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The transition to value-based care marks a fundamental shift for patients, insurers, and healthcare providers across the industry. The idea is that moving away from the traditional fee-for-service (FFS) model and embracing a value-based care (VBC) model will lead to better patient outcomes while reducing healthcare costs.

Recognizing the potential of value-based care, the Centers for Medicare & Medicaid Services (CMS) plans to transition its members to accountable care models by 2030. Yet, only 25% of U.S. healthcare spending is currently flowing through value-based, shared-risk contracts. With CMS being a catalyst for change across the healthcare system, adoption of value-based models is expected to finally take off.

For healthcare providers and billers, value-based arrangements introduce significant changes to billing processes and patient payment responsibilities. Understanding these implications is critical, as the financial stakes are high.

What Is Value-Based Care?

Value-based care is a healthcare delivery model that rewards providers for the quality of care they deliver rather than simply reimbursing them based on the volume of services they provide. VBC places a greater emphasis on preventative care, coordinated treatment plans, and cost-efficiency. Success in a value-based care model is measured by patient outcomes and overall health improvements, with metrics like reduced hospital readmissions and fewer chronic condition complications taking on more importance.

How Value-Based Care Impacts Billing Practices

Under the fee-for-service model, billing was straightforward—providers charged for the services they rendered. With value-based care, billing now ties to quality metrics and health outcomes, a paradigm shift that requires rethinking traditional billing workflows.

Rather than a simple process of paying for each visit or service, value-based billing incorporates shared savings programs, bundled payments, and risk-sharing agreements. For billing teams, these models introduce much more complexity, with payments tied to broader patient care episodes and overall performance metrics.

Navigating the transition comes with a number of challenges:

Ability to Measure Quality

Accurately determining and reporting metrics such as patient satisfaction and health outcomes are essential for improving the quality of care, driving informed decision-making, and ensuring accountability within the healthcare system. That said, translating a qualitative measurement to something quantitative—a payment—can be difficult. A balance between patient satisfaction (their assessment of the effectiveness of communication, service delivery, and overall experiences) and health outcomes must be achieved to measure the success of treatments and determine a fair payment.

Alignment with Insurance Carriers

VBC requires close collaboration with insurance companies to establish clear performance metrics and payment structures. This involves negotiating measurable outcomes, such as strong pharmaceutical adherence, reduced hospital readmissions, or enhanced preventive care efforts. Both parties must work together to align incentives, ensuring that providers are fairly reimbursed for delivering high-quality, cost-effective care.

Technology Upgrades

Electronic health record (EHR) systems play a critical role in modern healthcare by providing a centralized platform to manage and streamline essential processes. To be truly effective in the VBC model, EHR systems must seamlessly integrate billing with quality measurement and patient data. This means combining financial operations, such as invoicing and insurance claims, with tools that track clinical utilization trends to inform optimal care delivery and improve patient outcomes.

Data analytics platforms are required to allow providers to track performance metrics, while advanced revenue cycle management tools need to streamline billing processes by incorporating outcome-based payment models. Investing in these systems is no longer an option with the shift to VBC—it’s a requirement.

Patient Payment Responsibilities in Value-Based Care

One of the most significant shifts under value-based care lies in how it impacts patient payment responsibilities—and how the shifting patient responsibilities in turn affect healthcare providers.

Increased Transparency

Under VBC, the emphasis on preventative care and patient engagement often translates into a more transparent system. Patients are better informed about their care costs upfront, thanks to bundled payments and simplified billing structures. While this model fosters trust and clarity, it also requires clearer communication between providers and patients.

Shifting Cost-Sharing Models

With an emphasis on patient outcomes, cost-sharing models such as high-deductible health plans may become even more prevalent. Patients may bear higher point-of-service costs for routine care, requiring healthcare providers to guide patients through their payment responsibilities and offer flexible solutions like payment plans where needed. Cost calculator tools can also empower patients to seek the highest quality care from lower-cost care settings, such as urgent care instead of the emergency room.

More Financial Risk for Providers

Compared to the fee-for-service model, value-based care puts more weight on the provider to absorb financial risk if outcomes don’t meet agreed-upon metrics. This financial risk ties into patient payment responsibilities, creating scenarios where practices must collect payment while balancing patient satisfaction and organizational efficiency.

Preparing for the Transition

Healthcare providers and billers can take these steps to successfully transition to value-based care models:

Upgrade Technology Systems

Invest in advanced revenue cycle management (RCM) systems designed to streamline and optimize value-based billing processes and reporting. These systems not only improve the accuracy and efficiency of billing, but also help healthcare providers adapt to the shift from fee-for-service to value-based care. By automating key tasks such as claims processing, payment tracking, and patient billing, RCM systems reduce administrative burdens and minimize the risk of human error.

Enhance Staff Training

Provide comprehensive training to billing staff on the intricacies of value-based care billing, ensuring they understand concepts such as bundled payments, shared savings calculations, and other reimbursement models unique to VBC. This includes explaining how bundled payments combine multiple services into a single payment, fostering cost efficiency, and detailing how shared savings programs reward providers for lowering healthcare costs while maintaining quality.

Improve Communication

Establish clear and open lines of communication with both patients and payers to ensure everyone understands the billing processes and their respective payment responsibilities. For patients, this means providing detailed explanations of their financial obligations, such as copays, deductibles, and out-of-pocket expenses, as well as answering any questions they may have about their bills, to increase their financial literacy. For payers, it involves ensuring proper coordination regarding coverage, reimbursement policies, and claim submissions to avoid delays or denials.

A Win-Win for Patients and Providers

While the transition to value-based care brings challenges for providers, it ultimately enables healthcare systems to achieve better outcomes, greater patient satisfaction, and more efficient operations, benefiting all stakeholders.

For healthcare providers and billers, understanding the impact of value-based care on billing practices and patient payments is crucial. By adopting cutting-edge digital patient billing solutions, refining workflows, and prioritizing patient education, organizations can thrive—not just survive—in this new era of healthcare.

Get in touch with us today and learn more about how MailMyStatements’ BillingCycle Plus software can help streamline your patient billing and payment collection process with digital tools like eStatements, SMS text message payment alerts and reminders, and machine learning chatbots.