Mistakes to avoid in risk sharing

May 1, 2012

Private payers have the most experience with managing risk, but each stakeholder must achieve a perfect balance of risk and reward.

While payers traditionally have relied on a fee-for-service approach to reimbursement, today's healthcare landscape increasingly allows payers and providers to enter into agreements that include shared risk. Private payers have the most experience with managing risk, but each stakeholder must achieve a perfect balance of risk and reward.

The Bundled Payment for Care Improvement Initiative is another way CMS hopes to improve the financing of care. Certain services lend themselves to a bundled model, in which providers operate within a budget to deliver a package of services related to one episode of care, such as knee replacement surgery and rehabilitation, for example. Many hope to advance care effectiveness and efficiency now before the market is flooded with new enrollees in the coming years.

Such risk-management agreements don't come without potential pitfalls for payers and providers. What's more, few provider organizations have previous experience, and best practices are still emerging. Healthcare experts believe that before any group enters into risk sharing agreements, the parties involved need to carefully consider what's at stake and determine in advance how potential problems can be prevented.