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Learn the Lingo: Key Terms for Navigating the Value Based Care World

With the shift toward value-based payment models, pharmacists are seizing new opportunities to improve patient care in medical homes, accountable care organizations, and other innovative care models. This resource includes acronyms and terminology commonly used when practicing in or discussing innovative practice models. Each term includes a short description and references so you can further your practice in a value based care world. This is the first of multiple volumes that will be published by the Medical Home/ACO SIG.

Accountable Care Organization (ACO)

Accountable Care Organization (ACO)

ACOs are groups of health care providers and hospitals who partner together to provide high-quality, coordinated care and decrease overall health care costs for a defined population, with the goal of sharing these cost savings.1 The first Medicare ACOs were approved as part of the Affordable Care Act in 2009. In April 2015, Congress signed the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) into law, which shifted payment from a primarily fee-for-service (FFS) model toward a value-based payment model.2 One of MACRA’s model tracks are APMs, including ACOs.

Bundled Payment

Bundled Payment

Bundled payment is an alternative reimbursement model that is designed to help move from the traditional fee-for-service (FFS) payment to value-based care. With bundled payments, all providers and/or health care facilities associated with a patient undergoing a specific episode of care, or “clinical episode,” are paid a single fixed amount or “target price.” All providers and health care facilities share in the financial risks and outcomes associated with the episode of care.

Capitation

Capitation

According to the American College of Physicians,“ capitation is a fixed amount of money per patient per unit of time paid in advance to the physician [or health care provider] for the delivery of health care services.”1 The amount of money actually paid depends on the range of services provided, how many patients are involved, and the duration of time in which the services are provided.1 The capitation rate is often set at PMPM (per member, per month) or PMPY (per member, per year). The rates used in capitation are determined using the local costs and average utilization of services; as a result, rates can differ from one part of the country to the other. Before a capitation agreement is made, a list of specific services that must be provided to patients is included in the contract.

Healthcare Effectiveness Data and Information Set (HEDIS)

Healthcare Effectiveness Data and Information Set (HEDIS)

HEDIS is a comprehensive set of standardized performance measures designed to provide purchasers and consumers with the information needed for reliable comparison of health plan performance.1-3 Performance is evaluated using over 90 measurements across 6 domains of care: effectiveness of care, access/availability of care, experience of care, utilization and risk-adjusted utilization, health plan descriptive information, and measures collected using electronic clinical data systems.2 Claims and survey data are aggregated and analyzed retrospectively to depict the quality of care and customer service delivered to patients.

Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) and Merit-based Incentive Payment System (MIPS)
Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) and Merit-based Incentive Payment System (MIPS)

Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) and Merit-based Incentive Payment System (MIPS)

MACRA is legislation signed in April 2015 that is designed to transform the basis of health care clinician payment from volume to value.1 MACRA created the Quality Payment Program (QPP), which repealed the sustainable growth rate formula used to determine physician and other clinician FFS payment rates in Medicare as well as creating the MIPS.2,3 It also created bonus payments for entities participating in APMs.

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