A Health Plan Leader Offers Perspective on Value-Based Reimbursement Progress

A recent survey of 151 health insurance executives and their organizations’ adoption of value-based reimbursement revealed that despite being embraced by the Centers for Medicare & Medicaid Services (CMS), value-based reimbursement has a long way to go before finding widespread adoption and success amongst traditional health insurers.

The report, from Burlington, Mass.-based health technology company HealthEdge and market research firm Survata, indicated that health plans are divided on which value-based reimbursement programs are most successful, as respondents were nearly evenly split between patient-centered medical homes (PCMHs), accountable care organizations (ACOs), bundled payments and episodes-of-care programs.

It also found that health plans are struggling with internal (technology, infrastructure and administrative burdens) and external (member and provider engagement) barriers as they look to implement successful value-based programs.

“There’s no silver bullet to navigating the value-based payment model but if you throw in one chip at a time, eventually you build up enough small wins to ante up and generate strong results, all amidst an evolving landscape,” said Dave Mika, vice president, enterprise core system operations at Independent Health, a Buffalo, N.Y.-based health plan that serves approximately 375,000 members and has 1,080 associates, and a client of HealthEdge.

Independent Health officials have reported that 98 percent of its primary care practice members are now in full capitation contracts, with solid alignment of goals between Independent Health and its providers. “Pay-for-value has improved patient outcomes and lowered healthcare costs, all the while increasing customer satisfaction and overall health in the community,” they said.

Mika recently spoke with Healthcare Innovation Managing Editor Rajiv Leventhal about the survey’s findings, what they key challenges are with value-based reimbursement today, how payers and providers are working out the issues together, and more. Below are excerpts of that interview.

The research found that health plans are struggling with value-based reimbursement. From your experience, what are the biggest barriers here?

One of the biggest struggles is that all the entities involved are still figuring everything out as [policymakers have been forcing some change]. Provider adoption is a potential barrier, as providers are figuring out how they fit in, and what value-based reimbursement means to them in terms of how they practice. You also have members who are somewhat caught up in the mix. There are a lot of high-deductible plans out there so members want to know where they are getting the best service and the best quality for the dollars they are spending.

From a payer standpoint, at every step of the way, we have good, solid data coming in and going out the door to all affected parties to help facilitate a better understanding of the whole system. That’s where the rubber meets the road. It’s a relatively complex issue with no silver bullet to solving it. It takes a lot of attention and a lot of very smart people sitting down and figuring out how we meet all of those needs in a comprehensive and understandable way.

Considering the array of value-based payment program options out there, from ACOs to bundled payments to others, what goes into the process of how payers and providers decide on what’s right?

We look at the areas we want to move into that will help our providers—we don’t have our own providers, we utilize networks—to the point they will be able to practice in a manner that provides high-quality services to their patients, and does so in a fiscally responsible manner.

In doing that, we engage in a tremendous amount of collaboration with our provider partners. We work with them to understand their challenges, help them understand what’s coming through from a regulatory standpoint, and then look at what are cost-effective and treatment-effective approaches.

What IT and data challenges are there?

It starts with ensuring the data coming in the door is accurate and clear, and as the data progresses through our system—I am talking about encounter data primarily—there is an integrity in between the core systems and the consuming systems, as the data flows downstream. It does require a fairly heavy IT lift in terms of ensuring the integrity of that data as it moves forward.

With our core claims platform, for instance, we may have two dozen or more consuming systems looking at just our internal systems that are using that data and then serving that data up in various directions. It requires constant care and feeding, and staying abreast of everything new that is going on. It’s not only about how to get data to different places and the new tools coming out that will help facilitate that transparency, but also as the data requirements on the front-end change, making sure that all downstream consuming systems are accounted for appropriately. It’s an extremely complex environment that needs to tended to and managed at a high level. 

Trust and alignment among payers and providers is something that was brought up in the survey. It’s not always been as cordial a relationship as some would like. How are these relationships continuing to evolve?

Everyone’s experience is a little different. For us, and I have been with Independent Health since 1995, we always strive to manage and maintain our strong relationships with our provider partners. We have to first ensure there is trust between us, and we hope to then see that extend to our member base as our providers interface with our members. We expend a tremendous amount of energy communicating with our providers, seeking their input as we develop new value-based reimbursement models, and then working with them to manage effectively in the overall healthcare environment.

We spun off a company called Evolve Practice Partners that is designed specifically to help providers adapt their practices to function effectively and deliver high-quality care in a value-based environment. When we did that, we did it with an understanding that Independent Health is one of many plans that are at providers’ doors, and we knew that we had to take an approach where we would be not only helping them within the Independent Health [network], but with all the payers they interface is. It’s just another approach to continuing to build with the trust we have with our provider partners.

We have to work effectively and objectively. We have had instances in which provider partners were not delivering high-quality, cost effective care, and we worked with them tirelessly to help them understand the types of things that will help them function better in this type of environment. We have had providers who were overutilizing services and who were not collaborating, and not following some of the effective treatment courses that we would expect them to.

In some cases, we have had to cut ties with providers, and those have been very difficult decisions, especially when you have a patient base that goes to those providers who they trust. But sometimes they are just not adapting to the changing environment, and in some cases, not following accepted treatment courses with our patients. There are sometimes duplications of services and in some cases, providing care where there is no critical basis for it. We might absorb a little bad press and backlash from the member community when that happens, but at the end of the day we are doing it for all the right reasons—and that is delivering the right care at the right time and for the right price, for the benefit of the patient.