42 percent of Medicare payments tied to value in 2013

According to Catalyst for Payment Reform, a coalition of large employers and health care insurance purchasers, approximately 42 percent of the $360 billion in Medicare fee-for-service payments to providers in 2013 were tied to boost the value of care that patients receive.  CPR defines value in payment methods as those that either improve the quality or improve efficiency and reduce unnecessary spending.

In the report, one-third of Medicare payments were related to pay-for-performance programs, 12 percent to shared savings programs and 2 percent to shared-risk programs.  For calendar year 2013, the CPR report noted there were six Medicare programs that met that definition:

  1. The Hospital Value-Based Purchasing Program;
  2. End Stage Renal Disease Quality Incentive Program;
  3. Medicare Shared Savings Program for accountable care organizations;
  4. Medicare Pioneer ACO Program;
  5. Electronic Health Record Incentive Program for eligible hospitals; and

 In addition, in January the Department of Health and Human Services announced goals to tie 30% of Medicare FFS payments to alternative payment models and 85% to quality or value by 2016.  DHHS plans to achieve this goal through investment in alternative payment models such as Accountable Care Organizations (ACOs), advanced primary care medical home models, new models of bundling payments for episodes of care, and integrated care demonstrations for beneficiaries that are Medicare-Medicaid enrollees. Overall, HHS seeks to have 85 percent of Medicare fee-for-service payments in value-based purchasing categories 2 through 4 by 2016 and 90 percent by 2018.