As more health plans and providers are shifting from the traditional fee-for-service model to value-based care, FRG offers this guide to the exchange of information required to be successful. There are two major tenets: transparency and completeness.

Why is Transparency Important?

Transparency in value-based agreements is important because it allows providers to successfully understand population data to accomplish the goals laid out within their risk contracts. It is also an ethical obligation of risk-transferring organizations (health plans) to share specific and complete data with risk-bearing organizations (provider groups) so that they can effectively protect themselves from downside risk. This not only means making an account of large and complex figures easy to digest, but also sharing comprehensive, consistent, and frequent data to further collaboration and the interests of both the plan and the provider.

FRG’s success in presenting cohesive data through AccuReports® has allowed clients to continue to have an honest, open dialogue with providers that adds to creating a necessary trust that supports the mutual success of risk contracts.

The Three Pillars of Transparency

FRG has identified the following three pillars that support a platform of transparent data sharing in value-based healthcare.

Full Disclosure

  • Summary and congruent detail
  • Paid amounts with no exceptions.
  • Procedure and diagnosis codes with full specificity.
  • Explanatory granularity for allocated costs.

Frequent Data Sharing

  • Monthly updates
  • Minimal lag time
  • Regular adherence to monthly data production schedules.
  • Frequent payer-provider meetings to communicate trends.

Consistent Data Processing

  • Limited changes in file format (communicated in advance).
  • Consistent treatment of deal terms.
  • Predictable provider loading and member assignment lead time.
  • Limited retroactivity but full restatement.

Each of these topics will be explored in articles to follow. However, transparency is only part of a successful strategy: completeness is essential.

Building Complete Data Sets to Support Value-Based Agreements

When building data sets to support value-based agreements, three primary aspects need to be considered: developing reconciliations, understanding settlements, and linking performance to operations.

FRG compares the first aspect, developing reconciliations, to baking a cake because includes several ingredients. Some of the ingredients come directly from core processing systems while others come from actuarily developed schedules or receipts from accounts payable. They all have to be incorporated into a complete reconciliation for the data set to be meaningful, but they behave differently so like baking a cake we think of some as dry ingredients, others as wet ingredients, and we have to follow rules on mixing them together. The recipe for building complete value-based agreements reads as follows:

Data Preparation – Dry Ingredients

The following ingredients to reconciliation come from core processing systems and can be prepared chiefly by the IT department:

  • Premium Revenue
  • Member Eligibility
  • Provider Assessment File or “Attribution”
  • Claims & Encounters, Professional & Institutional
  • Pharmacy Data: PBM extract linked to Member Eligibility
  • Capitation Feed: Primary Care & Specialist with detail
  • Care gap numerator and denominator file

Data Preparation – Wet Ingredients

These ingredients require more human intervention, but they are each necessary for baking the cake:

  • Adjustments: Allocation of settlements; cost transfers
  • Incurred But Not Reported (IBNR): Factors? PMPMs? Developed and applied at what level?
  • Reinsurance program rates
  • Provider matric and hierarchy
  • Deal term codification

Data Validation – Mixing Instructions

The following considerations are important as the cake comes together to ensure that the reconciliations are reliable:

  • Do the figures tie to corporate financials?
  • Do the summary figures tie to the detail provided?
  • Are the membership levels at each group as expected or is there a mismatch in eligibility?
  • Have prior payments been deducted?
  • Does the outlook look favorable?

In a series of articles, FRG will go into detail on the pillars of transparency and the ingredients of completeness. This series will build on a 2017 presentation by FRG at The Medical Group Management (MGMA) Conference in Anaheim, California. At that time, the terms risk contract and service fund were more common terms applied to the types of arrangements that have become value-based care in 2024.

Delivering Actionable Insight for over 25 Years!

FRG provides data distribution services for health plans that write risk contracts with primary care providers, as well as aggregation services to provider groups who accept risk across multiple carriers.

For any additional information about FRG’s services and their impact on building transparent value-based agreements, email info@frgsystems.com or call 888-466-1025 today.