Delivering Value, Quality, and Improved Outcomes in Medicare and Medicaid

The transition to innovative, value-based, consumer-empowered care is a top Administration and Departmental priority. HHS continues to enact reforms in Medicare and Medicaid to promote quality, efficiency, and value of care. These reforms come with an array of operational and program integrity challenges, as well as promising opportunities for better health outcomes, lower costs, improved transparency and choices for consumers, and reduced administrative burden on providers.

Medicare and Medicaid, the two largest programs in the Department, are also among the most complex. Both programs offer benefits in multiple formats (FFS, managed care, and newer payment models); cover a broad array of health conditions, providers, services, and settings; and operate pursuant to intricate statutory directives and regulatory schemes. Increasingly, beneficiaries are enrolling in Medicare and Medicaid managed care options.

The transition to value in the Medicare and Medicaid programs is well underway, with continued growth expected. The Health Care Payment Learning & Action Network, an HHS-sponsored public-private partnership, estimated that for FY 2017, 90 percent of providers in Medicare FFS were paid based, at least in part, on quality and value, with 38 percent being paid under an alternate payment model or a population-based payment; the comparable numbers for Medicaid were 32 percent and 25 percent, respectively. HHS has introduced, and continues to introduce, a range of new models, including accountable care organizations (ACOs), medical homes, bundled payment models, primary care models, and others. Many of these models are designed as all-payer models to align with developments in the private sector. Most recently, HHS announced a major set of initiatives to reform payment and delivery of kidney care, including new payment models, technologies, and care options for patients.