Incorporating Value-Based Metrics into a Physician Compensation Plan

The term “value-based metrics” is broad in nature and is subject to various interpretations. To help clarify the definition, develop specific domains such as citizenship, quality, and patient satisfaction. These are broad categories that qualify for domain definition.Cost management may be another domain, but it is likely reserved for medical groups that have a significant portion of their revenue tied to value-based contracts. It may not yet be a viable option for medical groups that are incorporating a value-based component into their physician compensation plan for the first time. These domains are areas that can house multiple metrics necessary to align physician incentives with contracting levers, with the quality domain having the most variability.

Are you ready for value-based care? Here are five questions to consider.

Quality measures can vary significantly by specialty, so garnering physician input at the specialty level is vital to the success of determining quality metrics. Operational insight should be applied when choosing the actual measures to keep a manageable list intact across multiple payer requirements.

Determine measures for the quality domain

The following decision criteria offer thoughts that contribute to the selection of quality measures.The following decision criteria offer thoughts that contribute to the selection of quality measures.

1. The final list of quality measures tracked by a physician should be as condensed as possible. Most submission methods for the Merit-Based Incentive Payment System (MIPS) require the organization to choose six (6) measures. Data submitted through the Centers for Medicare & Medicaid Services (CMS) web interface requires fifteen (15) pre-determined measures, and other payer contracts may require more.

Shorten the list by considering the following:

• What have we already submitted for MIPS requirements?
• Cross-reference quality measures among other payer contracts to determine overlap with MIPS requirements.
• We recommend choosing between one (1) and three (3) quality measures from this list to measure physician performance for value-based compensation.

This process should result in a prioritized list of quality measures that influence reimbursement.

2. Consider operational factors when selecting quality measures from the shortlist. We recommend considering the ability to quantify and capture data associated with the measure, determining how the measure will be submitted, and past performance of the measure.
3. Consider compliance factors. Quality measures should lead activities that address the root cause of the desired outcome.

Implement the quality measures and evaluate results

It is easier to maximize performance with process-based quality measures, and they help physicians better acclimate to value-based metrics. As physicians become more accustomed to value-based metrics determining a portion of their compensation, consider evolving to a quality measure list more dominated by outcome measures. The shift to outcomes-based measures needs to coincide with payer contract requirements as the payers will continue to place emphasis here.

Next Steps

• Read Understanding Value-Based Compensation Models to learn how to assign dollars to value-based metrics
• Listen to a podcast about Innovative Physician Compensation Models
• Download our comprehensive white paper on Compensation Best Practices for Physician Enterprises to further look into value-based care and other physician compensation models

Are you ready to take your physician compensation plan to the next level? Contact us today and ask to speak with Alex Kirkland to assess your compensation plan.