Talk with a ChartSpan Representative Today!

Our team is ready to help you improve patient care and outcomes.

Blog

Healthcare Provider’s Guide to Value-Based Care

Healthcare providers today are expected to deliver high-quality patient care while effectively managing costs and improving organizational efficiency. To support these goals, the Centers for Medicare and Medicaid Services (CMS) introduced value-based care as an alternative to the traditional fee-for-service system for Medicare and Medicaid beneficiaries.

In a value-based care model, providers are compensated based on the quality of care they deliver, rather than the quantity of services performed. This model promotes preventive care to reduce unnecessary treatments, control chronic conditions, and lower healthcare costs, while improving patient outcomes.

CMS has set ambitious goals for value-based care, aiming to achieve 100% beneficiary participation in accountable care partnerships by 2030. The transition to value-based care programs or programs that help with value-based care, like Chronic Care Management, offers the potential for lower costs, enhanced patient outcomes, and increased provider satisfaction.

What is value-based care?

Value-based care is a healthcare model that encourages providers to deliver high-quality care. Providers are reimbursed based on positive patient outcomes rather than the number of procedures performed. This approach encourages preventive care, leading to the efficient use of healthcare resources with fewer unnecessary procedures and better coordination of care.

Value-based care relies on benchmarks or goals set by the program in which the healthcare provider is enrolled. Success is measured across several different categories, including:

Timeliness of care provided
Reduction of health disparities across a particular population
Reduction in hospital readmissions or procedures
Timeliness of information shared across providers in the network
Patient satisfaction from surveys or reviews
Percentage of patients who receive screenings or other preventive services

The reason for emphasizing “value” is simple: When the quality of care improves, patient outcomes improve, and costs decrease.

Value-based reimbursement explained

Value-based reimbursement compensates healthcare organizations for providing high-quality care to Medicare and Medicaid beneficiaries. Unlike the traditional fee-for-service model, where providers are reimbursed for each individual service, value-based reimbursement ties payments to the achievement of specific quality benchmarks, such as improved patient outcomes and reduced unnecessary services.

Key features of value-based reimbursement

Payment structure: Value-based reimbursement rewards providers for achieving better patient outcomes.
Objectives: Value-based models reward quality care, motivating providers to focus on preventive care and patient satisfaction.
Care coordination: Value-based reimbursement encourages coordinated care across providers, reducing redundancies and errors.
Risk and payment models: Some value-based care models include shared risk, meaning providers can gain or lose revenue depending on their performance against quality benchmarks.

Learn more: How to add an additional revenue stream with Chronic Care Management

Fee-for-service vs. value-based care

The traditional fee-for-service (FFS) model reimburses providers for each individual test, procedure, or visit. In contrast, value-based care reimburses providers based on patient outcomes and quality of care.

Service-based vs. outcome-oriented: FFS pays providers for each service, regardless of the outcome. Value-based care rewards providers for improving patient health, reducing expensive treatments, and increasing patient satisfaction.
Fragmented vs. coordinated care: FFS leads to fragmented care, as providers often operate in silos. Value-based care emphasizes integrated systems that share patient information across providers.
Retrospective vs. prospective payments: FFS payments are made after services are delivered. Value-based models often involve prospective payments, where providers receive payments upfront for a defined episode of care.
Excessive expenses vs. data-driven decisions: FFS patients are treated on an incident-by-incident basis, which may lead to overuse of services and higher costs. Value-based care uses data-driven decisions to streamline care and prevent unnecessary medical interventions.

How does value-based care work?

Transitioning to value-based care requires significant changes in how healthcare is delivered and paid for. Providers must track and report patient outcomes using Electronic Health Records (EHRs). This data helps determine whether you meet CMS benchmarks, which are essential for receiving reimbursement under value-based models.

Adopting value-based care involves shifting from reactive, incident-based care to a proactive model focused on managing patient health holistically. As a provider, you are encouraged to implement preventive care programs, like Chronic Care Management (CCM), and ensure that your practice is equipped to handle the reporting and care coordination necessary to succeed in this model.

Benefits of value-based care

Value-based care offers numerous benefits for both patients and providers:

Improved patient outcomes

Patients experience better management of chronic illnesses, leading to fewer doctor visits and medications and a higher quality of life. And improved patient outcomes lead to higher reimbursements for providers.

Greater access to care

Value-based models encourage patients to have a consistent source of care. Emphasis on primary care strengthens the provider-patient relationship, improves care continuity, and facilitates timely access to preventive services and early intervention.

Increased care coordination

Shared patient information across providers leads to fewer medical errors and redundant procedures. Care coordination helps providers increase the efficiency of patient care and achieve value-based care goals.

Lower healthcare costs

Avoiding unnecessary tests or treatments helps reduce healthcare expenses. When healthcare costs are lower, patients experience lower out-of-pocket expenses, and their insurance premiums and prescription costs may also decrease.

Emphasis on preventive care

With preventive care, patients can manage chronic diseases proactively, prevent more serious conditions from developing, and preemptively decrease future doctor visits. This also saves your practice time to care for additional patients and cuts avoidable expenses.

Data-driven decision making

Value-based care relies on data analytics to track and analyze patient outcomes and costs. This data-driven approach enables your practice to make informed decisions, identify areas for improvement, and optimize care delivery. As you focus on achieving value-based benchmarks, you will be rewarded for the high-quality care you provide.

Value-based care models

Several value-based care models reimburse providers based on the quality of care delivered. Below are a few of the most common models developed by CMS.

1. Accountable Care Organizations (ACOs)

ACOs include a network of physicians, hospitals, and other providers who agree to take responsibility for the quality and cost of care for a group of patients, most often Medicare and Medicaid patients. CMS offers several ACO models, including the Medicare Shared Savings Program, Advance Payment ACO Model, and Pioneer ACO Model.

ACOs have proven to reduce healthcare costs. The Medicare Shared Savings Plan saved Medicare $4.1 billion in 2020. And the benefits aren’t only financial. Collectively, ACOs had quality scores of 97.8%.

Despite these benefits, ACOs also present risks. If the ACO delivers high-quality, cost-effective care, all participating providers share the savings. However, if care quality falls short, network participants might bear the financial burden in repayments to Medicare.

2. Patient-Centered Medical Homes (PCMHs)

PCMHs coordinate patient care through a primary care physician. The PCMH model prioritizes patients’ needs and increases satisfaction by enhancing communication, coordinating care, and focusing on preventive and personalized care. The success of PCMH hinges on a quality, integrated EMR. The primary care physician will use the EMR to coordinate care with other providers as well as to report patient test results and updates.

3. Hospital Value-Based Purchasing (VBP)

In this program, acute-care hospitals are reimbursed for safety, quality clinical care, efficiency, cost reduction, and positive patient experience. By achieving these performance measures, hospitals can expect fewer readmissions and procedures and increased transparency of care.

4. Merit-Based Incentive Payment System (MIPS)

MIPS adjusts Medicare provider payments based on the quality of care delivered, patient engagement, and cost-effectiveness. Providers are rewarded for achieving quality benchmarks and improving patient outcomes.

Types of programs that support value-based care

Chronic Care Management (CCM)

CCM programs ensure a comprehensive, coordinated approach to care by connecting providers with chronically ill patients beyond the traditional clinical setting. Care managers assist with monthly communication, education about conditions and treatments, and proactive symptom monitoring to help detect potential health issues early and improve patient outcomes.

Transitional Care Management (TCM)

TCM programs receive reimbursement to support beneficiaries transitioning from an inpatient hospital stay to their community setting. Services may include follow-up visits, medication reconciliation, and care coordination within 30 days of discharge. TCM reduces the risk of readmission and ensures a smooth transition of care.

Behavioral Health Integration (BHI)

BHI programs earn reimbursement for incorporating behavioral health (mental health and substance use disorder) services into primary care settings. Reimbursable activities may include screening and assessment, care planning, and collaborative care management between primary care and behavioral health providers.

Remote Patient Monitoring (RPM)

RPM programs earn reimbursement for using technology to monitor and manage patients' chronic conditions remotely. RPM services may include the collection and analysis of patient-generated health data, such as vital signs, symptoms, and medication adherence.

Providers are compensated for the time spent reviewing and interpreting patient data, as well as for any necessary follow-up actions.

Financial reimbursement models in value-based care

Value-based care involves various reimbursement models that encourage providers to meet quality benchmarks. These include:

Prospective payments: Payments made upfront to providers to motivate them to deliver efficient care.
Bundled payments: Providers receive a single payment for an entire episode of care, covering all services within that period.
Shared savings models: ACOs and other models allow providers to share in the savings generated by delivering high-quality, cost-effective care.

Financial risk is also a key element of value-based care. Providers may face penalties or reduced payments if they fail to meet required benchmarks or exceed the cost limits set for an episode of care.

Why value-based care is worth the investment

Transitioning to value-based care can lead to dramatic improvements in patient outcomes, better care coordination, and lower overall healthcare costs. While the shift from exclusively fee-for-service models may be challenging, value-based care rewards providers for delivering high-quality, patient-centered care that emphasizes prevention and long-term health management.

By investing in programs that support value-based care, like Chronic Care Management (CCM), and leveraging tools like EHRs for tracking and reporting, you can ensure you meet CMS benchmarks and reap the financial rewards of this forward-thinking approach to healthcare.

Take the next step toward value-based care with ChartSpan

A Chronic Care Management (CCM) program is a powerful tool for achieving value-based care goals for Medicare patients with chronic conditions. ChartSpan’s full-service CCM program enhances care continuity, tracks outcomes, and integrates with EHRs, while fostering patient engagement through education and regular communication. By identifying care gaps and addressing issues early, CCM helps prevent complications and improve overall patient health.

Ready to transition your practice to value-based care? Contact us today to learn how our team can support your move towards a more patient-centered, outcome-driven model that delivers results for both your practice and your patients.