- Ann Arbor, Mich.-based Altarum has launched a new company, Payformance Solutions, to help payers and providers navigate value-based reimbursement contracts.
- Payformance operates as a neutral third-party to bridge the gap and facilitate collaboration between health insurers and providers.
- For payers, Payformance offers synergistic analytics, reporting and payment optimization solutions to assist with establishing and administering value-based payment programs. For providers, there are tools to design, contract and participate in value-based programs, plus real-time data for monitoring performance and measuring cash flow.
With Payformance Solutions, Altarum aims to crack a tough nut: getting payers’ and providers’ financial goals aligned with patient outcomes.
Reforms brought about by the Affordable Care Act, as well as growth in the Medicare Advantage market, have created new opportunities for providers and payers. Payers typically contract with multiple providers in a locale, which can result in hostile negotiations.
“Every dollar [providers] give up is, in a way, a dollar they are giving to a competitor,” Tom Valdivia, co-founder and chief medical officer of Bright Health, a startup health insurance company, told Healthcare Dive earlier this year.
Despite the rise in value-based care, most payer-provider contracts are drawn up as an adjunct to fee-for-service contracts, according to Steve Selbst, CEO of contracting and consulting firm Healthcents. Payers typically offer a bonus payment of about 5% for hitting certain quality measures, he wrote in a March 2016 LinkedIn post, adding providers should negotiate the terms of those bonuses.
The shift to value-based reimbursement has also sparked an increase in provider-sponsored health plans. In these instances, a providers inform a payer of their interest in being part of the payer’s network and may even request a particular rate.