Value-based Physician Reimbursement Gains Momentum

March 1, 2012

Preparation now will help ensure that you and your practice will thrive in the future.

UnitedHealth Group is joining the growing pack of insurers beginning to compensate physicians for value in addition to volume of services.

The payer says it will start offering at least 50 percent to 70 percent of its physicians bonuses for reaching cost and quality targets and/or participating in new care models, according to American Medical News.

The group’s move represents a growing trend among federal and private payers to shift from volume to value.

If this shift has not yet reached your practice, it’s likely to soon.

Other large health plans, like Aetna and WellPoint, have already adopted value-based incentives. And Medicare’s shared savings program is already promising “shared savings” to accountable care organization (ACO) “pioneers” who improve quality of care and reduce costs.

And, as UnitedHealth Group is the nation’s largest health plan, with physicians in every state, according to American Medical News, its move also signifies that the shift from volume to value is not a passing trend. It’s here to stay.

“Medicare and payers will continue taking steps that will lead medical groups to focus compensation on outcomes rather than on volume of procedures,” said Vivian Luce, the regional director of physician recruitment firm Cejka Search, in a recent Physicians Practice article.

Most insurers beginning to shift reimbursements toward value do not yet put physicians at risk for lower reimbursements. UnitedHealth Group, for instance, will provide physicians with bonuses for participating in value-based models, such as accountable care "shared savings" pilots and patient-centered medical homes, according to American Medical News.

But that’s likely to change soon.

As Luce went on to say, “Physicians who cannot meet quality outcome requirements and lower readmissions are likely to earn less." In other words, soon physicians will begin experiencing reimbursement reductions (and therefore compensation reductions) if they fail to reach quality and cost targets.

That’s why it’s so important that you and your practice begin preparing for shifting reimbursements now, rather than later. Preparation will help ensure that you will be able to thrive in the future.

One way to begin preparing is by taking a close look at your physician compensation plan. If it is still determined strictly by salary and/or RVUs, you may want to make some changes.

Consider tying a portion of physician compensation to non-guaranteed and non-productivity measures, such as patient satisfaction scores, cost, and quality targets, etc.

In a recent Physicians Practice article, Justin Chamblee, senior manager at the Coker Group, a hospital and physician practice consulting company, suggested tying $5,000 to $10,000 of compensation to such measures.

That’s one way to begin thinking about this new model of reimbursement, and more importantly, begin adjusting your practices accordingly.

Is your practice prepared for a shift from volume to value? Why or why not? 

Here are some resources to help you begin preparing for the volume to value shift:

2011 Physician Compensation SurveyPhysicians Need to ‘Earn Their Keep’ in Upcoming Compensation Models10 Ways the Volume to Value Shift Will Influence Physicians (Part I)10 Ways the Volume to Value Shift Will Influence Physicians (Part II)How Practices Can Add Incentives to Physician Pay2011 Fee Schedule Survey - Change Is in the Air