Obama Administration Hits Medicare Payment Target Early

WASHINGTON—Obama administration officials said Thursday they were almost a year ahead of their target to change the way Medicare pays hundreds of billions of dollars to providers for treating older Americans.

The Department of Health and Human Services had wanted the federal insurance program for seniors to make 30% of its payments to doctors and hospitals on the basis of the quality of care they provide, rather than the quantity, by the end of 2016. That was seen as a step toward hitting 50% by 2018, beyond the lifespan of the Obama administration.

Dr. Patrick Conway, the chief medical officer at the Centers for Medicare and Medicaid Services, said Thursday the 30% goal had been met as of January 2016, and the agency estimated roughly $117 billion out of a projected $380 billion Medicare fee-for-service payments for the year were going to providers who were participating in pay-for-performance programs.

In one such program, known as the Accountable Care Organizations system, hospitals or doctor groups contract to care for large pools of patients, and if they lower the total cost of their care while meeting quality measures, they get to split the savings with Medicare.

In another, known as bundled payments, providers agree to accept one overall Medicare price for all the services involved in an episode of care such as a hip replacement.

Around 20% of payments were already being made through such programs when Health and Human Services Secretary Sylvia Mathews Burwell announced the target in early 2015.

Dr. Conway said Thursday he had faced people who were skeptical the administration could push that share higher within two years.

“We actually think we set an ambitious, stretch goal for the end of 2016,” he said. “We even internally questioned whether we could reach the goal or not. We are excited about the progress that has been made in reaching the goal ahead of schedule.”

The announcement came shortly before President Barack Obama, in Milwaukee, touted the changes his administration has made to Medicare and the broader reach of the 2010 Affordable Care Act.

“We’ve been moving Medicare to a payment model that rewards quality of care over volume,” he said.

Mr. Obama was visiting Milwaukee to praise the city’s efforts in getting tens of thousands of residents to sign up for insurance coverage through HealthCare.gov during the health law’s main enrollment period that ended in mid-February.

“You get bragging rights this year!” he said. “You’re proof that the law works.”

While there, he also said the law should be credited with helping as many as 6 million young adults stay insured on their parents’ health plans until they turned 26, and some 14 million people who had gained affordable coverage through Medicaid and the health insurance exchanges.

Write to Louise Radnofsky at [email protected]

Source: Wall Street Journal Health