The Big Five: Payments Based on Value & Quality


It’s no secret that the healthcare industry has gone through rapid changes over the past couple of years, let alone the last few decades. From the introduction and emergence of electronic health records (EHR) and health information technology (HIT) to HIPAA regulations and compliance standards, the healthcare sector is a fluid, constantly evolving industry always working toward improving quality of care for patients; however, as in all industries, change does not come without a number of problems and issues. At TeleQuality, healthcare is the only market we serve; therefore, we recognize the importance of understanding the issues and challenges our rural healthcare partners are facing and try to find solutions for those challenges. Based on extensive industry research and customer feedback, we've developed this blogging series where we will delve into-

The Big Five: Top Issues Putting Healthcare Providers into Financial Crisis

  • Payments Based on Value & Quality
  • Healthcare Workforce Deficits
  • Limited Access to Health Care
  • Chronic Care Management
  • Cyber Security & Patient Data Breaches

Let’s break down the first topic today: the shift from volume to value-based care.

This paradigm shift from fee-for-service or volume-based reimbursement payment models to value-based care focused on patient outcomes is affecting all healthcare organizations, from rural areas to their metropolitan counterparts. After decades of building an industry around a volume-based payment method, there are several challenges that come with shifting to payments based on value and quality. These challenges are:

  1. Reimbursement rates changing based on quality outcomes and patient satisfaction
  2. Rapidly aging population
  3. Lack of interoperability of IT tools
  4. Reporting functionality of EHR systems
  5. Reducing readmissions to avoid readmission penalties from CMS

1. Reimbursement Rates Changing Based Upon Quality Outcomes and Patient Satisfaction

Up to 5% of Medicare reimbursements are now tied to various quality reporting programs, putting a significant amount of revenue at risk for each healthcare provider. With a lack of sufficient decision-support tools, it is a big challenge for healthcare organizations to make informed decisions about the impact these programs may have on the financial state of your organization.

2. Rapidly Aging Population

Every day there are 10,000 baby boomers becoming eligible for Medicare, all the while costs are significantly rising each year! In 2015, healthcare spending reached an all-time high of $10,000 per person and is on track to surpass $10,000 per person in 2016. As these baby boomers rely upon Medicare, this spending amount represents a transformation in the payer mix from commercial to Medicare. For healthcare providers, this results in even more revenue at risk of adjustment based on quality programs.



3. Lack of Interoperability of IT Tools

Large and small healthcare organizations are struggling with the lack of interoperability of electronic health record systems. Adding interfaces to allow transfer of information from one system to another can cost from $5,000 to upwards of $50,000 per connection. Some EHR vendors have purposely “locked” the data stored in their systems for competitive and proprietary reasons, but healthcare providers are the ones having to deal with those consequences directly. This is a significant hurdle to opening lines of communication and sharing of key patient information between providers to improve clinical outcomes.

SOLUTION: Work closely with your EHR provider and talk about how they support interoperability. Find out what initiatives they have in place to provide seamless transfer of information in and out of their EHR system. If your EHR provider is simply not an option, consider partnering with a 3rd party company that specifically supports your EHR platform and can guide you through your options for improving interoperability.

4. Reporting Functionality of EHR Systems

Reporting functionality of EHRs is also a hurdle to the mandatory quality reporting programs, creating an administrative burden on healthcare organizations who are required to participate in these programs.

SOLUTION: Here are some resources to check into that will help you get a handle on reporting out of your EHR:

  • Learn what reporting support your EHR vendor offers through your existing support agreement.
  • Find out what professional services your EHR vendor offers for reporting and pulling data from their system.
  • Find out if there are any 3rd-party companies that offer support on your EHR platform that bring some experience and expertise working with your EHR system.
  • Consider hiring or partnering with a company or individual that has experience in manipulating data and managing projects to help you work through reporting hassles with your EHR supplier.

5. Reducing Readmissions to Avoid Readmission Penalties from CMS

Costly readmission reduction programs are made more difficult to rural healthcare organizations due to limited staff, tools, and technology. Additional reasons for readmissions include:

  • Lack of social or family support.
  • Lack of / limited medical coverage causing patients to skip post-operative appointments or medication.
  • Lower education levels limit follow-through on discharge instructions.
  • Predispositions to certain diseases based on gender, age, and ethnicity.
  • Lack of transportation which prevents patients from seeking treatment of post-operative or post-discharge issues early on.


There are four, low-cost solutions that can be implemented to have a big impact on readmissions:

  • Physicians need to review their patient’s medication, upon discharge, with explicit instructions on how to properly take the medication(s).
  • Patients need to schedule their follow-up care appointment before the discharge is complete.
    • Patients with high risk for readmission should have an appointment within 7 days of discharge.
    • Patients with lower risk should have an appointment within 14 days of discharge.
    • A care coordination team member should call the patient after their discharge and cover 2 main areas:
      • Does the patient have any questions?
      • Are they having problems with their medications or discharge instructions?
      • Implement a teach-back process where the patients demonstrate comprehension of discharge information provided so any misunderstandings can be identified.

One health system that successfully implemented the four solutions above saw the following results:


Have you experienced these hurdles while preparing for the industry shift from volume to value-based care? What solutions is your healthcare organization implementing to face these challenges? Let us know in the comments below or email us at and we might feature them in our next blog post!