Devin L.

Brown

SBU 261 45

24 February 2023

Population Based Reimbursement:

A New Age to Healthcare

We are all familiar with what a trip to the doctor’s office is like. We make an

appointment and wait for what seems like forever to be seen by the doctor. When the doctor

finally reaches you in their busy que of patients they talk quickly and don’t really let you answer

any question in full or ask many questions. Usually, we are so flustered by their hurried response

that we forget the important things we wanted to ask in the first place. Before we know it the

doctor walks out of the room, and we are left not really knowing what just happened. Finally, we

receive a bill for the visit that seems very high for the little quality or thoughtfulness that was put

into the care that we received. This form of care is not beneficial for us as patients and often

makes us not want to go at all. In recent years many healthcare providers have noticed the issues

that exist within the healthcare system and know that something must be done to change it.

Healthcare is now becoming more focused on quality of care rather than quantity of care. One

way to incentivize quality of care is through population-based reimbursement or value-based

care. Value based care focuses on patients’ quality of care and encourages doctors to provide the

best quality of care. This care allows doctors to connect more with patients rather than treating

them like a number.

Value-based care is an alternative and potential replacement for fee-for-service

reimbursement and is based on quality rather than quantity (TechTarget, 2022). Population-based

payment models are prospective, based on a budget, and require providers to take on risk for

costs of care that exceed the budgeted amount (Picher, 2022). Value based care is the growing

alternative to healthcare’s traditional fee-for-service payment model as the industry seeks to

evolve to a more effective healthcare delivery system (Chuang, 2022). Value-based care is a

form of reimbursement that ties payments for care delivery to the quality of care provided and

rewards providers for both efficiency and effectiveness (TechTarget, 2022). This value-based

care has caused states that implement value-based models in their Medicaid programs have

designed these models to achieve health care goals, such as controlling costs, improving quality

and outcomes, enhancing patient and provider experience, and promoting health equity

(Ventures, 2022). The population based payment model is a value based payment model which

includes provider accountability for both quality and cost of care and is based on the number of

patients a provider serves as opposed to the number of services a provider performs (Ventures,

2022). Population based payments have been categorized by The Healthcare Payment Learning

and Action Network as the most advanced form of value-based payment models (Picher, 2022).

The goal of value-based care is to incentivize providers to develop more innovative approaches

to person-centered health care delivery by rewarding those that successfully manage care

(Picher, 2022).

Implementation

There are two approaches to implement value-based care which are voluntary or

mandatory. The voluntary approach involves independent providers to utilize value-based care at
their own will. Many states have taken voluntary approaches to promote population-based

payments in the commercial market. Maryland has a model which includes a global budget for

hospitals, an approach that Pennsylvania also has adopted for its rural hospitals. Ohio has

convened commercial plans and the Medicaid agency to collaborate on a multiple payer delivery

system reform initiative which includes comprehensive primary care payment and value-based

payments (Picher, 2022). More than 40 health care organizations signed the compact and

committed to making a good faith effort to participate in value-based payments and promote the

growth of this system of care. These healthcare organizations have also set goals to become more

committed to value-based payments. The mandatory approach uses regulatory and statutory

requirements to implement value-based care (Picher, 2022). In 2020, Rhode Island’s Office of

the Health Insurance Commissioner established affordability standards that require insurers to

increase their use of alternative payment methods. They also specifically require insurers to

adopt a prospective payment model for primary care, with payments through these models

accounting for 60 percent of covered lives by January 2024(Picher, 2022). The decision on

whether to implement value-based payment voluntarily or make it mandatory is very complex

and challenging. A voluntary approach emphasizes a collaborative, market-driven strategy,

which can hold political appeal but lack enforcement like a mandatory approach. A mandatory

approach also requires oversight by the state insurance department (Picher, 2022). Several states

have pursued strategies to move toward population-based payments across their health care

markets.

Benefits
Population-based payment models give providers more flexibility to coordinate and optimally

manage care for individuals and populations (Picher, 2022). Value based care will provide more

incentive for providers to provide quality care and ensure that a patient is seen as a whole and not

just one issue. The value-based system will advance the triple aim of providing better care for

individuals which is: improving population health management strategies, and reducing

healthcare costs (TechTarget, 2022). Value-based care models center on patient outcomes and

how well healthcare providers can improve quality of care based on specific measures. Value-

based care is designed to drive down healthcare costs and improve patient outcomes

(TechTarget, 2022). These models emphasize advancing quality of care while increasing patient

access and accounting for price at the point of care. providers are incentivized to use evidence-

based medicine, engage patients, upgrade health IT, and use data analytics to get paid for their

services. When patients receive more coordinated, appropriate, and effective care, providers are

rewarded (TechTarget, 2022). These models have been proven to reduce hospital readmissions

in Medicare beneficiaries by eight percent (TechTarget, 2022) “In Medicare’s Shared Savings

Program, physician-led accountable care organizations (ACO) achieved modest savings in total

spending (Picher, 2022).” Evidence for cost savings with population-based payments is limited

but the evidence that is available has proven that this process will work and improve over time.

Within five years, value-based care could be the norm for most patient populations. “The Health

Care Payment Learning and Action Network, a public-private partnership established by the

Centers for Medicare and Medicaid Services, has set aggressive goals. By 2025, they expect 50%

of Medicaid and commercial insurance payments and 100% of traditional Medicare and

Medicare Advantage payments to be tied to quality and value (O’Gara, 2020).” Value based care

is on track to improve patient health outcomes and improve the overall health of communities.
Value-based care enables us to pivot to a model that is more sustainable for patients and

clinicians, one which is also grounded in scientifically proven data points that more care doesn’t

equal better care. Value based care prioritizes reimbursement for positive clinical outcomes,

allowing for investment into healthcare infrastructure that focuses on the health of the

population. The continued implementation of value-based care is projected to enable patients

will be able to spend more time with their physician and be motivated to improve their health

outcomes with lower cost-sharing responsibilities and have better experiences without being

rushed through the healthcare delivery system (Chuang, 2022). Many medical groups are very

eager to drive innovative changes in order to meet the needs of patients and communities and to

improve the quality of healthcare.

Downsides

One of the downsides of value-based care is that Population-based payment models require

providers to change the way they provide care, and the changes are only sustainable if a critical

mass of public and private payers adopt aligned approaches which may be difficult to get them

on board (Picher, 2022). These models also require provider organizations to take on greater

financial risk than they have assumed under the traditional fee-for service payment system. This

may be a move that not all providers are prepared or willing to make (Picher, 2022). Another

issue that could arise due to this form of care is that provider organizations might be inclined to

pursue patients with fewer socioeconomic challenges (Picher, 2022). Value based payment

utilized data that is entered by providers who must report to payers on specific metrics and

demonstrate improvement. Also, healthcare providers must integrate their information systems in

order to be able to easily access patient data in order to provide optimal care (O’Gara, 2020).
This could be an issue if providers forget to enter data or enter data incorrectly. The biggest issue

to value-based care is ultimately getting all entities on board.

Overall, Value based care programs are important because they’re helping us move toward

paying providers based on the quality, rather than the quantity of care they give patients (CMS,

2022). Value-based programs reward health care providers with incentive payments for the

quality of care they give to people (CMS, 2022). The reimbursement and care models emphasize

advancing the quality of care and increasing patient access and accounting for price at the point

of care (TechTarget, 2022). Transitioning health care provider payment from fee-for-service to

value based payments has gained interest during the past decade (Picher, 2022). Reimbursement

in value-based care is dependent on positive patient outcomes, not the volume of services

rendered. Value-based care is still a new concept for most healthcare providers, and many are

still trying to implement the appropriate systems into their workflow (TechTarget, 2022). It may

take some time for these systems of care to become widely implemented. Once more of the

population begins to see the benefit of this system there will be more providers offering this kind

of care because they will know that it is the best path to improve the overall health of a

community.
References:

CMS' value-based programs. CMS. (2022, March 31). Retrieved February 24, 2023, from

https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-

Based-Programs/Value-Based-Programs

Chuang, C. (2022). Why value-based care is the future of medicine. Inside Envision. Retrieved

February 24, 2023, from

https://www.envisionphysicianservices.com/view-resources/inside-envision/why-value-

based-care-is-the-future-of-medicine

O’Gara, E. (2020, February 27). The role of Population Health in value-based care. Modern

Healthcare. Retrieved February 24, 2023, from

https://www.modernhealthcare.com/patient-care/role-population-health-value-based-care

Picher, C. (2022, February). Promote Adoption of Population Based Provider Payment. Profiles

of Cost ConStrategies.ategies . Retrieved February 24, 2023, from

https://www.commonwealthfund.org/sites/default/files/2022-02/Hwang_health_care_cost_

growth_10_profiles.pdf

Ventures, A. (2022, December 7). Population-based payments in Medicaid: Strengthening

provider incentives to transform care. Center for Health Care Strategies. Retrieved

February 24, 2023, from https://www.chcs.org/resource/paying-providers-to-achieve-

elusive-health-care-goals-using-population-based-payments-in-medicaid/

What is value-based care, what it means for providers? .TechTarget. RevCycleIntelligence.

(2022, March 2). Retrieved February 24, 2023, from

providers