![]() Insurance companies determine the fixed payment based on the historical performance of the hospital and providers. An episode of care could be a hip replacement or cardiac surgery, for example, and could include any inpatient, outpatient, and rehabilitation care costs. Under bundled payments, a single, fixed payment covers all services associated with an episode of care. Three of the most common agreements include:īundled Payments: One Payment, Multiple Providers Value-Based Reimbursement: Contract Modelsīecause value-based reimbursement is based on the quality and cost of care, there are several models medical groups and insurance companies can use to align on payment. These examples show that, despite operating on different value-based reimbursement contract models, they could still see positive results following a transition to value-based care. Blue Cross and Blue Shield of North Carolina touts $153 million in savings in 2019, their first year of rolling out a value-based care plan. Humana reduced healthcare costs through Medicare Advantage Programs by $3.5 billion and Humana isn't alone. Healthcare payers are also seeing significant cost savings after implementing value-based reimbursement programs. As the name suggests, patients are receiving more value for their money. Value-based care (also referred to as accountable care or population health management) is growing in popularity in part because the value-based reimbursement model provides incentives for providers to offer the best care at the lowest cost.
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