The current practice management systems in hospitals and clinics deploy technology and tools to automate workflow, reduce costs and provide the best quality of care. Medical leaders are developing tools including patient engagement systems, healthcare reimbursement models, and more to improve quality of service and boost ROI. Even a myriad of health plans and standards of care are implemented to change the dynamics of the U.S healthcare industry,   

With this industry becoming patient-centric, payments and reimbursements processes are also planned accordingly. And this is the goal of value-based Reimbursement in healthcare. Value-based care is primarily accepted as a better alternative to the traditional model of healthcare payments and reimbursements. Unlike the FFS model, value-based Reimbursement in healthcare ensures that you pay as per the quality of service collectively to one provider. There are different models under this type of healthcare reimbursement model. So, value-based Reimbursement in healthcare emphasizes affordability and patient satisfaction.   

How Does It Work?  

Organizations in different model types deploy Value-Based Reimbursement in healthcare. Each of these models leverages the process of advanced medical billing to speed up the Reimbursement and payment part. Delays and denials in payments reduce, and patients get much better treatment because the focus is the patient. Here are the different models of value-based reimbursement systems.   

How Does It Work?
  • Bundled Payments– When a patient reaches the hospital for some ailment, it’s not just the physicians involved in the care. Across the care continuum, the patient is served by hospital staff, nurses, pharmacists, and even insurers. And each of them has a different bill that either goes to insurers or employers. But bundled payments in value-based Reimbursement simplify the process with one bill that includes all services from various providers. Once this bill is paid, the amount is then divided among the providers as per their services in the care episode. On many levels, bundled payments benefit providers even though there’s a slight risk. Also, billers and coders need to handle patients’ electronic health records for error-free results carefully.   
  • ACOs– Value-based reimbursement models like ACOs are the most popular ones. These are a group of providers who come together to ensure affordable and quality care. This model assures patients of well-coordinated care with a focus on preventive services and healthier lifestyles. The different services in a care episode directed to patients are planned and chosen as per their requirements and costs. So, the patients end up satisfied, and providers, insurers, and employers also get benefitted. However, providers need appropriate tools for electronic data exchange across the care continuum. The better their healthcare interoperability, the more efficient the ACO will be.   
  • Pathway Model– Value-based Reimbursement in healthcare is a complex process. But it’s more complicated in the oncology segment. And Pathway model is the most suitable one. This is an evidence-based decision-making tool. It helps oncologists and patients select the treatment that is affordable and highly effective. Besides, oncology treatment costs millions of dollars throughout the care episode. And for some patients, insurance coverage isn’t enough. So, the pathway model of Reimbursement helps in cost reduction and better quality of care. Further, providers must leverage medical informatics to get the best evidence-based results.   
  • PCMH Model– Patient-centric medical home model is a type of value-based care reimbursement model. Unlike ACOs, where providers come together for quality care, PCMH providers set a monthly payment on any existing reimbursement model. This model ensures coordinated care, lesser cost, preventive care for acute patients, and reduced EVs. Moreover, this model is more effective with integrated healthcare solutions. So, ACOs implementing the PCMH model or other providers can opt for customized integrated healthcare management solutions for best outcomes.   
  • Capitation– The capitation model is categorized into two types- global and partial. In the global model, the providers get an amount designated to a patient. Also, providers keep the remaining amount as savings. But partial capitation model gives providers a single monthly payment to cover services in the care episode. Despite the difference in both the models, it has high risks involved. However, providers can use healthcare analytics solutions to mitigate some of the critical risks in this model.   

Barriers in Implementation of the Value-Based Reimbursement in Healthcare   

Currently, there is a paradigm shift from FFS to value-based Reimbursement in health. Many providers are adopting this. But many of them also face barriers in implementing value-based reimbursement solutions. Here are the three main challenges-   

Barriers in Implementation of the Value-Based Reimbursement

1. Lack of actionable and quality data– Data is the actual wealth of today’s healthcare industry. From revenue to clinical research, everything depends on data. Data helps providers with preventive services and even keeps track of reimbursements. Medical billing and coding also involve data. So, healthcare providers must ensure accurate medical records management for a smooth transition of payments. Likewise, the lack of actionable and quality data becomes a roadblock when implementing a value-based reimbursement model.   

2. Operational Pressure– At times, physicians and providers get exhausted due to patient-centric plans. Consistent and long-term care becomes too much, especially for smaller centers. So, some providers are skeptical of deploying value-care Reimbursement in healthcare due to staff and operations burnout.  

3. Risk Quotient– Value-based care reimbursement models involve high-end risks, especially capitation and bundled payments models. Moreover, all models have some level of risk. And no providers prefer high stakes involved in their revenues. So, the risk quotient is a significant barrier in value-based reimbursement systems.     

How to Implement Value-Based Reimbursement Software in Healthcare  

Understanding the barriers within your organization and using effective technology tools is essential to implement value-based reimbursement models in healthcare. Opting for customized solutions for value-based Reimbursement is helpful, as providers get to choose the features they need the most. Here are a few significant ones.   

How to Implement Value-Based Reimbursement Software
  • Find authentic VBR models– Providers need to understand their requirements before choosing a healthcare reimbursement model. There are varied models, but opting for an accurate model will boost your revenue. So, providers must make sure that you do a little research before selecting any value-based reimbursement software.   
  • Emphasize and analyze value-based care– Today’s healthcare reimbursement strategy focuses on patient-centric care. The value-based reimbursement system also ensures patient satisfaction and quality care as the basis of payments. So, providers must implement software aligned to value-based care.   
  • Identify patients’ population data and care opportunities– In value-based reimbursement payment, providers ensure preventive and cost-effective care. And for this, they need patient population data to identify the care opportunities. Providers can employ data analytics solutions to ensure error and risk-free extraction of patient population data. This data will help providers ensure affordability and increase care quality.   
  • Ensure flexibility and customization – As said before, the healthcare payment system is a complex process. Providers must ensure that their value-based reimbursement software offers flexibility. Opting for customized software is better, as it assures flexibility, multiple features, affordable and more. Moreover, providers can employ healthcare automation to enhance their software too.   

Benefits of Value-Based Reimbursement in Healthcare  

Now that you have clarity on the significant features of value-based reimbursement software and roadblocks in its implementation, here are a few benefits of it.   

Benefits of Value-Based Reimbursement in Healthcare
  • Improve Patient Experience– It’s evident that value-based care reimbursement in healthcare aims to improve the patient experience. Rising costs and technical errors impacted the reimbursement process and patient experience too. Patients were forced to pay for poor-quality service. But with value-based reimbursement implementation in hospital payment systems, patients’ experience improved and even emergency visits.   
  • Lower costs– Cost of the primary entity in value-based reimbursements in healthcare. Rising costs, delays in payments, claims denials, and errors affect the providers’ and insurers’ ROI. Moreover, patients are also highly impacted by high costs. So, value-based Reimbursement works to reduce costs by increasing the quality of care. And this benefits all the stakeholders.   
  • Streamlined Payment and Reimbursement– Unlike the traditional reimbursement process, value-based reimbursement tools and software streamline the whole practice. This makes payments and Reimbursement easier to get benefiting all the key players in this episode.   
  • Minimized Delays and Denials– Delays and denials in payments often occur due to documentation errors or missing information. Or else its failure to get regulatory compliance. So, providers must ensure accurate patient information, HIPAA-compliant solutions for value-based reimbursements, and effective data storage. Besides, providers can leverage cloud computing for effective data storage.   


With this guide, we hope that you have clarity on value-based Reimbursement in healthcare. Providers, employers, insurers, and patients must know about its functioning. Besides, value-based reimbursement models in healthcare are the future of payments and reimbursements in healthcare. From patient satisfaction to cost-effectiveness, value-based care reimbursements assure patients of the best quality of care. Such quality care reduces hospitals visits, healthier lifestyles, and timely prevention of acute care patients.   

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