4 Steps to Transition to Prospective Payment Agreements

By Chris Bethell

As value-based care adoption continues to grow, prospective payment continues to emerge as a preferred and proven cost savings and quality improvement strategy. Focusing on accountability, prospective payment models allocate risk to providers by tying payment to a predetermined, fixed amount.

Oftentimes miscommunication between providers and poor collaboration in treatment leave much to be gained—and much to be lost. There’s $800 million in unnecessary administrative costs a year due to communication breakdown.

To achieve success in prospective payment you need effective scaling, proper provider and cohort management, as well as data transparency between all care providers.

1. Go Slow

When launching a prospective payment program, it can be tempting to hit the run out of the gate. However, you want to begin slowly with a small sample size of providers so you can develop achievable goals for your program over time and assess the needs of your new program.

You also need to determine how big of a population you’re ready to manage. An effective method of scaling is to start by creating cohorts isolated by chronic conditions (like diabetes). Going slowly provides the foundation for effective scaling.

Expanding too quickly can create bumps in the road as you scale up. One example is a gap in healthcare analytics infrastructure. The majority of provider systems lack the analytical expertise, resources, and tools to launch a prospective care program without third-party assistance. Starting slow allows you to assess the infrastructure.

2. Take Pride in Your Role as an Enabler

In order for you to be successful in prospective payment, you need to acknowledge how the role of the payer has changed. The world of care and payment has become more complex and dynamic. You’re no longer removed from the process and only asked to pay at the end.

You need to be proactive in trying to enable evidence-based care, strong outcomes, provider education, and the collaboration, rather than competition, between providers. If they do not succeed in value-based payments, neither will you. You’re taking a leap, and a significant part of that is helping your providers invest money to empower themselves in reducing costs and improving quality earlier in care delivery.

Part of this is building trust with your providers. You want to build transparency within the contracting process. It’s important to create contracts that meet financial targets, but in prospective payment you need to also help providers thrive in the arrangement with the payer’s member population. Transparency in everything—member attribution, the terms, the variables, and the parameters—and is vital to build trust so your providers can feel empowered and deliver the best level of care possible.

3. Utilize Analytics

Creating the contract and building trust is only half the battle, you also need to align all of your providers to take advantage of the program so they can all work in harmony to deliver higher quality care to your member population.

To achieve this end, you need an analytics platform that is user-friendly and connective, so providers can work in tandem on patient care and close care gaps. Ensure you have a software platform in place that integrates data sources and makes the right data accessible so your providers can then connect high-risk populations with the types of care they need.

Your platform should also be simple enough in order to avoid confusion between your providers and overburdening. Providers are utilizing more and more analytics and technology in their practice, so being mindful of its usability ensures a good relationship with your providers as they find sharing and inputting information easy.

4. Select the Appropriate Providers

Ideally, you want to be able to connect patients in your member population with a provider with specific expertise in the diseases or cohorts they’re managing. Researchers at the Mayo Clinic found that “hospitals that perform the same procedure or treat the same condition repeatedly do it better than those who treat relatively few of the same condition or procedure.”

You also want to select providers that have demonstrated experience outside of an acute care setting and have fostered relationships with local post-acute care providers through transparency and effective communication. This enables them to better manage the patient jointly and effectively handle post-discharge care.

Lastly, providers should also have robust EMR processes to enable easy data-sharing and utilization within analytics software.

Check out the SpectraMedix VBP Performance Suite to see how SpectraMedix can help you transition to prospective payment

When done correctly, there’s a world of opportunity in prospective payments. With the right analytics tools, small steps, provider alignment, and analysis of your provider network healthcare ecosystem, you will in position to reap the benefits of prospective payments.

Tags: Health Plans

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