Class PPT slides

1. Analysis of a Healthcare
Organization’s Change to Value-
Based Medicare Reimbursement
Process
By: Peter Nyandeh Chie
DDBA 8560
Walden University

2. Introduction
Before the ACA, several programs were initiated to
confront the issues of access, quality, and cost in the U.S.
healthcare system. The Following Payment Models
emerged:
 The Fee-for-Service (FFS) Payment Model
 The Pay-for-Performance (P4P) Payment Model
 The Value-Based Payment Model - Introduced by the Affordable Care Act
(ACA)

3. The Fee-for-Service (FFS) Model
Payment to the healthcare providers, including
hospitals and physicians were based on unbundled
services.
The program paid by volume and complexity of the
tests performed.
No quality and efficiency were embedded into the
services physicians provided.

4. Pay-for-Performance (PFP) Model
An alternative to the FFS in the early 2000s.
Focused primarily on quality and cost reduction.
Initiated for service providers to be compensated
based on the quality and efficiency of the service.
An incentivized payment model;
No ordering and performing of unnecessary
procedures.

5. Value-Based Purchasing (VBP) Model
Introduced into the Affordable Care Act (ACA) in 2012;
Mandated that payments to hospitals under Medicare
be dependent upon quality and efficiency of care;
Several changes made to the Medicare reimbursement
process.

6. Value-Based Purchasing (VBP) Model
(Cont’d)
Healthcare payments were grouped into four
categories:
1. Fee-for-Service with no link to payment,
2. Fee-for-Service with a link of payment to quality,
3. Alternative payment models built on FFS architecture,
and
4. Population-based payment.

7. Value-Based Purchasing (VBP) Model
(Cont’d)
Four Quality Metrics were Specified:
1. Process metrics,
2. Outcome metrics,
3. Cost utilization metrics, and
4. Patient satisfaction metrics .

8. Value-Based Purchasing (VBP) Model
(Cont’d)
Health and Human Services (HHS) set several target
goals :
1. 2016 - 30% of Medicare payments placed in the
alternative model, categories 3 and 4
2. 50% by the end of 2018

9. Value-Based Purchasing (VBP) Model
(Cont’d)
The VBP model would either reward or withhold
incentives to hospitals and physicians if no targets
met.
In 2015, 1.5% of Medicare payments were withheld,
2% of the payments will be withheld by 2017.

10. Conclusion
Transitioning from a volume-based payment method to
one that creates value and rewards healthcare providers
was long overdue.
 Though the P4P was a unique model, it failed to replace the FFS.
 FFS model is still a part of the VBP.
 The U.S. Healthcare System has FFS, P4P, & VBP payment models.
Thanks.