Major Medicare Reforms Announced By Obama Administration

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Health and Human Services (HHS) Secretary Sylvia Mathews Burwell on Monday announced an ambitious new effort to reward quality medical care and phase out payments based solely on the volume of services provided in the Medicare program.

For the first time, the agency is setting an explicit timetable for transitioning Medicare away from its dominant fee-for-service model.

The department is aiming to tie 30 percent of traditional Medicare payments to care quality through Accountable Care Organizations (ACOs) or bundled payment arrangements by the end of 2016. Fifty percent would be tied to care quality by the end of 2018.

Altogether, the targets represent a 50-percent increase in value-based payments by 2016, HHS said.

In addition, Burwell announced the creation of a new Health Care Payment Learning and Action Network, which will work with stakeholders across the healthcare world to increase the use of alternative payment models.

“Whether you are a patient, a provider, a business, a health plan, or a taxpayer, it is in our common interest to build a healthcare system that delivers better care, spends health care dollars more wisely and results in healthier people,” Burwell said in a statement Monday.

”Today’s announcement is about improving the quality of care we receive when we are sick, while at the same time spending our health care dollars more wisely.”

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