The past half-decade is all about value-based care (VBC) system with switching to Alternative Payment Models that suit the requirements the best. Estimating the expense spent on the payment models and medical billing services, various trends will raise in 2020, and their implications will affect reimbursements.
How?
Understanding the dynamics of alternative payment models is what we all need right now. Only then we will be able to drive value to physicians’ payments and simplify financial objectives and clinical aspects.
Fee-for-Service to Value-Based Care Payment Models Transition
Fee-for-service (FFS) has been a great contribution to our existing payment models. It has saturated the levels of expenses as payments are decided on the rendered services. The transition from FFS to VBC will be based on outcomes and will be difficult to manage all of a sudden (if physicians don’t plan strategically).
However, FFS will be considered as a benchmark due to its wide applications for healthcare organizations and outsourcing medical billing companies for a long time. A solution is to compare available payment models from the payers with the FFS payment schedules and decide with the team about the most adventurous but suitable method of reimbursements.
Does the VBC System Align with Modern Payment Models?
The future of medicine depicts a system where physicians get reimbursements based on their quality of healthcare services and that too in a low budget.
Healthcare programs with pay for performance (P4P), bundled and episode-based payments and accountable care tick all the necessary boxes where all stakeholders are equally benefitted.
Let’s go through these models.
Pay-for-Performance Payment Model
In this payment model, healthcare professionals are incentivized for their efforts for exaggerated performance. The sub-programs are also called value-based purchasing.
High-end payers such as Medicaid and Medicare also function on the same framework – To reward clinicians for efficiency and effectivity and penalize them for average or below-average outcomes. This is the system that the leading insurance companies are practicing majorly or trying to implement.
This payment model is perfect for organizations, which don’t have lavished resources and can practice quality without much technology incorporation as the rest of the alternative payment models.
But, it does require proper benchmarks, the accuracy of the collection of data, and analysis to measure the results for professionals and medical practices. While this payment model encourages the culture of quality, it doesn’t address the existing cost issues.
There is no time constraint, so sometimes performance can’t compensate for the due period.
A few examples of sub-programs are:
- Hospital Readmission Reduction Program
- Hospital Value-Based Purchasing Program
- Home Health Value-Based Purchasing Model
- Skilled Nursing Facility Value-Based Program
- Hospital-Acquired Condition Reduction Program
- End-Stage Renal Disease Quality Incentive Program
Bundled Payment and Episode-Based Payments
This constitutes a system where clinicians are paid for a variety of services. The services, which were paid for separately, are also included in this program.
It is a middle pathway, where services bundled in a package can reflect on the quality of services delivered, provided how are they offered to the patients.
Episode-Based Payments work under CMS as part of ACA (Affordable Care Act) and reduce extra expenses.
The discrepancies in payments on the same services are removed via this program.
A few examples of sub-programs are:
- Oncology Care Model
- Comprehensive Care for Joint Replacement Model
- Bundled Payments for Care Improvement Advanced Model
Accountable Care Programs Model
This payment model appreciates efforts for cost reduction. It helps physicians’ finances, when they reduce cost expenses even lower than the benchmark set by the payers and cover them a little bit for the loss.
It works well with other payment models, where medical billing services can help and device effective cost-reducing strategies. The parties share the financial risks and so does the revenue.
There is also no rule set for the cash flow. Plus, it is simple like rendered services will be paid and non-rendered will not be. Quality + Low-Cost work in this case, and unnecessary procedures just for the sake of some bucks are not entertained.
Example of sub-program is:
- Medicare Shared Savings Program and Comprehensive Primary Care Plus
If you want to maximize revenue with effective strategies, you need a professional medical billing service to cater to your financial operations. Contact P3Care for more details.
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