Value Based Payments are Flourishing
Back in 2015, CMS set a goal to tie 30% of Medicare payments to alternative payment models by the end of 2016. The goal was met 11 months early. The 2016 Survey of America's Physicians: Practice Patterns and Perspectives found that 42% of physicians polled reported having their compensation tied to quality or value. The Health Care Transformation Task Force released similar results in 2016 with 41% of member providers and payers involved in value-based contracts. All of these statistics indicate that value based payments are becoming an accepted alternative to fee-for-service and will continue to grow both in the government and private sectors.
Home Health Care is a Value Enhancing Strategy
While value based payments proliferate, numerous studies have confirmed what many in the industry already knew. Home Health can play a significant role in a value improvement strategy. The latest report released by the Lewin Group analyzed home care providers participating in the CMS Bundled Payments for Care Improvement (BCPI) initiative and concluded that for congestive heart failure (CHF) patients, home health agencies (HHAs) achieved a $970 relative reduction in CHF payments for qualifying hospitalizations and the 90 days post discharge. A similar study by Dobson Davanzo and Associates examining CJR bundles concluded that when home care is the first setting after a hospitalization costs were reduced by $500.
The Implications of These Trends for HHAs
In combination, these two above trends mean changes for Home Health Agencies in the near future. While there will be significant opportunities to grow the business, there is also the potential for significant market consolidation and agency failures. As payers rely more on home care providers, there will be increasing oversight and pressure to accept some degree of risk and payments tied to performance. Agencies that can't demonstrate that they add value, will be passed over for those agencies that can as payers increasingly turn to narrow high performing networks.
The clock is ticking. It is imperative that agency's be prepared to meet the requirements of value based payments and to be a successful at-risk partner. Not only will agencies need the competencies to effectively manage patients in a cost-effective manner, have requisite management systems and technology, set sustainable rates and distribute savings, but they will also need to be able to prove they are a value added partner.
Becoming a Value Added Partner
Organizational readiness assessments are one component of successfully moving your organization to value based payments. These assessments will help you to identify strengths and gaps in current competencies and areas for improvement, but they are only one piece of the puzzle. In addition, a value added HHA must be able to clearly define its value. As high performing narrow networks become the norm, an HHA must be able to demonstrate that it is a better value partner than others in the marketplace. In short, it must have a compelling value-added story supported by data and the ability to continually improve performance. Thus, a second necessary component is a performance readiness assessment to evaluate the agency's cost and quality performance in comparison to other HHAs in the marketplace.
Every agency needs to know both its organizational readiness and its value added performance readiness in order to win in the value based payment health care market. It needs to be able to answer the following questions:
At Circumference Consulting LLC, we can help your agency answer these questions and be a winner in the value based payment marketplace. Our state of the art Organizational and Performance Readiness Assessment process can help your agency identify strengths and gaps and begin to define the parameters for value based pricing. In addition, we can help you to define your value based payment strategy and action plan, develop value based rates, develop value based partnerships, and institute an ongoing performance management process to ensure continued success. For more information contact us at: email@example.com