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Jun 2016 - IDC PlanScape - Doc # US41380616

IDC PlanScape: Value-Based Reimbursement Demands Payers Execute an Exchanges-Like Level of Effort

Author: Jeff Rivkin
Research Director, Payer IT Strategies

Abstract

This IDC study discusses the aspects of value-based reimbursement (VBR) initiatives.

"Value-based reimbursement will be organizationally and technically pervasive for payers. Similar to what happened in 2012–2015 around the ACA, shockwaves will operationally happen to payers because of value-based reimbursement soon. Hospitals and other providers are working hard to prepare for contract negotiations with payers using alternative payment models (APMs) using fee-for-value methodologies. Payers are experimenting with various methodologies and interpreting Medicare goals and are concerned with their internal pilot programs maturing. They are hanging onto fee for service because that is what is familiar. What is underestimated is the core procedural and systematic changes necessary in the middle and back offices to execute operationally under an environment where soon the majority of payments will be value based", states Jeff Rivkin, research director for Payer IT Strategies at IDC Health Insights. "New paradigms in finance, product definition, contract and rate modeling, and workflow will be established driven by direct change in provider contracting, episode recognition, care coordination, and claims pricing and processing. Fundamental revenue transformation is coming, and it is being underestimated. Most payers struggled operationally with ACA, and similar struggles come with VBR. Think multiyear, multiproject, and multidivision, and start now."

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