Of the $360 billion in payments Medicare made to providers in 2013, 58% continued to flow through traditional fee-for-service models with no regard for quality or outcomes, according to a new analysis by the employer-backed Catalyst for Payment Reform.
HHS recently announced ambitious targets to accelerate the government's move to value-based models, such as accountable care organizations and bundled payments.
Tuesday's report is Catalyst for Payment Reform's first look specifically at Medicare. It establishes a reference point for measuring implementation of federal payment reforms and indicates the Medicare program is evolving to better meet the needs of beneficiaries, the organization said in a news release.
“Our collective challenge going forward will be to gauge not just how quickly payment reform progresses, but also how effectively it helps to improve the quality and value of care for the over 50 million Americans insured by the Medicare program,” CPR Executive Director Suzanne Delbanco said.
The organization's report comes as a consensus is emerging that the industry is moving—and should move—rapidly away from fee-for-service payments as the dominant way of paying for healthcare services. A survey of 55 healthcare leaders participating in Modern Healthcare's CEO Power Panel indicated broad support for the movement.
Of the percentage Medicare paid in new models, 32.8% was under the Hospital Value-Based Purchasing and End-Stage Renal Disease Quality Incentive programs. Another 11.8% flowed through the Medicare Shared Savings Program for ACOs. About 1.9% flowed through the CMS Innovation Center's Pioneer ACO model, in which participants assume financial risk for their performance on cost and quality targets.
The CMS announced Monday that the Pioneer program generated $384 million in savings in its first two years. Many of the original participants have dropped out of the program because they struggled to thrive under the framework. The agency said Monday, though, that its actuary concluded the program has met the Affordable Care Act's criteria to be expanded to a larger number of Medicare beneficiaries.
Catalyst for Payment Reform represents large public- and private-sector employers and healthcare purchasers. Members include, for example, Boeing, Home Depot and public-employee retirement systems in California and Ohio. The organizations share the desire for “quality healthcare for their employees at more affordable prices,” spokeswoman Nicole Kohleriter-Perelman said ahead of the report's release.
CPR has also issued commercial-sector scorecards for the past two years, which showed a 30% jump in the portion of value-based payments by private payers between 2013 and 2014.
On Friday, a review was released looking at value-based payments by commercial insurers and Medicaid in New York State. That report found 94% of commercial payments and 72% of Medicaid payments in that state are still fee-for-service.
