Seven Considerations in the Financial Modeling of Value-Based Payment Arrangements

hfm Magazine

As hospitals and health systems in the United States continue to move from a purely fee-for-service (FFS) model to value-based payment, there are various ways in which they can accomplish this transition, some mandatory and others elective.

For example, hospitals and health systems already participate in mandatory Medicare value-based models such as the Value-Based Purchasing (VBP) Program, the Hospital-Acquired Condition (HAC) Reduction Program, and the Hospital Readmissions Reduction Program (HRRP). Meanwhile, elective value-based payment models include the Medicare Shared Savings Program (MSSP) and any number of commercial, Medicare Advantage (MA), and Medicaid managed care arrangements.

The financial impact of participating in these various models can be in the millions of dollars for these organizations and the provider organizations they may sponsor, such as accountable care organizations (ACOs) and clinically integrated networks (CINs).

This article was originally published by hfm Magazine, October 2018.