Payment & Delivery Models

Timely feedback is critical for value-based care incentives to work

Andis Robeznieks , Senior News Writer

AMA News Wire

Timely feedback is critical for value-based care incentives to work

Jun 10, 2024

Establishing how private-sector value-based care (VBC) arrangements can successfully improve quality, equity and affordability remains a work in progress.

As part of a commitment to enhancing patient experience, improving population health and reducing costs, the AMA is working with the health insurer trade group AHIP and the National Association of ACOs on an initiative known as the Future of Value. This collaboration recently produced a playbook on voluntary value-based care best practices that have been informed by real-world experience from across the country.

AMA Health System Program

Providing enterprise solutions to equip your leadership, physicians and care teams with resources to advance your programs while being recognized as a leader. 

Contributing to the effort were Geisinger, Henry Ford Health, The Permanente Medical Group and Virginia Mason Franciscan Health. They are all members of the AMA Health System Program, which provides enterprise solutions to equip leadership, physicians and care teams with resources to help drive the future of medicine.

By sharing what has worked for them, these systems provide guidance for other organizations to consider during the design, implementation and evaluation of their own value-based care participation.

The playbook provides insights into seven key payment domains. They are:

  • Payment attribution. Determining which patients and their associated medical costs that physicians or entities are accountable for.​
  • Benchmarking. Setting financial targets to compare to spending over a particular year.
  • Risk adjustment. Accounting for the relative sickness of patients. 
  • Quality performance impact on payment. Rewarding entities for performance on quality on a set of metrics.​
  • Levels of financial risk. Assuming some level of financial responsibility, if and when appropriate, for improving outcomes and costs of patients.​
  • Payment timing and accuracy. Structuring how and when funds flow in arrangements. ​
  • Incentivizing for value-based care practice participant performance. Considering how to educate and reward participants in achieving the goals of payment arrangements.​

Francis Mercado, MD, the ambulatory associate chief medical officer for Virginia Mason Franciscan Health’s Franciscan Medical Group, served on the work group that developed the playbook. He is also the executive committee chair for the system’s accountable care organization (ACO), the Tacoma-based Rainier Health Network, that has saved Medicare $39.9 million since 2013, including $13.6 million in 2021, compared with annual spending targets.

Dr. Mercado recently talked about Virginia Mason Franciscan Health’s experiences with value-based care during a recent AMA Insight Network webinar. The webinar is available on-demand for those who register.

Providing timely feedback is key

In explaining the seventh domain—incentivizing value-based care practice participant performance—the playbook explains the importance of educating physicians and nonphysician providers on the payment arrangement’s goals and criteria for distributing performance-based incentives, and the importance of timely feedback on individual performance related to those larger goals.

“The most effective design of participant incentives in VBC payment arrangements is still evolving, including determining whether and at which level to apply them,” the playbook adds.

The playbook highlights Virginia Mason Franciscan Health’s efforts to educate its nearly 5,000 employed physicians and other affiliated clinicians who provide care at 10 hospitals and almost 300 other care sites.

As a way to link physician incentives with payment-arrangement goals, physicians complete a quality attestation form—and get paid for doing so. Then a percentage of their compensation is based on quality performance and access initiatives.

In the playbook, Dr. Mercado emphasized how linking general payment-arrangement terms to specific physician and care team activities helps to highlight the importance of how those activities individually contribute to the larger goals of delivering high quality care and a patient-centered experience.

It also provides physicians clarity about what is needed from them to support Virginia Mason Franciscan Health’s value-based care efforts and how their efforts translate into payment.

“The sheer complexity of VBC payment arrangements and, at times, the unpredictability of payment can be addressed with clear advance documentation and regular feedback around methodologies and performance,” the playbook states.

It’s suggested that physician-level feedback be given no less than once a quarter and can be in the form of actionable reports and dashboards containing data on performance of the value-based care entity, individual physicians, and other participants in the arrangement who work at the physicians’ practice.

This “is critical to sustaining engagement and allows individual team members to monitor progress towards both individual and collective goals and deploy changes, as necessary,” the playbook says.

Regular feedback on progress towards quality targets throughout the performance period also makes it easier to monitor performance, while allowing more accurate financial projections and the ability to better adjust strategies and resources.

Nonfinancial incentives are also important to achieving an organization’s goals. Those recommended in the playbook include access to pertinent data, reducing administrative burdens such as prior authorization requirements, and ensuring transparency around performance metrics.

“Clear and achievable targets help value-based care entities improve quality performance,” the playbook says. “Providing quality-measure performance targets at the start of a performance year allows physicians, practices and VBC entities to best understand what is required to succeed, and how succeeding at quality will impact payment.”

Learn with the AMA about ways to improve value-based care data sharing and advance value-based care with alternative payment models in Medicare.

Succeed with value-based care