Balancing Reimbursement Strategies

When it comes to optimizing medical reimbursement, particularly in an environment where the payer mix skews toward Medicare and Medicaid, making the transition from a fee-for-service (FFS) environment to one that aims to deliver value-based care on a population level is no easy matter. When looked at through a population health management lens, adopting alternative payment models (APMs) is important because they incentivize healthcare providers to level-up the patient experience and improve the health of populations while also lowering per capita costs (satisfying the IHI Triple Aim).

Much of this comes down to providing better access to care for everyone, regardless of background or socioeconomic status; to me, this is the beating heart of PHM. But how can physicians care for traditionally underserved communities if they’re stuck in a FFS payment model that prioritizes one off procedures that often result in fragmented care delivery?

The answer: health systems need to embrace value-based payment models that are completely untethered to FFS. Anyone who’s spent any time looking at the medical reimbursement landscape, however, knows this isn’t nearly as straightforward as it sounds. Since the Affordable Care Act of 2010, the U.S. healthcare system has been locked in a transition period where CMS – along with a number of commercial payers – is encouraging a shift to risk-based payment models that hold providers responsible for providing care that patients deem valuable at a lower cost.

For a snapshot of how slow things are progressing, check out “The Future of Value-Based Payment: A Road Map to 2030,” a white paper published by the Leonard Davis Institute of Health Economics at the University of Pennsylvania. Although back in 2015 Health and Human Services (HHS) committed CMS to tying 90% of traditional Medicare FFS payments to quality by 2018, the chart in the UPenn white paper makes clear that we’ve fallen well short of that goal nearly four years after the original target date.

Consequently, there are still a large number of providers who, although on the path toward practicing value-based care, are still involved in hybrid payment models that combine both value-based and FFS elements. Still more concerning, as the white paper makes clear, on the topic of access to care for underserved groups including racial and ethnic minorities, rural populations, and individuals with disabilities, with some exceptions “value-based payment has yet to improve (or even explicitly address) access to care or health outcomes.” 

So how do providers with an eye toward improving the health of patient populations ensure that they chart a steady course through this proverbial no man’s land? The need for equilibrium is key, says Rick Foerster, Senior Vice President of Value-Based Operations at Privia Health, in a recent blog post. As Foerster sees it, advancing toward true value based care where all members of society can obtain quality care requires a cool head and a steady hand.

In his blog post, Foerster lays out four steps that can help maintain a practice’s or health system’s equilibrium during this time of transformation. I won’t go into detail because you can read his post for yourself, but these four steps include solidifying the base of your practice management, upgrading your patient experience, implementing the fundamentals of value-based care, and taking greater responsibility for the totality of your patients’ care and costs. “Fortifying your fundamentals,” writes Foerster, “can give you a solid foundation to build upon.” Everything should be moving like clockwork, from payroll to workflow to virtual patient access points; if not, you may have trouble making the shift to value‐based care.

Part of enhancing access to care means making your practice as convenient as possible to the needs of your patient population. Providing direct online scheduling and telehealth options are good examples of lowering barriers to entry. If patients feel your practice is unable to accommodate their often busy schedules, they may seek care at other, more expensive establishments where they risk being unable to afford necessary care.

On the “taking greater responsibility for the totality of your patients’ care and costs” front, Foerster brings up an interesting point that not enough heath systems are considering, mostly because there aren’t many incentives in place to do so currently: ascertaining patients’ behavioral health and taking non-clinical social determinants of health into account. He puts it this way: “To manage these elements, you must upgrade your accountability. Shift from reactive to proactive care; from understanding the average patient to understanding each individual patient; from facing the problems in front of you to problems you’re not yet aware of.” No easy feat to be sure, but necessary as a group or health system transitions to value-based care.

While taking on risk is just that – a risk – he concludes by noting that, in addition to getting your house in order in the ways outlined above, it may also help to find a partner because a “lack of resources or expertise is a frequent obstacle to implementing value-based care.” 

This notion of entering into partnerships to help chart a steady course through this period of transition is echoed in a 2017 report by the HFMA about the future of value-based care. As part of a workshop laboratory the group put together “to help facilitate problem-solving dialogue among a diverse cross-section of thought leaders in finance, clinical medicine, and health plans,” one of the major points of agreement was the need for establishing partnerships to accomplish the following:

  • Leverage infrastructure with providers in new markets
  • Develop products
  • Partner with health plan(s) to gain a larger provider network, access to membership, and direct-to-employer contracts

“To address cost and improve outcomes, many organizations are focused on high-risk populations,” the report reads, making reference to population health management. “But the real opportunity is to focus on the rising-risk population so that people and providers better understand how to manage chronic conditions to save costs for the long term.” The idea of focusing on such populations and entering risk-based arrangements through a phased approach is intriguing and something to keep an eye on. 

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