HHS: Medicare payments to be tied to quality, not quantity

The U.S. Department of Health and Human Services announced this week that future Medicare payments will be linked to quality and not quantity.

This is the first time the federal agency has set specific goals designed to move away from plans that reward providers for the amount of care they provide instead of the quality of care they provide.

In making this week’s announcement, HHS Secretary Sylvia Burwell said the goal will be to tie 30 percent of traditional, or fee-for-service, Medicare payments to quality or value through alternative payment models such as the Accountable Care Organizations or bundled payment arrangements by the end of next year, and tying 50 percent of payments to these models by the end of 2018.

HHS also set a goal of tying 85 percent of all traditional Medicare payments to quality or value by 2016 and 90 percent by 2018 through programs such as the Hospital Value Based Purchasing and the Hospital Readmissions Reduction Programs.

What does this mean for healthcare providers? It means they will be more accountable for the quality and the cost of care instead of “the more you do, the more you get paid,†model says Burwell.

The ultimate goal, according to HHS, is to make sure that patient care is better coordinated and patients get the appropriate treatment and medications.

Burwell also announced the creation of a Health Care Payment Learning and Action Network. Through this network, 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.

This is just one of many initiatives that providers can expect to see from the federal government as a result of the Affordable Care Act. How it will impact providers’ bottom lines remains to be seen. One thing is clear: The changes to how providers will be compensated will likely be felt across the board.

Initiatives such as these are just another step in the transformation of the healthcare reimbursement model as we know it today.

Click here to read the full announcement.