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By Monica E. Oss

The payer movement from “pay for volume” to “pay for value” is certainly uneven – but it is happening. Last month, I wrote about the evolution of reimbursement arrangements between health plans and provider organizations – What Does The Future For Payer P4P Look Like?, A Look At P4P From The Ground Level, and P4P In Practice @Magellan. My takeaway – health plans are in the experimental stages of designing systems that reward “high value” professionals and provider organizations.

The payer organization that seems to have made the most progress in moving these systems from reality to practice is Optum. I was impressed with the models presented by Deborah Adler, Senior Vice President, Behavioral Network Services, Optum Behavioral Health, during her presentation at the 2014 OPEN MINDS Performance Management Institute, The Payer Perspective On Future Models For Provider Collaboration: Performance Measurement, P4P, Gain-Sharing, & Risk-Based Contracting. She presented Optum’s new “Achievements in Clinical Excellence” (ACE) program – an initiative that rewards professionals and provider organizations that deliver “high value” care. The metrics used to assess value include:

  1. Peer review
  2. Follow-up after hospitalization
  3. Readmission rates
  4. Residual length of stay
  5. Behavioral health spending per inpatient episode


For the highest-value professionals and provider organizations, there is a “Platinum” level designation in the Optum network. That “Platinum” designation includes benefits such as streamlined clinical reviews, enhanced claims assistance, and resolution support via a designated contact with Optum; greater access to effectiveness and efficiency data – and Optum support staff; and Optum marketing on behalf of those professionals and provider organizations.

Ms. Adler also presented an update on Optum’s move to performance-based contracting with their network provider organizations. These contract models are limited to facility-based programs – with financial incentives based on: reduction in case mix adjusted average length of stay; reduction in risk-adjusted 30-day readmission rate to any inpatient level of care; and improved results on ambulatory follow-up rates (7 days post inpatient discharge). For achieving these performance goals, the P4P agreements have three types of financial incentive arrangements:

  1. Facility will earn escalator based sharing of savings if performance is within targeted range
  2. Facility will earn additional escalator through greater sharing of savings if performance exceeds range (up to a cap)
  3. Can earn an enhanced payment for exceeding effectiveness metrics

What surprised me? How far Optum has moved with implementation of this model. Ten percent of inpatient network-based care covered by Optum is tied to performance in some way – and that number is growing fast. The geographic footprint continues to expand.


How to prepare to compete “preferred position” with health plans? Check out these resources:

  1. Up The Food Chain – From FFS To Preferred & Exclusive Status
  2. How To Create Successful Partnerships With Managed Care Organizations: The New Rules For Service Provider Organizations
  3. Controlling Coordination = Controlling Referrals
  4. From Payer Vendor To Payer Partner
  5. What Do Payers Want? They Want You To Define Your Value!

And for more, check out our coverage from the 2014 OPEN MINDS Planning & Innovation Institute. And, don’t miss my presentation, The Payer Perspective On Future Models For Provider Collaboration: Performance Measurement, P4P, Gain-Sharing, & Risk-Based Contracting, at the California Planning & Performance Management Institute.

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