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HHS Head Plans to Get Aggressive with Value-Based Payments

The head of the U.S. Health and Human Services (HHS) said recently that the department will aggressively push to implement value-based payment, extending beyond ACOs and bundled payment initiatives.


“ . . . we want to look at bold measures that will fundamentally reorient how Medicare and Medicaid pay for care and create a true competitive playing field where value is rewarded handsomely,” said HHS Secretary Alex Azar II at a recent meeting of hospital executives. (“Azar: Time to Move Value-Based Payment Beyond ACOs, Bundles,” HFMA Weekly, March 7, 2018)


He said he plans to use the Center for Medicare and Medicaid Innovation and MACRA to experiment with new payment models.


Keys to Transformation


Azar outlined four “engines of transformation.” The first, as noted above, involves revamping federal value-based payment programs.


The second engine of transformation involves reducing government rules and regulations that inhibit integration and collaboration. Examples of regulations include:

  • Medicare and Medicaid price-reporting rules
  • FDA communication policies that hinder innovative pharmaceutical company and payer collaboration
  • Anti-fraud protections that impede useful coordination and integration of services


Another engine of transformation involves giving consumers greater control over health information through interoperable and accessible health IT, giving patients control of their records in a useful format and giving them the means to bring their records to a new provider.


Finally, he wants to encourage transparency from providers and payers. Azar said he would begin by encouraging the healthcare industry to find solutions and would “lay out more powerful incentives if it doesn’t.”


Consumer Focus


The key theme uniting the Secretary’s four priorities was that value will be determined by “a marketplace of many players” and not by “arbitrary authorities or central planners.” (“Azar: Time to Move Value-Based Payment Beyond ACOs, Bundles,” HFMA Weekly, March 7, 2018)


He wants a consumer-centric approach and argues that this will make transformation easier, but not painless. The reorientation toward consumers will potentially require “uncomfortable” federal intervention because facilitating a competitive, value-based marketplace “is going to be disruptive to existing actors, he said.” (“Azar: Time to Move Value-Based Payment Beyond ACOs, Bundles,” HFMA Weekly, March 7, 2018)




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