Summary
The U.S. faces increased healthcare spending coupled with relatively poor health outcomes. In other words, an unsustainable cost structure. As the healthcare industry seeks a more effective delivery system, value-based care (VBC) has become a growing alternative to the traditional fee-for-service payment model.
The U.S. faces increased healthcare spending coupled with relatively poor health outcomes. In other words, an unsustainable cost structure. As the healthcare industry seeks a more effective delivery system, value-based care (VBC) has become a growing alternative to the traditional fee-for-service payment model.
In a fee-for-service model, providers are paid for the quantity of healthcare services performed. In a value-based model, providers are incentivized by the quality and/or effectiveness of that care.
VBC puts the patient’s health and the doctor-patient relationship first. This helps improve patient outcomes and make care more affordable and sustainable.
In 2020, the COVID Public Health Emergency (PHE) declaration waived many requirements for VBC programs, including those for Accountable Care Organizations (ACOs) enrolled in Medicare Shared Savings Programs (MSSP) administered by the Centers for Medicare and Medicaid Services (CMS).
A significant change CMS made was to waive the requirement that participants take on downside risk, meaning that participants were not required to repay CMS for any losses sustained in the program. As a result, many ACOs chose not to purchase downside insurance risk protection.
The PHE declaration has since expired (on May 11, 2023), and ACOs are now required to share in any losses incurred by the ACO. This will increase the need for downside risk insurance protection.
This shifting landscape in the healthcare industry has brought new momentum to the idea of a VBC model. Payers, providers, investors, patients, and technology companies are all joining in the effort. The goal of CMS is to have all Medicare fee-for-service beneficiaries in a care relationship with accountability for quality and total cost of care by 2030. Government and commercial payers are projecting increased investment in the transition to VBC, recognizing it represents the future of healthcare.
Coverys is, actively analyzing all new CMS VBC programs to determine financial performance and program stability for participants. Our unique blend of insurance products and analytic capabilities allows us to support value-based payment reform in 2023 and beyond.
As valued-based payment reform grows, healthcare providers should consider new risk protection insurance products and analytic services to protect and support their practice or organization. Coverys currently offers*:
For more information about VBC programs visit the CMS VBC Programs webpage. For information about VBC downside risk protection, contact your insurance agent or broker or reach out to Brian York at byork@coverys.com.
*Insurance products provided by Coverys underwriting companies: ProSelect Insurance Company and Coverys Specialty Insurance Company.
Copyrighted. No legal or medical advice intended. This post includes general risk management guidelines. Such materials are for informational purposes only and may not reflect the most current legal or medical developments. These informational materials are not intended, and must not be taken, as legal or medical advice on any particular set of facts or circumstances.
In a fee-for-service model, providers are paid for the quantity of healthcare services performed. In a value-based model, providers are incentivized by the quality and/or effectiveness of that care.
VBC puts the patient’s health and the doctor-patient relationship first. This helps improve patient outcomes and make care more affordable and sustainable.
Renewed Need for Downside Risk Protection
In 2020, the COVID Public Health Emergency (PHE) declaration waived many requirements for VBC programs, including those for Accountable Care Organizations (ACOs) enrolled in Medicare Shared Savings Programs (MSSP) administered by the Centers for Medicare and Medicaid Services (CMS).A significant change CMS made was to waive the requirement that participants take on downside risk, meaning that participants were not required to repay CMS for any losses sustained in the program. As a result, many ACOs chose not to purchase downside insurance risk protection.
The PHE declaration has since expired (on May 11, 2023), and ACOs are now required to share in any losses incurred by the ACO. This will increase the need for downside risk insurance protection.
New Models, Newer Momentum
This shifting landscape in the healthcare industry has brought new momentum to the idea of a VBC model. Payers, providers, investors, patients, and technology companies are all joining in the effort. The goal of CMS is to have all Medicare fee-for-service beneficiaries in a care relationship with accountability for quality and total cost of care by 2030. Government and commercial payers are projecting increased investment in the transition to VBC, recognizing it represents the future of healthcare.Coverys is, actively analyzing all new CMS VBC programs to determine financial performance and program stability for participants. Our unique blend of insurance products and analytic capabilities allows us to support value-based payment reform in 2023 and beyond.
VBC Risk Protection Insurance & Analytics
As valued-based payment reform grows, healthcare providers should consider new risk protection insurance products and analytic services to protect and support their practice or organization. Coverys currently offers*:- Medicare Contractual Risk Protection (MCRP): Insurance and analytics for providers participating in the MSSP ACO program. These programs hold participants accountable to CMS for the quality, cost, and overall care of Medicare beneficiaries. This insurance coverage protects against the downside risk, while allowing the participants to take full advantage of the financial benefits. Analytic services are also available to help ACOs identify areas to improve care and performance in their contracts.
- Provider Excess Loss Insurance (PEL): PEL insurance covers physician groups, hospitals, and other medical providers that take contractual risk from commercial payers or government entities. It protects providers from the potential financial risks associated with catastrophic healthcare claims costs. For PEL policyholders interested in a deeper analysis of their performance, we can leverage our internal data with the group's historical claims data to analyze physician practice patterns and compare performance to fee-for-service Medicare benchmarks.
- Employer Stop Loss Insurance (ESL): This insurance targets employers self-funding their employee benefits program. ESL insurance can cover any type of employer profile, which gives us a significant opportunity to expand this insurance outside of healthcare. Using new predictive models, we help employers reduce the costs of healthcare by transitioning to self-insurance. We optimize a health plan’s performance by analyzing the plan’s benefits, networks, and third-party vendors.
For more information about VBC programs visit the CMS VBC Programs webpage. For information about VBC downside risk protection, contact your insurance agent or broker or reach out to Brian York at byork@coverys.com.
*Insurance products provided by Coverys underwriting companies: ProSelect Insurance Company and Coverys Specialty Insurance Company.
Copyrighted. No legal or medical advice intended. This post includes general risk management guidelines. Such materials are for informational purposes only and may not reflect the most current legal or medical developments. These informational materials are not intended, and must not be taken, as legal or medical advice on any particular set of facts or circumstances.