At a Glance
- The Value in Health Care Act of 2023 aims to shift healthcare reimbursement from fee-for-service to value-based care. This ties payments to quality of care and patient outcomes rather than quantity of services.
- The Act provides incentives like advanced funding, bonuses, and flexible benchmarks to help providers transition to alternative payment models like accountable care organizations (ACOs). This allows focusing on preventive care and chronic disease management.
- There is bipartisan support for the Act from healthcare organizations and providers.
The Value in Health Care Act of 2023 hopes to solve 2 significant challenges for providers and patients alike: high healthcare costs and poor patient outcomes. While it has not yet passed the House, this bill offers insight into potential changes in the healthcare payments landscape.
According to the National Health Expenditure Account (NHEA), healthcare spending grew to $12,914 per person in 2021, and it continues to remain high. Yet, compared to other high-income nations, patients in the United States do not have the outcomes expected commensurate with the level of expenditures.
Part of the problem lies in how healthcare organizations are paid. Traditionally, the more patients a provider sees, the more they earn, enticing treatment of sickness in an acute care and episodic manner. This model doesn’t necessarily put the patient or prevention first.
The Value in Health Care Act is one response to this crisis. Let’s dive into what this bill is, what providers can expect, and what organizations are supporting this bill.
What is the Value in Health Care Act of 2023?
The Value in Health Care Act of 2023 is a bipartisan bill that builds on a bill of the same name established in 2021. Reps. Peter Welch (D-Vt.), Suzan DelBene (D-Wash.), Darin LaHood (R-Ill.), and Brad Wenstrup (R-Ohio) introduced the original legislation with the goal of supporting accountable care organizations (ACOs).
The 2021 bill included several provisions, including:
- Provided advanced funding for ACOs
- Reviewed alternative payment models
- Increased rates for some Medicare Shared Savings Program (MSSP) ACOs
- Extended Alternative Payment Model (APM) bonuses
Essentially, the Value in Health Care Act aimed to incentivize and support providers with alternative payment models. The earlier pay-for-service model limited providers and hospitals, as revenue was not based on the value of services provided.
“Essentially, the Value in Health Care Act aimed to incentivize and support providers with alternative payment models. ”
In 2023, legislators extended additional support and incentives through:
- Further extending the Medicare incentive payment until 2025
- Enabling Centers for Medicare & Medicaid Services (CMS) to adjust ACO qualifications
- Allowing healthcare providers and organizations to take on more risk
- Removing revenue-based distinctions and providing financial benchmarks
These modifications aim to support more healthcare organizations nationwide in shifting to a value-based approach to medicine. In particular, these policies would be more inclusive of rural healthcare systems, which may have different standards and resources than urban organizations.
What is value-based care? (Understanding the transition from quantity to quality)
Value-based care centers around tying healthcare reimbursement to the quality of care received. This approach uses financial incentives to support providers and healthcare organizations in improving patient outcomes.
The older payment model of fee-for-service requires providers to see more and more patients and provide more and more services to turn a profit. As a result, this incentivized episodic treatment of acute disorders and delays in both preventive care as well as management of chronic diseases.
Meanwhile, a value-based care plan focuses on quality, not quantity. In contrast to traditional models, value-based payments are calculated by health outcomes. Hospital readmissions, overall population health, and patient engagement become critical to determining reimbursements.
The value-based approach, in theory, incentivizes healthcare organizations to focus on improving outcomes in the long term rather than scaling the number of patients they see over a period — thus creating a win-win situation for patients and providers.
There are 3 different value-based models:
- Accountable Care Organizations – ACOs are networks of healthcare organizations that work together to provide coordinated care.
- Bundled Payments – This approach to value-based healthcare combines reimbursement for all providers responsible for a patient’s care.
- Patient-Centered Medical Homes – In this model, a group of physicians and healthcare providers act as a team to offer end-to-end primary care support for a patient.
What providers need to know about the Value in Health Care Act
Ideally, this legislation should allow providers and healthcare organizations to earn more while offering higher-quality care to patients. According to the American Hospital Association (AHA), hospitals, providers, clinicians, and other healthcare providers will be able to leverage:
- Technical assistance for new APMs
- Additional APM incentives
- Benchmarks that ensure APMs aren’t penalized for successful care
The legislation also extends incentives to rural, underserved, and specialized healthcare organizations.
“Ideally, this legislation should allow providers and healthcare organizations to earn more while offering higher-quality care to patients. ”
Adopting value-based care models requires a shift in mindset, but leveraging these incentives early on is one way to differentiate your practice.
Who supports the Value in Health Care Act?
Many healthcare organizations support the 2023 Value in Health Care Act, including:
- Accountable for Health
- American Academy of Family Physicians
- American Academy of Orthopaedic Surgeons
- American College of Physicians
- American Hospital Association
- American Medical Association
- America’s Essential Hospitals
- America’s Physician Groups
- Association of American Medical Colleges
- Federation of American Hospitals
- Healthcare Leadership Council
- Health Care Transformation Task Force
- Medical Group Management Association National Association of ACOs
- National Rural Health Association Premier, Inc.
The road to improving patient outcomes
Regardless of whether your practice uses a traditional or value-based model, patient relationships are essential for positive outcomes and retention. Even something as simple as empathy can make a lasting impression, with 65% of patient satisfaction stemming from empathic communication.
To learn more about how you can build lasting relationships with patients and provide better value, check out our patient connections datasheet.
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