Medicare To Make 'Historic' Shift In Payments, Health Insurers Mixed

Health insurance companies were mixed Monday following news that the Obama administration will make a “historic” shift in how Medicare pays doctors and hospitals.

The new payment methodology hopes to move the program away from paying based on the “the more you do, the more you get paid” to one based on “quality and value,” according to U.S. Department of Health and Human Services Secretary Sylvia Mathews Burwell.

On the Health and Human Services blog, Burwell stated that the Department’s “first goal is for 30 percent of all Medicare provider payments to be in alternative payment models that are tied to how well providers care for their patients, instead of how much care they provide – and to do it by 2016. Our goal would then be to get to 50 percent by 2018.”

The second goal stated by Burwell is to tie at least 90 percent of Medicare fee-for-service payments to quality and value by 2018.

Burwell felt that if the program is successful, patients will “be more likely get the right tests and medications because his or her doctors are coordinating and have the information they need.”

Aetna Inc (NYSE: AET), CIGNA Corporation (NYSE: CI) fell slightly amid the news while WellCare Health Plans, Inc. (NYSE: WCG), Centene Corp (NYSE: CNC) and Humana Inc (NYSE: HUM) traded higher by mid-day on Monday.