Feds Set Explicit Goal to Eliminate Fee For Service in Self Funded Plans.

Stephen George, CEO Provider Risk

Jul 1, 2011

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Federal reforms under the Patient Protection and Affordable Care Act (PPACA) and Centers for Medicaid Services (CMS) continue to regulate material change to the status quo. Federal Exchange plans at 24,500 members and growing slowly. Enrollments by state can be found at: http://www.healthcare.gov/news/factsheets/pcip06102011a.html

Centers for Medicare Innovation have stated their goal to eliminate fee-for-service medicine in 30 new Accountable Care Organizations (ACO). Noteworthy is a CMS stated goal of also directing same ACO’s into “population based reimbursement” or capitation for Part A and Part B medical expenses. CMS is explicitly directing selected ACO’s to also modify existing contracts with both Medicaid and Commercial Self funded medical populations. Several well organized medical centers are eagerly applying for ACO participation by deadline in August.

CMS states, “The goal of population-based payment is to allow Pioneer ACOs the revenue flexibility to provide services not currently paid for under FFS, and to invest in infrastructure to support care coordination. This particular approach to population- based payment exposes the Pioneer ACO to the same level of financial risk as in the payment arrangement in the second performance period. The Innovation Center is open to testing a different form of population-based payment in the Alternative Payment Arrangement that would offer the Pioneer ACO greater levels of financial risk and reward.”