Health insurer Humana Inc. "has reached an agreement to pay five maternity-care providers, including three near Louisville, based at least in part on patient outcomes, rather than the number of health-care services they provide," reports Boris Ladwig of Insider Louisville.
The deals show how Humana is "moving away from the traditional fee-for-service model, in which health-care providers are paid for each individual care procedure, and toward so-called bundled care or capitation models, in which providers are paid for entire health episode or per patient," Ladwig writes. "Humana and the maternity care providers expect that their cooperation, which will target low-to-moderate risk pregnancies, will reduce readmissions and complications, thanks in part to data analysis."
If the clinics can reduce costs of a pregnancy below a target set in the contract, they can get part of the savings as a bonus — if patient outcomes improve. "For example, if the providers reduce costs, but quality declines — based on measures including the share of patients who make it to full term and the share of patients who require a C-section — the providers will not eligible for the bonus," Ladwig reports.
Brent Stice, director of value-based strategies for Humana, told Ladwig, “We don’t just want them to reduce cost if it doesn’t increase quality.”
Maternity-care providers who are participating in the plan are Ob/Gyn Associates of Southern Indiana, in New Albany; TriHealth and Seven Hills Women’s Health Centers, both of Cincinnati; and two providers in Kansas and Texas.
The Centers for Medicare and Medicaid Services has said bundled payments “may lead to higher quality and more coordinated care at a lower cost to Medicare,” Ladwig notes. "Government agencies and insurers are moving away from the fee-for-service model because they say it incentivizes providers to see as many patients and perform as many procedures as possible without focusing on health outcomes, which increases health-care costs both in the short and long terms. However, they say bundled payment and capitation models incentivize providers to perform as few procedures as necessary and to focus more on long-term health outcomes, which benefits patients and lowers costs."
Humana is making bundled payments to 40 orthopedic practices in 13 states for Medicare Advantage customers who get total hip or knee replacement, Ladwig reports: "Stice said the company is in conversations with other medical providers about such agreements, and he expects Humana’s push away from the fee-for-service model will continue."
The deals show how Humana is "moving away from the traditional fee-for-service model, in which health-care providers are paid for each individual care procedure, and toward so-called bundled care or capitation models, in which providers are paid for entire health episode or per patient," Ladwig writes. "Humana and the maternity care providers expect that their cooperation, which will target low-to-moderate risk pregnancies, will reduce readmissions and complications, thanks in part to data analysis."
If the clinics can reduce costs of a pregnancy below a target set in the contract, they can get part of the savings as a bonus — if patient outcomes improve. "For example, if the providers reduce costs, but quality declines — based on measures including the share of patients who make it to full term and the share of patients who require a C-section — the providers will not eligible for the bonus," Ladwig reports.
Brent Stice, director of value-based strategies for Humana, told Ladwig, “We don’t just want them to reduce cost if it doesn’t increase quality.”
Maternity-care providers who are participating in the plan are Ob/Gyn Associates of Southern Indiana, in New Albany; TriHealth and Seven Hills Women’s Health Centers, both of Cincinnati; and two providers in Kansas and Texas.
The Centers for Medicare and Medicaid Services has said bundled payments “may lead to higher quality and more coordinated care at a lower cost to Medicare,” Ladwig notes. "Government agencies and insurers are moving away from the fee-for-service model because they say it incentivizes providers to see as many patients and perform as many procedures as possible without focusing on health outcomes, which increases health-care costs both in the short and long terms. However, they say bundled payment and capitation models incentivize providers to perform as few procedures as necessary and to focus more on long-term health outcomes, which benefits patients and lowers costs."
Humana is making bundled payments to 40 orthopedic practices in 13 states for Medicare Advantage customers who get total hip or knee replacement, Ladwig reports: "Stice said the company is in conversations with other medical providers about such agreements, and he expects Humana’s push away from the fee-for-service model will continue."
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