Medicare proposes new rule that would reward for value not volume

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JEFFERSON CITY - Medicare proposed a new rule that would pay hospitals based on the quality of their knee and hip replacements.

The proposed five-year program would affect health providers in 75 cities throughout the nation, including Columbia. The proposed rule is in a comment period for the next 60-days.  

David Dillon, the spokesperson for the Missouri Hospital Association, said this rule is following with the Medicare trend of providing payment for value rather than volume.

Currently providers are being paid based on procedure. Under this rule, the federal government would provide hospitals with one lump sum for knee and hip replacement procedures.

"What we are seeing is more integration of services, where everyone that is providing them has a stake in the patient being well," Dillon said.

Dillon explained these bundle payments then go to all providers, and if the providers are not efficient in their procedures, they would be charged more than they are reimbursed.

"The incentive would be for them to do it at what is proven to be a regular time line for providing that after surgery care," Dillon said.

This new rule would create incentives for health care providers to perform more efficiently.

"Ultimately every actor in the health care delivery side is going to have a stake in doing their procedures very well and eliminating the costly things that can happen," Dillon said.

The rule acts in favor of the patients by creating the incentives for faster procedures, but Dillon said it will not affect them too much.

"Patients are probably not going to see any difference at all," Dillon said. "This is more about the way that providers get paid than that care is going to be delivered."

Dillon brought up a possible problem lying in the health care systems that are not currently very integrated that could be hurt by this rule.

"That is the potential downside of this, that it may be moving faster than the actual model we have for delivering care out there," Dillon said.

Another change Dillon anticipates is the role hospitals would play in the system.

"It also potentially puts hospitals in a place where we haven't traditionally been, which is if they pay us a lump sum through this bundle payment, do we then become a payer to third party entities like rehabilitation hospitals or nursing homes if the patient has to move the direction after care?" Dillon said.

He said this rule has the potential to reshape how the health care system works.

"The more you can control all the actors in providing care the better care that is delivered in the end," Dillon said.

Dillon expects the new rule will be slightly differently than the initial proposed rule and said it is fundamentally in line with the direction of delivery of care. He also predicts components of the rule to be questioned and vetted.

The deadline to submit comments is September 8.