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Yesterday the Secretary of the Department of Health and Human Services (HHS) formally announced HHS' intention to shift 90% of all traditional Medicare payments from fee-for-service (FFS) to quality or value-based payments by 2018. The secretary announced that HHS' goal is to have 30% of traditional FFS payments tied to quality or value in 2016, increasing to 50% by 2018, through alternative payment models such as reimbursement through Accountable Care Organizations (ACOs) and bundled payment arrangements.
The Secretary also announced creation of a Health Care Payment Learning and Action Network through which HHS will work with private payers, employers, consumers, providers, and states to develop and expand alternative payment models. An HHS press release regarding the Secretary's announcements can be viewed here.
While HHS' desire to shift to outcomes-based reimbursement is nothing new, the Secretary's announcements yesterday should signify to physicians and other healthcare providers that these payment models are likely to proliferate and as a result, pressure on providers to adapt to them can be expected to intensify. From a provider perspective, this is likely to mean that efforts to integrate through network formation, employment and the like will continue and networks may become more aggressive in their efforts to lock up eligible providers.
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