Overcoming the Obstacles Of Transitioning to Value Based Payment Models


The transition to newer payment models is a key issue in the healthcare industry. These reforms are focusing on increasing value, by offering high quality at low costs. We will take a look at few payment models, and then analyze the multiple challenges that the healthcare sector will face during the transition to value based payment models. Let’s get right into it.

Payment Models

  • Fee for Service: This payment model revolves around reimbursement for individual services that are offered to a patient. The pricing of services under this model differs from other economic sectors, as it is dependent on the negotiations between insurers and other providers, and not on the amount of money that the consumer is ready to pay for a certain product
  • Pay for Coordination: Payments with regards to care coordination services are the focus of the pay for coordination model. This model emphasizes on the need for improved relations between physicians and patients, and patients and providers
  • Pay for Performance: This model places its focus on financial incentives through achievement of measured goals with regards to patient experiences, use of resources, etc.
  • Bundled Payments: One time payments for multiple services provided for a certain condition or treatment fall under the category of Bundled Payments. These services are often provided by multiple providers and may involve more than one setting
  • Comprehensive Care Payment: This payment model, which is also known as Total Cost of Care Payment, focuses on a single payment inclusive of risk-adjustments for a wide range of services that are provided to a certain group during a certain period of time

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The value-based payment models mentioned above, like Pay for Coordination, Comprehensive Care Payment and Pay for Performance – emphasize on fulfilling the needs of the patient in the best manner possible, along with lowered costs. However, these models are likely to bring many problems to doctors, physicians and various medical practices in terms of billing requirements, as they may not be immediately familiar with the new regulations and requirements. Some obvious challenges in while transition to these value-based payment models may be listed as follows:

Defining Health-Care Value Accurately: understanding the proper definition of health-care value, can help move towards value based payment systems efficiently. Value may be defined as quality divided by unit cost. Appropriateness is a key player in this regard, but is not a part of this formula, which makes it difficult to define health-care value. The general misconception of patients that higher priced drugs offer higher quality has to be dealt with by physicians, who should take the responsibility of leading them the right way.

Implementation of the necessary Infrastructure: Physicians, hospitals, patients and stakeholders should be able to share information readily in order for the value based systems to work. Massive improvements are needed in health information technology, in terms of improving schedules, enhancing the accuracy of billing and coding processes and the development of data sharing systems.

Attribution of Care to Providers: Care Management Systems and shared savings payments are ways of attributing care to individuals, but this has a key flaw. Any attribution of care to a single provider does not consider any other care that a patient may receive. Patients in the hospital have also given several questions to the health-care sector regarding attribution of care. Overcoming this particular challenge may require difficult negotiations.

To overcome these challenges, it is recommended that healthcare establishments hand over their requirements to knowledgeable experts. Not only will this ensure fair payments and reimbursements, it will also free up resources for other operational tasks.

Role of MBC

MedicalBillersandCoders.com offers billing experts for every kind of specialty, both in the US and abroad. Reimbursements for physicians and practices in the modern age have become very complicated, and require thorough work in the billing and coding process. MBC, with improved billing, effective negotiations and appropriate documentation, can help physicians and hospitals cope with the newer value-based payment models.

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