Obama administration takes step to reform Medicare payments

The Obama administration on Wednesday rolled out a regulation to shift Medicare payments to reward quality health outcomes and implement the “doc fix” legislation passed by Congress last year. 


The doc fix legislation ended a system of a yearly scramble to avert cuts to doctors under Medicare and put in place a new system to make Medicare payments reward quality health outcomes for patients, as opposed to simply the number of tests and procedures provided. 

The proposed regulation issued Wednesday is a step toward implementing that new system. 

“The legislation Congress passed a little over a year ago was a milestone in our efforts to advance a health care system that rewards better care, smarter spending, and healthier people,” Health and Human Services (HHS) Secretary Sylvia BurwellSylvia Mary Mathews BurwellThe biggest revelations from Fauci's inbox What a Biden administration should look like Bogeymen of the far left deserve a place in any Biden administration MORE. “We have more work to do, but we are committed to implementing this important legislation and creating a health care system that works better for doctors, patients, and taxpayers alike.”

The rule announced Wednesday gives doctors a choice of two paths, both of which seek to pay them in part based on how well they treat patients. 

The first path, called the Merit-Based Incentive Payment System (MIPS), would increase or decrease payments up to 4 percent in the first year based on how well doctors meet benchmarks on quality, use of electronic health records and cost. 

The second path, known as advanced alternative payment models, would go even further in shifting toward rewarding quality.

It uses paths that have already put in motion by the Affordable Care Act, such as Accountable Care Organizations, where groups of doctors come together to share in Medicare’s savings if they reduce costs and meet quality goals. 

The rule is part of the administration’s larger effort to shift payment towards quality over quantity. It reached the goal of tying 30 percent of payments to quality this year.  

Officials said they will be listening to a wide variety of additional input before finalizing the rules. 

HHS released a whiteboard video to help explain the new system on Wednesday. 

“Instead of payments that encourage assembly-line style of care, this program helps doctors focus on quality and the one thing that matters most — whether patients are getting healthier,” the video states. 

Animated figures help act out the concepts. 

“These kind of smarter payments give doctors more freedom to practice medicine the best way they know how,” the video adds. “And they take people off the assembly line and put them in the center of their care. It’s a key part of our strategy to make our health care system work better for everyone.”