Value-Based Payment Engine Component #2 - Concurrent Episode Monitoring

Aver’s value-based payment engine works to take the pain out of bundled payment operation for payers, providing an outsourced solution for management of episodes of care. It is comprised of  four major components:

  1. Episode determination - identify members that are in episodes based on flexible eligibility criteria, and establish a budget based on a tiered or variable risk model.
  2. Concurrent episode monitoring - associate adjudicated claims to episodes and concurrently share episode statuses versus their established budgets with contracted providers.
  3. Quality data collection - collect quality data based contract rules and incorporate it into episode performance and reconciliation calculations.
  4. Episode-centric reconciliation - instead of reconciling completed episodes 6-12 months at a time, issue settlement payments upon completion of each episode.

This post focuses on concurrent episode monitoring, a key feature of Aver’s new value-based payment engine. A first-of-its-kind offering, this new tool gives payers and providers near-real time insight into episode performance. Understanding the importance and necessity of this earlier insight into care delivery requires a quick description of how episode monitoring worked in the past.

As Michael Ceballos and Elaine Daniels have previously described, payers operating their own bundled payment programs use a manual process that is tedious, costly, and leaves too much room for human error. Aver’s previous offerings take the headache out of bundled payment administration for payers through an episode reconciliation process that sits outside of, and leaves untouched, a payer’s existing claims adjudication system.

While valuable, these previous tools offered insights that were several weeks old. Payers would send Aver a monthly feed of all paid claims, which Aver would run through the payer’s bundled payment definitions using our proprietary software. Aver would identify fee-for-service payments made in relation to an episode of care and assigns that claim and payment amount to the episode budget. This process offered monthly insight into provider performance on bundled payment contracts, but this is not timely enough notification for providers to take action to help a patient who has detoured from the bundled payment care pathway.

In order to better coordinate care for patients during an episode and improve quality and outcomes while reducing costs, Aver’s value-based payment engine facilitates near-real-time communication between payers and providers. This win-win-win solution offers an improved episode of care experience for payers, providers, and patients.



"Aver’s value-based payment engine facilitates near-real-time communication between payers and providers."


Figure 1. Aver’s Value-Based Payment Engine leaves standard claims adjudication process untouched.

Value Based Engine - Claims Process.png

How the Payment Engine Works for Payers

Like Aver’s previous offerings, this new value-based payment engine sits outside of and doesn’t impose major modifications to the payer’s claims systems. It also doesn’t require payers’ claims adjudication systems to generate any additional information beyond what is already provided to providers. Instead, any messages related to members who are potentially in an episode of care that the payer would send to a provider will also be sent to Aver, such as authorization messages, claims paid, remittance statements. Payers continue to process fee-for-service claims as usual and send this information to Aver as the claims are processed, not monthly as before.

Aver runs all these claims through its value-based payment engine, determines which are part of the episode, and deducts the amount of that claim from the total budget for that episode. This information is communicated back to payers (and providers, described below), giving them near-real time insight into episode performance at the member and provider level.


How the Payment Engine Works for Providers

As with Aver’s previous offerings, providers continue to submit fee-for-service claims to and receive fee-for-service payments from payers. As soon as those claims are processed, episode initiating providers will see them via an online portal, with the amount of the claim applied to the total episode budget for each member. This claims information will give providers concurrent, or near-real time, insight into the performance of downstream providers, helping them make referral and steerage decisions driven by cost and quality data. This also helps providers to better manage leakage claims - providers will have earlier insight into patient visits within the episode that fall outside the team with whom the episode initiating provider is working.

Finally, Aver’s value-based payment engine gives providers concurrent insight into performance against the episode budget. Rather than monthly updates, with a final reconciliation up to 90 days after episode conclusion, providers will see how they are performing based on claims processed each day.


"... Aver’s value-based payment engine gives providers concurrent insight into performance against the episode budget. Rather than monthly updates, with a final reconciliation up to 90 days after episode conclusion, providers will see how they are performing based on claims processed each day."


How the Payment Engine Works for Patients

When using existing bundled payment management tools, patients are often unaware that they are engaged in an episode of care for which their provider will receive a bundled payment. Patients don’t see the behind-the-scenes care coordination and the information driving those efforts.

But, because Aver’s value-based payment engine offers providers concurrent insight into all bundle-related claims, including leakage claims, providers will be able to intervene earlier if and when patients detour from the established care pathway. These earlier interventions should contribute to an improved patient experience, higher quality care, and better patient outcomes. In addition, as providers and payers are able to reduce episode of care costs over time, patients will benefit from lower cost-sharing payments.


Concurrent Insight Throughout the Episode

Aver’s value-based payment engine automates the entire episode management process, from identifying members in a bundle to applying fee-for-service claims to the bundle. The engine also automates the application of quality measures and reconciliation payments, which we’ll describe in future posts. This automation reduces administrative costs to both payers and providers and dramatically reduces the potential for human error.

Automation also allows Aver to give payers and providers concurrent, near-real time insight into episode claims as they are processed. Earlier access to claims information, and its impact on the episode budget, allows providers to address care pathway deviation sooner, potentially improving their performance against the episode budget and improving care quality. When providers perform well in a bundled payment program, they are more likely to stay in the program over time, helping to advance a payer’s drive to increasing value-based payments.

Vice President, Product
Aver, Inc

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