The U.S. Department of Health and Human Services (HHS) has achieved its announced goal of moving at least 30 percent of Medicare fee-for-service payments to alternative payment models (APMs), nearly one year earlier than anticipated. In January 2015, HHS announced goals to drive Medicare and the overall U.S. health care system towards rewarding the quality of care as opposed to the quantity of care provided to beneficiaries. The goals included linking 30 percent of traditional, or fee-for-service, Medicare payments to quality or value through alternative payment models, such as Accountable Care Organizations (ACOs) or bundled payment arrangements, by the end of 2016; and linking 50 percent of payments to these models by the end of 2018.
HHS estimates that given the number of Medicare fee-for-service beneficiaries covered by the 477 ACOs participating in the Medicare Shared Savings Program and the Pioneer ACO Model, their annual Medicare expenditures are over 22 percent of the total Medicare fee-for-service payments. Combined with the implementation of bundled payments in the Comprehensive Care for Joint Replacement Model and the Oncology Care Model and other APM initiatives, HHS estimates that it already has met its 30 percent goal. HHS has published a fact sheet describing the APM initiatives included in its estimate.
These estimates were evaluated and confirmed by the independent Centers for Medicare & Medicaid Services (CMS) Office of the Actuary. CMS estimated progress toward the goal by multiplying the number of Medicare beneficiaries covered by providers participating in alternative payment models (net any overlap or attrition) by the expected cost of their care and compared that figure to projected overall Medicare fee-for-service spending. CMS estimates that, as of January 2016, roughly $117 billion out of a projected $380 billion annual Medicare fee-for-service payments (over 30.7 percent) will be linked to alternative payment models. The CMS Office of the Actuary estimate is provided here:
CMS will continue to track APMs being implemented by Medicare fee-for-service providers in addition to its own ACO and bundled payment initiatives through its Health Care Payment Learning and Action Network.