Hi-R-Ed Online

Learning Objectives

Hi everyone. Thanks for taking time out of your day to join us--I think you will find this to be an interesting topic! So let’s get started with our learning objectives.

The Learning Objectives for this course are fairly straightforward. While we will assume you have a basic knowledge of healthcare reform and some of the various payment models in use today, we will begin with a brief overview of where we have come from—before we talk about where we are going.

Upon completion of this program, you will be able to:

The purpose of setting learning objectives at the beginning of the course is to set the framework and goals for the information we will cover.

Once the course is completed you should be able to:

1.Describe at least two reasons why alternative payment models are needed. There has been a lot of talk about what’s wrong with the healthcare system here in the U.S., and at the conclusion of this program you will be able to describe several reasons why alternative payment models are needed.

2.List and define three payment models. The are several different types in use right now, and we will examine them in some detail.

3.Describe Medicare’s two main reasons for developing the shared savings model and how they affect the provider. This particular payment model has benefits for those providers who choose to participate, and we will discuss them.

4.List two areas of growth for providers with value-based payment models in the future. The alternative payment models we are going to discuss are evolving, as is the marketplace, and we will examine some areas of growth for providers.

Introduction: Fee-for Service

•Medicare driven performance-based programs

•Penalty only

Readmissions program

Hospital-Acquired Conditions program

In 2015, the Obama administration acted upon the realization that the fee-for-service model needed to be replaced with a less costly alternative. They announced that they would put plans in place so that by the end of 2018 half of all Medicare payments would be made through alternative payment models as opposed to the traditional fee-for-service system.

Medicare began their move to a more performance-based payment system by incorporating some penalty-only programs such as their Readmissions program and their Hospital-Acquired Conditions program. These programs provide no incentives for the hospitals to avoid readmissions, or treating a patient with a qualifying condition they acquired in the hospital, only the threat of a reduced or non-existent payment should those occur. These were early attempts by Medicare to move providers into thinking in a more quality-minded, quality-of-care mindset.

Alternate Payment Models

Alternative payment models (not just penalty-only programs), on the other hand, are more difficult for providers to adopt. The Centers for Medicare and Medicaid Services (CMS) have now reported that in 2016 Medicare linked 30% of traditional fee-for-service payments to value-based purchasing models—and saved nearly $1 billion(!)1, and that by the end of 2018 are expecting that percentage to increase to 90%.2

•Why is CMS so interested in alternative payment models?

1. current “a la carte” billing system

2. electronic health records system

3. billing to patients too confusing

4. fee-for-service does not encourage quality care

There were several reasons for this.

First, there was the existing “a la carte” healthcare billing process. Bill the patient for each and every visit and procedure, even duplicates. You can see the problem: See a patient once, get paid once--See that patient twice, get paid twice.

Second, there was the electronic health records system built from this billing process which was designed around a quantity of care, not quality of care, model.3

Third, there was the issue of a billing environment so convoluted and confusing that consumers didn’t know what they were paying for, nor sometimes how much to pay.

And fourth, and this has been the principal driver of the need for change, the fee-for-service system does nothing to encourage providers to give quality care.