Over the years, healthcare reimbursement models have been evolving to address various challenges in the healthcare industry. These changes come as costs continue to rise, technology advances, and the industry shifts toward value-based care. Healthcare providers are increasingly being reimbursed based on the quality of care they provide rather than the quantity of healthcare services rendered.
Value-based payment models have been shown to improve patient outcomes and contain costs when compared to fee-for-service models. It also incentivizes the quality of patient care, which benefits patients and providers alike. As value-based reimbursement models become more prevalent, it is important for providers to understand the different types currently being implemented.
One of the most significant shifts in reimbursement models has been the move away from fee-for-service (FFS) models toward value-based care. Value-based care models focus on quality, outcomes, and patient satisfaction rather than the volume of services provided. One example of value-based care is the Accountable Care Organizations (ACOs), such as San Diego-Scripps Health. Bundled payments, where providers may do 3 services and the payor only pays for the visit, and shared savings programs are also examples of value-based care models.
Alternative payment models, or APMs, are designed to provide financial incentives for healthcare providers to deliver cost-effective, high-quality care. There are a variety of APMs that differ depending on what qualifications and features each program uses. The best example of this type of reimbursement is the Medicare Shared Savings Program.
This is a new feature that saw widespread adoption following the pandemic. The COVID-19 pandemic accelerated the adoption of telehealth which led to changes in reimbursement policies. Many payors began covering telehealth services, and reimbursement models started including virtual care. While some payors have decided to forgo covering these visits, especially as governments continue to adapt to changing pandemic recommendations, others are still reimbursing. The ongoing expansion of telehealth will likely continue to influence reimbursement models.
Patient-centered medical home, or PCMH, models encourage primary care practices to provide comprehensive, coordinated, and patient-centered care. They often involve per-member, per-month (PMPM) payments to support care management and coordination. One Medical and similar concierge practices tend to use this model. Another example is Forward, a concierge practice with a storefront in a popular San Diego mall.
Many new reimbursement models are emphasizing the integration of behavioral health services into primary care to address the holistic needs of patients. Addressing patients’ mental health conditions has been shown to positively impact the total cost of care and improve an individual’s overall health. By combining primary care with mental health resources, providers can offer a better way to encompass mental health, substance use disorders, stress-related physical symptoms, and other forms of care. Many payors, such as Aetna, have begun using this model.
Healthcare reimbursement is complex and ever evolving mainly influenced by various stakeholders, including government agencies, private insurers, the pharmacological industry, providers, and patients. With so many changes, it can be difficult to keep up, especially for providers trying to balance their patients, staff, and business.
Good Stewart Consulting can help. We offer healthcare management consulting services for healthcare organizations so they can reach new heights. With our expertise, your medical practice can stay up to date with the latest in reimbursement and healthcare models. Our consultants have experience in a variety of markets, from private practices to academic health systems.
Contact us today to learn how we can help your healthcare organization!