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58% of Payers, Providers Adapt Value-Based Care Reimbursement

Recent surveys show that value-based care reimbursement is rising in popularity while physicians are lacking greater understanding of MACRA legislation.

By Vera Gruessner

Several surveys from 2016 show that more healthcare providers and payers than ever before are implementing value-based care reimbursement contracts and moving away from traditional fee-for-service payment models. This past June, ORC International and McKesson released a survey of 465 payers and hospitals showing that 58 percent are moving forward with incorporating value-based care reimbursement protocols in their practice, according to a company press release.

Value-Based Care Reimbursement

Additionally, survey data from the Health Care Transformation Task Force, which includes a membership of payers, providers, purchasers, and patients, gathered this past April shows that 41 percent of provider and payer business was in the form of value-based care reimbursement contracts by the end of 2015.

These two surveys discuss a trend based on prior data and the latest research that show value-based care reimbursement models becoming a more common payment arrangement. The survey from the Health Care Transformation Task Force outlines that the popularity of value-based care reimbursement increased by 11 percent from 2014 - when the percentage had risen to 30 percent - to the end of 2015.

The survey from ORC International also illustrates that value-based care has increased in popularity due to a 10 percent rise in value-based care reimbursement contracts from 2014. The poll takers also reported being 50 percent along the value continuum, which creeped up 4 percent over the last two years.

As many as 42 percent of providers part of the Health Care Transformation Task Force had their business in value-based care reimbursement arrangements whereas 38 percent of payers had their business in an alternative, value-based payment model. This particular survey defined value-based care payments as structures that “successfully incentivize and hold providers accountable for the total cost, patient experience and quality of care for a population of patients, either across an entire population over the course of a year or during a defined episode that spans multiple sites of care.”

READ MORE: APMs, Health Data Exchange among Top Payer Reform Goals

“This substantial progress toward our goal demonstrates the Task Force members’ commitment to accelerating the transformation to a value-based payment models that improve care and lower costs,” Task Force Executive Director Jeff Micklos, stated in a press release.  “While much work remains, Task Force members have built momentum over the past year that sets a positive tone as they move toward the goal of 75 percent in Triple Aim-based, value-based care arrangements by 2020.”    

The quick pace in adoption of value-based care reimbursement also holds some significant challenges for healthcare providers with the McKesson survey showing that many medical practices have not met certain quality metric or spending reduction goals. For example, the survey found that only 22 percent of hospitals have succeeded in decreasing their administrative costs and 26 percent have been able to reduce overall healthcare costs. Additionally, slightly less than one-third of polled hospitals have met their care coordination goals and 40 percent have improved patient outcomes.

“Payers and providers are clearly beginning to scale VBR,” Rod O’Reilly, president of McKesson Health Solutions, said in a public statement. “The swift pace of change, coupled with the daunting complexity of these payment models, is putting extreme pressure on the healthcare system. As we move beyond pilots, the ability for payers and providers to automate the complexity inherent in these models will be a deciding factor to success.”

An important point from the survey that truly shows how value-based care reimbursement has grown in the healthcare field is that researchers expect value-based, alternative payment models to become more common than fee-for-service by 2020. The results also showed that larger healthcare providers have seen more success with the transition to value-based care.

However, on the other side of the issue, a more recent survey coming from the Physicians Foundation and Merritt Hawkins found that 20 percent or one out of five doctors are familiar with the Medicare Access & CHIP Reauthorization Act of 2015 (MACRA), which emphasizes the transition to alternative payment models.

READ MORE: CMS Extends Pediatric Alternative Payment Model Comment Period

Along with this finding, at least 79 percent of total physician compensation is using a fee-for-service payment arrangement, the poll found. With less familiarity regarding MACRA legislation, many physicians may be more wary in transitioning to value-based care reimbursement. This shows that the Centers for Medicare & Medicaid Services (CMS) and private health payers will need to better educate healthcare providers and clinicians on how to effectively compete in a value-based care environment.

“Whether you are a patient, a provider, a business, a health plan, or a taxpayer, it is in our common interest to build a health care system that delivers better care, spends health care dollars more wisely and results in healthier people,” Department of Health & Human Services Secretary Sylvia M. Burwell said in a public statement. “We believe these goals can drive transformative change, help us manage and track progress, and create accountability for measurable improvement.”

Since CMS has positioned that half of their Medicare payments will be in the form of alternative payment models by the end of 2018, it is clear that value-based care reimbursement arrangements will become more common throughout the healthcare field and providers will need to familiarize themselves with MACRA legislation.


Dig Deeper:

READ MORE: Doctors Provide 5 Alternative Payment Model Improvements

How Payers Should Prepare for Value-Based Reimbursement

How to Overcome the Challenges of Bundled Payment Models


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