Posts Tagged ‘fee for service’

Infographic: The Financial Impact of Value-Based Healthcare Contracts

April 26th, 2019 by Melanie Matthews

As health systems evaluate their ability to transition from fee-for-service medicine toward value-based care, they must understand the financial impact of their strategy, according to a new infographic by Lumeris.

The infographic examines key decision points and outcomes for a health system.

11 Profitable Value-Based Reimbursement Models: Lessons from Early AdoptersCMS’s ambitious agenda for moving Medicare into alternative payment models is driving the U.S. healthcare system toward greater value-based purchasing at a furious rate. Private payors also have pledged to continue to shift payments away from fee for service and into alternative payment models such as accountable care organizations (ACOs). Fortunately, many healthcare organizations are already exploring value-based payments—often a single innovation at a time—testing models that reward providers for meeting Triple Aim goals of improving patient experience and population health while reducing healthcare’s per capita cost.

11 Profitable Value-Based Reimbursement Models: Lessons from Early Adopters encapsulates nearly a dozen such approaches, from Bon Secours’ building of a business case for its multidisciplinary care team to the John C. Lincoln ACO’s deep dive into data analytics to identify and manage the care of high-risk, high-cost ‘VIP’ patients to ‘beat the benchmark’ to WellPoint’s engagement of specialists in care coordination.

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Incentives Advance PCP-Specialist Communications in Value-Based Health System

January 6th, 2015 by Cheryl Miller

In a value-based reimbursement model, primary care physicians need to be quarterbacks for their patients, taking an additional interest in their care and following them to the end zone, or to other specialists providing care, says Chip Howard, Humana’s vice president of payment innovation in the provider development center of excellence. This will foster communication between physicians and specialists, a fundamental problem of the classic fee-for-service model.

Question: How can you manage and reward the complex interactions between primary care physicians (PCPs) and sub-specialists?

Response: (Chip Howard) That’s a pretty common question in the industry these days. If you think back to the old model, the classic fee-for-service model, the PCP potentially loses track of the member as they go to a specialist. The volume-based model is very fragmented. You don’t have communication, a fundamental problem of the model. But I think we’re on a discovery to potentially address that. Some thoughts that come to mind are putting incentives in place that will promote communication between PCP and specialists.

At the end of the day in a primary care model, we’re encouraging the PCPs to be the quarterback of the member’s care, to take that additional interest and follow the member through the path to other specialists that are providing care. There are also obligations on the specialist’s part that you would have to engage because it’s a two-way street.

Some other thoughts: we are starting to explore specialist engagement programs, whether it’s looking at bundled payments or at other sorts of programs that incentivize the specialist to achieve the Triple Aim: higher quality, lower cost, best outcomes. Then, putting data and analytics into the hands of PCPs that will enable them to potentially steer those members to specialists that are proving that they can work to achieve the Triple Aim on behalf of the patient.

There are also some ideas about how to promote interactions between PCPs and sub-specialists and start the ball rolling. That is a lot easier in an integrated system-type environment where there is one system that owns the continuum of care for the most part from PCP to specialist, to outpatient, inpatient, etc.

value-based reimbursement
Chip Howard is vice president, payment innovation in the Provider Development Center of Excellence, Humana. He is responsible for advancing Humana’s Accountable Care Continuum, expanding its Provider Reward Programs, innovative payment models and programs that enable providers to become successful risk-taking population health managers.

Source: Physician Value-Based Reimbursement: Quality Rewards for Population Health

Payment Bundling Requires Suspension of FFS State of Mind

March 25th, 2013 by Patricia Donovan
payment bundling shared savings

Webinar Replay: Moving Forward with Payment Bundling

Four hundred healthcare providers — about a tenth of all hospitals in the United States — can’t be wrong, can they?

That’s the number signed on to participate in a Medicare payment bundling pilot run by CMS, their biggest payor. And while it’s too early to know if the reimbursement concept will stick, one thing’s for certain, noted Jay Sultan during a recent webinar on Moving Forward with Payment Bundling: there’s a growing body of proof that the payment model works.

As an example, Sultan, associate vice president and chief product portfolio architect for TriZetto® shared some data from California’s Hoag Orthopedic Institute, formerly two surgical groups who have collaborated in a bundled payment model and “reengineered every aspect of care, from beginning to end, significantly lowering its common cost structure.” In one proof point shared by Sultan, Hoag reduced infection rates for knee replacements to 0.1 percent, significantly below the national 2 percent average, Sultan explained during the advice-filled session. The savings per avoided infection is about $60,000, he said.

While the federal payor has yet to report, early feedback from CMS’s recently concluded ACE bundled payment demo is largely positive in terms of revenue for participating payors, hospitals, physicians — even the patients in the pilot received a rebate from CMS, he added.

Based on Sultan’s own research, he is “not aware of any prospective payment, bundled payment program that was not beneficial for the providers, the payor and the members.” He contrasted prospective payments with retrospective payments, which he characterized as similar to fee-for-service (FFS) but with the possibility of receiving a bonus afterward.

There is a place for both payment types, but prospective does a better job of transforming care, Sultan noted.

Sultan went on to outline the general challenges for both payors and providers of crafting an episodic payment program, which could take up to 12 months. A strong analytics framework for both health plan and provider use is essential. What is also required is a mind shift on the part of entities unused to working together and sharing data, who need to realize that “under payment bundles, the provider and the payor have an opportunity to collaborate, instead of competing against each other in a zero sum way.”

For payors, some prickly areas early on might include provider contracting, claims administration, and impact on member responsibility.

Providers, for their part, must become adept at managing risk. Providers “need to be able to get the data, to develop analytics, and to develop methods for collaborating with each other — including the fact that some providers are going to lose,” he emphasized.

Sultan offered a wealth of advice for each entity contemplating a shift to bundled payments. For all stakeholders, what will be required is a paradigm shift away from FFS, the foundation for much of the industry’s day in, day out day out operations. “We measure our utilization by it, we evaluate our quality by it, we do all these things based on fee-for-service.

“When you change that, whether you’re changing it for shared savings ACOs, moving from FFS to capitation, or going from FFS to payment bundling, it has profound impacts throughout the entire organization.”

Sultan provides more advice on bundled payments, from two key factors to keep in mind when trying to engage physicians in the model to the major decision facing primary care now that CMS has introduced bundled payments for care coordination tasks, in this expanded interview.