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Fall Member Summit 2012. The LP Payment Method Forecast: Projecting the FFS Payment T ransition. October 16, 2012. A Starting Assumption. FFS Payment will increasingly be replaced by risk based payment. . Strategist’s Dilemma :. How quickly will it occur?. Needed:.
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The LP Payment Method Forecast:Projecting the FFS Payment Transition October 16, 2012
A Starting Assumption FFS Payment will increasingly be replaced by risk based payment.
Strategist’s Dilemma: How quickly will it occur?
Needed: Sophisticated methodology to systematically track and project the pace of the transition between FFS payment and risk based payment
The LP Payment Method Forecast • Predictive of: • The percentage of care within a medical market that will be paid through non FFS arrangements • Percentage of providers participating in a medical market • Uses both quantitative and qualitative analysis combined with locally gathered intelligence
The Deliverable The ability of a Chief Strategy Officer to present to the Board of Directors or senior management a defendable estimate each quarter of how quickly the payment model within a geographic medical market will change. The ability to develop customized forward looking scenarios illustrating how various potential developments could change the pace of the transition of FFS payment to risk base payment.
How It Works • Focuses on a rolling seven year period • Year -1 historical • Year +1 and +2 negotiated contracts • Year +3 through +7 projected by model • Identifies dozens of indicators, highlighting the most sensitive • Allows modeling scenarios based on externalities • Economic • Political • Regulatory • Consumer reaction to care models • Etc. • Base year calculation is coupled with systematic intelligence gathering • Quarterly recalibration drawn
Characteristics of the Model • Collaborative Intelligence • Historical client data • Existing contract data • Locally and nationally gathered intelligence • Comparable market behavior • Customized by market and need • Continuously improving • Compliments our monitoring of ACOs, insurance exchanges, Medicaid and Medicare
Status • Team working for 15 months • Structure of the model is sufficiently complete • Baselines are still developing • National model is functional • Ready to Beta Test local markets • Five to eight local markets
Beta Development • Five to eight markets of various sizes • Non competing participants • Client participation in collaborative development process • Fees will vary by size and complexity of market • Beta Market fee structure
Illustration Projected Historical Contracted