Value-based programs offer incentives to healthcare professionals to provide a high standard of care to Medicare beneficiaries. These initiatives are one component of a comprehensive quality plan designed to change the ways in which healthcare is delivered and paid for. Value-based initiatives facilitated the achievement of three objectives:
- Improved personalized care
- Better population health
- Lower healthcare costs
The Importance of Value-based Programs
Value-based initiatives are a crucial part of the shift toward compensating practitioners in terms of the quality rather than the quantity of the care that they deliver to patients.
Medicare is a key player in the transition away from the fee-for-service approach, which rewards quantity, toward value-based care, which rewards high-quality care and prudent spending. Medicare is the largest health insurer in the country, accounting for 1 of every 5 dollars spent on healthcare in the United States. The passage of the Affordable Care Act spurred the development of cutting-edge payment and treatment-delivery systems that reward superior care, cost-effective practices, and health maintenance. As a result, over the past ten years, Medicare has advanced responsible care and moved in the direction of value.
Thus, the Medicare Shared Saving Program under traditional Medicare brings together teams of physicians, hospitals, and other healthcare stakeholders as accountable care organizations (ACOs) for the purpose of improving the quality of care and health outcomes for beneficiaries. Now serving some 11 million people through more than 525,000 participating practitioners, the program has grown since recruiting its initial practitioners in 2011 to its present status as the nation’s the largest value-based buying program. Physician groups participating in the Shared Saving Program have higher quality scores than their peer groups that do not participate, and, over the past five years, this initiative has earned the Medicare Part-B Trust Fund at least $6 billion.
The relationship among the Shared Savings Program, an ACO, and the beneficiaries allocated to them provide an excellent example of an accountable care interaction. More and more payments to healthcare professionals are also being made through sophisticated value-based agreements under Medicare Advantage (MA), which accounts for 45% of Medicare membership.
CMS has offered its vision for Medicare, announcing the audacious goal of placing all of the beneficiaries of conventional Medicare within a care provider’s accountable healthcare setting by 2030. This announcement was made in light of the nation’s significant progress in adopting value-based care. The organization is also working to ensure that MA lives up to these value objectives. Recently, CMS also unveiled a National Quality Strategy in which, as the name suggests, quality is a key element.
The First Round of Value-based CMS Initiatives
The project consists of five original value-based schemes, each of which serves to tie measures of the quality of providers’ performance to the payments that they receive:
- ESRD QIP
- Value-based Purchasing (VBP) Program for Hospitals
- Hospital Readmission Reduction Program (HRRP)
- Physician Value-based Modifier (PVBM)
- Hospital-acquired Conditions (HAC) Reduction Program
Additional value-based initiatives include:
- Value-based Purchasing in Skilled Nursing Facilities (SNFVBP)
- Value-based Purchasing for Home Health (HHVBP)
