"Until the advent of recent reforms, the healthcare industry paid no premium for physicians who held themselves to the highest standards. This has changed now that Medicare and many private insurers are paying bonuses for the value and quality of care."

    - Praveen Arla, MD, MPH


    The Centers for Medicare & Medicaid Services is shifting to value-based payment.

    Each year, more and more American rely on Medicare. And with healthcare costs continuing to rise, demand for care is outpacing the supply. In response to these trends, and to promote greater effectiveness and sustainability, the Centers for Medicare & Medicaid Services is shifting to value-based payment models whereby providers are rewarded for improving health outcomes and optimizing cost, as compared with the traditional fee-for-service model, in which reimbursement is based on the number of tests or procedures that are performed.

    • In 2015, for the first time in its history, Health and Human Services established firm goals for transitioning to value-based payment: half of all fee-for-service payments are to be tied to value based payment models by 2018. HS also set a goal of tying 85 percent of all traditional Medicare payments to quality or value by 2016 and 90 percent by 2018.
    • Accountable Care Organizations (ACOs) are groups of providers who come together to participate in value based payment models such as the Medicare Shared Savings Program (MSSP).