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Physician Practice Roundtable

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Secure upfront financing for population health infrastructure

Standardize quality metrics around internal areas of focus

Negotiate to increase the frequency of claims feed

Importance

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to Remember That Will Strengthen Your Risk-Based Payment Contracts

Value-based payment contracts are critical to success in the new health care environment. But too many contracts lack essential elements that make the difference between provider success and failing to realize ROI. We’ve put together a list of reminders and suggestions to bring with you to the negotiating table when sitting down with payers.

The organization receives financial support for any population health investments already made, as well as for any new investments required to operationalize the contract.

Each contract includes six to eight quality metrics that are standardized around internal areas of focus.

Ideal Scenario

Ideal Scenario

Organization receives claims data monthly, or as close to real-time as possible.

Ideal Scenario

• Negotiate for upfront or interim payment

• Payment may be tied to meeting quality or other goals and repaid if goals are not met

• Minimize number of quality metrics tied to each contract; goal should be six to eight

• Pick metrics that are already an organizational priority

• Pick metrics you know you can hit

• Pick metrics with a halo effect to the entire metric list

• Ensure you and the payer are using the same metric definitions

• Consider additional quality measures for bonuses above and beyond basic contract terms

• Push for claims data at least monthly

• Create a single portal to view all claims across payers

• Request “pay for reporting” if claims data are not provided

Prioritize narrow network product design

Contracts cover HMO/narrow-network products with benefit design mechanisms (e.g., prior authorization requirements, tiered service, and network pricing) to seek care in the network. Patients are required to choose PCP and clinic.

Or, contracts that cover PPO/open access networks have tiered benefits to encourage patients to stay in-network. Patients are required to choose PCP and clinic.

Ideal Scenario

• Require patients to choose a PCP and clinic

• Define PCP with specificity; consider including urgent care, hospitalists, OB-GYNs, endocrinologists, and cardiologists as PCPs for attribution, if applicable

• Stop attributing new patients to your providers after nine months as not enough time is left in the year to ensure high-quality care

• Include patient financial incentives to seek care in the network

• Structure copays to incentivize the use of primary care and lower-acuity facilities (e.g., urgent care rather than emergency room)

• Limit access to certain drugs or services (e.g., imaging), or require preauthorization

Develop customized, market-specific cost targets

Cost target is set using the ideal methodology for the institution.

Ideal Scenario

• Push for the most favorable benchmarking methodology (e.g., historical baseline, local or network comparison, target percent of premium)

• If using a historical benchmark, determine which 12-month period should be used as baseline; it does not have to be the last 12 months

• Resist the minimum risk corridor, if possible

• Make sure a savings cap doesn’t cut you off

• Note that it’s difficult to get more than 50% of savings without agreeing to downside risk

• Negotiate risk score growth and corresponding changes to financial incentives and quality scores

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