AAOS Guide to Manage Alternate Payment Risks

The American Academy of Orthopaedic Surgeons (AAOS) wants to help you understand and successfully navigate the growing value-based payment landscape. To that end, the organization has developed an 18-page value-based care continuum (VBCC) guide to help your practice evaluate the various alternate payment models (APM) created by payers to achieve value-based care.

Click here for the guide.

The guide notes that providers who rely on fee-for-service and other retrospective payments during the COVID-19 pandemic, “are experiencing significant financial strain, since payment is made following the delivery of a specific service, vs. upfront management of a patient population.” A mix of prospective and retrospective payment sources “buffers a practice against the risk of a sudden rise or drop in utilization and creates more stability for practice finances.”

The Academy hopes the guide will help you identify where your practice’s existing payment arrangements fall along the continuum, understand the transition sought by payers to value-based care, and plan for continued changes in APM contracting arrangements.

In short, the guide helps you identify your risks and opportunities.

The typical assessment of an APM along the continuum, states the guide, “is the level of risk and opportunity that is involved for providers. The greater the opportunity for both financial gains and losses, typically the further along the continuum a given APM is found.”

Defining Cost, Quality and Value

Defining cost, quality and value is the key to finding your practice’s place along the continuum. So, the guide starts with clearing up confusion as various stakeholders have different definitions for the same terms used in a clinical setting.

The guide creates a “universal lens for interpreting this landscape. With the recent COVID pandemic, newer models that incorporate prospective (payment in advance of a service) may better insulate practices for the future.”

For example, here is how the Academy outlines a clear definition of cost, quality and value:

Quality

• Is the successful delivery of appropriate, evidence-based musculoskeletal health care in an effort to achieve sustained patient-centered improvements in health outcomes and quality of life
• Is exemplified by a physician-led musculoskeletal team focused on the individual patient’s preference in the delivery of care that is safe, accessible, equitable, and timely
• Fosters evidence-based innovations essential for the advancement of professional and scientific knowledge.

Value

• The relationship of a patient-centered health outcome to the total cost required to reach that outcome, given that care is:
• evidence-based
• appropriate
• timely
• sustainable
• occurs throughout a full cycle of musculoskeletal care for a patient’s condition.

Cost

• An investment and includes consideration of greater lifestyle and economic impacts.

Controlling Risk

Finally, knowing what risks are controllable can increase your likelihood of success before engaging an APM. Based on the size and scope of your practice, certain types of risk are more controllable than others. The AAOS strongly recommends that providers “focus on performance risk where they can have the most control and greatest impact.”