Value-Based Fears

With healthcare reimbursement quickly evolving to primarily a value-based model, many physicians fear the inevitable repercussions of not being prepared for contracting based upon patient outcomes. The unveiling of CMS’ Value-Based Modifier, the general market movement since the Affordable Care Act, the additional Advanced Payment Model research frightens and excites many stakeholders in the health industry simultaneously. Definitive action is required in order for Independent practices to remain sustainable as infrastructure, workflow, and policies and procedures will all need tweaking. With so many administrative initiatives taking place in our industry and the infancy of this one in particular, the precise path to take is far from clear. The substantiated worries noted by Jordan Rau’s “Quality Payment Incentives: What’s the point?” are valid given the concerns of counter-productive reporting metrics, across many aspects of the industry. And without the necessary due diligence and investment of resources, such concerns will not only grow but be of substantial monetary impact.


Considering the individual differences across patient populations, specialty-based quality benchmarking represents a difficult barrier to aligning fragmented healthcare practices in an equitable and beneficial fashion. As physicians will be the first to admit, patient outcomes often depend upon unreliable / non-compliant patients, not to mention the socioeconomic health predictors that further complicate the burden of outcome-based payment models. As MedPAC encourages episode bundles to reduce unnecessary reimbursement variation, physicians and strategically minded healthcare managers must prepare themselves for 21st century payment methodologies. Regardless of current contracting success, providers must remain attentive to the changing tides in order to sustain independence & effectively prove their value on paper. Despite minimal initial savings reported, CMS continues to push towards a Fee-For-Value (FFV) world, which commercial payers have begun and will only continue to follow. Earlier this year, HHS set a goal of tying 30 percent of all Medicare payments to quality and cost performance by the end of 2016, and increasing that mark to 50 percent by the end of 2018. Commercial payers are following close behind, with Aetna announcing that it expects to make 75 percent of payments through value-based contracts by 2020. Such movement can be perceived as a foggy burden or a strategic opportunity. However your view, your practice must embrace the change.


Without a clear recipe for success, begin your due diligence or partner with someone who can help. Potentially useful approaches include:

1. Activity-Based Cost Accounting with historical financial data

2. Integrating Claims data with clinical data

3. Population Health Analytic Tools with Predictive Capabilities

4. Implementing Registries to track patient health over time

5. Risk-management acknowledgement and preparation

6. Proper training for coding staff

Keep in mind, FFV models are not coming. They are here! So, “seize the day” and let’s get going…

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