Knowledge Expansion

The upside of downside: Innovative strategies for protecting downside risk

Insight Article

Medicare Payment Policies

Financial Management

Risk & Compliance

Andy Stonehouse MA
As healthcare organizations brace themselves for wholesale changes to the way risk is shifting from payer to provider for Medicare and Medicaid services, the issue of evaluating and mitigating that risk has become increasingly complex.

Dave Terry, MBA, is chief executive officer and co-founder of Boston’s Archway Health, a leader in analytics and bundled payment management. Along with Mah-Jabeen Soobader, PhD, MPH, Archway’s chief analytics officer, the two have significant expertise on the challenges facing providers as they cope with risk assessment.

At issue, both suggest, is a somewhat time-crunched target created by the leaders at the CMS Innovation Center to have 100% of providers participating in two-sided risk models by 2025. The introduction of several aggressively accelerated programs, including the Primary First Care and Direct Contracting models, expansion of the Comprehensive Care for Joint Replacement model (CJR), and a new and final cohort of the Bundled Payments for Care Improvement (BPCI) Advanced model, all represent an environment where providers need to immediately address risk assessment methodology. 

Terry and Soobader, who will speak on the topic during April’s MGMA20 | The Financial Conference in Nashville, Tenn., say the changes will likely require new actuarial methods for evaluating risk, as the small sample sizes and complex pricing models of the new value-based payment programs often don’t lend themselves to preexisting actuarial strategies. Teamwork, they agree, is critical to making the shift.

“What we are really seeing is that those organizations that are successful have clear alignment between the goals of the clinical team and the financial team,” Soobader said “When they work collaboratively, that’s when you get these practice and organizational changes that need to happen, to take on risk. There has to be a commitment to investment and resources to help them succeed. Even if the medical director and the CFO actually collaborate and work together, where we [have seen] them fail is where there’s no top-down support of these programs.”  

In their session, Terry and Soobader will discuss an innovative framework that blends risk assessment, mitigation and protection. They will also explain how risk is quantified and identify the key questions that need to be addressed to ensure a comprehensive approach to risk management.

By integrating the triad risk framework into a healthcare organization, the speakers suggest providers can have a better approach to coping with shortcomings in the move toward taking on downside risk, as well as build more comprehensive protection against risk.

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About the Author

Andy Stonehouse MA
Freelance Writer and Educator Colorado

Andy Stonehouse, MA, is a Colorado-based freelance writer and educator. His professional credits include serving as editor of Employee Benefit News and a variety of financial and insurance publications, in addition to work in the recreation and transportation fields.
 

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