The secretary of Health and Human Services expects payment changes to take off soon as patients gain increased access to their data.


June 20—Department of Health and Human Services (HHS) Secretary Alex Azar II has rejected the Obama administration’s goal of shifting 50 percent of Medicare payments to value-based payment models by the end of 2018. 

“I’m not sure that simply being in an alternative payment model, which was the metric the Obama administration used, is the one I would find to be substantive and real in terms of transformation of our healthcare system,” Azar said this week at a Washington Post forum.

In January 2015, then-HHS Secretary Sylvia M. Burwell announcedan initiative to move 30 percent of Medicare payments into alternative payment models (APMs) by the end of 2016 and 50 percent into APMs by the end of 2018.

Azar sad he is examining an alternative metric with specific time frames for implementation.

“We genuinely want to revolutionize how health care is paid for in this country in an outcome-based, health-based, non-procedure, non-sick-based way; we’re working on that and we want to get to real, concrete metrics,” Azar said.

Azar said there has been less movement toward value-based payment than some had hoped because of the challenges of changing a large industry. However, he viewed the progress to date as approaching a “hockey stick moment of fundamental transformation in how we pay.” Key to that shift are emerging requirements that patients own and control their health data.

A leading priority that Azar emphasized is the need to move the patient toward the center of the healthcare system.

Azar also said the current amount spent on health care—heading toward 20 percent of GDP—is “too much.”

Existing regulatory authority gives HHS the power to “make fundamental change,” he said. For example, most commercial insurers base their payment rates on some percentage of Medicare fee-for-service rates.

“The ability to change Medicare will drive critical mass in the system,” Azar said.

Azar said the newly finalized ruleexpanding access to association health plans will help the 28 to 29 million people who cannot afford coverage in the ACA marketplaces. He also doubted the new rule would negatively impact the ACA marketplaces “in a material way” because 87 percent of marketplace enrollees are subsidized and unlikely to give up free or low-cost care.

Critics have warned that younger, healthier enrollees would leave the ACA marketplaces if cheaper association plans became available.

“It is the healthy who have left; they are not there [anymore] to leave that market,” Azar said.

An additional final rule rejecting 2016 restrictions by the Obama administration on short-term insurance plans also is expected “soon,” he said.


Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

Publication Date: Thursday, June 21, 2018