Reimbursement Adequacy, Timely Data Needed for Risk-Based Payment

Hospitals and health systems need better claims reimbursement and data access to put more of their population under risk-based payment models, Premier reported.

Reimbursement inadequacy, timeliness of data, and access to data are preventing hospitals and health systems from moving to risk-based payment, according to a recent survey from healthcare improvement company Premier.

The survey of 177 healthcare professionals and physicians from hospitals and health systems across the country found that the shift to risk-based payments in healthcare has been slow. Across all payer types, most respondents said that less than 20 percent of their population was covered under a risk-based payment model.

Respondents also do not anticipate that percentage to change much in the next five years. About three-quarters of the healthcare professionals and physicians expect less than 50 percent of their population to be covered by a two-sided, risk-based contract by 2024 (i.e., shared savings, bundled payment, capitation, or other value-based care arrangement).

“The survey findings underscore that the movement to risk-based alternative payment models necessary to achieve this vision is progressing, but slowly,” Blair Childs, Premier’s senior vice president of public affairs, stated in a press release. “The survey also reveals the fundamental reasons for this slow pace, which largely amounts to needed economic incentives and access to data. This underscores the need for policy changes, as well as action by private organizations.”

Policymakers and payers should pay attention to the adequacy of claims reimbursement rates and data sharing arrangements, the survey showed.

When asked to rank the top three most significant barriers preventing organizations from moving to risk-based payment models in the Medicare fee-for-service program, respondents ranked reimbursement inadequacy as number one, followed by timeliness of data (e.g., claims files), competing or higher change priorities, and access to data (e.g., EHR clinical data).

Other challenges of risk-based payment adoption selected by ten percent or less of respondents included a lack of provider or clinically integrated networks, limited time in upside-only models, low benchmarks, inability to restructure beneficiary incentives to offer benefits that address social determinants of health, and inability to create narrow networks.

Payers and providers need to develop strong partnerships to shift to risk-based payment models that will advance care delivery and drive improved outcomes and value, according to Carrie Nelson, MD, chief clinical officer of Advocate Physician Partners, a care management collaboration with Advocate Health Care that brings together more than 5,000 physicians.

“These partnerships need to be built on access to standardized claims data, shared risk, clarity of roles and responsibilities and transparent business relationships,” she stated in the release.

Medicare may be a role model for other payers. The large public payer runs the most risk-based payment models, with 29 percent of respondents engaging with risk-based payments in Medicare fee-for-service and 22 percent with Medicare Advantage versus 23 percent with employer-sponsored health plans, 15 percent with Medicaid, and 11 percent with individual and small group plans.

Nearly one-half of respondents also had more than 20 percent of their patient population covered by risk-based arrangements in Medicare fee-for-service and Medicare Advantage, respectively.

Medicare is already taking steps to addressing some of the challenges identified by healthcare professionals and physicians in the survey. For example, last year, the public payer overhauled the Medicare Shared Savings Program – the largest accountable care organization program to date – to push more providers to assume downside financial risk sooner.

Providers have less time to adopt risk-based payments in the updated model, but they also have greater flexibility to create beneficiary incentive programs, use telehealth services, and develop the narrow networks prohibited by the Stark Law and other healthcare fraud regulations.

CMS is also providing multi-payer claims data access through some of its Innovation Center demonstrations. Participants have said the claims data have provided a much-needed solution to inconsistent claims data access and the desire to improve value-based care delivery.

But more work still needs to be done by Medicare and other payers to transition providers to risk-based payments. A survey released earlier this year by Numerof & Associates and David Nash, dean of the Jefferson College of Population Health, found that risk-based payment adoption is stalling in healthcare.

For the third consecutive year, the median percent of revenue from models with either upside or downside risk remained at around ten percent, the survey found. Additionally, almost one-third of respondents in risk-based models said their agreement had no downside risk.

“There is a great deal of uncertainty as we explore moving to risk-based contracts,” Steve Neorr, senior vice president and chief administrative officer of Triad HealthCare Network, a physician-led accountable care organization based in North Carolina, stated in the Premier relase. “We call on the Administration to provide more details on the emerging alternative payment models to help inform the best path forward for our system.”

Next Steps

Dig Deeper on Value-based care and reimbursement

xtelligent Health IT and EHR
xtelligent Patient Engagement
xtelligent Virtual Healthcare
Close