How to take on more risk without risking your practice (Value-Based Deals)

By Steve Liu, MD

The arrival of COVID in the early part of 2020 caused the volume of non-infected patients to plummet and forced organizations to take a hard look at their expenses. It also highlighted the need to better understand and track patient data and volumes. In 2020, many healthcare providers lost money on their fee-for-service (FFS) business, while those with capitated programs or other value-based care (VBC) contracts were often able to use them to help offset FFS losses. For example, Kaiser Permanente, which combines healthcare financing and delivery in a capitated model, saw its operating revenues increase, and it stayed in the black for 2020 despite significant cost increases.

While VBC progress has come in fits and starts, with a plethora of confusing models, many experts are predicting the resumed growth of these programs now that the pandemic is subsiding. The cost of healthcare services is simply too high to ignore, and the VBC lessons that government and commercial payers have learned over the past decade can be applied going forward.

money and covid ppe masks

As evidence of this, CMS says it’s planning to increase the percentage of Medicare down-sided risk contracts from less than 20% before the pandemic to 100% by 2025. Similarly, it has announced a plan to increase the percentage of Medicaid VBC contracts to 50% by that date. And usually, where CMS goes, commercial plans typically follow. However, that apparently won’t include the Next Generation ACO Model, which CMS announced will be discontinued by the end of 2021.

Delivering greater value while optimizing revenue collection is valuable under any payment model.  Kaufmann Hall projects that hospital margins will continue to be lower than normal through 2021, with more hospitals operating in the red. Many physician practices are also continuing to struggle with narrow margins.

Many VBC contracts today require more sophisticated metrics, data measurement and management than was needed to participate in programs like MIPS. Health systems need to have the necessary infrastructure and provider alignment in place, including clinicians, care navigators and a network of high-performing post-acute facilities and home health providers to deliver high-value, low-cost care. Physician practices and their individual physicians not only need to deliver value but must be able to demonstrate it to health systems and health plans, or they’ll be left out of VBC networks.

Keys to Success in Value-Based Deals

The key points to taking on value-based deals with government payers are:

  • Understand your current costs
  • Know what disease conditions/ bundles you can significantly impact
  • Be able to measure performance and give your physicians continual feedback on their and their group’s performance
  • Develop plans to modify performance as needed, such as using case managers, ambulatory navigators, or conveners to help manage care

Both health systems and physician practices need robust tech platforms to run their business efficiently under VBC, and that requires more than an EHR, especially when that care expands outside the borders of an EHR’s footprint both geographically and organizationally. With ever-thinner margins, having data and analytics to determine how your organization will fare financially in any kind of at-risk arrangement is critical. Having timely and accurate data is also critical if you are to align and manage physicians’ performance, so that they become partners in the practice’s success in VBC contracts by keeping costs down, reducing readmissions and unnecessary hospital and post-acute bed days, and optimizing quality.

Measurement: The Key to Managing Risk

The adage that you can’t manage something if you can’t measure it has perhaps never been truer than when participating in VBC. Before you jump in, make sure you can measure your current costs under FFS and that you can accurately track such utilization metrics as admissions and readmissions, length of stay by disease, SNF utilization and Medicare spending per beneficiary.  Know where you’re coming from so you can actively manage to where you’re headed.

statistics and data measuring glass

If you can’t trust that you have accurate and timely data, you can’t work with your physicians to bring those costs down and quality up. A robust charge capture system can deliver the KPI metrics you need to prove your worth to payers and healthcare provider partners.

Most practices will participate in more than one type of value-based program, so you also need analytics to determine upfront which patients (and where appropriate, their conditions) participate in which VBC programs where you can have a meaningful, positive impact. That enables you to target your scarce resources on the right patient populations and ensures you can adhere to the terms of each corresponding VBC program as you manage their care.

Physician Alignment: The Key to Managing Care

Even if you have the best data in the world, you can’t succeed in VBC unless your physicians are aligned with the goals of managing care and costs while striving to improve outcomes. That requires tools that make it easy to share the necessary insights to track and benchmark their performance.

ingenious med charge capture application leveraging value-based deals

Ingenious Med® has developed value-based rounding capabilities that automate identification of value-based patients which helps align physicians with value-based goals and requirements as they see patients, so you can reduce readmissions, LOS, post-acute resource utilization and other avoidable costs. We also enable you to track anticipated discharges, so you can facilitate timely discharges and coordinate smoother transitions of care.

Ingenious Med’s tools enable you to improve your tracking and care management of patients in any Value-Based Care contract, including:

  • Automatically identify and track members of value-based programs, including BPCI-A, ACOs, case rate and more
  • Minimizing unnecessary specialist consultant utilization
  • Facilitate virtual huddles to share patient information, disposition logistics and more across care teams
  • Connect care navigator resource staff directly to front-line providers
  • Ensure continuity of care and coordinated care transitions with HIPAA-secure messaging
  • Proactively manage to discharge targets and address any barriers to reduce avoidable bed-days
  • Ensure optimal use of lower-cost, high-quality post-acute utilization
  • Align providers on managing costs and care transitions
  • Reduce unnecessary length of stay (LOS) and avoidable readmissions

Efficient RCM: The Key to Financing Value-Based Participation

Creating the infrastructure needed to participate in VBC can entail significant start-up costs. That makes it more essential than ever to streamline your revenue cycle and strengthen your bottom line. Value-based organizations can use Ingenious Med’s charge capture solution to capture all appropriate charges painlessly and accurately without putting an undue burden on their physicians or coding and billing staff.  A robust mobile charge capture solution like Ingenious Med’s fixes errors or omissions upfront to avoid wasting time and losing dollars due to delayed or resubmitted charges. As a result, our customers experience an average increase of $30,000 in revenues per physician, along with reductions in the burden on billing and coding staff and the ability to cut accounts receivable.

nurse or doctor seated with mobile ingenious med application iphone

Ingenious Med’s easily implemented, point-of-care tools help physician practices and health systems gain more insights from healthcare data, automate workflows, and optimize revenues – enabling you to deliver greater value in both fee-for-service and value-based models. If VBC models increasingly entail taking on risk, operating efficiently without sacrificing quality of care for patients or quality of life for practitioners will be essential.

Learn how Ingenious Med’s solution can help your organization operate more efficiently and begin to take on more risk without risking your practice. For more information, please check out our value-based alignment page.