Fee-for-service still consumes most Medicare outlays: Report

Fee-for-service model still dominates
Fee-for-service model still dominates

Far more than half of the $360 billion in Medicare payments made just two years ago were based on traditional fee-for-service models without regard to quality or value, according to an independent report released Tuesday. It's a percentage that's expected to shrink significantly as government-managed healthcare programs aggressively move toward outcomes-based payment models, a new report asserts.

The report from the Catalyst for Payment Reform, an independent, purchaser-backed coalition, however, also found that 42% of the total Medicare fee-for-service payments made in 2013 were tied to provider-performance or other quality-driven incentives. The U.S. Department of Health & Human Services is pushing hard to tie at least half of all traditional fee-for-service Medicare payments to quality or value through alternative payment models, such as accountable care organizations or bundled payment arrangements, by the end of 2018.

CPR's analysis found that about one-third of the total amount of value-oriented payments were made to providers in the Hospital Value-Based Purchasing and End-Stage Renal Disease Quality Incentive programs, Modern Healthcare reported. About two-thirds were paid to providers participating in alternative payment models built on the fee-for-service platform.

The CPR report also said that almost 12% of payments went to providers sharing savings in accountable care organizations through the Medicare Shared Savings Program.