How to Transition From Fee-for-Service to Value-Based Care

With skyrocketing healthcare costs and stagnant health outcomes, it’s really no wonder that patients have grown increasingly dissatisfied with the care they’re receiving. In response, there have been repeated calls to overhaul the traditional Fee-for-Service payment model that most practices use today.

Enter Value-Based Care, an outcome-driven model that has many healthcare professionals feeling hopeful about the future of healthcare in the US. At the same time, such a big shift inevitably comes with some uncertainty. That’s why today, we’re delving into all things Value-Based Care with some practical tips for a smooth transition.

A Tale of Two Models

What is Fee-for-Service?

Fee-for-Service (FFS), the payment model currently used by the vast majority of practices in the US, reimburses providers based on the quantity of services they perform, regardless of patient outcomes. FFS offers significant financial stability for practices, but falls short when it comes to improving patient outcomes and lowering overall healthcare spending. These shortcomings have inspired a shift toward outcome-based care that incentivizes providers to keep their patients healthy and out of the hospital.

What is a Value-Based Care Model?

A Value-Based Care (VBC) model motivates providers to deliver high-quality care using a preventive, holistic approach—ideally cutting down on overall healthcare spending in the long run. (Check out our previous article for a more in-depth look at the differences between FFS and VBC.)

Four Skills to Master for VBC Success

The thought of abandoning a stable, tried-and-true FFS model for a less predictable VBC model has (understandably) left many healthcare professionals feeling overwhelmed and apprehensive. To start, here are four specific skills you should have a solid grasp on when mapping out a transition to Value-Based Care:

1. Empanelment: Identify and assign active patients to the appropriate care teams or clinicians, whereby establishing solid relationships that allow for continuity of care. The panel should be updated continuously to reflect patient life changes, such as moving or switching insurance plans.
2. Risk stratification: Be able to identify high-risk patients and help them avoid complications and hospitalizations.
3. Panel management: Proactively manage conditions by providing care outside of regular office visits.
4. Collaborative care: Collaboration ensures alignment of all members of the care team. Care teams should aim to meet daily to discuss the following topics:
   1. High-risk patients
   2. Safety issues
   3. Scheduling for clinicians and staff
   4. Scheduling for patients
   5. Roadblocks
   6. Any referrals needed for the day
   7. Follow-up visits

Ready to Get Started?

Those who are ready to transition to a VBC model have a few options for getting started:

• Sign up for a program through commercial insurance
• Join an Accountable Care Organization (ACO)
• Less common: Join a nationwide model funded by large employers, venture capitalists, or payers

Your VBC Implementation Checklist

Succeeding under a VBC model hinges heavily on adequate planning. Below is a checklist we put together to help you transition more smoothly.

1. Inform Stakeholders:
   Ensure that all stakeholders involved are properly informed on what VBC is and its numerous benefits.
2. Identify Shared Patient Health Needs:
   The current healthcare system fails to revolve around greater patient needs due to a lack of coordination and integrated services. Under a VBC model, however, care centers around segments of patients who have shared health needs—for example, a segment could be made up of elderly patients with multiple chronic conditions. This approach allows care teams to anticipate routine patient needs and improve care accordingly.
3. Create a Holistic Strategy:
   As part of a holistic approach, care teams should come up with a strategy that includes addressing both clinical and non-clinical needs. For example, an oncology clinic might consider assisting with transportation for patients who struggle to make it to their regular chemotherapy appointments. Addressing non-clinical needs helps address gaps in care that could lead to worsening health later on.
4. Define Performance Metrics:
   Performance metrics could include patient readmission rates or satisfaction scores, for example. Regularly tracking these metrics and extracting relevant insights from the data is an important aspect of delivering high-quality care.
5. Put Together a Diverse Care Team:
   Care teams should be interdisciplinary, consisting of both clinical and non-clinical staff as to personalize each patient’s care more effectively.
6. Educate and Train Staff:
   Ensure that staff members stay up to date on best practices for VBC by nurturing a work environment that promotes continued learning and adaptability as the healthcare system evolves.
7. Mitigate Risk:
   VBC involves taking on more financial risk than a traditional FFS model, which is why it’s critical to develop strategies to mitigate said risks. As such, it’s important to first assess an organization’s risk tolerance and establish risk-sharing agreements with payers, which helps to distribute any financial impact.
8. Analyze Health Outcomes and Associated Costs:
   Improving care requires analysis of health outcomes, along with the resulting costs. Health Information Technology (HIT), a helpful tool for implementing VBC, provides data required to measure the quality of care. Additionally, interoperability of systems ensures seamless data exchange, leading to improved communication and coordination between care team members.

Three VBC Payment Structures

VBC payments are typically structured in one of three ways:

1. Care coordination: Payments are made up front per patient and are intended for non-face-to-face visits.
2. Shared savings: Payments are made retrospectively after certain performance metrics have been satisfied.
3. Fee-for-Service: Pay per encounter (more on this below).

Is a Hybrid Model the Right Fit?

For some providers, completely abandoning FFS and jumping straight into VBC too quickly can result in complications that negatively impact care quality and revenue. That’s where a hybrid model can come in handy. A hybrid model detaches revenue from the volume of services rendered while still allowing practices to utilize the FFS billing structure they’ve come to rely on for their bottom line. Newer care management programs, for example, often incorporate VBC goals with an FFS billing structure that reimburses for time-based care delivered to patients with chronic conditions.

Make the Transition Seamless

Transitioning from Fee-for-Service to Value-Based Care might feel like an exceptionally daunting task, but with the right tools and knowledge, your practice can provide high-quality care while maximizing reimbursement opportunities. Take advantage of an advanced Chronic Care Management platform that supports both FFS and VBC programs and transforms workflows with AI-driven insights so you can seamlessly adapt to the ever-evolving healthcare landscape.

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