Medical practices’ portion of value-based revenues is gravely lacking according to a survey conducted by the Medical Group Management Association (MGMA) this August. The survey shows value-based payments by specialty, which unveils a hard truth — providers are not able to fully capitalize on the benefits of value-based care in terms of improving patient outcomes and bringing in deserved revenue to every practice.
Amidst the drive to move away from fee-for-service to value-based payment models, the healthcare system is moving at a snail’s pace with barriers like scheduling and billing challenges topping the list.
What are the implications of the survey findings? What are the ways in which practices can improve their payments and optimize their care?
Survey findings and their implications
MGMA uncovered some crucial information in its report, “Patient Access and Value-based Outcomes Amid the Great Attrition,” from data collected in 2021. The study looked into 2,300 organizations across different specialties and practice types.
1. Value-based payments remain low due to adoption barriers.
In the survey, primary care only received 6.7% of the total income from value-based contracts. Surgical specialties are faring less with just 5.5% while non-surgical specialties are relatively higher at 14.7% of total payments. The median revenue amount across all practices was found to be $30,992 per provider.
The survey findings reveal that medical practices are still facing barriers to fully adopting value-based payments. The recent pandemic has aggravated the problem of burnout, staff decline, inflation, operational burdens, and complex reimbursement regulations that have proven daunting to many providers.
2. Staffing shortages impact appointment availability
The MGMA survey looked mostly into value-based contracts but was also quite extensive in its scope to even include valuable insights on staffing. Staffing shortages in medical practices are evident and persistent as early retirement and healthcare workers opting to work for other less-taxing sectors.
Appointment schedules are not optimized resulting in changes to appointment availability for new patients, which is measured as the third-next-available appointment. The wait time has now increased by two days from 6.1 days in 2020 to 8.1 in 2021. In truth, waiting time increases by four minutes every year with the median wait time at 16 minutes in 2021. The waiting time for a provider inside the exam room has also increased by two minutes in 2020 with now a median of nine minutes.
With the resumption of in-office care, medical practices are still struggling to bring their patients to their doors at a time when they need care the most. To hurdle obstacles like transportation problems and inconvenience, for example, value-based virtual care services play a key role in delivering better quality care.
3. No-shows due to rising costs and longer waiting times.
Almost half or 49% of medical groups have reported that their no-show rates have significantly increased. On the other hand, 39% said it stayed the same and 12% experienced a decrease. For those who reported an increase or no change, the no-show rate is impacted by the cost of care, waiting time after scheduling an appointment, transportation problems, and patients forgetting or being indifferent to their health.
As consumers now prefer to use online channels, the no-show rates could improve since telehealth technology is easier, more convenient, and more far-reaching. Practices can innovate using telehealth technologies to avoid patient no-shows or cancellations.
4. Billing and collection problems affect the revenue cycle management
The survey also looked into the time spent to post charges for third-party payments from the moment care was delivered. Primary care practices have a low of 5.0 days, a slight drop from 5.2 days in 2020. Non-surgical and surgical specialties have the same number of days in 2020 but now facing long delays. Non-surgical specialties take 11.6 days while surgical specialties take 10.4 days.
Challenges in scheduling along with billing and collection delays negatively impact the revenue cycle management, which in turn, discourages practices to pursue value-based contracts. It should be noted that practices need to make upfront investments to ensure quality care so they could face financial risks with no assurance of a positive ROI initially.
5. Claims denials add to the financial burden of practices
Meanwhile, the number of claims denials on the first submission also rose with primary care practices increasing from 4% to 8% in 2021. Non-surgical and surgical specialties increased by 8.14% from 3% for non-surgical specialties and 4.16% for surgical specialties in the previous year.
The survey reveals that there is a need to resolve billing denials that could play an important role in easing the financial burdens on practices. In this way, it will be easier for them to transition toward value-based care that also promotes the welfare of the physicians and the medical staff, not just that of the patients.
Ways to improve value-based revenues
Providers have long acknowledged the importance of value-based care models. They recognize that treating patients when they are still well rather than when they are already very sick is more effective. Providing care with a focus on outcomes rather than quantity enables physicians to provide the quality care their patients need.
The problem is that many practices are uncertain about how to get started and avoid the risks of increased overhead or making a huge financial investment that many simply cannot afford.
For a smooth and successful transition, follow a game plan that focuses on optimizing patient care, brings in a sufficient margin, and offers financial stability for practices to remain independent and thriving.
Five simple steps to transition:
1. Identify the patient population.
Look first into your current value-based and fee-for-service performance as well as the needs of the patient population and health plan market dynamics then work around them. It is important to know the impact of value-based payment on the payers so that practices can develop a payer strategy. Patients should understand the benefits that they will obtain in exchange for the fees that they may be charged for participating in value-based care programs.
Best begin with Medicare’s qualified patients who can offer practices opportunities to participate in reimbursement programs that give incentives to providers. Patients with two or more chronic conditions can enroll in Medicare’s Chronic Care Management (CCM) and benefit from the close monitoring of Remote Patient Monitoring (RPM). Both CCM and RPM can be billed concurrently.
2. Have a clear idea of the long-term financial goals.
What is the long-term financial opportunity? Take into consideration the possible decrease in utilization, the infrastructure needed, and the projected income from value-based payments needed to meet the financial goal.
Unless practices partner with expert partners, programs like CCM and RPM would entail a significant financial commitment in building the infrastructure, purchasing the technology, and hiring new staff with the appropriate capabilities particularly in navigating new technology and the intricate billing requirements of Medicare. Practices need to know what their options are and which one will help them meet their financial goals. With CCM and RPM, for example, practices can opt to start their own or outsource these services to a qualified vendor.
3. Create a roadmap of what you need including the timeframe.
Follow a roadmap that details the tactical elements needed and the timeframe to implement them. Whether you are building your own virtual care programs or outsourcing, it is ideal to start with a few eligible patients who are the most high risk and could benefit from the preventative element of value-based care programs like CCM and RPM. In this way, you can easily track your progress and your margin and make the corrections needed to avoid the common pitfalls of increasing overhead and possible disruptions to your practice routine.
4. Use quality metrics as benchmarks
To successfully manage patients across the care continuum, it is crucial to set quality performance metrics that include accurate risk scores for the high level as well as clinical and social interventions. Tying physician compensation plans to quality metrics makes a lot of sense as they could bring additional value-based incentives for those who meet the quality performance measures. These metrics can be divided by priorities in the timeline.
Take for instance risk scores, which are critical in setting a benchmark that reflects the needs of the patient population being managed and therefore needed to establish the value-based payment budget to model and monitor in terms of financial performance and margin impact. Providers may need to calculate this metric before making clinical interventions.
5. Measure effectiveness of care
Providers can leverage technology with analytics capabilities and actionable intelligence to assess how effective the care strategies are so that they could be course-corrected. Regular reporting is crucial to see if the transition is happening smoothly and that the practice is on track with its financial goals including achieving sustainable long-term success.
Value-based care is focused on the outcomes so an easy way to measure its effectiveness is through lower inpatient admission rates and ER visits, as well as length of stay for hospitalizations. The most tangible is in seeing them healthy and well.
Value-based solutions that work
With reduced margins and the clamor to emphasize value, providers need solutions and the market foresight to easily transition into value and translate that into additional income. For the high-cost, high-risk patient population, the most beneficial and lucrative solution is to outsource with a credible vendor who has the technologies, resources, capacity for growth, and capabilities to optimize patient care and bring in deserved revenues to a practice.
Ascent Care Partners (ACP) offers turnkey healthcare services like Chronic Care Management (CCM) and Remote Patient Monitoring (RPM), which are value-based care programs proven to improve patient health outcomes and reduce costs. ACP provides a full service aiding practices from patient enrollment to the preparation of billing charges to make sure you get paid for all your non-face-to-face services.
We partner with the following providers:
- Primary Care Providers
- Family Practice Physicians
- Internists
- Gerontologists
- Non-Interventional Cardiologists
- Endocrinologists
- Wound Care Doctors
- and other providers
