Value-Based Reimbursement Models

June 4 2024

Healthcare facilities and medical providers are in the business of helping people feel better. To ensure patient care remains the central focus, healthcare entities and reimbursement systems have moved away from volume-based repayment to patient-centric methods, such as value-based reimbursement models.

This alternative to standard fee-for-service models prioritizes quality over quantity. Value over volume. Substance over the number of services. Learn how your facility can seamlessly transition to value-based reimbursement methods.


What Is Value-Based Reimbursement?

Value-based reimbursement links payment to the quality of care a patient receives. That means that a provider’s repayment relates directly to the effectiveness of their services. 

Traditional reimbursement methods charge for each test or procedure, which can lead to an emphasis on the quantity and types of healthcare services rendered. Value-based reimbursement incentivizes high-quality patient care and personalization, as well as provider accountability.


Most Common Value-Based Care Models

To be efficient, value-based care models must be structured. There are several reimbursement methods under a value-based system based on the assumed risks of providers and profit sharing.

Let’s identify the most common value-based reimbursement models healthcare facilities utilize.

Bundled Payment System

Also called episode-based payments, bundles are a single payment providers receive for the entire episode of care. Even if multiple providers deliver services, the amount does not change. 

Bundled payment encourages collaboration and reduces redundancies that often occur when provider services clash. 

Patient-Centered Medical Home (PCMH)

The PCMH care delivery model revolves around the patient’s primary care physician (PCP). This PCP coordinates medical services to better meet the patient’s needs and to provide a more personal approach. This one-on-one relationship ensures medical services are determined based on a patient’s unique goals and environmental factors. 

Accountable Care Organization (ACO)

An ACO model involves coordinated care between physicians, hospitals and other providers. This value-based care aims to improve patient outcomes and prevent redundant services and medical errors.

There are two reimbursement models that an ACO can participate in:

  • Shared savings: ACO providers who meet the quality of care and spending targets set out by the CMS share the savings with the payers.  If they go above spending targets, there is no shared risk — that is, they do not incur penalties from the payer. 
  • Shared risk: Also called downside risk models, providers who do not stay at or below the spending targets cover all or part of the extra costs. However, there is also a greater potential for financial benefit.  

Global Capitation

This value-based care model pays providers a designated amount per patient. While this lets them keep all savings, it also means that the provider incurs any sustained losses. 


3 Common Challenges With Value-Based Care Models

A value-based care model offers many advantages to patients and providers. However, there are three main challenges facilities can face when transitioning to this new system.

1. Data Measurement

A value-based care system relies on accurate patient data. Without communication and cooperation between healthcare providers, patient information is isolated. New systems and methods of data collection and implementation allow providers to work together for optimal patient care.

2. Defining Value-Based Outcomes

Defining and prioritizing desired outcomes in a value-based care model can be challenging, as this system focuses on quality. Values must be aligned and defined by both patients and providers.

3. The Difficulty of Change

Change is hard, especially when a facility already has a reimbursement model. Understanding the challenges of change can help care coordinators, physicians and the entire healthcare team cope with the shift to a value-based care method.


How Can Medrina Help?

Providing comprehensive care is the goal of any skilled nursing facility (SNF). Medicare’s Patient-Driven Payment Model (PDPM) is a payment rule for SNFs. The goal is to encourage your facility, nurses and care coordinators to prioritize value-based patient care over volume-driven standards.

Understanding and implementing PDPM can be challenging. With Medrina, our physiatrists become intrinsic members of your team. These skilled physicians understand the complexities of PDPM, allowing you to embrace the positive change this system can bring.

Partnering with Medrina means:

  • Effectively captured patient information.
  • Accurate PDPM mapped coding and patient classification.
  • Enhanced communication between providers.
  • Improved outcomes translating to profitability.


Maximize the Benefits of Value-Based Care With Medrina

Learn how Medrina can help your facility maximize the benefits of PDPM and a value-based care model. We work to enhance patient outcomes while encouraging cooperation and communication between physicians. Contact us today for more information about adding a dedicated, in-house physiatrist to your care facility.


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