Kevin Mehta

Payers and providers, especially physicians, have historically suffered from adversarial relationships that inhibit their ability to collaborate and improve care delivery.

The reasons for the lack of trust from the parties are numerous- and in some cases well-founded. But the shift to value-based care brings the potential to overcome these barriers and establish new relationships based on a shared commitment to enhance patient outcomes and continuously improve processes. 

Given the central role they play in care coordination and oversight, primary care physicians (PCPs) play an important role in the shift to value-based care. Chronic conditions, developmental disorders, and behavioral health issues account for the majority of costs in the health system. As the PCPs are most responsible for these types of patients, they will assume greater financial risk. In short, when it comes to chronic care, PCPs are the No. 1 risk-bearing entity for the patient. 

Because PCPs and other providers under value-based care arrangements assume a portion of the risk previously borne by payers, trust becomes a critical issue between the two parties. After all, how can providers feel any level of comfort taking on more risk if they cannot rely on the information they get from payers about that risk?

While there’s no need to delve deeply into the roots of physician-payer mistrust, it does help to briefly examine how we arrived at today’s state of affairs in order to find a way forward. Much of the acrimony stems from the nation’s seemingly never-ending healthcare-cost escalation, as well as each side’s attitudes about practice variation. 

As a result of these concerns, payers began to use a variety of tactics that physicians perceived as heavy-handed, including claims analysis and denials, prior authorizations, and narrow networks. Physicians perceive practice variation as professional judgment and a response to the unique needs of each individual patient. Payers often attribute practice variation to failure to follow population-level clinical evidence, outdated knowledge, hubris, or even greed. 

 by representatives of several payers, to progress beyond the trust issue, physicians and payers should seek to build relationships on three foundational factors: transparency, competence and motive. 

Value-based agreements cannot exist without a deep dive into all participants’ data, so the need for data-sharing may be the most important factor motivating physicians and payers to re-examine the nature of their existing relationships.

Bundled payments, which entail that all parties involved in an episode of care receive a one-time all-inclusive payment for services rendered based on estimated cost, provide an initial building block to obtaining greater transparency. The basis of bundled payment contracts is the underlying procedure and diagnosis codes that correspond to all of the procedures, services, and other elements included in the bundle. 

Some bundled payment contracts are essentially black boxes, with physicians never explicitly informed of all the billing codes that govern the contract. By developing bundled payment contracts to be more transparent, data-sharing among physicians and payers can form the basis of improved, collaborative, and mutually beneficial relationships. 

The power to understand one’s own, and the other party’s strengths and weaknesses, is an important part of building trust. At its most basic level, competence requires executing basic processes in a consistent, predictable, and reliable manner. Taking it a step further, it requires strong communication through actions, incentives, and reporting to support and reinforce the competence of the other party. For example, physicians expect payers to pay claims, facilitate prior authorizations, and communicate policy changes, while seeking input from physicians on how changes will affect their processes and workflows. Payers expect physicians to follow best clinical practices, achieve quality measures, and refine practices as new evidence comes to light. These practices must not be seen as table stakes but rather as ways for physicians to obtain more influence over the payers’ policy changes. In the end, the recognition of competence is like respect: It is earned, not given. 

Understanding motive begins with self-reflection, as well as considering the other party’s perspective. The JAMA viewpoint authors recommend physicians and payers adopt a perspective of “assuming positive intent” to realize that behavior is guided more by context and incentives than motive. Inevitably in most human endeavors, there is a gap between intent and effect, and physicians and payers would do well to keep that in mind when assessing the other’s actions. 

In the interim, a neutral third-party “referee” that brings payers and providers together can increase the velocity at which trusting relationships are built. This neutral third party can assist with data harmonization, baseline measurement, and bundle definition while keeping both parties informed of opportunities to improve processes and enhance outcomes. Encouragingly, as large health systems increasingly begin to sponsor their own health plans, both parties are likely to find common ground around shared experiences. 


	It’s taken a long time and numerous steps for the physician-payer relationship to fracture, and the cracks won’t be sealed overnight. Nonetheless, it is a relationship that needs to be improved if the U.S. is to have any hope of escaping its current 

 of high costs and less-than-stellar population health. Breaking down the walls of mistrust begins with transparency, and the data-sharing that’s required to reach successful value-based contracts provides a real opportunity to repair damage to the physician-payer relationship. 

Kevin Mehta serves is chief technology officer for 

. In this role, Mr. Mehta focuses on building data-driven, turnkey software solutions that provide payers and providers with the technical tools and resources needed to design, evaluate, build, measure and negotiate value-based reimbursement contracts.

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Physicians and payers should seek to build relationships on three foundational factors: transparency, competence, and motive.

Transition to value can build greater trust among physicians and payers 

Despite mixed signals from Washington, D.C., most healthcare stakeholders expect the transition to value-based care to gather steam in the coming years.

 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 

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.

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.

Understand your data and practice readiness:

 To build a mutually beneficial relationship with payers, physicians should keep in mind that both parties ultimately have the same goal: providing their patients and members with high-quality healthcare in a cost-effective manner. Certainly, both parties haven’t always seen eye-to-eye in the past and won’t always in the future, but that shared goal should form the foundation of any physician-payer relationship.

That similarity provides physicians with an opening to increase their bargaining power with payers-demonstrating through quality measures that they do, in fact, already provide quality care at a reasonable cost to their patients. It’s all about leveraging the data available to a practice to develop a full picture of the patient care the practice provides, such as cost, quality, utilization, and population health.

Know what services you perform well, and how you compare to other practices in the payer’s network. How does your quality performance compare to nearby, competing practices? Do you have the highest volume of patients? Some payers may share this data, and some may not, but physicians should always press them for it.

It may be a heavy lift, but if you’re able to conduct an analysis of how your practice would’ve performed under a value-based contract versus its actual performance in a fee-for-service contract, it will greatly enhance your understanding of the risks and opportunities available to your practice under value-based care.  

Know what is, isn’t and shouldn’t be negotiable:

 Many medical practices, particularly smaller ones, are unlikely to possess enough leverage to generate significant-or perhaps any-rate concessions on the part of payers. But the choice of quality measures included in the contract is open for discussion.

Carefully consider which quality measures will generate the most benefit for your practice. For example, consider a primary care practice that is seeking a value-based contract around a bundle of care for type 2 diabetes. There may be several options for quality measures including hospital readmission rates, total cost of care, percentage of avoidable complications and more.

It’s important that physician practices choose quality measures in which they have a significant opportunity to improve, which will enable them to gain higher margins on the associated services as they progress. In other words, ask, “Where is our opportunity to improve patient outcomes while reducing the volume of services being delivered?”

Understand that value-based contracts for certain conditions may not always make sense. For example, it may not be beneficial for a primary care physician to enter into a value-based agreement with an orthopedic group for knee-replacement bundles because the physician does not serve as the primary driver of resource decisions for these cases. However, the physician may have the opportunity to use those initial value-based contracting discussions to deepen the relationship with the orthopedics group, providing another avenue of practice growth.

Value-based care is transforming how care is measured, paid for and contracted, and will affect all players in the industry. Payers will continue the movement towards value-based contracting instead of relying on the fee-for-service approach, and providers that prepare for this change instead of reacting to it will benefit the most. While many primary care physicians face significant challenges in transitioning to a value-based world, the first step to success is negotiating the right contracts.

Kevin Mehta serves as chief technology officer for 

. Mehta focuses on building data-driven, turnkey software solutions that provide payers and providers with the technical tools and resources needed to design, evaluate, build, measure, and negotiate value-based reimbursement contracts.

Physicians can best prepare for success by working with payers on the right parameters.

Author | Kevin Mehta

Articles

Transition to value can build greater trust among physicians and payers

3 tips for negotiating value-based contracts