Value-based Care Contracting 101

Value-based Care Contracting is a key component to your VBC program. Fee-for-service contracts continue to be a challenge for VBC. The pandemic led to a drastic reduction in volumes that impacted FFS contracts revenue ($15B loss due to volume dips).

During the pandemic, organizations with value-based contracts were able to pivot operations to maintain revenue even when the volumes dropped. VBC payments will increase rapidly in the near future as hospitals and physician practices look to protect themselves against future downturns.

Value-based Care Contracting
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Revcycle Intelligence (of Xtelligent Healthcare Media) shared an in-depth article highlighting how to succeed at value-based contracting. We share our takeaways from the article below. 

Prior to engaging in contract negotiations:

  • Have a strong clinical leadership team to engage your physicians as their top priority (not 0.2 FTE). 
  • Build a strong referral network that can be managed tightly with hospitals and specialists
  • Make a meaningful investment in changing FFS workflows to optimize patient care and care coordination. Tracking and accountability are key.
  • Build strong financial models. Do you have the resources that you need to manage those medical costs and administrative costs of that population that you might get?


Heading into contract negotiations:

  • Promote your organization’s quality metrics. Do you have longer clinic hours compared to your neighboring groups? Do you have better STARS/HEDIS scores? Are you leading in patient satisfaction scores?
  • Build an experienced team to handle payor contract negotiations. Every contract is unique, and the fine print matters. Most importantly, understand how your payor will attribute patients.
  • Don’t over-commit on what data you can collect and report. Prepare your IT infrastructure well ahead of time. 
  • Make sure your payors will be good partners in promoting your group and helping you grow your patient base.


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After the negotiation:

  • Growth is key because organizations need a panel of patients for contracts to work, and those patients cannot all be high-risk. 
  • Keep close tabs on provider satisfaction, physician growth, and employer satisfaction with the care delivered. 
  • Noticeable dips in quality performance may necessitate change and possibly another round of negotiation. Identify shortfalls early and frequently communicate with your payor partners.
  • Success begets success with payor contracts. 

Read More:  Value-Based Contracting 101: Preparing, Negotiating and Succeeding


Doctus Team


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