March 07, 2019


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Medicare reimbursement rules are requiring physicians to move from fee-for-service to fee-for-value. Providers may be left wondering how to succeed in value-based payment. Caravan Health is here to explain the changing rules, the ever more complex requirements for health care providers, and the best path forward for success. Read this post and watch our on-demand webinar “How to Succeed in a Risk-Bearing ACO” to learn more.  

Health care costs have been rising quickly and that rise is projected to continue for the coming decades. This chart shows the increase in costs for Medicare and Medicaid through 2082.   


Policy makers in Washington have tried many ways to control health costs and some have been working – there is evidence that growth has slowed from double to single digits since the Affordable Care Act was enacted nine years ago. But those costs are still growing unsustainably. 

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) took some bold steps to control cost growth, including repeal of the sustainable growth rate which governed Medicare physician payment and replaced it with a value-based framework. MACRA didn’t eliminate fee-for-service Medicare, but essentially froze physician payment at the 2015 rates, with only nominal increases, followed by a period of no increases. Eventually, the only payment increases will be based on providers taking risk on their health costs. Individual providers who don’t get into risk can lose 0.5 percent of their incomes per year.  

Caravan Health was founded to transform health care 

Caravan Health has learned how population health management can transform the way health care is delivered, all while saving money for Medicare and earning shared savings back for providers. Chronic care management, annual wellness visits, and prudent use of health data have been central to learning the ropes of maximizing value-based payment. With this strong foundational approach, in 2017 Caravan Health ACOs achieved 94 percent quality scores and more than $54 million in total savings– more than $200 in savings per patient - far above the average for ACOs.  

What’s to come for ACOs? 

CMS published the new rules for Medicare Shared Savings ACOs, titled “Pathways to Success” late last year. This means that most ACOs will soon be on a faster path to risk. While some providers may be reluctant to take on risk, the Medicare payment rules are clear that providers must get into risk eventually to protect their incomes. Caravan Health has found that larger size is the key to responsibly going into risk and realizing true savings. Our collaborative ACO model allows providers to stay independent and still get the benefits of scale.  

The move from traditional fee-for-service to true fee-for-value is getting more real every year. The bottom line: Don’t go into risk alone – Caravan Health can be your reliable and experienced partner for maximizing Medicare payment.  

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