Medicare, Medicaid, and the Delivery System.

All these approaches have incentives that seem to motivate a certain trend (Guterman, Davis, Schoenbaum & Shih, w238).

However, of the above three, the fee-for-service is the traditional one. The capitation approach is up-to-date and is meant to be a step up concerning creating better incentives for preventive care, efficiency, and cost control in health care. Under this payment system, a hospital, a physician, or a medical group receives a given flat fee per month for caring for a patient registered in a managed health care plan, despite the cost of the patient’s care. In the global capitation mode, whole networks of physicians and hospitals band in unison to obtain single fixed per-month payments for registered health plan individuals. The providers sign one contract with a health plan covering the care group signatories, and then they must establish a way of dividing the capitated check among the members.

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Flexibility in shared savings symbolizes a major feature of the proposed Medicare ACO rule. As such, even though ACOs will be reimbursed by fee-for-services, CMS are also scheduled to come up with benchmarks designed towards every individual ACO. In case the ACO exceeds its specified standard in Medicare cost savings, it definitely qualifies for shared savings. However, it will as well be held accountable for any incurred losses for failing to meet the set benchmarks. In addition, CMS has proposed creating a minimum sharing rate meant to account for normal differences in expenditure that could determine whether ACO reaches or goes beyond its benchmark (Guterman, Davis, Schoenbaum & Shih, w250).

In the proposed rules, CMS has set forth two tracks for ACO reimbursement models. Here, ACOs will be asked to serve at least five thousand Medicare beneficiaries for a period of 3years. 

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