The Smart Medical Practice

Is Your Medical Practice Ready for Value-Based Payments?


value-based-paymentsRight now, CMS’s value-based payments program is a murky stew of acronyms and deadlines. Here’s what it boils down to:

  1. CMS is moving away from fee-for-service payment models and toward pay-for-performance models
  2. To do that, it’s aligning the Physician Quality Reporting System (PQRS) with a value-based payment modifier (VBPM)
  3. For now, VBPM applies to groups of 10 or more eligible professionals (EPs). However, by 2017, the VBPM will apply to all physicians

Clearly, physicians who have not paid much attention to quality measures need to start now. Beginning next year, EPs who do not successfully report to PQRS will face a 1.5% penalty in their covered professional services. In 2016, the penalty (which CMS calls a Value Modifier payment adjustment) increases to 2%. Note that the penalty will not be applied to a group of physicians if one or more in the group participates in the Pioneer ACO Model, the Medicare Shared Savings Program, or the Comprehensive Primary Care Initiative.

So, other than reporting to PQRS, how should physicians prepare for the shift to value-based payments? The first step is to increase pricing transparency. Your office should be prepared to provide patients with a real-time estimate of their out-of-pocket expenses for medical procedures you are recommending. This is a tall order for many practices and requires a fully integrated revenue-cycle management system that allows your front-office staff and billing staff to work together to inform patients.

Another preparatory step is to talk to your non-government payers about value-based payment opportunities. It’s important to understand what reimbursement methodologies they’re considering and what incentives may be available as a reward for efficient care.

Of course, to prove that efficiency, you’ll need to be able to show how your practice performs against payer- and/or government-based quality measures. For example, many payers have begun measuring how well practices control the costs of caring for patients with chronic conditions such as diabetes. With a sophisticated EMR, practices can easily track the health status of numerous patients with various chronic conditions. That EMR can also help your team provide more coordinated care to patients, boosting quality of care and efficiency.

Finally, today’s integrated systems make it easy to reach out to patients to further engage them in their own care. This includes automated reminders about appointments and prescription refills, alerts to front-office staff when referrals are not followed up on, and patient portals that allow robust interaction between patients and clinicians.

With penalties beginning soon and rising next year, it’s time to light a fire under all your value-based activities, from quality measurements to pricing transparency.

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