As healthcare regulations change, so do healthcare provider reimbursement models. With officials coming out of the woodwork to find the next solutions for America’s ever-growing healthcare needs, it’s no surprise that these models are shifting and changing nationwide. These changes will make a big difference in the future of American healthcare. Understanding different forms of reimbursement and their advantages and disadvantages can help you better figure out your healthcare organization’s revenue cycle management. The two main models between which the American healthcare network has been fluctuating are fee-for-service (FFS) and value-based care (VBC).
The fee-for-service reimbursement model is the traditional and most commonly used healthcare model in recent decades. In this model, healthcare providers charge based on individual services rendered (i.e. appointments, treatments, tests ordered, prescriptions given). Bills then list out these services separately, often making them long and complicated. This model has resulted in many providers taking on more and more patients in order to make more money and placing an emphasis on the quantity of services they can provide to their patients.
As government healthcare regulations change and public demands for better quality and easier-pay healthcare grow louder, many are trending away from this model.
The value-based care reimbursement model has been growing in popularity in recent years as patients seek out simpler and higher-quality healthcare services. In this model, reimbursement is based on the quality of care provided. It bases bills on patient satisfaction and positive outcomes rather than individual services rendered, which also makes the option for bundling payments available. Incentives offered through this model motivate healthcare providers to work together to give longer-lasting, more meaningful care and build closer relationships with their patients. In some cases, for instance, providers may actually be rewarded for outcomes in which patients don’t need to return for more appointments or treatments for a specific medical condition. This is opposed to FFS models in which providers get rewarded financially for bringing patients back in, even if doing so is unneeded. New technologies, such as telemedicine, will also undoubtedly shape the way VBC models are done.
This reimbursement model has not been without its complications, however. In places and organizations in which it is adopted, it means the model must be adapted alongside current FFS models, making the process even more complicated. In addition, FFS models will not go quietly into the night, and many physicians will undoubtedly be concerned about how VBC affects their revenue stream.
There are several different versions of value-based care. Some of these are accountable care organizations (ACOs), bundled payments and patient centered medical homes.
- ACOs are networks of providers, physicians and healthcare organizations that unite to provide the best possible care to patients. In an accountable relationship to one another and to their patients, they share in the rewards of medical savings and incentives won from positive outcomes, but also share in the risk of being penalized for negative outcomes.
- Bundled payments take the cost of each service and combine it into one “episode-based” payment. Pricing for each service is based on historical prices. This method challenges providers to find better methods of providing efficient and quality care to their patients. If providers can find a way to save money and be efficient, they can keep the savings, but if the cost is higher than expected, they have to absorb the cost themselves.
- Patient-centered medical homes (PCMH) centralize patient care through the services of a primary care physician. Providers and healthcare organizations work as a team to serve patients involved in the PCMH as best they can. This also fosters a closer relationship between patients and physicians.
Fee-for-service models may not be completely on their way out of the healthcare industry, but value-based care models are definitely pushing their way in. With government support backing VBC as a result of Medicare and ACA regulations (through the Centers for Medicare & Medicaid Services, or CMS), patients can expect to see VBC models becoming more and more popular as time goes on. VBC is friendlier to patients rather than providers overall and promotes the further improvement of healthcare policies. These ongoing trends will be worth paying attention to as VBC model techniques are tested and as healthcare regulations continue to evolve. Most states have already begun committing to adopting VBC models, and as time moves on, these models will only become more common and easier to navigate.
Additionally, with advances in technology giving patients more control over their health than ever, providers will need to stay up-to-date and in closer contact with their patients. New Medicare/Medicaid regulations are increasingly supporting VBC models, such as the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). MACRA introduced Alternative Payment Models (APMS) such as the Merit-Based Incentive Payment System (MIPS). MIPS is one program that offers rewards to those who can increase their positive patient outcomes and add efficiency to their work, and gives penalties for those who don’t.
This process will not be smooth, however. Many healthcare providers and organizations are still tied to FFS models, and it will take a lot of time and energy to make the switch.
How DECO can help
At DECO Recovery Management, we’re here to help you find solutions to your reimbursement issues. We offer customized assistance, so if you’re having trouble figuring out fee-for-service models, value-based care models or any related Medicare/Medicaid problems, we can help you understand and adopt a working revenue cycle. Contact us today!