Value-based Reimbursement Next Metric for Medical Practices

A new wave of change is occurring in healthcare: a seismic shift from volume-based payment to value-based payment. To succeed in adapting, your challenge is to catch the "right wave." The wave you want to catch is not quality. That wave has crested. Value is the wave that successful medical practices will ride in the next decade.

My challenge is to share tips from the experts to help you find the right wave. I'll also offer advice on timing, for, as with body surfing, mistiming your approach means you miss the wave.

Quality vs. value

Quality is doing something well. Value is doing something well and consistently achieving expected outcomes within competitive cost parameters. There's a big difference.

Since the 1970s, payer emphasis on "quality" has had little to do with actual quality, nothing to do with value, and everything to do with cost containment. They know it, we know it. Quality wasn't measured or rewarded. Sadly, organized medicine did not take the lead in defining or espousing quality. It has left us where we are today, with quality standards established by Medicare and other agencies.

The quality rewards of the Physician Quality Reporting System (PQRS) and meaningful use are being replaced by penalties. Reporting quality is now the baseline, just to keep what you have. Demonstrating value will be your ticket to get more. Payers have become advanced data-mining engines, capable of comparing your costs and outcomes with those of your peers in your town, state, and nationally, according to Deborah Keegan-Walker, president of Medical Practice Dimensions, Inc. "We've entered an era of cost and outcome transparency," she notes, "and physicians should fully understand and embrace the 'value management' tools payers are using."

Payers are unlikely to dip into their coffers to reward physicians and health systems that simply state their services show value. Your practice will need to demonstrate value to be rewarded. Those who fail to demonstrate value will face lower fee schedules.

Population health

Effective and proactive management of population subsets will be critical to demonstrating value. Randy Cook, president of AmpliPHY Physician Services, says that PCPs will succeed by directing care across all settings, coordinating care with specialists, and influencing chronic and preventable diseases. PCPs will seek clinical partners - specialists, ancillary service providers, and hospitals - who provide great service and outcomes at a competitive price.

Cook says he feels specialists who succeed will excel at coordinating care with PCPs, demonstrating better outcomes, being flexible regarding facility alignment, and leading clinical integration within their expertise.

Effective population health management for both PCPs and specialists will require a level of interoperability and reporting capabilities that most practice management (PM) systems and EHRs do not offer. PM/EHR vendor Greenway Medical is on the vanguard of integrated population management technology. As Sam Holliday, its vice president of population health services, says, "Physicians need a 'smart' system to help them care for patients individually and collectively across higher risk cohorts. Access to patient data from disparate sources at the point of care is a critical starting point."

Holliday made another excellent point. He says each payer will have its own value measures and standards, by disease class. The best PM/EHRs will allow physicians to easily "customize" the care they deliver to meet the value measures used by a patient's insurance.

The value measures each payer uses to measure and pay you will be similar but different. I urge you to meet with each of your primary payers and discuss their "incentive" plan. In my opinion, a key differentiator of PM/EHRs going forward will be the ability to integrate payer-specific value metrics at the individual patient level.

Timing is everything

Don't run away from the fee-for-service model just yet. It's the horse we rode in on, and there's no need to change horses until the time is right. Start measuring and documenting value and be ready when each payer is ready - some payers may be ready now, but others will not be ready until 2014 or later. Here's the key take-home: Your practice should be ready when the toggle switch gets flipped. By staying in touch with your payers and by working toward value with those whom you share patients, you will be more than ready to catch the value wave.

Lucien W. Roberts, III, MHA, FACMPE, is a Virginia-based writer, speaker, and consultant. For the past 20 years, he has worked in and consulted with physician practices in areas such as compliance, physician compensation, negotiations, strategic planning, and billing/collections. He may be reached at Lucien.roberts@yahoo.com.