Payment Reform

The Affordable Care Act included several new Medicare payment reforms designed to improve coordination and collaboration among physicians and other healthcare providers, moving towards integrating quality into payment systems.

These reforms - including the ongoing efforts on the Hill to repeal the SGR and create new systems, the development of Accountable Care Organizations (ACOs), and episode groupers or bundled payments- may provide incentives for otolaryngology- head and neck surgeons to use innovative products that improve quality and create efficiencies in the delivery of care.

Additional Information

AAO-HNS Efforts

*New*Academy Meets with Harold Miller and AMA Staff
On November 20, Academy Ad Hoc Payment Model workgroup leaders and staff met with American Medical Association (AMA) staff along with Harold Miller, President of Center for HealthCare Quality & Payment Reform, to discuss an alternative payment model collaboration effort. Discussion focused on how to move forward to decide which conditions and markets would be the best starting point for our specialty. Please see related resources below:

AAO-HNS Submits Comments to CMMI on Innovative Specialty Payment Models
On April 10, the Health Policy team, with input from Ad Hoc Payment Model work group members, submitted comments to the CMS Innovation Center (CMMI) on policy considerations for the development of innovative payment models for specialty provider services furnished mainly as outpatient care for patients with specific medical conditions.

While there are several barriers to moving forward with exploration, including significant diversity within the specialty, limited access to data and resources, the Academy provided CMMI with several otolaryngology disease processes that have garnered some interest among the AAO-HNS physician leaders in possibly developing an episode of care or bundle. To view the letter, click here. 

Congressional Committees Reach Agreement on SGR Repeal
On February 6, 2014, leaders from three Congressional committees released a bipartisan, bicameral agreement on legislation to permanently repeal the flawed Sustainable Growth Rate (SGR) payment formula and replace it with a new Medicare payment system that better incentivizes the delivery of high-quality, efficient healthcare.   Visit the Academy's Government Affairs page for further details.

Budget Deal with SGR "Patch" Signed by President
On December 26, 2013, President Obama signed the two-year budget deal negotiated by U.S. Representative Paul Ryan (R-WI) and U.S. Senator Patty Murray (D-WA).  Included as an amendment to this bill was language to halt (for three months) the 20+percent cut in Medicare physician payments scheduled for January 1, 2014.  Instead, physicians will receive a .5% positive increase during that time.  This payment "bridge" is intended to avoid payment disruptions as Congress completes its work on permanent SGR repeal legislation in early 2014.  The budget deal, including the SGR "bridge," was previously passed by the U.S. House of Representatives (332-94) and U.S. Senate (64-36) in mid-December.

AAO-HNS Comments on SGR Repeal Proposals
Congressional leaders identified repeal of the flawed Sustainable Growth Rate (SGR) formula as a top legislative priority for 2013. Since then, Congressional committees with jurisdiction over Medicare policy have spent substantial time developing legislation that would repeal the flawed SGR formula and replace it with a new payment system that better incentivizes the delivery of high-quality, and efficient, healthcare. As an active participant in this process, the AAO-HNS  submitted numerous formal comment letters highlighting the possible impact of various proposals on otolaryngology-head and neck surgery and offering suggestions for improving the legislative proposals.

On December 12, 2013, the House Ways & Means Committee unanimously (39-0) advanced an amended version of H.R. 2810. On the same day, the Senate Finance Committee passed a similar framework by a voice vote and followed their initial activity with the introduction of formal SGR-related legislative language on December 19, 2013.

The House Energy & Commerce Committee previously passed (51-0) H.R. 2810 on July 31, 2013. 

View our December 10, 2013  letter  to the House Ways & Means and Senate Finance Committees outlining necessary changes to SGR repeal framework. 

View our comments to the House Ways & Means and Senate Finance Committees. (11/12/13)

Click here to access information about additional recent efforts and legislative activity.

Accountable Care Organizations

Academy Comments on Application of Exclusivity Rules to ACOs

The Academy recently submitted comments to CMS outlining concerns with the manner in which the Agency was interpreting exclusivity requirements for providers participating in Accountable Care Organizations (ACOs). These comments were crafted in response to feedback from various practices and specialties that had experienced issues surrounding exclusivity when trying to participate in more than one ACO.

See the letter here

Innovation Resources

*New* HHS Announces New Funding Opportunities for Providers and Specialty Societies (10/24/14)

In response to the Academy’s repeated advocacy efforts urging the availability of federal resources to ease the transition to alternative payment models and assist specialty societies to develop applicable measures, CMS will award $840 million cooperative agreement funding for two network systems under a new initiative. For important November dates for webinars and LOIs, visit the CMMI webpage here.

Episode / Bundled Payment Analytics White Paper

The Healthcare and Incentives Improvement Institute (HCI3) recently released a White Paper on “Episode Analytics: Essential Tools for New Healthcare Models.”  The paper provides some background and a comparison of the types of episode analytics and explores the real-world experiences of payers and providers in using episode analytics for payment bundling and other purposes. Finally,

The paper includes some recommendations on how to use episode analytics to reduce variations and manage contracts that involve financial risk. To view the White Paper, visit:

Tonsillectomy Bundle in Arkansas Medicaid Payment Initiative

As part of a Center for Medicare and Medicaid Innovation (CMMI) State Innovation Program (SIM) grant, Arkansas developed a bundled payment initiative that included collaboration with private and public insurers with the goal to transform  Arkansas’ health system. Twelve bundles including inpatient and outpatient bundles were developed and launched over the short span of two years. Specific relevance to otolaryngology-head and neck surgeons is that one of the bundles is for tonsillectomy. For more information on the bundle and sample provider report, visit:

Outpatient Bundle Payment Framework for Colonoscopy

As members know, the goal of the Ad Hoc Payment Model work group is to review current and future payment trends in otolaryngology-head and neck surgery and other specialties. This month, the American Gastroentorological Association released a colonoscopy bundle payment framework for their members to use when negotiating with their local entities. For more information on the AGA’s initiative, click here. 

Ad Hoc Payment Model Workgroup Collaborates on Tonsillectomy Episode Bundle (11/13/13)

A goal of the Ad Hoc Payment Model Workgroup is to provide information and education to members on episode bundling and efforts to collaborate with groups such as Health Care Incentives Improvement Institute, Inc. (HCI3), who are working on developing episode bundles for commercial payers and provider groups. These efforts aim to cut down on variability in cost, help address under and over use, and reduce cost of complications to help create a shared savings opportunity. Tonsillectomy has been selected as the first procedure that is being reviewed to learn about the process of developing an episode bundle. For more information on the episode bundle tools developed by HCI3, click here.

Academy Explores Alternative Payment Models in Vancouver (10/23/13)
The Academy encourages members to utilize our resources on innovative payment strategies, beyond the current fee-for-service (FFS) system, aimed at creating a more sustainable and stable future in the practice of otolaryngology. During the Annual Meeting, Dr. Robert Lorenz, MD, MBA, elaborated on the six steps for creating bundled payment. Click here to learn the six vital steps to creating bundles.

The Academy Explores Bundled Payment as Option for Future Payment for Otolaryngology 
The Academy is exploring options for future payment models, including otolaryngology procedures that could be considered as episode groupers that would be included in bundled payments. For more information on bundled payments click here.