Get the E-newsletter
As healthcare stakeholders seek opportunities to
improve patient care and lower costs, health plans have created products and
designs that align with value-based care.
began with a Centers for Medicare & Medicaid Services [CMS] imperative to
implement a value-based provider reimbursement framework, putting some degree
of financial compensation for providers at risk by financially incentivizing
providers to demonstrate high-quality clinical outcomes metrics in patient care,”
says Yele Aluko, MD, chief medical officer at EY’s Americas Advisory
Health. “Commercial payers have followed suit in the design of their own
This activity is increasing, according to a 2016 Health Care Transformation Task Force Report,
which noted that the share of its provider and health plan members’ business
that used value-based payment arrangements increased from 30 percent in 2014 to
41 percent at the end of 2015. In a McKesson white paper, payers reported that 58 percent of their
business has already shifted to some form of value-based reimbursement, a 10
percent increase from two years earlier.
From provider incentives to enrollee cost-sharing to joint ventures, health
plans aim to create more-efficient business models that reduce clinical
variation and enhance the quality of care.
“The expected outcome
is to instill a culture of financial discipline and to hold providers
accountable for objective delivery of quality clinical outcomes, by embracing
the principles of value-driven care,” Aluko says.
BlueCross BlueShield of Western New York has
completed the first year of its BestPractice model, a plan that combines
fee-for-service and monthly capitation payments, with participating physicians
measured on quality (see the exhibit below). The insurer took into consideration pay-for-performance
programs such as the Medicare Access and CHIP Reauthorization Act (MACRA) and
New York State’s Advanced Primary Care model when designing BestPractice.
A Look at the BestPractice Model
“As a reimbursement model for primary care, it
was essentially designed to create alignment between the health plan and
physicians delivering on quality, efficient care,” says Thomas Schenk, MD, senior vice
president, chief medical officer, BlueCross BlueShield of Western New York.
Over 95 percent of primary care providers that are in the market and
participate with the insurer receive payment through BestPractice.
In 2017, the insurer determined physician payment
based on Healthcare Effectiveness Data and Information Set (HEDIS) compliance,
with 27 measurements ranging from adolescent immunizations to colorectal cancer
screening to osteoporosis management.
While BlueCross BlueShield of Western New York
is awaiting results from the first year, Schenk has noted a positive outcome in
the engagement of participating physicians. “We definitely have had a lot of
interest from the physicians in trying to be as active as they can be in
getting to all of the gap closures they can get,” Schenk (pictured at right) says.
In 2018, the health plan is measuring physician
performance based on HEDIS quality measures (80 percent) and cost of care (20
percent). Examples of cost-of-care measures include inpatient utilization,
emergency department utilization, laboratory services, and specialist services.
Schenk hopes to see this type of model expand
within the western New York market and into other markets. “The more physicians’
patient panels we can get in this kind of model, the more they can
fundamentally change their practice patterns and workflows,” he says.
has created products that focus on improved quality in other parts of the
country as well, such as the Arkansas HealthCare Payment
Improvement Initiative (AHCPII), a collaboration with Arkansas Medicaid and QualChoice. With an
episode-based payment model, AHCPII seeks to move away from a system focused on
volume and toward one that promotes better coordination of care.
A designated Principal
Accountable Provider (PAP) oversees an episode of care and is responsible for
its performance. Each year, the health plan determines a PAP’s performance and
payment based on quality of care and resource use. Other participating
providers receive reimbursement at standard fee-for-service rates and have
access to reports to learn about opportunities for improvement.
"If there are
providers [PAPs] in our state that can demonstrate higher quality of care while
controlling costs, the episodic payment program creates incentives for other
providers to achieve that level of value,” Max Greenwood, director of government
and media relations for Arkansas BlueCross BlueShield, says via email.
On the government side, CMS’s Comprehensive Primary Care Plus (CPC+) model incorporates public and private payers
to improve patient care and reduce clinical variation. Comprising two tracks,
CPC+ supplies educational resources and data to support participants in care
delivery, with practices paid based on performance.
In Round 1 of the model, 2,816 primary care
practices work with 54 aligned payers throughout 14 regions, while in Round 2,
up to 1,000 practices work with seven payers in four regions. Round 1 is
expected to run through the end of 2021 and Round 2 through 2022.
Both payment tracks include a risk-adjusted care
management fee, and practices also receive payment based on performance
measures that are focused on efficient clinical care, patient safety,
communication and care coordination, community/population health, and cost reduction.
CMS also reimburses Track 1 practices with
regular Medicare fee-for-service payments for covered evaluation and management
services. Track 2 practices receive a combination of fee-for-service payments
and a “comprehensive primary care payment” to account for in- and out-of-office
“CPC+ is grounded in
value-based compensation models providing improved payments to practices that
objectively demonstrate capabilities to deliver high-quality, cost-efficient
primary care,” Aluko (pictured at right) says. “One year into its existence, the model has large
potential, but value realization from this novel program is still pending.”
To incentivize consumers to proactively manage
their health, approaches such as the Medicare Advantage (MA)
Value-Based Insurance Design (VBID) Model have created cost-sharing
elements for health plan enrollees. Beginning in 2017, VBID allows MA plans to offer
additional benefits or decrease cost-sharing for enrollees with certain chronic
conditions. CMS tested the model in seven states in 2017 and is rolling it out
to additional states over the next couple of years; the model will run for five
Eligible MA plans that receive CMS approval in
designated states can customize benefit designs for enrollees with diabetes,
congestive heart failure, chronic obstructive pulmonary disease, past stroke,
hypertension, coronary artery disease, mood disorders, or combinations of these
The model examines whether patient cost-sharing and other health plan features
motivate enrollees to use high-value services that can positively impact their
health while lowering costs. Enrollees in the model have the opportunity to lower
their cost-sharing and receive more benefits—and are not at risk of paying
higher costs or receiving fewer benefits than other participants.
This type of payment model—which other payers such as Mayo Clinic,
BlueCross BlueShield of North Carolina, and state employee programs have
explored—has the potential to better involve consumers in
their own health outcomes. Some models may incorporate higher cost-sharing for certain
elective health choices. “It is a
good thing to encourage patient responsibility by way of self-empowerment through
education, and by providing additional insight that financial consequences
might exist for patients who continue controllable adverse lifestyle choices
and behaviors,” Aluko says.
Efforts to reduce clinical variation and
enhance patient care have also manifested in joint ventures between health
plans and providers. By sharing financial accountability and merging resources,
these partnerships have the potential to better manage patient populations
while lowering costs through value-based payment.
For example, Allina Health and Aetna have
created a jointly owned health plan company, Allina Health and Aetna Insurance Company, for
employers and consumers in the greater Minneapolis-St. Paul area, with plans to
launch insurance products in 2018. The company aims to utilize insurer and
provider data, integrated care, benefit design, and administrative support to
improve the consumer experience.
“The joint venture’s goal is to accelerate the
move away from fee-for-service health care to outcomes-based health care,”
Brigitte Nettesheim, Aetna’s president of transformative markets, says via
email. “In part, this helps ensure the more efficient use of healthcare
dollars, including the elimination of waste.”
Aetna and Allina Health will share information
about their members beyond demographics and insurance coverage, such as most
recent details about their health and any therapies. Aetna anticipates that
engagement of members in their own care will be higher in this market, as has
been the case in the four other joint ventures that the insurer has established
throughout the country.
Aetna has been collaborating with physicians
and healthcare organizations to build these products for more than seven years.
As of early 2016, providers in value-based arrangements had delivered care for
nearly 6.2 million Aetna members, representing an estimated 40 percent of the
company’s payments for medical care.
“This 50/50 partnership aligns both Allina
Health and Aetna’s incentives to deliver the best care in the most efficient
way possible,” Nettesheim (pictured at right) says. “Joint ownership of this new company, with
shared-profit-and-loss potential, will accelerate the change that’s necessary
to improve quality and experience while addressing affordability.”
The impact of such efforts on the industry is
uncertain. Many payment models have launched only recently, and approaches vary
across payers. “It’s still a fragmented response to an industry that requires a
more integrated response,” Aluko says. “From a macroeconomic perspective, is it
impacting cost reduction across the industry? We haven’t seen that yet.”
The acceleration of these types of products is
expected to continue, and if nothing else, the alignment of such products with
value-based payment shows the potential to reduce clinical variation and
improve care quality.
Health Care Transformation Task Force members,
including Aetna, established a goal of having 75 percent of business in
value-based arrangements by 2020. With value-based care models being
established in multiple markets, the focus on improved quality and reduced costs
will continue as a key factor in health plan business strategies.
While the industry-wide impact has yet to be
determined, Aluko notes that this approach “has created a culture
transformation within systems and physician enterprises that understand they
could be at financial risk if they
are unable to transparently demonstrate delivery of best practice in clinical
Barker is a digital communications professional and freelance writer in
in this article: Yele Aluko, MD, chief medical officer, Americas Advisory Health, EY; Max Greenwood, director, government and media relations,
Arkansas BlueCross BlueShield; Brigitte Nettesheim, president,
transformative markets, Aetna; Thomas Schenk,
MD, senior vice president, chief medical officer, BlueCross BlueShield of Western
VitalWare: Creating a Transparency Strategy: Meeting the Mandate to Post Standard Hospital Pricing
A senior leader of VitalWare talks about the need to create a comprehensive pricing strategy for consumers and how to get started.
HealthTrust: Solving Workforce Management Challenges
Two of HealthTrust’s senior leaders talk about strategies for optimizing the hospital workforce to improve productivity and reduce waste.
Grant Thornton: Optimizing the Ambulatory Workforce
One of Grant Thornton’s senior healthcare consultants addresses the topic of workforce management and the importance of a data-driven approach.
Cedar: Reimagining the Patient Financial Experience
Cedar’s CEO and co-founder tackles the topic of patient payment and the importance of having an innovative patient financial management system.
6 Patient Revenue Cycle Metrics You Should Be Tracking (and How to Improve Your Results)
Patient financial engagement is more challenging than ever – and more critical. With patient responsibility as a percentage of revenue on the rise, providers have seen their billing-related costs and accounts receivable levels increase. If increasing collection yield and reducing costs are a priority for your organization, the metrics outlined in this presentation will provide the framework you need to understand what’s working and what’s not, in order to guide your overall patient financial engagement initiatives and optimize results.
10 Ways to Reduce Patient Statement Volume (and Reduce Costs)
No two patients are the same. Each has a very personal healthcare experience, and each has distinct financial needs and preferences that have an impact on how, when and if they chose to pay their healthcare bill. It’s no longer effective to apply static billing techniques to solve the complex challenge of collecting balances from patients. The need to tailor financial conversations and payment options to individual needs and preferences is critical. This presentation provides 10 recommendations that will not only help you improve payment performance through a more tailored approach, but take control of rising collection costs.
Reduce Patient Balances Sent to Collection Agencies: Approaching New Problems with New Approaches
This white paper, written by Apex Vice President of Solutions and Services, Carrie Romandine, discusses the importance of patient segmentation and messaging specifically related to the patient revenue cycle. Applying strategic messaging that is tailored to each patient type will not only better educate consumers on payment options specific to their billing needs, but it will maximize the amount collected before sending to collections. Further, targeted messaging should be applied across all points of patient interaction (i.e. point of service, customer service, patient statements) and analyzed regularly for maximized results.
The Future of Online Patient Billing Portals
This white paper, written by Apex President Patrick Maurer, discusses methods to increase patient adoption of online payments. Providers are now seeking ways to incrementally collect more payments due from patients as well as speeding up the rate of collections. This white paper shows why patient-centric approaches to online payment portals are important complements to traditional provider-centric approaches.
Payment Portals Can Improve Self-Pay Collections and Support Meaningful Use
Increased electronic engagement between healthcare providers and patients provides significant opportunities for improving revenue cycle metrics and encouraging patients to access EHRs. This article, written by Apex Founder and CEO Brian Kueppers, explores a number of strategies to create synergy between patient billing, online payment portals and electronic health record (EHR) software to realize a high ROI in speed to payment, patient satisfaction and portal adoption for meaningful use.
Large Health System Drives 10% UP (Patient Payments) and 10% DOWN (Billing-related Costs)
Faced with a rising tide of bad debt, a large Southeastern healthcare system was seeing a sharp decline in net patient revenues. The need to improve collections was dire. By integrating critical tools and processes, the health system was able to increase online payments and improve its financial position. Taking a holistic approach increased overall collection yield by 10% while costs came down because the number of statements sent to patients fell by 10%, which equated to a $1.3M annualized improvement in patient cash over a six-month period. This case study explains how.
ICD-10: Managing Performance
With the ICD10 deadline quickly approaching and daily responsibilities not slowing down, final preparations for October 1 require strategic prioritization and laser focus.
Clarity Drives Collections
Read how Gwinnett Medical Center provides clear connections to financial information, offers multiple payment options for patients, and gives onsite staff the ability to collect payments at multiple points throughout the care process.
Orlando Health Gains Insight into Denials, Reduces A/R Days with RelayAnalytics Acuity
Read how Orlando Health was able to perform deeper dives into claims data to help the health system see claim rejections more quickly–even on the front end–and reduce A/R days.
Revenue Cycle Payment Clarity
To maintain fiscal fitness and boost patient satisfaction and loyalty, healthcare providers need visibility into when and how much they will be paid–by whom–and the ability to better navigate obstacles to payment. They need payment clarity. This whitepaper illuminates this concept that is winning fans at forward-thinking hospitals.
Streamlining the Patient Billing Process
Financial services staff are always looking for ways to improve the verification, billing and collections processes, and Munson Healthcare is no different. Read about how they streamlined the billing process to produce cleaner bills on the front end and helped financial services staff collect more than $1 million in additional upfront annual revenue in one year.
Wallace Thomson Hospital Automates to Maximize Limited Resources
Effective revenue cycle management can be a challenge for any hospital, but for smaller providers it is even tougher. Read how Wallace Thomson identified unreimbursed procedures, streamlined claims management, and improved its ability to determine charity eligibility.
7 Steps for Building and Funding Sustainability Projects
Before launching an energy-efficiency initiative, it’s important to build a solid business case and understand the funding options and potential incentives that are available. Healthcare leaders should consider taking the steps outlined in the whitepaper to ease the process of gaining approval, piloting, implementing, and supporting sustainability projects. You will find that investing in sustainability and energy efficiency helps hospitals add cash to their bottom line. Discover how hospitals and health systems have various options for funding energy-efficient and renewable-energy initiatives, depending on their current financial structure and strategy.
Key Capital Considerations for Mergers and Acquisitions
Health care is a dynamic mergers and acquisitions market with numerous hospitals and health systems contemplating or pursuing formal arrangements with other entities. These relationships often pose a strategic benefit, such as enhancing competencies across the continuum, facilitating economies of scale, or giving the participants a competitive advantage in a crowded market. Underpinning any profitable acquisition is a robust capital planning strategy that ensures an organization reserves sufficient funds and efficiently onboards partners that advance the enterprise mission and values.
Key Capital Considerations for Mergers and Acquisitions
The success of healthcare mergers, acquisitions, and other affiliations is predicated in part on available capital, and the need for and sources of funding are considerations present throughout the partnering process, from choosing a partner to evaluating an arrangement’s capital needs to selecting an integration model to finding the right money source to finance the deal. This whitepaper offers several strategies that health system leaders have used to assess and manage capital needs for their growing networks.
Trend Watch: Providers adapt as value-based care moves from hype to reality
Announcements from several commercial payers and the Centers for Medicare and Medicaid Services (CMS) early in 2015 around increased efforts to form value-based contracts with providers seemed to point to an impending rise in risk-based contracting. Rather than wait for disruption from the outside in, health care providers are now making inroads on collaborating with payers on various risk-based contracting models to increase the value of health care from within.
Yuma Regional Medical Center case study
Yuma Regional Medical Center (YRMC) is a not-for-profit hospital serving a population of roughly 200,000 in Yuma and the surrounding communities.
Before becoming a ZirMed client, Yuma was attempting to manually monitor hundreds of thousands of charges which led to significant charge capture leakage. Learn how Yuma & ZirMed worked together to address underlying collections issues at the front end, thus increasing Yuma’s overall bottom line.
Reforming with a New 50-Bed Acute Care Facility
Kindred Hospital Rehabilitation Services works with partners to audit the market and the facility’s role in that market to identify opportunities for improvement. This approach leads to successes; Kindred’s clinical rehab and management expertise complements our partners’ strengths. Every facility and challenge is unique, and requires a full objective analysis.
5-Minute Briefing on Revenue Integrity Through HIM WhitePaper Hospitals FS
As the critical link between patient care and reimbursement, health information enables more complete and accurate revenue capture. This 5-Minute White Paper Briefing shares how to achieve cost-effective revenue integrity by your optimizing HIM systems.
5-Minute Briefing on Accelerating Cash Flow Through HIM WhitePaper Hospitals FS
Speedier cash flow starts with better CDI and coding. This 5-Minute White Paper Briefing explains how providers can improve vital measures of technical and business performance to accelerate cash flow.
5-Minute Briefing on Reducing the Cost of RCM WhitePaper Hospitals FS
Qualified coders are getting harder to come by, and even the most seasoned professional can struggle with the complexity of ICD-10. This 5-Minute White Paper Briefing explains how partnerships can help improve coding and other key RCM operations potentially at a cost savings.
Providers Focus Too Much On Revenue Cycle Management
The point of managing your revenue cycle isn’t just to improve revenue and cash flow. It’s to do those things effectively by consistently following best practices— while spending as little time, money, and energy on them as possible.
Lucille Packard Children’s Hospital Stanford Case Study
How Lucile Packard Children’s Hospital Stanford increased payments received within 45 days by 20% and reduced paper submission claims by 70% by using ZirMed solutions.
Using Predictive Modeling To Detect Meaningful Correlations Across Claims Denials Data
The reasons claims are denied are so varied that managing denials can feel like chasing a thousand different tails. This situation is not surprising given that a hypothetical denial rate of just 5 percent translates to tens of thousands of denied claims per year for large hospitals—where real‐world denial rates often range from 12 to 22 percent. Read about how predictive modeling can detect meaningful correlations across claims denials data.
ZOLL and Emergency Mobile Health Care Case Study
Emergency Mobile Health Care (EMHC) was founded to be and remains an exclusively locally owned and operated emergency medical service organization; today EMHC serves a population of more than a million people in and around Memphis, answering 75,000 calls each year.
Maximizing Medicare Reimbursements White Paper
Since the Physician Quality Reporting Initiative (PQRI) introduction, CMS has paid more than $100 million in bonus payments to participants. However, these bonuses ended in 2015; providers who successfully meet the reporting requirements in 2016 will avoid the 2% negative payment adjustment in 2018, so now is the time to act! Included in this whitepaper are implications of increasing patient responsibility, collections best practices, and collections and internal control solutions.
Denials Deconstructed: Getting Your Claims Paid
Getting paid what your physician deserves—that’s the goal of every biller. Yet even for the best billers, achieving that success can be elusive when denials stand in the way of success, presenting challenges at every turn. Denials aren’t going away, but you can learn techniques to manage and even prevent them.Join practice management expert Elizabeth W. Woodcock, MBA, FACMPE, CPC, to: Discover methods to translate denial data into business intelligence to improve your bottom line, determine staff productivity benchmarks for billers, and recognize common mistakes in denial management.
Automation and Operational Improvement Drive Sustainable Results
Physician practices must improve organizational efficiency to compete in this era of reduced reimbursement and escalating administrative costs.
Revenue Cycle Management Resolves Migration Implementation Issues
Many healthcare organizations are pursuing next-generation health information systems solutions. Learn more about Navigant's work with University of Michigan Health System.
Partnering For Success – Provider Achieves Strength in Stability
The proper implementation of healthcare information technology systems is crucial to an organization’s financial health.
Building a Clinically-Integrated Network
As value-based payment models evolve, providers are challenged to maintain superior clinical outcomes while controlling costs.
Winning in the Post-Acute Marketplace
Read more about factors contributing to the changes in the post-acute marketplace and what it means for manufacturers, physicians, clinicians, patients, and post-acute facilities as they anticipate the transition to the second curve.
Building A Common Vision with Employed Physicians
HSG helped the physicians and executives of St. Claire Regional in Morehead, Kentucky, define their shared vision for how the group would evolve over the next decade. As well as, develop the strategic and operational priorities which refocused and accelerated the group’s evolution.
Practice Performance Improvement
The client was a nine-hospital health system with 14 clinics serving communities in a multi-state market with very limited access to care, poor economic conditions, high unemployment, and a heavy Medicare/Medicaid/uninsured payer mix. In most of these communities, the system was the sole source of care.
Though the clinics were of substantial size (they employed 98 physicians) and comprised of multiple specialists, the physicians functioned as individuals and the practices lacked any real group culture.
Clinical Integration Without Spending a Fortune
Clinical integration can be expensive, but it doesn’t have to be, as this four-step road map for developing a CIN proves. Does it have to cost millions to initiate a clinical integration strategy?
Contrary to popular belief, we have clients who have generated substantial shared savings and a significant ROI over time, without massive investments. Yes, some financial capital is required for resources the CIN providers can’t bring to the table themselves. But the size of that investment can be miniscule relative to the value it produces: improved outcomes and documentation for payers.
Adding Value to Physician Compensation
Today’s concerns about physician compensation are the result of the changing healthcare environment. The transition to value is slow, but finally becoming a reality. Proactive hospitals want to ensure that provider incentives are properly aligned with ever-increasing value-based demands.
This report focuses on the three big questions HSG receives about adding value to physician compensation; Why are organizations redesigning their provider compensation plans? What elements and parameters must be part of successful compensation plans? How are organizations implementing compensation changes?
Effective Revenue Cycle Management in Your Network
Revenue Cycle Management has become an even more complex issue with declining reimbursements, implementation of Electronic Health Records, evolving local carrier determinations (LCD), and payer credentialing [The emphasis on healthcare fraud, abuse and compliance has increased the importance of accuracy of data reporting and claims filing).
The efficiency of a medical practice’s billing operations has critical impact on the financial performance. In many cases, patient billings are the primary revenue source that pays staff salaries, provider compensation and overhead operating cost. Inefficiencies or inaccurate billing will contribute to operating losses.
Succeeding in Value-Based Care
This publication identifies and outlines the necessary characteristics of a fully-functioning clinically integrated network (CIN). What it doesn’t do is detail how hospitals and providers can participate in the value-based care environment during the development process.
One common misconception is that the CIN can’t do anything significant until it has obtained the FTC’s “clinically integrated” stamp of approval. While the network must satisfy the FTC’s definition of clinical integration before single signature contracting for FFS rates and contracts can legally start, hospitals and providers can enjoy three key benefits during the development process.
Therapy: Benefits at All Levels of Care
Nearly half of all Medicare beneficiaries treated in the hospital will need post-acute care services after discharge. For these patients, a stay in an inpatient rehabilitation facility, skilled nursing facility or other post-acute care setting comes between hospital and home.
Does Your Budgeting Process Lack Accountability?
With the proper process, tools, and feedback mechanisms in place, budgeting can be a valuable exercise for organizations while helping hold organizational leaders accountable. Having a proper monthly variance review process is one of the most critical factors in creating a more efficient and accurate budget. Monthly variance reporting puts parameters around what is to be expected during the upcoming budget entry process.
Cost Accounting: the Key to Cost Management and Profitability
Managing the cost of patient care is the top strategic priority of most hospital CFOs today. As healthcare shifts to more data-driven decision making, having clear visibility into key volume, cost and profitability measures across clinical service lines is becoming increasingly important for both long-range and tactical planning activities. In turn, the cost accounting function in healthcare provider organizations is becoming an increasingly important and strategic function. This whitepaper includes five strategies for efficient and accurate cost accounting and service line analytics and keys to overcoming the associated challenges.