Driving Innovation in Provider-Payer Value-Based Care Relationships

September 30, 2019 - Alternative payment models have emerged in recent years as the healthcare industry has shifted its focus from a fee-for-service reimbursement model to value-based care. This transition is commonly called moving from fee-for-service to fee-for-volume that focuses on quality outcomes.

For these contracts to be successful, providers and payers must reach shared decisions surrounding the metrics used to measure success and the appropriate payment allocations outlined in the agreements. 

Brian Burns, a managed care network advisor with over 31 years of managed care industry experience, explained the key factors to success in these provider-payer relationships that will springboard success for value-based care models.

Trust in the Partnership

If a value-based care agreement is to be successful, the payer-provider relationship that founded the agreement must be built on trust. Ideally, the relationship will have been in place for several years, building upon past successes and mutual understandings. These new agreements require processes to be built differently than in the past. Payers and providers will require new documentation and workflow. The relationship can quickly become tense unless there is a solid foundation of trust.

Physician leadership leading the efforts for a cross-functional team is a best practice in starting these conversations. Participants should meet regularly but avoid a rush to get something done for the sake of getting something done. Building a balanced and equitable agreement is far more important for the benefit of the patients than a rushed one.

To help build trust, Burns suggested payers focus on implementing necessary and straightforward administrative tasks without going over the top. 

“Overzealous actions on prior authorization, medical record reviews, or other administrative requests are counterproductive,” he argued. “In these arrangements, there must be a balance between a payer’s desire to ensure medical necessity and appropriateness of services and a provider’s ability to manage the health of the population that is attributed to their practice.”

For a new payer entering the market, trust can be challenging to build. There are no longstanding relationships and the payer risks being seen as the “new person” who is not to be trusted.

“They have to get involved in the community and participate in community events. It might be helping with a farmer’s market on Saturday mornings or helping a 5K run,” Burns explained. “It might be attending a hospital’s gala, fundraiser or another event. What you’re trying to do is become part of the local fabric. You’re not just an insurance company. You’re a partner, a community collaborator.”

Burns also recommended that payers and providers ensure there are people from local communities on their team. For some national payers, this may be a challenge. Likewise, providers, more and more, are using out of town consultants or administrators to help run the practice. However, at the end of the day, the delivery of healthcare is a local issue, so ensuring a good mix of local staff participants in the design and implementation of the arrangement is critical.

Quality, Timely Data

Data is another crucial component of value-based care. When agreeing on the terms of an alternative payment model, providers and payers need to agree on their member population, the claims data they will be using, and the timeframe of the data to mark success.

Managing all three of these components might seem simple given the copious amounts of data payers and providers have at their disposal, but ensuring this data is high-quality and timely can be a challenge. If not managed properly, inaccurate or incomplete data can drive a wedge between the provider-payer relationship needed for value-based care agreements.

“I’ve seen some of these deals get very prickly when incorrect data is sent and people have wasted time. Data is such a big deal,” Burns explained.

One of the ways to ensure high-quality and timely data that helps maintain provider satisfaction is to discuss these topics in the initial stages of forming the agreement. Reaching agreement on the included population of patients is critical. For example, will the arrangement include all HMO members, all PPO members, just fully insured members, are self-funded members included, are union groups included. These are broad categories so discussions will need to identify any carve-out populations. Providers and payers will then know what to expect and what data is available to them.

Additionally, Burns recommended establishing regular meetings to review the data and understand progress.

“Once the arrangement is effective, you’ve got to have frequent oversight meetings on all the data, so everyone knows how the contract is going throughout the year,” he said. “It would be far better to correct course during the year to meet performance targets than wait until the end of the performance year to identify corrective actions. At that point, it is too late. Being proactive in having a regular cadence of meetings also helps to build trust in the data, the processes, and the relationship.”

Reasonable Performance Targets

As different value-based reimbursement models grow in popularity, providers are quickly becoming inundated with a large number of metrics they are responsible for. When providers are balancing multiple payers, keeping track of all of these measures can lead to a high level of provider burnout.

“Physician satisfaction is a huge deal,” Burns said. “A lot of it has to do with all these administrative hassles, hurdles, and hoops payers put them through.”

To help minimize this burnout, Burns recommended having performance measures target quality metrics payers and providers are already collecting such as HEDIS measures for the commercial block of business and Star Ratings for Medicare Advantage. To the extent this can happen the more efficient the data gathering process will be.

“Payers shouldn’t include all the HEDIS measures, there are too many. Instead, include only the top ones they are most interested in that will drive the best outcomes for the member population,” Burns noted.

  “Focus on what you need. Focus on measures that will further increase the health of the population. Be mindful of the number of measures included as too many may result in a lack of focus. More importantly, recognize the potential positive community impact that could be realized if the quality metrics are met.   

Start Simple

The ultimate goal of value-based care is to focus on the quality of care rather than the quantity of care, but quality takes time to measure. Starting a value-based care contract is a great thing; however, payers and providers should use prudence and start rather simple. This first step gets everyone moving in the same direction and builds trust. 

Value-based care arrangements include a lot of claims data. These deals include total cost of care performance targets for the attributed population. Due to the inherent lag in claims data, the effectiveness of a value-based care deal cannot be analyzed until several months into the second year of the agreement. If providers and payers want to add more risk into the agreement, year two is not the time to do so because of the lag in performance data. Once the data is produced, vetted, and both parties have a chance to review it then it would be a good time to enhance the performance measures. In this case, it would be year three.

“By doing it this way, you build some rhythm and trust and therefore increase your chance for success. In time, build up the risk component which gets everyone’s skin in the game,” Burns proposed. “Many providers are embracing risk, and many are performing very well.

To implement this strategy, Burns said payers and providers need to “start simple, start slow and then layer in sophistication with upside and downside risk. This is a marathon, not a sprint.”

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