Provider, payer communities react to HHS value-based payment initiative

Most appear to take wait-and-see attitude
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Reaction was mixed to Monday's news that the U.S. Department of Health and Human Services intends to aggressively shift Medicare provider payments from a fee-for-service (FFS) model to a system based more on quality and improved patient outcomes.

A variety of provider and payer constituents issued statements following the announcement from HHS Secretary Sylvia Mathews Burwell that the agency would move 30 percent of all FFS-based payments to a value-based performance model by 2016, and 50 percent by 2018.

Many of the constituents suggested they were taking a wait-and-see approach.

"We look forward to hearing more details behind the percentages HHS put forward as well as their plans to reach these percentage targets, said American Medical Association (AMA) President Robert M. Wah, M.D., in a statement emailed to FierceHealthFinance. The bulk of the AMA's statement was focused on fixing the sustainable growth rate formula and an observation that "patients benefit when physicians have the flexibility and resources to redesign care."

The hospital community was not much more sanguine.

American Hospital Association (AHA) Executive Vice President Rick Pollack said in a statement that the trade group, which lobbies on behalf of the nation's not-for-profit hospitals, wants to learn more from HHS on how it intends to phase in these new goals. "At the same time, " he said, "we encourage the Administration to fully evaluate and improve on the delivery system reforms currently in place to ensure that we are learning from the pilot and demonstration projects to best meet patient needs."  

The AHA's counterpart in the for-profit sector sounded slightly more enthusiastic. "We welcome Secretary Burwell's announcement outlining goals and timelines that further shift the focus of Medicare payments to a value-based system," said Chip Kahn, executive director of the Federation of American Hospitals. "As we proceed, it is important that Medicare take the time to test new approaches and ensure that only reforms proven to be efficient and effective are put in place."

The payer community appeared most receptive to the change.

"The commitment to improving the way physicians, hospitals and other providers are paid sends a strong and clear message, and it should result in long-term improvements in quality and affordability," the Pacific Business Group on Health (PBGH) said in a statement.

PBGH said it was especially pleased with the goal to have a majority of Medicare payments in 2018 based on alternative payment models, such as accountable care organizations, medical homes and bundled payments.  "Large employers, who provide health benefits to millions of employees and their families, support this initiative and will work with government purchasers to ensure that providers who improve quality and affordability will be recognized and paid accordingly," the group said. 

To learn more:
- read the AHA announcement
- here's the PBGH statement (.pdf)
- check out the Federation of American Hospitals' statement 
- read the AMA statement

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