09 Mar Top Three Difficulties in Moving to Value-Based Payments
Through the transition to value-based reimbursement, healthcare delivery models will need to change radically to provided better care at a lower cost. The new reimbursement models for healthcare services will be successful only if the delivery models adapt.
Previously, the payment structure of healthcare has been based on the number of clinic/hospital visits or the number of tests performed.
Now, reimbursement will be based on the value of the care provided.
In some cases with shared service contracts, the fee for service reimbursement level will fluctuate based on quality measures. Amidst this reimbursement modification, payment technology is now being challenged more than in any previous healthcare era.
Here are the top three challenges for value-based payments:
It is widely recognized in the healthcare community that value-based payment contracts are in their initial stages with structure around shared savings methodology. Medical facilities will need a quite sophisticated accounting department to track the shared savings that are calculated at the end of the contract period. Essentially you will require the IT department or a purchased software product to have the ability to measure performance for a defined patient population.
2. Quality Standards
In the value-based system, medical providers will have to measure and track quality standards. Several value-based incentives rely on quality measures for reimbursement. It also includes penalties for not complying with these standards. Proof of quality standards being met before payment is relatively new and will affect cash flow. The providers must have an efficient internal system to track the financial and quality performance of all patient care encounters.
The full transition to value-based care reimbursement will take a significant amount of time – so there might be a negative impact in the short term. The time frame to be fully integrated with value-based reimbursement and risk sharing is unknown. Medical facilities will have to get serious about analyzing their procedures, volumes, revenue, and margins.
Overall, value-based healthcare reimbursement can be key to keeping healthcare cost from escalating out of control. Though there are immediate challenges, it is believed that it will be very beneficial in the long term and should be used at all times.
Find out how to succeed in moving to value-based payment models in this article: How to Succeed in Moving to Value-Based Reimbursements.
Sunlit Cove Healthcare Consultants
We provide management and consulting services to help healthcare businesses run efficiently. Navigating the dynamic and complex revenue cycle management is a challenge for many health plans, health care vendors, and providers. Our consulting services are available to assist with your day-to-day operations and provide expertise in growth and change management. We manage all aspects of your enterprise from the development of the revenue cycle management process to the completion of your business cycle.
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