Healthcare is in transition from the fee-for-service model, in which physicians are paid a fee for every specific service rendered, to the new value-based care (VBC) model, which reimburses based on the quality of patient care. VBC “changes the way that providers are reimbursed or paid,” says Charles Saunders, MD, CEO of Integra Connect, an IT company that offers technology and services to help specialists succeed under VBC in West Palm Beach, Fla.
The fee-for-service revenue cycle, according to Joe Sawyer, MBA, chief marketing and communications officer at Integra is “oriented around patients coming in, having a visit with the physician and then the practice ensures that it is appropriately reimbursed for the services it provided.”
In “the new world of value based care” the practice takes on accountability “for an entire episode of care,” Sawyer explains. He gives the example of oncology care model, an alternative payment model, in which case the oncologists are accountable for “cost and quality during the entire period that patient’s receiving chemo, not just the chemo they’re receiving in the office.”
Seek new analytics
Since reimbursement under VBC is based on quality measures that practices must meet and shared-risk of costs with patients, Sawyer says that it will become necessary for practices to acquire new technology solutions that “are able to do the same things that payers do, in order to confidently assume risk.”
For some practices, this might mean investing in a newer, more up-to-date EHR software designed with VBC in mind, or at the very least to find technology that plugs-in to an existing EHR to bring it up to speed.
“The quality measures, especially the alternative payment models, require physician practices to have a holistic view of their patients,” Sawyer says. “From a revenue flow point perspective, it speaks to the need of having a whole new generation of analytics that can manage performance so you can actually forecast revenue.”
Perform a financial biopsy
Now that patients are assuming greater financial responsibility, with high deductible health plans, Saunders warns that may mean the “amount of potential bad debt may increase for a practice.”
This necessitates what he calls “a financial biopsy” of the patient at the time of registration to determine “what’s their propensity to pay, and what alternate sponsors are there to cover that—whether it’s a supplemental insurance, subrogation or Medicaid.”
Many of the alternative payment models, in fact, require financial counseling for the patient as a part of the model, Saunders says. “Which means you have to estimate for the patient what their out-of-pocket payment is so they can make an informed decision whether they want to get [treatment].”
RCM becomes a shared responsibility
RCM management used to be “a back office function,” whereas now, the practices that will thrive under VBC will be those where the lead practice administrators are “very much on the front lines alongside their clinical counterparts, because they have to look together at how they’re performing against various measures,” Sawyer says.
Optimizing RCM for VBC “requires a very different mindset, a different set of work clothes and skills, and different supporting technology to be able to track what’s going on when patients walk out the door,” he says.