What is Value Based Reimbursement Looking Like in 2019?

key lying on money suggesting what is value based reimbursement key on money

Change is a constant in the healthcare industry, and for all healthcare providers submitting claims to Medicare, it’s important to carefully review your processes based on what’s to come with Value-Based Reimbursement (VBR).   And if you’re still wondering, “What is value-based reimbursement?“, read on.  We’ll discuss how VBR will affect your payments next year … and in the future.


What is value-based reimbursement?

We can define value-based reimbursement as a payment model where providers are compensated based on improvements in patient health rather than the number of services rendered.  Of course, there are several types of these models that fit under this definition.  There is the Quality Payment Program (QPP), which includes the Merit-based Incentive Payment System (MIPS).  QPP also includes Advanced Payment Models (APMs) such as Accountable Care Organizations (ACOs).   Hospital and physician payments for one episode of care are also bundled in some payment systems.  See here for CMS-published and physician-focused details about the “bundled payments” Model.

All of these programs are subject to revisions or changes in 2019, and some changes are already in place. Other changes are still in the proposal stage at the Centers for Medicare and Medicaid (CMS).

Many providers already participate in a QPP by being a member of an ACO.  A study from 2016 showed 25% of physicians participated in an ACO.  However, the geographic distribution of this physician participation is very uneven.  At least 277 physician groups participate in bundled payment arrangements.  In these arrangements, incentive compensation is available for hospitals and physicians who provide episodes of care for specific conditions.  But that leaves most physicians with the MIPS option to participate in a QPP.


Changes to MIPS in 2019

One of the most important changes to Value-Based Reimbursement involves adding various types of healthcare professionals to the list of those eligible and affected by MIPS.  The first years included physicians, physician assistants, and various nursing professionals (certified RN anesthetists, Advance practice RN, and Clinical Nurse Specialists).  For 2019, a number of rehabilitation therapists and other clinicians are now eligible to participate in MIPS.

Some professionals are still excluded from MIPS.  These include clinicians enrolled for their first year in Medicare Part B.  Also excluded are small practices with annual Medicare billed charges of less than $90,000, or less than 200 Medicare Part B beneficiaries. And professionals participating in other Advanced Payment Models who collect more than 25% of their Medicare payments through such models are excluded.


So, what is value-based reimbursement worth?

How prepared are you? CMS is upping the ante on incentives and penalties for not participating in MIPS or another APM.  For performance in 2018, the maximum payment adjustment is plus or minus 5% of Medicare payments in 2020.  These incentives/penalties increase by 2% per year for the next two years.  To paraphrase a former U.S. Senator, a percent here and a percent there, and soon you are talking about real money!


What is value-based reimbursement performance?

There are four categories of performance that affect MIPS value-based reimbursement.

  • Quality: select six quality measures from a list of over 300 evidence-based measures, or select a pre-defined specialty-specific measure.
  • Clinical practice improvement activities: select from a list of 112 activities in 8 categories.  The categories range from Achieving Health Equity to Population Management.
  • Advancing Care Information: utilize a certified EHR system, and send information to a Health Information Exchange and/or Public Health Clinical Data Registries.
  • Cost: submit claims information, but note: these measures are under revision for 2019.

So the answer to the question “what is value-based reimbursement” is complicated at best.  But the potential rewards and penalties are very specific and easy to understand.

The above is a very simple description of how you can approach value-based reimbursement in light of these changes.  However, more than ever before, physicians, hospitals, and other clinicians are seeking out qualified healthcare consultants to streamline changes, soften transitions, and ensure compliance to the continuously shifting rules and regulations that envelop the healthcare industry. This includes the transition from fee-for-service (FFS) to VBR.  Using consultants is a cost-effective way to identify opportunities for VBR compliance within an existing FFS structure.

When you need proven expertise and performance

Jim Hook, MPH

Mr. James D. Hook has over 30 years of healthcare executive management and consulting experience in medical groups, hospitals, IPA’s, MSO’s, and other healthcare organizations.