Why Payers Should Educate Providers on Value-Based Care

July 29, 2016 - Both private payers and public payers like the Centers for Medicare & Medicaid Services (CMS) have a long road ahead of them in supporting healthcare providers and consumers with the transition to value-based care reimbursement. For example, a survey from the Deloitte Center for Health Solutions found that half of polled doctors had never heard of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), according to a company press release.

"The changes associated with MACRA are fast approaching," Anne Phelps, Principal of Deloitte & Touche LLP, said in a public statement. "The first performance reporting period begins January 1, 2017. The fact that so many physicians and clinicians still haven't heard of the law means they'll have a lot of work to do over the next five months, including evaluating current payment processes and understanding how physicians are organized within their hospitals or practices."

MACRA is a major healthcare law that will move hospitals and physician practices serving Medicare beneficiaries toward a value-based care reimbursement model that stresses care coordination and financial risk-sharing. Out of 600 polled doctors, about 300 did not have a good grasp or understanding of MACRA.

"MACRA is what can make value-based care real," said Mitch Morris, Principal at Deloitte Consulting LLP, stated in the release. "It's exciting but also challenging. For example, while the survey found the majority of physicians believe that the performance of the US healthcare system can be improved by measuring care outcomes and processes and measuring resource utilization and costs, the survey also found most physicians believe performance reporting to be burdensome and don't support tying compensation to quality. These physicians will likely have to change aspects of their practices to meet new reporting requirements."

Along with educating providers on upcoming healthcare rulings, payers will need to work with consumers to ensure that they are more prepared to handle out-of-pocket costs and other cost-sharing aspects of their health plans.

According to an Alegeus Healthcare report, 66 percent of surveyed consumers stated that “planning for out-of-pocket costs” is the most challenging part of their healthcare management while 60 percent rated handling medical care finances as the second most challenging.

In fact, the top four most challenging aspects of healthcare management for consumers polled in the survey relate to medical finances. This shows that consumers are finding the management of their healthcare spending stressful and daunting. Payers may need to create strategies to unburden consumers from the issues of cost-sharing.

The survey also showed that consumers find it very challenging to differentiate between multiple benefit options and deciphering jargon such as copays or deductibles. In the changing healthcare landscape and its movement toward value-based care reimbursement, payers will need to meet the needs of stakeholders and consumers. A greater focus of consumer education and satisfaction may need to be incorporated.

The Department of Health and Human Services (HHS) has brought much focus toward value-based care reimbursement especially with its goal to tie more and more medical claims among their Medicare beneficiaries to alternative payment models.

On Monday, July 25, HHS announced in a press release several new proposals aimed at moving Medicare payments toward a system based on value instead of volume. These proposals are aimed at incentivizing doctors to prevent medical complications, ensure quicker recovery times, and avoid hospital readmissions. All this steps would improve patient satisfaction as well as reduce overall healthcare spending.

The proposals include bringing in one particular form of value-based care reimbursement called  healthcare bundled payments, which pay providers based on an episode of care starting from a hospital admission all the way through recovery, follow-up appointments, and even home care.

A brand new bundled payment model is going to be positioned for cardiac care and a similar bundled payment program used in hip replacement surgeries is going to be utilized for other types of hip surgeries. HHS is also proposing a new program to stimulate the use of cardiac rehabilitation services as well as allowing physicians with strong participation in bundled payments to qualify for the Quality Payment Program.

The cardiac rehabilitation proposal is looking to improve risk assessments and prevention of cardiac disease, the press release announced. With heart attacks and strokes costing the healthcare industry as much as $300 billion in spending every year, new payment strategies from public and private payers may bring these costs down.

“Having a heart attack or undergoing heart surgery is scary and stressful for patients and their families,” HH Secretary Sylvia M. Burwell said in a public statement. “Today’s proposal is an important step to improving the quality of care Americans receive and driving down costs. By focusing on episodes of care and rewarding successful recoveries, bundled payments encourage hospitals to coordinate care to achieve the best outcomes possible for patients.”

Essentially, HHS states that bundled payments will boost care coordination and ensure better health outcomes by providing payment for an entire episode of care both in and out of the hospital.

“Patients want the peace of mind of knowing they will receive high-quality, coordinated care from the minute they’re admitted to the hospital through their recovery,” Patrick Conway, M.D., CMS Principal Deputy Administrator, noted in the press release. “The variation in cost and quality for the same surgery at different hospitals shows there are major opportunities for hospitals included in today’s models to reduce costs, improve care, and receive additional payments by improving patient outcomes.”

The future for health payers will be centered on moving away from fee-for-service payments and adopting value-based care reimbursement, which means insurers will need to work with providers to better educate on strategies for meeting quality care benchmarks and incentivizing physicians through bundled payments and other alternative payment strategies.

Dig Deeper:

The Role Risk Plays in Value-Based Care Reimbursement Models

5 Elements Essential for Value-based Care Reimbursement