5 Measures to Consider for a Value-Based Distribution Model

Volume-based, fee-for-service reimbursement is gradually being replaced with value-based reimbursement. In fact, CMS recently announced a target of 50 percent of Medicare payments tied to quality or value through alternative payment models by 2018. A Clinically Integrated Network is one type of model that is helping move the industry from volume to value. In the CIN, providers collaborate to achieve enough integration at the clinical level to contract jointly with payers and reach the Triple Aim — better patient care, better population health, and lower cost of care. 

One factor that helps ensure the success of the CIN is the method by which the organization compensates participating providers for furnishing high quality, cost-effective care. In this environment of delivery and payment system reforms, distribution models based on the value contributed to the organization by its providers are better positioned to achieve organizational objectives.A value-based distribution model is the centerpiece of the CIN. Successful integrated organizations begin early to carefully plan the distribution model to be flexible, transparent, and equitable. Doing so requires subjectivity and consideration of the following five items, just to name a few:

1. Rewards should represent the relative contributions to overall value each provider and provider class delivers. CIN members normally represent a diverse group such as physicians, hospitals, rural health clinics, community health centers, and post-acute care providers. The value afforded by each class of provider or individual provider may be significantly different and rewards should relate to the value.

2. Pooling distributable value by provider class is critical since provider classes ultimately share the reward system based on relative contribution toward overall value. Historically high-cost providers may not represent the largest contributors to high quality at the lowest cost. For example, successful providers that focus on wellness and reduce expensive subspecialty care and readmissions drive cost savings. In a clinically integrated organization with an effective value-based distribution model, this value is recognized and used to reward appropriate, high-quality, cost-effective care.

3. Providers should be incentivized with goals that help meet the CIN objectives as well as the Triple Aim. The system should encourage cost-effective care, collaborative care, and clinical outcome measures. For example, better post-discharge care management can reduce hospital readmissions and reduce or eliminate reimbursement penalties while also decreasing direct and indirect patient care cost. On the other hand, improved screenings can enhance patient wellness and reduce the high costs of catastrophic disease. These can be measured at both the individual provider and organization-wide levels, provided that the right efficiency drivers are identified. Efficiency drivers might include reductions in length of stay, C-section rates, or high-cost ancillaries such as advanced imaging. 

4. Teamwork measures can be established to achieve collaborative care goals necessary to reach the overarching organization objectives. Collaboration, coordination, and communication are essential. Transition along the fragmented points of care in the health care delivery model is crucial to successfully manage care in the clinically integrated environment.

A care team comprised of primary care physicians, anesthesia providers, and surgical specialists may be assigned responsibility for the care of surgical patients, while care management representatives from acute and post-acute care facilities have responsibility for working with providers through surgery, post-discharge care, and rehabilitation, including communication between surgeons and PCPs. Accountability for the providers responsible for transitioning care helps avoid duplicate service and maintain efficiency.

5. Quality measures should employ nationally recognized, evidenced-based best practices for care from sources such as the Agency for Healthcare Research and Quality (AHRQ), the National Committee for Quality Assurance (NCQA), and the National Quality Forum (NQF). Including input from clinicians committed to the success of the project will help create measurements that are applicable to the CIN and associated providers.

Value-based distribution models should be clear, easily understood, and practical. While not the sole means for motivating providers, basing the reward system on measures that support the objectives and goals of the clinically integrated organization is but one important step in the overall effort toward unifying providers in providing high quality, efficient patient care.