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Value-based reimbursement

Value-based reimbursement is the payment model for medical services that is gradually replacing the traditional fee-for-service model for payers and healthcare organizations. The goal is to cut rising healthcare costs by switching from a model based on quantity to value-based reimbursement, which is based on quality.

Value-based reimbursement is considered a way to cap costs and spread financial risk among providers, while encouraging coordination of care, disease prevention and better management of chronic conditions. This is seen as a threat to the survival of clinical labs, which expect to see far fewer tests ordered by healthcare providers.

In partnership with THE DARK REPORT, the Clinical Laboratory Management Association is working to help labs navigate these revenue-threatening changes. “As fee-for-service reimbursement gives way to bundled reimbursement and per-member-per-month payment, labs will only be successful if they add value to physicians by helping them diagnose disease earlier and more accurately,” says CLMA President Paul Epner.

Medicare, the largest payer in the U.S., has recently been ordered by the Department of Health and Human Services to link 30 percent of fee-for-service payments to quality or value through alternative payment models, such as accountable care organizations (ACOs) or bundled payment arrangements by the end of 2016, and tying 50 percent of payments to these models by the end of 2018.

An ACO, for example is a group of doctors, hospitals and health care providers who work together to provide higher-quality coordinated care to their patients, while helping to slow health care cost growth. In addition to this, through the widespread use of health information technology, the health care data needed to track these efforts is now available.

HHS also set a goal of tying 85 percent of all traditional Medicare payments to quality or value by 2016 and 90 percent by 2018 through programs such as the Hospital Value Based Purchasing and the Hospital Readmissions Reduction Programs. This is the first time in the history of the Medicare program that HHS has set explicit goals for alternative payment models and value-based payments.

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