medical reimbursement model

February 10, 2017

bundled-payments-guide-ad-retouched-400-pxSomeone recently quipped, “I’m all in favor of progress as long as I don’t have to change.” Today, it is a foregone conclusion that progress in healthcare requires hospitals to increase measurable quality and streamline costs. This combination is essential to surviving and thriving in the emerging value-based healthcare landscape. So how does this impact reimbursement for services? What changes are required for this type of progress?

Among myriad other challenges, changes in reimbursement models are driving changes in operations, including data collection and reporting. Providers are being encouraged and incentivized to implement value-based care (VBC) that emphasizes cost savings and quality outcomes instead of the traditional fee-for-service (FFS) reimbursement model that pays according to the number of procedures performed. The idea is that when hospitals have financial incentives to be accountable for patient outcomes, then the comprehensive focus on quality will result in overall lower costs.

Transitioning from FFS to VBC may be especially difficult for ORs with the high cost of procedures, but several strategies can help clear the path to progress.

Up Your Game on Teamwork
While physicians are accustomed to independence, to support VBC they also must engage in closer communication and coordination with other care providers and hospital personnel. Could some trays or packets be streamlined? What can be standardized without compromising quality, or possibly improving quality?

Think Outside the Hospital
You don’t have to do everything yourself. You don’t re-roof your own house unless that’s your expertise; instead, you find a good contractor. Similarly, you don’t have to handle every specialized function of your hospital with your own in-house staff. Examine your existing processes and procedures to see where a third party—one that can bring significant expertise and quality data to support your VBC strategy—might make sense.

Dive into the Details
Many large opportunities to control costs have already been implemented. Now, healthcare providers need to examine their processes for the small things that can add up to big differences. Are you starting cases on time? What’s your room turnover rate? Are you able to compare your performance to your peers? This is data at work for your future dollars. Track it. Measure it. Use it.

With increasing frequency, accountability in healthcare is required. As reimbursement becomes more contingent on VBC, addressing operational and reporting challenges will be essential to the financial health of your OR, and if CMS continues with plans to use 2017 as the performance year for determining clinician payment adjustments in 2019 under MACRA, then today’s performance data collection is already vital. All the major reimbursement models require significant data infrastructure to ensure that the applicable information is collected and analyzed in order to negotiate rates, verify performance measures, and ultimately achieve maximum reimbursement. Providers who can track the data can confirm their accountability and maximize their revenue.  Under VBC, progress means “prove it.” And for those who can prove it, weathering the change will be much less painful.

To learn more, get our free guide to Understanding New Reimbursement Models and How They May Impact Your Hospital and OR.