The healthcare industry continues to move away from the traditional fee-for-service (FFS) payment model and toward value-based care (VBC). The 2021 Health Care Payment Learning & Action Network (LAN) report found that 40.9 percent of U.S. healthcare payments were tied to value-based reimbursement models, nearly doubling since 2015, when only 23 percent of payments were tied to VBC models.
By linking payment to patient outcomes rather than to the volume of services provided, VBC payment models aim to incentivize payers and providers to deliver quality, cost-effective care by increasing payments for positive patient outcomes and reducing payments for negative patient outcomes, such as early hospital readmissions after discharge.
Payer and provider alignment with VBC payment models is critical. Providers and payers who don’t align their information technology (IT) systems and workflows with VBC stand to lose revenue due to higher cost and lower quality. They also risk reputational harm: the quality measures that VBC models use to assess performance, such as Healthcare Effectiveness Data and Information Set (HEDIS®) data and CMS Star Ratings, can influence patients and health plan members when they are choosing providers and plans.
On the other hand, payers and providers who approach VBC strategically can set themselves up for a win-win-win-win scenario. That’s because the VBC approach to healthcare aligns with the goals of healthcare’s Quadruple Aim:
- Improved health outcomes
- Improved patient experience
- Lower healthcare costs
- Improved provider experience
This is what we mean by a “win-win-win-win” scenario: VBC done right can result not only in better patient outcomes, but also in an improved patient experience, lower healthcare costs, and an improved provider experience.
So how can payers and providers optimize their organizations to enable VBC and achieve these wins? The answer lies in the strategic deployment of interoperability. Interoperability refers to the seamless exchange of data between multiple systems. These may be internal systems, such as the ability to exchange data between numerous departments or various databases within one health system. Interoperability also means the ability to exchange data with external entities, such as a payer’s ability to seamlessly exchange data with its provider network.
When properly designed and deployed, interoperability can support increased collaboration between payers, providers, members, patients and other healthcare/community partners. Interoperability can enable a comprehensive view of each patient/plan member’s health, including the care provided, clinical outcomes and insight into the utilization/cost of care.
The following examples illustrate how interoperability-enabled alignment with VBC can benefit payers, providers, and patients.
Payer use case: interoperability and risk adjustment
Accurate risk assessment is an important component of VBC. For example, in Medicare Advantage plans, patients with a higher risk score generate adjusted (higher) payments. VBC models use risk adjustment to account for the fact that some patients are sicker and therefore more costly than others, so payments are adjusted accordingly. But to be eligible for those higher payments, payers and providers must thoroughly and accurately document all the patient’s relevant diagnoses.
This can be challenging when each patient’s clinical care data is scattered across multiple data sources in different data silos: payer claims data, clinical data in the provider’s EHR, third-party data from patient visits to providers outside the current provider’s system, etc. However, payers that develop a comprehensive, properly configured interoperability solution will increase their opportunity to collect comprehensive data on each member, enabling more accurate risk adjustment scores.
Provider use case: Hierarchical Condition Category (HCC) codes and care management
For members that are least engaged with their care team or ones that may have significant HCC coding opportunities, payers will often deploy a vendor to conduct in-home assessments (IHA). While these encounters are intended to be performed by a clinician and are supposed to mimic a “provider” visit, in reality, they neither address the clinical needs on the spot, nor do they generate appropriate follow-up to truly be considered a clinical visit. Even though actionable clinical and social determinants of health (SDOH) information may be gathered during the visit, the lack of communication and collaboration with the PCP and their care management teams make these visits more about harvesting new diagnosis codes and boosting risk adjustment factor (RAF) scores, than provision of clinical care.
This approach can serve payers well, but it can be frustrating to PCPs and their care teams, who either get the summary of the IHAs via snail mail or in a cluster of PDFs, if at all. Often, they don’t even know that their patients had an IHA. The meaningful clinical data collected during the visit can be used to update care plans and provide necessary care management, but only if it is shared with the provider in an actionable, timely and meaningful manner. This can only happen if payers and providers establish bi-directional interoperability solutions that enable the payers to use what they need for risk adjustment purposes, while also sharing their findings with providers and their own care management teams to address the newly diagnosed clinical conditions and SDOH findings.
Patient use case: care gaps and the patient experience
One way payers can improve their HEDIS scores (and thus their CMS reimbursement rates under VBC models) is by identifying and addressing care gaps. Care gaps related to preventative screenings and disease management are a common focus. By increasing these gaps where appropriate, payers and care teams can improve patient outcomes and improve HEDIS scores.
Consider colonoscopies. In the U.S., colorectal cancer is the second most common cause of cancer deaths. Preventative screenings are effective in finding colorectal cancer in its early, treatable stages. Which is why payers audit for colonoscopy screening care gaps and reach out to members and/or providers when a member appears to be out of compliance with colonoscopy screening guidelines (i.e., every 10 years, beginning at age 45, for patients of average risk).
But what if that member already had a colonoscopy within the past 10 years, and the payer just does not have a record of it since it could have been performed before the patient became a plan member? Suggesting that the patient needs a colonoscopy, when they are already compliant, is an inefficient use of resources and results in a negative patient experience. In addition, it can cause the patient to lose faith in the quality of the provider or payer’s care. In payers’ limited claims-based view, a true picture of quality performance is hard to achieve. A comprehensive approach to interoperability would ensure that the payer and provider have a complete view with gap insight for each of their members/patients, so that this type of mistake would not occur.
The need for a more comprehensive view of each patient is driving payers and providers to increase their collaboration efforts. When payers and providers work together to exchange actionable data, it creates an opportunity for mutual success in population health management and VBC.
As these examples illustrate, interoperability is necessary — but not sufficient — to support an organization’s alignment with VBC. Organizations need to deploy interoperability solutions in the larger context of a focus on what they are trying to achieve. That is, they must first clearly define their goals for data exchange. The right technology partner can help an organization optimize information systems and workflows for VBC by identifying opportunities, and then designing and deploying the right technology tools to achieve those goals.
Performance improvement (PI) solutions play a key role in optimizing VBC-aligned outcomes. PI solutions enhance the capture and accuracy of the data flowing into the network of information achieved by interoperability. PI optimizes the ROI on interoperability by aligning processes to ensure the right data is leveraged at the right time within the workflow. Creating insight via interoperability solutions is a key first step; however, closing the care gap is the final mile which drives higher quality and improved patient outcomes.
Building solutions that support VBC requires thought, time, and investment. But when it’s done correctly, everybody wins, including payers, providers, and patients.