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Medicare Hits Goal on Linking Payments to Quality Metrics Early

By Kerry Young, CQ Roll Call

March 3, 2016 -- Medicare officials estimate that almost $1 of every $3 spent in the traditional fee-for-service program now runs through one of the special projects that are designed to judge the quality of care provided to the nation’s elderly and disabled people.

The Centers for Medicare and Medicaid Services (CMS) on Thursday announced that it had reached a goal early of tying 30 percent of fee-for-service reimbursements to alternative payment models, such as so-called accountable care organizations that require providers to coordinate on patients' care. As of January, about $117 billion of a projected $380 billion in annual fee-for-service payments were estimated to fund these projects. Last year, Health and Human Services Secretary Sylvia Mathews Burwell announced a goal of tying 30 percent of fee-for-service payments to alternative payment models by the end of 2016.

The shift is among the lower-profile changes in the American medical system due in part to the 2010 health overhaul. The law gave CMS a $10 billion fund and new authority to test ways to try to shift Medicare away from a longstanding tradition of paying for services without holding providers accountable for how well they helped people preserve or regain their health.

CMS Chief Medical Officer Patrick Conway on Thursday cited the January announcement of 121 new accountable care organizations as a sign of the success of these efforts and a reason for reaching the 30 percent goal ahead of time.

CMS is seeking through these alternative payment models to change the incentives in medical care. The traditional approach rewards doctors for care that can result in needless duplication of medical tests, for example, which frustrate patients while doing nothing to improve their care. The alternative models stress a more coordinated approach to care, in which these kinds of missteps are supposed to occur less often and doctors may be more likely to detect early signs of worsening disease.

"At the end of the day, people know this is the right thing to do" Conway said on a press call about more coordinated care.

The estimates unveiled Thursday were evaluated by CMS’ Office of the Actuary and found to be sound and reasonable. Before the implementation of the 2010 health law, Medicare paid essentially nothing through alternative payment models, CMS said. By 2014, about 20 percent of payments were made through alternative payment models.

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