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

Reimbursement News

UnitedHealth Takes Steps to Embrace Value-Based Reimbursement

By Ryan Mcaskill

More healthcare providers and payers are embracing value-based reimbursement instead of fee-for-service.

- One of the biggest trends in the healthcare industry is the adoption of value-based reimbursement instead of the traditional fee-for-service approach. With the incentive programs through various agencies like the Centers for Medicare and Medicaid Services, new regulations like the Affordable Care Act and the growth of Accountable Care Organizations that focus reimbursement on the quality of care, it becomes critical for physicians and hospitals to aim billing towards value and not the number of services performed.

This is something that both providers and payers are moving towards at a quickening pace. Earlier this week, UnitedHealth, the largest single health carrier in the United States with approximately 70 million beneficiaries, held its fourth quarter earnings call. It featured several company executives and covered a wide array of topics.

One of the more interesting points, however, focused on a move toward value-based reimbursement. Stephen Hemsley, UnitedHealth CEO, said that a value-based approach is a key area of focus. Specifically, the company is striving “to align incentives with delivery system, really anchored on advancing quality of healthcare first, but also improving the affordability of it.”

According to Dan Schumacher, the UnitedHealth Group CFO, in 2014, the health insurance company posted about $36 billion in value-based arrangements. By the end of 2015, he projects a 20 percent increase in concentration of value-based reimbursement, which will come in at $43 billion.

“On the cost side, we’re also seeing the outcomes there,” Schumacher said. “We talked at the Investor Day and we had a breakout seminar that talked about driving 1 percent to 6 percent aggregate savings from our value-based reimbursement approaches and then within that, obviously the numbers can be more significant based on how they’re designed and as well as how tightly they are aligned around quality and performance and outcome.”

The company is on track to meet a previous commitment to increase value-based arrangements to $65 billion by the end of 2018.

This clearly points to a larger shift in the health insurance landscape as performance and value become more important. The Centers for Medicare and Medicaid Service said that 20 percent of its reimbursement payments for Medicare health insurance program for the elderly are not fee-for-service based.

“The structure actually drives volume towards the better providers that enter into these performance contracts,” Hemsley said. “We’re progressing these contracts into more sophisticated forms where they’re actually taking on even greater performance responsibility over time.”

Across the nation, the healthcare system is coming together to move away from the traditional fee-for-service model and embracing value. With one of the leading healthcare providers actively backing this approach, it will gain more steam. Physicians and hospitals need to get onboard or run the risk of falling behind the competition.

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