How is the payer-provider relationship evolving? Both sides weigh in

Healthcare industry trends such as growth in data analytics and high-deductible health plans are causing payer and provider relationships to evolve.

With this evolution comes the need for greater communication and collaboration between the two sides. A recent Availity survey of 40 health plans and 400 practice- and facility-based providers found 53 percent of payers "strongly agree" providers and health plans need to collaborate to be profitable.

Craig Samitt, MD, chief clinical officer of Indianapolis-based Anthem, sees collaboration between payers and providers as a mandate rather than an option for managing population health and for the continued evolution and transformation of healthcare.

Anthem has changed how it interacts with providers in the last several years. This change is based on the belief that collaboration between health plans and providers leads to better outcomes and lower costs, says Dr. Samitt.

Optima Health CMO Thomas Lundquist, MD, agreed payer and provider relationships have become more collaborative. Optima is part of Sentara Health Plans, a Virginia Beach, Va.-based payer with more than 26,000 in-network providers and more than 100 in-network hospitals.

"I think in some cases some payers are playing the role they always have and are not necessarily very interactive with many providers. On the other hand some payers like ourselves are very much collaborating with and investing our time and energy and our team's bandwidth in providers, especially those organized around the healthcare Triple Aim," he says.

Although collaboration is improving, disputes between payers and providers is still a common occurance, according to Dennis Laraway, executive vice president and CFO of Houston-based Memorial Hermann Health System. He says there are still many legacy payer-provider relationships that are often fee-for-service oriented and unit price oriented. At Memorial Hermann, for instance, more than 95 percent of the system's revenue stream is still fee-for-service, claims-based reimbursement.

"Even in the day-to-day joint operating activities between payer and provider, you still see a great deal of payment dispute activity over the authorization of the service, and payment arrangements per contract vs. those that were adjudicated in the claim," sais Mr. Laraway. "Again very much a legacy framework, fee for service, that still carries out today between payer and provider."

Still, Mr. Laraway acknowledges some evolution of change has occurred, as there are more contemporary arrangements emerging between payer and provider along accountable care structures.

"Memorial Hermann's success as an ACO for the CMS payment demonstration is evidence of our commitment to shift volume into a population-based framework. We're continuing to work with commercial payers to strive for similar payment models, especially when the member can truly be attributed directly to our provider network," says Mr. Laraway.

Karim Habibi, senior vice president and chief of managed care at NYU Langone Medical Center in New York City, also noted the payer-provider relationship has become collaborative.

"These value-based contracts are still laid on the top of the fee-for-service contracts and have the inherent limitations of fee for service, but such contracts are expected to continue to improve and evolve over time," said Mr. Habibi.

Data analytics

While payers and providers talked in general terms about the relationship between the two sides, they specifically discussed how data analytics now plays a role.

Dr. Samitt discussed Anthem's AIM Specialty Health subsidiary, a specialty benefit management company, which he says makes actionable data available to physicians so they can make better informed treatment decisions in high-risk, high-cost areas such as oncology. Additionally, he noted Anthem's partnership in California called Vivity, which is a product off the insurer's California health plan in partnership with seven health systems in the state. Dr. Samitt says Anthem worked to develop an analytics platform in support of Vivity that provides participating health systems with necessary population health information and predictive analytics.

Dr. Lundquist with Optima acknowledged health plans weren't previously designed to do physician-level reporting very well. Therefore, Optima invested in a couple key areas of provider analytics.

"We had to spend time and energy and continue effort to make sure our database is structured for physician reporting," he says. "Then on top of that, once you get that data cleaned up, we've invested in... creating analytics platforms that allow us to show provider at a provider level and also a provider group level and also at a clinically integrated network level how the cost efficiency or lack thereof exists around an episode of care."

Still, he says Optima believes the health plan must improve in certain analytics areas, such as creating transparency in real time when it comes to quality. That way the health plan can give providers their quality score card on a monthly basis if possible. Optima representatives said the organization provides "efficiency and effectiveness" scores at the request of providers, as well as quality scorecards to its clinically integrated network.

At Memorial Hermann, Mr. Laraway says the system has been participating in the introduction of the accountable care models through member attribution logic with the large commercial payers in Houston. "It allows us to obtain claim information to then be shared between payer and provider network."

As a result, Mr. Laraway says Memorial Hermann is able to link claim information with its clinical information system, allowing the organization to view trends and incidents of its patients and begin making decisions around clinical care management.

"By having the data, it allows us to stratify the population, work with our physicians around data trends for the patients they're serving and we can provide value back to the table for the payer. That allows both parties to share in some performance incentives that are now value driven rather than volume driven," he adds.

Mr. Habibi with NYU Langone believes analytics is crucial to success under value-based contracts. However, he said this requires significant investment in IT infrastructure, which allows providers to integrate claims data from the payers with hospital EMR data and physicians EMR data. He said providers also need the "ability to normalize the data to create a clinically enriched data sets that can be used to manage the health of the attributed patient population."

High-deductible health plans

Along with analytics, the rise in popularity of high-deductible health plans has played a role in the evolving payer-provider relationship.

Dr. Samitt says HDHPs have contributed to payer-provider collaboration in two major ways. First, the growth of such plans is essentially transforming healthcare into a retail market, especially for services viewed as commodities like imaging. Second, he believes HDHPs force an imperative for payers and providers to work collaboratively to improve quality while reducing costs.

"The reason why both force the necessity for payer and provider collaboration is each distinct player has done what they can in their world to drive toward greater value," says Dr. Samitt. "Payers have used historical benefits management tools to maximize quality and reduce cost. Providers have worked to improve value but with limited access to capital and tools to move to the next level. And unless we begin to see partnerships with shared accountability and coordination of functions across players, consumers are not going to get what they need in a high-deductible world."

When it comes to patients with HDHPs, Dr. Lundquist agreed payers and providers both have roles to play in creating value for consumers. For instance, two medications that provide the same treatment could have different costs to patient. Therefore, he says providers need to know cost to the health plan and patient, while payers need to be able to provide patients with information about medications and tests and what their projected costs are.

HDHPs have also affected the roles of payers and providers when it comes to the back end of the revenue cycle, as providers are now seeking more payment from the patient rather than the payer, Mr. Laraway notes. "Direct patient billing is perhaps the most difficult aspect of the overall revenue cycle, so further shifting financial responsibility from primary payer to patient puts added pressure on the provider sector to chase payments — one patient at a time."

Still, Mr. Habibi said there is opportunity for providers and payers to collaborate on reducing inappropriate or unnecessary care instead of pushing that responsibility on consumers through HDHPs.


Copyright © 2022 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.


Featured Webinars

Featured Whitepapers

Featured Podcast

Top 40 articles from the past 6 months