Payment Reform Commission Posits Framework for Shift to Global Payment

A framework for making an effective and orderly transition to global payment was the main topic at today’s next-to-last meeting of the Special Commission on the Health Care Payment System.

The commission’s transition framework relies heavily on the creation of Accountable Care Organizations (ACOs), virtual or actual provider networks that integrate health care services and improve coordination of patient care.

The structure, scope, and function of ACOs was one of many parameters that an independent board to oversee the transition would be charged with, according to the framework. The board would also be responsible for identifying adjustment factors for global payments and tracking milestones, among other tasks. The framework calls for board intervention if certain milestones are not met, which sparked debate about state rate setting and the stick-or-carrot approach to incentives. Commission member Alice Coombs, M.D., MMS president-elect, called for a “nurturing” approach to help providers make the change rather than penalty-based incentives.

The timeframe set forth in the framework for a completed transition to global payment is five years or less, and it encourages providers who are in a higher state of readiness to move more quickly.

There was also debate about the so-called “complementary strategies” that many stakeholders say must be addressed in tandem with payment reform. These include malpractice reform, health plan benefit redesign, and administrative simplification. Some commission members, including Dr. Coombs, insisted that these strategies are inextricably linked to payment reform, while other commission members said such matters could distract the board from its primary purpose.

The commission’s final meeting, originally scheduled for May 26, has been postponed until late June. Between now and then, the commission will iteratively draft a final report of recommendations for the Legislature.