American Association for Physician Leadership

Strategy and Innovation

Competition in Healthcare and Non–Fee-for-Service Revenue Arrangements

Ronald B. Sterling, CPA, MBA

June 8, 2017


The Medicare Quality Payment Program and other non–fee-for-service (non-FFS) programs from a variety of payers pose new patient service and care challenges to practices and healthcare organizations (HCOs). Revenue generation is moving from completion of a patient encounter or procedure to sustained patient service excellence over a month, months, or even a year. Compensation for non-FFS arrangements may be based on a standard of performance or require your practice to develop innovative ways to serve patients and manage their health. Shared savings, care management, episode of care, and other non-FFS arrangements require new patient service strategies and tactics. Further complications are the specific scope of services and target patient populations from each payer and program.

Your practice or healthcare organization (HCO) is faced with a widening range of competitors who want to treat and manage your patients. From standalone urgent care centers and clinics co-located with pharmacies to home visits by emergency service crews during slow periods, as well as any number of doctors offering services over the Internet, your patients and payers have a wide array of new care options that challenge your practice/HCO to provide more effective, value-added patient services.

Effective Use of Technology

Many non–fee-for-service (non-FFS) programs pay practices to improve patient service and management outside of the office visit. Improved patient management and service may be needed to earn a quality or performance incentive or improve cost-effectiveness for episode of care, capitation, or care management–based plans. Just as significantly, the speed and response of serving patients may make the difference between a patient’s choice to use your practice/HCO or go to an urgent care clinic.

HIPAA-compliant Skype-like interactions with patients are changing the nature and frequency of contact with patients.

A quick walk down the healthcare aisle of your favorite electronics store will present a variety of Web-enabled devices to monitor patient status and conditions. Scales, spirometers, glucose meters, blood pressure devices, and more allow patients to provide subjective information to your practice/HCO from anywhere they may be: at home; at a restaurant; at the health club; or on vacation. Similarly, smartphone apps collect subjective feedback from patients using Health Assessment Questionnaires or health logs tailored to the patient’s specific issue or problem. Indeed, HIPAA-compliant Skype-like interactions with patients are changing the nature and frequency of contact with patients.

Important patient information can be sent by patients anytime and may include actionable insights into patient wellness as well as immediate opportunities to address issues before the situation evolves into a more complex and expensive healthcare problem. These patient interactions present a unique opportunity to manage and monitor continuity of care, as well as, in some cases, cost-effectively address patient issues even before the patient is aware of a problem. For example, problematic trends in weight, breathing, pain levels, or even frequency of disease occurrences could trigger a response from your practice/HCO.

These technologies require appropriate clinical standards, clinically trained staff, and documentation techniques to ensure that the patient issues are addressed within the continuity-of-care strategy for the patient, disease state, and practice/HCO. Your practice also must have processes to manage these interactions and to integrate patient information into the patient record to support continuity of care and document your patient services.

Patient Service

Many practices/HCOs have not yet capitalized on electronic medical records to improve patient service and “stretch the clinic.” Patient order and call management are the keys to successful patient service. Unfortunately, order and call management are frequent examples of a failure to capitalize on technology or refine workflow to improve patient services and efficiency.

Your practice may be compensated for proactively managing patients in place of an office visit.

In many practices/HCOs, a patient call produces a message to be addressed by the doctor, or a same-day appointment for a patient with a pressing issue. Patient orders for recommended future clinical activities often are entered as a text note, which cannot be easily managed by certified electronic health record technology (CEHRT) or staff. Even when entered as an order, many CEHRTs do not comprehensively address patient orders or calls, which are the key to non-FFS patient management. For example, many CEHRTs do not differentiate between patient order delays driven by patient convenience and delays due to time waiting for the physician’s clinical advice.

Unlike the FFS model, where the practice is not compensated for patient services outside of the clinical visit, under the non-FFS model, your practice may be compensated for proactively managing patients in place of an office visit as well as addressing problematic changes in patient conditions that can lead to more serious and expensive issues.

In many situations, addressing a patient call or incoming information is time sensitive both from the patient’s perspective and for the practice/HCO management strategy. For example, the practice/HCO may have non-FFS care management responsibilities to monitor incoming information from patients all day every day. Indeed, non-FFS arrangements may include financial incentives to provide more clinical advice and more actively manage patients outside of a clinical visit.

To improve responses to patients as well as address an increasing volume of incoming information from patients, practices/HCOs should review their patient triage and service strategy. For example, providing more active patient management triggered by patient information from the patient portal or patient wellness information from a smartphone app may require monitoring of those sources by a nurse or midlevel provider to ensure the patient receives a timely response and advice.

The key question is what resources will be available to address the continual flow of patient calls, reports from remote devices, and secure messages. Equally important, the practice may be competing with an Internet doctor, 24-hour urgent care center, and other 24/7 options. A properly staffed clinical call center may be needed to ensure timely monitoring of patient issues as well as clinically appropriate response and advice to ensure the proper level of care. For example, increasing pain levels may be addressed by an adjustment of patient medication rather than a hospital visit. Similarly, a blood pressure trend may trigger a response from the clinical call center before the patient is even aware of a problem.

Patient service enhancements require physician-driven clinical protocols as well as policies and procedure with CEHRT features to support more effective patient service. Properly trained and qualified staff operating under physician-developed protocols using effective CEHRT-based tools will empower the practice to manage and serve the patient. For example, the practice may consider upgrading the clinical call center with nurses and mid-level providers. Additionally, the practice may develop documentation templates for the scope of services provided by the clinical call center.

Continuous Monitoring and Improvement

Your practice will not derive a return on your investment in technology and resources if the patient service process is not adjusted to meet patient-specific issues as well as capitalize on new insights and capabilities. Your response should be focused on providing more added value to patients and payers through proactive patient management and services. Your success will depend on managing patient services continuously to ensure that patient issues are addressed in a timely manner and that information is gathered to substantiate the practice’s contribution to patient wellness and lower costs.

Monitoring performance is critical for patient care as well as to ensure that the practice has records to substantiate that it is meeting the performance requirements of each plan. Your internal performance statistics provide a valuable check on the “report card” maintained by the non-FFS plan administrator. For example, a practice was denied a performance incentive due to not meeting a vaccination requirement. The practice presented its internal results, which substantially differed from those of the plan. Indeed, plans may not have all the information that your practice has, which could lead to problems and lost revenue. Tracking your own performance will improve your clinical operation and ensure proper compensation from each non-FFS arrangement.

Monitoring of practice performance and response should be designed to ensure that all patient issues are addressed on a timely basis and that non-FFS plan requirements are met. From an elevated blood pressure reading received over the weekend, to checking up on an outstanding radiology study, the practice needs a process to ensure that patients’ clinical needs are properly triggered and clinical activities are properly documented.

The medical leadership should define the performance standards for all patient interactions.

Practices should inventory the patient service items that may be part of general practice treatment strategies, patient-specific orders, or non-FFS plan-specific issues. For example, onboarding of new patients may include a health coach session for a non-FFS arrangement. The practice may have a requirement that all alerts received from a weight scale be reviewed by the clinical call center within two hours of receipt as well as a non-FFS plan requirement that patients on incoming referrals be contacted within 48 hours to schedule an appointment.

To monitor performance, the medical leadership should define the performance standards for all patient interactions, including the completion of a clinical note, ensuring a treatment plan for each patient, and a response standard for each type of activity. For example, the practice may have a different response time for messages received over the patient portal than for incoming procedure reports from specialists.

A report or review of CEHRT information should be designed to support each performance standard. For example, the practice may need to review each provider’s work screen for overdue messages as well as generate a report for overdue patient orders. Response requirements for each type and class of patient issue should be defined by the medical leadership. For example, patient inquiries on post-procedure issues may have priority in the clinical call center, to be addressed by a mid-level provider, while questions about a future procedure may be assigned to a nurse for response within the day.

Each day, an assigned staff member should review the related patient service items across the practice to identify overdue issues and items. Overdue items should be highlighted and brought to the attention of the appropriate party. Statistics on compliance by clinical staff and provider should be compiled daily.

The medical leadership should review daily performance statistics on a periodic basis to ensure that the practice is operating within standards as well as identify emerging problems or opportunities. For example, a provider who frequently fails to sign clinical notes within the allowed timeframe may be contacted by the chief medical officer. In other situations, problems with patients reviewing their messages over the patient portal may be addressed through a procedure change.


Non-FFS arrangements are part of a general search for a way to control and manage escalating healthcare costs. These arrangements present a unique opportunity to use new techniques and technologies to improve patient care and avert serious healthcare issues. To meet these challenges, practices need to work on improving patient services and clinical operations to “sync up” with techniques that can lead to improved patient adherence, more effective patient services, and better results. These market demands can be addressed through a new look at how your organization uses technology, services patients, and manages clinical performance. Otherwise, your patient base may choose or be directed to alternative care models that more effectively interact with patients at less cost for payers and patients.

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