Value-Based Payment Fundamentals: A Guide to New York State Medicaid VBP

Publication Year: 2018
Patient Need Addressed: Care Coordination/Management, Chronic Conditions
Population Focus: Medicaid beneficiaries
Intervention Type: Education, Partnership, Service redesign
Type of Literature: Grey

As part of our continued support for member hospitals and health systems participating in the Delivery System Reform Incentive Payment (DSRIP) program, GNYHA developed Value-Based Payment Fundamentals: A Guide to New York State Medicaid Value-Based Payment.

GNYHA created this value-based payment (VBP) curriculum to help performing provider systems (PPSs) meet a specific DSRIP requirement to train their partner primary care providers, behavioral health providers, and community-based organizations on VBP concepts. This requirement stems from the New York State Department of Health’s (DOH) reliance on PPSs to further its aggressive goals to funnel 80% of Medicaid managed care payments through VBP arrangements.

The curriculum is a response to requests from GNYHA’s DSRIP Workforce Workgroup, which convenes individuals responsible for developing and implementing PPS workforce training strategies, as well as PPS finance and partner engagement leads. Developed with input from PPSs and DOH, the curriculum includes content in the following areas:

  • Defining VBP and the policy context for this shift
  • New York State’s VBP program and the role of partners
  • Integrated delivery systems in VBP
  • Capabilities, benefits, and challenges to VBP

    In addition to learning content, the curriculum includes case studies and specific examples of how VBP may impact provider operations, frontline staff, billing, and partnerships between healthcare and community stakeholders. It complements DOH training materials that have been largely geared towards those who will develop and negotiate VBP contracts.

  • Insights Results

    Overview of article/program

  • This guide consists of curriculum geared towards Performing Provider Systems (PPSs) to help them support their efforts in facilitating the shift towards value-based payment (VBP). The curriculum includes 5 key elements: 1) Learning objects (i.e., what learners should know after the completion of each section); 2) Learning content (i.e., information to support the learning objectives); 3) VBP, including tools, articles, and other materials to support curriculum development); 4) VBP terms (i.e., commonly used terms and acronyms that are highlighted throughout the curriculum; and 5) Appendix items (i.e., supplemental curriculum materials to support learners’ understanding of VBP)
  • VBP arrangements are contractual agreements between providers and payers that incentivize performance around healthcare outcomes and costs related to healthcare utilization. There are 2 fundamental variables to VBPs: quality and efficiency
  • VBP arrangements can support population health, improve healthcare quality and decrease costs through potential revenue streams related to achieving bonuses or shared savings. Population health tools like registries, EHRs, and health information exchanges can help to facilitate and support VBP arrangements.. However, it must be considered that typically providers cannot bill to these supporting activities
  • New York’s Department of Health (DOH) developed a VBP program to support changes to the healthcare system being implemented as part of DSRIP. There are 4 levels of DOH VBP arrangements, which are based on the extent of payment/reward for good performance on quality measures and improved efficiency resulting in cost savings: 1) Level 1: FFS payments with a bonus and/or withhold based on quality scores; 2) Level 1: FFS with upside-only shared savings when quality scores are sufficient. The amount of savings that can be shared with the VBP contractor increases as quality performance increases; 3) Level 2: FFS with risk sharing (the VBP contractor shares in losses as well as savings depending on quality performance. Shared savings increase as quality performance increases, and shared losses can increase as quality performance decreases); and 4) Level 3: Prepaid capitation with a quality-based component. VBP arrangements have a limited impact on how providers bill for services with the exception of Level 3 arrangements
  • DOH developed 4 VBP models that fall into 2 categories (i.e., population based arrangements and episode-based arrangements). All of these models can be implemented at any VBP level: 1) Total Care for General Population (TCGP): VBP contractors are responsible for all Medicaid-covered services related to the care for attributed individuals; 2) Total Care for Special Needs Subpopulations: VBP contractors are responsible for all Medicaid-covered services for populations that already have dedicated managed care arrangements, including HIV/AIDS, and Health and Recovery Plans; 3) Integrated Primary Care (IPC) Bundle: Contracted primary care providers (PCPs) are responsible for preventive and sick care, as well as care coordination activities. IPC includes a Chronic Bundle for 14 chronic diseases, including asthma, and hypertension. Serious acute care services such as cancer and trauma care are not included in the IPC bundle. Savings in the IPC generally result from reductions in hospital use and hospitals that cooperate with PCPs in these arrangements can share in the savings; and 4) Maternity Bundle: Contracted hospitals and/or providers that deliver maternity care are responsible for all care from the onset of pregnancy through the first month of a newborn’s care
  • There are multiple participants in New York’s VBP arrangements: 1) Managed care organizations (MCO) – contract with providers to deliver payments for services to the MCO’s members and play a significant role in selecting the VBP model, their measures, quality and utilization targets, and reimbursement levels; 2) Hospitals; 3) Primary care staff; 4) Behavioral health providers (may not take on risk); 5) Post-acute care staff (e.g., home health, skill nursing); and 6) Community-based organizations
  • Many of New York’s PPSs have been working towards developing integrated delivery systems (IDS) as part of their DSRIP projects. Within IDS, key elements include defined partner roles and processes, governance, outcomes data sharing, sharing patient information, communication strategy, payer contracting, and funds flow

    Key takeaways/implications

    • There are many capabilities for success in VBP including: 1) Care management and care coordination (i.e., addressing complex healthcare needs through clinical and non-clinical activities); 2) Referral management (i.e., managing resource utilization and health outcomes that require referrals); 3) Technology (i.e., using EHRs, health information exchanges and other technological platforms to facilitate communication, transfer information and share data between network partners to promote health outcomes, identify trends and areas of opportunity to improve quality and reduce cost of care); and 4) Quality improvement and performance measurement
    • Benefits of VBP for contractors and network partners include: 1) Improved patient experience and outcomes; 2) Financial incentives for VBP contractors and network partners; and 3) Operational benefits and sustaining healthcare reform
    • Barriers and challenges to VBP include: 1) Required infrastructure and capabilities (e.g., legal, IT, contracting and administrative support); 2) Assumption of risk; and 3) Partnerships
    • VBPs are becoming more common nationally, especially through CMS models like bundled payment initiatives and accountable care organizations, as policymakers begin to evaluate ways to reduce healthcare spending