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Integration of Alternative Payments Along the Spectrum of Healthcare Reimbursement Models

Integration of Alternative Payments Along the Spectrum of Healthcare Reimbursement Models

A number of factors over the last few years have been causing healthcare organizations to reconsider their compensation programs for both employed and independently-contracted healthcare providers including:

  • Reduced reimbursement
  • Increased consumerism and patients directing more of their care
  • Evolving healthcare delivery models to include the increased utilization and presence of advanced practice providers, care coordinators, patient advocates, etc.
  • Increased importance on “Triple Aim” (i.e., cost, quality, and service objectives) and organizations going through Six Sigma and Lean processes

As a result of the above stated factors, Gallagher Integrated has seen greater integration of alternative payments along the spectrum of healthcare reimbursement models which spans from fee-for-service whereby healthcare providers file distinct claims and are paid separately for each service provided (e.g., inpatient, outpatient, physician, post-acute provider, etc.) to capitation whereby a health system is paid a fixed payment per attributed patient over a pre-defined period of time, regardless of the total number of separate/distinct episodes of care. Examples of such alternative payment models include, but are not limited to, fee-for-coordination, value-based reimbursement, bundled payments, shared savings programs, etc.

One alternative payment model—the bundled payment model—has recently been brought into the national discussion with the CMS announcing plans to cancel the Episode Payment Models and the Cardiac Rehabilitation Incentive Payment Model and to revise certain aspects of the Comprehensive Care for Joint Replacement Model. These models intended to shift Medicare payments from rewarding quantity to rewarding quality by creating incentives for hospitals to deliver higher quality, more efficient healthcare, at a lower cost. Comments on the proposed rule changes must be provided no later than October 15, 2017.

As healthcare payment models and delivery systems continue to evolve, Gallagher Integrated can provide your organization with expert guidance on the path from volume-based healthcare to value-based healthcare. Please contact Blake Sternard at or Frankie Szeto at for more information.

Blake  Sternard


Blake Sternard is a Consultant with the Physician Services service line of Integrated Healthcare Strategies, a part of the Gallagher Human Resources & Compensation Consulting practice. Mr. Sternard focuses his work efforts on improving the financial performance of physician practices and ensuring clients meet regulatory compliance.

Mr. Sternard’s areas of expertise include testing proposed compensation models against related market compensation and productivity metrics, as well as evaluating a practice’s overall financials and operations. His ...

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