Steps for Value-Based Contracting

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Steps for Value-Based Contracting
Healthcare organizations or providers have
established the infrastructure and workflows to
support value-based care. However, most
respondents to the latest Value-Based Care
Assessment from Insights said over 75 percent of
their organizations revenue is from
fee-for-service contracts hence Fee-for-service
contracts pose real challenges to value-based
contracting, especially for physician practices.
The adoption of value-based contracting is rising
in the US for various benefits. Lets understand
what value-based contracting is? And its
benefits Value-Based Contracting The US health
care system is going through a volume-to-value
transformation to control cost and improve
patient outcomes with value-based contracting
services and health care reimbursement
models. Now that you know a little more about
value-based contracting, lets look at the
benefits of this payment model in more detail.
The important benefit is value-based contracts
limit the payers exposure to financial risk by
providing price reductions or refunds for
ineffective treatment. Now lets look at other
Key Benefits Improvement in patient
outcomes  If payers can provide access to a
greater range of medicines (since manufacturers
are reducing their risk of exposure to
sub-optimal outcomes), patient outcomes could
improve.
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Steps for Value-Based Contracting
Reduction in medical costs  Value-based
contracting could lead to a reduction in medical
costs through a reduction in hospitalizations,
emergency room visits by helping to control
diseases better. Reduction in the cost of
medicines  Under value-based contracting,
manufacturers may pay higher rebates for patients
who dont meet the agreed-upon outcome targets,
which may potentially reduce the cost of
medicines. While talking about value-based
contracts, it comes in all shapes and sizes, from
pay-for-reporting to bundled payments for
episodic care to full capitation for patient
populations. Organizations are implementing
value-based contracts solely depends on the type
of care they deliver, the market in which they
reside, and their patient population. Lets look
at various steps in detail. Steps for
Value-Based Contracting Commitment Only signing
the contract is not sufficient for money-making
which is the conception among most physicians.
However, you need to make sure that you will
eliminate all the inefficiencies of healthcare
which leads to save money and achieve quality
goals. So that's the first thing a very honest
commitment.
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Steps for Value-Based Contracting
Physicians Engagement Physician engagement is the
second step that results in value-based care.
Physicians can lead other physicians much better
and guide other physicians who may be worried
about taking the risk of being in a value-based
arrangement. Hence physician and clinician
engagement is the secret sauce to value-based
success regardless of the complexity of the
value-based contract. Partnerships and
Networking Networks and partnerships are key
because organizations cannot do value-based care
by themselves. Partnerships and networking help
to create the right alignment in the community
with physicians, with other clinical providers,
with hospital systems, with payers, with
post-acute, with home health, and bring all
stakeholders together for a common
purpose. Financial Assessment You need to
consider the financial component of value-based
contracts by creating some financial modeling of
the population you think you're going to get in
that value-based arrangement. Moreover, you need
to consider various factors like resources that
you need to manage those medical and
administrative costs of that population that you
might get.
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Steps for Value-Based Contracting
Finally, risk appetite, infrastructure, and
clinical engagement are all key to the
value-based contracting process. With the help of
the above factors leaders should assess their
organizations capabilities and decide to engage
with a payer to put a value-based contract in
place. Now you have understood the steps for
value-based contracting. Lets evaluate the
success of value-based contracts in the following
brief. Evaluating the success of value-based
contracts Cost Savings Medicare contracts are
concerned about cost savings. For example, if
your ACO satisfies or exceeds quality
measurements along with saves money in the
Medicare Shared Savings Program which covers the
added costs of the value-based infrastructure
then your ACO contract has been a
success. Financially solvency You need to have
financial solvency which requires maintaining a
margin of profitability to add more patients to
the value-based care model. However, some other
factors to consider include provider satisfaction
with the contract, physician growth in the
organization, and patient as well as employer
satisfaction with the care delivered per the
contract.
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Steps for Value-Based Contracting
Quality improvement Quality improvement is
another obvious factor. Value-based contracts
only work when organizations notice a significant
improvement in quality metrics agreed upon by the
practice and the payer. Noticeable decline in
quality performance may initiate change and
possibly another round of negotiation. If you
want to know more, you can get in touch with us.
We are a leading medical billing and coding
company providing services across the US.