In recent years, many healthcare delivery organizations have adopted some form of value-based payment model, shifting the focus of healthcare from the quantity of services to the quality of outcomes. In a promising trend for healthcare overall, more than half of healthcare payments in 2023 will be part of a value-based healthcare reimbursement model. Flat-fee pricing, which offers a fixed fee per patient for a defined period of time, is one payment model that will play a large role in this transformation. By giving providers a fixed budget, flat-fee pricing can encourage preventive care, effective chronic disease management, and ultimately reduce unnecessary healthcare costs – all hallmarks of value-based healthcare.
The Centers for Medicare and Medicaid Services (CMS) has a goal of having all traditional Medicare beneficiaries in a care relationship with accountability for quality and cost by 2030. One of the most forward-thinking ACO initiatives they have launched is ACO REACH (Realizing Equity, Access, and Community Health), which includes global flat-fee pricing for affiliated beneficiaries. Recently, CMS announced a similar program to provide ACOs more flexibility to transition to value-based care through the ACO Primary Care Flex program. The Center for Medicare and Medicaid Innovation (CMMI), along with other initiatives, have demonstrated that risk acceptance with flat-fee contracting is here to stay. Efficiently managing flat-fee payments requires a robust technology foundation with advanced funds flow analytics. Payment technology designed specifically for flat-fee management offers a way to optimize fund allocation and ensure financial sustainability.
Hurdles to overcome
Despite the benefits for payers, providers, and patients, moving to a flat-fee environment presents unique challenges. Traditional claims processing systems are often ill-equipped to manage the complexities of flat-fee. Common limitations include:
Limited predictive capabilities: Without integrated data analytics, it can be difficult to accurately predict patient needs and resource allocation, leading to inefficiencies and missed opportunities to provide needed care or fill gaps in care.
Reimbursement delays and errors: Core management systems built for fee-for-service are retroactive, only reimbursing after services are completed. Flat-fee requires the ability to proactively track attributable beneficiaries and provide regular updates as beneficiary reconciliations progress throughout the performance year. Without these capabilities, organizations risk underpayments that limit revenue, or overpayments that must be repaid later, both of which are stressful for finance departments.
Financial blind spots: Poor visibility into financial performance impedes budgeting and forecasting, increasing the risk of economic instability. As organizations implement risk-based models, they need access to near real-time data along with tools that surface financial challenges and opportunities during the performance year and prescribe actions to correct performance as needed.
Payment technology designed for flat-fee management offers a powerful solution to these challenges. The right software automates the manual processes associated with claims reconciliation and payment processing, significantly reducing the administrative burden on healthcare providers. This saves time and resources and minimizes the risk of errors and delays in claims processing. Additionally, these platforms are designed to adapt to evolving regulatory requirements from organizations like CMS, such as ODAG (Organizational Decision, Appeal, and Grievance) protocol reporting. This ensures compliance with changing regulations and helps healthcare providers avoid potential fines. Streamlined flat-fee management allows health systems to focus on delivering quality care and improving patient outcomes.
Integrated Data and Actionable Insights
Today, many organizations operate using multiple point solutions, including for analytics, care management, and claims processing. But as alternative payment models such as flat-rate pricing grow in VBC programs, the need for a more integrated approach is growing. An integrated technology stack that uses the same underlying data sources for both analytics and payment applications eliminates data silos. It consolidates information from dozens of different data sources, including patient records, billing data, and cost reports, into a central data lake. From this single source of truth, everyone involved in a patient’s care has access to the same accurate, up-to-date information.
Integrated analytics and payment technologies also offer powerful predictive capabilities. Predictive modeling can identify high-risk patients and potential cost drivers before they impact clinical or financial bottom line. With the right data, healthcare providers can proactively intervene and implement preventative measures to improve quality of care, while reducing unnecessary costs and improving financial performance.
Financial Sustainability in a Value-Based World
Flat-fee payments are essential to drive cost-effective, patient-centered care. Finding payment technology solutions designed specifically for alternative payment models like flat-fee payments can help payers and providers achieve financial sustainability in a value-based system. This streamlines processes, improves cost control, and ensures accurate reimbursement. Adopting these innovative solutions can help healthcare organizations successfully navigate the evolving reimbursement environment and ensure long-term success in a value-based future.
Photo: ipopba, Getty Images
David Morris is Executive Vice President and Chief Commercial Officer at Cedar Gate Technologies. He has more than 30 years of operations and leadership experience with leading companies across the healthcare ecosystem, driving client success in value-based care by addressing the technology and services needs of payers, providers and self-funded employers.
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