Adoption of value-based care (VBC) programs has been expanding. For example, if the healthcare payment share of the VBC program that is at risk is likely to lose revenue if the provider does not meet quality or cost targets, reaching 28.5% in 2023, up from 12.5% in 2019.
Despite this steady growth, the Centers for Medicare and Medicaid Services (CMS) will implement significant policy changes in 2026. For the first time, select hospitals must participate in one of the programs.
In selected core basic statistics areas across the United States, approximately 750 hospitals will be required to participate in the five-year transformational plot responsibility model (team) program of CMS. Selected hospitals will be responsible for the cost and outcomes of Medicare beneficiaries who pay for one of five high-volume surgical procedures: lower limb arthroplasty, surgical hip femoral fracture treatment, spinal cord fusion, coronary bypass grafts and large intestinal surgery.
These account for about 15% of hospital Medicare revenue, and the lack of target prices will affect the bottom line.
The beginning of a new normal
The team aims to reduce some of the $47.6 billion spent annually on CMS spending within 30 days of discharge. However, at a higher level, the team will also help CMS improve its goal of integrating all traditional Medicare beneficiaries into responsible care arrangements by 2030. This means that when the next VBC authorization for CMS becomes a reality, team success may give an advantage to the organization.
Importantly, hospitals and health systems can expect more value-based care plans if the team significantly improves clinical outcomes and reduces costs.
Preparing for such a value-based care-driven environment requires a more proactive approach to care than some providers are accustomed to. Developing into a more active organization requires more than More Data, but Correct Insights from previously blind spot care settings such as post-acute care. This data-driven prevention strategy has been implemented in several leading health systems, using the knowledge and experience to prepare for a new normal in health care.
Teamwork time
In the short term, team participation can have a significant impact on the hospital’s financial performance for two reasons:
- The hospital may lose revenue starting from the second year of the team. Similar to other bundled payment plans, CMS has been implemented, and if the patient spends more than the payment for that episode, the hospital will be subject to excess costs.
- Cost limits or “pricing” are based on the hospital’s geographical area, not its personal historical cost. Often, large, large hospitals participating in the team are often in a vulnerable group, even if they consistently achieve better results.
According to an estimate, if an unexpected fee occurs, the hospital may lose $1,750 per episode, such as a patient within 30 days. Multiply by thousands or tens of thousands of procedures each year, unprepared hospitals will lose millions of dollars each year.
Adventure outside the four walls
An important aspect of the preparation team is that the hospital reviews its network of post-acute care (PAC) facilities, where many patients will be transferred after the surgery. This is because 21% to 53% of expenditures related to the team's plan to designate procedures occur after the patient leaves the hospital.
Not only can most of the spending occur in the walls of the hospital, skilled nursing facilities (SNF) and other PAC providers (called collaborators under the team model), they also assume most of the responsibility for preventing costly hospital readmissions. This will greatly benefit the hospital if their nursing manager has continued visibility into the patient’s health status and trajectory during post-emergency admission.
However, the methods used by most hospitals to monitor the health and care of patients in PAC facilities have become obsolete by today’s standards. Typically, patients receive a pile of paper forms and other documents from a clinical hospital in SNF to interpret and enter their electronic health records (EHR). As patients recover and recover, clinicians in hospitals and PAC facilities still exchange most updates via fax or phone.
Inevitably, the adverse risk of postoperative complications or adverse events will be increased until the patient needs emergency care and re-accommodation. Both of these results may exceed the cost of the team pricing limit.
The gleaming light enters the black hole
Hospital leaders and clinicians often refer to this lack of visibility into patients’ acute care as a “black hole.” Given the inherent risks, many hospitals and health systems have taken the necessary steps to overhaul the acute care monitoring protocol by using real-time and easy-to-access data and care collaboration tools.
These technologies provide connectivity for the EHR of PAC facilities, even if hospitals may consider “out of the network” facilities. From the hospital’s EHR, the nursing manager can monitor each patient’s journey regardless of the staffing level or availability of the acute care facility.
Similarly, using the same tool, hospitals can accurately assess the patient’s likelihood within seven or 30 days through an algorithmic risk score, which evaluates patient readmission based on data on medication, treatment annotations, laboratory results, progress indications and vital signs. This score allows the nursing manager to identify high-risk patients and intervene before an emergency room visit or re-hospital is required, greatly increasing the overall cost of an episode.
As mentioned earlier, the team model includes collaborators working with hospitals to ensure a smooth transition in care and improve patient outcomes. These include not only nursing homes, but also family health facilities, inpatient rehabilitation facilities or other PAC providers. Collaborators assume financial responsibility for a portion of the bundled payment and may receive financial incentives for providing high-quality, cost-effective care. Their collaborative agents’ collaborative agents (including revenue sharing payments (rewards for cost savings and quality improvements)) help them.
Finally, help hospitals control plot costs by identifying collaborators who share their commitment to quality and efficiency and networking around these partners, thus developing into a connected, data-driven acute care management strategy. For example, hospitals can create scorecards based on key performance indicators such as 30-day readmission rate, transfer rate, and length of stay. Hospitals can also track and compare PAC facilities in their networks based on CMS’s quality metrics, health check data, staffing performance, re-hospitalization and ED access rates.
Combining these strategies and partners can help hospitals better control episode costs, improve care coordination and stronger patient outcomes. In turn, collaborators benefit by sharing savings, ensuring a strong recommendation pipeline and increasing care efficiency. Both groups have consistent incentives to improve the quality of care while keeping costs within the bundled payment framework.
Where do I turn?
Since hospitals consider options for coping team tasks, they should consider the following actions:
- Looking for partners with an extensive collaborative network that can provide patient visibility in a PAC environment to control costs and improve outcomes.
- Consider a consultant who helps hospitals reduce reimbursement, reduce avoidable readmissions and penalties, and improve patient satisfaction.
- Explore techniques to significantly reduce or eliminate manual data management activities while facilitating easy-to-interpretable feasible guidance, such as determining patients’ readmission risks and ranking PAC providers.
The value of preparation
Over the years, CMS has expressed and developed numerous voluntary programs that demonstrate its belief in VBC as the highest quality and most cost-effective care strategy for its beneficiaries and participants. The team plan represents an important step forward in the agency's commitment and may affect private payers on a similar path.
Providers organizations relying on CMS will earn nearly half or more of their revenue and should recognize the opportunities presented by the team to prepare and equip their organizations to realize this value-based care future. The resulting proactive care strategies and workflows will support long-term sustainability of the hospital and may improve patient outcomes and experience.
Source: Skynesher, Getty Images
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