HHS Goal to Lower Healthcare Costs

Two dozen leaders representing consumers, insurers, providers, and business leaders recently met with HHS Secretary Sylvia M. Burwell as she announced measurable goals to move the Medicare program and the healthcare system towards paying providers based on quality, rather than the quantity of care. The goal at HHS www.hhs.gov is to tie 85 percent of all traditional Medicare payments to quality or value by 2016 and 90 percent by 2018.

The adoption of EHRs continues to increase among physicians, hospitals, and others serving Medicare and Medicaid beneficiaries by using technology to evaluate patients’ medical status, enabling doctors to efficiently coordinate care, and helps to eliminate redundant procedures. The number of U.S physicians using EHRs increased from 18 percent to 78 percent between 2001 and 2013 and 94 percent of hospitals now use certified EHRs.

Working to improve the quality of care and to lower costs, the CMS Innovation Center http://innovation.cms.gov is testing new innovative payment and service delivery models. The “Pioneer Accountable Care Organization Model” http://innovation.cms.gov/initiatives/Pioneer-aco-model has 19 ACOs currently participating in the demonstration model.

Preliminary results show that Pioneer ACOs have generated savings of $147 million in their first year. During the second year, the Pioneer ACOs generated model savings of over $96 million and savings to the Medicare Trust Funds of about $41 million.

The Round One Innovation Center’s Health Innovation Awards http://innovation.cms.gov/initiatives/Health-Care-Innovation-Awards are funding up to $1 billion in awards to 107 organizations across the country that are using the funds to implement new ideas to deliver better health, improve care, and lower costs for people enrolled in Medicare, Medicaid, and CHIP. The Health Care Innovation Awards Round Two are funding up to $360 million to 39 organizations to test new payment and service delivery models.

It is important to track information on the ten million Medicare-Medicaid enrollees that suffer from multiple or severe chronic conditions requiring coordinated care. Total annual spending for their care is about $300 billion. Twelve states including California, Colorado, Illinois, Massachusetts, Michigan, Minnesota, New York, Ohio, South Carolina, Texas, Virginia, and Washington have now entered into agreements with CMS to integrate care for Medicare-Medicaid enrollees.

To do a better job coordinating care for beneficiaries with multiple chronic conditions, a new chronic care management fee is beginning. This separate payment for chronic care management will support physician practices to help coordinate care for Medicare beneficiaries with multiple chronic conditions. This will help support clinicians when they are coordinating care outside of regular office visits.

To make these goals scalable beyond Medicare, Secretary Burwell also announced the creation of a “Health Care Payment Learning and Action Network” to work with private payers, employers, consumers, providers, states, state Medicaid programs, and other partners to expand alternative payment models into their programs. The Network will hold their first meeting in March 2015 with more details to be announced in the near future.