Obama administration pushes to change Medicare payments for heart attacks

The Obama administration is pushing forward with moves to transform how Medicare pays for care, announcing a new system for paying for heart surgery. 

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The announcement comes as the administration, in its final months in office, seeks to further shift Medicare payments towards rewarding quality health outcomes and away from the old system of simply paying for the number of services provided. 

The new system will pay hospitals a set amount, known as a “bundled payment,” for the care around a heart attack or bypass surgery, instead of paying separately for each component of care. If the hospital meets quality targets and ends up spending less than the target, it gets to keep some of the money that is saved; if it spends over the target, it has to pay back money to the government. 

The idea is to incentivize saving money and providing quality care. 

Notably, while the administration is phasing in the new system over five years and restricting it to certain geographic areas, participation in the new model is mandatory in those areas, not voluntary like in some other new payment models. 

The administration is trying to reach a goal of linking 50 percent of Medicare payments to quality by 2018, after already meeting its goal of 30 percent. 

Dr. Patrick Conway, a top official at the Centers for Medicare and Medicaid Services (CMS), said it is “important to keep pushing forward” on changing how Medicare pays for care. 

He said that the CMS has heard “excitement” from healthcare providers about its bundled payment model for hip and knee replacements and that this announcement would build on that program. 

“I think we are moving at the right pace,” he said. 

The CMS will seek comments on the proposal before finalizing it, he said. 

More than 200,000 Medicare beneficiaries were hospitalized for heart attacks or bypass surgery in 2014, costing more than $6 billion, the CMS said. But pointing to the need for reform, the CMS says that the cost of treating those patients and the rate of readmission to the hospital varied by over 50 percent across hospitals.