Pay-for-Performance in Medicare

V. Key Issues: Population Health >> H. Quality/Satisfaction >> General Approaches >> Pay-for-Performance >> Pay-for-Performance in Medicare (last updated 12.24.17)
Lead Editor: Dana Beezley-Smith, Ph.D.

Topic Outline


The Affordable Care Act (ACA) authorized several new Medicare initiatives that use pay-for-performance (P4P) strategies to incentivize health care providers to reduce costs and improve quality. In such programs, reimbursement reflects provider performance on quality metrics based on adherence to certain care processes, scores on patient satisfaction surveys, and/or patient outcomes. The ACA also built upon some pre-existing P4P programs. Medicare experiments created by the ACA include the following:

Section 3001: Hospital Value-Based Purchasing Program
Section 3002: Improvements to Medicare’s Physician Quality and Reporting System (PQRS)
Section 3007: Application of Medicare’s Value-Based Physician Payment Modifier (VBPM) to Physicians Payments
Section 3008: The Hospital-Acquired Condition (HAC) Reduction Program
Section 3022: Medicare’s Shared Savings Program (Accountable Care Organizations)
Section 3025: Hospital Readmissions Reduction Program (HRRP)

Other models are authorized by Section 3021 of the ACA, which established the Center for Medicare & Medicaid Innovation (CMMI).

  • Setting Value-Based Payment Goals — HHS Efforts to Improve U.S. Health Care. New England Journal of Medicine. Burwell, Sylvia (1.26.15) “The Department of Health and Human Services (HHS) now intends to focus its energies on augmenting reform in three important and interdependent ways: using incentives to motivate higher-value care, by increasingly tying payment to value through alternative payment models; changing the way care is delivered through greater teamwork and integration, more effective coordination of providers across settings, and greater attention by providers to population health; and harnessing the power of information to improve care for patients… Our goal is to have 85% of all Medicare fee-for-service payments tied to quality or value by 2016, and 90% by 2018. Perhaps even more important, our target is to have 30% of Medicare payments tied to quality or value through alternative payment models by the end of 2016, and 50% of payments by the end of 2018.”
  • Health Care Payment Learning and Action Network. “To help achieve better care, smarter spending, and healthier people, the Department of Health and Human Services (HHS) is working in concert with our partners in the private, public, and non-profit sectors to transform the nation’s health system to emphasize value over volume. HHS has set a goal of tying 30 percent of Medicare fee-for-service payments to quality or value through alternative payment models by 2016 and 50 percent by 2018. HHS has also set a goal of tying 85 percent of all Medicare fee-for-service to quality or value by 2016 and 90 percent by 2018. To support these efforts, HHS has launched the Health Care Payment Learning and Action Network to help advance the work being done across sectors to increase the adoption of value-based payments and alternative payment models…Working together, HHS, private sector payers, providers, employers, states, consumer groups, individual consumers, and other partners will help health care payments transition more quickly toward alternative payment models —– a critical step toward better care, smarter spending, and healthier people. If you would like more information or wish to participate in the Health Care Payment Learning and Action Network, registration is now open.” (Center for Medicare and Medicaid Services, March, 2015)

In September, 2017, the new administrator for CMS indicated a willingness to redesign Medicare’s P4P programs.

  • CMS Champions Innovation and Competition While Buoying Value-based Care. “The CMS issued a ‘request for information’ Wednesday from providers and patient advocacy groups on new ideas to bring to the Center for Medicare and Medicaid Innovation responsible for creating new payment models. The notice came after CMS Administrator Seema Verma wrote in a Wall Street Journal op-ed Tuesday evening that the Innovation Center’s old policies led to consolidation that has been widely blamed for growing overall healthcare costs. She also said the policies burdened providers. ‘Providers need the freedom to design and offer new approaches to delivering care. Our goal is to increase flexibility by providing more waivers from current requirements,’ she wrote.” (Modern Healthcare, 9.20.17)

Hospital Value-Based Purchasing Program (HVBP)

The Hospital Value-Based Purchasing (VBP) Program, applied under Medicare’s inpatient prospective payment system (IPPS), adjusts payments to hospitals based on CMS measures of quality of care furnished to patients. Starting in October 2012, with payment adjustments beginning in fiscal year (FY) 2013, the program “affects payment for inpatient stays in more than 3,000 hospitals across the country.” Medicare makes incentive payments to hospitals based on either how well they perform on each measure or how much they improve their performance on each measure compared to their performance during a baseline period.
A hospital that chooses not to participate in the Hospital Inpatient Quality Reporting (IQR) Program will be excluded from the Hospital VBP Program. Hospitals that are excluded from the Program do not incur the reduction of 1.5 percent but are not eligible to receive additional incentives.
The FY 2016 Program will adjust payments for performance from October 1, 2015 through September 30, 2016.
Visit Hospital Compare to see the scoring and supplemental data for participating hospitals.

Quality Measures

A hospital’s Total Performance Score is currently derived from ratings across several domains. The measures used in 2012 are available here, and are updated annually.
2016. According to Stratis Health, the quality domains for FY 2016 are:

  • Clinical Process of Care: 10 percent of Total Performance Score
  • Patient Experience of Care (from results of the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey): 25 percent of Total Performance Score
  • Outcome: (hospital mortality measures for acute myocardial infarction, heart failure, and pneumonia, and the central line-associated bloodstream infection measure): 40 percent of Total Performance Score
  • Efficiency: (Medicare Spending per Beneficiary measure gauges efficiency by calculating total cost to Medicare for hospitals’ episodes): 25 percent of Total Performance Score

2017. According to CMS, “the FY 2017 measure set will add two new Safety measures and one new Clinical Care-Process measure, re-adopt the current version of the CLABSI measure, and remove six ‘topped-out’ clinical process measures. Over 78 percent of the measures in the Hospital VBP Program will assess health outcomes, patient experience and cost.”
The two new outcome measures for the new Safety domain in FY 2017 are a) hospital-onset methicillin-resistant Staphylococcus aureus (MRSA) bacteremia and b) Clostridium difficile infection. The new Clinical Care-Process measure will be “early elective deliveries.” The Studer Group has listed the 2017 measures here.
2018. CMS will weight the four domains (Safety, Clinical Care, Efficiency and Cost Reduction, Patient and Care Giver-Centered Experience of Care/Care Coordination) equally, each worth 25 percent of the total score.
2019 and 2020. For FY 2019, CMS will measure complication rates following elective hip and knee arthroplasty within a 30-month performance period and, for 2020, a 36-month performance period.


Hospital VBP incentive payments to hospitals are funded from reductions in the fees Medicare pays hospitals through its Diagnosis-Related Group (DRG) system for each patient discharge. The base operating DRG percent reduction was 1.0 percent for Fiscal Year (FY) 2013, 1.25 percent for FY 2014, 1.5 percent for FY 2015, and 1.75 percent for FY 2016. A 2 percent reduction is applied for FY 2017 and subsequent years. 

Payment Adjustments

Avatar Solutions reports that 1.75% of Medicare reimbursement is at risk in 2016. This is a 0.25% increase from VBP FY 2015. The amount at risk will continue to increase 0.25% per year until it reaches a maximum 2% in FY 2017.

Changes to Medicare’s Physician Quality and Reporting System (PQRS)

  • Extends payments under the Physician Quality Reporting System (PQRS, formerly the Physician Quality Reporting Initiative or PQRI), which provides incentives for reporting quality data to Medicare.
  • Creates appeals and feedback processes for participating professionals in PQRS.
  • Establishes a participation pathway for physicians completing a qualified Maintenance of Certification program with their specialty board of medicine.
  • Beginning in 2014, professionals who do not submit measures to PQRS will experience Medicare payment reductions.
  • For 2015, the penalty for failure to submit data is a reduction in payment to 98.5% of the fee scheduled amount, and for 2016 and subsequent years, the penalty is a reduction to 88% of the fee-scheduled amount.

Physician Compare Reporting

According to CMS, Physician Compare scores reflect clinician performance on the following measures:

If a health care professional or group practice participates in one or more of these programs, Physician Compare includes a green check mark on the profile page.

  • Individual Clinicians Now Get Stars on Physician Compare Site. “The report-carding of American medicine expanded on December 10 when Medicare introduced performance scores on six quality-of-care measures for more than 40,000 individual clinicians on its Physician Compare website… the government refreshed Physician Compare data for group practices and ACOs to reflect PQRS performance in 2014 and added new measures for them as well, including eight from the CAHPS survey for some 290 group practices. But the big news was the addition of scores for individual clinicians on up to six PQRS measures oriented toward primary care… Dr Stack said that in light of ‘widespread accuracy issues with the 2014 PQRS calculations,’ the release of performance scores on individual clinicians was premature. ‘The AMA is a strong supporter of transparency, but [the December 10] action goes in the opposite direction — offering the public information that will lead consumers to draw faulty inferences about the quality of care that an individual physician or group provides,’ he said. More information about Physician Compare is available on the program’s website.” (Medscape Medical News, 12.14.15)

Value-Based Physician Payment Modifier (VBPM)

According to CMS (2015), “Section 3007 of the Affordable Care Act mandated that, by 2015, CMS begin applying a Value Modifier under the Medicare PFS (Physician Fee Schedule)… We are applying the Value Modifier in 2015 based on performance in 2013 for groups of 100 or more eligible professionals (EPs).” The VBPM program adjusts a physician’s Medicare reimbursement up or down based on how he or she scores on quality and cost-effectiveness measures. Payment reflects performance in the Physician Quality Reporting System, and cost data from Medicare fee-for-service claims. More information on the program is found here.

Eligible Professionals

  • CMS applied the VBM to group practices of 100 or more eligible professionals (EPs) in 2015 (for 2013 performance) and to groups of 10 or more EPs in 2016 (for 2014 performance).
  • In 2017, all physicians, including solo practitioners, will be scored under the VBPM, followed by other clinicians such as nurse practitioners and physician assistants in 2018.
  • For 2015 and 2016, the Value Modifier does not apply to groups of physicians in which any of the group’s physicians participate in the Medicare Shared Savings Program, the Pioneer ACO Model, or the Comprehensive Primary Care initiative during 2013 and 2014. For 2017, the Value Modifier will apply to participants in these three initiatives.  
  • For 2018, the Value Modifier will also apply to Medicare PFS payments made to non-physician EPs. 
  • In 2019, the VMB will be folded into the new Merit-Based Incentive Payment System (MIPS) created by the Medicare Access and CHIP Reauthorization Act of 2015.

Payment Adjustments

  • Although groups of all sizes were eligible for bonuses in 2016, only groups of 100 or more EPs faced the risk of a penalty.
  • According to CMS, “CY 2015 is the performance period for the Value Modifier that will be applied in CY 2017. In order to be eligible for upward, downward, or neutral payment adjustments under the Value Modifier quality-tiering methodology and to avoid an automatic negative two percent (-2.0%) (for physician groups with between 2 to 9 EPs and physician solo practitioners) or negative four percent (-4.0%) (for physician groups with 10 or more EPs) Value Modifier payment adjustment in CY 2017, EPs in groups and solo practitioners MUST participate in the Physician Quality Reporting System (PQRS) and satisfy reporting requirements as a group or as individuals in CY 2015.”

Hospital-Acquired Condition (HAC) Reduction Program

Section 3008 of the Patient Protection and Affordable Care Act (ACA) established the Hospital-Acquired Condition (HAC) Reduction Program to build upon an existing HAC program established under the Deficit Reduction Act (DRA) of 2005. As described in the Journal of the American Medical Association, hospitals in this program are evaluated according to 2 domains.2,3 Domain 1 constitutes 35% of the total score and is solely based on the Agency for Healthcare Research and Quality’s (AHRQ) Patient Safety for Selected Indicators (PSI)-90 composite measure. Domain 2 accounts for the remaining 65% of the total score. Beginning October 1, 2014 (fiscal year [FY] 2015), hospitals scoring in the worst quartile had their Centers for Medicare & Medicaid Services’ (CMS’) payments reduced by 1%, totaling approximately $373 million nationally.4,5
According to CMS, the program requires that effective Fiscal Year (FY) 2015 (for discharges beginning on October 1, 2014), the Secretary of the Department of Health and Human Services must adjust payments to applicable hospitals that rank in the worst-performing quartile of all subsection (d) hospitals with respect to risk-adjusted HAC quality measures. “These hospitals will have their payments reduced to 99 percent of what would otherwise have been paid for such discharges. In the FY 2016 HAC Reduction Program, hospitals with a Total HAC Score greater than 6.7500 are subject to a payment reduction.”
Scores for each measure, Domain 1 and Domain 2 scores, and Total HAC Scores are available on Hospital Compare. Background information regarding the HAC Reduction Program measures, scoring methodology, review and corrections process, and hospital-specific reports are found at

Payment Adjustments

According to Premier, Inc., the ACA required CMS to reduce inpatient payments by 1 percent starting in FY 2015 for the quartile of hospitals with the highest hospital-acquired conditions. The 1 percent reduction applies to the total inpatient payment that would otherwise be made including all adjustments (IME, DSH, etc.) as well as after adjustments for VBP and readmissions. CMS estimates that 807 hospitals would be subject to the 1 percent reduction in 2016. “CMS is finalizing its proposal to extend the extraordinary circumstance exception under Hospital VBP to the HAC Reduction program.”

FY 2016

In the FY 2015 Final Rule, CMS adopted the following HAC measures. 

  • Domain 1 – Agency for Healthcare Research and Quality (AHRQ) Patient Safety Indicator (PSI) 90 Composite. The AHRQ PSI 90 Composite is calculated using hospitals’ Medicare fee-for-service claims for discharges from July 1, 2012 through June 30, 2014. The AHRQ PSI 90 Composite includes the following eight PSIs:
    • PSI 03 – Pressure Ulcer
    • PSI 06 – Iatrogenic Pneumothorax
    • PSI 07 – Central Venous Catheter-Related Bloodstream Infections
    • PSI 08 – Postoperative Hip Fracture
    • PSI 12 – Perioperative Pulmonary Embolism or Deep Vein Thrombosis
    • PSI 13 – Postoperative Sepsis
    • PSI 14 – Postoperative Wound Dehiscence
    • PSI 15 – Accidental Puncture or Laceration
  • Domain 2 – Centers for Disease Control and Prevention (CDC) National Healthcare Safety Network (NHSN) Healthcare-Associated Infection (HAI) measures. The following three CDC NHSN HAI measures are calculated using hospitals’ chart-abstracted surveillance data reported to NHSN for infections occurring from January 1, 2013 through December 31, 2014:
    • Central Line-Associated Bloodstream Infection (CLABSI)
    • Catheter-Associated Urinary Tract Infection (CAUTI)
    • Surgical Site Infection (SSI) (colon and hysterectomy)

FY 2017

For FY 2017 payment, CMS is changing the contribution of each domain to the Total HAC score: domain 1 (AHRQ Patient Safety Indicators) will decrease from 25 percent to 15 percent and domain 2 (CDC NHSN measures) will increase from 75 percent to 85 percent. Additionally, CMS is finalizing its proposal to include all domain 2 measures in the domain 2 score (an average of all measures scores in the domain); previously, if a hospital did not report a measure in domain 2 the measure was not included in the average.

FY 2018

For FY 2018 payment, CMS is expanding the population of the CLABSI and CAUTI measures to include medical and surgical ward locations in addition to adult and pediatric ICU.

Hospital Readmissions Reduction Program (HRRP)

According to QualityNet, Section 3025 of the 2010 Affordable Care Act (Public Law 111-148) requires the Secretary of the Department of Health and Human Services to establish a Hospital Readmissions Reduction Program whereby the Secretary reduces Inpatient Prospective Payment System (IPPS) payments to hospitals for excess readmissions beginning on or after October 1, 2012 (Fiscal Year [FY] 2013). The Centers for Medicare & Medicaid Services (CMS) adopted and publicly reported the following 30-day risk standardized readmission measures to comply with these requirements.

Effective Program Year

Finalized in IPPS Rule

30-day Risk Standardized Readmission Measures

FY 2013 and FY 2014

FY 2012

  • Acute myocardial infarction (AMI)
  • Heart failure (HF)
  • Pneumonia

FY 2015 and FY 2016

FY 2014

  • AMI
  • HF
  • Pneumonia
  • Chronic obstructive pulmonary disease (COPD)
  • Elective primary total hip and/or total knee arthroplasty (THA/TKA)

FY 2017

FY 2015

  • AMI
  • HF
  • Pneumonia
  • COPD
  • Coronary Artery Bypass Graft (CABG) Surgery

Payment Adjustments

According to the Kaiser Family Foundation, average penalties (among hospitals receiving a penalty) will also increase compared to previous years; however, they will remain below 1 percent, despite the maximum cap on the penalty increasing to 3 percent as part of the planned phase-in of the HRRP.
CMS estimated total hospital penalties under the HRRP to sum to $428 million in 2015, an increase over prior years ($290 million in 2013 and $227 million in 2014).8 This increase is due mostly to more hospitals receiving a penalty, given the expanded number of initial diagnoses included in calculating readmission rates, but a small part of the increase may also due to the increase in the maximum penalty.

Medicare Advantage Plan Bonus Payments

End-Stage Renal Disease (ESRD) Quality Incentive Program (QIP)

The End-Stage Renal Disease (ESRD) Quality Incentive Program (QIP) was created by the 2008 Medicare Improvements for Patients and Providers Act (MIPPA). The Centers for Medicare & Medicaid Services (CMS) established the program “to promote high-quality services in outpatient dialysis facilities treating Medicare patients with ESRD.” The program began with measurement of facilities’ performance in 2010, with payment adjustments applied in 2012. According to CMS, payment reductions result when a facility’s overall score on applicable measures “does not meet established standards.” CMS publicly reports facility ESRD QIP scores on Dialysis Facility Compare.  In addition, each facility is required to display a Performance Score Certificate.

Payment Adjustments

“Immediately following the completion of the performance period, CMS assesses the facility’s performance based on the comparison period and calculates a score for each measure, according to the methodology detailed each year in a final rule published in the Federal Register. Scores for each measure are then combined to create the Total Performance Score for each facility. If a facility’s Total Performance Score does not meet or exceed the performance standards established during the earlier comparison period, then it will incur payment reductions of up to two percent for the entire PY (payment year).”

Quality Measures for 2016

Dialysis Adequacy

Vascular Access

Mineral and Bone Disorder


  • Standardized Mortality Ratio

ESRD Hospitalization/Readmission

Anemia Management

Comprehensive ESRD (End-Stage Renal Disease) Care (CEC) Model 

In 2013, the Centers for Medicare & Medicaid Services (CMS) announced the development of the Comprehensive End-Stage Renal Disease (ESRD) Care model, the first Accountable Care Organization (ACO) model with a disease-specific focus. Developed through the Affordable Care Act’s Innovation Center, the model aims to identify ways to improve the coordination and quality of care for Medicare beneficiaries living with ESRD, while also reducing Medicare expenditures.
The model began on October 1, 2015 and as of summer 2016, there were 13 ESRD Seamless Care Organizations (ESCOs) participating in the Comprehensive ESRD Care Model. (List). The initial agreement period lasts for three years with the option to extend the program for two additional one-year periods based on performance.

Payment Adjustments

Participating organizations will be clinically and financially responsible for all care offered to a group of matched beneficiaries, not only dialysis care or care specifically related to a beneficiary’s ESRD. The Comprehensive ESRD Care Model incorporates separate financial arrangements for larger and smaller dialysis organizations, as defined by the United States Renal Data System (USRDS).

  • Large Dialysis Organizations (LDOs) have 200 or more dialysis facilities and are eligible for shared savings payments. LDOs will also be liable for shared losses, and will have higher overall levels of risk compared with smaller facilities.
  • Non-large dialysis organizations (Non-LDOs) include chains with fewer than 200 dialysis facilities, independent dialysis facilities, and hospital-based dialysis facilities. Non-LDOs may participate in (a) a one-sided track where they will be able to receive shared savings payments, but will not be liable for payment of shared losses, or (b) a track with higher risk and the potential for shared losses. “The one-sided track is offered in recognition of non-LDOs more limited resources.” 

Quality Measures and Measure Weights

Advanced Primary Care Initiatives

The Centers for Medicare & Medicaid Services (CMS) is developing initiatives to test innovations in advanced primary care, particularly mechanisms to encourage more comprehensiveness in primary care delivery; to improve the care of complex patients; to facilitate robust connections to the medical neighborhood and community-based services; and to move reimbursement from encounter-based towards value-driven, population-based care.


Advanced primary care is based on principles of the Patient Centered Medical Home and builds on the care delivery models employed in other CMS model tests, including the Comprehensive Primary Care Initiative. Next generation model(s) for advanced primary care would seek to improve further the delivery of patient-centered care and population health. CMS is currently exploring topics of interest including:

  • increased comprehensiveness of, and patient continuity with, primary care (i.e., care provided with greater depth and breadth and through longitudinal relationships between patients and primary care providers),
  • care of patients with complex needs,
  • closer connections between primary care and other clinical care (“the medical neighborhood”) and community-based services,
  • moving from encounter-based payment or encounter-based payment with care management fees towards population-based payments (PBPs) to support the infrastructure needed for advanced primary care, create incentives for innovation in care delivery, and promote accountability for costs and quality of care, including consideration of appropriate mechanisms to assign beneficiaries to unique practices,
  • mechanisms to support small primary care practices in the transformation to advanced primary care,
  • advanced primary care within accountable care organizations (ACOs),
  • multi-payer participation,
  • performance measurement that is meaningful to beneficiaries and clinicians,
  • matching documentation requirements to the goals of advanced primary care while protecting MS program integrity, and
  • use of health information technology (HIT), including electronic health records, data analytics, and population health tools, to support advanced primary care.

Transforming Clinical Practice Initiative

The Transforming Clinical Practice Initiative is designed to help clinicians achieve large-scale health transformation and prepare for pay-for-performance. The initiative is designed to support more than 140,000 clinician practices. Support and Alignment Network 2.0 awardees’ activities, coaching, and technical assistance should result in the rapid transition of practices through five phases of transformation:

Set aims

  • Use data to drive care
  • Achieve progress on aims
  • Achieve benchmark status
  • Thrive as a business via pay-for-value approaches

Visit the CMS site for more information on support activities.

Comprehensive Primary Care (CPC)

According to CMS, the Comprehensive Primary Care (CPC) initiative is a four-year multi-payer initiative that launched in October 2012. CMS is collaborating with commercial and state health insurance plans in seven U.S. regions to offer population-based care management fees and shared savings opportunities to participating primary care practices in supporting the provision of a core set of five “Comprehensive” primary care functions (CMS):

  • Access and Continuity: Primary care practices optimize continuity and timely, 24/7 access to care guided by the medical record. Practices track continuity of care by provider or panel.
  • Planned Care for Chronic Conditions and Preventive Care: Participating primary care practices proactively assess their patients to determine their needs and provide appropriate and timely chronic and preventive care, including medication management and review. Providers develop a personalized plan of care for high-risk patients and use team-based approaches like the integration of behavioral health services into practices to meet patient needs efficiently.
  • Risk-Stratified Care Management: Patients with serious or multiple medical conditions need extra support to ensure they are getting the medical care and/or medications they need. Participating primary care practices empanel and risk stratify their whole practice population, and implement care management for these patients with high needs.
  • Patients and Caregiver Engagement: Primary care practices engage patients and their families in decision-making in all aspects of care, including improvements in the system of care. Practices integrate culturally competent self-management support and the use of decision aids for preference sensitive conditions into usual care.
  • Coordination of Care Across the Medical Neighborhood: Primary care is the first point of contact for many patients, and takes the lead in coordinating care as the center of patients’ experiences with medical care. Practices work closely with patients’ other health care providers, coordinating and managing care transitions, referrals, and information exchange.

CMS guides development of the five CPC functions at each CPC practice through a framework of ‘Milestones.’ Participating practices report their Milestone progress regularly through a web portal.”
“The initiative is testing whether provision of these functions at each practice site — supported by multi-payer payment reform, the continuous use of data to guide improvement, and meaningful use of health information technology — can achieve improved care, better health for populations, and lower costs, and can inform future Medicare and Medicaid policy.”

CMS Comprehensive Primary Care Initiative Participants to Improve Care Coordination, Share in Savings. Under the CPC initiative, the Centers for Medicare and Medicaid Services (CMS), in conjunction with qualified commercial and state insurance plans, will pay participating practices a care management fee to provide enhanced and better coordinated care to Medicare fee-for-service beneficiaries. This includes ensuring access to care, improving management of high-risk patients, delivering preventive care, engaging patients and care givers, and coordinating care across the healthcare continuum. In addition to the management fee, CPC providers will also share in any savings they generate after two years.” (MedHOK, 10.3.12)

Number Served

As of October 2015, there were 441 CPC practice sites and 2,188 participating providers serving approximately 2,700,000 patients, of which approximately 410,177 are Medicare and Medicaid beneficiaries. There are also 38 public and private payers participating in the Comprehensive Primary Care initiative (List).
Visit the Where Innovation is Happening page to view an interactive map of this model.

Comprehensive Primary Care Plus (CPC+)

  • CMS Announces Comprehensive Primary Care Plus Risk Based Payment Model. “The five-year, Comprehensive Primary Care Plus, or CPC+, starts in January 2017 and will include up to 5,000 practices and 20,000 physicians in an estimated 20 regions. It pays participating physicians under two tracks. Both give practices up-front incentive payments the physicians will either keep or repay based on their performance on quality and utilization metrics, CMS said in a news release.” (HealthcareIT News, 4.11.16)
  • CMS Expands Comprehensive Primary Care Plus to New Regions. “Eligible participants in Louisiana, Nebraska, North Dakota, and the Greater Buffalo Region of New York State will be able to join Round 2 of the CPC+ from 2018 to 2022. They will join nearly 2900 practices and 53 payers in 14 other regions, including Arkansas, Colorado, Hawaii, Michigan, Montana, New Jersey, Ohio, Oklahoma, Oregon, Kansas, Missouri, New York, Rhode Island, and Tennessee… The program, which began earlier in 2017, offers primary care providers the chance to build their population health management skills while benefiting from financial incentives that can prepare them for value-based care. Participants in both Track 1 and Track 2 of the CPC+ receive prospective care management payments, although Track 2 practices have their fee-for-service reimbursements reduced to increase the incentive to cut costs.” (HealthIT Analytics, 5.17.17)

Multi-payer Advanced Primary Care Practice (MAPCP) 

Under this demonstration, CMS participated in multi-payer reform initiatives that were being conducted by states to make advanced primary care practices (also called medical homes) more broadly available. The demonstration was intended to evaluate whether advanced primary care practice (APC) could reduce unjustified utilization and expenditures, while improving the safety, effectiveness, timeliness, and efficiency of health care.
The demonstration program paid a monthly care management fee for beneficiaries receiving primary care from APC practices. The care management fee was intended to cover care coordination, improved access, patient education, and other services to support the chronically ill.


Medicare participation in three of the state’s programs (Vermont, New York, and Rhode Island) started July 1, 2011. Two additional states (North Carolina and Michigan) were effective October 1, 2011 and the three remaining states became operational January 1, 2012. Each state’s program was planned to be operational for 3 years. In early 2014 a decision was made to extend the demonstration in all states through the end of 2014, and in September 2014 CMS announced that it would offer six of the eight states participating the opportunity to extend the demonstration through 2016. The offer to extend the demonstration was made to those states for which some of the MAPCP Demonstration payment goes to community based organizations that could not bill independently under the Chronic Care Management (CCM) codes that took effect in January, 2015. Five states (Maine, Michigan, New York, Rhode Island, Vermont) accepted the offer to participate through 2016.

FQHC Advanced Primary Care Practice Demonstration (FQHC APCP)

The three-year Demonstration was designed to evaluate the effect of the advanced primary care practice model, commonly referred to as the patient-centered medical home, in improving care, promoting health, and reducing the cost of care provided to Medicare beneficiaries served by FQHCs. FQHCs received a monthly care management fee of $6.00 for each eligible Medicare beneficiary attributed to their practice to help defray the cost of transformation into a person-centered, coordinated, seamless primary care practice. This payment was in addition to the usual all-inclusive payment FQHCs receive for providing Medicare covered services.
The Federally Qualified Health Center (FQHC) Advanced Primary Care Practice (APCP) Demonstration concluded on October 31, 2014 as scheduled. 434 participating sites participated.

Million Hearts®: Cardiovascular Disease Risk Reduction Model (Million-Hearts-CVDRRM)

According to CMS (5.28.15), “The Million Hearts®: CVD Model is a randomized-controlled trial that seeks to bridge a gap in cardiovascular care by providing targeted incentives for providers to engage in individual CVD risk calculation and population-level risk management. Instead of focusing on the individual components of risk, participating practices will engage in risk stratification across a patient panel to identify those at highest risk for ASCVD.”  The trial will use the predictive modeling approach of the American Heart Association/American College of Cardiology to identify patients who are at high risk of having a cardiovascular event in the future. Both control and intervention practices will use this method to select their high-risk patients and will work with those patients to reduce their risk factors. The primary outcomes of the trial will be population-wide reduction in 10-year composite risk and population-wide reduction in composite incidence of myocardial infarction and stroke.” The trial runs for five years, beginning in January 2017 and ending by December 2022.

Eligible Professionals

720 practices divided between intervention and control cohorts of equal size including general/family practice, internal medicine, geriatric medicine, multispecialty care, nephrology, and cardiovascular care, private practices (with more than one provider per practice), community health centers and other community-based clinics, hospital-owned physician practices, or hospital/physician organizations. All participating practices must use certified electronic health records, and their physicians must have met meaningful use stage 1 criteria.
In 2016, CMS announced “there are 516 participating organizations” (List) participating in the program.

Eligible Beneficiaries

According to Medscape News (6.1.15), the practices will care for 300,000 Medicare beneficiaries (150,000 in each cohort). The target population for the Million Hearts® CVD model are “Medicare FFS beneficiaries aged 40-79 years of age who have not had a previous Heart Attack, Stroke, or Transient Ischemic Attack. They cannot be in hospice or have End Stage Renal Disease (ESRD).”

Payment Adjustments

Physicians in the intervention group will be paid extra for helping patients achieve favorable outcomes on a sliding scale: $10 per beneficiary for initial screening, and then $10 per beneficiary per month for an absolute risk reduction of greater than 10 percentage points, $5 per beneficiary per month for an absolute risk reduction of between two and 10 percentage points, and no bonus for a drop of less than two percentage points.
Practices in the control group will be asked to report only clinical data such as age and cholesterol level on patients at years 1, 2, 3, and 5 of the model. Practices in the control group will be given a payment of $20 per beneficiary for each reporting cycle.

Bundled Payment Demonstrations

According to CMS, bundled payment programs reflect pay-for-performance initiatives because service providers are awarded bonuses (or lose funds) for scores on cost and quality. “This alignment leads to a heightened focus on care coordination and management throughout the episode that prioritizes the provision of those items and services which improve beneficiary outcomes and experience at the lowest cost.” Proponents believe bundling payments for episodes of care will improve efficiencies, patient outcomes, and collaboration among providers, while reducing the demand for unnecessary testing and treatments.

Voluntary Bundled Payment Programs

Bundled Payment for Care Improvement (BPCI)

Bundled Payment for Care Improvement (BPCI) is a program begun in 2013 in which hospitals, physician group practices and post-acute care providers accepted clinical and financial risk for patients over specified time frames (30-, 60-, or 90-days). Participating providers select episodes to test from a group of 48 clinical conditions among four broadly defined models of care, which range from procedures such as joint replacements to medical conditions. BPCI participants entered the at-risk phase between 2013 and 2015 and have the option to continue participating in the initiative through FY 2018.
Phase 2. As of April 1, 2016, BPCI had 1522 participants comprised of 321 Awardees and 1201 Episode Initiators actively involved in care redesign. The breakdown of participants by provider type is as follows: Acute Care Hospitals (385), Physician Group Practices (283), Home Health Agencies (99), Inpatient Rehabilitation Facilities (9), Long-Term Care Hospitals (1), and Skilled Nursing Facilities (681).  The difference between the totals in participants and providers is due to the fact that there are Awardees that are not initiating clinical episodes and therefore not included in the breakdown of participants by provider type.
“Over the course of the initiative, CMS will work with participating organizations to assess whether the models being tested result in improved patient care and lower costs to Medicare.”

Mandatory Bundled Payment Programs

CMS will Cancel Major Bundled Payment Initiatives. “CMS has proposed canceling the cardiac and expanded joint replacement bundled payment models. The rule, which was sent to the Office of Management and Budget last week, would cancel the mandatory bundled payment programs for heart attacks and bypass surgeries as well as expansion of the existing Comprehensive Care for Joint Replacement model to include surgical treatments for hip and femur fractures. Those bundled payment initiatives have already been delayed twice. They’re currently slated to take effect Jan. 1, 2018.” (Becker’s CFO Report, 8.14.17)

Comprehensive Care for Joint Replacement Model (CJR)

 In July 2015 Medicare announced the launch of a mandatory bundled payment program (Comprehensive Care for Joint Replacement Model) in several geographic regions by January 1, 2016. In November 2105, the agency moved the start date to April 1, 2016.
CMS has implemented the CJR model in 67 geographic areas, defined by metropolitan statistical areas (MSAs), and nearly all hospitals in those geographic areas are required to participate. (MSAs are defined as counties associated with a core urban area with a population of at least 50,000). Non-MSA counties (no urban core area or urban core area of less than 50,000 population) were not eligible for selection. As of November 2015, approximately 800 hospitals were being required to participate in the CJR model.

Payment Adjustments. The facility at which the hip or knee replacement and/or other major leg procedure takes place will be accountable for the costs and quality of related care from the time of the surgery through 90 days after hospital discharge. Providers and suppliers are paid under the usual payment system rules and procedures of the Medicare program for episode services throughout the year. At the end of a model performance year, actual spending for the episode (total expenditures for related services under Medicare Parts A and B) is compared to the Medicare target episode price for the responsible hospital. Depending on the participant hospital’s quality and episode spending performance, the hospital may receive an additional payment from Medicare or be required to repay Medicare for a portion of the episode spending.

CMS Proposed Changes. On July 25, 2016 the Department of Health & Human Services (HHS) proposed several changes to the model aligning the financial arrangements policies for CJR with the proposed EPMs; allowing ACOs, CAHs, and hospitals to be CJR collaborators; modifying terms and policies related to pricing and the reconciliation process; excluding a small number of beneficiaries aligned to certain ACOs from the CJR model; make small changes to composite quality score methodology; and making the CJR model potentially eligible to be a MACRA Advanced APM.

Quality Measures

  • THA/TKA Complications: Hospital-Level Risk-Standardized Complication Rate (RSCR) Following Elective Primary Total Hip Arthroplasty (THA) and/or Total Knee Arthroplasty (TKA) (National Quality Forum [NQF] #1550)
  • Hospital Consumer Assessment of Healthcare Providers and Systems (HCAPHS) Survey (NQF #0166)
  • Successful Voluntary Reporting of Patient-Reported Outcomes 

Episode Payment Models

Similar to bundled payment programs, episode payment models (EPMs) were introduced in July 2016 through CMS proposed rulemaking (Advancing Care Coordination through Episode Payment Models) to supplement the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA)The models address care for heart attacks, bypass surgery, and surgical hip/femur fracture and will be tested for 5 performance years. All three models are mandatory for the locations selected. The first performance period will run from July 1, 2017 to December 31, 2017. The second through fifth performance periods would align with calendar years 2018 through 2021.

  • Providers: Too Soon to Expand Medicare Bundled Payment Models. “The comment period for a proposed rule establishing a cardiac payment bundle and expanding a hip replacement model closed Monday. Advocates claim CMS hasn’t gauged the success of the knee and hip replacement model, before duplicating it for cardiac patients. The rule would also expand the joint replacement model, which launched in April, to include hip and femur fracture treatment… ‘Hospitals do not have an unlimited capacity to implement bundled payment models,’ the association said in a 40-page comment letter. ‘Indeed, the proposal to expand [the joint replacement model] also was put forth less than four months after the program began. Neither CMS nor hospital participants have had the time or the data to be able to analyze any lessons learned, successes or failures.’” (The Hill, 10.6.16)
  • Kindred, NAHC Say to Hit the Brakes on Bundled Payments. “In April 2016, the mandatory Comprehensive Care for Joint Replacement (CJR) demonstration got underway. Under this program, hospitals in selected geographic areas would be responsible for controlling costs for orthopedic patients from the time of surgery to 90 days after hospital discharge; the hospital would have to pay Medicare for costs exceeding a certain benchmark, but would receive an incentive payment for keeping costs below that threshold… CMS’ move to expand mandatory bundled payments to heart conditions and femur fractures—announced through a proposed rule issued in July—is too aggressive, many stakeholders argue. CMS should take more time to evaluate the CJR demonstration before implementing mandatory bundled payments for other conditions, according to public comments on the July proposed rule that were submitted last week by various organizations, including the National Association for Home Care & Hospice (NAHC), Kindred Healthcare (NYSE: KND), and the Alliance for Home Health Quality & Innovation (AHHQI). ‘Although bundled payment models may work to create efficiencies in health care delivery they can also encourage negative behaviors by the entity(s) that bears the financial risk, such as stinting on care; a delicate balance that CMS has expressed concern over in both this proposed rule and with the initiation of the CJR model,’ NAHC stated. ‘Therefore, it is perplexing why CMS would go forward with plans to create and test three new episode payment models that will impact a significant number of Medicare beneficiaries and health care providers without clear evidence of the effectiveness of these models.’” (Home Health Care News, 10.16.16)

Cardiac Care Bundled Payment Model

The acute myocardial infarction (AMI) and coronary artery bypass graft (CABG) models will require acute-care hospitals in 98 areas to participate in retrospective episode payment models for Medicare beneficiaries now receiving care under a fee-for-service model. “An eligible beneficiary who receives care at such a hospital will automatically be included in the applicable EPM.”


  • Watch for Potential Pitfalls as CMS Tests a New Bundled Payment Program for Cardiac Care. “But Francois de Brantes, executive director of the Health Care Incentives Improvement Institute, outlined for me three potential weaknesses in the payment model. First, by paying hospitals to lead these programs, physicians can serve only as participating providers rather than as organizers of care, he said in an email. As a result, physicians would have less flexibility to schedule these procedures at a less expensive facility outside the hospital. He also contends that the program fails to adjust adequately for patient illness severity. In addition to these concerns, de Brantes also sees three potential pitfalls to monitor as the five-year test proceeds.(Health Journalism, 8.4.16)
  • Grumbling Over Bundling: Cardiologists React Warily to Plans for Lump-Sum Payments for Cardiac Care. “With the experience of mandatory public reporting—and the knowledge that it seems to affect patient care and outcomes—cardiologists aired concerns to TCTMD about how CMS would handle risk adjustment. For example, it’s unclear how the bundled payments will account for differences among cases, ‘so that cardiologists and hospitals are not penalized for taking care of the sickest patients,’ Casale said. Risk adjustment helps, Rosenfield concurred, but it doesn’t go far enough. ‘What I would say is that the proposed bundles must adequately accommodate the needs of those sickest patients, who often actually, by the way, benefit the most from treatment that interventional cardiologists can render.’ For bundling to be successful, it must somehow allow for decisions to be made on a case-by-case basis when needed, he argued. ‘Every single patient is different. And how does one implement a program that makes a broad swath among patients while still accommodating the needs of individual patients? That is a challenge we face as a country, as a healthcare system… We need to grapple with it.’ Moreover, he added, “patients need to be aware of what the system is directing them to do, or directing their doctors and providers to do.’ In what he called the ‘era of capitation’ of the 1980s, when physicians were paid per patient regardless of the care given, Rosenfield said ‘patients weren’t really aware that certain treatments were being withheld because their doctor or their healthcare system or their insurance provider was going to lose if they rendered certain treatments.’” (TCTMD, 9.23.16)

Surgical Hip/Femur Fracture Treatment (SHFFT) Model

The surgical hip/femur fracture treatment (SHFFT) program builds upon the CJR model and will apply to the same 67 metropolitan statistical areas (MSAs) that were selected for that model. “An eligible beneficiary who receives care at such a hospital will automatically be included in the applicable EPM.”

Payment Adjustments

For all three models, CMS will “set target prices for different episodes based on historical data on total costs related to the episode for Medicare fee-for-service beneficiaries,” beginning with hospitalization and extending 90 days beyond discharge. Target prices will be adjusted based on the complexity of treating a heart attack or providing bypass surgery.
CMS will continue paying hospitals and other providers and suppliers according to the usual Medicare FFS payment systems. However, claims data would be used to calculate an actual episode payment, which would “be reconciled against an established EPM quality-adjusted target price. The amount of this calculation, if positive, would be paid to the participant. This would be called a reconciliation payment. If negative, we would require repayment from the participant hospital beginning with episodes ending in the second quarter of performance year 2 of the EPMs.”


Downside risk (possible repayments to Medicare) would be phased in:

  • July 2017 – March 2018 (performance year 1 and quarter 1 of performance year 2): No repayment;
  • April 2018 – December 2018 (quarters 2 through 4 of performance year 2): Capped at 5 percent;
  • 2019 (performance year 3): Capped at 10 percent; and
  • 2020 – 2021 (performance years 4 and 5): Capped at 20 percent.

Gains (payments from Medicare to hospitals) would be phased in:

  • July 2017 – December 2018 (performance years 1 and 2): Capped at 5 percent;
  • 2019 (performance year 3): Capped at 10 percent; and
  • 2020 – 2021 (performance years 4 and 5): Capped at 20 percent.            

Quality Measurement

EPM participants’ quality performance also would be assessed at reconciliation; each participant would receive a composite quality score and a corresponding quality category. EPM participants scoring in a quality category of “acceptable” or higher will be eligible for a reconciliation payment. CMS proposes to phase in the requirement that participants pay the difference to Medicare beginning for performance year 2 if their episode payments are higher than the quality-adjusted target price. “Under this proposal, Medicare would not require repayment from hospitals for performance year 1 for actual episode payments that exceed their target price in performance year 1, and an applicable discount factor would be used for calculating repayment amounts for performance years 2 and 3.

Proposed Measures for the AMI Model

  • MORT-30-AMI: Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate (RSMR) Following Acute Myocardial Infarction (AMI) Hospitalization (NQF #0230).
  • AMI Excess Days: Excess Days in Acute Care after Hospitalization for Acute Myocardial Infarction (acute care days include emergency department, observation, and inpatient readmission days)
  • HCAPHS Survey (NQF #0166), linear mean roll-up (HLMR) scores like CJR

Proposed Measures for the CABG Model

  • MORT-30-CABG: Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate (RSMR) Following Coronary Artery Bypass Graft Surgery (NQF #2558)
  • HCAPHS Survey (NQF #0166), HLMR scores like CJR

Proposed Measures for the SHFFT Model

  • THA/TKA Complications: Hospital-Level Risk-Standardized Complication Rate (RSCR) Following Elective Primary Total Hip Arthroplasty (THA) and/or Total Knee Arthroplasty (TKA) (National Quality Forum [NQF] #1550)
  • Hospital Consumer Assessment of Healthcare Providers and Systems (HCAPHS) Survey (NQF #0166)
  • Successful Voluntary Reporting of Patient-Reported Outcomes 

Cardiac Rehabilitation Incentive Payment Model

In July 2016, CMS proposed a new model to increase cardiac rehabilitation utilization, aiming to test the impact of incentive payments to hospitals where beneficiaries are hospitalized for a heart attack or bypass surgery, “which would be based on beneficiary utilization of cardiac rehabilitation and intensive cardiac rehabilitation services in the 90-day care period following hospital discharge.” The program is proposed to begin July 1, 2017.


CMS proposed a two-part cardiac rehabilitation incentive payment paid retrospectively based on the total cardiac rehabilitation use of beneficiaries attributable to participant hospitals:

  • The initial payment would be $25 per cardiac rehabilitation service for each of the first 11 services paid for by Medicare during the care period for a heart attack or bypass surgery.
  • After 11 services are paid for by Medicare for a beneficiary, the payment would increase to $175 per service paid for by Medicare during the care period for a heart attack or bypass surgery.
  • Payments would be available to hospital participants in 45 geographic areas that were not selected for the cardiac care bundled payment models, as well as 45 geographic areas that were selected for the cardiac care bundled payment models.

CMS Oncology Care Model (OCM)

The CMS Oncology Care Model (OCM) is a multi-payer model focused physician group practices’ that have entered into payment arrangements that include financial and performance accountability for episodes of care surrounding chemotherapy administration to cancer patients.  The practices will provide enhanced services to Medicare beneficiaries, such as care coordination and navigation, and use national treatment guidelines for care. OCM is a five-year model that began on July 1, 2016, and runs through June 30, 2021.

Payment Adjustments

OCM incorporates a two-part payment system, including a $160-per-beneficiary Monthly Enhanced Oncology Services (MEOS) allotment for the duration of the episode and the potential for a performance-based payment for managing/coordinating care for oncology patients while lowering the total cost of care and improving care quality

The Medicare Diabetes Prevention Program

According to acting CMS director, Andy Slavitt (11.2.16), The Medicare Diabetes Prevention Program (MDPP) is an expansion of HHS’ Diabetes Prevention Program (DPP). MDPP is set to begin in 2018, and aims to assist eligible Medicare beneficiaries to increase physical activity, control weight, and decrease the risk of diabetes. The MDPP core benefit is a 12-month intervention that consists of at least 16 weekly core hour-long sessions, over months 1-6, and at least 6 monthly core maintenance sessions over months 6-12, furnished regardless of weight loss. In addition, beneficiaries have access to three month intervals of ongoing maintenance sessions after the core 12-month intervention if they achieve and maintain the required minimum weight loss of 5 percent in the preceding three months. Medicare cost-sharing does not apply to MDPP services.

Eligible Beneficiaries

Coverage of the MDPP services will be available for beneficiaries who:

  • Are enrolled in Medicare Part B;
  • Have, as of the date of attendance at the first core session, a body mass index (BMI) of at least 25 if not self-identified as Asian or a BMI of at least 23 if self-identified as Asian;
  • Have, within the 12 months prior to attending the first core session, a hemoglobin A1c test with a value between 5.7 and 6.4 percent, a fasting plasma glucose of 110-125 mg/dL, or a 2-hour plasma glucose of 140-199 mg/dL (oral glucose tolerance test);
  • Have no previous diagnosis of type 1 or type 2 diabetes with the exception of gestational diabetes; and
  • Do not have end-stage renal disease (ESRD).

Payment Adjustments

According to CMS, the payment structure for the MDPP expanded model will be finalized in rulemaking during 2017, with payment for MDPP services in 2018.

Shared Decision Making (SDM) Model

The SDM Model, a 5-year demonstration project, will test the integration of a specific, structured Four Step process to shared decision making into routine clinical practice workflows of practitioners participating in Accountable Care Organizations (ACOs), designed to help beneficiaries collaborate with their practitioners to make medical decisions aligning with their values and preferences. According to CMS (12.8.16), “the Model seeks to determine if this design results in improved beneficiary outcomes and lower Medicare spending while maintaining or improving quality, and whether it results in increased beneficiary satisfaction with care decisions.”

Eligible Beneficiaries

Patients with stable ischemic heart disease, hip or knee osteoarthritis, herniated disk or spinal stenosis, clinically localized prostate cancer (cancer that is confined to the prostate gland), and benign prostate hyperplasia. Information provided will help the beneficiary decide whether surgery or other medical treatments are the right choice for them. The SDM Model expects to engage over 150,000 Medicare beneficiaries annually.

Eligible Professionals

Health care professionals practicing in Accountable Care Organizations.


The ACOs will receive $50 per SDM service delivered by their practitioners, “as long as all required SDM Activities are completed.” Medscape Medical News reports (12.12.16) that “it is possible, but not required, that they will pass this money onto physicians who engage in shared decision making discussions.”
CMS reports that Four Steps of the SDM Process will include:

  • Identifying SDM-eligible beneficiaries;
  • Distributing the patient decision aid to eligible beneficiaries;
  • Furnishing the SDM Service (Shared Decision Making: Discussion, Decision and Documentation); and
  • Tracking and SDM Reporting.

Step 3 is considered a SDM Service (furnished by the SDM practitioner) and Steps 1, 2, and 4 are considered SDM Activities (completed by the participating ACO, and/or SDM practice or practitioner).

Direct Decision Support (DDS) Model

According to CMS (12.8.16), the DDS Model, a 5-year demonstration project, uses organizations to engage an assigned population of Medicare fee-for-service beneficiaries in ongoing communications and medical decision support on behalf of CMS. “Decision Support Organizations will not be health care providers or suppliers, will not engage in the practice of medicine, and will not interfere with the practitioner-patient relationship. They provide beneficiaries with reliable information that they can incorporate into discussions with their practitioners regarding health care decisions.” Up to seven Decision Support Organizations (DSOs) must commit for at least 2 years.

Eligible Population

Medscape Medical News reports (12.12.16) that “beneficiaries assigned to a decision support organization will receive a letter informing them they have been enrolled in the program. They will also be told they can opt out of the initiative.” The Model expects to reach 700,000 Medicare fee-for-service beneficiaries annually.


Health care professionals will not receive payments for improved outcomes; instead, Decision Support Organizations will. “The DSOs will receive a fixed per beneficiary per month (PBPM) payment for each beneficiary in the geographic region assigned to them. Twenty-five percent of this amount will be withheld as a performance incentive, which DSOs will be eligible to receive on an annual basis if they meet performance metrics as specified in their Model Participant Agreements.”

Psychiatric Collaborative Care Model

In its 2017 payment rule (11.2.16), CMS finalized payments for codes that describe specific behavioral health services furnished using the psychiatric Collaborative Care Model. In this model, patients are cared for through a team approach, involving a primary care practitioner, behavioral health care manager, and psychiatric consultant. “We are also finalizing new coding and payment for care using the Psychiatric Collaborative Care Model that supports mental and behavioral health through a team-based, coordinated approach involving a psychiatric consultant, a behavioral health care manager, and the primary care clinician and which extends beyond the scope of an office visit.”

Medicare Shared Savings Program (MSSP)

Medicare Access and CHIP Reauthorization Act (MACRA)

Outcomes in Medicare Pay-for-Performance Programs


  • Health Reform: Linking Medicare Payment to Quality Outcome. Center for Medicare Advocacy, 2011.
  • An In-depth Look at Six Cost Containment Programs in the Affordable Care Act. Center for Healthcare Research & Transformation, May 2014.
  • QualityNet. Established by the Centers for Medicare & Medicaid Services (CMS), QualityNet provides healthcare quality improvement news, resources and data reporting tools and applications used by healthcare providers and others.
  • Analysis of Bundled Payment. RAND Corporation, 2016.
  • The Future Of Delivery System Reform. Antos, Joseph and James Capretta. (4.20.17). “The Affordable Care Act (ACA) authorized a broad agenda of reform projects, including accountable care organizations (ACOs), bundled payments, value-based purchasing, primary care initiatives, and other payment and service delivery models. The Medicare Access and CHIP Reauthorization Act (MACRA) of 2015 established new ways of paying physicians intended to promote high-quality patient care. What will happen to these initiatives under a Congress where Republicans are still seeking to enact major new health reforms and a president who could aggressively use authority granted by the ACA to make sweeping changes in Medicare and other health programs? Does this spell the end of delivery system reform, or could this be a new start with a greater potential to promote efficient and effective health care?”