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Value-Based Care News

Key Strategies for Transitioning to Value-Based Care Payments

Value-based care payments are becoming mainstream at CMS and private health payers are jumping on board as well.

By Vera Gruessner

With value-based care payments impacting both payers and providers around the country as the healthcare industry transitions toward a new climate based on quality of care, preventive services, and better patient outcomes, health insurers must take on new responsibilities to ensure they are moving strategically toward value-based care.

Accountable Care Organizations

There are specific areas in which health payers must work with their provider network to ensure that patient outcomes are improved in less time and with fewer resources used. Through these means, patients will receive adequate care at lower cost. The way value-based care payments work is by incentivizing providers to improve the quality of care by offering financial rewards and shared savings such as through accountable care organizations.

What steps should health payers take to succeed in value-based care payments and to ensure their provider networks meet quality metrics? First, payers will need to work toward reducing hospital readmission rates, hospital-acquired infections, and the lengths of stays. This will reduce overall costs while also ensuring better outcomes among the patient community.

CMS strategies to embrace value-based care

Federal agencies such as the Centers for Medicare & Medicaid Services (CMS) are working toward establishing value-based care payments among hospitals and providers. For instance, CMS has created the Medicare Shared Savings Program, which incentivizes providers to work together and form accountable care organizations in order to share in cost savings.

CMS also started the Medicare Bundled Payment for Care Improvement program and the Comprehensive Care for Joint Replacement program, which reimburse providers using episode-based care instead of paying for each healthcare service. This incentivizes physicians to better coordinate care in order to be fully reimbursed for their section of the episode of care.

How payers can transition to value-based care payments

New contracts will need to be signed if both payers and their partnering providers are looking to move into the world of value-based care payments. The contracts will need to position providers to take on more risk and meet quality performance benchmarks while payers will need to decide on which pay-for-performance strategies are best.

Accountable care organizations, bundled payments, patient-centered medical homes and risk-based contracts are some of the opportunities that payers have to move away from fee-for-service reimbursement. Payers should also encourage the use of clinical decision support tools among their provider network to ensure less waste.

There are specific challenges that payers may face when implementing bundled payments, however. There may be certain costs that would be outside of the providers’ control, which means payers and providers may have conflict over some claim denials.

For instance, when it comes to preventive care and following a wellness plan, physicians may not have as much ability to control their patients’ behaviors. When it comes to overcoming the challenges associated with bundled payments, spoke with Michael Ciarametaro, the Director of Research at the National Pharmaceutical Council, and Robert W. Dubois, MD, PhD, the Chief Science Officer and Executive Vice President of the National Pharmaceutical Council.

“We laid out three general principles,” Ciarametaro said. “In terms of setting up the contracts, they need to be designed in a way that provides adequate reimbursement to achieve the optimal outcomes. There are four pieces under that. The first one is providing sufficient reimbursement for all the services and technologies required. The second is reimbursing for an appropriate clinical time-frame. If you’re too short, you tend to focus on practices instead of outcomes.”

“The third is to recognize that clinical practice evolves pretty quickly, which means adjusting payment to adjust to those evidence-based practice changes whether it means doing things differently or whether to adopt new technologies. The fourth step is to focus on homogenous patient populations.”

“The other things you can do are carve outs,” he continued. “If you have particular drugs or services that are expensive and highly variable, it may make sense to exclude those from the bundles.”


Dig Deeper:

How Quality Metrics Affect Value-Based Care Reimbursement

The Role Risk Plays in Value-Based Care Reimbursement Models


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