Managing your commercial value-based payer contract requirements

The Medical Group Management Association’s most recent MGMA Stat poll asked healthcare leaders: “Does your organization participate in any commercial value-based payer contracts?” The majority (55%) responded “yes,” while 45% said “no.”

The poll was conducted on Feb. 4, 2020, with 883 applicable responses.

Respondents whose practices participate in value-based contracts with commercial payers also were asked how many metrics are tied to those contracts:

• 46% reported 1-5 metrics
• 29% reported 6-10 metrics
• 14% reported 11-15 metrics
• 11% reported 16+ metrics

Practice leaders need to identify efficient ways to embrace a level of quality incentives in balance with the cost of gathering and managing data for quality reporting.

“Practices that already track measures for MIPS or an alternative payment model (APM) should be conscientious of how many additional quality measures they agree to track under their commercial value-based contracts,” advised Andrew Hajde, CMPE, assistant director, Association Content, MGMA. “It may be very reasonable, for example, to track the same seven measures across multiple payers, but it can become very challenging to perform well if you were to agree to track numerous measures which vary under each commercial contract. You could easily end up with dozens of metrics to keep track of.”

The core of value-based care: Patients and culture in focus

For leaders at Hatfield Medical Group, Chandler, Ariz., moving away from the “eat-what-you-kill” mindset of fee-for-service meant aligning practice resources to fit well with the quality metrics of value-based plans.

David Hatfield, DO, MMM, president and CEO, Hatfield Medical Group, pointed to his work with Administrator Jim Schafer to implement cultural change to support that shift to a patient-centric focus. “One of the toughest challenges we faced was improving access to care,” Schafer said. “We had to make sure a system was in place to ensure patients could get in to see their physician same day or next day, depending on their issue. ... We also wanted to make sure that the whole patient experience was improved, which may not be the first thing you do in a fee-for-service model.”

Setting expectations with payers

Hatfield noted that the payer-provider relationship often can be adversarial, which can complicate the process of engaging with payer representatives about why the practice would move into a value-based payment model.

“Jim and I started to have discussions with them around total medical expense, where we were leaking and where we needed to rein it in,” Hatfield noted. “We had to build relationships with payers and help them understand what we’re doing.”

Once a practice decides to pursue commercial value-based payment models, Hatfield said it’s good to be aggressive in making those expectations clear in talks with payers. “Get out in front of more payers. ... We want to be held accountable, so we’re alright if payers hold us accountable,” Hatfield added. “Being held accountable means managing the cost to care for the patient.”

Simplifying administration of multiple contracts

When it comes to considering the costs and administrative requirements of multiple value-based contracts, there’s one key factor for success, according to Corey Shank, MS, associate managing director for managed care, Texas Tech University Health Sciences Center, Lubbock, Texas: “Consolidate information.”

Getting to a simplified clinical administration of multiple value-based contracts requires a focus on data management that goes beyond simply checking portals for payer data, building dashboards and having a single look into your analytics, Shank said.

Action steps to thread the data

Shank recommends three action steps for integrating payers’ information:

1. Normalize the data: Normalize data files from payers depending on the columns, rows, tabs and other methods in the file(s) you receive.
2. Use shared keys: Find a field in the payers’ data sets that link to your data system, also known as a “shared key.” Good examples of shared keys are billing IDs used, such as a subscriber ID.
3. Tie your data systems together: Once data is normalized and the shared keys are defined, your systems’ data can be linked to scheduling systems, health records and other systems used within your practice. This helps better manage patients as they come in so that providers know which specific actions can be taken to improve quality scores. (See Table 1 for an example of the value-based situation identifier.) ​

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Quality reporting and communication tips

Shank recommends these tips for building out reporting of performance data:

1. Make it consumable: Provide a dashboard or report for the user and keep it as simple as possible. Instead of emphasizing measures in which providers are lagging, present information on areas for improvement.
2. Make it timely: Don’t wait until a monthly or quarterly meeting to share data if there are opportunities to improve. Instead, build a cascading delivery of the data. Begin with a weekly operations update that leads into a monthly management review and ultimately a quarterly report for leadership.
3. Make it targeted: Tailor the data for each audience. An operations audience needs to know their missed opportunities on a frequent basis along with the status of case-managed patients, whereas managers need date-specific performance for measuring team goals, and practice leadership need to assign critical values to performance (e.g., bonuses).

Learn more

Click here for a video demonstrating how to thread payer data in Microsoft Excel.

Would you like to join our polling panel to voice your opinion on important practice management topics? MGMA Stat is a national poll that addresses practice management issues, the impact of new legislation and related topics. Participation is open to all healthcare leaders. Results of other polls and information on how to participate in MGMA Stat are available at: mgma.com/stat  

Need professional assistance understanding your options for contracting? MGMA Consulting can help identify actionable solutions tailored for your organization.