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Aug 25, 2020

The new realities – and new opportunities – of value-based-care

by Gary Skole

The onset of COVID-19 invites us to consider a value-based-care approach, like outsourced selected care management services, as a powerful solution to plugging revenue gaps.

With the onset of COVID-19 and changes in healthcare reimbursement, hospitals and physician groups are all looking for new ways to drive revenue, while continuing to deliver outstanding care. The challenge is how to accomplish this without adding to the burden of overworked providers and staff.

But our current situation, uncharted territory and all, invites us to consider a value-based-care approach, like outsourced care management services, as a powerful solution rather than just a cost-saving strategy. 

Prior to the pandemic, both patients and healthcare providers alike tended to resist the idea of remote care, but as we’ve seen, that’s changed rapidly over the past few months. The future of healthcare is heading in this direction with payors expecting provider participation – and even factoring it into total compensation.

In short, what happens outside of the hospital or physician's office is going to play a much larger role now in the way patients are cared for – and providers are reimbursed. And for those who recognize and embrace this change, the future is a bright one.

But the million dollar question remains: 

Are there opportunities out there that meet most of, if not all of the following requirements?

  • Enhance patient care and offer a better patient experience.

  • Require little to no risk from the provider.

  • Add little to no cost.

  • Can be adopted with little to no disruption in the current practice.

  • Require little effort on the part of the staff.

  • Take advantage of services already being performed, yet not being billed.

  • Have a quick turnaround with new revenue seen in just a few months as opposed to several years.

Furthermore, CMS is aggressively pushing several new codes and has recently relaxed the requirements placed on providers in order to incentivise greater participation and guide them away from the fee-for-service model and more towards value-based-care. 

There are several new programs that are easy to implement, offer a great ROI, and demand little to no risk from the provider. Ideally, these solutions should be able to prevent revenue leakage while simultaneously adding new revenue sources. 

So what do these opportunities look like? 

The shift towards value-based-care is happening quickly.  A great example is the partnership between IBC and the University of Pennsylvania Health System. In this agreement, IBC rewards Penn Medicine's hospitals and physicians for improving care quality and reducing cost. Fifty percent of Penn Medicine's potential earnings are based on its ability to reduce hospital-acquired infections and readmissions and follow evidence-based guidelines. The other half is based on Penn Medicine's ability to manage costs through collaboration and coordination along the continuum of care. Penn Medicine is totally at risk.

Placing greater value on reducing readmissions as well as collaboration along the care continuum offers new opportunities for providers to capture revenue beyond the hospital walls. 

It’s okay to start small. 

Hospitals such as Penn Medicine may be better positioned than some smaller hospitals or even medical practices to take on that level of risk, but that doesn’t mean preparing for the future has to be an all-or-nothing proposition. There are still many ways to capture new revenue and enter the world of value-based care at a slower, more conservative pace.

Adding services such as Transitional Care Management (TCM) and Chronic Care Management (CCM) are great places to start. These services meet all the criteria of both preventing revenue leakage while building a new stream of business. They can also be implemented with little to no disruption or cost. Let’s try to get a better understanding of what these services are and then look at the various ways they can be added.

Transitional Care Management

TCM is designed for primary care doctors and specialists as well as non-qualifying medical practitioners to help patients transition from a hospital or other facility back into the home setting. This is a 30-day program that involves a face-to-face visit within the first 7-14 days along with some level of support and monitoring such as telephonic or video case management. The goals of this program are to offer support and education to recently released patients in order to close gaps of care and prevent unnecessary readmission. 

The best functioning programs coordinate the discharge so that patients are followed very closely for the first 30 days. This is typically done by a nurse, but ideally there would be a collaborative care model that may include the physician, social worker and medical assistant. This process typically requires a staff of clinical professionals available 24/7. Outreach needs to be performed regularly, education offered, and social determinants of health considered. Due to the demands on staff time and the complexity of tracking, many hospitals and physician practices either do not perform TCM or do so very poorly. This leads to lost opportunity to both reduce penalties and capture additional revenue.

Chronic Care Management 

CCM can have the effect of reducing unnecessary readmissions, improving patient satisfaction,  and increasing provider revenue. This program enables physicians or hospitals to provide ongoing support to patients with chronic care needs. CCM can compliment TCM or be utilized on its own as patients don’t need to be hospitalized in order to qualify. 

CCM is meant for patients that have at least two chronic conditions, each expected to last at least 12 months or until the patient’s death, and where a comprehensive treatment plan for the patient can be established, implemented, and monitored. Except for the initial visit, the entire process can be completed remotely

Considering your options.

Providers looking to take advantage of either TCM or CCM need to consider two options: perform the services internally utilizing company employees and software, or outsource to a third-party provider.

Option 1: Do it yourself.

In this scenario, the provider either needs to have excess staff or hire individuals specifically to perform these tasks. Appropriate software is also necessary to track time spent and record interventions in order to accurately bill for the services. Many EHR programs do offer this as part of their package and should be investigated when considering the do-it-yourself model.

While this option would seem to make the most sense for providers by giving them greater control and saving money, there are other factors that need to be considered.

  • Hiring new staff can be difficult, expensive, and complicated, and if they leave, the entire program is in jeopardy.

  • Some software programs offer TCM and CCM functionality, but in reality, aren’t user friendly or comprehensive enough to be considered an asset.

  • This type of service can take time away from running the practice and seeing patients.

  • If performed incorrectly, the practice may be vulnerable to penalties from an audit.

Option 2: Outsourcing.

Outsourcing offers your practice the ability to test the waters of TCM and CCM without making a large financial or time commitment. While a bit more costly than the DIY model, there are many advantages to consider.

  • An outsourced program allows medical practices to focus on patient care without additional administrative headaches.

  • Outsourced companies have a level of expertise that can increase program effectiveness and reduce the risk of penalties. This includes expertise in coding and patient engagement.

  • Outsourced companies typical use software specifically designed for working with these codes, allowing for greater efficiency, the capture of valuable data beyond the basics, and the use of multi-modal forms of communication

  • Redundancy in staffing allows for continuity of the program should one of the team members leave.

  • Outsourced vendors may also offer additional ways for new revenue generation that providers may be missing out on with other programs beyond TCM and CCM. This can often more than make up for the cost of outsourcing.

  • An outside care manager can deflect calls that would otherwise come to the physician.

If you’re considering the outsourced model, be careful about providers simply looking to bill for as many patients as possible. A good provider should be seen more as a partner than simply a vendor.

How much can you expect to earn?

Earnings depend on several factors. These include:

  • The size of the practice and patient volume.

  • Payer mix.

  • The commitment of the physicians, NPs and clinical support staff to the program.

  • The ability of coders to capture all charges accurately. 

  • The complexity of the cases being managed.

  • The efficiency of the staff.

  • The level of patient engagement.

While it’s hard to put an exact dollar figure on how much new revenue can be generated due to all the factors listed above, practices can expect to net between 30-50% of fees being billed for these new services.


Healthcare is at a crossroads, and providers with the vision to work within this changing landscape can actually offer patients a new level of customized care while improving their bottom line. But embracing the new win/win of value-based-care means taking action now, finding what works for your organization, and committing to making those programs a success for the long term.

About the Author

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Gary Skole

Gary is a founder of AlzBetter with decades of experience improving care for patients with challenging healthcare needs at home. He is a published author and frequent speaker on Dementia, Transitional Care Management, and Patient Engagement.