Even before Medicare's Quality Payment Program reimbursement changes were rolled out earlier this year, medical practices were looking at ways to align physician compensation with value over the traditional standard of volume.
But the lingering question for many practices as they consider this paramount shift is: Where do we start?
This is not an uncommon situation, according to Justin Chamblee, CPA, senior vice president of Alpharetta, Ga.-based consulting firm Coker Group, and his colleague, Jon Morris, JD, MBA a manager with the company.
Chamblee and Morris will offer guidance during their presentation, "Aligning Physician Compensation and Organizational Goals in the Value-based Era," at the 2016 Medical Group Management Association (MGMA) Conference in San Francisco. Their presentation is scheduled for Monday, October 31 from 7 a.m. to 8 a.m..
The duo recently spoke with Physicians Practice on how practices can move forward with compensation changes with minimal impact to physicians and daily operations.
Physicians Practice: What major physician compensation changes and/or challenges are you seeing in private medical practices?
Justin Chamblee: Reimbursement continues to decline or put more [pay] at risk while operating expenses are staying the same or increasing. Just trying to ensure a physician can make a proper wage from their practice is the core challenge.
A second challenge is navigating the value-based reimbursement realm. There's a lot of talk with respect to the volume-to-value shift and I think when you are part of a health system, you can delegate all of the big decisions with respect to that to the health system. Private practices need to decide: Do we join an [independent practice association] and let them drive some of that? Do we join a certain health system's accountable care organization? Do we pursue a Medicare Shared Savings Program? There's a lot of key decisions that private practices are having to make in terms of that volume-to-value shift and tantamount being: How does it affect our revenue generation going forward?
Jon Morris: I think another core thing leading to it all would be technological and regulatory requirements. …In order to maintain revenues, you have to have all the technology to track and measure everything and also meet all the tech requirements. [The cost of that] infrastructure, in my opinion, has been a pretty large contributor to all the consolidation you've seen in healthcare.
PP: How can private practices align physician compensation with practice goals?
Chamblee: For private practices, the key thing is to start slow, meaning a lot of practices feel like they need to make this massive paradigm shift with respect to volume-to-value, In reality, the shift [in reimbursement] in most environments is going pretty slow.
So if you are still 95 percent fee-for-service, let that drive your compensation model decisions versus moving to a pure panel-based compensation model or something like that. Just going slow would be the first thing.
Number two, focus on the data. A lot of the emphasis on value-based reimbursement and incentive opportunities all require substantial data to support them. So if you don't have the data, it will be hard to incorporate it into your compensation methodologies. Look at the IT structure and your population health management tools to see that you have the data to support any desires that you want to incentivize in your physician compensation model.