COVID-19 Delays Value-Based Care Contract Negotiations

Challenges to value-based care contract negotiations existed before COVID-19, but the pandemic set the movement back even further. Instead, provider and payer organizations have shifted focus from innovative payment models to address the present challenges: increased patient flow, lockdown orders, limited testing, and stalled vaccine rollouts.

Findings from Insights, the research division of Xtelligent Healthcare Media, revealed many experts across the industry are unsure when revenue levels, patient volume, and operational efficiency will return to pre-pandemic levels and allow for value-based care efforts to recommence.

Nearly half (49 percent) of respondents to the Value-Based Care Assessment: 2020 believe it will take a year for patient volume to stabilize. Another 50 percent say the same of operational performance.

Respondents were the most skeptical about revenue levels as a majority, 41 percent, anticipate one to two years before these levels to return to pre-pandemic levels.

Such uncertainty makes negotiations and innovation challenging as provider organizations are more concerned with immediately battling COVID-19.

“During the beginning of COVID we weren’t worried about value-based care. We were just worried about getting our patients cared for,” said the chief operations officer of one community oncology practice during qualitative follow-up.

As such, participation in value-based care models declined throughout the pandemic as negotiating, contracting, and reporting on quality measures took a backseat to patient care. While pay-for-performance remains the most common model, participation declined by 18 percent in the last year: 55 percent of respondents were participating in this model in 2019 and 37 said the same in 2020.

In fact, all alternative payment models saw a decline in participation over the last year including:

• Bundled payment
• Accountable care organizations
• Patient-centered medical homes
• Shared savings
• Shared losses
• Capitation

This hints at a larger industry trend as COVID-19 management is prioritized over innovative payment model negotiations. Innovation can only continue once the pandemic has waned.

How the industry manages the current crisis will set the stage for post-pandemic growth and innovation. Hopefully, payer-provider teamwork continues post-pandemic. But instead of working together to tackle the coronavirus pandemic, payers and providers will ideally shift efforts to continue moving the needle towards value-based care.

The Value-Based Care Assessment: 2020 highlights the impact of COVID-19 on the value-based care transition. Results also track perceptions of innovative reimbursement models over time, comparing results from 2020 to 2019. The full report is available here.