Mobile Integrated Health (MIH) and Community Paramedicine (CP) programs are demonstrating positive impact on chronic disease management, access to care, and appropriate utilization of healthcare resources. Amidst recognition of MIH as a solution to today’s healthcare crises, challenges in moving beyond Fee-For-Service (FFS) or grant-funding persist.
To grow and thrive, MIH programs are now looking to value-based care (VBC) models. These models reward healthcare providers based on outcomes rather than volume, making them a natural fit for MIH teams focused on reducing unnecessary hospital admissions and emergency department (ED) visits, helping patients adhere to their provider’s care plan, and improving quality of life.
Why MIH and Value-Based Care Fit
At its core, Mobile Integrated Health is value-based care. MIH lightens healthcare costs, fills gaps in care, and supports vulnerable populations, especially those with chronic conditions, in addressing social determinants of health and managing care from home. These efforts can improve disease management, avoid unnecessary overcrowding of ED’s, or help providers meet clinical care goals.
For rural hospitals and overstretched provider groups, partnering with MIH offers a cost-effective way to improve outcomes for high-need, high-risk patients while protecting already thin operating margins.
What is Capitation?
To understand value-based care arrangements, first understanding capitation models is key. According to the Centers for Medicare and Medicaid Services (CMS):
Capitation is a way of paying health care providers or organizations in which they receive a predictable, upfront, set amount of money to cover the predicted cost of all or some of the health care services for a specific patient over a certain period of time.
In practice, this means a set amount of money is paid to the healthcare provider per patient, for a set amount of time, or for a certain set of services. This payment doesn’t change, even if complexity of care increases or more visits are required.
Capitation is not new, being trialed in the 1970’s as Medicare first implemented modified FFS models within health maintenance organizations (HMOs). From the concept of reimbursing at 80% of projected costs to the idea of bundled payments, capitation has existed for decades. As healthcare increasingly prioritizes population health management, it has again gained traction as a core element for value-based payment models.
Are Capitation Models Good or Bad?
There are advantages and disadvantages to consider. A few are outlined here:
Disadvantages:
Recognizing there is a specific, limited revenue under capitation models, providers may be tempted to stay “under budget.” Teams are taking on more financial risk, particularly for high need, complex care patient populations. Efforts must be made to ensure quality of care is not jeopardized and ensure the right level of care is provided, even if the cost of care exceeds the capitated payment.
Advantages:
When capitation contracts include pre-payment, it can create more stability and predictability in provider revenue. It may also foster innovation in care, keeping a focus on prevention, early intervention, and efficiency in care delivery. Provider groups may be more likely to prioritize preventative care, collaborate with social work and case managers, engage MIH/CP teams, integrate with specialty providers, and leverage technology resources to meet patient needs.
Fee-for-service models may drive a focus on volume of services, without maintaining health outcomes as a priority. Overall, capitation models tend to align more closely with value-based care concepts, prioritizing quality and preventative care. The key to ensuring these models will work: designing contracts which balance financial incentives with robust but achievable quality and outcomes in patient care.
How MIH Can Leverage Capitation Models?
MIH teams are effective in a value-based world by aligning with partner goals, demonstrating return on investment (ROI), and leveraging data to reduce costs and improve outcomes. Through this impact, MIH/CP is well-positioned to partner with payers and providers under capitation arrangements to augment standard of care with MIH services.
Common capitation models which can be leveraged by MIH to achieve positive ROI include:
● PMPM (Per Member Per Month): A flat monthly payment provided to cover care for each individual enrolled in a program, regardless of how many services they use. This model encourages preventive, efficient care, and aligns well with MIH teams managing complex populations.
● PEPM (Per Enrollee Per Month): Similar to PMPM, but often tied to program-specific enrollment rather than broader population health. MIH programs contracted to support recently discharged patients, for example, might receive a PEPM payment to manage those enrollees for 30 or 90 days.
● Risk-Sharing Agreements: Arrangements in which MIH teams share in financial rewards—or penalties—based on predefined performance metrics. In an upside risk model, MIH teams earn a share of cost savings if they improve outcomes and reduce costs. In a downside risk model, the team may also be held accountable if outcomes worsen or targets aren’t met. These models require tight data tracking and reporting but offer high potential for sustainable funding.
MIH teams can align priorities with those of payers, provider groups, or health systems to not only sustain operations, but thrive under these contracts. By reducing hospitalizations, managing chronic care transitions, and preventing gaps that lead to costly episodes of care, MIH programs align with value-based care principles.
These demonstrations of measurable outcomes lend well to leveraging capitated payments, and MIH teams can transform from grant-funded pilots into indispensable partners across healthcare.