How Will This Toolkit Help Me?
This toolkit will help leaders and organizations understand the principles underlying physician-led value-based care models. This toolkit includes step-by-step guidance for implementing value-based care, including how to identify high-risk patients, design a care model, and optimize team-based care in pursuit of a sustainable model for the practice.
Unlike traditional payment models that link payments to the number and type of services utilized, value-based health care is a delivery model in which payments to providers, including hospitals and physicians, are linked to patient health outcomes and quality. The “value” in value-based health care is derived from measuring health outcomes against the cost of delivering the outcomes. Under value-based care agreements, providers are rewarded for helping patients improve their health, reduce the effects and incidence of chronic disease, and live healthier lives in an evidence-based way.1 Value-based care may also be called an alternative payment model (APM).
Many organizations are striving to achieve the Quadruple Aim (Figure 1). By their very definition, value-based care models are designed to improve patient care, reduce costs, and yield better outcomes. While the relationship between care delivery models and well-being may not be apparent, delivering quality patient care is a principal driver of physician satisfaction and a contributor to well-being.
The American Medical Association (AMA) recognizes that the physician is best suited to assume a leadership role in transitioning to APMs.2 As such, AMA policy on physician alternative payment models can help you and your practice determine what is feasible.2
Five STEPS to Transition Your Practice to Value-based Care
Identify High Utilization, High-Risk Patient Populations
Design the Care Model
Optimize Team-Based Care to Sustain Your Model
Partner for Success
Drive Appropriate Utilization and Quantify the Impact
STEP 1 Identify High Utilization, High-Risk Patient Populations
Knowing your patients is the foundation of value-based care. Patient populations with the highest risk of hospitalization or high emergency department (ED) utilization tend to drive high health care costs and often receive fragmented care. These populations include polychronic patients with multiple chronic and complex conditions and co-morbidities, such as diabetes, hypertension, depression, heart failure, cancer, kidney failure, or chronic obstructive pulmonary disease.
Utilizing evidence-based standards of care developed by medical specialty organizations can improve outcomes for the most common medical conditions that drive excess costs. Identifying patients with gaps in care can help prevent the deterioration of chronic medical conditions. Pull data from your patient care registry or electronic health record (EHR). For example, you may search for all patients with numerous ED visits within the last 2 years or patients with select chronic conditions such as uncontrolled diabetes or uncontrolled hypertension.
Categorizing patients by insurance status may also be informative. The Centers for Medicare & Medicaid Services (CMS) has set a goal for all Medicare fee-for-service and most Medicaid beneficiaries to be in a relationship with health care providers accountable for the quality and total cost of care by 2030.4 You may opt to target these populations for inclusion in your value-based care model.4 Many commercial insurers and employer-sponsored insurance plans are partnering with physicians to develop value-based care benefits for patients.
Remember, this is usually a transition, and it is important to identify tools and treatment-related services that benefit the fee-for-service (FFS) and fee-for-value (FFV) worlds. These services include the Medicare Annual Wellness Visit (AWV) and other preventive care, chronic care management, transitional care management, and collaborative care models—to name a few. These services all have FFS reimbursement attached but can help lower the cost of care through better managing unnecessary utilization and improving the quality of care delivered.
AMA STEPS Forward Simplified Outpatient Documentation and Coding Toolkit
This toolkit offers valuable documentation and coding tips and includes suggestions related to SDOH.
STEP 2 Design the Care Model
Create a care model that is evidence-based and easy to follow. Several structures can support value-based care, including accountable care organizations (ACOs), patient-centered medical homes (PCMHs), or commercial and governmental payer contracts that pay for high quality, low cost, and improved outcomes in addition to the specific services rendered.
Consider the following elements to customize a value-based care model for your practice:
The target patient population(s) (refer back to STEP 1)
Payers who will be involved
Changes in the type and volume of services you offer
Compliance with federal and state laws
Anticipated or expected benefits for patients and payers; you can proactively work with insurance contractors in your organization's revenue cycle team to create and test VBC benefits
Existing or updated workflows necessary to provide the desired care to the selected patient population
Team members who will support the new model
Roles and responsibilities of each physician and the care team
Frequency of patient contact, including phone calls, emails, or portal messages
Frequency of direct patient contact from visits to clinical practices, urgent care, and telehealth or visits by home health providers
Available data sources to measure impacts, such as clinical, administrative, and payer or strategic partner data
Transition costs associated with implementing the new model—for example, funding for investments in new people, processes, and technologies required to support alternative payment models that a practice needs to plan for from the outset
The Physician-Focused Payment Model Technical Advisory Committee (PTAC) is crowdsourcing alternative payment model proposals from organizations, professional societies, health systems, and individual physicians across specialties.9 Check out the features of these submissions and consider how they might work in your model.
Examples of PTAC submissions include APMs that range from episode-specific to longitudinal, team-based management of patients with chronic conditions such as9,10:
Other APM designs submitted to PTAC enable higher quality, lower cost care delivery in9,10:
The Health Care Payment Learning & Action Network (HCP LAN), composed of public and private health care leaders, is another resource for understanding and developing an alternative payment model that meets your needs.
The Centers for Medicare & Medicaid Services (CMS) has set forth strategic objectives for the future of value-based care that may also be guiding principles for your model (Figure 2).4
As you select or craft your new value-based care model, keep success metrics top-of-mind. Metrics for each population should be measurable and provide a baseline to assess against future impact. Select metrics that are easy to capture and automate in the electronic health record (EHR) or a population health registry to prevent having to extract them manually.
STEP 3 Optimize Team-Based Care to Sustain Your Model
Thoughtful planning and awareness of the characteristics of your practice's attributed patient population(s) are essential to assemble a cost-effective, appropriately staffed, and sustainable value-based care model.
By definition, value-based care teams are multidisciplinary teams. Depending on their licensure, background, and training—and with proper education and redistribution of responsibilities—current care team members could potentially fill the staffing needs of your new value-based care model.12 Leveraging the expertise of existing team members can be a cost-effective strategy during the initial transition period. As you expand the value-based care model, you might need to hire new team members, mainly because value-based models rely heavily on effective care coordination, care management, and robust data capture and analytics.
The care team leader should be a physician who identifies, engages, and elicits each team member's unique training, experience, and qualifications to help patients achieve their care goals.12 The physician leader should also supervise the application of these skills.12,13
Related AMA STEPS Forward toolkits can help you recruit, train, and retain exceptional medical assistants who can fill some of the roles outlined in Table 2:
Given the significant involvement of numerous care team members, consider integrating the fundamentals of team-based care to ensure the success and sustainability of your value-based care model. For example, team efficiency and efficacy improve when the physician leads a brief daily huddle in the morning and involves the entire care team. This daily huddle anticipates any care management needs for that day and ensures the practice is adequately resourced to meet those needs.
STEP 4 Partner for Success
Depending on the size of your practice or organization, you may need the additional resources a collaboration can offer to help you successfully shift to a value-based care model. Coordination with local hospitals, specialty practices, physical therapy service providers, skilled nursing facilities, urgent care centers, and payer partners are some strategic arrangements that may enhance your ability to offer patients better transitional care and outpatient care management. Consult with a legal advisor before establishing multi-provider structures to avoid running afoul of fraud, abuse, and other laws applicable to the health care space.
Collaboration and partnering avoid care fragmentation, which presents significant safety risks and can result in patient dissatisfaction and disengagement. Collaborating between hospitals and practices provides an ideal opportunity to reduce care fragmentation by enhancing coordination and communication. Through this collaboration, hospitals can offer discharge lists and reports on emergency department visits, enabling your practice to effectively follow up with patients and maintain continuity of care. Obtaining the daily ADT (Admission, Discharge, and Transfer) feeds from the facilities where your patients receive treatment, whenever feasible, is highly advantageous. These feeds can be integrated into your data and analytics platform or directed to a team pool EHR inbox that is accessible to the nurse navigator as part of their daily workflow.
Begin conversations with potential collaborators and payers by asking them to help you and the community make this move toward value together, for the benefit of your patients. Come to the table with a thoughtful business model that you can discuss and involve your legal advisors (Figure 3).
The Future of Sustainable Value-based Payment: Voluntary Best Practices to Advance Data Sharing
STEP 5 Drive Appropriate Utilization and Quantify the Impact
As your practice transitions to the new model, it is imperative to focus on reducing variability and directing utilization toward the desired lower-cost, high-quality approach. Patient choice and clinical needs ultimately determine where they receive care, even though staying within an integrated provider network generally improves quality and lowers costs.
Analyze to Reveal Variability and Opportunity
Take a holistic approach to analyze how the total cost of care can be improved. For instance, it may seem counterintuitive, but prescribing patients a more expensive medication that improves clinical outcomes may reduce downstream hospitalizations. Identifying and improving medication adherence may decrease the time spent on preauthorization for second- and third-line medications. To identify potential unnecessary costs associated with your practice, work with a financial expert or utilize analytic software to analyze high-cost spending patterns that do not contribute to better patient outcomes. For example, the analysis may uncover that an imaging center used by your practice is more expensive than others in the area. After evaluating service quality and ensuring value, referring patients to high-quality, lower-cost centers may be wise.
In today's environment, access to care is an increasingly pressing issue. Evaluate your office hours, availability of same-day appointments, and after-hours care options. If patients visit the ED for non-urgent care, there is an immediate opportunity to reduce the cost of care for your patient population. The COVID-19 pandemic has permanently reshaped health care, solidifying telehealth as a prominent solution to overcome some access limitations. Team-based telehealth can be a powerful tool for providing 24/7 patient care access, and many practices are forging strategic partnerships with telehealth providers.
AMA Telehealth Implementation Playbook
AMA Accelerating and Enhancing Behavioral Health Integration Through Digitally Enabled Care: Opportunities and Challenges Playbook
Keep in mind that there may be initial expenses involved in acquiring analytics programs or support. Before implementing any referral practices or changes, consult legal counsel to ensure compliance with relevant federal and state laws.
Leverage Team-Based Care Fundamentals
Beyond patient care, incorporating team-based practice fundamentals can aid in your quest to identify and eliminate unnecessary costs while improving practice efficiency. These fundamentals include pre-visit planning, team documentation, and advanced rooming and discharge.
When your team gains more authority and feels empowered to help patients manage chronic or polychronic conditions, collaborators will likely rely on your practice as the new model is adopted and refined. By implementing a more effective, team-based approach to care, outcomes should improve, allowing physicians to dedicate their time to new appointments, annual visits, and critical patients. Intermediate care, follow-ups, and education can be handled by other team members, with the approval of the physician team leader, and in accordance with each physician's preferences and applicable state regulations.
AMA STEPS Forward Saving Time Playbook
Measure, Refine, Repeat
Regularly review your practice's performance against established objectives monthly or quarterly, making necessary adjustments (Figure 4). Consider utilizing the Plan-Do-Study-Act (PDSA) method to monitor your progress.
Value-based Care Metrics (281 KB)
Value-based care models are the future of sustainable health care. By shifting towards this model, your practice and your patients can reap the benefits of this outcomes-focused approach that incentivizes high-quality, patient-focused care and reduces overall health care costs.
Journal Articles and Other Publications
What are the components of value-based care? AMA Health Systems Science. Renewed March 21, 2023. Accessed June 20, 2023. https://edhub.ama-assn.org/health-systems-science/interactive/18028223
Miller HD, Marks SS. A guide to physician-focused alternative payment models. American Medical Association and the Center for Healthcare Quality and Payment Reform. Accessed June 20, 2023. https://www.ama-assn.org/system/files/corp/media-browser/specialty%20group/washington/alternative-payment-models-physician-guide.pdf
Green DE, Hamory BH, Terrell GE, O'Connell J. A case report: Cornerstone Health Care reduced the total cost of care through population segmentation and care model redesign. Popul Health Manag. 2017;20(4):309-317. doi:10.1089/pop.2016.0105
Terrell GE. No pipe dream: achieving care that is accountable for cost, quality, and outcomes. N C Med J. 2016;77(4):269-275. doi:10.18043/ncm.77.4.269
Malâtre-Lansac A, Engel CC, Xenakis L, et al. Factors influencing physician practices' adoption of behavioral health integration in the United States: a qualitative study. Ann Intern Med. 2020;173(2):92-99. doi:10.7326/M20-0132
Accountable care organization (ACO) Realizing Equity, Access, and Community Health (REACH) model. CMS.gov. February 24, 2022. Accessed June 27, 2023. https://www.cms.gov/newsroom/fact-sheets/accountable-care-organization-aco-realizing-equity-access-and-community-health-reach-model
Lewis C, Horstman C, Bluementhal D, Abrams MK. Value-based care: what it is, and why it's needed. The Commonwealth Fund. February 7, 2023. Accessed June 27, 2023. https://www.commonwealthfund.org/publications/explainer/2023/feb/value-based-care-what-it-is-why-its-needed
Pandey A, Eastman D, Hsu H, Kerrissey MJ, Rosenthal MB, Chien AT. Value-based purchasing design and effect: a systematic review and analysis. Health Aff (Millwood). 2023;42(6):813-821. doi:10.1377/hlthaff.2022.01455
Horstman C, Lewis C. Engaging primary care in value-based payment: new findings from the 2022 Commonwealth Fund survey of primary care physicians. The Commonwealth Fund. April 13, 2023.Accessed May 25, 2023. https://www.commonwealthfund.org/blog/2023/engaging-primary-care-value-based-payment-new-findings-2022-commonwealth-fund-survey
Teisberg E, Wallace S, O'Hara S. Defining and implementing value-based health care: a strategic framework. Acad Med. 2020;95(5):682-685. doi:10.1097/ACM.0000000000003122
Liao JM, Navathe AS, Werner RM. The impact of Medicare's alternative payment models on the value of care. Annu Rev Public Health. 2020;41:551-565. doi: 10.1146/annurev-publhealth-040119-094327
Lewis C, Horstman C, Blumenthal D, Abrams MK. Value-based care: what it is, and why it's needed. The Commonwealth Fund. February 7, 2023. Accessed May 23, 2023. https://www.commonwealthfund.org/publications/explainer/2023/feb/value-based-care-what-it-is-why-its-needed
Abrams MK, Nuzum R, Zezza MA, Ryan J, Kiszla J, Guterman S. The Affordable Care Act's payment and delivery system reforms: A progress report at five years. The Commonwealth Fund. May 7, 2015. Accessed May 25, 2023. http://www.commonwealthfund.org/publications/issue-briefs/2015/may/aca-payment-and-delivery-system-reforms-at-5-years
Gerhard W, Korenda L, Morris M, Vadnerkar G. The road to value-based care: Your mileage may vary. Deloitte Center for Health Solutions. May 11, 2015. Accessed May 23, 2023. https://www2.deloitte.com/content/dam/insights/us/articles/value-based-care-market-shift/DUP-1063_Value-based-care_vFINAL_5.11.15.pdf
Characteristics of a rational Medicare payment system. American Medical Association. 2022. Accessed June 20, 2023. https://www.ama-assn.org/system/files/characteristics-rational-medicare-payment-principles-signatories.pdf
Payments for accountable specialty care or “PASC.” American Medical Association. 2022. Accessed June 20, 2023. https://www.ama-assn.org/system/files/apm-payments-accountable-specialty-care-pasc.pdf
Rosenthal MB, Alidina S, Ding H, Kumar A. Realizing the potential of accountable care in Medicaid. The Commonwealth Fund. April 12, 2023. Accessed May 25, 2023. https://www.commonwealthfund.org/publications/issue-briefs/2023/apr/realizing-potential-accountable-care-medicaid
Porter ME, Lee TH. The strategy that will fix health care. Harvard Business Review. October 2013. Accessed May 24, 2023. https://hbr.org/2013/10/the-strategy-that-will-fix-health-care
Nussbaum S, McClellan M, Metlay G. Principles for a framework for alternative payment models. JAMA. 2018;319(7):653–654. doi:10.1001/jama.2017.20226
Ouayogodé MH, Fraze T, Rich EC, Colla CH. Association of organizational factors and physician practices' participation in alternative payment models. JAMA Netw Open. 2020;3(4):e202019. doi:10.1001/jamanetworkopen.2020.2019
Delivering value-based care means hiring service-oriented staff. Medical Economics. March 25, 2016. Accessed May 24, 2023. https://www.medicaleconomics.com/view/delivering-value-based-care-means-hiring-service-oriented-staff
Must hospitals send ADT notifications to physicians' EHR inbox? American Medical Association. May 5, 2023. Accessed May 23, 2023. https://www.ama-assn.org/practice-management/sustainability/must-hospitals-send-adt-notifications-physicians-ehr-inbox
Medicare alternative payment models. American Medical Association. Updated January 31, 2023. Accessed June 20, 2023. https://www.ama-assn.org/practice-management/payment-delivery-models/medicare-alternative-payment-models
Evaluating pay-for-performance contracts. American Medical Association. 2018. Accessed June 20, 2023. https://www.ama-assn.org/sites/ama-assn.org/files/corp/media-browser/member/about-ama/pay-performance-contracts.pdf
Evaluating bundled or episode-based contracts. American Medical Association. 2018. Accessed June 20, 2023. https://www.ama-assn.org/system/files/corp/media-browser/public/about-ama/bundled-episode-based-contracts_0.pdf
Evaluating Medicare Advantage value-based contracts. 2019. Accessed June 20, 2023. https://www.ama-assn.org/system/files/2019-04/medicare-advantage-value-based-contracts.pdf
Where do I fit in? Dividing the pie in new payment models. American Medical Association. April 2014. Accessed July 20, 2023. https://www.ama-assn.org/sites/ama-assn.org/files/corp/media-browser/wash/innovators-committee-physician-payment-reform-white-paper.pdf
Value-based care models: deep dive FAQs for hospital-affiliated physicians. American Medical Association. 2018. Accessed July 20, 2023. https://www.ama-assn.org/sites/ama-assn.org/files/corp/media-browser/public/physicians/macra/hospital-affiliated-faqs.pdf
Related American Medical Association Policies
Websites
Health Care Payment Learning & Action Network (HCPLAN). Accessed June 27, 2023. https://hcp-lan.org/
Building successful value-based partnerships. Healthcare Transformation Task Force. September 1, 2017. Accessed May 23, 2023. https://hcttf.org/building-successful-value-based-partnerships/
Value-based care. Medical Economics. Accessed May 24, 2023. https://www.medicaleconomics.com/topics/value-based-care
Debunking regulatory myths. American Medical Association. April 10, 2023. Accessed May 23, 2023. https://www.ama-assn.org/practice-management/sustainability/debunking-regulatory-myths
Major physician measurement sets. Agency for Healthcare Research and Quality (AHRQ). Last reviewed January 2023. Accessed May 24, 2023. https://www.ahrq.gov/talkingquality/measures/setting/physician/measurement-sets.html
AMA PolicyFinder. Accessed May 23, 2023. https://policysearch.ama-assn.org/policyfinder
Value Transformation Framework. National Association of Community Health Centers. Accessed June 26, 2023. https://www.nachc.org/clinical-matters/value-transformation-framework/
Principles for Medicare physician payment reform. American Medical Association. Updated September 20, 2022. Accessed June 20, 2023. https://www.ama-assn.org/practice-management/medicare-medicaid/principles-medicare-physician-payment-reform
Community health worker (CHW) networks and training programs. National Association of Community Health Workers (NACHW). Accessed June 20, 2023. https://nachw.org/membership/chw-networks-and-certification-programs/
Quality Payment Program (QPP) specifics. American Medical Association. Updated July 26, 2022. Accessed June 20, 2023. https://www.ama-assn.org/practice-management/medicare-medicaid/quality-payment-program-qpp-specifics
Videos
Podcasts