Proposed Changes in Medicare

The President plans to change Medicare fairly dramatically over the next few years. Currently, about 20% of Medicare payments are made through one of the trial or experimental payments system. These system try something other then the traditional fee-for-service model under which there is an incentive for more treatment, tests, and other activity, none of which is tied to outcomes. The experimental programs try to align payments with better outcomes.

The administration wants to increase the number of payments going through these program to 50% over the next few years. Here’s a summary of the programs and what the proposal could mean to you.

The Affordable Care Act included several provisions that set up such alternative payment plans, including Accountable Care Organizations, Patient-Centered Medical Homes, bundled payments and other pay-for-performance programs. Currently 20 percent of traditional payments go through these programs.

Now the administration’s plan is to expand participation in these payment models—by 2016, they expect 30 percent, then 50 percent by 2018.

So, what will that mean for the patient? In theory, better care at a lower cost, though there is limited information about how successful some of the pilot initiatives have been, including Accountable Care Organizations or ACOs.