Many health plans still use fee-for-service (FFS) payments. This system pays for services by number, not results. Fee-for-service promotes more tests and visits but does not reward better health. Changing to value-based care means redesigning billing so payments depend on quality and patient health.
Maria Ansari, MD, CEO of The Permanente Medical Group, says value-based care focuses on managing the health of groups rather than one-time treatments. Still, many health plans and doctors find it hard to leave the old system. Almost 60% of US doctors now work in value-based programs like Accountable Care Organizations (ACOs). This shows some progress but also mixed payment types remain common.
Value-based care needs timely and accurate data to check health results and costs. Health plans find it hard to combine data from claims, electronic health records (EHRs), and wellness programs. When data is missing or scattered, it’s tough to understand patient groups or align providers.
For example, self-funded health plans have trouble spotting high-risk patients and checking if care helps them. Studies show investing in IT systems that work well together and strong data analysis is needed. Without smooth data sharing, managing population health and care coordination is harder.
Many providers do not trust insurers and worry about changes to their work and pay. In the past, doctors and insurers often disagreed and focused on money instead of working together. Roy A. Beveridge points out that this distrust is a big hurdle to value-based care.
Laura E. Happe says that the relationship must move from just business to one based on trust and cooperation. Health plans should share clear data, give feedback often, and work on shared goals to improve patient health.
Aligning providers also means renegotiating contracts and creating payments that reward quality instead of volume. These contracts are often complex and slow down adopting value-based payments widely.
Doctors and health plans say the paperwork and rules make value-based care hard. Providers must prove they meet quality targets, adjust for risks, and submit correct claims. Many billing codes still suit fee-for-service and don’t cover team or virtual care well.
Behavioral health faces special problems with not enough workers and billing systems that don’t fit care coordination or online visits. New billing codes from CMS for integrated care have faced mixed responses because they are complicated.
Some solutions include using peer specialists, flexible staffing, and working with schools for training. But growing these solutions while doing value-based care is still difficult.
Even with lots of data, no single system measures value-based care success for all. Different plans use different methods based on where they are and what they need. For example, the University of Utah’s “value equation” and the STEEEP framework (safe, timely, effective, efficient, equitable, patient-centered) offer ideas but are not rules everywhere.
This lack of standard ways to measure makes comparing results and improving care harder. It also makes it difficult to know how much value-based care helps the whole population.
Rules from the government add more difficulty. Health plans must follow federal and state laws, including ones for Medicare Advantage and Medicaid. A recent Medicare Advantage report showed slower growth and more competition that plans must handle carefully.
Also, new policies like Medicaid work requirements may cut coverage for millions. This could make it harder for some people to get care and hurt value-based care results at the population level.
Health plans need clear and organized steps to meet these challenges and make value-based care work well.
Health plans can lower provider resistance by building trust beyond just payments. Sharing clear and useful data on time helps teamwork. Laura E. Happe says insurers should give providers data tools and care coordination systems to help decisions.
Models where both sides share risks and rewards improve cooperation. Some groups have created national guides and networks to make value-based contracts easier and more common.
Strong Health IT systems support value-based care success. Spending on compatible EHRs, claim platforms, and health analytics lets plans gather data well. This helps find high-risk patients and measure real results.
Integrated behavioral and primary care often use Health Information Exchanges (HIEs) and IT staff in clinical teams to improve communication. Telehealth and virtual care expand access, especially where workers are few.
Predictive analytics also help health plans use resources smartly and spot patients who need preventive or chronic care.
Automated billing and reporting cut down paperwork for providers. CMS added new billing codes for integrated care, but many do not use them because they are complex.
Making workflows simpler, clear instructions, and easy tools can improve participation. Adding admin support to care teams lowers pressure on clinicians, helping with job satisfaction and less burnout.
Health plans should also consider other payment types like ACOs, bundled payments, and pay-for-performance that link money to quality goals clearly.
Fixing workforce shortages in behavioral health and care coordination takes planning. Programs like fellowships, internships, and school partnerships build future workers trained in integrated care.
Peer specialists and flexible staffing add to current resources and help chronic care, which improves patient involvement and follow-through.
Health plans do better when they use consistent frameworks for quality and value that match national standards. While no one measure fits all, tools like the University of Utah’s “value equation” and STEEEP give structured ways to decide what to measure.
Tracking health results important to patients—like ability, comfort, and calm—supports patient-centered care. Using methods like time-driven activity-based costing shows how much care costs at the patient level, making costs clearer.
Following a small set of clear, outcome-focused measures by patient group helps clinical teams check performance and change care as needed.
Self-funded employer health plans are using value-based care ideas more to help employees stay healthy and save money. Employers use predictive data and insights to work with health plans and providers for focused care.
Health plans can team up with employers using shared savings and bundled payments to prove value. Open reporting and clear communication encourage shared responsibility and investment.
AI and automated workflows are important tools to help health plans solve problems of value-based care.
AI helps health plans study large amounts of data fast and find patterns hard for humans to see. Predictive analytics spot patients at risk for bad outcomes or costly hospital stays. This helps plans focus care where it’s needed most.
For example, Medicare Advantage programs use AI for risk adjustment and Hierarchical Condition Category (HCC) coding to set payments that match patient complexity. ForeSee Medical’s AI and natural language processing speed up coding for better reimbursement and care fit.
Automation makes claims handling accurate and efficient. As payments shift from fee-for-service to value-based, claims must meet quality standards. Automated steps cut errors and flag claims needing review, keeping payments honest.
This cuts down work for plans and providers and speeds up payments.
AI in EHRs can give clinical decision help by offering evidence-based tips and next steps. This fits treatment with value-based care goals and helps improve health while controlling costs.
For behavioral health, virtual care platforms with AI assist small practices by sharing psychiatric expertise. This supports care coordination and increases capacity in places needing more care.
Automatic messaging helps with patient follow-ups, appointment reminders, and screening checks. This raises use of preventive care and chronic disease care, key parts of value-based care.
Automated steps also improve coordination by standardizing referrals, screenings, and outcome tracking. This lowers care differences and boosts teamwork.
Clinician burnout makes value-based care harder to do well. Technology that automates routine admin tasks lets doctors spend more time with patients. Smaller patient groups encouraged by value-based care combined with smooth workflows can boost job happiness and lower turnover.
Maria Ansari, MD, says that team-based care led by physicians and supported by technology helps this progress.
Medical administrators and IT managers in the U.S. face special challenges and chances when moving their organizations to value-based care. Because payer rules, laws, and Medicaid vary by state, local solution changes are often needed.
Administrators must pick Health IT vendors that support data sharing, real-time reports, and AI tools. Aligning contracts with payers and providers for clear risk and reward sharing needs good negotiating and market knowledge.
Staff training is important for both clinical and office workers to handle new workflows and documentation. IT managers should focus on linking systems and keeping patient data safe under new care coordination models.
Since Medicare Advantage covers many seniors in value-based plans, administrators should watch CMS rules and payment updates closely. Using data to manage chronic diseases and prevention will be key.
Health plans in the US are moving through a complex change to value-based care. By solving data problems, improving provider teamwork, easing paperwork, growing the workforce, adopting clear measurement systems, and using AI and automation, these groups can better put value-based care into action. Medical administrators and IT staff have important roles in making this change succeed, helping patients, providers, and controlling healthcare costs.
Value-based care is a healthcare delivery model that incentivizes providers based on patient health outcomes rather than the volume of services provided. It focuses on improving the quality of care while controlling costs.
Value-based care shifts revenue cycle management from fee-for-service to performance-based metrics, requiring providers to adapt billing and collections processes to meet quality and efficiency benchmarks.
Lynn Garbee is a Partner at HealthScape Advisors, with over 25 years of experience in health plan leadership, specializing in value-based care program design and operationalization.
Lynn has extensive experience in strategy development and execution within health plans, particularly in managing value-based care outcomes and reimbursement strategies.
Technology enables data integration and analytics necessary for tracking patient outcomes, managing care transitions, and improving operational efficiencies through revenue cycle management.
Value-based care requires the development of innovative reimbursement strategies that prioritize patient outcomes, leading to new contracts that align financial incentives with quality care.
Health plans encounter challenges in aligning provider networks, ensuring accurate data collection, managing care quality, and navigating regulatory changes in a value-based care environment.
Claims operations are critical in ensuring payment integrity and efficient reimbursement processes, facilitating the transition from volume to value-based reimbursement models.
Medicare Advantage plans often include value-based care strategies as they seek to improve patient outcomes while managing costs, reflecting shifts in how care is delivered and reimbursed.
Future trends may include increased payer-provider collaboration, advanced data analytics for care management, and innovative payment models designed to enhance care quality and patient satisfaction.
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