Outpatient facilities lead transition to alternative payment models, other providers slower to follow

A new, Peer60 study shows 70 percent of U.S. outpatient facilities are moving towards using a new payment method in spite of the wide variety of business models they operate within compared to those in hospitals. This study also found that a significant number of healthcare providers, for example, hospitals, were resistant to using alternative payment methods even though there is a transition from a fee-for-service model to a value-based model instead. Their findings showed only 36 percent of respondents would use an alternative model with 58 percent stating that they are not yet considering a switch. Large hospitals are more likely to consider a change of payment method as they have the resources and confidence to do so.

Despite the ongoing shift from fee-for-service to a value-based care model, a significant number providers are resistant to implementing alternative payment methods even though revenue cycle management continues to be a critical aspect of a provider's health, says a new Peer60 report.

Of the hospitals polled, just 36 percent reported they were actively adopting an alternative payment model. Fifty-eight percent of respondents said they were "not yet" seeking a new model, a slight decrease from 61 percent in 2015; but the percentage of respondents claiming they would not adopt an alternative payment model increased over last year's tally, from 3 to 5 percent.

Bigger hospitals were more likely than smaller ones to have the resources to implement a new payment model, and expressed more confidence in making the change. Hospitals with fewer than 500 beds were more likely to be among the slowest to adopt. What drew researchers' attention was the relatively high percentage of outpatient facilities -- 70 percent -- who indicated they were transitioning to a new payment model, despite the significantly different business models under which they operate as compared to hospitals.

[Also: Feds reach goal of tying 30% of Medicare payments to value]

Providers offered a variety of reasons for not adopting a value-based payment model. Some worried doctors would be paid less than ever before due to noncompliant patients; outcomes determined primarily by patient compliance, some respondents said, could lead to physicians cherry-picking patients whose outcomes will show higher levels of value.

Some also believed that, with no standardized approach, quality measures by national organizations might not accurately reflect local volumes and supply and demand metrics.

Of those indicating a willingness to pursue alternative payment models, the highest percentage, 34 percent, said they were most interested in adopting a bundled payments model. Those models involve payments for multiple services provided in one episode of care linked together -- leading to what researchers called a "happy medium" between fee-for-service billing and capitation. The Centers for Medicare and Medicaid Services claims that bundled payments allow for greater adaptability and flexibility on the part of the provider in deciding how payments are allocated.

[Also: Hospitals moving slowly toward value-based pay]

At 31 percent, the second-most popular alternative payment option was a tie between value-based purchasing, in which hospital quality data determines payment based on the quality of service rather than the quantity; and accountable care organizations, in which groups of healthcare providers come together to coordinate care.

Largely, providers believe the switch will result in the need for tighter clinical and financial integration, necessitating the addition of resources dedicated to improving clinical-financial performance. The authors predicted that providers will feel an ever-increasing amount of pressure, and in all likelihood will have to start or expand care management programs to ensure quality standards are being met.

Twitter: @JELagasse