In, "Just What Do You Mean, 'Pay for Value?'" Part I, we began an overview of the fundamental shift in reimbursement models from traditional fee-for-service to pay-for-value. The term, "pay for value," is a little enigmatic, and though disagreement exists as to how much weight each element should have in this brave new world, there are a few basic criteria used to measure the landscape.
High Deductible Health Plans
At first glance one might not consider high deductible health plans as a member of the pay for value club. HDHPs are still fee for service, after all. Yet consider that healthcare consumers with HDHPs have a significant financial incentive to assess value delivered, at least until their annual deductible is met. Health savings accounts (HSAs) often go hand in hand with HDHPs, and their associated tax benefits enhance the incentive.
Quality and performance incentives are typically structured as a bonus over and above contracted fee for service payments. Incentives are paid for attaining defined specific and quantifiable goals per payer contract.
The tiered fee for service model utilizes value metrics to adjust the provider fee schedule. An example of tiered fee for service reimbursement is the Medicare value based payment modifier. Section 3007 of the Affordable Care Act mandated that, by 2015, CMS begin applying a value modifier under the Medicare Physician Fee Schedule (MPFS). Both cost and quality data are to be included in calculating payments for physicians. Physicians in groups of 100 or more eligible professionals who submit claims to Medicare under a single tax identification number will be subject to the value modifier in 2015, based on their performance in calendar year 2013.
Medical group practices with 100 or more eligible providers can voluntarily choose to participate in quality tiering under the value modifier. Quality tiering will determine if a group's performance is statistically better, the same, or worse than the national mean. Quality tiering could result in a positive or negative 2015 payment adjustment. The 2012 QRURs, containing 2011 data on the groups cost and quality, will help groups decide if they want to choose quality tiering as part of their 2013 value modifier. For more on the CMS value-based payment modifier see http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeedbackProgram/ValueBasedPaymentModifier.html.
More value based payment models to come in Part III.