Real Time Incentives for Providers to Achieve VBP Goals During COVID-19

By Raj Lakhanpal, MD, FACEP, CEO, SpectraMedix
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Since February 2020, COVID-19 has continued its course throughout the United States. As the year comes to a close, stakeholders from across the industry are trying to figure out the best way to navigate many of the shifts seen in the healthcare industry over the last eight months.

As a result of COVID-19, many provider organizations have experienced increased financial strain. COVID-19 has dramatically decreased healthcare spending, with patients and providers delaying certain non-essential healthcare services for months. As a result, providers have seen a decline in outpatient visits. Combined with having to invest in increased personal protective equipment (PPE), providers continue to be concerned about whether they can make up for lost time and how they can avoid situations like this in the future.

The situation became quite clear, as expressed in a recent press release by Blue Cross NC: “Since the start of the pandemic, patients have cancelled or delayed their doctor’s appointments and elective procedures. More practices and patients have turned to telehealth, but virtual visits have not fully made up for the loss of income.” Even though telehealth has been regarded as a silver lining during this pandemic, telehealth visits cost almost half as much as in-person visits and do not make up for all the lost revenue. In many respects, COVID-19 has exposed some of the pitfalls of the healthcare business and information models.

Among the ways to circumvent these pitfalls is the use of real-time (monthly) incentives with your primary care providers (PCPs) to close care gaps, improve STAR ratings, optimize risk scoring (RAF scores), and meet the total cost of care targets for health plan members, but especially for those in Medicare Advantage plans. Instead of waiting 12-18 months to be receive incentives, providers can be paid monthly, which could lead to greater compliance.

Moving your STAR rating forward gives you a twofold benefit: it allows you to attract more members and potentially earn a 5% bonus.

With one-fifth of Medicare Advantage beneficiaries utilizing CMS STAR ratings in their healthcare decision making, your STAR rating is crucial. Studies have shown that if a Medicare Advantage plan increases their STAR rating by one star their membership improves by 8-12% and specifically jumping from 3 to 4 stars increases membership by 13-17%. Plans with a high STAR rating (4+) receive a 5% bonus, and maintaining 5 stars enables you to have open enrollment all year instead of in a specified two-month period. Additionally, Medicare Advantage plans yield higher than nominal revenue and operating margin with PMPM revenue of $800 - $1200 and operating margin of $30 - $60 PMPM.

RAF score improvement should also be an area of intense focus. Based on the RAF scores of your membership, different rates apply and significantly more revenue can be generated by members with specified clinical conditions. A lot of this data is not carried over year-to-year if services for that condition are not rendered. To ensure accurate and optimized RAF scores, you want to validate claims data and reference secondary data to ensure chronic conditions, even when services haven’t been rendered in the past year, are being documented.

As the year comes to a close, it is clear that payers have much to gain with improved STAR ratings and optimized RAF scores. By meeting VBP targets, most arrangements provide an opportunity for providers to earn 15-20% more. Payers have the infrastructure and tools that enable providers to meet these goals to the benefit of all stakeholders.

I welcome discussion on this topic, so please feel free to respond on LinkedIn or reach out to me directly at my email address: raj.lakhanpal@spectramedix.com.