Planning to pursue value-based care? Start with the basics.
As the shift from fee-for-service to value-based care continues, the industry is moving toward preventive medicine in which compensation is based on outcomes. But given the size and complexity of the U.S. healthcare system, it can be a challenge to steer the ship.
Triple and Quadruple Aim
The Institute for Healthcare Improvement (IHI) laid out an approach to optimizing the healthcare system called the Triple Aim. It focuses on improving patient care, reducing costs, and improving population health. Industry leaders also made clinician experience a priority, creating a Quadruple Aim, which IHI said it supports as a way for organizations to deliver on their strategy.
Achieving success in value-based programs — in which quality measures help determine reimbursement — often requires changes in philosophical views, as well as significant investments in new organizational, workflow, and IT processes.
Did you know many programs allow providers to choose quality measures based on their circumstances? Consider taking these steps to find the best fit:
Understand how measures are scored. The Center for Medicare & Medicaid Services (CMS) shares performance benchmarks for quality measures in MIPS every year. They are available for download at qpp.cms.gov. Considering how your practice will perform on measures will help you determine which to report to Medicare or other payers.
Focus on documentation workflows. Work with the providers at your practice to ensure the documentation requirements for clinical measures are part of their clinical workflow, as well as the workflows of their supporting staff members. Be prepared to adjust workflows to meet documentation requirements.
Prepare to monitor performance. When it comes to individual clinical performance, some providers may excel and others may struggle. You can use data and analytics to help them move the needle.
Value-based contracts use reimbursement mechanisms tied to the measurement of clinical quality and costs of care. Depending on how an organization performs under any given contract, providers may be compensated through a mix of the following:
Fee-for-service adjustments. Depending on quality or cost performance, a payer may adjust a provider’s claims reimbursement up or down by a certain percentage. The Merit-Based Incentive Payment System (MIPS), for example, determines Medicare payment adjustments.
Per Member Per Month (PMPM) reimbursements. Some payers will offer providers a set number of dollars per patient per month for taking on responsibility for coordinating that patient’s care. Many Patient-Centered Medical Homes carry contracts like these.
Shared savings and shared losses. Some arrangements reward providers based on how much they save the system. An expenditure target is attached to a provider’s patients. If the provider saves the system money, or comes in under the target, they share in the savings. If a provider loses the system money, they may have to reimburse the payer. Accountable Care Organizations (ACOs) are the most common organization that enter into this type of payment arrangement.
Capitation. Managed care organizations use this payment arrangement to control costs. It pays a provider or group of providers a set amount for each enrolled individual and is determined in part on the number of primary care services provided. The amount varies from plan to plan.
How you are paid
Compensation depends on the contract’s unique performance metrics, and generally it falls into three categories:
Quality. A payer will measure your performance based on a set of quality measures. The number and type will depend on the payer and your patient population. Generally, these measures are process-oriented or based on clinical outcomes. For example, one measure may look at how many patients received a screening, while another may look at a clinical indicator like blood pressure. Quality measures that are also good indicators of utilization, like the frequency of hospital admissions and readmission, are common.
Cost. Cost is generally measured in two ways. One way is to look at per capita healthcare expenditures. The other is to look at episode-based measures, or the cost of certain incidents, like heart attacks. Currently, CMS uses claims data to determine cost.
Process. Many contracts require process changes. Some may relate back to technology, like requiring an EHR, electronic care plans, and risk measurement. Other examples include morning huddles between clinicians, providing 24/7 services, and post-discharge protocols.