HHS Announces Goals and Timeline for Expanding New Medicare Payment Models

Speaking to key healthcare industry stakeholders on Tuesday, Jan. 26, HHS Secretary Sylvia M. Burwell announced an ambitious plan to shift Medicare away from the fee-for-service payment model toward payment based on quality, value and cost-containment. New payment models created by the Affordable Care Act that link healthcare provider payments to the quality and cost of care, including Accountable Care Organizations (ACOs), primary care medical homes and bundled payment models, will serve as a catalyst for this transformation.    

Leveraging experienced and knowledge gained through programs authorized under the Affordable Care Act, HHS seeks to drive toward value through three mechanisms:

  • Payment Incentives -- Setting ambitious, but achievable goals for the adoption of these new payment models, HHS expects that health care providers can move with greater certainty towards these approaches, with proven benefits for patients and families. 
  • Care Delivery – Supporting providers to find new ways to coordinate and integrate care, will focus on improving the health of communities – with a priority on prevention and wellness.
  • Information Sharing – Improving the way information is distributed and working to create more transparency on the cost and quality of care to bring electronic health information to inform care, and to bring the most recent scientific evidence to the point of care so we can bolster clinical decision-making.

These goals include tying:

  • 30 percent of traditional, or fee-for-service, Medicare payments to quality or value through alternative payment models, such as Accountable Care Organizations (ACOs) or bundled payment arrangements by the end of 2016; 
  • 50 percent of payments to these models by the end of 2018; and
  • 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.

In addition, the creation of a Health Care Payment Learning and Action Network was announced where HHS “will intensify its work with states and private payers to support adoption of alternative payments models through their own aligned work, sometimes even exceeding the goals set for Medicare. The Network will hold its first meeting in March 2015.

In her announcement Burwell stated that, “We believe these goals can drive transformative change, help us manage and track progress, and create accountability for measureable improvement.”  Moving forward, health IT will play an integral role in providing healthcare data to track these efforts, achieve quality outcomes and control costs.  It is important to recognize the critical role that interoperability and health IT standards will play to achieve these goals, ensuring that data is available at the point of care and is in alignment with payment policies.


Additional information:


Medicare Payment Models