Six strategies for profitability with new payment models
Since the Affordable Care Act was signed into law in 2010, CMS has been encouraging physician practices to move from a fee-for-service payment model to one that rewards value. It has been testing models that incentivize clinicians to provide preventive, proactive, and appropriate care that improves patient outcomes and experience and decreases unnecessary healthcare spending. Most recently, it has focused on ensuring health equity across all patient populations.
Many practices experienced the financial benefits of value-based care (VBC) during the height of the COVID-19 pandemic, when they received regular per patient payments from value-based care contracts, despite a significant decline in service volume. If your practice was not amongst them, you may still question whether you can maintain profitability under VBC. You may struggle to understand the terms of contracts, lack the data analytics you need to manage patient populations, or fear you will not be able to make the contracts profitable for your practice.
But value-based care is not an issue of if, but when. Fee-for-service payment is simply not financially sustainable. While your practice may not be ready to make the transition to VBC immediately, you should consider the strategies you’ll need to implement to make these payment models profitable for your practice.
Here are 6 strategies to help set your practice up for success when you’re ready to make the switch:
1. Negotiate contracts that will work for your practice
Your priority is to ensure your practice is compensated for the quality of care and outcomes it provides your patients. A payer’s priority is to limit their financial liability. While these priorities are diametrically opposed, when you work with payers to develop trust and good communication, you have the best chance to negotiate a contract that:
Provides realistic capitation/reimbursement schedules that correspond with the risk/utilization profile for your patient panel.
Ensures access to utilization data for the patient panel that will guide the efficient use of your limited resources and enable identification of patients in high utilization periods that require increased care management support.
Focuses on care quality metrics that you can realistically monitor and manage rather than metrics that you have little visibility into or influence over.
Utilizes financial performance metrics, such as MLR targets, that are based on realistic thresholds and for which the payer shares the algorithms for both the revenue and cost metrics.
Aligns with your financial and patient care goals and values so you can secure buy-in from the physicians in your practices.
Prepare for negotiating by doing a full analysis of your practice’s historical performance. This should include your patient panel’s historical statistics regarding office visits, revenues, and patient risk scores. Ask your providers and staff:
What they’ll need to improve care quality and outcomes.
How they can reduce the unnecessary utilization of high-cost treatments, services, and facilities.
What additional resources your practice needs to manage contracts in terms of staff and technology.
Also, consider hiring a consultant to assess your financial opportunities and serve as your advocate in the negotiating process.
2. Maximize the efficiency and effectiveness of limited resources
Given current staffing constraints across the industry, it’s impossible to provide continuous care to every patient on your panel. Instead, you should develop a strategy to deliver dynamic care management services that focus on the cohort of patients that are entering or transitioning through a period of high utilization (e.g.: cardiac/cerebrovascular events, oncology events, etc.). Patients who have consumed the most health care services in the previous year have already transitioned thorough their health care event and are on the backside of the curve, returning to a lower level of utilization.
Once you identify high-risk patients, you can develop workflows to guide them through their high utilization period with close monitoring and care management services. Look for a technology solution lets you integrate data and analytics technology with your EHR systems and garner insights into issues that your staff has the expertise, authority, and opportunity to resolve. When you focus attention on those specific patients who will benefit the most from care management, you maximize the efficiency and effectiveness of your limited staffing resources.
3. Collaborate with partners to coordinate care
Quality care requires that every clinician knows when other providers have seen their patients, what treatments and medications they’ve been prescribed, whether patients are complying with their prescribed treatments, how many trips they’ve taken to the ED, or even whether they’ve been hospitalized.
Building opportunities to collaborate is easiest when you connect with medical specialists and continuing care providers with similar goals and aligned incentives. Your collaboration can be automated with technology that enables you to communicate with care partners, share patient data, and align on care pathways for timely and seamless transitions.
4. Invest in technology that is interoperable
Interoperable technology means that the data in one system can be accessed and utilized on another. If you have technology platforms that can’t talk to each other, your practice may suffer from significant workflow inefficiencies. As you update your systems — revenue cycle management, scheduling, staffing, patient engagement — make sure they integrate seamlessly with your EHR system. You can then more easily deliver information and insights to clinicians at the point of care that drive critical health discussions, decisions, and orders.
5. Update practice workflows and analytics capabilities
When investing in new technology, look for a solution that will significantly increase the effectiveness of your face-to-face time with patients and facilitate care and transition management. Consider options such as face sheets that are easy to read at a glance and include risk analyses, automated scheduling for annual wellness visits, email alerts for recommended tests or screenings, patient referral support, HCC updates to keep your risk scores current and ensure accurate reimbursement, and notifications when a patient is ready to be transitioned to another level of care.
6. Focus on the healthcare issues your clinicians can act on and resolve
If you’ve collected patient data through your EHR but have no way to access, analyze, and act upon it quickly and easily, you may struggle to meet the requirements of your VBC contracts. The right solution will provide clarity about what is going on with your seriously ill patient population now, with insights into cost and utilization risk, medication compliance, mortality risk, and psychosocial issues that are hard for humans to recognize and quantify remotely. It should help you monitor and manage their care, and determine what health issues you have the expertise, authority, and opportunity to act on and resolve.
Be Proactive in Your Move into Value-Based Care
When you are ready to embrace VBC, it’s critical you understand the landscape, have partnerships with like-minded providers, and have resources you need to make your transition successful. The right strategies, technology, and collaboration will help you maximize your potential not only to meet the quality and cost metrics of those contracts but also to achieve greater work satisfaction and financial and clinical success for your organization.
Duane Feger is a health economist who has partnered with public and private healthcare organizations to help them deliver cost effective care, healthier populations, and financial success. He is currently applying his in-depth knowledge of the industry to the design, development and implementation of risk assessment and predictive modeling tools for Acclivity Health Solutions located in Jacksonville, FL. In addition to publishing several white papers in health economics and health analytics, Duane has also presented for John Hopkins at national conferences and leads educational presentations for healthcare providers and administrators.