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Medicare is responsible for more than one in five dollars spent on health care in the United States. Given its size and mission, Medicare programs and policies have a major role in transitioning the health care system away from fee-for-service payment, which incentivizes the quantity of care, and toward value-based payment, which incentivizes higher-quality care and more efficient spending. In July 2022, in Health Affairs Forefront, the Centers for Medicare and Medicaid Services (CMS) articulated our overall Medicare value-based care strategy of alignment, growth, and equity. Since then, CMS has promulgated several final rules for both traditional Medicare and Medicare Advantage (MA), announced new alternative payment models, and is considering future potential policies with multipayer alignment, growth of accountable care, and promotion of equity in mind.
The selection of these objectives—alignment, growth, and equity—is deliberate to maximize care transformation and improve care for the people we serve. Alignment is important because CMS programs pay for care on behalf of more than 160 million people across the United States, and providers interface with a multitude of payers across CMS’s traditional Medicare, MA, Medicaid and the Children’s Health Insurance Program, and Marketplace programs, as well as commercial insurance. Individual practitioners often don’t check what insurance a patient possesses when they walk into clinic examination rooms, and so without alignment, it can be confusing to reconcile disparate value-based requirements. As such, alignment across payers for value-based care model and program features is critical so that provider organizations can focus their attention and truly transform health care delivery.