Value-Based Care News

How Payers Could Gain Success in Value-Based Care Models

Population health management will play a key role in strengthening value-based care models.

By Vera Gruessner

Value-based care models are on their way to becoming the main form of reimbursement between payers and providers especially when considering the goals of the Centers for Medicare & Medicaid Services (CMS) to position 50 percent of Medicare payments to be in an alternative payment model by 2018.

Alternative Payment Models

Karen Ignani, President of EmblemHealth and former CEO of America’s Health Insurance Plans, wrote about how payers are seeking to combine reimbursement and financial incentives with healthcare quality improvements through value-based care models.

The Obama administration and the Affordable Care Act positioned the healthcare industry to advance value-based care models further and work together to deliver care more quickly and effectively, said Ignani. Currently, more than 60 percent of HMO health plan members at EmblemHealth are being served through value-based care models.

Along with the federal Medicare program, public payers from individual states have also begun embracing value-based care reimbursement. New York is one example where the state is looking to include value-based care models in 80 percent of their managed care contracts by 2020.

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  • In Massachusetts, the state Medicaid program also received a waiver from CMS that will enable providers to expand their work in value-based care and participate in accountable care organizations.

    What steps should commercial payers take to transition to value-based care models? With traditional fee-for-service payment ingrained in provider reimbursement for decades, both payers and providers often lack the experience necessary to quickly succeed at value-based care. When taking on financial risk through alternative payment contracts, payers will need to require providers to report sufficient improvement to care quality in order to receive complete reimbursement.

    Taking on financial risk does mean that providers may not receive full payment due to unknown patient outcomes. However, it also incentivizes providers to focus on quality metrics and preventive care.

    Payers are advised to adopt clinical decision support tools when working with providers to create a value-based care contract and make decisions on whether certain medical services are necessary or not to reduce wasteful spending.

    “I think clinical decision support is that much more important in the value-based model because it eliminates waste. In the value-based model, waste is of high importance to eliminate,” Ryan Lee, MD, MBA, Director of MRI, Director of Quality and Section Chief of Neuroradiology, in the Department of Radiology at Einstein Healthcare Network, said in a prior interview. “Clinical decision support allows a clinician to order the right test at the right time to minimize the wrong tests being ordered.”

    Exchanging and analyzing claims data along with clinical information can also boost population health management, which is a key aspect of a successful value-based care platform. Payers could use population health tools to aggregate which patients are at higher risk and which ones require preventive care. This could also bring payers to improve patient engagement with their members.

    Patients will also benefit from value-based care models, which should lead to improved patient safety and higher quality care, wrote Ignani. Additionally, alternative payment models could assist with improving chronic disease management and preventive care. Payers and providers working together through a value-based care contract often have stronger data sharing protocols meant to enhance population health management and cut health disparities.

    “Clinicians working in partnership with health plans gain access to innovative new programs that provide data in support of their efforts to identify disparities and to better manage the health of their patients,” Ignani wrote for  the Healthcare Financial Management Association.

    In order to gain these important benefits and outcomes for the patient population, payers would be wise to follow these steps when implementing value-based care models.

     

    Dig Deeper:

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    How Health Insurance Mergers Could Change the Payer Industry