On January 26, the U.S. Department of Health and Human Services (HHS) announced that it is testing new healthcare payment models to improve the quality of care and reduce the cost of providing it. HHS released a detailed Fact Sheet summarizing its proposals and goals.

One such goal is to tie 30% of traditional fee-for-service Medicare payments to quality or value through alternative payment models, including accountable care organizations (ACOs), primary care medical homes, or bundled payments for episodes of care by the end of 2016, and 50% of such payments to these models by the end of 2018. Overall, HHS hopes to make 85% of all Medicare fee-for-service payments based on “value-based" reimbursement by the end of 2016 and 90% by the end of 2018 through the use of these and other programs.  

HHS also announced the creation of a Health Care Payment Learning and Action Network to foster collaboration among HHS, private payers, large employers, providers, consumers, and state and federal partners, and accelerate the transition to alternative payment models.  

Value-based payments represented approximately 20% of Medicare fee-for-service payments to providers at the end of 2014.