Payment Reform

The U.S. health care system is in the midst of an ambitious transition away from fee-for-service (FFS) payment. Medicare, the most influential payer in the system, has instituted a range of FFS alternatives, with the global budget models featured in its Accountable Care Organization (ACO) programs being the most prominent. States have also been active in payment reform, with a core focus on Medicaid. Some states rely on global payment approaches, while others rely on bundled payments for specified episodes of care. The Payment Reform area focuses on projects that evaluate the impact of new payment models and support public and private efforts to improve the design, effectiveness, and sustainability of new payment models.

Ongoing Projects

 

Engagement and Impact. Our work has laid the foundation for much of what is known about the impacts of population based payment. It has had a big impact on ACO regulations and the general movement towards transformation of Medicare payment. For example, our research influenced the rules regarding updating the benchmark (CMS appropriately weakened the connection between current performance and future payment), the push to equalized payments across organizations, the interaction between population based and episode based payment, and the flexibility to allow CPC+ practices to participate as ACOs. Our Novermber 2014 [M1] > comment letter on ACO regulation updates was widely influential and cited in recommendations to CMS and in proposed regulations.[1]-[2] We have ongoing collaborations with CMS about changes to ACO regulations and are beginning related work with the Veterans Administration.

 

[1] Chernew M, McGuire T, McWilliams JM. Refining the ACO Program: Issues and Options. November 7, 2014. Healthcare Markets and Regulation Lab.

 

 

Chernew, McGuire McWilliams 2014 Refining the ACO Program: Issues and Options272 KB