Last week, the Department of Health and Human Services (HHS) proposed a mandatory change in the way Medicare will pay providers of hip and knee replacements. The change will bundle such payments so that one fee pays for the doctor, hospital, device and rehab that goes along with the replacement surgery, instead of through discrete payments under the current fee-for-service system.
This is the first instance of HHS using authority from the Affordable Care Act to scale up a new method of payment based on positive results from payment-reform experiments.
Last week, the Department of Health and Human Services (HHS) proposed a mandatory change in the way Medicare will pay providers of hip and knee replacements. The change will bundle such payments so that one fee pays for the doctor, hospital, device and rehab that goes along with the replacement surgery, instead of through discrete payments under the current fee-for-service system.
This is the first instance of HHS using authority from the Affordable Care Act to scale up a new method of payment based on positive results from payment-reform experiments.
The new payment initiative is one stop on the road towards the administration’s’ goal of having a majority of Medicare payments delivered through alternative payment (not fee-for-service) models. Such alternative models have seemingly broad bipartisan support in Congress, given the overwhelming majorities such value-based payments received in the spring passage of legislation to establish a new physician payment formula for Medicare.
Yet the House Appropriations Committee recently passed a bill defunding two key government agencies that design and research payment reform — legislation the Congressional Budget Office has said will increase deficits by $37 billion over 10 years.
Hopefully, such hypocritical and shortsighted action will be reversed. With growing pressure on the federal budget, we are at a crucial time for getting payment reform right.
