Benefits Of The Next Payment Model

• Pay providers differentially according to performance (and reinforce with benefit design); • Design approaches to payment that reduce waste while not diminishing quality, including reducing unwarranted payment variation;

Another reimbursement is the Pay-for-performance model where the providers are only paid when they are able to achieve a specific goal. “Insurers pay providers an “extra” amount if certain standards, usually related to the quality of care, are met”(Gapenski, 2013, p.69) The

First implemented in 1985 by Aetna (previously U.S. Healthcare), P4P programs were used to reward top performers and improve outcomes (Bruno, 2012). The incentives were meant to improve the quality of patient care by basing incentives on patient outcomes. Conversely, fee-for-service reimbursements are based on the treatments and set limits on the amount reimbursed for services. Because of these limits, incentives for use of pharmaceuticals and non-invasive procedures can impact how physicians practice.

A mixed payment system combined with physician monitoring, will provide physicians with incentives to consider costs and benefits of different treatment options, which will lead to an efficient level and quality of care. (1,2)

Four compensation models are laid out by the Bangor Family Physician case study. These models include: (1) revenue model; (2) net income model; (3) base salary plus

· Pay-for-performance payment model – healthcare payment systems that offer financial rewards to providers who achieve, improve or excel their performance on specified quality of care and cost measures (HealthCare Incentives Improvement Institute, N.D.)

Reimbursement and Pay-for-Performance HCS 531 November 11th, 2013 Regina Pointer Introduction There is a growing trend in the United States called pay-for-performance. Pay-for-performance is a system that is used where providers are compensated by payers for meeting certain pre-established measures for quality and efficiency (What is Pay-for-Performance, n.a.). We are going to be discussing what pay-for-performance is. There are different aspects of pay-for-performance which include; the effects of reimbursement by this approach, the impact cost reductions has on quality and efficiency of health care, the affects to the providers and patients, and the effects on the future of health care.

The service-based pay structure provides significant motivation for healthcare providers to deliver as many services as possible, with little to no consideration of patient outcomes. Furthermore, this structure provides no incentive for certain key elements of healthcare such as patient education and care coordination, both of which have led to diminished costs and better outcomes for patients. I am of the opinion that very little quality improvement will take place if this pay-for-service model persists. The current transition from service-based pay to quality-based pay is definitely a move in the right

For anyone who has kept up with the news, the US healthcare system has undergone major changes in recent years. Insurance providers are no longer able to deny someone coverage based on pre-existing conditions. The advent of healthcare marketplaces has changed the way people purchase health insurance. Children can stay on their parents' health insurance plans until 26. Leading the healthcare revolution is InnovaCare Health. This organization is a leading provider of Medicaid and Medicare Advantage plans. InnovaCare Health recently announced it would partner with the Health Care Payment Learning and Action Network. This is a significant private-public partnership that seeks to change compensation models to reflect the quality of care instead of quantity. This new partnership reflects InnovaCare Health's to affect change in compensation sooner rather than later. The current healthcare model focuses on reimbursing physicians based on the number of patients seen or procedures performed. This encourages "treadmill medicine," or a model that focuses on rapid turnover. This can often lead to detrimental effects on patient health. The new quality model would reward physicians based on practice targets. Potential goals include HbA1c goals for patients with diabetes, the percentage of patients who smoke, and hospital stay after surgical procedures.

Besides, the financial incentives for hospitals and physicians that belong to ACOs, Jaffery & Golden 2013, asked and then answered the question “why would providers join this program? One reason is to prepare for the future”. Fee-for-service reimbursement, which has been how hospitals get paid for their services rely solely on the volume of patient seen without taking into consideration the quality of care provided. Payers today, such as government, commercial insurers, employers, and individual consumers are now requesting on value -based-payment, which consist of delivering the highest level of care at a lower cost. The volume based system even though the traditional way of how payments are made is not a viable long-term option (Jaffery and Golden, 2013, p.98).

Under payment, an ideal healthcare system will have the challenge of delivering higher quality for lower costs. The system’s payment reform will involve a transition from fee-for-service to global from systems that are value-based important for the achievement of the overall healthcare goals. An ideal healthcare payment system will give a great deal of support to value-driven system of healthcare delivery (Kent, 2013). The fee-for-service payment system will be of great importance to the healthcare system as it will help control the costs of health care.

Breakdown of participants including both Awardees and Episode Initiators by Models is as below: • Model 1 – 11 • Model 2 – 741 • Model 3 – 1353 • Model 4 – 10 CMS intends to work with BPCI participants to assess the effectiveness of the payment models on improvement of patient care and reduction of the healthcare costs. “All models include provider-led care redesign and enhancements, such as reengineered care pathways using evidence-based medicine, standardized operating protocols, improved care transitions, and care coordination. Awardee Agreements may also include proposals for gainsharing among provider partners.” (Center for Medicare and Medicaid Services,

According to the Centers form Medicare & Medicaid Services a Prospective Payment System (PPS) is a "method of reimbursement in which Medicare payment is based on a predetermined, fixed amount." There are different amounts for the different types of care settings including: home health agencies, hospice, acute inpatient hospitals, inpatient psychiatric facilities, skilled nursing facilities, long-term care hospitals, and inpatient rehabilitation facilities. The two facility types I chose to look at are home health agencies and skilled nursing facilities. For home health the PPS payment is based on a 60 day episode of care. The agency gets half of this payment when the claim is filed and half at the end of the 60 day period. At a skilled

With new reforms being put in place under the Affordable Care Act such as the pay-for-performance (P4P) also known as “value-based purchasing,” which is intended to help provide maintain and efficient programs to improve health care cost. Healthcare providers, hospitals, medical groups, and physicians are offered incentives for meeting certain performance goals; it also fines for increased costs and medical errors such as incorrect medication or dosages. In two different studies quality of care was found to have improved at P4P hospitals compared to non-P4P hospitals Lindenauer et al. (2007) and Grossbart (2006). However, a study by Werner et al.(2011) found no continuing benefits in quality of care. One measure being advocated for is the Hospital Readmissions Reduction Program (HRRP) to prevent hospital readmissions as a way to improve the quality of care and at the same time cut cost. If patients are readmitted within 30 days after discharges due to conditions like acute myocardial infarction (AMI), heart failure, and pneumonia, fines can be levied such as 1 percent of Medicare payments. Others include the Hospital Value-Based Purchasing (VBP) is based on how well the hospital performs compared to other hospitals or the improvement of their own performance compared to a baseline time. The goal is to encourage better outcomes for patients and improve experience during hospital stays. And the Hospital-Acquired Condition (HAC) Reduction Program motivates hospitals to increase the safety of it patients by cut the number of hospital-acquired conditions and patient safety (Medicare.gov, n.d.) (Kruse, Polsky, Stuart, & Werner, 2012)(Gu et al.,

The Balanced Budget Act (BBA) of 1997 significantly cut Medicare In 2012, the ACA found an excessive amount of readmissions of patients that were hospitalized within 30 days for the same medical conditions. This factor viewed under the ACA as a quality issue and CMS implemented value-based incentive payments based on performance in a set of quality measures. The plan is to implement a pay for performance (P4P) in formulas used by Medicare to reimbursement providers. “The objective is to link reimbursement to quality and efficiency as an incentive to improve the quality of health care, as well as reduce system-wide costs” (Shi and Singh, 2015). In addition to the P4P, nonprofit hospitals also focus on continual improvement, data and cost containment throughout the organization (Adamopoulos,