The Role of Payers in Healthcare and Care Management

In the care management plan puzzle, payers in the healthcare system hold key pieces needed to complete it. In fact, they’re often the only ones who know the full picture of the services a patient is receiving.

Taking the time to understand the role of payers in care management is crucial to coordinating effective care. In this blog post, we’ll break down who payers are and the part they play in care management. This includes common reimbursement models and a brief overview of claims data and its limitations.

Who is Considered a Payer in Healthcare?

When it comes to who are the payers in healthcare, they’re typically categorized in four ways: Health plans, payers, insurers, and payviders. A common misconception is that these types of payers are all synonymous with each other, but they’re not exactly interchangeable terms.

Health plans pay the cost of medical care, while the payer processes and pays provider claims. The most common type of payers are insurers (insurance companies), and payviders are providers and payers in healthcare.

Payers Role in Care Management

At its core, the payer’s role entails balancing cost and quality of care. Their day-to-day is managing the resources of a patient’s care plan in a way that ensures the most successful outcome is achieved with the least amount of money spent and/or wasted.

To help align cost with care outcomes of their members, payer care management programs target and engage specific types of patients. Examples of these programs include transition of care management, complex case management, chronic condition management, and lifestyle and prevention programs.

Transition of Care Management

When a patient goes from one care center to another — like going to the hospital then back to their PCP, for example — there’s always a possibility something could slip through the cracks. During transitions of care, primary care physicians (PCPs) often encounter care gaps that are beyond their control due to factors such as inaccessible patient records, unclear discharge care plans, or limited effort by others to engage the primary care team or the patient and their caregivers.

Recognizing this, payers began hiring nurses and doctors to provide management of care in those gaps, making sure that the handoff between the silos of care is effective. Some payers have also incorporated admission, discharge, transfer (ADT) alerts so providers can reach out to patients during transitions in care when it has the greatest impact on health outcomes.

Promoting Value-Based Care

Value-based care (VBC) allows purchasers of healthcare and payers to hold providers accountable for both quality and cost of care. The goal of value-based care is to improve population health management and preventive care, which should subsequently reduce costs and unnecessary utilization.

Value-Based Care vs. Fee-for-Service Reimbursement

Value-based care emerged in response to flaws attributed to the traditional fee-for-service (FFS) model, which the U.S. healthcare system has been operating under for decades. Fee-for-service entails payers reimbursing providers for each individual service delivered to patients, regardless of how effective it was. Value-based care facilitates a patient-centered care approach, reimbursing providers based on the quality of care and patient outcomes.

Using alternative payment models (APMs), value-based care shifts the incentive for providers to ensure patients with certain chronic conditions receive all preventative services that best practices dictate they should.

Value-Based Reimbursement

Here’s an example of value-based care reimbursement: Say a patient is in need of a hip replacement. A provider who has a value-based arrangement with the payer will get reimbursed a set amount for all services they provide for this hip replacement. If the patient recovers well and doesn’t have any complications that require more service, the provider would pocket any money leftover from that lump sum.

On the flip side, if the patient does poorly and requires additional surgery or extended physical therapy, the provider would end up losing money on this patient thereby incentivizing them to improve their practices so that fewer of their patients have adverse outcomes.

If the patient gets well quickly, the hospital makes more money than they would if they had just been reimbursed for the services they provided. The payer wins because providers are doing things to promote more effective utilization, like making sure their patients are doing their rehab exercises and are taking medications correctly. Plus, patients win because their doctors are monitoring their outcomes better.

What is Healthcare Claims Data?

Claims data includes information on the services and treatments rendered by the provider as well as the diagnoses they assigned to the patient. It’s produced as part of revenue cycle management (RCM) for healthcare providers. When a provider performs a service, they submit a claim to the payer for reimbursement. Each payer organization collects insight from these claims and houses them in their own respective databases.

Limitations of Claims Data

Claims data can often be delayed due to varying processing times. While this may not be an issue in some cases, it can be a problem if a patient is admitted to the emergency room or discharged from the hospital. When there is a critical health status change, a patient’s care team needs to be notified in real-time, not weeks after the fact.

This article was originally published by Audacious Inquiry, now a part of PointClickCare.