Under VBP models, providers are not paid solely on a fee-for-service basis. Depending on the model, you may be paid:
- for reporting performance metrics to a payer
- based on your performance on specific metrics
- a fixed amount for a set of services to an attributed set of patients
You may also be eligible to share in savings related to identified patients and/or be accountable for sharing in downside risk for those same patients.
Staff and clinicians have to understand VBP models and terms and agree on a level of financial opportunity and risk in VBP arrangements that is appropriate to your size and attributed or assigned population with respective payers. The glossary and the VBP Basics page offer definitions of key terms such as Assignment, Attribution and Member Month. The LAN Framework is also helpful.
As the LAN Category increases from Category 2 to 3 and 4, the level of financial reward and risk to participating provider entities also increases. Advanced VBP models (Categories 3 and 4) more significantly restructure payment for provider entities to better enable and support delivery system transformation.
For example, prospectively paid VBP models require stronger provider financial management and administrative functionality within the provider entity to accept and, in some cases, distribute payments to clinicians, for an array of services and to manage within the prospective payment amount. Prospectively paid models may also create challenges for accurate data collection for providers and payers since payment is no longer linked to individual FFS codes or visits.
If the VBP model(s) that a payer is asking you to participate in is not clear, or if you are uncertain of any aspects of how your payment will differ – ask for more clarity. For example, ask the payer to simulate your payments as if you participated in this VBP model in the past year. This “shadow payment data” should indicate what your practice would have earned or lost if you participated in this type of VBP model in the prior year, and should clearly indicate your performance on related quality and financial metrics.
VBP Toolkit Menu
- Understand VBP models
- Educate your team on VBP terms and models
- Assess internal interest and understanding of VBP
- Assess your readiness for a new or modified VBP model(s)
- Identify current data analytical capabilities and gaps
- Understand member attribution and assignment
- Understand your population and health disparities
- Understand types of financial risk in VBP models
- Get ready for VBP
- Go live with VBP model(s)
- Promote provider clinical transformation to foster VBP success
- Access technical assistance and peer learning
- Understand how quality is measured and used in different VBP models
- Maximize quality improvement – performance on measures
- Review results and make modifications
- Scale up current VBP contracts and engage additional payers
- Understand VBP compact models
- Primary care model
- Specialty care models (future content)
- Hospital care model (future content)
As you review different types of VBP models offered by payers in the VBP Compact, consider:
- The populations and services that may present the greatest opportunity for you and your payers to achieve your defined value objectives;
- How each VBP model might work to improve care and costs of care for different populations or subpopulations;
- Your provider entity structure, financial arrangements, and the size and distribution of payer membership; and
- Partners that might be important to contract with under a VBP model based on your current financial arrangements with them, their VBP experience, capacity, and readiness.
When your VBP team, or a subset of the team, meets with payers, it is important that they ask how the VBP methodology might impact clinical and administrative operations. Ask for assistance in reviewing data from the payer to better predict future payouts and liabilities under a new VBP model and to identify “low-hanging fruit” in terms of opportunities for additional payments. For example, a family practice may be more quickly able to improve its rate on a HEDIS measure with a lower denominator because it applies to few attributed patients compared to other measures in the VBP model. The practice needs to have successful outreach to fewer patients to address gaps in care and improve your numerator and overall HEDIS rate.