AIS Newsletter Examines Ways to Engage Specialists in Value-Based Payment Contracts

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The March issue of Atlantic Information Services, Inc.’s ACO Business News tracks some strategies proposed by industry experts for getting specialists involved in value-based payment contracts within the context of a commercial ACO-type model.

As payers pledge to move the bulk of their business into value-based payment contracts within the next few years, they are testing various initiatives to get specialists — and the significant chunk of health care spending they control — involved. The March issue of Atlantic Information Services, Inc.’s ACO Business News (ABN) tracks some of the strategies proposed by industry experts within the context of a commercial accountable care organization (ACO)-type model.

One way to get specialists on board with value-based payments — as opposed to fee-for-service (FFS) —would be to carve out “virtual bundles” around particular procedures, and then make those bundles the responsibility of the procedure specialist, Rich Bajner, managing director in Navigant Consulting Inc.’s health care practice, tells ABN. This could work with common procedures, such as knee and hip joint replacement, spine surgery or coronary artery bypass graft surgery, he says.

An example of a payer that is ahead of the curve is Cigna Corp., which evolved its value-based care program to include specialists last year. Currently, Cigna is working with specialists in orthopedics, obstetrics/gynecology, cardiology, gastroenterology and oncology, says spokesperson Mark Slitt, who adds, “Our own research indicates that 57% of medical costs are spent on these five specialties.” Within a few years, he tells ABN, Cigna wants the majority of its members with complex health needs or chronic conditions to receive their care from a provider with an incentive-based payment arrangement. According to Slitt, the value-based payment arrangements with specialists include: pay-for-performance arrangements that create incentives for achieving targeted quality and cost benchmarks; incentives for adhering to evidence-based medicine guidelines in areas such as oncology or obstetrical care; shared savings programs around a targeted medical cost for an episode of care; and global payments for episodes of care.

The move to value-based payments doesn’t mean that fee-for-service is completely going away. As David Muhlestein, director of research at Leavitt Partners LLC, observes, FFS payments to specialists who are caring for ACO patients would still fall under the umbrella of “value-based payments,” since someone (although not the specialist) is responsible for managing care. Therefore, some percentage of specialists may continue to be reimbursed under a FFS system for their services, even if that reimbursement comes under a value-based system, he explains to ABN.

But, specialists who adopt value-based payments could see a competitive advantage, Banjer says. “The new reality is most of your revenue will be coming from negotiated risk-sharing arrangements. You won’t have the opportunity to say most of your business comes from fee-for-service.”

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About ACO Business News
ACO Business News delivers timely news and business strategies on accountable care organizations for physicians and provider groups, hospitals, health plans, pharma companies and their advisers. The monthly newsletter covers the latest industry actions to design and create ACOs, results that are already being achieved by ACO-like entities, the impact of ACOs on health plans and pharma, and HHS regulations and guidance on this provocative new trend in health care. Featuring the pros and cons of various strategies for different types of organizations, ACO Business News is designed to help readers avoid the pitfalls ahead and transform exciting ACO opportunities into winning business strategies. Visit for more information.

About Atlantic Information Services
Atlantic Information Services, Inc. (AIS) is a publishing and information company that has been serving the health care industry for more than 25 years. It develops highly targeted news, data and strategic information for managers in hospitals, health plans, medical group practices, pharmaceutical companies and other health care organizations. AIS products include print and electronic newsletters, websites, looseleafs, books, strategic reports, databases, webinars and conferences. Learn more at

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Jill Brown, Executive Editor
Atlantic Information Services
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