Despite mixed signals from Washington, D.C., most healthcare stakeholders expect the transition to value-based care to gather steam in the coming years.
For example, a 2017 Quest Diagnostics survey of 450 primary care physicians and health plan executives found that 82% said the transition to value-based care will continue, regardless of changes to healthcare policy in the nation’s capital. In other words, expansion of alternative payment models is inevitable, and nearly everyone in the industry will need to adapt.
For most physician practices, the transition to value-based care will not be quick or easy. This notion was underscored by the Quest survey, which revealed that just 43% of physicians said they have the tools to succeed in a value-based world.
Clearly, many physicians face significant challenges as the healthcare system evolves from the fee-for-service payment model to value-based care. For physicians, getting value-based care right starts with negotiating the correct terms in value-based contracts with payers.
Here are three key steps physicians should follow to successfully negotiate beneficial value-based care contracts with payers. The tips are based on the assumption that physicians who are negotiating value-based contracts have performed adequate due diligence to ensure that the opportunity makes sense, given their practices’ key characteristics such as patient mix and risk tolerance. Also, because value-based care is still in its early stages, the transition to this new model is ongoing and evolving, meaning no one has all the answers yet.
Find a partner with the right skills: Data forms the basis for any contract negotiation, so practices need a partner that knows how to compile, mine, and effectively document internal claims and patient data that clearly illustrate the practice’s history of delivering high-quality, cost-effective care.
In some cases, that expertise is in-house, but others may benefit from working with technology and analytics partners that have deeper experience in designing, evaluating, building, measuring, and negotiating value-based reimbursement contracts while also aligning financial goals with improved patient outcomes. Another option is to leverage the knowledge of colleagues—physicians you are friendly with, a specialty institute or your state medical society, for example.
Regardless of what partners you choose, walking into a contract negotiation with quality and cost information in-hand will give the negotiators a sense of confidence, and show the payer that the practice is providing a valuable service to its members.
Realize that the negotiation is only the first step in the process and that you will need to continue to collect quality measures, and interpret payer reports as contract reconciliation occurs and rates adjust over time. So, these skills will be, at a minimum, needed periodically as part of your practice management contracting cycle.