Value Based Payment

Choosing the Right Path Forward for Value-Based Care

April 25, 2018 3:23 pm

As reported recently in an HFMA feature article, the adoption of value-based payment models continues to grow steadily across all parts of the country. 

As healthcare leaders, we must consider the unique aspects of our organizations and our markets to identify models that will truly make a difference. Following the old adage that health care is delivered locally, there is no one-size-fits-all approach to value-based care.

In 2017, BlueCross BlueShield of Western New York introduced a new payment model—BestPractice—that is focused on strengthening primary care. Although not dissimilar from Medicare programs such as the Comprehensive Primary Care Plus (CPC+) initiative and the Quality Payment Program of the Medicare Access and CHIP Reauthorization Act (MACRA), BestPractice is tailored to address the unique needs of our market and the physician community.

Our region has struggled with a physician shortage and physician burnout. As a local primary care physician myself, I know that this trend has only accelerated under traditional, volume-inducing fee-for-service payment models.

When BestPractice was launched, there was one primary care physician for every 1,666 residents in the eight counties of western New York. In comparison, the national ratio was one primary care physician per 1,250 residents.

A New Model

BestPractice is uniquely designed to strengthen and provide stability to primary care in our region, with the participation of over 95 percent of the practices in our network.

The payment model combines fee-for-service reimbursement for routine and preventive care with a per-member-per-month (PMPM) care management fee. This monthly payment gives practices a consistent cash flow and recognizes the services that are provided outside a normal office visit, such as email, telemedicine, and secure texting.

Historically, one of the downsides to monthly capitation payments is that they create an incentive for physicians to drop sicker, more costly patients. Given the aging and relatively flat population in western New York, BestPractice is designed to prevent this tactic by adjusting a provider’s monthly payment based on patient risk profiles. In other words, patients with more complicated diagnoses, such as diabetes or cardiovascular disease, warrant a higher PMPM.

As this was the first venture into value-based payment for the vast majority of our network, which is composed mostly of small practices with two to five physicians, downside risk was minimized and an enhanced level of support was provided by our health plan. 

In 2017, a maximum of 10 percent of a physician’s monthly payment could be adjusted based on quality performance compared to peers. We assess performance using a set of Healthcare Effectiveness Data and Information Set (HEDIS) measures that are aligned with the health needs of our region.

In 2018, a maximum of 20 percent is adjusted based on a combined quality and total-cost factor. The latter metric includes not just the costs of services rendered by the physician but also the costs of services that their patients receive in other settings (specialists, hospital, emergency department, etc.) 

Promising Outcomes

BlueCross BlueShield recognizes that if physicians are going to be responsible for managing the total cost of care for their patients, our health plan must be responsible for equipping them with the information they need to do that. As a result, there has been an unprecedented level of payer-provider engagement. 

New, customized reporting on quality, cost, and utilization data has empowered physicians to change their referral patterns to favor higher-quality and more efficient settings. Physicians are not only requesting this information, they are using it.

While it’s too early to measure the impact, we are already seeing positive movement and are pleased with our region’s adoption of this model. We’ve seen other local payers follow and, as a result, have been able to sponsor and help implement the CPC+ program and its resources to further support primary care here. 

Our experience tells us that this level of traction and momentum in the transition to value-based care is possible when models are developed that align the interests and needs of payers, providers, and the local communities we serve.

Thomas Schenk, MD,is senior vice president, chief medical officer for HealthNow New York Inc., the parent company of BlueCross BlueShield of Western New York, Buffalo.

Read more on the Leadership Blog, including a prior post about BlueCross BlueShield of Western New York’s tiered-benefit products.


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