The death of fee-for-service has been much talked about, but the traditional payment model may have been dealt one of its first significant blows at the beginning of this week. The Obama administration announced plans to dramatically alter the way Medicare reimburses providers over the next four years, according to an LA Times report.
Here are three things to know about Medicare's planned transformation.
1. The first goal of plan will shift 30 percent of payments to physicians and hospitals to alternative models by next year, according to the report. These alternative programs include models in which providers are rewarded for meeting cost and quality metrics. This represents a jump of approximately 10 percent. As of now roughly 20 percent of Medicare payments are funneled through such alternatives.
2. The plan aims to ramp up these efforts and have 50 percent of Medicare payments delivered through alternative models by 2018. Details on how these goals will be accomplished have yet to be revealed.
3. "Today's announcement is about improving the quality of care we receive when we are risk, while at the same time spending our healthcare dollars more wisely. We believe these goals can drive transformative change, help us manage and track progress, and create accountability for measurable improvement," said HHS Secretary Sylvia M. Burwell, according to the report.