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Value-Based Reimbursement Knowledge Hub

Health care payment reform aims to fix the broken reimbursement system in the U.S. See what it takes to thrive in this new, value-based payment environment.

Bill For Care You're Already Providing

Payers — primarily Medicare — are putting their money where their mouth is and starting to recognize and reward work that’s been proven to improve the quality of care and help keep long-term costs down.  Patients are gaining greater access to care. And providers now have more ways to get paid for the care they provide, with increased flexibility in how they’re providing that care.

Chronic Care Management (CCM)

Chronic Care Management marks the first time Medicare has offered payment for chronic care management occurring outside of office visits to maintain population health. Reimbursements are scheduled monthly for non face-to-face care management services lasting 20 minutes or more to patients with two or more chronic conditions, which accounts for 66% of all Medicare patients*. 

*Per CMS fact sheet 

Transitional Care Management (TCM)

Each year there are $12 billion in preventable readmission costs,** an astounding figure that Transitional Care Management (TCM) is looking to put an end to. TCM is a monthly Medicare reimbursement for all the work that happens during the 30 days following an inpatient discharge to ensure that a patient is able to recover properly. Depending on the complexity of the condition and the care provided, payments can range anywhere from $171 to $239 per 30-day period — a significant improvement over the $78 to $111 received for a non-TCM billed office visit. 

Private payer payment reform initiatives

Private payers can play a critical role in reducing costs and driving quality improvement in healthcare—and they’re motivated to do so since they are responsible for treatment costs not covered by government programs or paid directly by patients. So, private payers are trying a variety of payment reform options, including accountable care and pay for performance healthcare.

Here are some programs run by private payers that encourage both lower cost and quality improvement in healthcare: 

Patient-centered medical home recognition

Designated as an alternative payment model under MACRA, the patient-centered medical home (PCMH) is an increasingly popular pay-for-performance healthcare model that emphasizes continuous, coordinated patient care. It’s been shown to lower costs while improving healthcare outcomes.

The medical home model requires an ongoing commitment to quality improvement in healthcare by encouraging comprehensive, accessible patient care that’s coordinated across a team of providers. More than 90 health plans and 43 state Medicaid programs recognize this model of primary care by incorporating PCMH recognition into their own programs; many will offer financial incentives to practices that adopt the model.2

Pay-for-performance (P4P) programs 

In pay-for-performance healthcare, providers are compensated by insurance payers for meeting certain pre-established measures for both quality and efficiency. P4P programs are becoming an important part of the effort toward quality improvement in healthcare. Payments available from P4P programs can average 7% of a physician’s compensation, though they can be as high as 30%.4

There are currently more than 180 P4P programs available to providers, but participation remains relatively low. The key difficulty in establishing the right pay for performance setting is in choosing appropriate benchmarks. In addition, hospitals and healthcare providers may not have processes in place to collect data valid for quality assessment.

One example of a P4P program is Bridges to Excellence (BTE), a private non-profit organization that works with insurance companies to facilitate quality improvement and incentives. To be eligible for recognition through BTE, a physician must achieve minimum thresholds for quality care assessed through both process and outcome measures. Where applicable, clinicians can establish eligibility for pay for performance bonuses, differential reimbursement, or other incentives from payers and health plans.

1 Longworth, D.L. (September 2011.) Accountable care organizations, the patient-centered medical home, and health care reform: What does it all mean? Cleveland Clinic Journal of Medicine, Vol. 78 9 571-582. Available at:

2 Patient-Centered Primary Care Collaborative

3 Goodnough, A. and Sack, K. October 17, 2011. "Massachusetts Tries to Rein In Its Health Costs". The New York Times. Available at:

4 “Blue Cross Blue Shield of Massachusetts, The Alternative QUALITY Contract.” May 2010. Available at:

5 Med-Vantage/Leapfrog press release, “Med-Vantage and Leapfrog Present Early Results From 4th National P4P Survey,” March 9, 2009.

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