From Fee-For-Service
to Value-Based Enterprise
Transforming Nephrology Economics
for 1,000 Patient Panel
Document Purpose & Executive Proposal
PURPOSE: This educational deck presents a comprehensive financial and operational analysis demonstrating how your nephrology practice can transition from traditional Fee-For-Service (FFS) reimbursement to a provider-led Value-Based Enterprise (VBE) model, achieving sustainable 3X revenue growth while improving patient outcomes.
CURRENT CHALLENGE: Under FFS, your 1,000-patient nephrology practice generates approximately $1.2M annually through episodic billing (office visits, procedures, diagnostics), with 60-90 day payment delays, 15-20% denial rates, and no compensation for care coordination or quality outcomes. Physicians spend 40% of their time on administrative tasks rather than patient care.
PROPOSED SOLUTION: Form a provider-led VBE under OIG 2020 Safe Harbor provisions, partnering with ACUITYhealth as your technology enabler (70/30 revenue split). This structure allows you to contract directly with all payers under a single unified agreement, receiving risk-adjusted Per-Member-Per-Month (PMPM) payments ranging from $150-$700 based on patient complexity.
KEY TRANSFORMATION: Transition from volume-based billing (number of visits) to value-based payments (patient outcomes), utilizing ACUITYhealth's Continuous Health Index (CHI) scoring system, FHIR-native documentation, and AI-powered care coordination to stratify your population across 5 risk tiers and optimize care delivery.
FINANCIAL OPPORTUNITY: Generate $3.72M base PMPM revenue plus $558K in quality bonuses and shared savings, totaling $4.28M annuallyβa 257% increase over current FFS model. Investment of $550K in technology and care coordination infrastructure delivers ROI within 6 months and $8M value over 5 years.
From $1,200/year (FFS) β $3,700/year (VBE)
Single Contract, All Payers
CONTRACT CONSOLIDATION: Currently, your practice manages 15-20 separate payer contracts, each with different fee schedules, prior authorization requirements, quality metrics, and payment terms. This administrative complexity consumes significant resources and creates payment variability. Under the VBE model, all payers participate in a single unified contract with standardized PMPM rates adjusted only for patient risk (RAF scores), eliminating contract negotiations, reducing administrative burden by 80%, and providing predictable monthly revenue regardless of payer mix. The VBE acts as the contracting entity, pooling risk across all insurance types while maintaining higher reimbursement rates through value-based performance.
| Payer Mix | % Patients | Current FFS | VBE PMPM |
|---|---|---|---|
| Medicare Advantage | 45% | $95/visit | $350/month |
| Traditional Medicare | 30% | $105/visit | $300/month |
| Commercial | 20% | $120/visit | $275/month |
| Medicaid | 5% | $75/visit | $225/month |
Population Risk
Stratification
1,000 Nephrology Patients
Across 5 Tiers
DETAILED TIER BREAKDOWN
ESRD on dialysis + Transplant recipients
β₯2.0
$700
$420,000
11.3% of total revenue
Pre-ESRD, Frequent Admits
1.6-1.9
$500
$900,000
24.2% of total revenue
CKD 4-5, High Complexity
1.2-1.5
$350
$1,050,000
28.2% of total revenue
CKD 3b-4, Controlled
0.8-1.1
$250
$900,000
24.2% of total revenue
CKD 2-3a, Stable
0.3-0.7
$150
$450,000
12.1% of total revenue
Higher complexity = Higher PMPM = Better care coordination
Revenue Distribution by Tier
Financial Impact
Analysis
Fee-For-Service vs
Value-Based Enterprise
WHAT IT COVERS: Monthly per-patient payments replace all FFS billing, covering comprehensive nephrology care management including:
- All office visits (unlimited frequency)
- Care coordination & team-based services
- 24/7 patient access & monitoring
- Medication management & reconciliation
- Lab review & treatment planning
- Dialysis oversight & transitions
- Patient education & engagement
- Digital health platform access
PAYMENT STRUCTURE: Risk-adjusted rates from $150-$700 PMPM based on patient CHI scores and RAF levels, paid monthly in advance, no claims submission required.
QUALITY METRICS (10% bonus = $372K):
- 30-day readmission rate <14%
- BP control <130/80 (75% of patients)
- HbA1c <7% (80% of diabetics)
- Statin therapy (95% indicated)
- Depression screening (100%)
- Albuminuria testing (annual 100%)
- Phosphate control (ESRD patients)
- Vascular access (AVF >65%)
SHARED SAVINGS (5% = $186K): Generated by reducing total cost of care through decreased hospitalizations, ED visits, and delayed ESRD progression. Practice receives 50% of documented savings below benchmark.
DATA REQUIREMENTS: Monthly reporting via FHIR-enabled payer portal with automated CHI scoring validation.
| Revenue Stream | FFS Model | VBE Model | Ξ Change |
|---|---|---|---|
| Base Revenue | |||
| β’ Office Visits (4x/year) | $400,000 | β | |
| β’ Labs & Diagnostics | $300,000 | β | |
| β’ Procedures | $500,000 | β | |
| β’ PMPM Payments | β | $3,720,000 | |
| Base Total | $1,200,000 | $3,720,000 | +210% |
| Performance Bonuses | |||
| β’ Quality Metrics | $0 | $372,000 | +100% |
| β’ Shared Savings | $0 | $186,000 | +100% |
| GRAND TOTAL | $1,200,000 | $4,278,000 | +257% |
Predictable monthly cash flow vs episodic billing
Per-Provider Economics (10 Nephrologists)
| Metric | FFS | VBE |
|---|---|---|
| Revenue per Provider | $120,000 | $427,800 |
| Patients per Provider | 100 | 100 |
| Revenue per Patient | $1,200 | $4,278 |
Operational
Transformation
From Volume to Value
Care Delivery Model
| Operational Metric | FFS Reality | VBE Model |
|---|---|---|
| Visit Frequency | Quarterly mandated | Risk-based flexible |
| Documentation | 60 min/patient | 15 min (AI-assisted) |
| Care Team | MD-centric | Team-based + APPs |
| Revenue Cycle | 60-90 day lag | Monthly prepaid |
| Denial Rate | 15-20% | 0% (prepaid) |
| Admin Burden | 40% of time | 10% of time |
Care Delivery by Tier
| Tier | FFS Approach | VBE Approach | Outcome Impact |
|---|---|---|---|
| 5 | Reactive crisis | 24/7 monitoring | β50% admits |
| 4 | Quarterly visits | Weekly touchpoints | β30% progression |
| 3 | Standard protocol | Personalized plans | β25% ER visits |
| 2 | Minimal engagement | Digital monitoring | β40% med adherence |
| 1 | Annual check | Prevention focus | β15% progression |
Physicians focus on care, not paperwork
Technology Requirements
Quality Metrics
& Outcomes
Measurable Impact on
Patient Care
TARGET: Reduce from 28% to 14%
FINANCIAL IMPACT: +$150,000 bonus
HOW TO ACHIEVE:
- Post-discharge calls within 48 hours
- Medication reconciliation at every transition
- 7-day follow-up appointments scheduled
- 24/7 nurse triage line for crisis intervention
- Home health referrals for high-risk patients
MEASUREMENT: Track via QHIN encounter data, automated CHI alerts for admissions, monthly payer reports.
TARGET: 75% achieving <130/80 (up from 45%)
FINANCIAL IMPACT: +$80,000 bonus
HOW TO ACHIEVE:
- Home BP monitoring with digital upload
- Pharmacist-led medication titration protocols
- ACE/ARB optimization for all CKD patients
- Salt restriction education (DASH diet)
- Monthly virtual check-ins for uncontrolled BP
MEASUREMENT: Average of last 3 readings in 12 months, exclude ESRD on dialysis, document medical exceptions.
TARGET: 80% achieving <7% (up from 50%)
FINANCIAL IMPACT: +$60,000 bonus
HOW TO ACHIEVE:
- Quarterly A1C testing for all diabetics
- Continuous glucose monitoring for high-risk
- Endocrinology co-management protocols
- GLP-1 agonist consideration for CKD
- Diabetes educator referrals
MEASUREMENT: Most recent A1C in past 12 months, individualized targets for elderly/comorbid, exclude hospice patients.
TARGET: 95% of indicated patients (up from 60%)
FINANCIAL IMPACT: +$40,000 bonus
HOW TO ACHIEVE:
- Auto-populate statin orders in EMR
- Pharmacist review of all CKD patients
- Document contraindications clearly
- Use alternative statins for intolerance
- Patient education on CV risk reduction
MEASUREMENT: All CKD 3+ with diabetes or age >50, documented prescription fills, medical exceptions allowed.
TARGET: 100% annual screening (up from 30%)
FINANCIAL IMPACT: +$42,000 bonus
HOW TO ACHIEVE:
- PHQ-9 integrated in rooming process
- Digital app screening between visits
- BHI (Behavioral Health Integration) workflows
- Warm handoffs to social work/psychology
- Follow-up protocol for positive screens
MEASUREMENT: PHQ-2 or PHQ-9 documented annually, positive screens require follow-up plan, exclude severe dementia.
ALBUMINURIA TESTING: 100% annual UACR testing for all CKD/DM patients to guide ACE/ARB therapy
PHOSPHATE CONTROL: 80% ESRD patients with phosphate 3.5-5.5 mg/dL through binder optimization
VASCULAR ACCESS: >65% AVF (arteriovenous fistula) for HD patients, early referral at eGFR <20
ANEMIA MANAGEMENT: Hemoglobin 10-12 g/dL for 85% CKD patients using ESA protocols
BONE HEALTH: PTH monitoring quarterly for CKD 4-5, vitamin D supplementation per protocol
Better outcomes = Higher reimbursement
Clinical Outcomes by Tier
| Tier | Key Metric | FFS | VBE | Improvement |
|---|---|---|---|---|
| 5 | Mortality Rate | 18% | 12% | β33% |
| 4 | ESRD Progression | 40%/year | 25%/year | β37% |
| 3 | Hospitalization | 35% | 20% | β43% |
| 2 | eGFR Decline | 4 mL/min/yr | 2 mL/min/yr | β50% |
| 1 | CKD Progression | 20% | 10% | β50% |
Patient Experience
Value-Based
Partnership Structure
70/30 Revenue Split Model
Practice + Technology Partner
- Clinical care delivery for 1,000 patients
- Patient relationships & engagement
- Quality outcomes achievement
- VBE governance & leadership
- Payer contracting entity
- Care team management
- EMR documentation & compliance
- HEDIS/CMS quality reporting
- Care coordination protocols
- Medication management
- Lab review & treatment plans
- Hospital & dialysis rounding
Covers providers, staff, operations
- CHI risk scoring (16-system AI)
- FHIR/QHIN data pipeline
- Patient engagement app
- Payer portal & reporting
- AI documentation system
- Predictive analytics engine
- 24/7 technical support
- Monthly performance reports
- Compliance & audit support
- Training & onboarding
- Quality measure tracking
- Continuous platform updates
FMV technology & analytics
UNIFIED VBE STRUCTURE
Enables 3X total revenue growth for practice
Investment & Returns
| Investment Area | Year 1 Cost | ROI Timeline | 5-Year Value |
|---|---|---|---|
| Technology Platform | $200,000 | 6 months | $5.5M |
| Care Coordination Staff | $300,000 | 3 months | $2.0M |
| Training & Implementation | $50,000 | 12 months | $500K |
| Total Investment | $550,000 | 6 months avg | $8.0M |
Payer Contract Structure
12-Month
Implementation Plan
Transition from FFS to VBE
Phased Approach
- VBE entity formation under OIG Safe Harbor
- Technology partner selection (ACUITYhealth)
- Payer negotiations initiated
- Staff training program launched
- Baseline metrics documented
FFS continues: $300K/quarter
No VBE revenue yet - preparation phase
- QHIN/FHIR connection established
- CHI scoring deployed for all patients
- Patient app launched and tested
- Care teams established by tier
- First payer contracts signed
Pilot PMPM begins: $450K/quarter
50% FFS + 50% VBE hybrid model
- 75% patient enrollment achieved
- Payer portal fully operational
- Quality metrics tracking automated
- First PMPM payments received
- Care coordination protocols active
50% VBE active: $700K/quarter
Transitioning majority to value-based
- 100% patient coverage complete
- Performance bonuses earned
- Shared savings achieved
- Full VBE operations mature
- Year 2 expansion planned
Full VBE: $1.07M/quarter
100% value-based, FFS eliminated
283% increase over current FFS model
Success Metrics Dashboard
TARGETS: 25% (Month 3) β 75% (Month 6) β 100% (Month 12)
DEFINITION: Percentage of active nephrology patients onboarded to VBE model with signed consent, digital app activation, and care plan documented.
HOW TO ACHIEVE:
- Phase rollout by risk tier (start with Tier 5)
- In-clinic enrollment during regular visits
- Outreach campaigns via phone/text/mail
- Staff incentives for enrollment targets
- Patient education materials in multiple languages
TRACKING: Weekly reports from patient engagement platform, dashboard updates every Monday.
TARGET: 100% from Month 3 onward
DEFINITION: Real-time Continuous Health Index scores calculated for all enrolled patients using FHIR data feeds, updated daily with 16-system transformer model.
HOW TO ACHIEVE:
- Complete QHIN/CommonWell integration
- EMR data mapping to FHIR resources
- Lab interface real-time feeds
- Daily batch processing at 2 AM
- Provider dashboard training completed
VALIDATION: Manual chart review of 5% sample monthly, >95% accuracy required for billing activation.
TARGETS: $50K (Month 3) β $155K (Month 6) β $310K (Month 12)
DEFINITION: Monthly per-member-per-month payments received from all payers under unified VBE contract, risk-adjusted by tier.
HOW TO ACHIEVE:
- Complete payer contract negotiations
- Submit monthly enrollment rosters
- Accurate RAF score documentation
- Tier assignment validation quarterly
- Electronic funds transfer setup
RECONCILIATION: Monthly payer statements matched to enrollment, disputes resolved within 30 days.
TARGETS: 3/10 (Month 3) β 7/10 (Month 6) β 10/10 (Month 12)
DEFINITION: Number of HEDIS/CMS quality measures achieving target thresholds for bonus payments.
HOW TO ACHIEVE:
- Quality dashboard reviews weekly
- Gap lists distributed to care teams
- Standing orders for screenings
- Patient outreach for overdue labs
- Exception documentation training
PRIORITY ORDER: Start with highest-value metrics (readmissions, BP control), expand to comprehensive panel by Month 9.
TARGETS: 25% (Month 3) β 20% (Month 6) β 14% (Month 12)
DEFINITION: 30-day all-cause readmissions for nephrology patients, excluding planned admissions and hospice.
HOW TO ACHIEVE:
- Real-time admission alerts via QHIN
- Discharge planning nurse embedded
- 48-hour post-discharge calls mandatory
- 7-day follow-up scheduling at discharge
- High-risk patient stratification daily
MONITORING: Daily huddles for admitted patients, weekly readmission review committee, root cause analysis for all readmits.
PROVIDER ADOPTION: 100% nephrologists using CHI dashboard daily, documenting in FHIR-enabled templates
DIGITAL ENGAGEMENT: 60% patients logging into app weekly, completing health assessments
CARE TEAM UTILIZATION: APPs managing 40% of Tier 1-2 visits, pharmacists conducting med reviews monthly
DOCUMENTATION TIME: Reduced from 60 to 15 minutes per encounter using AI assistance
PAYER SATISFACTION: Monthly scorecards >90%, no reporting delays, audit readiness maintained
Key Decision Points
Thank You
Your Value-Based Transformation Team
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