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HHS faces daunting challenge in moving away from fee-for-service payment

About Joseph Burns

Joseph Burns (@jburns18), a Massachusetts-based independent journalist, is AHCJ’s topic leader on health insurance. He welcomes questions and suggestions on insurance resources and tip sheets at joseph@healthjournalism.org.

Image by 401(K) 2012 via Flickr

Image by 401(K) 2012 via Flickr

Finally, we may be seeing the beginning of the end of fee-for-service payment.

In an announcement Monday, the federal Department of Health and Human Services set two goals for changing how Medicare will pay for care, making the most significant change in payment in its 50-year history. First, HHS Secretary Sylvia Mathews Burwell said that next year, 30 percent of all payment to Medicare providers would be in alternative payment programs that reward hospitals and physicians for how well they care for patients rather than how much care they provide.

By 2018, 50 percent of payments would go into alternative payment programs, such as accountable care organizations, patient-centered medical homes and bundled payments, she wrote.

“In alternative payment models, providers are accountable for the quality and cost of care for the people and populations they serve, moving away from the old way of doing things, which amounted to, ‘the more you do, the more you get paid,’” Burwell added. Continue reading