A new report issued by the Center for American Progress (CAP) examines three alternatives to fee-for-service payments: 1) Bundled payments, 2) Patient-centered medical homes, and 3) Accountable care organizations.
The report compiles and highlights recent data from organizations testing these reform options. This report also includes new findings from our conversations with a variety of health care providers and payers who are implementing these reforms. Together, these data and feedback highlight key lessons, strategies for success, and implementation challenges that can help guide the movement away from the current payment system to one that emphasizes value and patients.
Each of the three payment reforms highlighted in this report—bundled payments (fixed amounts paid to health care providers for a bundle of services or all the care a patient is expected to need during a period of time), patient-centered medical homes (redesigned primary care practices that focus more on preventive care, patient education, and care coordination between different health care providers), and accountable care organizations (groups of health care providers who agree to share responsibility for coordinating lower-cost, higher-quality care for a group of patients)—is designed to lower costs both for payers and patients and to improve patient outcomes and experiences.
November 8, 2011
While a primary aim of the Affordable Care Act (ACA) was to increase access to affordable health insurance coverage, a critical, although less publicized, component of the law is a series of provisions designed to improve health care quality and efficiency and to advance the concept of “value-based purchasing.” The Agency for Health Care Research and Quality (AHRQ) defines the concept of value-based purchasing as holding “providers of health care accountable for both the cost and quality of care.” AHRQ notes that “value-based purchasing brings together information on the quality of health care, including patient outcomes and health status, with data on the dollar outlays going towards health. It focuses on managing the use of the health care system to reduce inappropriate care and to identify and reward the best-performing providers. This strategy can be contrasted with more limited efforts to negotiate price discounts, which reduce costs but do little to ensure that quality of care is improved.”
April 20, 2011
An earlier Implementation Brief provided an overview of the Medicare Shared Savings Program (MSSP) for Accountable Care Organizations (ACOs), which was established by §3022 of the Affordable Care Act (ACA) by adding §1899 to the Social Security Act. On April 7, 2011, the federal Centers for Medicare and Medicaid Services (CMS) published a proposed rule implementing the MSSP. This proposed rule was accompanied by several additional policy documents:
July 7, 2010
The health reform law requires the Secretary of HHS to establish a Medicaid demonstration project “to evaluate integrated care around a hospitalization.” Specifically, this project aims “to evaluate the use of bundled payments for the provision of integrated care for a Medicaid beneficiary . . . with respect to an episode of care that includes a hospitalization . . . and for concurrent physicians services provided during a hospitalization.”
June 27, 2010
The law introduces ACOs on a voluntary basis by directing the Secretary of Health and Human Services to establish a “Pediatric Accountable Care Organization Demonstration Project.” This demonstration project would authorize a participating state to allow certain qualified Medicaid providers to organize themselves into an ACO for the purposes of receiving incentive payments “in the same manner as an accountable care organization is recognized and provided with incentive payments” under the health reform law’s Medicare ACO pilot program. The Medicaid ACO demonstration, akin to the Medicare ACO pilot, is aimed at reducing expenditure growth and improving health outcomes.
April 29, 2010
Introduces Accountable Care Organizations on a voluntary basis by directing the Secretary of Health and Human Services to develop a “Medicare Shared Savings Program.”