On June 22, 2020, CMS issued a press release calling for a renewed national commitment to value-based payment models for healthcare providers rather than fee-for-service models. The proclamation came as CMS also released data demonstrating the disparate impact of COVID-19 on Medicare recipients including higher hospitalization rates among older Americans, those with chronic conditions, minorities and low-income individuals.

According to CMS, the healthcare industry must change its payment structure to promote the overall health of patients and create incentives for doctors to keep patients healthy, rather than continue to deliver expensive healthcare services and treatments on a fee-for-service basis. A blog post published in conjunction with the press release from CMS added, “We have to hold providers accountable for the outcomes they achieve, and poor health outcomes for minorities or those of a lower socio-economic status is not acceptable. Until we move to a system that incentivizes value over volume and starts paying doctors for better health outcomes, we’ll never be able to adequately address the social determinants of health.”

The data included in the announcement found more than 325,000 Medicare beneficiaries contracted COVID-19 between January 1 and May 16, 2020 and nearly 110,000 Medicare beneficiaries were hospitalized for COVID-19-related treatment. The hospitalization rates were highest for beneficiaries with end stage renal disease, African American beneficiaries, Hispanic beneficiaries and among beneficiaries who are age 85 or older. The data also showed that 28% of hospitalized Medicare beneficiaries died in the hospital.

The CMS announcement is available here. The CMS blog post by CMS Administrator Seema Verma with more details on the new data is available here.