What will make value-based reimbursement stick?

Payers say shift is here to stay — but not without provider pushback

Across the country, health insurance companies and the Centers for Medicare and Medicaid Services are rolling out various value initiatives intended to jumpstart the shift away from fee-for-service reimbursements. Though no two models are exactly the same, they all speak to the same effort — improving health care outcomes while reducing costs.

However, the models are still very much in their test phases. And because their real impact lands squarely on the shoulders of providers who must bear more responsibility while — in theory — receiving less in reimbursements, not all stakeholders are welcoming the change. As payers push the new financial arrangements, they must fight the provider perception that tying payment to value is about cutting costs at the expense of doctors.

"It's certainly not without friction," said Clay Phillips, vice president of network innovation for BlueCross BlueShield of Tennessee. "We're talking about changing the way we've done business for 40, 60 years, and the way people have been paid and the way they earn their living. There are questions about fairness."

Even so, developing and improving quality initiatives is a major focus for BlueCross BlueShield in the coming years, as it is for most insurance companies nationwide. From the payer perspective, the fee-for-service model, in which providers are reimbursed per unit of service, has increased health care spending while care outcomes have remained fragmented, stagnant and less than ideal.

"In no other industry would you just continue to pay for outcomes that aren't where you want them to be," said Lisa Slattery, vice president of quality management at BCBS.

Value-based reimbursement models vary in scope and requirements. Under some, providers are still reimbursed per service, with the potential of a bonus for lowering costs or performing additional services. Others provide financial incentives upfront to make infrastructure improvements, and the next year's payment is linked to the prior year's performance. Bundled payment programs, coming out of CMS's Innovation Center, provide a singular reimbursement for an entire episode of care.

The Patient Centered Medical Home, a coordination program intended to improve primary care, is an increasingly common value-based model. BCBS has 28 such programs in Tennessee, and pays an additional $3 per patient per month for providers to identify chronic patients and coordinate their care. The PCMH will be a major focus moving forward, Phillips said, as the insurer seeks to intensify the focus on quality and improve the coordination of care.

"There are 100 different models and ways to get at this," Phillips said. "The programs work best when they're combined not only with that change in payment philosophy, but when they're supported by enabling the providers to transform the delivery of care."

That support is crucial, and indeed, a major criticism by providers is that many quality initiatives come with unrealistic expectations of what providers are capable of achieving. Often, that’s because of infrastructure issues but sometimes the question is more general: Should physicians really take on significant financial risk when they have a limited scope of control?

"Because of the amount of change that's occurring now, whether it's the ACA or the fact that Medicare reimbursements are flat and we're always threatened with more cuts, physicians are reluctant to change," said Dr. Chris Young, president of the Tennessee Medical Association. "They don't feel like they have the security, so they're reluctant to make big investments in the current reimbursement environment."

For BlueCross, efforts in the coming years will speak to those investments, seeking to assist providers with the tools necessary to meet quality metrics or better coordinate care. Early in the shift, the support focused on purchasing electronic health record systems and getting practices accredited as necessary. Now, Phillips said, providers need two primary tools to be successful at value-based reimbursement: a patient registry and a way to track those patients through their care continuum.

"It creates a management issue for providers," Phillips said. "They're not just submitting claims, but managing reports and making sure they’re hitting the marks that are being requested by the payer. A lot of this technology is still developing, but the technology is what makes it possible."

Yet, providers are also skeptical and/or critical of technologies, particularly electronic health records, that are intended to streamline communication between providers but, in doing so, add another level of responsibility.

"The drawback to EHRs is that they turn physicians into data entry people instead of engaging on a personal level," Young said. "They're being pressured into production. If we can make it to a place where an EHR becomes useful, I do think there's money to be saved there so physician reimbursements could be preserved. But there's a struggle."

Insurers also are trying to improve data turnaround, getting information derived from claims back in the hands of providers to offer an additional perspective on their performance. For example, BlueCross knows when patients don't fill their prescriptions or schedule necessary procedures. Making that data actionable to the provider is key, Slattery said.

TMA officials are working with insurers to improve relations and advocate for physician-led care teams so that clinical perspectives are included in cost-cutting measures over the coming years.

"We do have to get the cost down," Young said. "No question, we have to get the cost down, but in a way that preserves the quality."

Striking that balance is the challenge, and often, providers and payers have very different opinions on how to get there. All kinds of initiatives and ideas are cropping up across the country, but best practices have still to emerge from the crowd.

"It's all up in the air right now," Phillips said. "Everybody recognizes we're going to make a transformation in America around this, and there are a lot of ways to go about it. We'll see what settles down in the next few years, but I don't think it will be one model. I think we'll see multiple approaches."