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    Payment reform shifts to high gear

    Public, private sectors commit to historic industry changes


    After several years of uneven progress, the pace of healthcare payment reform shifted into high gear in January when the U.S Department of Health and Human Services (HHS) announced plans to tie 30% of traditional, or fee-for-service, Medicare payments to quality or value alternative payment models by the end of 2016, and 50% by the end of 2018. 

    Payment reform goalsWith the idea of volume to value reimbursement now an expectation, HHS quickly followed up with plans to help the healthcare community achieve the goal, starting with the formation of the Health Care Payment Learning and Action Network.

    On the 5th anniversary of the Affordable Care Act (ACA), Network members met for the first time in Washington D.C. to begin their work. Payers, providers, employers, consumers and non-profit leaders listened as a steady stream of government figures framed the challenge.

    “For years, we’ve felt the effects of a healthcare system that…incentivizes the quantity of tests over quality of care, that prioritizes volume over value, that addresses conditions…instead of patients,” said HHS Secretary Sylvia M. Burwell.

    “After countless internal and external conversations looking at the data of what works [and] where the evidence will drive us, we determined that to get to a better care model…we would need to change the way that we pay providers,” said Karen B. DeSalvo, M.D., M.P.H., MSc., acting assistant secretary for HHS.

    Related: HHS announces historic changes to Medicare

    “The alignment on alternative payment models such as ACOs (accountable care organizations) or bundled payments or advance primary care is critical to moving our nation forward,“ said Patrick Conway, M.D., MSc., chief medical officer of the U.S. Centers for Medicare and Medicaid Services (CMS).

    Finally, President Obama himself took the stage, recalling a main goal of the law that‘s taken a back seat to the uninsurance rate. “A lot of the attention has been rightly focused on people’s access to care, and that obviously was a huge motivator to us passing the Affordable Care Act…but what was also a central notion of the Affordable Care Act was that we had an inefficient system with a lot of waste...” said President Obama. “We don’t want the incentives to be skewed so that providers feel obliged to do more tests, we want them to do the right tests.”

    While there’s long been discussion about payment reform, this latest effort represents a level of consensus and collaboration not before seen. The Network’s 2,800 members include seven of 10 of the county’s largest private payers. “If you put up CMS and the amount of people we insure plus these private payers, we already represent the majority of the American population,” said Conway. “We are going to lead and catalyze from the public sector, but the public/private partnership here is critical and essential.”


    NEXT: Raising the bar


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