Payer Fuses Value-Based Care, Support Payments for Small Practices

July 15, 2020 - Blue Cross Blue Shield of Massachusetts (Blue Cross) announced a new value-based payment model that offers small practices financial support through a global payment, upside risk incentives, and an immediate support payment.

“Many independent primary care physicians want to practice medicine in a way that's more patient-centered and less focused on tests and procedures, but they have never had a payment arrangement that encouraged it. Now they do,” said Matthew Day, Blue Cross senior vice president of network payment innovation and contract management.

Value-based programs are difficult to incorporate into a small practice setting. The high costs associated with taking on seriously ill patients prevent small practices from engaging in high risk models. As a result, Blue Cross has previously geared most of its value-based care payment programs toward practices with 10,000 Blue Cross members or more. That is, until this point.

The new Blue Cross model builds off of previous value-based care models in order make it more feasible to fold into small practices. Blue Cross designed the model for practices with 1,000 to 20,000 Blue Cross members.

“We want to extend our nationally recognized value-based payment approach—which rewards providers for the quality of the patient care they deliver instead of the quantity of tests and health care services they provide—to more clinicians along the health care continuum,” explained Day.

The value-based care agreement incorporates three financial features.

First, independent primary care practices will receive a certain amount of money that they can spend at their own discretion. The number of patients in each practice will determine how much money Blue Cross offers the practices.

Blue Cross called these “global” payments, expressed an article from Coverage, the payer’s health news site. The model is detached from medical billing codes.

“For example, they can use their global budget to hire social workers, health coaches and case managers to address patient needs in a wide variety of ways,” Mark Friedberg, MD, Mark Friedberg, an internist and Blue Cross's head of performance measurement and improvement, said in the Coverage article.

“The flexibility in the plans lets doctors also focus on the social and economic factors that contribute to health and even explore how digital health tools, such as a coaching app for managing chronic conditions, can work alongside—or instead of—procedures and prescriptions,” Friedberg continued.

Second, on top of this cash pool, providers will engage in upside-risk and may receive incentive payments based on certain quality measurements.

Third, providers will immediately acquire support payments when they commit to the value-based payment model. While the pilot itself does not launch until 2021, this immediate support payment will provide funding to any provider participants starting in 2020 once they sign the value-based care contract.

“The contract gives small practices the freedom to care for their patients in the most effective way possible, and the incentive payments give primary care groups the ability to receive significantly more in revenue,” said Christian Lassonde, a Blue Cross senior actuary with responsibility for contract design in the Coverage article.

The pilot program was in development for 18 months and formed with input from primary care practices, the press release emphasized.

Payers have been adopting a variety of new payment models to help support providers financially in recent months. Some have taken on an advance claims reimbursement strategy.  Both public and private payers have engaged in this form of payment, enabling providers to receive reimbursement upfront.

Payers have also launched programs to help providers secure funding from sources other than payer partners. For example, Centene started a grant-writing program for providers to receive loans through the CARES Act.

Despite the various hurdles, many payers have pushed forward with value-based care arrangements. Blue Cross and Blue Shield of North Carolina (Blue Cross NC) started a capitated model that will offer participants monthly payments based on outcomes.

Payers continue to develop new value-based care models, fusing these with efforts to financially support provider partners.