If your healthcare agency works with multiple insurance providers, you've likely heard the terms “fee-for-service” and “value-based care.” You may already be brushing up on value-based care models as Medicare and Medicaid have shifted toward this service model.
As a healthcare professional, you must understand these models for reimbursing services. Each model is geared toward achieving specific patient outcomes and has different requirements for determining how much to reimburse you for your services. Learn more about each model and how they compare so you can recoup proper payments.
What Is Fee-For-Service?
Fee-for-service (FFS) is the traditional healthcare model. When Medicare, Medicaid, and insurance providers use this model, each service is billed and reimbursed separately. As a result, your agency is incentivized to provide more services because your payment depends on how many services you provide.
For example, under the fee-for-service model, you are reimbursed separately for office visits, tests, procedures, and treatments.
How It Works
If your patient’s provider reimburses using the FFS model, you submit claims for each service you offer and the insurance provider reimburses them separately. Under this model, you get reimbursed regardless of the patient’s outcome. This model is simpler and more flexible, although FFS makes it harder to coordinate care across multiple providers.
What Is Value-Based Care?
Value-based care focuses on your care quality and patient experience. Rather than incentivizing your agency to provide more services per patient, value-based care encourages you to enhance the patient experience.
Under the value-based care model, you treat the patient holistically. Since your payments are tied to positive patient outcomes, you are encouraged to collaborate with other service providers.
For example, when treating a patient with a complex condition who needs multiple diagnostic tests, medication, physical therapy, and other treatments, you are more likely to conduct all these services in-house under the FFS model. However, since the value-based care model depends on quality, with value-based care you will likely assemble a comprehensive team of professionals to improve treatment.
How It Works
Under this model, you can submit a bundled medical bill or an episode-based bill that covers all services rendered during treatment. If you’re coordinating services with other caregivers, you can submit their services on the same bill.
Fee-for-Service vs. Value-Based Care
Although many insurance providers are shifting to a value-based care model, you will still see the fee-for-service model in your practice. Here are some key differences between these two models.
Patient Outcomes
Because the fee-for-service model focuses on the services you provide rather than patient outcomes, you may end up overservicing a patient. Performing multiple services for a patient can increase the amount of money they must pay out of pocket, and it can put financial burdens on insurance providers.
Additionally, your payment is not tied to each patient’s result. If one treatment proves unsuccessful, you can always try a different service. Since value-based care ties your reimbursement to patient satisfaction and care quality, this model may encourage you to focus more on preventive care and other services that help your patients manage their condition.
Financial Risk
In many cases, value-based care poses less risk than the fee-for-service model. You are rewarded for providing high-quality care and therefore persuaded to produce positive patient outcomes.. You are also motivated to offer more preventive care that keeps patients healthy and out of the hospital.
Healthcare Costs
Since value-based care models emphasize prevention, your patients may see a reduction in their healthcare costs. You and your patients work together to address lifestyle changes and other factors within a patient’s control that reduce their chances of needing expensive tests, surgeries, medication, and other procedures.
Making the Shift to Value-Based Care
As the Centers for Medicare and Medicaid Services and other large providers shift to value-based care models, you must change with them. As you start considering the shift, learn to assess your highest-risk patients.
Look through your current patient roster and identify those most likely to need expensive healthcare treatments. These patients include people dealing with multiple comorbidities that make them vulnerable to complications from diseases.
Also, examine the various social determinants of health in your area including factors contributing to high healthcare costs. Once you’ve assessed your most high-risk patients, develop strategies for cost-effectively managing their care. Find partners in the area who can help with treatments.
Encourage Wellness
Depending on their insurance provider, many patients should be eligible for reduced-cost or free annual wellness exams and physicals. Encourage your patients to have an annual physical to detect potential health problems in their early stages.
If you’re not doing so already, use your patient management system to automate reminders to those patients overdue for a physical.
Focus on Patient Experience
You have worked hard to build a trusting relationship with your patients, but you should become familiar with their experience. Evaluate the typical patient experience from how long they have to wait to the amount of time spent with their practitioners.
Look at other factors that improve patient experience, such as the ease of scheduling, their ability to ask pre-appointment questions, and error-free billing. Gather feedback by asking for comment cards or sending out a survey to your existing patients.
Make a list of potential improvements and develop strategies to implement them.
Let PUREDI Help You Navigate Value-Based Care
Because the value-based care payment model focuses on quality, you must become familiar with new codes and claim submittal processes. Or let PUREDI guide you through the process. We deliver medical billing services from a team with over two decades of experience in medical billing and practice management.
Our professional team members stay current with new developments in medical billing, including value-based care. Our 100% cloud-based solution can flag claim errors before you submit them so you can make sure all your claims are clean. We stay on top of regulations and understand how to work with multiple providers for coordinated claims.
Schedule a demo to learn more.
