Transforming Medicare's Payment Systems: Progress Shaped By The ACA

Abstract

The Affordable Care Act promoted payment reforms directly and through the creation of the Center for Medicare and Medicaid Innovation, which it endowed with the authority to introduce Alternative Payment Models (APMs) into Medicare and Medicaid. We conducted a narrative review of these payment reforms, finding that several programs generated modest savings while maintaining or improving the quality of care, but they had high dropout rates. In general, evidence for other APMs is less conclusive, and whether the reforms spurred similar changes in the private sector remains anecdotal. Despite challenges, APMs provide incentives for efficient care provision and offer providers a way to succeed financially in an environment with slowly rising fee-for-service prices. Thus, we consider the Affordable Care Act's payment reforms to be modestly successful, and we encourage both the purging of initiatives that aren't working and the continued development and study of promising ones.

Keywords: Accountable care organizations; Affordable Care Act; Costs and spending; Fee-for-service; Health policy; Medicaid services; Medicare Advantage; Payment; Quality of care; Traditional Medicare.