Study Finds That Less Than 20% of Medicare Spending is Value-based

Boston-based health insurance company Coverys found that less than 20% of Medicare spending is value-based. In order to meet future targets set by the Center for Medicare & Medicaid Services’ (CMS), Medicare providers must be in a fully value-based reimbursement model by 2025. For that to occur, approximately $1 trillion of healthcare risk must be shifted to hospitals from the federal government. In a similar vein, CMS is striving to place half of its Medicaid and commercial health plans in value-based contracts by 2025.

“The shift from volume to value is still in the early stages, but it is already having a dramatic effect on how care is delivered and paid for, as well as on who assumes the risk,” the report stated. “Over the next five years, every provider organization in the country will face new choices and challenges on how best to manage and finance this shift. In order to be successful, providers need to have a deep understanding of the value-based programs they are pursuing, their opportunities for revenue growth, and the risk of loss.” Read more here.

(Source: Jack O’Brien, Health Leaders, August 18, 2020)