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How Medical Consortium Handles Value-Based Care Reimbursement

How do membership organizations manage their revenue cycle in a value-based care reimbursement environment?

By Vera Gruessner

Healthcare organizations around the country have been revamping their strategies to keep revenue stable in the midst of changing healthcare payment models. Reforms have been aimed at helping providers adopt value-based care reimbursement. With greater accountability toward their own reimbursement due to the shift away from fee-for-service payments, how do healthcare providers manage their revenue cycle?

Affordable Care Act

Some potential solutions in the midst of the transforming value-based care reimbursement environment may be to adopt data analytics technology and improve population health management, reports.

Data analytics can help better track patient health outcomes and stabilize hospital revenue cycles while population health management can help better address why certain patients require more costly interventions. Another way providers could strengthen their revenue cycle is by incorporating risk into value-based care reimbursement contracts with payers.

Henry Tuttle, Chief Executive Office of Health Center Partners, and Sabra Matovsky, Executive Vice President of Integrated Health Partners, spoke with about their perspectives on how to manage revenue in the midst of the value-based care reimbursement shift.

Tuttle explained that Health Center Partners has been around for close to 40 years when several medical organizations realized that working together as a consortium would bring about better results for patient care and healthcare spending.

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“Our organization will be celebrating its 40th anniversary next year. It wasn’t the first health center in Dorchester but it wasn’t long after that our forebearers here decided that working together as a consortia would bring them better results and better patient outcomes than remaining independent and unassociated,” Tuttle explained.

“Health Center Partners is a new name for our consortia as of March 1st. Most states across the country have a primary care association that helps facilitate community health among independent members. California is the same,” he continued. “There is a state primary care association in Sacramento, but because California is so large, the state is divided up into what are called regional area consortia that represent the activity that happens at the local community level in community health. Depending upon what you’re measuring, we outpace states like Florida and Missouri because of population density.”

Tuttle mentioned how the clinical care coordination his organization supports is optimal due to the fact that the Department of Health and Human Services (HHS) has tracked their data for nearly a decade, which further stimulated their efforts.

Revenue cycle management from earliest days

When asked how the organization first began, where their funding came from, and how they are managing their revenue cycle today, Henry Tuttle responded, “In the beginning, there was a new structure that members charged themselves to underwrite the cost of shared services. We started in the basement of a church and then moved to a basement of one of our member organizations and, over time, we moved from trailers into buildings.”

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“Today our revenue comes from variety of sources. Dues are still a portion of our revenue. We have public and private grant revenue and we have fee-for-service. Also, we have some administrative fees on materials management, for example. Collectively, that’s where our budget comes from,” he added.

Value-based care in a payer-saturated market

Sabra Matovsky also discussed how the Integrated Health Partners, a subsidiary of Health Center Partners, works with health payers to manage revenue and bring more focus toward value-based care reimbursement contracts.

"San Diego in terms of Medicaid is a bit of a unique market in that we’re called geographic managed care,” Matovsky acknowledged. “Unlike in some other counties where you have one Medicaid program run across the county or two health plans, in San Diego, the geographic managed care model is one that allows health plans to apply and, if you meet the standards of operation and are accepted as a provider, then you are allowed to be a health plan in San Diego.”

“We have much more participation from a variety of health plans in San Diego than you might see in other places that have a one-plan structure. In San Diego, 93 percent of people in Medical are already on managed care and we’ve traditionally had five plans. However, we have two new plans entering even with 93 percent saturation and we have two existing plans being purchased,” she continued. “So we have the equivalent of four new health plans coming into San Diego.”

Matovsky also mentioned that there has been “some chaos” in the primary care setting with regard to operational challenges and the fact that many health plans are having a “turf war” over garnering membership organizations into their provider network. Matovsky said that greater efficiency is needed when it comes to transitioning primary care settings toward a value-based care reimbursement environment.

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“Over time, fee-for-service will go away and what they get in their upfront revenue will be final for primary care offices,” she commented. “Really helping them be more efficient and understanding their costs and making sure that all of the coding for the services are performing is a challenge for us and one of the things that we’re working diligently towards optimizing.”

The challenges of the Affordable Care Act

When asked about some of the challenges of adhering to Affordable Care Act regulations, Matovsky answered, “One of the challenges that we’ve experienced over time is that we’re predominantly Medicaid although we do have some commercial contracts. Some of the payers that went into providing care under the Affordable Care Act in the commercial space didn’t necessarily contract with us.”

“They were relying on a different PPO network of providers. So oftentimes, we get an outreach grant to sign patients up but we don’t necessarily have contracts with all the health plans that operate in that space. That was somewhat problematic. It is better for us this year because some of the plans that operate in the MediCal space and have Covered California contracts are lower-cost options."


Dig Deeper:

How the Affordable Care Act Changed the Face of Health Insurance

How Payers Should Prepare for Value-Based Reimbursement


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