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5 IT challenges of supporting VBR

5 IT challenges of supporting VBR

The technological obstacles to addressing Value-Based Reimbursement are many — and it all starts with confusing language that does not clearly address the system changes needed.

Take the Patient Centered Medical Home (PCMH) concept, for instance. PCMH alone might have any one of 10 or more different ways they are paid other than ordinary fee-for-service. And a PCMH is only one of several new types of VBR programs.

IT shops already handling these new VBR requirements successfully often focus on actual requirements for both new and changed functionality, not program labels.

 Leaving aside the many administrative, organizational, operational, and financial challenges these new payment models create, IT departments should have deep concerns. In a mandate-weary environment of The Affordable Care Act, HIPAA Privacy & Security Final Rule and 5010, meaningful use and more, these emerging payment models will require new capabilities as well as a new tempo of changes that existing IT systems (claim adjudication, EHR, et. al.) are poorly suited to handle.

Here, then, is a look at the most common challenges:

1. VBR requires changing how patients are treated.

Success under VBR programs requires the delivery of care in more efficient and coordinated ways, rather than the status-quo of maximizing volume.  Provider workflows must change and one might think EMR investments can be leveraged to make the needed changes in care delivery.  Unfortunately, in most EMR settings, such an ability is more aspirational than real. The slave-like focus on Meaningful Use attainment has often led EHR implementations to simply automate the legacy workflows that pre-existed them and as a result are too brittle to easily adapt to the change required by VBR. Many providers have invested in population health management systems as a direct result of the growth of VBR programs. These powerful solutions promise to meet some new requirements, such as population stratification and alert generation, but in the near-term they remain limited by immature predictive analytics, the incomplete data inputs they receive, and their inability to impact the daily workflows of front-line providers.

2. Payers need to share claims and utilization data with providers.

Providers also need to share clinical data with the payers, for the measurement of quality and identification of any underutilization. The nature of these data transfers require a great flexibility in how quickly and how often they are created. More importantly, providers are not equipped to receive the claim data, nor payers the clinical data. Neither has the ability to analyze the new data effectively or use it well nor to combine the dataset they already have (claims for payers and clinical data for providers) with the other dataset to get a coherent view. Analytics capable of bridging these new challenges are nascent at best. In particular, providers need analytics prior to signing new agreements, so they can model the impact, locate opportunities for improved care delivery, and ensure they can be successful under the proposed terms.

3. Providers need payers to administer new types of benefit programs.

They must allow a PPO-style choice yet encourage members to stay within a smaller group of providers aligning around value. Core claim systems need to alter member benefit calculations based upon the VBR program in place and the use of aligned providers in a micro or overlay network. In the future, plans will want to share with providers the cost of reduced member responsibility to manage leakage outside the aligned providers.


4. VBR will have a direct impact on revenue cycle management.

Simply put: RCM is unable to handle VBR. Consider operating a provider organization where 30 percent of CMS revenue in 2016 or 75 percent of commercial revenue in 2020 (both targets have been set forth recently) cannot be evaluated or automated through the revenue cycle. Such system changes must handle the entire breadth discussed previously of global case rates, partial capitation, and large population-based bonus payments, in addition to the significant remnant of fee-for-service which will continue to exist for a very long time.

5. For every IT challenge addressed here, there is another undescribed.

Contracting systems used by payers and providers do not easily handle VBR agreements. Provider core claim and provider management systems cannot comprehend the new tiering, micro networks, and overlay networks created by VBR. Provider site of care selection systems need to evaluate whether their hospital will make more profit sending a patient to an independent MRI facility across the street than doing it in the hospital. Case management systems need to adapt their logic to handle new pathways and relationships driven by VBR. The variable part of employed physician salaries should be based on the same VBR incentives that reward the hospital.

While the above discussion of IT challenges posed by widespread adoption of VBR is broad, it should not be viewed as a reason to abandon VBR program development. Like any other IT challenge, organizations must establish specific requirements, sequence the work to deliver the highest value, and trust that innovators in the industry will develop solutions to meet new market needs. In particular, CMS needs to consider how to continue paying for claims processing at a fraction of the cost paid by commercial plans, yet allow their contractors to modernize and increase the system capabilities as needed.

IT managers should realize that the flaws of fee-for-service have finally accumulated to cause a broad sweeping change in the industry. Addressing the new requirements creates opportunities to address other challenges inherent in the legacy systems used. VBR will result in winners and losers; like the shift to DRGs and capitation, some organizations will fail and others will thrive and grow. IT enablement of VBR will be an important factor in that success or failure.

This Article was also published in Government Health IT