“Value-Based” Medicare Reimbursement Plan Wins Broad Support

A plan to tie Medicare reimbursements to patient outcomes rather than services rendered earned praise from a variety of medical groups. But at least one organization suggested that the move creates disincentives for doctors to help the sick.

The U.S. Department of Health and Human Services wants to get medical facilities out of the fee-for-service mindset when it comes to Medicare.

Last week, HHS announced a “historic” effort to shift its Medicare reimbursements to a “value-based” system from the current one that pays based on the volume of services that doctors and hospitals provide to patients.

“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,” HHS Secretary Sylvia Burwell said in a news release. She added that the goal of the plan is “improving the quality of care we receive when we are sick, while at the same time spending our healthcare dollars more wisely.”

The plan would shift many of the agency’s Medicare reimbursements to new payment systems enabled by the Affordable Care Act, such as accountable care organizations, in which groups of healthcare providers have financial incentives to work together to coordinate care, reduce unnecessary procedures, and control costs, according to HHS.

Medical Groups Largely Approve

The American Medical Association praised the plan, saying that changing payment structures will benefit both patients and healthcare providers.

“Physicians have many ideas for redesigning and improving the delivery of high-quality patient care in this country,” AMA President Robert M. Wah said. “We strongly support reform of the Medicare payment system, including elimination of Medicare’s flawed sustainable growth rate formula, which provides a pathway for physicians to innovate and develop new models of healthcare delivery for our patients.”

And the American Hospital Association said that the changes announced by HHS are similar to ones the hospital industry was already putting in place. AHA Executive Vice President Rick Pollack said, “We encourage the administration to fully evaluate and improve on the delivery system reforms currently in place to ensure that we are learning from the pilot and demonstration projects to best meet patient needs.”

Last week’s HHS meeting, where the plan was announced, also included officials from AARP, America’s Health Insurance Plans, and the Blue Cross Blue Shield Association, among others.

An opposing Voice

But the Association of American Physicians and Surgeons raised concern that the plan could create incentives for doctors to avoid treating sick patients.

“While everybody else gets paid for performing a certain task or working a certain number of hours, doctors are to be paid—or not paid—based on health outcomes or achievement of as-yet-undefined quality metrics,” AAPS Executive Director Jane Orient said in a statement. “Health outcomes are largely outside the doctor’s control. Complicated patients or those who choose an unhealthy lifestyle will be money losers for doctors.”

AAPS differs from many other medical associations in that it generally opposes government involvement in healthcare. In its ethics code, it urges members not to take part in the Medicare program, saying that it “recommends a policy of non-participation to all physicians as the only legal, moral, and ethical means of concretely expressing their complete disapproval of the spirit and philosophy” behind the Medicare law.

Ernie Smith

By Ernie Smith

Ernie Smith is a former senior editor for Associations Now. MORE

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