WASHINGTON -- By 2016, the Department of Health and Human Services (HHS) is aiming to have 85% of provider payments under Medicare's fee-for-service system based on the quality or value of care rather than volume, the agency announced Monday.
The announcement came in a meeting with "with nearly two dozen leaders representing consumers, insurers, providers, and business leaders," according to an agency . HHS is hoping to have 90% of the payments based on value or quality by 2018, the release said, noting that the payments would be made through programs such as the Hospital Value Based Purchasing Program and the Hospital Readmissions Reduction Program.
In addition, by the end of 2016, the agency hopes to be making 30% of its payments through alternative payment models like accountable care organizations (ACOs) -- affiliations of doctors, hospitals, and other providers that jointly care for Medicare patients -- upping that percentage to 50% by the end of 2018. This is the first time the agency has announced specific goals for these types of payments, which currently represent 20% of Medicare's $362 billion in fee-for-service payments.
HHS has already shown savings of $417 million to Medicare from existing ACO programs, the release noted.
"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," said HHS Secretary . "We believe these goals can drive transformative change, help us manage and track progress, and create accountability for measurable improvement."
HHS also announced the creation of the "Health Care Payment Learning and Action Network" to help spread its reimbursement ideas beyond Medicare.
"Through the Learning and Action 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," the release said. "HHS will intensify its work with states and private payers to support adoption of alternative payment models through their own aligned work, sometimes even exceeding the goals set for Medicare."
The first meeting of the network will be in March, with more details to come, according to the agency.
The announcement included comments from several provider and payer groups. "We're on board, and we're committed to changing how we pay for and deliver care to achieve better health," said , executive vice president and chief executive officer of the American Academy of Family Physicians.
"Advancing a patient-centered health system requires a fundamental transformation in how we pay for and deliver care. Today's announcement by Secretary Burwell is a major step forward in achieving that goal," said , president and CEO of America's Health Insurance Plans, an industry trade group.
There were no comments in the release from CMS administrator , who announced her resignation Jan. 16, effective at the end of February.
The American Medical Association (AMA) praised the HHS action. "Today's announcement by [HHS] 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 the administrative and regulatory burdens physicians face today," AMA president , said in a statement. "We look forward to participating in the Learning and Action Network and working collaboratively to achieve the goals of improving healthcare delivery."
The goals announced by HHS seem ambitious but realistic "given the groundwork HHS has already laid for value-based payment," , vice-president for payment and delivery reform at Avalere Health, a consulting firm here, said in an email to MedPage Today. "They also provide a business case for providers to embrace other HHS priorities, such as true meaningful use of health [information technology]."
On the question of whether switching to these payment mechanisms will mean lower reimbursement for physicians, Seidman noted that "Real wages for physicians have been decreasing for years. This is more about how they will be paid in the future."
"Over time, physicians will need to perform on quality metrics -- just as hospitals and health plans do -- to see favorable compensation."