Recapping Value-Based Payment – Getting from Here to There…

By | HCEG Top 10, HealthEdge, payment, reimbursement, Risk-Sharing, Value-Based Payment, Webinar Series | No Comments

Our sponsor partner HealthEdge hosted HCEG’s Webinar Series event in March: Value-Based Payments – Getting from here to there…

Harry Merkin, VP of Marketing at HealthEdge and Dave Mika VP of Enterprise Core System Operations at Independent Health shared insight and real world experience on how health plans and their provider networks can transition from traditional fee for service (FFS) to value-based payment (VBP).

This blog post recaps highlights of the webinar and provides access to additional information from the webinar. A recording of the webinar can be found here. You can also check out this Twitter Moment summarizing live Tweets from the webinar.

Value-Based Payment Began in the Late 1990’s 

In the late 1990’s, capitation models began paving the way for change from traditional FFS payment models to models focused on helping establish effective, cost-efficient practice models. In the last few years, value-based payments have become the latest and greatest models for reimbursement of care. The importance of value-based payments is supported by HealthCare Executive Group members ranking Value-Based Payment as #3 on the 2018 HCEG Top 10 list.

Moreover, recent statements by current and former HHS officials have supported the need for value-based payment:

“There is no turning back to an unsustainable system that pays for procedures rather than value”, and the transition “needs to accelerate dramatically.” – Alex Azar, Secretary of HHS, 3/5/18 at the Federation of American Hospitals’ conference

“I highly encourage health care leaders to listen intently to his full remarks. The transition to value is moving forward; if you aren’t already preparing for it, it is time to get on-board.“ – Michael Levitt, former governor of Utah and former HHS Secretary

Value-Based Payment Can Lower Costs and Improve Outcomes

Harry Merkin shared the results of a November 2017 Humana study showing that VBP programs achieve meaningful gains in cost and quality vs. traditional FFS methods with total healthcare costs associated with VBC plans 15% lower than care costs of FFS plans. And a more recent survey by the Healthcare Financial Management Association revealed that 70% of healthcare organizations participating in VBP programs have achieved positive results.

Value-based Payment Must Address the Quadruple Aim

Independent Health’s Dave Mika shared real-world insight into the experience his organization has witnessed. A key focus raised by Dave is that health plans looking to implement or extend value-based payment programs must address the four pillars of the Quadruple Aim

  1. Enhancing patient experience
  2. Improving population health
  3. Reducing costs
  4. Improving the work life of health care providers

Questions from Webinar Participants About Value-Based Payment

HCEG webinar series events always include the opportunity for questions from participants and this webinar was no exception. Two of many questions included the following short, paraphrased responses by Dave Mika – and other questions can be obtained from the webinar recording:

What is the key to gaining alignment with PCP’s?

Answer: Actively reaching out to and collaborating with key stakeholders in the local community.

What data has proven to be most useful to the provider network?

Answer: Information on patient gaps in care– ideally provided at the point of care in the physician’s workflow – can be very effective in improving value.

And More on How to Get There from Here…

In addition to the above, the webinar addressed the following considerations for transitioning from traditional FFS programs to VBP programs:

  • Aligning delivery and reimbursement models with high-performing providers
  • Tools for members to self-manage and self-navigate the care delivery system
  • Technology support including web and digital capabilities

The move to value-based reimbursement appears inevitable, and only those health plans and providers that begin to transition and adapt today will be successful in the future. Change doesn’t happen overnight. To learn more about how making the transition from FFS to VBP, check out the webinar recording, consider contacting HealthEdge for more information and keep in touch with the HealthCare Executive Group by connecting with us on Twitter, Facebook, LinkedIn and subscribing to our newsletter.

Value-Based Payments – Getting from here to there…

By | Healthcare Reform, HealthEdge, payment, reimbursement, Value-Based Care, Value-Based Payment | No Comments

 value-based payments (VBP) models. Capitation models traditional fee-for-service (FFS)

Since the late 1990’s, the reimbursement landscape in healthcare has been changing. Capitation models paved the way for a change from traditional fee-for-service (FFS) payment models to a focus on helping physician partners establish effective, cost-efficient practice models. And now value-based payments are the latest and greatest models for reimbursement of care. In fact, value-based payments were ranked by HealthCare Executive Group members as #3 on the 2018 HCEG Top 10 list.

value-based payments (VBP) models. Capitation models traditional fee-for-service (FFS) MACRAWhile uncertainty surrounding healthcare reform in the United States continues and the industry waits for more definitive reimbursement policy from the federal government, one thing is certain—the trend for value-based payments (VBP) continues. Health plans and providers really have no choice but to transition from the traditional fee-for-service model in order to drive down soaring costs and positively impact patient outcomes.

“There is no turning back to an unsustainable system that pays for procedures rather than value” and the transition “needs to accelerate dramatically.”

– Alex Azar, Secretary of Health and Human Services, March 5, 2018 at the Federation of American Hospitals’ conference

Obstacles in the Path to Value-based Payments

There are many obstacles that must be addressed to successfully implement value-based payments models that reward providers for positive performance and encourage poor performers to improve. In order to achieve the expected outcomes and performance required by VBP, health plans must have the flexibility to develop, implement and administer value-based contracts with providers responsible for care delivery, care management, and care coordination across the medical neighborhood.

value-based payments (VBP) models. Capitation models traditional fee-for-service (FFS) MACRA

How to get there from here…Value-based Payments

On Thursday, March 22, 2018 at 2:00PM ET, Harry Merkin of HealthEdge and Dave Mika of Independent Health will share their insight and real world experience on how to get from here to there with value-based payment. Some of the information they will share includes:

  1. Essential elements of a transition from traditional Fee For Service to Value-based Payment
  2. Independent Health’s story of how important technology-driven strategies are to their adoption of value-based payments
  3. How models being driven by CMS are also impacting commercial contracts
  4. How some health plans are responding to the value-based payment movement including findings from a study of value-based care payments by Humana
  5. The importance of primary care physicians as critical to transforming the way health care is delivered
  6. The type of technology support needed by health plans and providers

The move to value-based reimbursement is inevitable, and only those health plans that adapt will be successful in the future. And developing the capabilities to effectively respond to change doesn’t happen overnight.

Reserve your seat today and learn how to get there from here

Thurs, March 22, 2018 | 11:00am PT / 2:00pm ET Healthcare Executive Leadership Forum at Guidewell Innovation Center

Learn About Value-Based Payments from Industry Thought Leaders

Presenter – Harry Merkin

Vice President of Marketing, HealthEdge

Harry Merkin has worked with both payers and providers through many dynamic changes in healthcare for a number of years. He is currently responsible for Marketing at HealthEdge, including product marketing, demand generation and thought leadership. He previously had similar responsibilities at Evariant and NaviNet and has collaborated with many transformative entities across the healthcare landscape. Harry has helped introduce and promote innovative enterprise software solutions that enable payers to improve their competitive effectiveness, as well as perform valuable communications between payers and providers, and allow providers to effectively collaborate with patients and consumers as well as with each other

Co-Presenter – Dave Mika

Vice President, Enterprise Core System Operations, Independent Health

Dave Mika plays an integral role in leading the operations unit at Independent Health, located in Buffalo, NY. He is responsible for the coordination of activities across the organization to more effectively manage workloads and partner closely with individual business unit owners to achieve operational excellence. A former Army Reserve combat medic and Licensed Practical Nurse with more than 30 years of experience in the health insurance industry, Mika has also held management positions in member appeals, provider relations, project management and product development and implementation.

HCEG Virtual Panel Summary

By | payer, payment, reimbursement, Uncategorized

2015.08.12 - Reimbursementy

On Thursday, August 6th, HCEG presented and HTMS?sponsored a Virtual Panel??From Concept to Reality: Practical Considerations of Implementing Alternative Reimbursement Models.?? Below is a summary of the call.

To those of us who have been in the healthcare industry for more than a few years it seems we?re always talking about alternatives to fee-for-service reimbursement.? Lots and lots of talk, and only bits of action?as an industry we?re a bit stuck in the gap between theory and practice.

To help us develop practical reimbursement innovation we were fortunate to have panelists today who are not only expert thinkers, they?re expert doers.? The panelists generously shared their practical experience in value-based reimbursement from both payer and provider perspectives.

  1. Craig Samitt, MD, MBA, Partner and Global Provider Practice Leader dug into the details of physician incentive alignment, using his experience at Dean Clinic where 75% of provider revenue was capitated. He offered 9 lessons learned:
  2. Following Dr. DiLoreto, Dan Tuteur, Chief Strategy Officer at Colorado HealthOP shared the pros and cons of being in a startup health plan trying to bring reimbursement and benefit innovation to a well-established marketplace. Benefiting from a blank slate and no historical friction with providers, but handicapped by the inability to promise any patient volume, Colorado HealthOP was successful in finding providers who were already on the path from volume-to-value and capitalize on their interest and experience.? Interestingly, Colorado HealthOP is able to use their benefit agreements to drive change among their members and support from providers.? Members, who complete a health survey, have a basic lab panel done, and select primary care providers are rewarded with richer outpatient mental health and primary care benefits.? Happily, this dynamic has been popular with providers.? Dan predicts Colorado HealthOP will consider capitation for primary care and some limited bundled payments for orthopedics and physical therapy, but significant innovation won?t be implemented until 2017 and thereafter.
  3. David DiLoreto, MD, CEO at Presence Health Partners, opened the discussion by walking us through how his ACO, which represents the continuum of providers, has leveraged its significant experience with government programs into the commercial arena.
    1. Moving from volume to value is a team effort; including physicians from the get-go is crucial.
    2. Don?t look to compensation redesign to fix everything. Peer pressure alone works very well in driving certain desirable changes regardless of reimbursement structures.
    3. Design a balanced mix of incentives. For example, individual physician production is still important, so don?t build compensation formulae that hurt production unnecessarily.
    4. Build a multi-tiered structure including global, departmental, and physician level components. Patient satisfaction and productivity should be evaluated for individual physicians, while quality and access are more meaningfully measured at the departmental level.
    5. Measure at the outset for two reasons?to understand baseline performance, and to benefit from the phenomenon that measurement alone tends to drive behavior changes.
    6. Offer alternatives. Physicians need multiple ?points of entry? depending on the nature of their specialty and their patients.
    7. Size matters?incentives, thresholds, have to be big enough to get the attention of providers and make them change in the desirable direction.
    8. Remember to keep hurdles low enough that providers have confidence they can get over them.
    9. Prepare to change based on evidence and experience.

The panelists also addressed several questions:

Q: When thinking about both impact and level of interest, what are the thresholds in terms of percent of revenue, percent of patients, or other levels do you think apply when trying to move to value-based reimbursement?? How much of a provider?s business must apply for them to be willing to make the investment in changes in practice to participate in an alternative reimbursement scheme?

A: Dr. DiLoreto shared that in his experience, 10% of a provider?s patients falling under value-based reimbursement is sufficient to get the provider?s attention; for a health system, 20-30% of total revenue is the threshold.

A: Dr. Samitt added that once a practice or patient population yields 30-40% of total revenue from value-based payments, the ROI for the provider is enough to drive the entire practice to a population health approach.? Dr. Samitt volunteered that in talking to physicians, he found using percentages was much less compelling than absolute dollars.? 5% seems small; $5,000 seems ?worth the hassle? of making the necessary changes.

A: Dan Tuteur explained that as a start up, they have no opportunity to drive these kinds of numbers, so instead of focusing on the volume of patients or revenue impact, they gravitated to physician who were already on the road to accepting alternative reimbursement.

Q: Can you comment on whether and how you used both benefits and provider contracts to change provider practices?

A: Dan Tuteur opened the discussion by explaining how they began by encouraging shopping for best prices and developing ways to make price transparency an advantage for members.? Colorado HealthOP hired an outside firm to manage this with members, but they found that providers? contract restrictions (with competing plans) made it difficult, in particular the way some contracts defined tiers.? They were helped by the benefit approach of offering better outpatient mental health and primary care coverage if patients participated in the wellness programs summarized above.

A: Dr. DiLoreto talked about the prevalent under-use of wellness benefits by members.? To offset member reluctance, they incorporated encouraging use of wellness benefits in provider contracts, which in turn gets more patients to their primary care physicians.? This has a secondary advantage for the provider and health plans by generating more primary care claims, which is crucial to member attribution to an ACO.

Q: Do you see a future where fee-for-service is the exception?

A: Dan Tuteur explained that as a start up their challenge in moving beyond vanilla fee-for-service is lack of historical data about their rapidly growing membership, where patterns of utilization were very different in year one than in year two.? With an accumulation of data, he believes it will be possible to estimate how quickly such a change could come.

A: Dr. Samitt wrapped up the conversation by stating that it depends on what we mean by fee-for-service?plain old payments without quality measures will become the exception within the next few years, but fee-for-service with quality incentives can and should persist.

Next Stage of Reimbursements

By | payer, payment, reimbursement

2015.07.28 - ReimbursementyTo those of us who have been in the healthcare industry for more than a few years, the perennial discussion about moving away from fee-for-service is getting a bit tiresome when do we stop talking and start doing on a broad scale.

When we look back at the 1960’s (Medicare and Medicaid were passed in 1965), the story was about getting more dollars into the system to pay for the care of elderly and disadvantaged populations. Today, we’re in a serious hunt to find ways to wring dollars out of the system. And the journey we’ve taken with Medicare tells us a lot about what has happened and will happen in the commercial sector.

When Medicare was implemented we paid providers based on submitted charges what seems like a quaint and na’ve approach, but alternatives didn’t show up until 1972 (the HMO Act), with the first reimbursement reform appearing in 1989 when the first step toward non-charge based reimbursement was legislated for Medicare a requirement that professional providers be paid according to a relative value scale. Medicare HMOs didn’t appear until 1997. Every few years another tweak in benefits or payments was legislated, with 2003 bringing the first prescription drug coverage. 2008 started Medicare, tracked in large part by commercial health plans, down the road to mandated reporting on quality measures, federally-incented investments in EHRs, and penalties + payments to drive better, more cost-effective care.

Finally we capped off the decade with the passage of the Affordable Care Act which included not only reforms to the insurance business but various permanent programs to reduce overall costs and improve outcomes. As we look to 2016, when HHS plans to make 30% of its fee for service payments through alternative models and 85% of payments tied to quality or value, growing in 2018 to 50% and 90% respectively, it’s clear we’re moving into a serious doing phase.

For some expert thinking on what this doing phase looks like already and where it’s headed, please join us for our panel discussion From Concept to Reality: Practical Considerations of Implementing Alternative Reimbursement Models. To understand the doing phase, we need to listen to expert doers, and we will be privileged to hear from three of them.

Dr. DiLoreto will talk about how delivery systems are responding to new reimbursement models and provide his perspective on ways payers can work more effectively with their networks.

2015.07.28 - Reimbursementy PromoDan Tuteur will share his lessons from developing innovative reimbursement methods in a startup health plan forging brand new provider relationships.

Craig Samitt will talk about actualizing the vision of changing physician behavior by aligning incentives based on his personal experience.

After their respective brief presentations the panel will take your questions and engage in a lively discussion. Please do not miss this opportunity to listen to and talk about the real world of alternative reimbursement.