Blog | Tuesday, March 3, 2015

Not your father's Medicare


When the Affordable Care Act (ACA) was passed in 2010, the most contentious provisions, which are still the subject of challenges in federal courts, were the establishment of state-wide insurance exchanges, the “individual mandate” that compels eligible citizens to buy insurance, and the expansion of state Medicaid programs. Less well appreciated, but arguably more important, were a wide range of reforms to the Medicare program. Summarized here, they touch on almost all aspects of the program, but I want to concentrate on just 1.

The law directed the Centers for Medicare and Medicaid Services (CMS) to move Medicare from a strictly fee-for-service (FFS) payment model (“paying for volume”) to one in which the quality of care was factored into the payment received by hospitals and physicians (“paying for value”). As I have written previously, I believe this is the right move. There are just too many challenges to improving care and lowering costs that derive from “straight” FFS that is disconnected from any assessment of quality.

And while you may not have known that they grew out of the ACA, the payment reforms themselves have gotten a lot of attention. Penalties for readmissions, requirements for physician quality reporting, pilot programs for bundled payments and accountable care organizations are just of few of the Medicare reforms. Even though they currently influence a small percentage of overall Medicare spending, these changes may already be having a big impact on how care is delivered.

With that in mind, the announcement that CMS is going to aggressively ramp up the use of alternative payment models is big news. These graphics were taken from 1 of the accompanying documents that CMS also released:

Together they show that Medicare is going to change profoundly, and fast. Given its dominance as the biggest payer of health care services in the country, this is nothing short of revolutionary.

Lots can go wrong with trying to change this much this fast, but I think this is a big bold step in the right direction. What do you think?

Ira S. Nash, MD, FACP, is the senior vice president and executive director of the North Shore-LIJ Medical Group, and a professor of Cardiology and Population Health at Hofstra North Shore-LIJ School of Medicine. He is Board Certified in Internal Medicine and Cardiovascular Diseases and was in the private practice of cardiology before joining the full-time faculty of Massachusetts General Hospital. He then held a number of senior positions at Mount Sinai Medical Center prior to joining North Shore-LIJ. He is married with two daughters and enjoys cars, reading biographies and histories, and following his favorite baseball team, the New York Yankees, when not practicing medicine. This post originally appeared at his blog, Ausculation.