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The Future of Fee-for-Service Reimbursement

In January, the U. S. Department of Health & Human Services (HHS) announced its 3-year plan to reform payment for Medicare services. They seek to revamp the fee-for-service model by linking reimbursement to quality and value (alternative payment model or APM). Whether you are enrolled with Medicare or not, this will eventually apply to you since we know that other payors follow suit with Medicare in general. Additionally, many hospital organizations are beginning to require that a certain percentage of their provider’s patient panels are Medicare and your payment may be dependent on that.

HHS Secretary Sylvia M. Burwell said, “Whether you are a patient, a provider, a business, a health plan, or a taxpayer, it is in our common interest to build a healthcare system that delivers better care, spends healthcare dollars more wisely and results in healthier people. We believe these goals can drive transformative change, help us manage and track progress, and create accountability for measurable improvement.”

Currently at about 20 percent, the plan calls for the percentage of Medicare payments that are linked to quality and value to reach 85 percent by the end of 2016 and 90 percent by 2018. Existing Medicare quality and value linked payment programs include the Hospital Value-Based Purchasing (VBP) program and the Hospital Readmission Reduction Program (HRRP). This is a very fluid process and many more value-based programs are expected. Much is yet to be determined, but this change is coming.

Allison Garrison, PA-C