Today, I would like to give you some great value- an article put out by Verisk Health that you can download for free entitled “Risk-Adjusted Base Payments Can Support the Move to Value”.

In it, you will discover:

  • Value-based care in the marketplace
  • The redefined roles of PCPs
  • Risk-adjusted base payments as a means to ensure that PCPs are properly funded for the added responsibilities that they will take on in managing the health nolvadex of populations

Risk-adjusted base payments have been bandied about as a good technique to transition to payment on value but this has led to glazed eyes, and blank stares.

The healthcare financial management association ( has made this easier to understand in their whitepaper of January 2015 where you can request to download a copy.

The article, written by Matt Siegel, senior vice president of Verisk Health, includes a case study to illustrate success with risk-adjusted base payment adoption:

Risk-Adjusted Primary Care Payments Help New York Providers Improve Care

 In 2009, a regional health plan in upstate New York undertook a pilot project using a risk-adjusted base payment model.

Three of the health plan’s primary care practices volunteered to adopt a patient centered medical home (PCMH) model and accept these types of risk-adjusted payments. The plan’s goal was to compensate the practices for additional activities that can:

  • Improve care coordination
  • Reduce emergency department (ED) visits and avoidable hospitalizations
  • Improve compliance with clinical guidelines.

Success was measured across three dimensions: patient satisfaction, HEDIS quality scores, and appropriate utilization.

At the end of the first year, the practices saw significant results:

  • Per member, per month costs decreased by $32.
  • Hospital admission rates fell by 24%
  • Admissions for ambulatory-care-sensitive conditions were reduced by 20%
  • Imaging services dropped by 18 percent. ED visits decreased by 9%

Patient satisfaction was high, and total primary care provider compensation increased significantly.

The pilot was so successful that the plan expanded its PCMH model with risk-adjusted base payments to additional primary care practices.

So, what is risk-adjusted base payment and why do we need it?

Providers will be rewarded for both quality and efficiency of care in value-based payments but patients and conditions are obviously not the same when it comes to high risk. If there is no adjustment, high-risk patients would not be able to find a doctor willing to care for them.

As the payment system shifts from services rendered to a value- based model, this adjustment seeks to cover the added costs while keeping people healthy more than just treating symptoms and current medical ailments.

Essentially, the risk-adjusted base payment model “predicts the overall resources—in dollars—required for primary care physicians to deliver proactive, well-coordinated care to patients based on their illness burdens”.

Each medical condition gets a value to more accurately assume risks. The value is derived by considering not only the actual cost of primary care services, but also the indirect cost of “managing chronic conditions and referrals and coordinating care when a patient is hospitalized or visits the emergency department (ED).”

The whitepaper is worth downloading. For further questions you can reach Matt at:

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See you at the next post!