risk-adjusted base payments can support the move to value

As healthcare reform takes hold across the nation, primary care physicians are preparing for the shift to value-based payment by including risk-adjusted base payment in their payment models. Among other goals, these models aim to cover the additional costs associated with keeping people well, beyond merely treating disease, and aligning payment with expected use of resources.

Risk-adjusted base payment models predict the overall resources-in dollars- required for primary care physicians to deliver proactive, well-coordinated care to patients based on their illness burdens. Traditional risk adjustment creates a per member capitation payment based on age bands split for gender. Risk-adjusted payment models, however, which may assign a value to each clinical condition, capture wider variations in clinical need among patients and allow for more accurate risk assumptions depending on how many conditions the models consider. These values take into account the direct costs of primary care services, as well as the indirect costs of managing chronic conditions and referrals and coordinating care when a patient is hospitalized or visits the emergency department (ED).

Enhanced Funding lor Primary Care

Value-based payments, which reward providers for the quality and efficiency of care, as opposed to the volume of patients treated, are slowly and steadily gaining a foothold through new care models such as accountable care organizations (ACOs) and patient-centered medical homes (PCMHs). These innovative payment and delivery models herald an important change in focus from treating disease to managing health and wellness-an emphasis that requires providers and their care teams to spend more time on patient care and care coordination across an increasingly complex healthcare system. In many ways, these are not new concepts. What is new is the extent of these financial incentives in payment arrangements and how they align to the care delivery systems.