Bass, Berry & Sims attorney Cindy Reisz was the featured guest on the two-part Buy-In podcast discussing value-based arrangements among healthcare providers. During the podcasts, Cindy discussed the healthcare industry’s transition from a fee-for-service payment model to a value-based payment model and the impact the COVID-19 pandemic has had on these payment approaches.

“The pandemic may be serving as a catalyst for adoption of more value-based payment models,” Cindy said. “I think the pandemic has highlighted the pitfalls of paying for healthcare services based solely on the number of patients seen or the number of procedures performed. It also reinforced the benefits of tying the cost of healthcare to value and not volume.”

The podcast episodes also examined the proposed changes to the federal Stark Law related to value-based care arrangements and financial risk sharing associated with value-based programs. Related to the Stark Law proposed changes, Cindy observed that “the proposed rules were intended to strike a balance between the flexibility that we all agreed was needed for innovation to flourish and the safeguards that CMS, in particular, believes is necessary to protect patients and the federal healthcare programs against fraud and abuse. CMS expressed some concerns about four categories of issues: the first was limiting medically-necessary care, the next was cherry-picking the healthiest patients to participate in these arrangements, the third was lemon dropping – dropping the sicker patients, and the last is inappropriate manipulation of data used to verify performance and outcomes.”

Cindy continued by saying, “Overall, I think the proposed rule represents a comprehensive effort especially when you look at what the OIG did with its proposed rule for modifying the Anti-Kickback Statute and adding some safe harbors that supports a shift to reimbursement models that are driven by quality and efficiency rather than volume. However, we are still concerned that some of these aspects may be difficult to interpret and apply in practice.”

The full episodes “Creating Value with Value-Based Arrangements – Part 1 and Part 2” are available online. Buy-In is a podcast series produced by HORNE Healthcare exploring valuation topics ranging from physician compensation and hospital mergers to value-based arrangements and telehealth.