In my last blog post, we looked at the first two significant policy issues that will shape the future of health IT this year and beyond—EHR meaningful use and interoperability. Today, we focus on alternative payments, telehealth care delivery models, and ICD-10 (briefly)
Alternative Payment and Care Delivery Models
A newly-proposed CMS Shared Savings Program Rule focuses on more ACO flexibility, greater performance-based risk and reward as well as the use of innovative care coordination and telehealth tools. While I am still holding out for passage of bipartisan, bicameral SGR/ FFS reform legislation, there has been real progress out of the Department of Health and Human Services (HHS) as it has proposed phasing in an alternative payment models that leverage outcomes and quality-based payments with a smaller fee-for-service reimbursement. Basically, paying providers for value, not volume.
Through this January announcement:
- HHS has set a goal of tying 30 percent of traditional, or fee-for-service, Medicare payments to quality or value through alternative payment models, such as ACO, PCMH or bundled payment arrangements by the end of 2016, and tying 50 percent of payments to these models by the end of 2018
- HHS also set a goal of tying 85 percent of all traditional Medicare payments to quality or value by 2016 and 90 percent by 2018 through programs such as the Hospital Value Based Purchasing and the Hospital Readmissions Reduction Programs
Note: In 2011, Medicare made almost no payments to providers through alternative payment models, but today such payments represent approximately 20 percent of Medicare payments. The goals announced in January represent a 50 percent increase by 2016.
- To put this in perspective, in 2014, Medicare fee-for-service payments were $362 billion so a significant amount of payments will be shifting quickly into alternative payment models and this trend will not be tied to just Medicare but rather all insurers including Medicaid will be briskly moving in this direction
HHS has adopted a framework that categorizes health care payment according to how providers receive payment to provide care:
- Category 1—fee-for-service with no link of payment to quality
- Category 2—fee-for-service with a link of payment to quality
- Category 3—alternative payment models built on fee-for-service architecture
- Category 4—population-based payment
Medicare telehealth expansion includes use of health IT for chronic care
Medicare has expanded its covered telehealth services to include wellness (HCPCS code G0438) as well as several behavioral health visits. Beginning in January 2015, Medicare will reimburse physicians $40-$42/patient/month for chronic care management services for patients with more than one chronic condition
- Physicians must use EHR systems that meet 2011 or 2014 certification criteria for meaningful use and a scope of service
- Chronic care management is expected be provided by clinical staff directed by a physician or other qualified health professional. The level of service is expected to be 20 minutes per patient per month
Oh, and let’s not forget about our decade-long transition to ICD-10 on October 1, 2015.
So as you can see and are probably well aware, 2015 has already started off with seismic shifts in public policy in an attempt to stabilize the rate of growth of our annual healthcare costs. I don’t believe anyone can kid themselves and think that we will ever reduce our nation’s healthcare expenses, but what many of us are passionately working towards is creating a smarter and sustainable healthcare system that will at least reduce the rate in which our costs are increasing and truly create a healthcare system where we see intrinsic value and the patient becomes an informed and accountable consumer. We can all dream can’t we?
What questions do you have?
As a healthcare innovation executive and strategist, Justin is a corporate, board and policy advisor who also serves as an Entrepreneur-in-Residence with the Georgia Institute of Technology’s Advanced Technology Development Center (ATDC). In addition, Mr. Barnes is Chairman Emeritus of the HIMSS EHR Association as well as Co-Chairman of the Accountable Care Community of Practice. Barnes has appeared in more than 1,000 journals, magazines and broadcast media outlets relating to national leadership of healthcare and health IT. Barnes also recently launched the weekly radio show, “This Just In.”