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Value-based models gain traction

March 04, 2016

According to the Department of Health and Human Services (HHS), an estimated 30% of Medicare payments are now tied to value-based payment models, ahead of the goal HHS had set for itself. In January 2015, the administration called for meeting that milestone at the end of this year. 

The Affordable Care Act established tools such as the Medicare Shared Savings Program and the Center for Medicare and Medicaid Innovation, which test accountable care organizations (ACOs), advanced primary care medical homes, and models that bundle payments for episodes of care.

Today, there are 477 Medicare ACOs participating in the value models. In 2014, these programs generated a total net savings of $411 million, according to the department.  The estimates were evaluated by the independent Centers for Medicare & Medicaid Services (CMS) Office of the Actuary. As of January 2016, CMS estimates that roughly $117 billion out of a projected $380 billion Medicare fee-for-service payments are tied to alternative payment models.









Federal health leaders also say dozens of insurance companies, health systems, employers, and organizations have set their own goals to move to alternative payment models. The data above only reflects payments made for Medicare beneficiaries, but commercial payers seem to be on-pace as well.

The 2014 National Scorecard on Payment Reform by Catalyst for Payment Reform (CPR), an independent, non-profit employer coalition, showed that in commercial health plans, 40% of payments are designed to encourage providers to deliver value-oriented care—a jump from the previous study’s 11% projection.

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