee which has been filled by PAMED President Scott Shapiro, MD, FACC, FCPP. Additionally, PAMED is participating on the five workgroups that have been created.
- The Pennsylvania Medicaid program in its Health Choices RFP, effective January 2017, has stressed value-based purchasing strategies for the health plans who will win the contracts. These include gain sharing contracts, risk contracts, episodes of care payments, bundled payments, use of centers of excellence, and Accountable Care Organizations. Each physical health managed care organization (PH-MCO) must enter into arrangements with providers that incorporate value-based purchasing strategies. Goals for value-based purchasing strategies are percentages of the PH-MCO ‘s expenditure of the medical portion of the capitation and maternity revenue received from the Department of Human Services. The PH-MCO must achieve the following percentages of VBP:
- Calendar year 2017 – 7.5 percent of the medical portion of the capitation and maternity care revenue must be expended through value based purchasing strategies
- Calendar year 2018 – 15 percent of the medical portion and maternity care revenue must be expended through value based purchasing strategies
- Calendar year 2019 – 30 percent of the medical portion of the capitation and maternity care revenue must be expended through value based purchasing strategies.
A recent RAND study sponsored by the American Medical Association identified several activities to enhance physician practices’ abilities to respond successfully to APMs.
- Physician practices need support and guidance to optimize the quantity and content of physician work under alternative payment models.
- Addressing physicians’ concerns about the operational details of alternative payment models could improve their effectiveness.
- To succeed in alternative payment models, physician practices need data and resources for data management and analysis.
- Harmonizing key components of alternative payment models, especially performance measures, would help physician practices respond constructively.
So, volume to value is here and spreading rapidly. How can you prepare for the transition that will take the learning of new skills sets to be successful? PAMED’s innovative CME series of six online, on-demand modules, free to PAMED members, can help. Facilitated by PAMED member and nationally respected expert Ray Fabius, MD, the courses cover important topics, including practical health informatics, using the data toolbox in your practice, quality management, process improvement, lessons learned from the managed care era, and population health. You can earn up to 1 credit of CME for each online course.