Transitioning from Fee-for-Service to Fee-for-Value

G2 Group

Written by Geoff Fromme

As the healthcare industry transitions payment structures and responds to new regulations, many physicians and physician groups wonder how their revenues will be affected. With fee-for-service reimbursement now targeted for extinction, both primary care and specialist physicians—and their independent physician associations (IPAs)—need to consider participating in fee-for-value contracts through a clinically integrated network (CIN).

CIN organization typically involves healthcare providers and physicians coming together to streamline their business structure, enhance accountability and cost transparency, and to improve access and the quality of their patients’ care. While CIN development is by no means an easy task, the right partners, leadership, capital structure and business plan can help ease the process. Transitioning to fee-for-value reimbursement with a CIN necessitates active involvement from all parties, so administrators and physicians alike must be fully engaged during every step of the process.

Through the use of evidence based practices and continuous collaboration among its physician members, the CIN promotes a renewed sense of value in the healthcare industry. Utilizing a wide array of techniques specifically designed to improve outcomes and accessibility while lowering costs, successful CINs work to:

Redesign Care Process—linking patients directly to providers specializing in their needs helps enhance quality of care. Proper CIN development requires physicians and healthcare providers to collaborate closely so patient information can be easily accessed and shared.
• Effectively Measure Performance—patient surveys and activity reporting enable CINs to monitor and track cost, utilization, and clinical performance.
• Adopt Best Practices—forward-looking CINs identify and create relationships and partnerships with programs and services with evidence of success.

Participation in a clinically integrated network (CIN) is a strategy any physician practice or IPA can employ. Clinical integration allows physicians to participate in value-based contracts and bundled payments as part of the CIN’s provider network. Unlike IPAs, CINs can enter directly into contracts with payers on behalf of their participants; and because CINs are designed to drive value, they offer the added benefit of being an anti-trust safe harbor. However, to align with an established CIN, physicians must be able to demonstrate the “value” that they would provide to the CIN in terms of cost performance and clinical outcomes.

Is your IPA or health system currently seeking to transition to a CIN? Or are you a physician looking to align your practice with a successful CIN? We want to hear your thoughts on the transition process. Please leave a comment below, or feel free to message one of our experts directly. Let’s continue the conversation.

The G2 Group is a nationally-recognized, healthcare management consulting firm specializing in business development for hospitals, health systems, and physicians. For specific questions about this article and other topics, please feel free to email one of our experts directly.