The Reimbursement Model Shift in Medical Billing

Here are some of the most common:

Pay-for-Performance

Pay-for-performance (P4P) programs provide financial incentives when providers meet specific quality benchmarks. Providers earn bonus payments for metrics like patient satisfaction, preventive care rates, and chronic disease management. Medicare has implemented several P4P programs to reward physicians and hospitals that focus on prevention and evidence-based care.

Bundled Payments

Bundled payment models pay a single rate to cover all services in an episode of care. For example, one bundled payment would cover everything related to a knee replacement surgery, including pre-operative services, hospitalization, procedures, and post-discharge care. This incentivizes providers to deliver care efficiently within the bundle amount. Medicare is expanding bundled payment programs for orthopedic procedures and other common services.

Accountable Care Organizations

Accountable Care Organizations (ACOs) bring groups of providers together to coordinate care for a population of patients. The ACO as a whole is accountable for the cost and quality of care for those patients. If the ACO meets savings and quality goals, it shares the savings with Medicare. More than 1,000 ACOs now exist serving over 30 million patients.

Capitation

In a capitated model, providers receive a flat fee per patient per month to manage all care. Capitation shifts financial risk onto providers to keep patients healthy and manage costs. It incentivizes preventive care and chronic disease management. Capitation is common in managed Medicaid plans and some Medicare Advantage plans.

• Focus on preventive care and chronic disease management – Value-based models emphasize preventive care and proactive chronic disease management. Thorough coding for annual wellness visits, screenings, immunizations, and chronic care management is essential to capturing available revenue.
• Leverage EMR data for quality reporting – Many value-based programs require reporting on quality metrics. Billers need to partner with clinicians to extract quality data from the electronic medical record (EMR) to showcase performance.
• Understand bundle definitions – For bundled payments, billers need to understand exactly which services are covered in the bundle. Items billed separately could end up being denied.
• Coordinate care across providers – Models like ACOs require coordination between different healthcare providers. Billers must collaborate to assign billing rights, reconcile bundled payments, and share cost data across systems.
• Employ strong analytics – To succeed under value-based models, providers need analytics to track utilization patterns, patient risk factors, clinic costs, and other data. Billers need access to analytics reports to improve revenue cycle performance.
• Verify plan details – With capitation models, getting the patient’s health plan correct is crucial. Billers need to verify plan eligibility, covered benefits, and capitation agreements to avoid costly claim denials.
  

Examples include:

• Automation tools – Automation, especially robotic process automation (RPA), can streamline repetitive billing tasks like claims management, benefit verification, and denial prevention. This saves time and minimizes human error.
• Advanced analytics – Data analytics tools provide actionable insights to help improve revenue and cash flow. Dashboards can track key performance indicators and metrics for value-based reimbursement models.
• Artificial intelligence – AI is assisting billers by automating data entry from unstructured documentation, auditing charts, providing real-time claim status, and predicting denied claims.
• Patient engagement tools – Apps and patient portals are engaging patients in their care. This supports preventive care and chronic disease management required under value-based models.
• Cloud-based platforms – New cloud billing systems easily scale to accommodate changes in reimbursement models. They facilitate collaboration across providers with connected access to billing data.
  

Training programs should focus on the following areas to equip staff for value-based care environments:

• Analytics skills – Billers will need to understand data analysis and how to generate reports on quality metrics, high-risk patients, disease management outcomes, and other factors tied to reimbursement.
• Collaboration abilities – Value-based models require increased coordination between billers, clinicians, and other departments. Communications and teamwork skills are essential.
• Patient engagement strategies – Billers play a bigger role in areas like patient recall, medication adherence, preventive care reminders, and post-discharge follow-up to impact outcomes.
• Regulatory knowledge – Billers must stay up-to-date on the complex regulations and program requirements that underpin Medicare, Medicaid, and commercial payer value-based programs.
• Critical thinking – With less reliance on fee-for-service billing codes, billers will need problem-solving skills to maximize reimbursement across value-based models’ differing incentives and payment calculations.
• Technical proficiency – Mastering new billing technologies, analytics systems, and care coordination platforms will be a must. Ongoing training on emerging tools is key.

Investing in robust education, mentorship programs, and career development initiatives for billing staff will be crucial to develop the competencies needed for value-based reimbursement environments.

Here are some key capabilities needed:

• Flexibility – Systems must readily accommodate new value-based reimbursement models, quality programs, and payment arrangements as they emerge.
• Analytics – Robust analytics tools are imperative to understand clinical and financial data insights and model financial impact of various payment programs.
• Interoperability – Patient data, clinical metrics, claims information, and reimbursement data must flow seamlessly across different IT systems to coordinate care and reporting. HL7 standards, enabling healthcare interoperability is key.
• Automation – Automated workflows boost revenue cycle efficiency. AI-driven automation can help with tasks like documentation review, prior authorization, and code auditing.
• Patient engagement – Providers need ways to connect with patients before and after visits to help manage conditions and achieve clinical targets tied to reimbursement.
• Enterprise integration – Tighter integration between core IT systems like EHRs, billing systems, and population health tools enables accurate quality measurement and revenue tracking.

Updating legacy revenue cycle systems is no small task, but necessary to build the technology infrastructure required for value-based payment models.

Here are some factors that influence participation:

• Organizational size and type – Large integrated health systems typically have more resources to implement value-based programs. Smaller and rural providers face greater barriers.
• Payer mix – Providers with a higher share of Medicare and Medicaid patients have more incentives to enter value-based arrangements.
• Health IT capabilities – Sophisticated analytics tools and interoperable systems better position organizations for data exchange, care coordination, and reporting required in value-based models.
• Past performance – High-quality providers are incentivized to enter value-based contracts confident they will hit benchmarks. Lower performers may be reluctant.
• Provider engagement – Securing clinician buy-in to practice reforms is key for successfully transitioning to value-based care.

Organizations across the healthcare spectrum will need to make strategic decisions on how aggressively to push into value-based reimbursement depending on market dynamics, competitive pressures, and internal capabilities.