patients or patient groups; linking these shared savings and
other payments to providers who prevented unneeded (and
therefore unbilled) patient care thus becomes important. A
variety of regulatory schemes require that these savings be
paid proportionally to the owners or participants in the APM
venture as well, so business systems need to be able to track
this and integrate this information into the back-end payments of bonus or savings revenues.
Deciding What to Measure
Once the capabilities of the enterprise’s various data systems have been established, the contract negotiation team,
which should include providers as well as business executives, counsel, and other subject matter experts, should
convene to discuss which data will be measured within the
APM and what monetary value will be assigned to each of
these measurable data points.
Clinicians generally do not like being measured on
things that don’t matter clinically; yet, “you can’t manage what you don’t measure” is still the order of the day.
The unfortunate reality of APM contracting is that once
one payer requires a healthcare provider to measure some
performance capability, the APM ends up measuring it for
all payers on the theory that quality is payer agnostic and
the enterprise doesn’t want to discriminate in the qual-
ity care it delivers based on payer type. Thus, controlling
the number and quality of measurable data points at the
outset of an APM relationship is critical to prevent partici-
pants from measuring everything and focusing on nothing
of clinical significance.
APM participants can’t forget the various legal mandates
not to create payment methodologies that incentivize providers to deprive patients of medically necessary care.
However, the definition of “medically necessary” may
vary depending on which regulatory scheme you apply
and what a particular payer thinks about therapeutically
Monitoring compliance with all of the contract’s provisions is a necessary step, which is made more difficult by the
traditional separation of enterprise oversight and management into different silos of responsibility. To the extent that a
separate business organization has not been formed to deal
with APM contracting and payment issues, close collaboration between clinical and administrative departments
needs to be created and maintained.
For example, physicians may not make critical distinctions
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