One insurer proves that value-based reimbursement works in practice


Humana’s value-based reimbursement model with physicians has helped to improve care quality and health outcomes for its Medicare Advantage (MA) program members.

Healthcare payment changes are moving full-speed ahead, with payers reporting that they are 58% along the flow toward full value-based reimbursement, a 10% jump since 2014.

Case in point, Humana’s value-based reimbursement model with physicians has helped to improve care quality and health outcomes for its Medicare Advantage (MA) program members for the third year in a row.

Humana’s 2015 value-based care results compared physicians and members under value-based agreements with Humana versus those in traditional fee-for-service settings


“At a high level, we found three things,” says Humana Chief Medical Officer Roy Beveridge, MD, Managed Healthcare Executive editorial advisor. “First, that physicians in value-based reimbursement agreements with Humana delivered higher quality care. They had 19% higher Healthcare Effectiveness Data and Information Set [HEDIS] scores compared to physicians in standard MA settings based on an internal attribution model. Second, members cared for by physicians in value-based reimbursement agreements had healthier outcomes than in standard MA settings.”

Among members under value-based care, Humana saw higher screening rates for colorectal cancer (up by 8%), breast cancer (up by 6%), and osteoporosis management (up by 13%). These members also experienced 6% fewer emergency room visits. And, for older adults with special needs, we increased the assessment rate by 5% for pain screening and 10% for medication reviews.

Third, Humana saw a 20% reduction in medical costs for members cared for by physicians in value-based reimbursement agreements versus an estimation of original fee-for-service Medicare costs.

“These cost reductions may benefit members in a number of ways, including future reductions in out-of-pocket costs and lower premiums,” Beveridge says.

“We hope these results are encouraging to managed care executives as they look for ways they can drive quality and cost improvements in the near term,” he adds. “It’s especially timely, considering that our government has set forth ambitious targets that tie more care to quality metrics and value-based reimbursement. The 2015 results show that value-based reimbursement models do work in practice, not just in theory.”

For the 2015 results, Humana compared two data sets. First, they looked at quality metrics and outcomes for approximately 1.2 million MA members affiliated with physicians in value-based reimbursement agreements with Humana. Then, that data set was compared to quality metrics and outcomes for 170,000 members cared for in standard MA settings.

Next: Challenge ahead



“A challenge with standard, fee-for-service Medicare is that it does not account for physicians who meet or exceed quality and cost targets,” Beveridge says. “The complex care physicians give does not get recognized as it should. Under value-based reimbursement agreements, physicians are not only paid for achieving quality and cost targets, they also generally have greater flexibility to spend more time with their patients, approach care holistically, and extend access to preventive services.”

Tying payment to quality, however, can represent an operational shift for physicians, according to Beveridge. “And, it does require a degree of preparedness. That’s something we hear often from the physician community. That’s why we offer a range of value-based reimbursement models, as well as support, to meet practices where they currently are in terms of their readiness to take on value-based care.”

Based on the results, Beveridge says there are three things to know.

1.   High-quality care and outcomes remain the first priority.

“Helping patients achieve their best health leads to less time in hospitals and fewer acute care episodes,” he says. “As a result, the entire health care system sees the benefit through lowered medical costs. Improved costs are a direct result of improved care. It’s something we at Humana fundamentally believe in.”

2.   It is crucial for health plans and physicians to be in complete alignment at the onset of a value-based reimbursement agreement-and, it should be a two-sided relationship.

“That means that health plans must work harder to offer physicians the resources and support they need to migrate toward value-based reimbursement,” he says. “Expect more from your health plan, including simplified quality metrics for physicians that are clinically meaningful. This is a common pain point I often hear from physicians.”

3.   Health plans recognize that they, too, need to adapt under value-based payment models.

“The perception of plans and physicians being at odds is a common one under fee-for-service,” Beveridge says. “But, this is changing. We’re seeing what’s possible when both sides work in unison, as demonstrated by our 2015 MA value-based care results. Being open to this type of relationship with your health plan can put a powerful ally in your corner as you embark on the transition away from fee-for-service.”


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