The Financial, Regulatory, and Technological Hurdles for Value Based Care: Q&A with Matthew Hellinger and Ian Goldberger

Ian Goldberger
Principal of transaction advisory in
the Business Consulting Services
practice and Transaction Advisory
practice lead
Kaufman Rossin

Value based care (VBC) is being championed by many members of the pharmaceutical industry as a better way to provide care and services to patients. Matthew Hellinger, director in the business consulting services at Kaufman Rossin, and Ian Goldberger, principal of transaction advisory and transaction advisory lead at Kaufman Rossin, discuss the hurdles that payers are facing and why they’re still pushing forward with VBC.

Pharmaceutical Executive: What are some of the hurdles making the adoption of VBC difficult?
Matthew Hellinger and Ian Goldberger: Technology infrastructure and adequate data analysts to manage medical expenses and assess funding in relation to members’ risk scores and medical costs are challenges in the adoption of value-based care.

In addition, there can be a big learning curve for providers. Many providers may not be familiar with key terms that drive financial performance in VBC, such as MRA, IBNR, Rebates, etc.

It can be difficult to assess quality outcomes for specialists. Currently, most VBC models are currently in place for primary care, with only a few specialties such as nephrology having robust programs.

Matthew Hellinger
Director in the business consulting
services practice
Kaufman Rossin

VBC is a different model than traditional care, which some physicians may not want or know how to adopt. For example, VBC includes more touchpoints with the patient or engagement of care coordinators to provide opportunities for patients to discuss their medical conditions in advance, to avoid excess care that may not be needed.

PE: How can providers navigate VBC payment models?
Hellinger and Goldberger: It can be challenging for individual providers to negotiate direct VBC contracts with payers. They may have to work through an Independent Physician Association (IPA) or Managed Services Organization (MSO) that has the infrastructure and knowledge to help them navigate VBC adoption. Typically, in these models, providers will have to pay the IPA or MSO for access to their systems and knowledge.

It can be helpful for providers to engage an experienced professional advisor that routinely works within the healthcare industry to help them assess viability of transitioning to a VBC arrangement.

PE: How will providers choose which models work best for them?
Hellinger and Goldberger: One of the first steps for providers is to review the current member pool and understand if they are open to a VBC health plan. They should also understand which VBC payers are operating in their geographic area.

Which model is the best fit for the provider will depend on the provider’s current membership performance. When discussing with a partner (health plan, IPA, or MSO), it’s advisable for a provider to request and review data to align on what level of risk makes sense for them (global risk, shared risk, capitation only, quality bonuses, etc.).

For example:

• If members are profitable most of the time a risk relationship may yield higher income
• If members are not as profitable or in deficits, providers may be better off with a pure capitation model without risk or remain at fee-for-service.

PE: Will it be necessary for these companies to adapt their strategies to stay compliant with regulations?
Hellinger and Goldberger: Yes–groups should retain educated legal counsel that is well versed and on top of CMS regulations for value-based care contracting and operations. The space is relatively new and nuanced; therefore CMS routinely will make changes to reimbursement and documentation processes that influence financial outcomes.

Healthcare groups should understand appropriate documentation requirements in order to be accurately reimbursed for members’ health conditions.