Goals and Timeline for Transitioning Medicare Reimbursement from Volume to Value

For the first time in the history of the Medicare program, on Jan. 26, 2015, the U.S. Department of Health and Human services announced goals and a timeline to shift Medicare reimbursement toward paying providers based on quality of the care they give their patients, rather than quantity.

The goals include tying:

  • 30 percent of traditional (fee-for-service) Medicare reimbursement to quality/value through alternative payment models, such as Accountable Care Organizations (ACOs) or bundled payment arrangements by the end of 2016, and 50 percent through 2018.
  • 85 percent of all traditional Medicare payments to quality/value by 2016, and 90 percent by 2018, through programs such as the Hospital Value Based Purchasing and the Hospital Readmission Reduction Programs.

“Are the goals realistic? Time will tell,” Dennis Olmstead, chief strategy officer and medical economist for the Pennsylvania Medical Society (PAMED), told the Central Penn Business Journal.

He also said the provider community is supportive of these things, but it’s important to put “realistic” expectations on these reforms, given all the other mandates providers are facing today.

“People have to understand that many of these skills that providers and physicians will need in the future aren’t things they may have been trained in,” he said. “They are learning how to look at risk, obtaining the necessary information technology structure that you need and gaining analytical skills. It all takes money and time while they are trying to see patients, operate their practice and keep up with clinical changes in medicine.”

In the release, HHS Secretary Sylvia Burwell also announced the creation of a Health Care Payment Learning and Action Network, through which HHS will work with private payers, employers, consumers, providers, states and state Medicaid programs, and other partners to expand alternative payment models into their programs.

How can I prepare and be ahead of the curve?

To succeed in value-based delivery will take investments of your time, energy, money, and the learning of new skill sets. Through a CME series of six online, on-demand courses, free to PAMED members, help ensure you have the skills necessary to succeed in the transition from volume to value. This series is facilitated by PAMED member Ray Fabius, MD, a nationally respected expert in quality and population health. Learn more and access the courses.