Payment Reform
Blog posted by Nancy Rehkamp
All the media we consume and professional journals we read today include a wide array of articles about health care reform and the need for change. Regardless of where you believe Congress will take health care reform, most think payment reform will be required to assure continued U.S. economic growth. Early in the health policy debate, health care providers, payers, and suppliers, through their associations, agreed to reduce the growth in health care spending by 1.5 percent per year. Achieving this goal will be challenging based on anticipated growth due to population changes.
There are a number of ways to slow the growth in health care costs and many of the options are either in development or being tested. The current focus is on improving quality, reducing utilization, and reducing costs per treatment or unit. The key elements of improving quality and reducing utilization being tested include:
- Patient-centered care
- Care coordination/disease management
- Patient-directed care
- Improvements in care transitions
- Evidence-based best practices
- Electronic health information exchange
- Increased communication with patients via electronic media
- Chronic care management
Additionally, there are four main ways to change reimbursement being discussed:
- Recalibrate fee for service
- Global payments expansion and/or modifications
- Pay for performance or performance incentives
- Episode-based payments–30, 60, 90 day episodes or some variation
Most of the payment reform methodologies incorporate the quality and utilization reduction elements into the reimbursement formulas. Thousands of providers are currently experimenting with these new methodologies, some with great success. We have identified more than 15 payment reform methodologies being tested either through CMS demonstrations, payer contracting with providers, or other funded research studies.
Over the coming months, we will review the findings of these experiments and highlight the learnings from these demonstrations in this weekly blog. We will also be reviewing how the quality and utilization initiatives are woven into the payment methodology. We welcome your questions and/or experiences with these new reimbursement methodologies.