Value-Based Payments

Value-Based Payment Initiatives

Wondering Where the Shared Savings Are?

Shared savings deals are all the rage these days. Many provider groups in markets around the U.S. want to engage in shared savings contracts with private payers covering commercial, Medicare-Advantage and even Medicaid patients. Payers are only too happy to participate. Shared savings transfers a substantial amount of the financial and underwriting risk to the providers, increasing the likelihood that even larger surpluses will accrue to the payers than under traditional volume-based fee-for-service contracts.

On the surface, implementing a value-based program may look simple— identify a population of patients, figure out what you spent last year on that group, and if the provider group spends less on those patients next year, while at the same time maintaining or improving quality of care, both the payer and provider group will share in the savings.

If only what appears to look so easy were indeed really that easy! Physicians often erroneously believe that they know how to make the most cost-effective decisions on behalf of their patients, and that they will always make the optimal decisions that will both improve their patient’s lives while at the same time save everybody money and generate significant surpluses for the members of the ACO. Just get the insurance company out of the way and everybody benefits! Right?

Wrong. Shared savings programs are hard. The Mile High team knows this because we are right in the thick of it, working to prevent ACOs and payers from “killing each other.” In some cases, we serve as reporting and reconciliation vendors, transparently reporting shared savings performance to both ACO and payer. In other situations, we represent just the ACO as they try to stand up a new shared savings initiative that will work for both the ACO and the payer.
Then there is the least desirable but often necessary role in which we serve. When the ACO deal wasn’t set up properly in the beginning and now the parties are lawyer-ed up. In this situation, Mile High has successfully worked to keep the warring parties out of litigation by recalculating shared savings retrospectively and promoting out-of-court settlements.

Where is your organization on the value-based program continuum?