Reimbursement News

HHS, CMS Speak Out on CMS’s Innovation Center Pilot Project

“We recognize that keeping people healthy is about more than what happens inside a doctor’s office."

By Jacqueline DiChiara

- Medicare reimbursements are preparing to emerge from a fee-for-service caterpillar’s cocoon to a value-based butterfly. The newly announced Accountable Health Communities [AHC] model – a CMS Innovation Center Pilot Project model – is slated to keep healthcare costs under control.

Accountable Health Communities model Medicare reimbursement

Earlier this week, the Department of Health and Human Services (HHS) announced implementation of the AHC model, a new 5-year long $157 million funding opportunity. 

HHS's objective is to assess if screening beneficiaries for health-related social needs, referrals, and a greater focus on community-based services will advance Medicare and Medicaid’s affordability.

HHS has indeed been busy promoting its impressively broad goal of “better, smarter, healthier” healthcare.

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  • In a historic announcement that was truly the first of its kind, nearly one year ago, HHS established definitive Medicare reimbursement goals and an accompanying timeline:

    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 Accountable Care Organizations (ACOs) 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. 

    “New targets have been set for value-based payment: 85% of Medicare fee-for-service payments should be tied to quality or value by 2016, and 30% of Medicare payments should be tied to quality or value through alternative payment models by 2016 (50% by 2018),” wrote Sylvia M. Burwell, HHS Secretary, in the New England Journal of Medicine last March.

    These goals are reimbursement game changers. They represent a 50 percent increase for those Medicare payments to providers via alternative payment models; in 2014, Medicare fee-for-service payments topped $360 billion.

    HHS and CMS say the AHC Model will ensure healthcare dollars are spent wisely

    Following the announcement of the AHC model a few days ago, both HHS and the Centers for Medicare & Medicaid Services (CMS) have released commentary on the beneficial significance of merging clinical care with social services.

    “The [AHC] model is yet another step towards building a health care system that results in healthier people and stronger communities and spends our health care dollars more wisely,” said Burwell.

    “We recognize that keeping people healthy is about more than what happens inside a doctor’s office, and that’s why, for the first time, we are testing whether screening patients for health-related social needs and connecting them to local community resources like housing and transportation to the doctor will ultimately improve their health and reduce the cost to taxpayers.”

    “For decades, we’ve known that social needs profoundly affect health, and this model will help us understand which strategies work to help improve health and spend dollars more wisely,” stated Patrick Conway, MD, CMS Deputy Administrator and Chief Medical Officer. 

    “We will learn how health and health care improvements can be achieved through strong partnerships and linkages at the community level.”