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Apple Pickers or Federal Judges: Strong versus Weak Incentives in Physician Payment

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There is broad agreement that paying for value in health care makes more sense than simply paying for volume (VanLare and Conway 2012; Porter and Lee 2015). Reflecting this agreement, in January 2015, Department of Health and Human Services Secretary Sylvia Mathews Burwell announced that HHS has set a goal of tying 85 percent of all traditional Medicare payments to quality or value by 2016 and 90 percent by 2018, and of having 30 percent of all traditional Medicare payments be made through alternative payment models, such as accountable care organizations (ACOs) or bundled payment arrangements, by the end of 2016, and 50 percent by the end of 2018 (Burwell 2015). The goals of shifting payments to alternative payment models and linking remaining fee-for-service payments to quality are also strongly reflected in the MACRA legislation enacted in 2015 (Steinbrook 2015).

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