ACHP Statement: Senate Finance Committee Hearing on “Medicare Value-based Purchasing (MVP) Act”

WASHINGTON, D.C. Jack Ebeler, president and CEO of the Alliance of Community Health Plans (ACHP), issued the following statement today in reaction to the Senate Finance Committee’s hearing on the “Medicare Value-based Purchasing Act”:

“The current Medicare payment system rewards failure, penalizes success and does little to encourage better patient care.  We often pay more for mediocre results than we do for excellence.  As the nation’s largest payer, Medicare can reverse this damaging trend.  Aligning payments with quality will encourage health plans and providers to do better.

“We commend Chairman Grassley and Senator Baucus for their leadership in addressing these concerns.  Many provisions of the MVP Act will drive quality improvement throughout Medicare.

“We are pleased that the bill’s quality payment incentives would apply to all Medicare providers and that the incentives would reward high-quality care as well as quality improvement.  We are also pleased that quality measures will stress clinical performance.  However, the bill’s funding mechanism poses a significant barrier to successful implementation and long-term sustainability.

“Last year, the Medicare Payment Advisory Commission recommended that Congress begin a pay-for-performance system with Medicare Advantage health plans because of their leadership and experience in measuring quality and reporting results.  As the legislative process progresses, we welcome the opportunity to share our views with Congress on constructing a pay-for-performance system that improves care for all Medicare beneficiaries.”

# # #

ACHP’s Payment-for-Performance Principles:

  1. Payment-for-performance incentives should eventually apply to all Medicare providers, including fee-for-service and Medicare Advantage. Given health plans long record of reporting on standardized measures of quality, it is reasonable to begin with Medicare Advantage plans, including HMOs and PPOs.
  2. Pay-for-performance incentives should be based upon standards of excellence and improvement.
  3. Measures to evaluate both fee-for-service Medicare and Medicare Advantage plans should be developed. In the interim, incentives should be based on existing measures and should emphasize clinical effectiveness.
  4. To ensure successful implementation and sustainability, pay-for-performance incentives should be financed with a new, dedicated stream of funding.

Related Documents:

# # #

ACHP is a leadership organization that brings together innovative health plans and provider organizations that are among America’s best at delivering affordable, high-quality coverage and care to their communities. Drawing on years of experience, members collaborate to identify problems, share information and work toward solutions to some of health care’s biggest challenges. Their work is the foundation for ACHP’s advocacy on behalf of better health care nationally.  More information is available at

Capital Health Plan; CareOregon; Fallon Community Health Plan; Group Health Cooperative; Group Health Cooperative of South Central Wisconsin; Health Alliance Plan; HealthPartners; HIP Health Plan of New York; Kaiser Foundation Health Plans and the Permanente Federation; M•Plan; OSF HealthPlans; UCare Minnesota; UPMC Health Plan