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As the shift from fee-for-service to value-based payment unfolds, one thing is very clear: volume is no longer king. Before 2010, medical providers were paid for the amount of services they provided. The more patients they treated, the more money they made. That certainty has disappeared with value-based compensation and results are now driving compensation. To be successful, a supplier must learn to modify both the quality curve and the cost curve. In short, providers must increase quality while reducing costs.
When contemplating negotiating or entering into a value-based contract, the first thing to consider is the amount of financial risk your healthcare business or practice may take.
The best way to determine which payment model best suits your needs is to hire a qualified financial health analyst who will be able to generate financial risk models. So a vendor will have a common starting point to negotiate, as well as a better understanding of the issues, risks, and potential cost savings involved.
Once financial risk has been assessed, the next area to consider is what quality metrics to include in the value-based contract. Unfortunately, there are no easy answers for this. In fact, there are likely more questions than answers right now. One certainty is that wherever CMS goes, the rest of the payers are likely to follow. Under the CHIP Reauthorization and Medicare Access Act of 2015, the Secretary of Health and Human Services is directed to consolidate the components of the three existing performance incentive programs specified into a new Merit-based Incentive Payment system ( MIP) under which physicians, physician assistants, nurse practitioners, clinical nurse specialists, and registered and certified nurse anesthetists would receive annual pay increases or decreases based on their performance according to standards that the Secretary will establish according to specified criteria . This new model is still a couple of years away from its implementation, but it will be important to follow it, as it will probably be the guide for many payers.
Additionally, the Medicare & Medicaid Innovation Center is also testing numerous models that have a wide range of quality metrics outlined and these will also inspire managed care payment models to be implemented on a larger scale. When reviewing these metrics, the vendor’s focus should be on what the practice does well. What is it that your practice or business does every day really well that makes a difference in the lives of your patients? This is where the opportunity is!