Value-Based Medicine: Part 1

Value-based payment: What does it mean, and how can ObGyns get out ahead?

Author and Disclosure Information



Paying for value

In an attempt to move away from fee-for-service medicine, payers and employers are adopting alternative payment models (APMs) that are intended to reward physicians and other health care providers for delivering value. Although APMs can be a catchall term, the Health Care Payment Learning and Action Network (LAN), a multi-stakeholder collaborative convened by the US Centers for Medicare & Medicaid Services, has laid out a framework for the different types of APMs11 (FIGURE). This framework provides a common reference point for concepts related to value-based care.

Although ACOG does not endorse all the concepts and principles included in the LAN white paper, it does support moving away from fee-for-service payments that lack any link to quality or outcomes. Originally, the LAN envisioned that all physicians, providers, and hospital systems would move in the direction of adopting Category 4 APMs, but in the recent “refresh” of the LAN’s white paper, the authors recognized that not all entities will be able to move toward population-based payments—nor will it be beneficial for all providers to do so. ACOG agrees that not all ObGyns will be able to thrive under population-based payments, so we must lead the way in developing models and measures that appropriately assess value in the care that ObGyns provide.

ACOG has undertaken its first foray into value-based payments by developing an “episode group” related to benign hysterectomy, with attendant quality measures. (An episode group is a collection of services associated with treating a condition or performing a procedure that are both clinically and temporally related.) The goal in creating episode groups is to create alignment across payers so that ObGyns are not faced with multitudinous payer-specific metrics and reporting requirements. As the benign hysterectomy episode group is refined and adopted by payers, ACOG plans to expand to other treatments and, eventually, develop condition-based episode groups that incentivize the most appropriate treatment options for patients.

Current forms of APMs are mostly Category 2 and 3 models. Rates of proper screening for cervical and breast cancer have been used as performance metrics for bonus payments. Major payers have pushed specific metrics as cutoffs for limiting narrow networks.12 For example, Covered California, the state health care exchange, has set a nulliparous term singleton vertex cesarean rate of 23.9% by 2018 as a necessary standard for inclusion of a hospital’s entire services (obstetric and nonobstetric) in their network. Episode group payments for total obstetric care included in the episode routine services, such as ultrasonography, have been previously utilized to discourage overutilization.

Such payment incentives can lead to underutilization of resources, however, which might lead to poorer outcomes and therefore result in overall greater cost. For example, poor screening for fetal anomalies or poorly managed medical conditions such as diabetes can lead to markedly increased costs in neonatal management. Therefore, some authorities have proposed tying incentives for obstetric care to performance outcome measures in neonatal care as a method of finding “sweet spots” for utilization of complex services and episode groups. Such models will depend on more robust clinical information sources and standardization.8

How can ObGyns succeed?

So what does success look like under these value-based payments for ObGyns? This is new territory, in a rapidly changing environment in which providers who flourished under the fee-for-service system will only survive under the new system if they become knowledgeable about the nuances of the new payment methods. Providers should understand that success is going to be defined as reaching the “Triple Aim”13 of improving the health of the population, containing costs, and improving the experience of health care.

Practice patient-centered care. One way to better position yourself is to focus on delivering patient-centered care and improving customer service in your practice. By implementing patient satisfaction surveys, you can identify where you are most vulnerable. One option is to utilize the Consumer Assessment of Healthcare Providers and Systems Clinician and Group Survey, developed by the US Department of Health and Human Services’ Agency for Healthcare Research & Quality. However, there are other assessment tools available, and you should investigate what works best for your practice.

Code properly. Another key to making sure you are in an optimal position is to properly document and code the services you deliver. Accurately capturing the clinical complexity of your patients will help down the road with risk adjustment and risk stratification for cost and quality measures. Many payment models, including episode groups, are built on the fee-for-service system, so coding for services is still important in the transition to alternative models. Modern EHRs are building new tools to assist clinician documentation, such as tools that aid coding. Carefully groomed and up-to-date problem lists can help providers keep track of appropriate testing and screening by enabling decision support tools that are imbedded in the systems. Although upgrading can be expensive, especially for small group practices, the development of “software as a service” or cloud-based EHRs will likely drive individual costs down.10

One example of point-of-care decision support that ACOG is spearheading to support our Fellows is the ACOG Prenatal Record (APR) by Dorsata.14 The APR is an application designed by ObGyns to work seamlessly with an existing EHR system to improve clinical workflow, save time, and help ObGyns support high-quality prenatal outcomes. The APR uses the same simplicity, flexibility, and familiarity of the original paper-based flowsheet, but in an electronic format to integrate ACOG guidance, which provides a more robust solution. The APR uses information such as gestational age, pregnancy history, the problem list, and other risk factors to provide patient and visit-specific care plans based on ACOG clinical practice guidelines. It was designed to help reduce physician burden by creating an easy-to-navigate electronic flowsheet that provides everything ObGyns need to know about each patient, succinctly captured in a single view.

ACOG also offers comprehensive coding workshops across the country and webinars on special coding topics to help Fellows learn to properly code their services. Availing yourself of these educational opportunities now so that you are better prepared to transition to value-based payment is a great way to ensure success in the future.

Chances are that some of your payers are already requiring you to report on metrics or tracking your performance using claims data. Pay attention to the performance measures that you are being held accountable for by payers when you review your payer contracts. Make sure you understand how your patients may fall into and out of the measure numerators and denominators. Ask yourself whether these metrics are ones that you can reasonably influence and that are within your control.

Of course, you can also reach out to ACOG for help. We are here to educate, inform, and guide you on these changes and provide assistance to ensure your success. Send inquiries to:

Share your thoughts! Send your Letter to the Editor to Please include your name and the city and state in which you practice.

Next Article: