Value-Based Payment Engine - Overview

In a recent post, Michael described how Aver supports a payer’s manual bundled payment workflow, making the process much more efficient and reconciling payments much faster than payers can do on their own. These tools are doing a great job of helping many payers meet their value-based contracting goals today.

 

But many health plans still struggle to operationalize value-based contracts using legacy claims adjudication systems designed for fee-for-service payment. Plans face challenges in marrying their commitment to value-based reimbursement as the primary strategy to contain medical costs and improve quality with the unsustainable administrative costs of manually implementing those contracts.

 

But many health plans still struggle to operationalize value-based contracts using legacy claims adjudication systems designed for fee-for-service payment. Plans face challenges in marrying their commitment to value-based reimbursement as the primary strategy to contain medical costs and improve quality with the unsustainable administrative costs of manually implementing those contracts.

Aver is in the midst of exciting growth, developing tools that will enable health plans to automate their value-based contracts without investing in capital intensive IT upgrades. These new tools will reduce the administrative costs of bundled payments associated with the manual processes payers use now. Based on Aver’s seven years of experience in designing IT solutions to facilitate value-based contracts, we know these new solutions will help payers move a greater portion of health care dollars to payments tied to value.

 

Why Payers and Providers Are Moving to Value

Payers and providers are partially aligned in their motivation for pursuing value-based contracts. Both parties seek to better integrate and coordinate care to improve quality and patient outcomes. But their financial incentives for moving into value-based arrangements differ slightly. Providers are moving to value-based contracts seeking stability from volatile fee-for-service payments. Providers understand that the future is value, but also tend to be highly risk averse. Providers face so many unknowns in a bundled payment environment -- What is the total cost of an episode? How do downstream providers perform? What are the risk profiles of past and future patients? How should the total price be responsive to that risk?  How can I be sure quality metrics really capture the quality of care I provide?

Payers are moving to value-based contracts largely to constrain health care cost growth while maintaining or improving quality. Bundled payments can help them achieve this goal and move a substantial portion of their medical spend into bundled payment contracts. In addition, using tiered risk pricing alleviates concerns raised by providers by better matching bundle payments to patient risk profiles. But operationalizing these new payment models using existing claims adjudication systems is cumbersome and expensive at best, requiring extensive use of manpower to manually process bundles one at a time.

 

How Aver Solves for Value

Aver’s analysis of historic claims data can help answer many of these questions.  Our tiered episode pricing framework helps to ensure the bundled payment amount for a particular patient is more responsive to that patient’s specific risk profile. But providers still need operational tools to give them the confidence required to accept a value-based contract. Payers need operational tools to accurately and efficiently make payments under a bundled payment contract so that they can take these program to scale. Aver is building those tools.

Aver’s new tools automate the operationalization of episodic payments for payers, eliminating manual workarounds with a solution that sits alongside existing claims adjudication systems and that is aligned with the established flow of EDI-based information between payers and providers. In addition, these tools will give both payers and providers information about episode performance while the episode is in process. This responsive pricing and concurrent insight will help providers change their behavior and care pathways faster, ensuring they succeed under a bundled payment contract and stay in the program for the future, taking a payer’s value-based program to scale.

 

This responsive pricing and concurrent insight will help providers change their behavior and care pathways faster, ensuring they succeed under a bundled payment contract and stay in the program for the future, taking a payer’s value-based program to scale.

 

Aver’s value-based reimbursement transactional engine 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.

These new tools will truly revolutionize the way payers and providers engage in bundled payment contracts. In addition, Aver will manage a payer’s bundled payments and provide payers and providers with concurrent information about in-process episodes of care in an automated way, working with payer’s existing claims adjudication systems while eliminating existing, expensive manual workarounds payers are using to implement their value-based strategy. Over the coming weeks, my colleagues and I will lay out the major components of Aver’s value-based reimbursement transactional engine.



NEIL SANGHAVI
Vice President, Product
Aver, Inc


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