As Medicare moves to implement the Medicare Access and CHIP Reauthorization Act, which establishes two distinct forms of value-based payment, hospitals are debating which option they should go with ahead of the planned implementation in 2019.

The first option is the merit-based incentive payment system, which pays doctors and providers based on a number of performance-based criteria. The second is for the hospital to come up with an “alternative payment model” that is subject to approval by Medicare.

Under an alternative payment model, the provider would come up with a number of ways to improve patient care and reduce costs that it would submit to the Centers for Medicare and Medicaid Services. CMS would offer such providers a lump-sum incentive payment beginning in 2019, when the new system is slated to go into effect. The highest-performing providers would begin receiving even bigger lump sums beginning in 2026.