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Christina Rosario

By: Christina Rosario on August 29th, 2016

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How to Transition from Fee-for-Service to Value-Based Reimbursement

Value-Based Care

Big changes are coming to how we provide healthcare services in the United States. In a bid to improve efficiencies and treat more patients more quickly with less waste, we are going to be transitioning from the older model based on fees for services to a new one that is dedicated more to value-based reimbursements.

We all have a vested interest in seeing healthcare improved in this country, and the ways we did business in the middle of the 20th century don’t apply so much to the modern era, especially when you consider the intensive networking of computers and the rise of analytics and software tools that help us move patients through the healthcare system more easily.

When you look at an enormous industry like healthcare, the challenges to improve how we provide services can appear daunting. However, professionals are devising systems to help us move forward to emphasize values over fees, going forward.

This means that the amount of money providers collect will be based not on how many times a patient visited the office or how many tests were performed on the patient, but rather on what value of care they have provided. This makes sense, since the goal of each patient encounter should be improved health, which does not naturally follow simply from ordering and documenting more tests (that may not always be warranted).

With these thoughts in mind, here is how we will transition from fee-for-services to value-based reimbursements.


Growth in Reimbursements from Medicare and Medicaid

More patients are moving over from commercial insurers to government coverage through Medicare and Medicaid.

The pace is increasing as we get closer to completely implementing the expansion to Medicaid via the Affordable Care Act, according to a recent report from HealthCatalyst.


Keeping Track of Quality Measures

You can’t see how well the system is functioning if you don’t track various indicators. To spur efficiency, there will be incentives as well as penalties. Medical providers submit quality measures information for programs including the Physician Quality Reporting System, Hospital Outpatient Quality Reporting and Hospital Quality Reporting.


Drive to Grow More Efficient

As the mix of payments comes more from the government and less from commercial insurers, medical organizations will naturally want to boost the number of patients they see.

There could be a lot more competitive pressure, prompting a hospital to become known for being a higher performing facility than others in the region in an attempt to attract more patients, especially large groups covered by local employers, noted the HealthCatalyst report.


Analytics are Essential

The added data being collected won’t do anyone any good if it just sits in databases. Analytics are therefore crucial for improving efficiency. HealthCatalyst notes we will use analytics to streamline our operations and cut down on waste while automatically keeping track of various quality measures.

It’s clear that healthcare providers are in for some big changes as the nation moves to emphasize values and results over the sheer number of tests, visits, and procedures. What steps is your organization preparing to take to transition from fee-for-service to value-based reimbursement?


Key Takeaway

  • The way we will deliver healthcare is changing in the United States, from fees-for-service to a system based on value-based reimbursement.
  • Leading the change is a growing shift of many patients from private insurers to Medicaid and Medicare.
  • With fewer patients coming in from private insurers, medical organizations will be competing for them more greatly so they can maintain better revenue flow.
  • Medical organizations will use analytics to make better sense of patient data and further drive efficiency.


About Christina Rosario

Christina Rosario is the Director of Sales and Marketing at Advanced Data Systems Corporation, a leading provider of healthcare IT solutions for medical practices and billing companies. When she's not helping ADS clients boost productivity and profitability, she can be found browsing travel websites, shopping in NYC, and spending time with her family.