There is little doubt within the healthcare industry that the emphasis on quality over quantity will likely continue to gain momentum. While most payer contracts still largely favor a fee-for-service model today, the U.S. Department of Health and Human Services (HHS) is working to accelerate this change with the goal of transitioning 50 percent of Medicare reimbursements from fee-for-service to value-based payments by 2018 . And, commercial payers are likely to follow suit.
While this seismic change in how providers are paid does bring about a new set of challenges, there are specific strategies that executives can leverage to shore up the financial health of their organization. By rethinking the role of finance teams within care organizations, financial professionals can profoundly influence the success of the facility as a whole.
The following highlights some of the most effective strategies that forward-thinking teams can implement to help maximize revenue and minimize risk in an era of value-based reimbursements with solid financial leadership.
1. Manage multiple revenue models simultaneously
In most industries, financial executives are tasked with calculating revenue projections and creating financial models to help make data-driven decisions to ensure the financial sustainability of the organization. For teams working within a value-based payment paradigm, financial leaders must navigate these projections with a greater degree of complexity – especially with the introduction of reimbursement contracts that include a shared savings contingency that is layered on top of a traditional fee-for-service framework.
In many instances, executives need to book revenue per usual throughout the course of the year while simultaneously modeling the estimated additional reimbursement they can expect to receive if their operational costs fall below industry benchmarks. By taking the proactive position of managing multiple revenue models, financial stakeholders can help their organization better understand their financial footing.
2. Serve as a trusted advisor to clinical team members
Physicians, nurses and other clinicians are trained to recommend the most effective plans of care to drive optimal health outcomes. Financial teams within the organization can also help support staff members by providing the right information they need to make those informed decisions.
Finance professionals can help analyze the costs associated with various treatment protocols. In many instances, clinicians can select from a cohort of evidence-based treatments with similar levels of efficacy. By having a clear line of sight into costs, providers can help the consumer save money (especially those with high-deductible health plans) and also align operations with value-based payment models.
3. Assess risk during negotiations
One of the most important shifts in terms of the roles and responsibilities of healthcare finance executives is the expanded need for due diligence prior to payer contract negotiations.
Finance teams need to thoroughly investigate the possible risks and rewards associated with payer partnerships, especially those involving quality-based payment arrangements. Every care organization is unique and many choose to specialize in areas such as addiction recovery and behavioral health service lines. Financially successful care organizations should assess whether value-based payment models are aligned with those priorities.
4. Mine Electronic Health Record (EHR) data to consistently monitor operations
Reimbursement contracts that lean heavily on value-based payment models place a unique set of demands upon finance teams. To remain successful, care organizations may need to implement new systems (and optimize existing ones) to give them visibility into fixed and variable costs in addition to net revenue.
This is especially vital for organizations that have entered into reimbursement contracts with global payment and capitation agreements.
For example, many care organizations have had success implementing population health programs enabling them to intervene on behalf of high-risk populations – improving health outcomes, reducing costs and maintaining profitability.
5. Collaborate with executive leadership regarding service line optimization.
Finance teams are also uniquely positioned to help their executive leadership better understand how they can remain competitive and serve their communities while operating within value-based care models.
In some instances, reimbursement contracts that reward quality over quantity require that providers meet or exceed benchmarks for specific service lines. Financial professionals can help vet contracts to ensure that they align with the priorities of the organization as well.
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If you’d like to learn how the CareLogic EHR Platform can help your behavioral health facility improve health outcomes and successfully manage value-based payment models, please contact us for more information, or read some of our customer success stories. If you’d like to see CareLogic in action, please request a demo.