Are your providers prepared for the death of fee-for-service?

Practice administrators working with providers to transition away from fee-for-service and toward value-based reimbursement may find reluctance from their physicians, according to Dennis Flint, MGMA member, director of operations, Peak MSO, Colorado Springs, Colo. 

“We’ve been rewarding excess because that’s how the system has worked, but that’s being blown up,” Flint says. He lead a session at the MGMA 2017 Financial Management and Payer Contracting Conference called “Preparing Physicians for the Death of Fee-for-Service” and says that practice administrators need to think about how to handle a less-is-more paradigm. Flint has some simple recommendations for how administrators can start shifting their providers in the value-based direction.

He recommends administrators start setting an acuity level for their patients. In order to smoothly transition into a value-based system, practices need to have an understanding of the health level of patients. Coding is an essential part of that, so he recommends making sure doctors understand hierarchical condition categories.

Flint also suggests revisiting physician compensation models and making changes that reward value. “You’ve got to get physicians involved in the transition process,” Flint explains. “And you have to be willing to penalize providers if they are not being cost effective.”

After addressing patient health and compensation models, Flint recommends analyzing payer contracts in order to maximize your revenue. The key question to ask: “How much risk can I afford to take?” says Flint. “When it comes to value-based reimbursement, you want to be the pie-cutter.”

Flint’s overarching advice in the shift to value-based reimbursement is just to be proactive. “Shifting your providers away from fee-for-service is achievable, but you can’t just wait and see what happens – you’ve got to start now and you need to be committed,” he says.