Healthcare Law Blog

Quality Over Quantity: The Shift from Fee-for-Service to Value-Based Payment Systems

The United States Department for Health and Human Services (“HHS”) recently announced its intention to tie thirty percent of fee-for-service Medicare payments to alternative and value-based payment models by 2016. HHS hopes to increase that amount to fifty percent by the end of 2018. Currently, up to twenty percent of payments are made through alternative models, a substantial increase in a short amount of time since almost no payments were made through alternative models as recently as 2011. Two days after HHS’ announcement, a group of key health care industry stakeholders announced the formation of the Health Care Transformation Task Force, a new industry consortium making a public commitment to transition seventy-five percent of its business between now and 2020 to value-based arrangements. These developments demonstrate the shift from fee-for-service payments based on quantity of work regardless of outcome and signals a larger trend to seek quality over quantity. With the seemingly meteoric rise of value-based care, it is important to understand the ramifications of alternative payment models within the health care industry as a whole. More >