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Current Challenges in Payment Reform

June 28, 2011
By Alyson Pusey, BIO.

The Affordable Care Act created several demonstration projects to test innovative care delivery systems that increase quality of care while decreasing costs. 

Speaking as a panelist was Jonathan Blum, Deputy Administrator and Director of the Center for Medicare at CMS, who discussed how the agency is thinking about payment reform.  Evidenced by the recent proposed rule on accountable care organizations (ACOs), the agency is looking to providers and the health care community to start thinking about the health care delivery system in terms of “journeys” of care, not “episodes” of care.  At the same time, CMS is also looking to manage and improve existing payment methodologies to improve quality and decrease costs. 

Blum pointed to changes in privately administered Medicare Advantage plans to highlight CMS’s reforms of existing payment methodologies.  Starting next year, these plans will be receive differential payments based on a star rating mechanism, which will use not only customer service and timeliness in claims processing to rate plans, but also outcomes and experience of care.  The Biotechnology industry should think about ways to help meet CMS’s initiatives, says Blum.  Products that produce favorable outcomes—such as those that help decrease hospital readmissions, should be covered and paid. With the comment period on ACO regulations recently closed, Blum encouraged stakeholders to continue the dialogue on payment reform approaches.