The Intersection of FFS and VBC Medicine: HEDIS®

by | 08/30/22 | Featured

The National Committee for Quality Assurance (NCQA) has developed a list of metrics and measures they consider pertinent to the assessment of quality in the delivery of healthcare based on access, availability, effectiveness, and outcomes – Healthcare Effectiveness Data and Information Set, better known as HEDIS®. There are more than 90 HEDIS® measures. Some address patient experience, and the rest aim at improving quality through the parameters mentioned.

In addition to being a barometer of the quality of care delivered to patients, most payers tie practice incentives to performance on HEDIS® measures. These incentives are often in the form of activity-based payments – so-called Pay-for Performance (P4P) – where a practice is either compensated directly for performing certain HEDIS® tasks or for meeting a percentile threshold of performance for specific HEDIS® measures. 

More mature practices, those involved in shared savings contracts, likely must meet certain HEDIS® thresholds or gates to qualify for earning any savings. This is how health plans and CMS ensure patients are receiving care and savings aren’t generated by simply rationing that care.

Practices on the full-risk end of the VBC delivery model spectrum have yet another way HEDIS® can impact their revenue. If a practice is fully responsible for healthcare spend in a Medicare Advantage (MA) Plan, they would like their benchmark of spend per patient, basically the insurance premium, to be as high as possible. HEDIS® measures are used in calculating the CMS Star program grades for the quality of MA Plans. Closure of the HEDIS® gaps can assist greatly in the achievement of higher Star ratings. MA Plans earning more than 4.5 Stars are paid at a higher rate per patient than other MA plans – their benchmark per patient is higher leaving more opportunity for savings.

Physicians often cringe at quality being measured through these measures, but the ones usually emphasized do have impact on patients’ health and their outcomes. Few would argue that HEDIS® measures like controlling blood pressure, controlling diabetes, screening for complication of diabetes, screening for breast or colorectal cancer, screening for depression, or immunizing against Influenza don’t bring benefit to patients. 

In spite of this, physicians still often take issue with HEDIS® measures like Control of Diabetes since it does rely on the patient’s participation in the care. However, the fact that some patients will not adhere to their plan is why no one is expected to have 100% of their patients with diabetes well-controlled. Also, the Hemoglobin A-1c level by which HEDIS® measures control is less stringent than most physicians consider to be well-controlled. So, it’s not as “unfair” as it may seem at first blush.

Beyond simple control of diabetes, physicians are measured on their management of diabetes through their identification of disease complications. The HEDIS® measures for retinal and kidney evaluation in patients with diabetes help avoid complications costly to both patient function and healthcare spend.

Other HEDIS® measures that are general population screenings, like mammogram and colorectal cancer screening, aid in early detection. Early detection not only improves patient outcomes and survivorship but decreases the medical cost to treat those conditions when they’re identified early.

Even if you disagree with the use of these metrics to measure quality, following through with these efforts, or “closing the HEDIS® care gaps”, can benefit the practice as well as the patient. 

If a practice or organization has the capability to internally perform any of the tests linked to HEDIS®, there can be FFS revenue associated. The bigger picture, though, from my perspective, is in VBC where intentionally addressing these issues with patients’ health leads to better outcomes, decreased utilization of rescue care, and lower costs. The revenue from savings can far outpace the reimbursement from billed services.

From a FFS perspective, other HEDIS® measures like depression screening help revenue through making an Annual Wellness Visit (AWV) complete or when done outside of an AWV. Depression can have a major impact on other chronic conditions like diabetes, heart failure, and COPD, leading to decompensation of these conditions, ED visits, hospitalizations, and increased cost of care. As with most HEDIS® activity measures (as opposed to outcome measures) screening needs to be followed by appropriate care based on the test results. When identified and treated, though, the additive comorbidities associated with depression can be better managed.


Advanced Care Planning is a newer HEDIS® measure, and its FFS and VBC benefits will be discussed in the next blog entry. Suffice it to say, completion of and action on advanced care planning is a great benefit to the well-being of patients and adds revenue to a practice regardless of the delivery model / system.

Awareness of which HEDIS® measures to address on which patient at what time will not only improve patients’ outcomes, but offers various value based contracting revenue opportunities for a practice or organization. Assessing a patient’s needs – preferably before they come to the office – and addressing them in a timely manner is often the hurdle many practices don’t clear. More on this later ….