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A next-generation Medicare payment scheme

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The current shared savings payment models do not work effectively for low-cost Accountable Care Organizations (ACOs), say David Krueger and John Toussaint in a HealthAffairs blog entry.

CMS and others have challenged them to design a better  Medicare payment scheme, In response, they’ve  come up with  global risk-adjusted payment system that’s detailed in a HealthAffairs piece linked here.

They go into great detail, but here’s their quick summary:

“At a high level, CMS would pay ACOs a set amount to cover all health care costs for a population of enrollees. This would be a per-member, per-year payment with appropriate adjustments for risk and geography. ACOs would be expected to improve their performance over time while CMS compresses the variation in per-member, per-year payments being made to participating ACOs. While all ACOs would be expected to improve, the least efficient ACOs would be expected to make the greatest improvements.

“Non-participants would remain on the Medicare fee-for-service payment system with progressive downward adjustments in fees. In essence, the model would reward provider systems on the path to improvement and reward those that are achieving the goals of the triple aim — lower cost, higher quality, and a better patient experience.”








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