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Administration Slows Shift to Value-Based Payments

The Obama Administration used the Affordable Care Act (ACA) to advance value-based payments. The current administration, however, has been making a series of regulatory changes that “slow or shrink some of these initiatives and let many doctors delay adopting the new system.”


Decreased incentives to participate in value-based care and a reduction in reimbursement under the various pay policies outlined in the rulemakings may cause some to scale back the number of Medicare patients they treat, noted a hospital executive.


Health and Human Services (HHS) has been issuing changes to mandatory payment programs, but these actions have attracted far less attention from the general public than attempts to dismantle ACA. Analysts note that the changes have the potential to affect far more people, because private insurers tend to follow what Medicare does.


The burgeoning rules have added fuel to a debate on how committed the agency is to moving from a fee-for-service system to one that focuses on value and quality.


Changes to bundled payment programs will affect more than 1,100 hospitals that were scheduled to take part in the cardiac initiative next year, and 800 hospitals that have been participating in the joint replacement programs.


While Congress passed a bipartisan law in 2015 creating a new payment framework that is supposed to reward doctors for value over volume, CMS recently finalized a rule that exempts more than 900,000 providers from having to report under the Merit-based Incentive Payment System.


Research has shown that the traditional fee-for-service model of paying doctors often results in unnecessary or inappropriate care. The federal government has been slowly moving away from it since 1983, when Medicare changed some of its payments to hospitals.


Some analysts note there has been little demand from hospitals or physicians to cancel the bundled payment program or to delay merit-based payments. In fact, “many doctors are still subject to the rules of the merit-based system, which passed with bipartisan support in Congress in 2015. Other value-based programs are continuing.”


“New rules from HHS and CMS seem to undermine statements from agency officials that they want to make Medicare less burdensome.”


“The overall theme is that the one thing hospitals have to count on is that we’re going to have significantly lower revenue in the future,” a health system executive noted.


(Sources: Trump Administration Moving To Slow Down Shift To Value-Based Payments, AHLA Member Services, November 13, 2017; “Unsure of CMS’ strategy, providers may retreat on risk models, Modern Healthcare, November 11, 2017; “Trump Health Agency Challenges Consensus on Reducing Costs,” New York Times, November 12, 2017.




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