“Up to your toes” in Value-Based Reimbursement
Written by Denny Flint May 13, 2016
Note: This series is written for CareCloud one of the most advanced and prepared EHRs on the market today. They had the foresight to see ahead and prepare for this paradigm shift in reimbursement.
In the introduction to this blog series, we talked about the sacking of traditional fee-for-service payments and the rapid push to value-based models that reward quality and cost-effectiveness over quantity of services provided. For this article, imagine you are staring down at a foreboding, roiling body of water and you know you have to go in. So what do you do? Dip your toes in first. Hence this blog’s title.
This isn’t like the ICD-10 transition with its numerous delays and minimal direct impact on your money. Value-based reimbursement is already here. CMS is ahead of their stated target of transitioning at least 30% of FFS to value-based models by the end of 2016. Keep in mind, commercial payers have already embarked upon the VBR campaign so we’re not just talking about CMS here. As of December 2015, the following graph indicates the percentage of contracts by payer that are already covered under value-based models.
As the above graph indicates, you may already be participating in a VBR model. And if you are participating, many of your VBR metrics are already being measured (PQRS, chronic disease burden management, PCMH, etc.) Measurements mean collecting data. Under VBR, now more than ever, data is key. Data is king. In the introductory article we emphasized the need to secure forward thinking EHR’s that possess the necessary analytics to collect quality and cost-effectiveness data that is paramount to survive and thrive within these models. In the upcoming series of articles, we’ll spend significant effort explaining the new models, what the commercial payers are doing about VBR, and what you have to do to adapt.
As an overarching touchstone, it’s worth holding these new payment models in your minds with one simple statement. “Less is more.” In other words, the revenue “driver” is no longer the volume of services, but rather less services delivered in a cost-effective, quality manner. Remember this concept as you read this series and prepare your organization. The “less is more” mantra helps guide not only revenue cycle decisions, but also the very fashion in which you mold your care delivery.
All journeys begin with the first step. For us, to get to the end of the road with a well-planned VBR approach, we first have to understand the destination. We’ll do that by explaining the different models and what they mean to you. It is impossible to discuss what is the health care industry’s most sweeping change to how you get paid without defining the acronyms and programs so bear with me. It will make sense if you spend time understanding what the pieces are in order to see how they fit into the VBR puzzle. Unfortunately, we have not seen a mandated government program with this many acronyms since we were in the military. In order to give you a “Global to Minutiae” view, we will order the acronyms in the successive blog articles from 30,000 feet to ground zero. Again, please keep in mind this is the “housekeeping” part of this blog series. I promise in the next several articles we will dive into exactly what you need to do within your own organizations in order to prevail. In the upcoming articles, we’ll take a detailed look into explaining the various VBR conduits you need to know about and exactly what you need to do.
(A quick warning: When you read value-based related articles, blogs, tweets, etc. from industry “experts” be aware many of the following terms are being inappropriately interchanged so definitions may be muddled.)
30,000 Foot View
VBR – Value Based Reimbursement
General term that describes the payment models for both government and commercial payers that replace traditional fee for service. By definition, value-based reimbursement, also called value-based payment, involves paying for quality under certain defined measures, incentivizing cost control and ultimately producing better population-based outcomes. “Less is more” rather than volume of services drives the revenue. This requires a paradigm shift in thinking for all team members. DATA is key and having the right vendors in place is critical to collecting the required reporting data.
20,000 Foot View
MACRA – Medicare and CHIPS Reauthorization Act of 2015
When it comes to CMS, this is the regulatory force that is driving VBR momentum. Though CMS-related, commercial payers have already begun following CMS’ lead. The important thing to know about MACRA is that, under the regulation, an organization must choose one of two paths to comply. 1.) MIPS (see below), or 2.) a qualified APM (see below). Which of these two paths you choose drives your entire Medicare VBR implementation plan so do not take this responsibility lightly. Each of the two paths have unique metrics you must measure in order to take advantage of incentives and avoid penalties.
10,000 Foot Views
MIPS – Merit-based Incentive Payment System (one of two MACRA pathways)
MIPS combines 3 elements (PQRS, Meaningful Use EHR incentive, and Value-based Payment Modifier) into one consolidated program with the end result being an upward, downward or neutral adjustment to your Medicare Part B payments beginning in 2017. Though much of the MIPS legislation has yet to be finalized, keep in mind you are already being measured under PQRS and M.U. so the data-sets you create today have a direct impact on your future reimbursement. There are four weighted performance categories upon which you will be assessed: Quality, Resource Use, CPIA (Clinical Practice Improvement activities), and Meaningful Use of ONC certified technology. Choosing the MIPS pathway for MACRA means you must be able to capture the data by which you will be measured within those 4 performance categories.
APM – Alternative Payment Models (the second path that leads to MACRA)
This should be further defined as “certain acceptable” APMs because there currently exists many APMs but only certain of them qualify under MACRA. Again, choosing this pathway under MACRA negates the need to report the MIPS data. Beginning in 2019, lump sum incentive payments will be issued to providers successfully participating in APMs. According to a March 2016 National Business Group on Health survey, 55% of primary care already participates in at least one APM.
Here is a list of the most common APMs:
- Pay for Performance
- Bundled Payments (BPCI – Bundled Payments for Care Improvement)
- Patient Centered Medical Home (PCMH)
- Shared Risk
- Shared Savings
- Accountable Care Organizations (ACOs)
So there you have it. Your first 30,000 to 10,000 foot foray into VBR. You now have a good idea about what Medicare is doing about Value-Based Reimbursement. The next five articles address a deeper understanding of the two MACRA pathways (MIPS and APM), how to succeed in each, which pathway makes the most sense for your organization to choose, and a thorough discussion about what the commercial side of the industry is doing about VBR.
CareCloud and Advanced Medical Services are both prepared to help you with this paradigm shift. Please contact CareCloud for EHR services and please contact Advanced Medical Services for revenue cycle management, physician billing, coding and value-based reimbursement consulting services. www.admedserv.com Phone: 719-278-2888 Email: email@example.com
About the author: Denny Flint sits on the Advisory and Editorial Board of Advanced Medical Services. He has over 30 + year in Healthcare Management Experience. He is the Director of Operations for Specialty MedCare (cardiac and thoracic surgeons in Colorado) and the Director of Operations for Peak MSO. If you wish to contact Denny please Email: firstname.lastname@example.org