Healthcare Revenue Cycle Management, ICD-10, Claims Reimbursement, Medicare, Medicaid

Value-Based Care News

46% of Providers Unsure About Value-Based Purchasing Impact

Only about 12 percent of healthcare providers and staff said that value-based purchasing would positively impact their healthcare revenue cycles, a survey revealed.

About 46 percent of providers and healthcare staff were uncertain how value-based purchasing would impact their revenue cycles, a survey showed

Source: Thinkstock

By Jacqueline LaPointe

- Value-based purchasing is not a new term for many providers, yet 46.4 percent of healthcare providers and leaders are still unsure how the shift away from fee-for-service payments will impact their revenue cycles, a recent Physicians Practice survey stated.

Out of the 1,124 respondents, only 12.5 percent said that the value-based purchasing would positively impact their healthcare revenue cycles. But another 29.4 percent stated that it would negatively affect their bottom lines.

How Value-Based Purchasing Will Affect Healthcare Revenue Cycles

Source: Physicians Practice

Some of the uncertainty and negatively around value-based purchasing may stem from a lack of model participation. The survey revealed that 35 percent of providers and leaders expect only 1 percent to 10 percent of their 2017 revenue to come from non-fee-for-service contracts.

The second most popular response was no revenue from value-based purchasing contracts with 25.7 percent.

2017 Revenue From Value-Based Purchasing Predictions

Source: Physicians Practice

Despite lackluster value-based purchasing revenue predictions, researchers noted that providers are slowly progressing with the shift away from fee-for-service. While a little over one-third of providers and leaders anticipate up to 10 percent of this year’s revenue to come from value-based purchasing contracts, this figure is up from just 18.4 percent in 2015.

The survey report stated that providers may not anticipate large portions of their 2017 revenue to come from value-based purchasing because many private payers have yet to shift away from fee-for-service contracts.

The AMGA recently reported similar concerns with value-based purchasing adoption among private payers. A December 2016 survey revealed that 18 percent of healthcare leaders had no access to risk-based value-based purchasing products in their market.

Another 46 percent said there was only 1 percent to 19 percent of private plans offering risk-based contracts in their market.

With limited value-based purchasing options, many providers in the Physicians Practice survey are reconsidering their organization’s structure. About 34 percent of participants said they will become an employed physician or retire in light of the value-based purchasing transition.

Many providers are also looking into more value-based purchasing options to better manage the payment shift. Approximately 32.3 percent stated they plan on participating in a pay-for-performance model, 26.7 percent said they will join an accountable care organization (ACO), and 20.3 percent anticipate becoming a patient-centered medical home. Another 30 percent are considering a shift to a direct-pay model.

Other top considerations for managing the value-based purchasing transition included shifting to a concierge medicine model and adding ancillary services.

While some providers are adding more value-based purchasing models, the slow shift away from fee-for-service reimbursement indicated trouble for MACRA participation. Roughly 31 percent of respondents stated that they are mostly fee-for-service and not prepared for MACRA. 

MACRA Readiness Chart

Source: Physicians Practice

Even more shockingly, another 19.6 percent of participants did not know what MACRA was.

While about one-half of providers and leaders are either unprepared or uncertain, the other half was split on how they are preparing for the new value-based purchasing program. Around 20 percent of respondents said they implemented some value-based purchasing models to prepare, but they still primarily receive revenue from fee-for-service.

Another 15.9 percent said they are already mostly value-based through an ACO or patient-centered medical home and 13.1 percent stated they are completely fee-for-service but plan to switch to more value-based purchasing for MACRA participation.

The recent survey echoed similar results from other recent research. A February Health Catalyst and peer60 survey also uncovered that most healthcare executives are not ready for MACRA. Only one-third of executives said that their organization was prepared for the new program.

With some providers are feeling less than ready for MACRA participation, many more are also unsure how the program will impact their healthcare revenue cycles. Almost 60 percent of participants in the Physicians Practice survey reported that they do not know how MACRA will affect their bottom line at this point.

Few providers and leaders thought the value-based purchasing program would improve their practice. Only 9.2 percent said MACRA would streamline operations and patient care.

Another 31 percent also viewed MACRA as just “another initiative seeking the end of independence in favor of collaboration.”

Even though many providers expressed concerns with MACRA and value-based purchasing in general, healthcare organizations are in the middle of the transition away from fee-for-service. The Quality Payment Program started its first performance year on Jan. 1, 2017 and the Department of Health and Human Services still aims to tie 50 percent of Medicare reimbursement to an alternative payment model by the end of 2018.


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