Value-Based Payment: Putting Patient Health First: When recommending a medical procedure, should doctors prioritize insurance reimbursements or patient health? The answer hinges on the payment model.
In a fee-for-service system, providers are compensated for each individual service, potentially incentivizing excessive care. This model can lead to increased costs and harm patients through unnecessary treatments or medications.
Conversely, value-based payment (VBP) models reward providers for delivering high-quality care and managing costs. This approach prioritizes patient health and overall well-being by focusing on outcomes rather than service volume.
To prioritize patient care, the Centers for Medicare & Medicaid Services (CMS) has spent a decade transitioning U.S. healthcare towards a value-based payment system. A key component is the Medicare Shared Savings Program, where healthcare providers form Accountable Care Organizations (ACOs). These ACOs receive financial incentives for improving patient outcomes and reducing costs in areas like cancer screening, diabetes management, and patient satisfaction. In 2022, the program yielded $1.8 billion in Medicare savings while enhancing care quality.
ACOs: Leading the Way in Value-Based Care:
While CMS aims to enroll all traditional Medicare beneficiaries in value-based care by 2030, progress has been slower than anticipated.
Healthcare organizations face the challenge of reducing costs without sacrificing revenue. Accountable Care Organizations (ACOs) with a strong primary care base have demonstrated success in the Shared Savings Program, achieving significant Medicare savings and physician bonuses. A key strategy involves shifting care from inpatient to outpatient settings when appropriate. However, this approach can negatively impact revenue for short-term acute care hospitals and skilled nursing facilities, which often struggle to cut costs due to substantial fixed expenses.
To address this, experts like advocate for innovative strategies that allow healthcare organizations to reduce costs without undermining their financial stability. The CMS Comprehensive Care for Joint Replacement program offers a promising model. By bundling payments for all aspects of joint replacement care, this program incentivizes hospitals to optimize services, leading to reduced post-operative facility stays without compromising patient outcomes. This approach demonstrates how cost savings can be achieved without harming a hospital’s bottom line.
Ghost Savings Exposed: How Upcoding Skews VBP Reimbursements:
CMS Should Revise Risk Adjustment to Eliminate “Ghost Savings”. Value-Based Payment (VBP) models link reimbursements to patient health outcomes. To balance payment disparities, reimbursements are adjusted based on patient health risks, as predicted by diagnostic codes. This risk adjustment ensures practices aren’t discouraged from treating complex, high-cost patients.
However, the current system incentivizes healthcare providers to aggressively code patient conditions to maximize reimbursement, a practice known as “upcoding.” This leads to inflated risk scores and apparent cost savings — “ghost savings” — that don’t reflect actual improvements in patient care.
Researchers argue that CMS should modify VBP to prioritize genuine cost reduction. By recalibrating risk adjustment models to focus on patient outcomes rather than diagnostic codes, CMS can redirect financial incentives towards improving patient health and away from excessive documentation.
Overcome VBP Challenges: CMS Needs to Provide Tech Support:
CMS must bolster the transition to Value-Based Payment (VBP) with technical support. Unlike the fee-for-service model where revenue is tied to patient volume, VBP rewards providers for quality and cost-efficiency. This shift complicates financial forecasting as income is now linked to achieving quality and cost benchmarks, rather than service delivery.
To navigate this complex transition, healthcare organizations require robust forecasting tools and software. CMS should provide or subsidize access to these tools, ensuring they are built on accurate, standardized data. Expert guidance on data interpretation and application is also crucial.
While VBP programs like the Shared Savings Program have shown promise, widespread adoption is hindered by challenges. Overcoming these obstacles will be essential for realizing VBP’s full potential for patients, providers, and taxpayers.
Key Services Offered by Medical Billing Outsourcing Companies
- Patient Demographics and Insurance Verification: Accurate patient information and eligibility verification are crucial for smooth billing.
- Medical Coding: Assigning correct codes to medical procedures and diagnoses is essential for accurate reimbursement.
- Charge Entry and Claims Submission: Efficiently capturing charges and submitting clean claims to payers.
- Payment Posting and AR Management: Timely and accurate posting of payments and effective management of outstanding accounts receivable.
- Denial Management: Addressing and appealing denied claims to maximize revenue.
- Reporting and Analytics: Providing insights into practice performance and identifying areas for improvement.
Choosing the Right Outsourcing Partner
When selecting a medical billing outsourcing company like Allzone, consider the following factors:
- Expertise and Experience: Look for a company with a proven track record in handling medical billing for physicians in your specialty.
- HIPAA Compliance: Ensure the company has robust security measures to protect patient data.
- Technology and Software: Evaluate the company’s technology and software capabilities to ensure efficient processes.
- Client References: Request references from other physicians to assess the company’s performance.
- Pricing and Contracts: Understand the pricing structure and contract terms clearly.