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

Value-Based Care News

Uniform Operational System Key to Value-Based Payments, CAQH Says

Stakeholders should collaborate to improve operational areas like data quality, provider attribution, and quality measurement to boost value-based payments success, CAQH CORE stated.

Value-based payments

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By Jacqueline LaPointe

- The healthcare industry needs an “efficient, uniform operational system” to sustain value-based payment success, the Council for Affordable Quality Healthcare’s (CAQH) Committee on Operating Rules for Information Exchange (CORE) recently advised in a new report.

“Many features of value-based payment do not align with the current fee-for-service operational system,” the committee stated. “Indeed, proprietary systems and processes for implementing value-based payment have already begun to introduce operational variations. Without collaboration to minimize variations, the current environment is ripe for repeating a scenario that cost stakeholders billions of dollars and slowed and complicated adoption of fee-for-service transactions.”

CAQH CORE identified five areas of opportunity to streamline data needed for value-based payment success. The areas are data quality and uniformity, healthcare interoperability, patient risk stratification, provider attribution, and quality measurement.

Each of the identified areas suffers from a lack of data and process standardization, making it difficult for providers to succeed under value-based payments models. The lack of standardization also creates a patchwork of interoperable systems.

To transition the industry away from a fragmented operational system built for fee-for-service, CAQH CORE provided recommendations on applying the lessons of fee-for-service to streamline adoption of value-based payments.*

Data Quality and Uniformity

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Irregular data, or non-standardized data and data quality, emerged as a major challenge of value-based payment success, CAQH CORE reported.

“Improving the accuracy, completeness and timeliness of data and enabling easier access to high-quality data are high priorities for participants in this CAQH CORE research,” the report stated. “Going forward, although providers and health plans anticipated a genuine need for some new data elements, they believed improving the standardization and quality of data should be the overriding priority, whenever feasible.”

Specifically, stakeholders expressed irregular data concerns with provider identification.

Provider identification is key to accurate value-based reimbursement. Payers must know a provider’s specialty and relationship to the patient to determine quality and cost performance, which translates to value-based reimbursement.

While provider identification is important to value-based payment, the industry lacks common standardized data on identity and does not consistently use national provider identification standards. HIPAA requires the National Provider Identifier (NPI) to be used on healthcare transactions, but CAQH CORE found that NPI is not always used on claims. Private payers use proprietary identifiers, often acting as substitutes for the NPI on claims.

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Medicaid also uses a Medicaid ID as well as the NPI. And CMS employs both the NPI and the Tax Identification Number (TIN).

CAQH CORE recommended that CMS, industry groups, specialty societies, and standards development organizations promote the use of the NPI for all standard healthcare transactions because it is a federally mandated provider identification system.

The committee also advised healthcare stakeholders to standardize code sets used for medical billing.

Providers use a variety of medical code sets to submit claims and quality data to payers. CMS uses the ICD-10-CM/PCS medical code set, while the American Medical Association publishes the Current Procedural Terminology code set every year.

These are standard code sets, but payers have different operating processes for using the codes for claims. For example, providers may use the code set to identify all of a patient’s conditions and co-morbidities, but claim processors may truncate the codes, resulting in inaccurate payment for the treatment of all conditions and co-morbidities.

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Industry leaders should promote consistent use of medical and non-medical code set standards, CAQH CORE recommended.

They should also consider new standard data elements that document social determinants of health and support standardization of a national patient identifier. Promoting these items will ensure providers are getting paid for treating the whole patient and that information can be shared across the care continuum.


Technical and process interoperability are needed for value-based payment success. Technical interoperability is the “the ability to pass data from one information system to another while maintaining accuracy and validity,” CAQH CORE reported.

Process interoperability has to do with “common expectations for workflows, connectivity processes, timeliness of data provision, response time to inquiries or requests, security requirements, consent/authorization management and other practices that affect multiple stakeholders.”

Technical interoperability is key to ensuring providers can share data across the care continuum, while process interoperability standardizes interpretation of data to make more reliable comparisons.

“Data increasingly needs to be appropriately and securely shared across the continuum of care by providers, between providers and health plans and with patients. Such an exchange requires different forms of standards and technologies,” the report stated.

To promote technical interoperability, the committee called for the testing and promotion of new and emerging standards for technical interoperability and education for providers, payers, and vendors on data sharing benefits and the elimination of data blocking. Stakeholders should also explore how standards can be consistently used and trusted, such as certifications.

For process interoperability, stakeholders should gather and distribute workflow and policy best practices for value-based payment, as well as address workflow and policy processes in operating rules.

Patient Risk Stratification

Value-based payment success hinges on patient risk stratification. The classification of patients into risk categories allows providers to allocate the appropriate resources to patient populations, which mitigates the risk of excessive healthcare costs and adverse events.

However, providers face a challenge with patient risk stratification because they are uncertain how health plans use risk assessments and if payers are using a different patient risk stratification methodology than themselves.

Adding to the challenge is the fact that providers contract with several payers at a time, which may all have a different patient risk stratification methodology.

“While different risk stratification methodologies may be appropriate for different types of patient populations, the ability to accurately identify the methodology used, and to streamline the number of methodologies used, would reduce administrative burden and assure that providers are focusing resources on appropriate patient populations, reducing provider risk in a shared savings or shared risk payment environment,” CAQH CORE wrote.

CMS and industry groups should boost industry awareness of methodology variation and its impact on value-based payment operational success, the commission suggested. Variation can be appropriate for different patient populations, but providers and payers should understand the methodology differences to maximize value-based payments.

Analytics organizations, population health organizations, and trade associations should also increase transparency of patient risk stratification methodologies, CAQH CORE advised.

“Given the lack of transparency, the industry would benefit from more research on the efficacy of risk stratification approaches, a first step to creating a set of standard individual risk stratification methodologies that would benefit both providers and health plans,” the committee elaborated.

Provider Attribution

Value-based payment models use provider attribution to connect patients with the provider responsible for their outcomes. While knowing attributed patients is key to maximizing value-based payment, providers oftentimes experience challenges with actually knowing which patients are attributed to an alternative payment model, CAQH CORE found.

Provider attribution obstacles stem from the use of TINs to attribute patients. Providers can bill under multiple TINs or bill using a TIN for the group or organization.

Variation in provider attribution methodology by payer also contributes to provider attribution woes. Some value-based payment models attribute patients to an organization and allow the organization to attribute to individual patients, while other models allow patients to attribute themselves by seeing a certain provider. Prospective and retrospective methodologies also exist for provider attribution.

Like with patient risk stratification, providers contracting with several payers also have to manage several different patient attribution models at once.

CAQH CORE noted that it may not a viable option to reduce the number of attribution models at this point in the value-based payment journey. But health plans, CMS, and industry groups can improve transparency for attribution models and develop a catalog to help inform providers and health plans.

Stakeholders should also clarify the data needed to attribute patients, the commission added. “Identifying providers at the individual level, their relationships to other providers (e.g., same group, same physical location, within network) and their specialty with respect to their patients (e.g., PCP, specialist by type) can improve the accuracy of patient attribution,” the report stated.

Quality Measurement

Quality measurement is not uniform across value-based payment models, CAQH CORE reported.

Thirty-three CMS programs and federal individual exchange market plans utilize over 850 quality unique measures, with just one-third used by private payers in employer-sponsored health plans and plans sold on the individual market, a cited National Quality Forum report showed.

Stakeholders explained to the commission that misalignment resulted in redundant information, administrative burden, and an over-proliferation of quality measures. Specifically, quality measure misalignment contributed to medical groups spending 15.1 hours per physician per week on quality reporting and entering information into the EHR, a recent MGMA study revealed.

Harmonization of quality measures should be a top priority to advance value-based payments, CAQH CORE stated.

Healthcare stakeholders should also aim to reduce quality reporting burdens and require quality measures to be actionable.

The recommendations for each of the five identified areas of opportunity should be considered as soon as possible to promote value-based payment implementation and success, CAQH CORE emphasized.

“By collaborating now, before proprietary systems and processes become entrenched in value-based payment operations, by reaching out to potential collaborators across the industry and by applying lessons learned through its success in the fee-for-service space, CAQH CORE hopes to energize an effort to ease value-based payment operational inefficiencies,” the report stated.

*EDIT4/5: Previous version of this article stated, "To transition the industry away from a fragmented operational system built for fee-for-service, CAQH CORE provided recommendations to improve the five areas of opportunity and bring them into the value-based payment environment.”


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