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MGMA 2020: Transitioning to value-based care


Primary care doctors have been reluctant to embrace risk-based care contracts

Although risk-based care contracts have existed for many years, primary care doctors have been reluctant to embrace them. But with careful planning, these contracts can offer medical practices the flexibility and income they need to provide high-quality care, while maintaining their independence.

Representatives of practices using value-based payment contracts discussed their benefits during a session on the second day of the Medical Group Management Association’s 2020 Medical Practice Excellence conference.

“Why enter into these plans? First and foremost, it’s financial stability,” said Timothy Irvine, MD, a physician at IKP Family Medicine in The Woodlands, Tex, which has about 6,000 patients under capitated or pay-for-performance contracts. “The monthly capitation checks they provide are a dependable revenue stream that helps even out the ups and downs of the revenue cycle.”

The revenue stream proved especially important during the early months of the COVID-19 pandemic, when in-person patient visits all but dried up. “Our practice is in a much better position because of our participation in value-based contracts,” Irvine said.

Along with financial stability, being in value-based contracts has helped IKP improve its productivity and patient outcomes by offering a monthly, per-capita care management fee. The practice uses the funds to help cover the costs of care coordination managers. “These are the employees who tie everything together so when a patient comes in, it is the most productive visit we can have,” he said.

Joe Nicholson, DO, chief medical officer of CareAllies, a Cigna-owned consulting firm that helps practices transition to value-based care, said that process requires significant time and effort. “Those that succeed start small, and transition to a greater percentage of risk-based contracts over time, often focusing on areas they’ve already targeted for improvement.”

Nicholson advised practices to consider the following when deciding whether to enter into value-based contracts, and with which payer(s):

  • The payer mix: What mix of public and commercial contracts make the most sense for your practice?
  • The policies of the payer(s): Which payers have the best policies for treatment of chronic conditions, and invest in services that address the social determinants of health challenges in your community?
  • Reporting requirements: Look for payers that have similar quality reporting requirements so as to make it easier for your practice to test and scale risk-based arrangements
  • Flexibility in utilization management: Does the payer’s approach to utilization management allow your practice to manage and control service and treatment offerings for patients.

Nicholson also stressed the importance of collaboration and data-sharing with payers. “For every quality measure a practice is expected to report on, the payer should be willing to provide supporting clinical and cost data about its related patient populations, so the practice can assess where it needs to improve,” he said.

Practicing value-based medicine is what has enabled San Antonio, Tex.-based Gonzaba Medical Group to maintain its independence, according to William Gonzaba, MD, and Francisco Gonzaba, MHA, the practice’s medical director and executive director of business operations, respectively. After five years of struggling to succeed exclusively under the fee-for-service model, in 2005 the practice supplemented it with a full-risk capitated contract with a Medicare Advantage plan.

The key to success under such a contract, they said, is maximizing net revenue by focusing on factors such as performance on HEDIS metrics and reducing use of ineffective or duplicative services so as to reduce costs without harming the quality of care.

Throughout its experience, William said, the practice has been guided by the Institute for Healthcare Improvement’s “Triple Aim” of patient experience, population health and cost reduction, adding that the three parts are interlocking.

“If you really focus on delivering the right care at the right time, improving population health and patient satisfaction, you will invariably reduce the cost of care,” he said.

“The transition to a full-risk, value-based model of care is difficult, and it may not be the right fit for every practice, but it has allowed us to grow and remain independent,” Francisco said. “Ultimately, either you can manage the care, or it will manage you.”

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