Shifting Medicare Payments in Anesthesia and Healthcare

By March 21, 2016Health

Health and Human Services (HHS) announced goals to shift Medicare payments from quantity-based compensation toward result-based compensation for healthcare providers in January 2015 (1). The HHS set a goal of shifting 30 percent of traditional, or fee-for-service, Medicare payments to alternative payment models by the end of 2016 and 50 percent by the end of 2018. To achieve these goals, Medicare has planned to use alternative payment models such as Accountable Care Organizations (ACOs), bundled payment arrangements, and the implementation of the Affordable Care Act. In March 2016, the HHS announced that it has already reached its goal of shifting 30 percent of Medicare payments to quality-based payments (2). It attributes its early success to the tools provided by the Affordable Care Act such as the Medicare Shared Savings Program and the Center for Medicare and Medicaid Innovation.

This reform has implications for all health care providers. Previously, payment for each individual service is received regardless of the result for these patients. Under this payment system, many patients who had multiple doctors experienced difficulty due to the lack of communication between providers. According to HHS, the Affordable Care Act and shift to alternative payment models gives providers better patient information and results in better relationships with among providers (2). For anesthesia providers, this is especially important because they are likely one of many healthcare providers for any given patient, and better access to medical history and communication with the patient’s other physicians is critical. Additionally, a new payment model that incentives healthcare results will also incentivize the development of safer and more effective techniques and equipment. Anesthesia research conducted by many hospitals, universities, and other organizations worldwide will become increasingly more pertinent as the appeal for more effective methods grows.

This shift will likely be seen even outside of Medicare in many different healthcare payment methods. Dozens of insurance companies, employers, and organizations have joined the Centers for Medicare & Medicaid Services (CMS) to move toward alternative payment models. A Health Care Payment Learning and Action network was established to support efforts by the government, private sector payers, employers, and others seeking healthcare coverage to create a payment system that leads to the most affordable and best healthcare results.

Healthcare providers should be aware of how this new quality-based model with affect Medicare payments. There is an incentive to participate in the Physician Quality Reporting System (PQRS), which collects clinical data for the CMS to research the most cost effective treatments with the best results (3). Anesthesia providers can report through the National Anesthesia Clinical Outcomes Registry (NACOR) (4). NACOR collects data and outcomes of anesthesia practices such as the duration of surgery, agents used, infections, and any prolonged length of stay (5). NACOR also identifies areas for improvement for healthcare providers based on quality gaps found through reported data (4).

To keep practices financially sustainable, it is vital for healthcare providers to be familiar with changes in this new payment model. Staying up to date with the quality of techniques and equipment is now essential not only for patient care, but also for Medicare reimbursements.