The Many Changes Coming Around Value Based Pricing
There are many changes coming around Value Based Pricing Medicare/Medicaid lines of business. I’ve been speaking with many health plan clients over the last several weeks about it… is your plan ready?
What is Value Based Pricing?
Value Based Pricing is a big change where provider reimbursement is going from Fee for Service to being paid on the provider’s quality care for members. So no more being reimbursed on volume of care, but being reimbursed based on the quality of care they are providing. This change is bringing to the forefront the idea that there will be better care for the members while reducing cost of care.
Who and What Does this Impact?
The effect of Value Based Pricing is quite wide, affecting Health Plans, Providers, Facilities and more. This change specifically affects Medicare as well as Medicaid populations.
Here are Three Top Items to Consider
Key Point 1
Switching to Value Based Pricing will be more complex than the normal Fee for Service reimbursement.
Key Point 2
For providers, the change is on reimbursement. Providers will no longer receive reimbursement payments based on the number of visits. Instead, now payments will be based on the quality and value of care the providers are delivering, ultimately driving much better care at a lower cost.
Key Point 3
Value Based Pricing is aimed to help shift the revenue mix for the rising costs of Medicare and Medicaid.
There are Four Health Plan Challenges that Lay Ahead
Changing/Re-Contracting with the health plans’ provider networks to get away from Fee-for-Service contracting into the Value Based Pricing model.
Value Based reconciliation is a new type of reconciliation that is complex and will need to be developed.
There will be a whole set of quality measures that will need to be tracked.
There are many factors that need to be reviewed for plans focusing on Medicare and Medicaid to optimize their margins with the reduced payments from Medicare and Medicaid.
Health Plan Readiness
Are You Ready?
Are you ready for re-contracting with providers, including contract and network changes?
Do you have a solution for creating, storing, reconciling and reporting to CMS the newly defined quality measures?
Do you have a solution for optimizing margins due to the reduced payments from Medicare and Medicaid?
Because of reduced payments from Medicare and Medicaid, health plans must be more efficient in operations to lower their costs.