The Appeal of Risk-Adjusted Payment Models
Healthcare is undergoing a notable shift as value-based care becomes more popular among payers, who prefer to reimburse based on patient outcomes instead of services rendered. This model emphasizes the long-term health of patients and aims to reduce rising healthcare costs. Traditionally, physicians have operated under fee-for-service models, but the growing cost pressures and benefits of value-based care are encouraging a shift towards these newer payment models.
To encourage more physicians to adopt value-based care, payers are introducing risk-adjusted payment models. In these models, physicians assume some financial risk but also stand to gain from the savings achieved through efficient and preventive care. The success of these models relies heavily on the right technological investments and robust tracking systems to monitor patient care and outcomes.
Patrick Sulzburger, CPA and owner of Coding and Compliance Initiatives, explains that risk-adjusted payment models are designed to fairly compensate healthcare providers by considering the complexity of a patient's condition. These models acknowledge that not all patients require the same level of care; thus, payments are adjusted based on patient risk, which is quantified through hierarchical condition category (HCC) codes that reflect the patient's health status.
Getting Started with Value-Based Contracts
For physicians new to this model, the transition can be facilitated by examining their major payer mix and reaching out to those payers to explore available value-based programs, such as Medicare's Shared Savings Programs. Sulzburger highlights that while adopting these models doesn't necessarily require heavy investments in new technology, it does necessitate enhanced data collection and an increased administrative load initially.
Financial Impacts and Operational Changes
Practices participating in risk-based payment models can expect a financial ramp-up phase, where initial years may involve learning and adjustment, particularly in accurately capturing and coding patient data. However, practices stand to substantially increase their revenue over time through shared savings from efficient care management.
Moreover, a practice-wide educational effort is crucial. Staff from physicians to coders and administrative personnel need training to adapt to the nuances of value-based care, emphasizing accurate documentation and patient engagement strategies. Some practices might find it beneficial to hire chronic care navigators to manage ongoing patient care effectively.
Looking Forward
Value-based care is not just a passing trend but a fundamental shift in healthcare reimbursement that is expected to grow in prevalence. Sulzberger predicts that as the industry continues to emphasize cost containment and quality care, the revenue from value-based models will increasingly constitute a larger portion of healthcare revenue.
This paradigm shift represents a proactive approach to healthcare, focusing on prevention and efficient management of chronic conditions, promising not only better health outcomes for patients but also a more sustainable healthcare system. As these models become more integrated into our healthcare framework, they offer a promising path toward enhancing the efficacy and affordability of care.
For healthcare organizations looking to succeed in the transformation to CMS value-based care delivery models, including the Medicare Advantage Program, ForeSee Medical is a specialized software platform for accurate Medicare risk adjustment. Through artificial intelligence like proprietary medical algorithms and natural language processing, ForeSee Medical optimizes HCC coding and value-based models, empowering healthcare providers to positively influence health outcomes.
Blog by: The ForeSee Medical Team