Effective Strategies in Urology for Responding to the Accountable Care Reimbursement Movement

Urology Practice Management - October 2016, Vol 5, No 5 - AUA Meeting Highlights
Charles Bankhead

Urology practices must develop strategic plans to respond to the move toward the accountable care reimbursement structure or risk being forced into a position of providing care that is more costly and unsustainable, according to 2 management consultants from the Coker Group in Alpharetta, GA, who presented during the 2016 American Urological Association Practice Management Conference.

Healthcare reform and associated economic pressures “have changed the rules” for virtually all healthcare providers, and providers must reinvent strategic approaches and care delivery models in response to these changes, said Max Reiboldt, CPA, President and Chief Executive Officer, the Coker Group.

“There are many ways to address the ongoing changes in the industry without making significant concessions. It is important to understand that while these changes may seem intimidating, they provide a unique opportunity to capitalize on the changes in the market,” said Mr Reiboldt.

In recent months, 5 methods have emerged most often as providers seek to respond to the accountable care era, including:

  1. Alteration of next-generation compensation structures
  2. Introduction of second-generation alignment models
  3. Development of a care process design system
  4. Establishment of a population health management system
  5. Fee-for-value–based reimbursement models.
Alteration of Next-Generation Compensation Structures

In a 2015 survey of physician compensation by Medscape, of more than 19,500 physicians surveyed, 63% were employed, and more than 30% said that they participated in accountable care organizations (ACOs). Value-based payments accounted for nearly 40% of all commercial payments to hospitals.

“In January 2015, HHS [the Department of Health & Human Services] pledged to funnel nearly half of Medicare’s nonmanaged care funds—approximately $360 billion—to accountable care and other new payment arrangements by 2018. Since then, Aetna, Blue Cross, and other major commercial players have followed suit,” said Aimee Greeter, MPH, Vice President of the Coker Group.

One result of this transition has been the emergence of nonproductivity incentives, driven primarily by a shift in focus from volume to value. “Value drivers” are often tied to quality-based reimbursement initiatives. However, because of the traditional reimbursement structure, volume remains important to the majority of healthcare organizations.

“In numerous instances, historical compensation structures have been inherently flawed. A number of first-generation contracts are based on incentives tied to work relative value units [wRVUs], or simply large amounts of guaranteed pay. While wRVUs are important in driving productivity, they do not directly relate to realized reimbursement. Hospitals are now considering what is the most effective way to renew contracts,” said Ms Greeter.

The challenge is to create a responsive model that blends fee-for-service and fee-for-value payments. The development of this model begins with providing a reasonable base level of compensation. A focus on wRVU productivity should be retained without overemphasizing it. In addition, provide a means to incentivize nonproductivity criteria, such as quality and patient satisfaction. Finally, assess the merits of a situation before determining stipends.

Second-Generation Alignment Models

A clinically integrated network (CIN) or a clinically integrated organization (CIO) is the future of emerging delivery models. Finding a “happy medium” between hospital and physician control represents the focus and the challenge, said Ms Greeter.

The transition to a CIN or a CIO comprises 2 steps—alignment and clinical integration. Of these 2 steps, alignment is the “primary vehicle” to the future. The development of a CIO/CIN or an ACO requires collaboration among many stakeholders, possibly including competitors. Without sufficient alignment and harmony among practice partners, quality of care and population health management will likely suffer, said Ms Greeter.

“The primary focus of a CIN/CIO is to create a high degree of interdependence among participating providers through care coordination and data transfer, sharing, and application. It is a network of interdependent healthcare facilities and providers that collaboratively develop and sustain clinical initiatives, performance metrics, and goals on an ongoing basis,” she said.

“It is patient-centric, its structures may vary from provider to provider, and it is heavily reliant on a robust IT [information technology] infrastructure. Centralized contracting is an essential element,” Ms Greeter added.

Second-generation alignment models typically involve the following 4 key, heavily negotiated areas:

  1. Compensation model
  2. Governance structure
  3. Noncompete clause
  4. Income distribution plans.
Implementing the Care Process Design System

The care process design system is a systematic methodology for developing refined care pathways that reliably and consistently drive high-quality, low-cost care, while generating relevant information to foster continuous clinical and process improvement, said Ms Greeter. The care process design system strives to create a practice environment in which physicians understand their organizational impact and their role in finding ways to reduce costs while improving quality.

The care process system comprises the following 4 key components:

  1. Mapping and designing common care process units and cost-accounting care process units by means of time-dependent, activity-based cost accounting
  2. Monitoring care process units on an ongoing basis to achieve data-driven improvement in value
  3. Linking care process units to create “integrated practice units” across the continuum of care
  4. Marketing high-value care process units and integrated practice units to payers and employers.

The development of the care process design system requires a multidisciplinary design team that is tasked with developing best practice guidelines and determining case rate and outcomes measures. Team members include physician leaders, financial experts, historical patients, clinical and nonclinical experts, and process and improvement experts.

“The care process design system…is the culmination of value producing efforts and works to increase the value of care. As will all initiatives of the accountable care era, the true struggle lies in affecting the way care is delivered. Once an organization has established the compensation, structure, and reimbursement models, it is necessary to consider how infrastructure can be developed to allow for successes in all areas of the CPDS [care process design system],” said Ms Greeter.

Establishing a Population Health Management System

According to the American College of Healthcare Executives, population health refers to “health outcomes and their distribution in a population.” Population health management includes an expanded primary care platform, optimized care, proactive patient outreach and engagement, the conversion of data into actionable intelligence, the allocation of resources to the areas of greatest need, and an increased emphasis on prevention and wellness.

“There must be a commitment to population health management across the continuum of care,” said Mr Reiboldt.

Specific initiatives to effect organizational change include mapping care across the continuum to enforce care coordination, working with community partners, committing resources to population health, sharing data, and participating in health information exchange. Physicians should receive specific training in population health management.

Capitalizing on Fee-for-Value Models

Recent government actions and statements leave no doubt that new and evolving value-based reimbursement models will become permanent fixtures of healthcare de­livery, said Mr Reiboldt. Although organizations may not have a choice about participation, they must still consider internal strategies before becoming overly invested in a program, particularly commercial programs.

Value-based reimbursement models present challenges but also opportunities for increased reimbursement. It is incumbent on organizations to identify and emphasize traits, services, and characteristics that can infuse the value proposition into their organizational framework.

Once opportunities have been identified, organizations must develop strategic solutions to change the way care is delivered to capitalize on the opportunities, said Mr Reiboldt.

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