Healthone: A Cvikota Company

Just What Do You Mean, "Pay for Value?" Part III

Submitted Monday, December 9th 2013 1:39 pm by Paul

Part II of this series provided an overview of several pay-for-value reimbursement models. In this segment of "Just What Do You Mean, 'Pay for Value?'" we will look at a few more.

Network Participation based on Value Metrics
Health plans offered through exchanges under The Patient Protection and Affordable Care Act (PPACA) may employ this model as they attempt to fulfill quality metrics reporting requirements. Value will be defined by the payors and participation in the payer network will hinge upon attaining value-based quality determiners.

Withhold/Bonus Pools
Under the Withhold/Bonus Pool model, a percentage of fee-for-service reimbursement goes into a pool. At the end of the measurement period the pool is distributed (or not distributed) among specialists and primary care physicians based on performance against value metrics. How the pool is distributed is a matter of great concern for providers and is potentially a source of significant contention as participants seek to maximize their portion of the reimbursement pie.

Shared Savings/Shared Risk
The shared savings/shared risk model is common between payors and Accountable Care Organizations (ACOs). Payors and providers agree to share premium dollars and associated risk. Models and equations for determining each party's share are numerous, but the CMS framework emphasizes rewards for component entities based on their relative contributions to the ACO's total shared savings and quality performance.

Episode of Care/Case Rate
Under this model a fixed payment is made to participating providers on a per case basis, regardless of the type or volume of services used in the episode of care.

Bundled Payment
Akin to the episode of care/case rate model, in the bundled payment model a contracting entity receives one payment for all services related to a given episode of care. However, the contracting entity distributes payments to all providers involved, who are not permitted to collect separately. See Medicare Bundled Payments for Care Improvement Initiative at

Capitation/Full Risk/Risk Pool
Capitation models represent the extreme end of the risk continuum for providers. Essentially, there are two. Full Risk Capitation pays providers insurance premium dollars allocated for care on a per member basis. Risk Pull Capitation pools insurance premium dollars and allocates the pool among providers.

Navigating the Change
Cvikota Company is out front in developing reimbursement analysis and practice metric tools to arm providers with valuable data when negotiating contracts in the new paradigm of Pay for Value. Along with Medicare, many of the largest insurance carriers are moving resolutely toward value-based reimbursement. The winds of change are blowing, and we can build walls or windmills. If providers are to stay strong and viable, they will have to adapt and make the new payment models work for them. Contact Cvikota Company now to ask about how our comprehensive revenue cycle management suite can work for you.

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