The Future of Value-Based Purchasing: Congress to Steer Away from Medicare Fee-for-Service

Posted on Tuesday, January 31, 2017 1:16 PM

Among the healthcare leaders, providers and insurers are pushing Congress and the Trump administration to advance Medicare into value-based payment models.

Several healthcare organizations have sent letters to Republican lawmakers praising the benefits of payment models that focus on quality and value.

“We’re looking for a signal from incoming policymakers that they continue to support (these models) and the investments being made in the private sector,” said Jeff Micklos, Executive Director of the Health Care Transformation Task Force, a consortium of providers, payers, purchasers and others that have committed to putting 75% of their business in alternative pay models by 2020.

According to estimates by the America Medical Group Association, adopting value-based payment models such as accountable care organizations can cost anywhere from millions for many moderately sized physicians’ practices to billions for major healthcare systems.

President Donald Trump hasn’t spoken in regards to whether or not he supports or opposes moving away from fee-for-service. However, U.S. Rep. Tom Price supports has been very critical of the Center for Medicare & Medicaid Innovation.

The Innovation Center was instrumental in the Obama administration’s goal of tying 30% of traditional, or fee-for-service, Medicare payments to quality or value through alternative payment models. The goal was to hit 50% by the end of 2018.

During Tuesday’s Senate confirmation hearing, Price said the Innovation Center had “gotten off track.” He and other Republicans said the mandatory nature of some of the pilot programs was “dictating to physicians how they must practice.” Additionally, he explained that the center, which was created under the Affordable Care Act, should shift their focus to benefit patients.

The healthcare coalition wrote Congress and included the following requests in the letter:
• Require federal and commercial payers to share claims data with healthcare providers
• Increased use of safe-harbor waivers
• Exemptions to protect hospitals from unintentionally violating anti-kickback laws when providers collaborate on value-based pay initiatives

There has been less interest in alternative pay models due to the widespread fear of penalties, felony conviction, or exclusion from Medicaid and Medicare. In order to have more flexibility to anti-kickback laws, Congress would have to intervene.

Due to the complexity of the laws, there have been several congressional committee hearings to discuss possible changes.

“A key message we’re sending is continue to incentivize providers to enter into these kind of systems,” Freeman said.

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