Value-based Care Reimbursement Makes Strides in Health Plans

February 22, 2016 - The fee-for-service payment model is slowly becoming an antiquated concept as more insurers and healthcare providers adopt value-based care reimbursement. Karen Ignani, President of Emblem Health and former CEO of America’s Health Insurance Plans, wrote for the Healthcare Financial Management Association about the importance of the Affordable Care Act and value-based care reimbursement.

Essentially, many more payers and providers are looking to tie high-quality medical care to financial incentives through value-based care reimbursement contracts. The Affordable Care Act has brought more healthcare coverage to the millions of people who lived without it before. Obamacare also stimulated stakeholders to work together in order to create an environment where medical care is “delivered efficiently and effectively,” explains Ignani.

When it comes to a greater focus on value-based care, EmblemHealth, for example, has more than 60 percent of their HMO health plan members obtaining clinical services through a value-based care reimbursement arrangement. Ignani plans to increase that statistic over the coming year.

The Medicare program is also slowly putting an end to the fee-for-service payment model by embracing alternative forms of reimbursement. Individual states have also embraced new payment models when contracting with healthcare providers. By the year 2020, the state of New York, for instance, will integrate value-based care reimbursement is at least 80 percent of their managed care payments.

It seems that financial incentives tied to better quality care is a system that succeeds among payers, providers, and the patient community. In fact, the patient community will benefit greatly from payment systems that stimulate safer and more effective services at lower cost, according to Ignani.

Value-based care aims to improve chronic disease management and outreach for patients who are struggling to obtain the right healthcare services including preventive therapies. When health payers and clinicians work together toward obtaining high quality care, more data will be shared in an effort to boost population health management and reduce disparities.

Through value-based care reimbursement arrangements, hospitals and clinics receive real-time data to strengthen care coordination, medication management, and appointment scheduling.

“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. In partnership with health plans, physicians and hospitals receive real-time information that helps them improve care coordination and identify patients who need follow-up, reminders to fill their prescriptions, checkups, or testing,” wrote Ignani.

In fact, health plans can partner with multiple hospitals and medical practices to form a larger establishment, such as an accountable care organization, that works together to improve care coordination, better health outcomes, and reduced medical costs. EmblemHealth partnered with physician groups about four years ago to create AdvantageCare Physicians, one of the largest medical practices in the New York City area.

These partnerships have shown to reduce hospital readmission rates as well as the number of emergency room visits. Patient satisfaction is also a major goal among providers of today and pursuing value-based care payment arrangements could go a long way to improving satisfaction scores.

Essentially, moving away from fee-for-service payment and embracing value-based care is expected to improve care coordination along with patient outcomes, Karen Ignani explains.

“Some of these payment reforms do have real promise to ultimately lower costs and drive the healthcare system away from providing more and more services but ultimately keeping people healthy and keeping them out of the hospital,” Jeremy Earl, Associate at McDermott Will & Emory, and Ankur Goel, told HealthPayerIntelligence.com.

The Healthcare Financial Management Association relates in another story how larger teams are now working together to define financial incentives and clinical quality goals so that multiple departments and organizations are on the same page.

Many healthcare providers are seeking ways to stop “repeating the same mistakes they made in the past,” improve patient safety, and reduce medical errors. Emory Healthcare Network has more than 1,800 doctors’ offices as part of its organization and has moved to contract through an accountable care organization in a commercial health plan in 2014.

“In the early 1990s, many provider organizations that negotiated capitated agreements with payers failed because they didn’t understand population management agreements,” S. Patrick Hammond, CEO of Emory Healthcare Network, told the news source.

“Although a contract may have sounded reasonable because it was based on averages, the reality is that no population is based on averages,” he mentioned.

As the ACO expanded, it is now working with Blue Cross and Blue Shield of Georgia to help manage the health of 35,000 members. It has also shown to boost quality metric data and meet the goals of accountable care.

“We jumped in sooner with an ACO to take more upside and downside so we could negotiate to retain a higher percentage of what we saved,” Hammond explained.

A tiered incentive plan has helped Emory Healthcare Network meet these quality performance benchmarks. For instance, primary care physician bonuses depend upon the efficient operation of the ACO and its overall performance.

“With primary care, you can basically attribute membership back to the primary care physicians, and they have a lot of direct impact on the measures,” Hammond continued. “Assigning a patient to specialists is a much bigger challenge because the number of attributed patients they treat is much smaller.”

As more providers and payers form these partnerships like Emory Healthcare Network, the medical industry’s integration of value-based care reimbursement will help achieve the Triple Aim – better population health outcomes and improved patient satisfaction at lower cost.