• Center on Health Equity and Access
  • Clinical
  • Health Care Cost
  • Health Care Delivery
  • Insurance
  • Policy
  • Technology
  • Value-Based Care

Coming Together to Streamline Value-Based Payment


Many believe value-based payment can change the trajectory of national health expenditures and improve the quality of care, yet its success remains uncertain.

Written by Erin Weber, director of CAQH CORE.

An incredible change in how care is measured, billed, and paid is slowly transforming large portions of the United States healthcare industry. Many believe value-based payment can change the trajectory of national health expenditures and improve the quality of care, yet its success remains uncertain.

Early adopters of value-based payment have encountered numerous challenges to operationalizing the new model. In many ways, fee-for-service administrative processes and systems simply do not align with the needs of value-based payment. For example, no single system supports exchange of all the necessary data for value-based payment. The claims system was designed to support fee-for-service reimbursement. Electronic health record (EHR) systems hold much of the clinical data needed for direct patient care, yet they were not intended to integrate financial and clinical data or to serve as analytics tools. Health plans also maintain siloed systems, in which there is no clean way to integrate clinical data from providers.

Innovation has delivered important advances, and it has also created an operational patchwork of work-arounds and proprietary approaches. The challenge is that some uniformity is needed to prevent administrative roadblocks that can keep new payment models from thriving. The success of value-based payment hinges on achieving a new level of collaboration and cooperation between stakeholders.

We’ve seen this happen before. CAQH CORE was founded to address a similar issue arising from the initial adoption of electronic fee-for-service transactions. Health plans, providers, vendors, clearinghouses, government entities, standards development organizations, and other stakeholders came together to hammer out common rules of the road to help the industry uniformly and more fully implement Health Insurance Portability and Accountability Act (HIPAA) standard transactions. Through ongoing collaboration, these stakeholders continue to create and promote rules that, in combination with other industry efforts, help health plans, providers, government entities, vendors, and clearinghouses conduct fee-for-service administrative transactions electronically and securely. Importantly, these rules help eliminate many manual phone, fax and mail transactions.

As our organization followed the advance of value-based payment, it became clear that the emerging system was at risk of repeating fee-for-service-era mistakes. After a 2-year study, CAQH CORE released a report, All Together Now: Applying the Lessons of Fee-for-Service to Streamline Adoption of Value-Based Payments, which identifies 5 opportunity areas that, if improved, would streamline value-based payment operations. The report also details specific strategies to address each of these areas.

One of the opportunity areas identified in the report—data quality and uniformity—tackles the common problem of irregularities in data. That is, healthcare operational data often lacks the precision necessary to achieve the fluid interactions needed across stakeholders for success in value-based payment.

Discrepancies in the quality or uniformity of data can cause a host of issues in value-based payment. Missing, inaccurate, or obscure provider data can impact quality, cost, and patient experience. It may cause inaccurate risk-based payments when a provider’s specialty and relationship to the patient are unclear. Inaccurate provider data may cause unsuccessful provider-to-provider network referrals, affecting the overall amount of payment able to be made and potentially increasing patient out-of-pocket cost. Provider identity also plays a role in care accountability, which can affect quality measurement, system cost, and patient cost.

As an example, the lack of a single, universal standard for provider identification can be a source of confusion. Some commercial health plans use a proprietary identifier in lieu of the standard National Provider Identifier (NPI) on claims. Medicaid programs typically use both a Medicaid ID and NPI (when applicable based on the provider). CMS uses both the NPI and the tax identification number (TIN), which sometimes identify physicians at the group level.

Of course, data quality and uniformity are affected by many other issues. Even inconsistent use of seemingly common terms can be a source of trouble. When used inconsistently, terms to describe the date and time of an event, such as “discharge from an emergency department” or the nature of an event, such as “admission for observation,” can compromise the ability to measure timeliness of care and affect patients’ financial obligations.

Also, while standards exist for the use of many medical code sets in HIPAA-mandated transactions, EHR systems, quality measures, and so forth, there are no standards for the use of others. For example, a provider reporting the number of diabetics with an HbA1c level above 9.0% may encounter an error because “HbA1c” can be represented in more than 100 different ways.

To improve data quality and uniformity, the CAQH CORE report recommends promotion and enforcement of existing data sets and data element standards, especially where such standards are federally mandated. We also recommend pursuing voluntary agreement on adoption of applicable uniform definitions.

In addition to data quality and uniformity, the report identifies 4 other opportunity areas. Each of these represent a substantial opportunity to prevent repeating the mistakes of fee-for-service data exchange and, ultimately, to streamline value-based payment operations.

  • Interoperability. The scale and scope of collaboration needed for success in value-based payment magnifies the need for interoperability. Improvements are needed in semantic interoperability, as described above in the discussion on data quality, as well as in technical and process interoperability. Of course, numerous efforts are already pursuing improvements in technical interoperability. Our recommendation fully supports those efforts by encouraging use of existing and emerging standards and technologies. Process interoperability affects how information is exchanged and how actions are interpreted by other stakeholders. More carefully choreographed workflows, processes and policies would allow stakeholders to make more reliable comparisons and act on timelier insights, among other benefits. Our recommendation to promote process interoperability focuses on cataloging best practices.
  • Patient risk stratification. Characterizing patients’ risk and using that understanding to direct the focus of care coordination activities and adjust payment based on patient risk factors are hallmarks of value-based payment. In our research, however, it was clear that the multitude of risk stratification and risk adjustment methodologies used today are sources of confusion that erode trust. Also, despite the vast amounts of data available today, gaps still need to be filled before the full potential of patient risk stratification can be realized in value-based payment. Our recommendations seek to improve awareness of the threats caused by variability and data gaps and to promote collaboration and transparency in risk stratification and risk adjustment models.
  • Provider attribution. In value-based payment models, providers take responsibility for the care of specific patients, yet many providers indicate that they do not understand attribution models when they engage in these arrangements and that they may not be informed about their attributed patients. We identified two underlying operational causes. First, providers frequently bill under multiple TINs or may bill under TINs that specify identification at the group or organization level. In these cases, reliance on the TIN for provider attribution is inadequate. Second, there is little uniformity in provider attribution methodologies. The large number of attribution methodologies is a source of provider frustration, as it can obscure the provider’s view of the patient’s true care coordination needs. To improve the accuracy of provider attribution, we recommend the promotion of more precise means of identifying providers at the individual level, including the use of standardized data. We also recommend a streamlined approach and more transparency in the use of provider attribution models, beginning with a catalog of models and a library of leading practices.
  • Quality measurements. Responding to the growing number of clinical quality measurement programs has become an operational burden for providers. In many cases, redundant information is collected and communicated inconsistently. CAQH CORE identified 3 specific operational challenges posed by quality measurement that provide opportunity for improvement: Over-proliferation of quality measures, the process to generate quality data for value-based payment initiatives, and the lack of quality measures that are truly useful for improving care and addressing consumer concerns. Many efforts to improve quality measurement, reporting and to promote harmonization are already underway. Our recommendation lends support to those efforts and proposes industry education on the quality measurement improvement goals, such as improved consistency in measures across programs, reductions in the data collection burden and a requirement that measures be actionable.

Industry collaboration is needed to address the operational challenges currently impeding value-based payment adoption. We are currently assembling a multi-stakeholder Advisory Group to prioritize report recommendations and identify those that will deliver the greatest benefit to healthcare providers, consumers and health plans. The group will then determine the appropriate role for CAQH CORE in pursuing each recommendation.

You can learn more about this effort and read the report here.

Related Videos
Virginia Kaklamani, MD | image credit: uthscsa.edu
Ruben A. Mesa, MD, president and executive director of Atrium Health Levine Cancer Institute and Atrium Health Wake Forest Baptist Comprehensive Cancer Center
Dr Guru Sonpavde
Video 2 - "Adverse Events & Existing Treatment Options for Dry Eye Disease"
Overview of Dry Eye Disease (DED) Causes and Treatments
Related Content
© 2023 MJH Life Sciences
All rights reserved.