Nearly 60 million Americans are covered by Medicare and about 10,000 become eligible for Medicare every day. High-risk beneficiaries and those dealing with multiple and complex chronic diseases are driving cost and quality of care concerns.
Medicare primarily functioned as a fee-for-service (FFS) system where the volume of services delivered, not value, drove payment. This contributed to increased costs with a minimal focus on improving the quality of care. Consequently, the Centers for Medicare & Medicaid Services (CMS) began to look for a different payment system that encouraged incentives for value delivered and that recognized quality of care. The change from fee-for-service to value-based care had already begun in the commercial insurance sector as the large health plans looked to lower costs, spread risk and address quality of care issues.