What Value-Based Reimbursement Really Looks Like

Value-Based Reimbursement (VBR) and Value-Based Purchasing (VBP) are terms being thrown around quite a bit, especially in the wake of the new MACRA/MIPs installments. With all the buzz, I feel like it’s a good time to write a quick VBR overview, answering the big questions: What is the real definition of Value-Based Reimbursement, what are the goals, and how can it be achieved, or at least initiated, today? If you read this and want to learn more about what your organization can be doing to get things started, feel free to email me at bill.ayres@divurgent.com.

What is VBR? VBR, or VBP, is the result of a Centers for Medicare & Medicaid Services (CMS)-initiated program to reward hospitals with incentive payments for the quality of care they give to people with Medicare, and promotes better clinical outcomes for hospitalized patients and makes their care experience better during hospital stays, according to CMS. But the more important questions end up becoming “what is changing?” and “how is this different from before?” Below, I’ve outlined some of the major differences between our traditional Fee-for-Service (FFS) model and a VBR Model.

Fee for Service—Traditional Model

  • Incentivized for quantity of services (treatments, tests, more admissions)
  • Promotes a Payer centric environment and not a concentration on Provider quality
  • Pushes more financial burden on patient (High Deductibles/Co-Payments/Plans)

Value Based Reimbursement—Next Generation Model

  • Incentivized for quality of outcomes linked to reimbursement
  • Increases IT activity to link quality outcomes to reimbursement
  • Interfaces directly with Provider Supply Chain Management (SCM) modalities
  • Promotes Patient Pricing/Care Delivery transparency

What are the Goals of CMS’ VBR Program? Below are some of the major goals CMS aims to accomplish through the VBR Program, as well as some other incentive-based programs that correlate with VBR, like as MACRA/MIPs.

  • Decrease Medical Care Costs
  • Reduce Preventive Hospital Readmissions
  • Improve Quality of Care in the Care Continuum
  • Incentives to Deliver Efficient & Effective Care
    • Designated Populations
    • Sub Populations
  • Commitment to Encourage Wellness & Preventive Care
  • Reducing Medical Care Costs
  • Encouragement of Alternative Payment Models
    • Better Care Efficiency
    • Reduce Overall Costs
  • Quality Standards: Rewards & Penalties
    • Penalties for Failing to Meet Quality Standards
    • Rewards for High Quality, Low-Cost Care

What are the Models to Help Achieve VBR? Just like anything in healthcare, there’s no one-size-fits-all solution. Below are just a few samples of the types of avenues to achieve VBR, some of which are already being implemented by provider groups and coalitions.

  • Pay for Performance (P4P)
  • Bundled Payments/Episode of Care
  • Patient Centered Medical Home (PCMH)
  • Shared Savings
  • ACOs
  • Shared Risk
  • Full Risk/Capitation Models
    • Partial Capitation Model
    • Global Capitation Model
  • Provider-Sponsored Health Plans (PSHPs)

Leave a Reply

Your email address will not be published. Required fields are marked *