Strengthening Original Medicare

Administration Physicians Share Strengthening Original Medicare By Center for Medicare The Center for Medicare oversees the $1.2 trillion Medicare program that cares for roughly 70 million Americans and influences the healthcare system for everyone. Our work has traditionally been divided among Original Medicare (OM), which encompasses Parts A and B, and our work managing Parts C and D, or Medicare Advantage (MA) and prescription drug plans, respectively. In recent years, increased MA enrollment has made it a particularly prominent part of the Medicare program. Even so, we are committed to strengthening and supporting both MA and OM and ensuring that OM remains a robust coverage option for Medicare beneficiaries. Our goals are to promote choice while improving access and affordability for the Medicare beneficiary and to be good stewards for the American taxpayer, our two most important stakeholders. Within OM, there is a distinction between the part of the program accountable for the quality and cost of care, particularly through beneficiary alignment to accountable care organizations (ACOs), and those outside these programs and models. The latter “unmanaged” portion of OM has historically been defined by fragmentation, fee-for-service payment, and administrative price-setting that has proven slow to respond to innovation or encourage long-term care coordination. This program design has been a major obstacle to driving affordability and quality for hardworking Americans and their families. As a Center, we are interested in ensuring that OM can establish better incentives to invest in high-value care. We are implementing a three-part policy strategy while transforming our operations to strengthen OM: Aligning Spending and Value in OM: Flawed payment policies can negatively impact access to care, drive up costs for beneficiaries, and undermine incentives for care coordination. As a leading payer, we also understand that CMS’ payment policies for Medicare — and their shortcomings — are often adopted in the broader healthcare system. We are focused on removing distorted pricing and refining payment methodologies to encourage high-value care that meets the patient’s needs at the right place, at the right time, and in the right way. We hope to do this by using more empiric data sources and incorporating best practices from the private sector, curbing unwarranted payment differentials across care sites, broadening use of episode and population-based payment, and examining innovative pricing approaches that consider the adoption of new technology, including but not limited to clinical artificial intelligence (AI), to drive down costs for beneficiaries. Empower Beneficiaries to Make Informed Choices : Outdated technology, siloed information, and hidden fees make it harder for beneficiaries to find the best care and increase the administrative burden for clinicians. We are doubling down on promoting price and quality transparency so that beneficiaries can make informed choices about the providers they choose to see. We consider these the first steps to improving the value of benefit design in Original Medicare. As a first step we are proposing to give ACOs in the Medicare Shared Savings Program (Shared Savings Program), that apply and are approved, the option to reduce or eliminate specific cost sharing for certain Part B services for beneficiaries assigned to their ACO starting in April 2027. Our goal is to reduce potential cost barriers for beneficiaries to receive high value care. We may take further steps in the future. Accelerate Accountability: We know that healthcare providers perform better when they are held accountable for their care’s cost and quality. Increased participation in ACOs helps this effort, and we believe we can go even further. To that end, we aim to effectively manage the continued growth of Medicare’s ACO programs, including the Shared Savings Program, given its demonstrated higher-quality care for its beneficiaries. As we move forward in these endeavors, we acknowledge that outdated technology, siloed information, and hidden fees make it harder for beneficiaries to find the best care. And they increase administrative burden for clinicians. We are working to make healthcare data interoperability a reality so that healthcare providers and patients have access to people-specific longitudinal data sets that should improve care coordination and delivery. We view interoperability as a necessary foundation to realizing some of our objectives above. Finally, but perhaps most transformative, we intend to modernize Medicare’s claims processing system to support real-time claims processing, which will more easily support innovative payment structures and enhanced program integrity. The remainder of this blog post describes our principal CY 2027 policy proposals in the Physician Fee Schedule (PFS) and Outpatient Prospective Payment System (OPPS) across our strategic pillars of aligning spending and val