PAYMENT REFORM | ||
Provision | Status | Impact to Date |
Hospital Readmissions Reduction Program
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Hospital-Acquired Conditions Reduction Program With this provision, the Affordable Care Act (ACA) aims to strengthen the Hospital-Acquired Conditions (HAC) Program that predated the passage of the ACA. In FY 2015, hospitals that rank in the lowest-performing quartile of HACs, based on data collected two years prior, will be paid 99% of the payment that would otherwise apply (i.e., would be subject to a 1% payment reduction). This HAC Reduction Program adjustment will be applied after adjustments are made under the Hospital Value-Based Purchasing (VBP) Program and the Readmissions Reduction Program. The HAC Reduction Program is separate from and in addition to the HAC Program, which withholds payments to hospitals for select conditions not present upon admission to the hospital. |
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Hospital Value-Based Purchasing Program
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Physician Value-Based Payment Program
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Bundled Payments for Care Improvement (BPCI) Initiative Tests bundled payment in the Medicare program, which means a single payment is made for an episode of care (e.g., a set of services delivered by designated providers in specified health care settings, usually delivered within a certain period of time and related to treating a patient’s medical condition or surgical procedure). The goal of this three-year initiative is to encourage hospitals and physicians to work together to coordinate care, improve care transitions and reduce unnecessary re-hospitalizations. |
There are four types of bundled payment arrangements:
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Reductions in Growth to Medicare Payment Rates for Certain Services The payment rates that Medicare reimburse providers in the FFS program are determined by formulas specified by law. The ACA applies downward adjustments to the payment rate update for certain providers. These provisions include the “productivity adjustments,” which are permanent and apply to all providers except physicians. The productivity adjustments reduce default year-over-year price updates to account for economy-wide productivity growth. In addition the ACA called for specific reductions in payment rate updates for certain providers in certain years. For example, hospital payment rates are to be reduced by 0.1 percentage points to 0.75 percentage points from 2010 to 2019. These reductions are in addition to the productivity adjustments. |
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Reductions in Payment to Medicare Advantage Plans The ACA modified the methodology for calculating benchmarks to reduce the gap in payment between Medicare Advantage (MA) and traditional Medicare. Additionally, the law provided financial incentives for plans to improve their quality. These include new quality incentive payments beginning in 2012 for plans with quality ratings of 4 or more stars on a 5-star system. |
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CHANGES IN ORGANIZATION OF HEALTH CARE DELIVERY | ||
Provision | Status | Impact to Date |
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Medicare Shared Savings Program (MSSP) Established in 2012 as a new provider category, the Medicare Shared Savings Program targets FFS Medicare providers to become ACOs. If MSSP ACOs meet predetermined quality thresholds and achieve savings below budgeted targets, the provider network shares the savings 50-50 with Medicare. To obtain 60% share of the savings, MSSP ACOs must also agree to share in excess costs if spending exceeds budget targets. |
There are 405 Medicare ACOs in the MSSP program serving 7.2 million Medicare beneficiaries (14% of the Medicare population). |
Year 1 results show:
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Pioneer ACOs The Pioneer ACO program is a Center for Medicare and Medicaid Innovation (CMMI) initiative that can inform refinements to MSSP. Pioneer ACOs engage in payment arrangements with Medicare with higher levels of risk and reward, as well as test alternative design elements (e.g., patient attribution). |
The Pioneer ACO is entering its third performance year with 19 organizations. The program started with 32 participants. Of the 13 that have left the program, 11 applied to participate in the MSSP program and 2 declined to continue as ACOs. |
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Advance Payment ACOs This model tests whether advance payments will assist participation in the Medicare ACO programs for physician-led (i.e., do not include inpatient facilities and have more than $50 million in total annual revenue) and rural organizations (mainly hospital systems) with limited access to start-up capital. These models can be characterized as “prepaid shared savings” models. As a second iteration of this program, CMS has developed the ACO Investment Model. Through this model, CMS will invest up to $114 million in infrastructure and redesigned care processes at up to 75 MSSP participants, also aimed at small and rural providers. This program not only will help new participants to participate, but also will enable ongoing participants to move toward higher-risk models. |
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Next Generation ACO On March 10, 2015, CMS announced the Next Generation Model ACO, which is aimed at attracting organizations experienced with coordinating care for populations of patients. |
What distinguishes the Next Generation ACO from the Pioneer and MSSP programs is that the model offers financial arrangements with higher levels of risk and reward. Selected organizations will also be offered a variety of payment arrangements to help them gradually transition away from FFS reimbursement toward capitation. There is also a greater emphasis on beneficiary incentives than in the other programs (e.g., patients receive reward payments for obtaining care from an ACO, greater access to telehealth). The ACO must have a minimum of 10,000 beneficiaries to apply. |
CMS is accepting two waves of applications—June 1, 2015, and June 1, 2016. |
Primary Care Transformation Through Implementation of Medical Homes | ||
Comprehensive Primary Care Initiative (CPC) This four-year, multi-payer initiative is testing a new delivery and payment model to promote better access, care coordination, chronic disease management, and new ways to engage patients and caregivers. To help participating practices, CPC offers enhanced payment ($20 per-member per-month [PMPM] with an option for shared savings in Years 3 and 4), technical assistance, and ongoing data about practice performance. |
The initiative involves 30 payers (including CMS) and 492 providers serving 2.5 million patients in seven markets: Arkansas; Colorado; New Jersey; Capital District-Hudson Valley Region of New York; Cincinnati–Dayton Region of Ohio and Kentucky; Tulsa, Oklahoma; and Oregon. |
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Multi-Payer Advanced Primary Care Practice Demonstration This is a multi-payer initiative where Medicare joined state-sponsored pilots involving Medicaid and private payers. All payers are providing a PMPM fee to help support primary care sites provide care aligned with the medical home model. |
Participants:
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Federally Qualified Health Center (FQHC) Advanced Primary Care Practice Demonstration Provides $6.00 PMPM for eligible Medicare beneficiaries served by community health centers for three years to promote FQHCs to become recognized by the National Committee for Quality Assurance (NCQA) as patient-centered medical homes. |
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Independence at Home Demonstration The Innovation Center is supporting medical practices to test the effectiveness of delivering team-based comprehensive primary care services at home to high-need Medicare beneficiaries. The three-year demonstration will reward health care providers that demonstrate improvements in quality of care while reducing costs. |
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Other Provisions Related to Primary Care Transformation | ||
Health Homes Health homes target low-income patients with complex needs, such as chronic conditions or mental health or substance abuse problems. Under this optional new benefit, state Medicaid programs can designate certain providers to serve as health homes. Building on the patient-centered medical home, health homes integrate physical and behavioral health care (both mental health and substance abuse) and long-term services and supports for high-need, high-cost patients. The federal government pays 90% of the costs of these additional services for two years with the expectation that the state will sustain the program. |
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Community-Based Care Transitions Program
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Medicaid Incentives for the Prevention of Chronic Diseases Model
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WORKFORCE POLICY | ||
Provision | Status | Impact to Date |
National Health Service Corps National Health Service Corp (NHSC) resources are used to recruit primary care providers to serve underserved areas or populations through reduction or elimination of student debt. The Affordable Care Act increased the award amount available to NHSC members by creating the mandatory NHSC Fund. |
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National Health Care Workforce Commission Commission of experts to review, assess, and report to Congress on variety of issues including workforce supply and distribution, education and training capacity, and implications of federal policies impacting the health care workforce. |
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Medicare Primary Care Incentive Program A quarterly incentive payment program to augment Medicare payment for primary care services when furnished by primary care practitioners, beginning in 2011 and ending in 2015.
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Increased Medicaid Payment for Primary Care
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Teaching Health Centers The ACA incentivizes the development and expansion of teaching health centers that operate a primary care residency program through this $230 million, five-year initiative. |
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Distribution of Additional Residency Positions This program redistributes unused Medicare resident slots to hospitals meeting certain criteria. |
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WORKFORCE POLICY | ||
Provision | Status | Impact to Date |
Center for Medicare and Medicaid Innovation (CMMI) Established to identify and evaluate new payment and service delivery models for Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP) while enhancing quality of care for beneficiaries. HHS Secretary authorized to expand successful innovations if they reduce costs and/or improve outcomes. |
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State Innovation Models Initiative (part of CMMI) Provides federal dollars and technical assistance for health system transformation efforts to help states partner with private payers to achieve better health care outcomes at lower costs. |
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Medicaid Innovation Accelerator Program (part of CMMI) New technical assistance program launched by CMS in July 2014 to support states in accelerating payment and delivery system reforms for Medicaid beneficiaries. |
The first four issues CMCS has decided to address through the Innovation Accelerator Program (IAP) are: substance use disorders, super utilizers of health care services, community integration to support long-term services and supports, and physical/mental health integration. |
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Patient-Centered Outcomes Research Institute (PCORI) Public-private partnership created to encourage research on diagnosis and treatment options and to accelerate patient-centered outcomes research and methodological research. |
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Medicare-Medicaid Coordination Office Created to increase coordination between Medicare and Medicaid for the 9.6 million low-income, aged, and disabled beneficiaries who are eligible for both programs and who account for a disproportionate share of spending in the two programs. |
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National Strategy for Quality Improvement in Health Care (NQS) Led by the Agency for Healthcare Research and Quality and designed to align quality improvement efforts across multiple federal agencies, state agencies, local entities, and the private sector. Guided by three aims to provide better, more affordable care to create healthy people and healthy communities. To achieve these aims, the NQS applies six priorities that address the range of quality concerns that affect most Americans. |
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Prevention and Public Health Fund Established to provide sustained national investment in prevention and public health to improve health outcomes and health care quality. Major investments support diabetes prevention, immunization programs, tobacco use prevention, heart disease and stroke prevention, and the Community Transformation Grants. |
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Community Transformation Grants Grants to local government and community-based organizations for evidence-based preventive programs to promote health and reduce health disparities. |
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2. | Boccuti C, Casillas G. Aiming for fewer hospital U-turns: The Medicare hospital readmission reduction program. Washington, D.C.: Kaiser Family Foundation, 2015. |
3. | Geographic Variation Public Use File. Washington, D.C.: Centers for Medicare and Medicaid Services, February 2015. |
4. | Brennan N. Findings from recent CMS research on Medicare. Baltimore, Md.: Centers for Medicare and Medicaid Services, 2014. |
5. | Agency for Healthcare Research and Quality. Interim update on 2013 annual hospital-acquired condition rate and estimates of cost savings and deaths averted from 2010 to 2013. Rockville, Md.: AHRQ, 2014. |
6. | Centers for Medicare and Medicaid Services. FY 2015 final rule tables. Baltimore, Md.: CMS, 2014 (accessed March 16, 2015, at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/FY2015-IPPS-Final-Rule-Home-Page-Items/FY2015-Final-Rule-Tables.html?DLPage=1&DLSort=0&DLSortDir=ascending). |
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11. | Centers for Medicare and Medicaid Services. Bundled payments for care improvement initiative fact sheet. Baltimore, Md.: CMS, 2014. |
12. | Ibid. |
13. | Centers for Medicare and Medicaid Services. CMS innovation center model participants dataset. Baltimore, Md.: CMS, no date (accessed March 16, 2015, at https://data.cms.gov/dataset/BPCI-Initiative-Filtered-View/e5a5-c768). |
14. | Dummit L, Marrufo G, Marshall J, et al. CMS bundled payments for care improvement (BPCI) initiative models 2–4: Year 1 evaluation and monitoring report. Falls Church, Va.: The Lewin Group, 2015. |
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16. | Ibid. |
17. | Office of the Assistant Secretary for Planning and Evaluation. The Medicare Advantage program in 2014. Washington, D.C.: ASPE, 2014. |
18. | Ibid. |
19. | Cavanaugh, S. ACOs moving ahead. Washington, D.C.: CMS, 2014 (accessed March 15, 2015, at http://blog.cms.gov/2014/12/22/acos-moving-ahead/). |
20. | Centers for Medicare and Medicaid Services. Medicare ACOs continue to succeed in improving care, lowering cost growth. Baltimore, Md.: CMS, Nov. 2014. |
21. | McClellan M, Kocot SL, White R. Early evidence on Medicare ACOs and next steps for the Medicare ACO program. Bethesda, Md.: Health Affairs Blog, 2015 (accessed March 16, 2015, at http://healthaffairs.org/blog/2015/01/22/early-evidence-on-medicare-acos-and-next-steps-for-the-medicare-aco-program/). |
22. | Centers for Medicare and Medicaid Services. Fact sheets: Medicare ACOs continue to succeed in improving care, lowering cost growth. Baltimore, Md.: CMS, Sept. 2014. |
23. | McWilliams JM, Landon BE, Chernew ME, Zaslavsky AM. Changes in patients’ experiences in Medicare accountable care organizations. N Engl J Med 2014; 371:1715–24. |
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25. | Centers for Medicare and Medicaid Services. Medicare shared savings program accountable care organizations performance year 1 results. Baltimore, Md.: CMS, 2014 (accessed March 16, 2015, at https://data.cms.gov/ACO/Medicare-Shared-Savings-Program-Accountable-Care-O/yuq5-65xt). |
26. | Conway, P. Building on the success of the ACO model. Washington, D.C.: CMS, 2015 (accessed March 15, 2015, at http://blog.cms.gov/2015/03/10/building-on-the-success-of-the-aco-model/). |
27. | Taylor E, Dale S, Peikes D, et al. Evaluation of the Comprehensive Primary Care Initiative: First annual report. Princeton, N.J.: Mathematica Policy Research, 2015. |
28. | McCall N, Haber S, Van Hasselt M, et al. Evaluation of the Multi-Payer Advanced Primary Care Practice demonstration: First annual report. Research Triangle Park, N.C.: RTI International, 2015. |
29. | Centers for Medicare and Medicaid Services. Report to Congress. Baltimore, Md.: CMS, 2014. |
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31. | Centers for Medicare and Medicaid Services. Community-based care transitions program. Baltimore, Md.: CMS, no date (accessed March 16, 2015, at http://innovation.cms.gov/initiatives/CCTP/). |
32. | Econometrica, Inc. Evaluation of the community-based care transitions program. Bethesda, Md.: Econometrica, 2014. |
33. | Van Vleet A, Rudowitz R. An overview of Medicaid incentives for the prevention of chronic disease (MIPCD) grants. Washington, D.C.: Kaiser Family Foundation, 2014. |
34. | Sebelius, K. Initial report to Congress: Medicaid incentives for prevention of chronic diseases evaluation. Washington, D.C.: U.S. Department of Health and Human Services, 2013. |
35. | Wakefield M. National Health Service Corps strengthens primary care workforce. Washington, D.C.: HHS, 2014 (accessed March 15, 2015, at http://www.hhs.gov/blog/2014/10/national-health-service-corps-strengthens-primary-care-workforce.html). |
36. | Health Resources and Services Administration. Affordable Care Act helps National Health Service Corps increase access to primary care. Rockville, Md.: HRSA, 2013. |
37. | Centers for Medicare and Medicaid Services. Medicare PCIP payments for 2012 are over $664 million. Baltimore, Md.: CMS, 2013. |
38. | Centers for Medicare and Medicaid Services. Medicare PCIP payments for 2011 will exceed $560 million. Baltimore, Md.: CMS, 2012. |
39. | Medicare Payment Advisory Commission. Report to Congress: Medicare payment policy. Washington, D.C.: MedPAC, 2015. |
40. | Snyder L, Paradise J, Rudowitz R. The ACA primary care increase: State plans for SFY 2015. Washington, D.C.: Kaiser Family Foundation, 2014. |
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42. | Polsky D, Richards M, Basseyn S, et al. Appointment availability after increases in Medicaid payments for primary care. N Engl J Med 2015; 372:537–45. |
43. | Health Resources and Services Administration. Teaching health center graduate medical education (THCGME). Rockville, Md.: no date (accessed March 16, 2015, at http://bhpr.hrsa.gov/grants/teachinghealthcenters/). |
44. | Centers for Medicare and Medicaid Services. Section 5503 cap decreases and increases. Baltimore, Md.: CMS, 2011 (accessed March 16, 2015, at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/DGME.html). |
45. | Centers for Medicare and Medicaid Services. CMS Innovation Center: Report to Congress. Baltimore, Md.: CMS, 2014. |
46. | Centers for Medicare and Medicaid Services. State innovation models initiative: General information. Baltimore, Md.: CMS, no date (accessed March 16, 2015, at http://innovation.cms.gov/initiatives/State-Innovations/). |
47. | National Association of Medicaid Directors. Perspectives on innovation: A state Medicaid approach to evaluation. Washington, D.C.: NAMD, 2015. |
48. | Oregon Health Authority. Oregon’s health system transformation: 2013 performance report. Salem, Ore.: 2014. |
49. | Llanos, K. CMS commentary. Baltimore, Md.: CMS, Dec. 2014 (accessed March 16, 2015, at http://medicaid.gov/state-resource-center/innovation-accelerator-program/iap-commentary/cms-commentary.html). |
50. | Patient-Centered Outcomes Research Institute. About PCORI fact sheet. Washington, D.C.: PCORI, 2015. |
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53. | National Association of County & City Health Officials, Public health and prevention provisions of the Affordable Care Act. Washington, D.C.: NACCHO, 2013. |
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55. | Ibid. |