Healthcare to shift away from fee-for-service in historic overhaul

Starting in 2016, 30 percent of Medicare payments will be based on how well patients are cared for, and by 2018 that number will increase to 50 percent, according to an announcement from HHS.

The change is being made to "drive the healthcare system towards greater value-based purchasing — rather than continuing to reward volume regardless of quality of care delivered," according to CMS.

Investments in alternative payment models created under the Patient Protection and Affordable Care Act, including accountable care organizations, will help achieve HHS' overhaul goals.

HHS also seeks to have 85 percent of all traditional Medicare payments tied to quality or value by 2016 through initiatives such as the Hospital Value Based Purchasing Program and the Hospital Readmissions Reduction Program, with that number increasing to 90 percent by 2018.

"This is the first time in the history of the Medicare program that HHS has set explicit goals for alternative payment models and value-based payments," according to the HHS announcement.

The overhaul has already garnered industry support. American Medical Association President Robert Wah said the plan "aligns with the American Medical Association's commitment to work toward innovative care delivery reform that will promote high-quality and efficient care for our nation's seniors who count on Medicare, while reducing administrative and regulatory burdens physicians face today." He also said the AMA looks forward to hearing more "details behind the percentages."

To make these goals reach beyond Medicare, HHS Secretary Sylvia Mathews Burwell announced the creation of a Health Care Payment Learning and Action Network. Through the Learning and Action Network, HHS will work with private payers, employers, consumers, healthcare providers, states and state Medicaid programs to expand alternative payment models into their programs.

“Whether you are a patient, a provider, a business, a health plan, or a taxpayer, it is in our common interest to build a healthcare system that delivers better care, spends healthcare dollars more wisely and results in healthier people," said Ms.  Burwell. "Today's announcement is about improving the quality of care we receive when we are sick, while at the same time spending our healthcare dollars more wisely."

National Partnership for Women & Families President Debra L. Ness said, "Today's announcement will be remembered as a pivotal and transformative moment in making our healthcare system more patient- and family-centered."

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