Are You Affected by Medicare Reforms?

Did you know that the Center for Medicare and Medicaid Services (CMS) is considering changing the way it pays health care providers? Although these changes won’t affect families directly, it is important to understand how health care providers are being paid and how policy makers are reducing overall costs.

Learn more about how seniors will be affected by medicare reforms.

Center for Medicare and Medicaid Service Changes to Health Care

Medicare is a social insurance program providing coverage to 55 million Americans who are 65 and older, as well as young adults with permanent disabilities. The CMS is currently evaluating three new payment models for health care providers within traditional Medicare. These include:

Accountable care organizations (AC0s)
Bundled payments
Medical homes

Together, these new models impact the incentives to health care professionals who provide care to approximately 10 million Medicare beneficiaries. As policymakers reform the Medicare system, CMS is testing each of these models, looking specifically at each model’s:

Goals
Financial incentives
Size
Potential beneficiary implications

Medicare Reforms in the U.S.

The Medicare system’s delivery is being reformed to address a number of concerns, including:

Rising costs
Quality of care
Inefficient spending
Affordability

Policymakers have established the Affordable Care Act (ACA), which is identifying and testing new health care payment models with the goal of finding solutions to the above concerns.

According to the authors of the report Payments and Delivery System Reform in Medicare, these Medicare reforms focus on “shifting a portion of traditional Medicare payments from fee-for-service (FFS) (which reimburses based on the number of services provided) to payment systems that incorporate some link to the ‘value’ of care as determined by selected metrics, such as patient outcomes and Medicare spending.”

Let’s take a look at each model:

Accountable Care Organizations (ACOs)

What Are They?

“Groups of doctors, hospitals, and other health care providers who agree to share collective accountability for the quality and cost of care delivered to the patients attributed to their ACO.”
Examples include: Medicare Shared Savings Program (MSSP), Pioneer ACO, Advance Payment ACO (subset of MSSP).

Payment Structure

“Payments to ACOs incorporate financial incentives in the form of shared savings or losses (sometimes referred to as bonuses or penalties) for performance on identified spending and quality metrics.”

Bundled Payments

What Are They?

“Establishes an overall budget for services provided to a patient receiving a course of treatment for a given clinical condition over a defined period of time.”
Examples include: inpatient hospital services; inpatient hospital, physician, and post-acute services; post-acute services; inpatient hospital and physician services.

Payment Structure

“In contrast to paying for each service individually, bundled payments provide incentives for providers to come in ‘under budget’ for episodes of care.”

Medical Homes

What Are They?

“Team-based models of patient care that rely heavily on the primary care practice (provider and care team) as the main and central source for delivery and coordination of the majority of health, illness, and wellness care for Medicare beneficiaries.”
Examples include: Multi-Payer Advanced Primary Care Practice (MAPCP), Comprehensive Primary Care (CPC), Federally-Qualified Health Center (FQHC), Advanced Primary Care Practice, Independence at Home (IAH).

Payment Structure

“Health insurers that support the medical home model typically provide monthly care management fees or other payments in addition to fee-for-service reimbursement for activities related to patient care and coordination.”

Which Model is Best?

To date, not enough information has been gathered for policymakers to determine the performance of each of these new models. However, according to Payments and Delivery System Reform in Medicare, initial observations show that the ACO model is performing better in these three areas:

1. Savings – ACOs have reported the most savings to date – approximately $465 million dollars in total. In comparison, medical homes savings total $25 million while the CMS has yet to produce reports detailing the total savings of the bundled payments model.

2. Quality – The CMS reports that to date, ACOs have shown the greatest improvement in quality service to beneficiaries. “In addition to quality improvements over time, CMS states that ACO performance on quality measures is comparably as good as or better than the traditional Medicare program overall.” In comparison, medical homes showed small improvements in quality and bundled payments found no notable differences in quality.

3. Participation – According to the CMS, health care provider participation of ACOs doubled in growth, and grew in three of the four bundled payment models. For medical homes, participation by health care providers remained relatively the same.

Impacts on Families and Seniors

Does it matter which of these incentive models your health care provider participates in? At the moment it’s unclear as to how families will be impacted, if at all.

To date, the CMS reports that “for the most part, Medicare beneficiaries in these models do not experience any changes in their Medicare benefits, as they are not required to see certain providers and do not experience differences in their levels of cost-sharing.”

However, Payments and Delivery System Reform in Medicare did note that:

“Beneficiaries whose primary care provider is transforming their practice into a medical home may notice differences in the delivery of their care — for example, greater reliance on clinical teams and electronic health records — but for the ACO and bundled payment models, beneficiaries would not necessarily notice changes in care practices.”

Have you noticed an impact in the care of yourself or a loved one whose provider is using one of these Medicare models? Share your experiences with us in the comments below.