The Executive Suite: Planning for success in value-based agreements

Primary care physicians and their practices face a daunting array of challenges today just to keep their doors open. In addition to the everyday hurdles associated with running a successful business, they must grapple with the moving targets the industry and government regulators throw in their paths related to billing and coding, documentation, Electronic Health Record (EHR) implementations and more.

With the number of independent primary care practices dwindling, primary care physicians and advanced practitioners must accommodate larger panel sizes. Factor in the pressures presented by the healthcare worker shortage and information-sharing mandates and it’s understandable why the incidence of clinician burnout is so high.

Considering these influences, the adoption of alternative payment models (APMs) -- most notably, value-based care (VBC) -- seems an inordinately heavy lift for many practices. For certain, VBC isn’t going anywhere. In fact, according to CMS, all Medicare payments and the vast majority of Medicaid payments will be governed by value-based contracts by 2030. But providers have reservations with 56% of PCPs reporting concerns about the impact VBC programs will have on their livelihood.

Operationalizing and making sense of VBC and the transition from fee-for-service (FFS) to VBC has proven challenging -- especially for PCPs serving the most complex and underserved patients. So how can independent physician practices effectively partner with health plans to improve outcomes and support their advancement along the APM continuum? And what are some proven strategies and best practices to manage risk-based contracts?

Operational challenges

Value-based contracting requires a different set of business capabilities with which practices have little experience.

Existing technology is not much help; EHRs and health plan portals do not consistently support providers in value-based models. Practices that have embraced these models report that documentation, data collection and reporting place strains their resources. They worry that a lack of clarity in measurement requirements means they won’t be paid fairly for their performance, and that value-based contracts distract from day-to-day patient care.

The number of contracts or arrangements can be overwhelming. For example, seven APM contracts with different health plans typically means seven sets of metrics. And within those contractual expectations, there are usually different targets, thresholds, and methodologies for the practice to achieve success. Practice staff must go to different portals, because each plan has their own way to submit information, communicate, and share performance reports. Working with a host of different MCOs presents an immediate challenge in getting organized and determining each disparate plan for the practice.

Before entering a VBC contract, measure your baseline value

Before even negotiating a value-based contract it is crucial to gauge your practice’s baseline performance in key areas such as prevention, chronic disease management such as diabetes mellitus and hypertension, access to care, and efficiency.It’s important to know your baseline value. For those practices that can do this self-assessment, that’s great, but for others who may not know where to begin, there are resources that can help.

Measuring how you are taking care of your asthmatic kids is not a waste of time, and you should be rewarded for having better-than-average performance. But there's no way to know unless you measure it. If you don't have the tools and resources to measure yourself and manage claims, consider a partner. There are organizations that help practices negotiate contracts, conduct self-evaluations, and secure better terms than are possible when flying solo.

Getting paid

Moving to APMs and from volume to value takes some worthy work. And when the greatest revenue in a practice is still generated by FFS, trying to balance volume and value is challenging.

So, how do practices get paid in an APM? Traditionally, it is at the end of the performance year. If the performance year is a calendar year, that could mean waiting 18 to 20 months to get a check. It’s hard to run a business with such payment delays -- particularly the smaller and independent practices -- to make the case for investing in the extra resources and tools. A solution for this conundrum could be to look for partners that offer risk bearing services – they are out there.

Communicate and partner

In the ongoing relationship with the health plan, be sure to maintain open lines of communication. The plan wants you to be successful and to communicate with honesty about what is working and what is not.

Be collaborative and open to advice. The plan can share best practices of high-performing PCPs. Participate in regular meetings and develop relationships with counterparts at the health plans. Your physician leader should be talking regularly with the health plan’s medical director, your quality person with the health plan’s quality director. Such regular connections pay off because when things might seem awry on your end, being able to pick up the phone and call your counterpart is the path to resolution. Your performance matters. If it didn’t, the plan would not spend time with you.

Another tip: learn their language and the way that health plans speak or communicate. They have their own acronym soup with such terms like PMPM, which is short for per member per month.

The health plans get a sense of the complexity of your patient population based on the cost of care delivered for your patients through claims, as well as through your coding behavior. Coding is the way that you are articulating and telling your patient story to the health plan, and they should be able to glean from your coding and documentation key details such as chronic disease, preventive screenings, and the socioeconomic barriers that are contributing to the physical and mental well-being of your patients.

To be successful in the transition from FFS to VBC, seek out partners and lean on them for support.