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Health Plans See Positive Results With Value-Based Care Reimbursement

Value-based reimbursements have been much debated since both houses of Congress overwhelmingly passed the Medicare Access and Children’s Health Insurance Program Reauthorization Act (MACRA) in 2015, setting the stage for Alternate Payment Models in Medicare, with incentives for providers embracing pay for value. CMS has been pushing value-based reimbursement models aggressively for years, recently introducing new reimbursements for Medicare and Medicaid members to address social factors such as isolation, food insecurity, and chronic conditions.

IT executives who responded to a recent HealthEdge-commissioned survey, conducted by Survata, cited value-based reimbursement as a top reason for modernizing their infrastructure. Of 245 IT decisionmakers surveyed, 96% said that the expansion of the value-based Medicare Advantage design factors into their recognition of the need to change.

The COVID-19 pandemic has also highlighted the flaws of the Fee-for-Service, with providers of all types experiencing delay of preventative and elective medicine resulting in revenue disruption. This has combined with the wave of hospitalizations of patients creating claims and requiring more manual processing, leading to higher costs for both health plans and providers.

Market pressures to adopt value-based reimbursement create an operational imperative for health plans, and core administrative systems must have the flexibility to configure all types of value-based contracts and benefit plans, from simple incentives to risk sharing, including full capitation. Configuration must also respond to changing regulations and competitive challenges quickly and easily, with minimum disruption and at low cost.

“The ability to stand up new plans and benefits and pivot to satisfy new CMS requirements has become very, very significant for us… a few years ago our claims and data platform was very old. We are on HealthEdge today. And it’s made a difference in how fast we can turn things around.” – Ghita Worcester, Senior Vice President of Public Affairs and Chief Marketing Officer of UCare.

UCare,  a regional health plan in Wisconsin and Minnesota, has sustained a 96 percent retention rate over 20 years of proven experience with their Medicare Advantage line of business.

Another key to successful value-based arrangements is the partnership between health plans and providers, a traditionally challenging one. Health plans must not only construct value-based contracts with aligned goals for mutual success, but they must also provide actionable data on a real-time basis to their providers to avoid expensive encounters or hospitalizations. With this information, providers can quickly and confidently take key actions necessary for their patients to remain healthy.

HealthEdge customer Humana recently shared in its “2020 Value-based Care Report” that collectively, its 2.4 million Medicare Advantage members benefitting from value-based models spent 211,000 fewer days in the hospital and emergency rooms. Overall, the value-based agreements resulted in 10.3% fewer emergency room visits and 29.2% fewer hospital admissions, with a cumulative savings of $4 billion compared to original Medicare.

The premise of value-based models depends on operational readiness and data transparency. The results can be overwhelmingly positive for health plans, providers, and patients. HealthEdge customers report great success working with their provider networks to bring down costs while improving outcomes.