Providers won’t be the only ones affected by the shift to value-based care and away from a fee-for-service mentality.

For many years, health insurers have built massive information systems and methodologies around taking in claims, adjudicating them and making payments. Just as providers’ world is changing, insurers are seeing the need to adopt new approaches.

Health insurers’ operations are expected to be affected by the shift to value-based reimbursement, as they follow the lead of Centers for Medicare and Medicare Services, which has set explicit goals for payments.

Payers are taking multi-pronged approaches in their strategies to make the inevitable transition to value-based care. They are using more advanced and streamlined platforms, expanding data analytics and building faster health information exchanges. They are also working with providers to ease into the many changes that both parties face.

Three major payers—Anthem, Horizon Blue Cross Blue Shield of New Jersey and UnitedHealthcare—say they aren’t underestimating the impact because they’ve already established a variety of programs and expanded their analytics teams to help with the transition.

“All payers are rolling in the same direction toward value-based approaches,” says Lisa McDonnel, senior vice president of National Network Strategy and Innovation for United Healthcare.

Payers are projecting reimbursements tied to value-based payment arrangements will increase to 52 percent within the next five years, up from 32 percent, says Jeff Rivkin, author of a report for IDC Planscape on the shift to value-based care. So far, 90 percent of payers and 81 percent of hospitals have already implemented a mix of value-based reimbursement and fee-for-service, the report says.

Data from the Health Care Transformation Task Force, a consortium of payers and providers, confirms the transition that’s occurring. Its recent survey showed that 41 percent of its provider and payer members had implemented value-based care reimbursement by the end of 2015. The consortium plans to move 75 percent of payments to value-based reimbursement by 2020.

For commercial payers to accomplish shifts of this magnitude, they are turning to analytics to ease the transition.

Veeneta Lakhani, Anthem’s vice president of provider enablement, says the company has been working on a population health management tool that is shared with its providers.

Anthem uses claims-based data and analytics to give a “comprehensive view” of its transactions by aggregating claims across all healthcare plans, Lakhani says. It is through the data that Anthem can see “what their gaps in care look like from a quality perspective,” she says. Anthem then will be able to “proactively understand which patients might be at risk and do additional focus,” says Lakhani.

The challenge, she adds, is that claim data—“a vast data set”—needs to be standardized for Anthem’s clinical algorithms. “It wasn’t perfect from the start,” says Lakhani. “Our tool set really has to evolve beyond just addressing our patients.”

Similarly, Horizon’s population health division has an analytics team developing standard reports with claim data and key quality measures for the insurer, which then distributes the information to its partners. It also manages file transfer uploads from providers, which send the payer claims data extracts, says Steve Peskin, executive medical director for population health for Horizon.

It’s a difficult challenge to scale the analytics tools and expand capabilities, such as working in real time and finding meaningful data.

The importance of payers and providers communicating through data sharing in real time is immense, insurers contend. Many times, providers will complain that data is three or four months old, or they have to wait for claims to languish without payment, Peskin says. Having a health information exchange (HIE) work in real time will address those concerns through the timeliness of the exchange. Peskin adds that these exchanges facilitate better clinical care and decision making.

Another challenge on a par with information exchange, Peskin says, is dealing with the multiple EMR environments of provider organizations.

Horizon works with “multiple EMRs, with multiple versions” of those records systems, and that adds to the complexity of importing and migrating information, he says. Although the payer gets data feeds directly from providers, the multiple EMR environment adds complexity and time to the task.

“It adds to the connectivity challenge, the ability to extract or abstract information and to integrate that across the proverbial electronic highway,” says Peskin. “How we juxtapose what we call a health information exchange will improve how we do bidirectional sharing.”

He says Horizon’s Data Services Platform, the payer’s HIE, will work with the various EMR platforms it encounters. “We won’t have our own EMR. We’ll have a conduit that will better link the information” from the EMR system, Peskin says. “We’ll import information, and we’ll be able to point it back to the clinical organizations, so they’ll have better knowledge at the point of care.”

Patrick Kennedy, founder of PJ Consulting, says data will play a huge role in the transition from fee for service to value-based reimbursement.

“Larger payers are investing a lot in being truly able to analyze all their data at the patient level, at the doctor level, and they’re really trying to analyze it,” he says.

For value-based reimbursement, payers need to determine the complete cost of a surgery, such as a hip replacement, that they will pay every time a provider performs it. Comprehensive data is a key factor in not only determining pricing for value-based contracts with providers but also fostering a collegial relationship with them.

For example, UnitedHealthcare develops its programs based on the needs of populations in its network. The payer works with its regional and local teams to determine providers based on organization and how likely they are to accept risk, she says. UnitedHealthcare provides a support model for the contracted provider, which includes monthly meetings, along with data summaries that “point that provider in a direction that will have the best impact,” McDonnel says.

“We can actually provide them data,” she adds. “We have a pretty robust team that does analytics on our provider network.”

Through a secure environment, UnitedHealthcare and its providers can share data back and forth in real time; providers receive reports every few days. Information on members, such as emergency room or hospital admissions, lab work and specialist visits, is available to the provider as a means of enhancing care coordination.

McDonnel says UnitedHealthcare is creating cross-carrier platforms with Link, a “cloud-based tool that allows us to put apps on Link that providers can use to do simple transactions.”

The apps will give providers the ability to verify a member’s benefits eligibility, check the status of a claim, submit prior authorization to UnitedHealthcare and update the practice’s contact information, among other features.

“The applications available via Link address 90 percent of the most common reasons a provider calls UnitedHealthcare,” McDonnel says.

Optum, a UnitedHealth Group for health services, developed Link as a multi-payer tool that is available to payers other than UnitedHealthcare. Link will eventually replace UnitedHealthcare’s current provider portal as a “one-stop shop,” she says. These collaborations foster a culture shift, as both providers and payers move away from fee for service.

For Horizon, Peskin says the insurer and its providers are learning through “conversation and observation.”

Peskin says he established onboarding sessions with Horizon’s new providers to go over reports and a roadmap of what the first 24 months will look like. The insurer does this through a mix of monthly webinars and speakers, along with providers meeting with Peskin and his team in person, to “advance best practices,” he says.

McDonnel and Lakhani also note the cultural evolution. “Payers and providers need one another to make this successful,” she says. “We bring things to the table, like data and information, and they bring things to the table, like delivery services and who they coordinate care with.” This aligned interest allows for collaborative work and shared assets, McDonnel says.

“We share in the savings that are achieved,” adds Lakhani.

Despite building stronger relationships with their providers, working with hundreds or thousands of providers on the switch has not been easy.

Although taking big strides to meet the demands of value-based care, insurers will need to build and sustain a new operational strategy before the healthcare landscape changes within the next five years, says Rivkin, author of the IDC Health Insights report, entitled IDC PlanScape: Value-Based Reimbursement Demands Payers Execute an Exchanges-Like Level of Effort.

“Value-based reimbursement…is coming out of the pilot phase, the experimenting is over, and the organizational impact is equivalently massive,” Rivkin writes. “Payers are underestimating the operational impact.”

“Providers and payers are negotiating in a different way,” says Rivkin. “Everyone’s coming up to speed.”

Peskin says both insurers and providers “moving beyond a win-lose construct of negotiating,” which he attributes to the growing information available that offers better insight into the factors that affect inefficiency.

For payers, part of that inefficiency is working with providers in value-based reimbursement while still working with other provider organizations in fee-for-service contracts. Payers need to change those contracts for operational purposes, but Lakhani says that’s just the start.

“We realized at the beginning of this: It’s not just about changing the contracts,” says Lakhani. “That’s a step in the overall scheme of things, but we need to help providers become successful on delivering on value-based care.”

“Healthcare is very local,” she continues. “It’s hard to take a process that’s ‘one size fits all’ and make it work everywhere.”

To reach a widespread level of value-based care takes effort and time—much longer than the payers’ proposed timeline cited in Rivkin’s report, says Kennedy.

“Nothing happens fast in healthcare,” he says.

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