What is the benefit of Value-based care for doctors?

When working with patients to bill their medical insurance, it can be confusing to understand the different systems available. Since the introduction of Value-Based Care, the confusion has increased.

Most of the information available today about Value-Based Care is written by insurance providers explaining the core benefits to patients. While this is helpful, it may be a little one-sided. This article explains the process for doctors billing patients under this new system.

How Value Based Care Evolved?

In the past, most of the billing was done through Fee For Service type arrangements between doctors and the insurers.

With fee-for-service, doctors and hospitals were paid based on the number of health care services they could deliver, such as tests and procedures. Payment generally had little to do with whether their patients’ health improved.

The current trend in commercial healthcare is called Value-Based Care (sometimes known by the acronym VBC, or the term pay-for-value), in which the patient bears a greater share of cost.

 

Should Doctors Bill Patients at the time of service?

Under this new VBC model, fewer plans use office copays, and more plans apply the office visit obligation to the patient’s deductible. The problem with this approach is that very often patients aren’t quite as efficient at making payments as the insurance company is.

In many instances, the doctor’s office doesn’t know what amount the contract is going to allow for the service provided. 

Many of these new plans may also include an FSA (Flexible Spending Account), an HSA (Health Spending Account or Health Savings Account), or even an HRA (Health Reimbursement Account). Some patients may be skeptical paying with one of these cards when they have no guarantee that the payment is correct.

Each of these plans has very strict usage guidelines, and only certain types of services or commodities are payable from these funds. If a patient overpays, the fund must be reimbursed, and that can be complicated for both the provider and the patient. From a cash flow standpoint, these plans can be a problem.

There are different ways to manage this issue: some offices ask for a flat down payment amount and bill the patient for the balance.

Today, with a Value Based Care model, those policies will need to be revamped, and a more directive approach to patient payments collection will likely be necessary.