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Limited Healthcare Payment Incentives Challenge Care Management

Capitated payments under Medicare Advantage plans presented an opportunity for effective care management, but limited healthcare payment incentives stood in the way for providers.

Providers cited a lack of healthcare payment incentives for care coordination as a top care management challenge

Source: Thinkstock

By Jacqueline LaPointe

- Misaligned healthcare payment incentives topped the list of challenges providers and payers faced when implementing effective care management programs under Medicare Advantage plans with capitated payments, a recent Robert Graham Center for Policy Studies in Family Medicine and Primary Care report stated.

“Absent coordination of incentives, care management programs often result in offices hosting multiple care managers,” researchers wrote. “Different care managers can run services and inclusion criteria. This leads to confusion for both the patient and provider, and distraction from the objectives of each program.”

Using data from a literature review, expert insights, and site visits to successful models in the field, researchers found that risk-based capitated payments under Medicare Advantage plans offered the greatest opportunity to advance care delivery and decrease healthcare costs.

Capitated payments under Medicare Advantage plans presented the opportunity because the claims reimbursement model facilitated provider and payer alignment.

“The incentives inherent in Medicare Advantage’s capitated (fixed) monthly payment for patients encourage providers and payers to work together and share data at the level of population health and in real time for individual patient care,” the report stated. “These incentives align to enable providers to think creatively about delivering care and innovate.”

Under the capitated payment structure, providers had more flexibility to develop care management programs that included individualizing treatment plans according to patient needs and sending patients to the appropriate provider and care setting.

The prospective component of Medicare Advantage capitated payments also permitted healthcare organizations to invest in practice transformations to implement care management programs. With prospective payments, organizations implemented updated healthcare staffing, communication solutions, and data analytics tools.

However, interviewees from provider and payer organizations cited healthcare payment incentive issues as an issue with achieving a care management goal. A common theme throughout the interviews was that claims reimbursement and payment structure was the driver of care delivery and care team composition.

Without proper healthcare payment incentives, the studied care management programs encountered obstacles with coordinating care across all facilities.

Interviewees also identified limited health IT harmonization across inpatient and outpatient settings as well as between care management applications and the EHR systems as top issues facing care management implementation.

To align healthcare payment incentives with care management programs, researchers suggested the following healthcare payment reforms:

• Incentivize the use of risk stratification to pinpoint high-need, high-risk patients

• Reimburse for coordination by primary care for each managed patient

• Implement incentives for developing care management teams that include appropriate personnel, such as a registered nurse, social work, or community home worker

• Align differing claims reimbursement systems and benefits for dually eligible individuals and patients with multiple chronic diseases by adopting value-based capitated payments

• Provide flexibility in claims reimbursement and coverage to ensure providers can treat patients at the most appropriate care setting and offer additional benefits when necessary to meet care goals

Additionally, healthcare stakeholders should keep in mind that the four successful care management models studied indicated that payer flexibility and provider empowerment were critical to effective programs. The models suggested that allowing providers to focus on aggregate healthcare costs and quality outcomes resulted in effective care management programs.

While incentivizing care management via appropriate healthcare payments is key to implementing effective programs, researchers also called on healthcare stakeholders to continue testing care management models. The models should include value-based incentive payments, promote a culture of care management, improve team-based care and communication, individualize patient care, and foster trust between payers, providers, and patients.

In addition, stakeholders should assess outcome and cost performance differences between health plans and provider organizations that use care management models and those that do not. They should also expand provider value-based and risk-based provider contracts for Medicare Advantage that include care management, researchers suggested.


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