How to choose the right value-based care model for your practice

More and more practices and healthcare organizations are adopting value based care (VBC) models, either to participate in CMS programs and private payer contracts, or to focus on improving care quality and keeping costs down for both patients and providers. The landscape of quality-based programs continues to grow, and as a busy physician, you need to assess which models might be most beneficial to you, you practice, and your patients in both the short and long term.

The four most common types of value based care models—pay for performance (P4P), quality incentives, shared savings and risk, and global capitation—exist on a spectrum of risk and each requires unique proficiencies and expertise.

It’s important to note that VBC programs are not limited to government payers: many commercial and private payers also offer or require participation in some quality-based programs. However, government payers currently play a large role in bringing VBC to US healthcare, partly due to the Center’s for Medicare & Medicaid mandate to have 100% of Medicare participants enrolled in VBC programs by 2030.¹

Let’s take a closer look at these categories of healthcare reimbursement models and what questions you should consider while planning for your move into VBC.

Pay for performance: identifying and engaging patients

Pay for performance (P4P) is the payment model most similar to the more familiar fee-for-service approach, which reimburses clinicians for each service they provide regardless of health outcomes. P4P gives providers the opportunity to be paid for coordinating care and delivering tools and services to help patients be more active in their own care, like enrolling qualifying patients in a chronic or transitional care management program.

Pay for performance programs are designed to carry little to no downside risk (i.e., financial penalties) and may be relatively straightforward for practices—particularly those new to value based care—to implement. Still, there are important considerations to weigh around P4P programs. Let’s look at some.

Are pay for performance programs right for your practice?

Consider asking yourself these questions when evaluating your organization’s readiness to participate in pay for performance programs, such as Medicare’s Chronic and Transitional Care Management programs:²

Do I have an efficient and accurate medical billing function?

Patient registration, medical coding, claim submission, and all the other elements of fee-for-service medical billing are core competencies you’ll need to manage successful pay for performance programs. Most P4P arrangements pay you for work you do in addition to standard care, so this function is a must-have.

Do I prefer upfront or trailing payments and/or reimbursements?

Pay for performance programs like Medicare’s Chronic Care Management are billed via the Medicare Physician Fee Schedule.³ If you prefer programs that pay before care is delivered, pay for performance may not be the right fit for your practice.

Can I predict and identify which patients are (or will be) eligible for participation in pay for performance programs?

How well can you see your patient population at a glance? You likely know your patients very well on a personal level, but can you also see how they fit in broad categories using your current EHR or practice management system? For instance, you must be able to identify which of your patients have two or more chronic conditions in order to enroll them in Medicare’s Chronic Care Management program.

Can I engage patients with self-service tools and proactive communication?

Part of running a successful P4P program is engaging and informing your patients about your new offering and how it works. Consider using a patient engagement solution with both outreach capabilities and self-service patient tools to remind patients of upcoming appointments, share preventative care actions, and other communications.

Do I serve the right patient populations?

One simple question to ask is, “Do I serve the right patients for this program?” Be sure to determine who qualifies for enrollment in specific programs and if you have enough patients to participate.

athenaOne’s patient engagement capabilities can be especially helpful when participating in P4P programs, enabling you to proactively communicate with your patient population and provide them with self-service tools to improve key quality measures.

athenaOne’s population health tools are also helpful for seeing your patient population at a glance, enabling you to understand which programs you’re best suited for.  

The four types of value based care models—pay for performance (P4P), quality incentives, shared savings and risk, and global capitation—exist on a spectrum of risk and each requires unique proficiencies and expertise.

Quality incentives: tracking quality with CEHRT

Quality incentives is currently the most popular value-based care model, primarily due to the Merit-based Incentive Payment System (MIPS) program which is compulsory for many practices that are enrolled in Medicare.⁴ Quality incentives like MIPS reward providers who meet certain quality- and performance-based metrics for a defined set of patients.

Quality incentives carry some amount of downside risk, meaning poor performance can lead to a financial penalty. And, since payments are based on performance over a 12-month period, payment can lag for years after services have been provided and key metrics have been met.

Are quality incentive programs right for your practice?

Let’s take a closer look at considerations for participation in quality incentive programs:

Do I have an efficient and accurate medical billing function?

Quality incentive programs like MIPS reimburse providers via adjustments to the Medicare Part B payment schedule. This means any services provided related to MIPS are billed via standard medical billing processes and factored into subsequent adjustments to the schedule. Note that MIPS performance is based on a prior year’s metrics, so success in your first year of participation is beneficial.

Do I prefer upfront or trailing payments and/or reimbursements?

Quality incentive programs like MIPS are measured over the course of a “performance year.” Your performance is then calculated during the subsequent year, and adjustments to Part B take effect the following year. Be aware that you won’t see any incentive payments based on your first-year-performance for over two years.

Do I have a Certified Electronic Health Records Technology (CEHRT) solution?

In an effort to promote interoperability between health systems, the Centers for Medicare & Medicaid Services (CMS) and the Office of the National Coordinator for Health Information Technology (ONC) have set criteria for how health data is structured and stored in an electronic health records or electronic medical records systems.⁵ Having an ONC-certified EHR is required for participation in certain programs, like MIPS.

Can I close care and diagnosis gaps at the point of care?

Closing care and diagnosis gaps is an important element of many value-based care programs. The ability to see and address these gaps while you’re with your patient is crucial. Be sure your EHR can deliver that information at the crucial moment.

Can I track and report on program-specific quality measures?

To leverage a quality incentive program, you will need to track and report on specific quality measures like controlling blood pressure, various screenings, post-intervention assessments, and many others. This capability is crucial for success under these kinds of metrics.

athenaOne’s ONC-certified EHR product is designed to support organizations participating in MIPS and other quality incentive programs. MIPS dashboards and reporting help you track your performance throughout the year, and also identifies your strongest 90-day reporting period. These capabilities enabled athenaOne users perform above national averages across nearly all MIPS metrics in 2022.

Shared savings and risk: ACOs and referral networks

Shared savings and risk programs encourage practices—or groups of practices organized into accountable care organizations (ACOs)—to manage costs associated with groups of high-risk patients. Savings are tracked over a period of time and distributed back to participating providers as an incentive payment.

Programs like the Medicare Shared Savings Program (MSSP) build in both upside and downside risk, so it’s important to be confident in your ability to both manage costs and track crucial information for large panels of patients.⁶

Are shared savings and risk programs right for your practice?

Here are a few important considerations for shared savings and risk:

Do I have an efficient and accurate medical billing function? 

Shared savings and risk programs like the MSSP reward providers in part for lowering overall healthcare costs for their patient population. To participate, providers must have efficient and trackable revenue cycle management processes in-place. 
 

Do I prefer upfront or trailing payments and/or reimbursements?

Shared savings and risk programs reward participating ACOs with a portion of the savings they achieve over a period of time for a specific panel of patients (this is known as a performance payment). Performance payments, like quality incentives, are paid out after savings have been calculated for the performance period. Note: if you operate in a rural or underserved area, you may qualify for upfront payments through the MSSP Advance investment Payments (AIP) program.

Am I part of an ACO or am I willing to join an ACO?

Shared savings and risk programs are designed to encourage healthcare providers to form ACOs to share resources and other cost-saving measures. If you are a small practice that is not interested in joining an ACO, shared savings and risk programs like MSSP likely aren’t a good fit for you.

Do I have a strong referral network and thorough knowledge of specialists and other providers in my region?

Shared savings and risk programs work, in part, but focusing on the total cost of patients’ care, not just the care they receive at your practice. To be successful, it’s beneficial to have a highly interoperable EHR and to be part of a strong referral network in your area.

Can I quickly and accurately segment patients according to their Hierarchical Condition Categories (HCC) and Risk Adjustment Factors (RAF) scores?

Quantifying patients’ risk levels is crucial for managing large panels of patients in shared savings and risk program.⁷ Does your healthcare IT solution enable you to do this?

athenaOne’s practice and revenue cycle management capabilities enable practices and ACOs to efficiently manage medical billing tasks and maintain trackable records for MIPS reporting. The platform also provides access to a variety of marketplace applications for tasks like HCC and RAF calculation.

Global capitation: population health and risk adjustments

Like shared savings and risk, global capitation programs incentivize healthcare organizations to carefully manage the costs of care for groups of high-risk patients. Typically, you’ll receive a set amount each month per enrolled patient; if you keep costs below that amount, you get to keep the balance.

Global capitation programs are sometimes called “full risk” because the healthcare provider takes on the entirety of the financial risk built into the program. This risk is counterbalanced by the potential for a greater reward.

Below, you’ll notice that we don’t ask about your medical billing and revenue cycle management capabilities for global capitation programs. Of the four payment models discussed here, global capitation is the only approach that does not require an efficient fee-for-service-style revenue cycle management process.

Are global capitation programs right for your practice?

Here are some factors to consider when evaluating healthcare capitation programs:

Do I prefer upfront or trailing payments and/or reimbursements?

Of the four categories of VBC payment models, global capitation is the only type designed using upfront or capitated payments. Typically, participating healthcare organizations receive funds to pay for patients’ care ahead of time; any surplus money is considered a bonus. If this kind of predicable cashflow is appealing, be sure to look into capitation programs.

Do I have the ability to track and help coordinate my high-risk patients’ care beyond my practice?

Global capitation programs like Medicare’s Program of All-Inclusive Care for the Elderly (PACE) incentivize participating practices to coordinate care for the elderly who might otherwise go to a nursing home.⁸ The ability to coordinate care in a cost-effective way is crucial to success.

Do I have a robust and capable population health tool?

Global capitation programs typically serve large groups of high-risk patients. If you’d like to enroll in a capitation program, it’s important to have a population health tool capable of collecting, analyzing, and reporting on data for specific groups.

Can I quickly and accurately segment patients according to their Hierarchical Condition Categories (HCC) and Risk Adjustment Factors (RAF) scores?

The ability to calculate patients’ level of risk, or the projected cost of their care, is essential for global capitation programs. Ideally, these calculations can be done quickly, even at the point of care.

Success in global capitation programs hinges on accurate and timely analytics of your patient population. athenaOne’s population health capabilities enable you to identify your highest risk and highest costs patients and use that information to intervene and enroll them into appropriate care management programs.

Plan for today, prepare for tomorrow

No matter where you are in your journey with VBC, it’s important to consider where you’re headed. As you find success in certain quality-based programs, you may begin to move up the spectrum of risk into more complex and profitable programs.

The right technology partner can help you assess your readiness for certain payment models and can make recommendations for how to round out your proficiencies to broaden your options down the road.

If you’d like to learn more about value-based care and how it might benefit you and your patients, read the articles below.