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News | Value-Based Payment

Despite the pandemic, hospitals continue to shift toward value-based payment

News | Value-Based Payment

Despite the pandemic, hospitals continue to shift toward value-based payment

The COVID-19 pandemic has complicated the efforts of hospitals and health systems to succeed under risk-based payment models, but that hasn’t dampened some organizations’ pushes to increase their revenue from value-based payment (VBP).

In response to the pandemic’s disruption in care for patients in VBP models, Medicare has offered providers wide latitude to help them avoid financial consequences during 2020. Medicaid programs and many commercial health plans operating VBP models have offered similar flexibility.

Although the broad disruption in care delivery has affected many elderly and chronically ill patients in VBP models, potentially leading to a worsening of underlying conditions and other complications, some hospitals and health systems say they plan to expand their participation in such models after the pandemic.

“We are moving farther, faster” in VBP, said Emily Brower, senior vice president of clinical integration and physician services for Trinity Health. “Because of how COVID has exposed the fissures in fee-for-service-based alternative payment models, we are moving fast to get to those population-based payment models.”

Looking to expand VBP participation

Specifically, the health system anticipates signing on to more models that use prepayments and premiums for a set patient population. Those models are seen as “a much more resilient payment stream,” Brower said.

That view stems from the steep decline in patient volumes due to lockdown orders and state bans on elective care, which produced historic fee-for-service (FFS) payment decreases for hospitals.

By July, Trinity had signed three new commercial-plan contracts with VBP components, said Harpreet Cheema, vice president of product development for the Michigan-based health system.  Those will add to the health system’s 1.3 million patients and $10 billion in revenue linked to VBP models.

Robert Fields, MD, senior vice president and CMO of population health for Mount Sinai Health System, is pushing health plans to use different process measures in their VBP models after the pandemic. For instance, ensuring access to primary and specialty care through telemedicine and other formats is “worthwhile incentivizing,” he said.

Additionally, models need to reward newly expanded care approaches, like remote monitoring.

“Those are worthwhile measures because it takes planning, it takes investment and it takes scale to do that for a delivery system,” Fields said. 

New York City-based Mount Sinai operates under commercial insurance contracts that cover 200,000 lives in varying forms of risk-based payment.

Medicare VBP questions linger

Mount Sinai also cares for about 50,000 lives through Medicare Advantage VBP arrangements and another 50,000 in Medicare accountable care organizations.

The health system also is evaluating whether to move some of its physician practices into Medicare’s coming Direct Contracting (DC) model.

“We still need some more details [on DC models]. There are some risk adjustment details and other things that haven’t come out yet that are kind of key to making a final decision,” Fields said. “Everyone’s waiting on those final details.”

Trinity is pushing CMS to reverse its proposal to end pandemic-related emergency payments for telephone-based telehealth while maintaining payments for video-based telehealth, as proposed in the CY21 Medicare physician payment rule.

Brower said telehealth utilization has been a major part of Trinity’s approach during the pandemic to managing patients for whom it has financial risk under Medicare.

“A lot of how we reached them was if they didn’t have a video component, we could drop to a phone call only and still do a lot of great work addressing gaps in care, making sure patients had home-delivered meds, home-delivered meals and a connection with folks who could check in with them,” Brower said.

Brower said CMS’s concerns about the overuse or abuse of telephone calls was not relevant to providers, including Trinity Health, that operate under total-cost-of-care models.

“We don’t want everyone and anyone to be billing telephone calls that don’t really turn into a full visit,” Brower said. “Within those models, ‘Let us make those trade-offs and decisions and decide what is the right way to get care to the patient.’” 

Similarly, Cheema said Trinity is pushing commercial health plans to maintain parity post-pandemic between payments for telehealth and for in-person care, and to maintain the range of services that are eligible for telehealth delivery.

However, after the public health emergency, “We expect that payers are going to lower their reimbursement below in-person rates,” Cheema said.

About the Author

Rich Daly, HFMA Senior Writer and Editor,

is based in the Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

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