Sometimes, it seems that with pay-for-performance (P4P), there is lots of talk but not much action. But, if you look at the reimbursement programs of the major payers, there is slow but steady progress. I would call it glacial in the best sense of the word – a huge force, moving slowly, that completely changes the landscape around it.
A review of P4P in one payer – Optum – illustrates the slow but steady effect of P4P on the market. We have covered Optum’s P4P initiatives over the past couple of years for a couple key reasons. The United Healthcare system, of which Optum is a part, provides health insurance coverage for roughly 1 in 4 Americans – so, a big impact. And, the Optum vision for provider partnerships is far reaching, with a goal of moving the relationship with partners, over time, to gainsharing.
In a 2012 presentation at the OPEN MINDS Planning & Innovation Institute, the Optum team first presented this big picture framework (see The Payer Perspective On A Changing Healthcare Market). And a recent conversation with Deborah Adler, Senior Vice President, Behavioral Network Services, Optum Behavioral Health provided an update on some of their key initiatives.
Achievements in Clinical Excellence (ACE) program – Inpatient
Eligible provider type – Facilities must be in the Optum Network and have a minimum of 50 discharges from inpatient care during the review period (1 year). In addition, each facility must have at least 25 qualified discharges for select measures.
Performance measures – Readmission rates, follow-up after hospitalization, peer review, residual length of stay, and behavioral health spend per inpatient episode (see ACE Facility Measures Fact Sheet)
Incentives – Optum will provide additional promotional and marketing activities on behalf of Platinum facilities directed toward local and regional referral sources.
Current participation – 174 with a plan to have 286 by the end of 2015.
This initiative is focused on inpatient levels of care and rewards professionals and provider organizations that deliver “high value” care (see ‘Pay For Value’ Making Its Way To Practice). Last month, Ms. Adler noted that the inpatient program has more participating organizations than just a year ago – with almost 20% of inpatient expenditures tied to pay-for-value. These contract models are not limited to facility-based programs. The inpatient performance-based contracts tie financial incentives to both effectiveness and efficiency measures including – the 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). Ms. Adler reports that she has seen inpatient program improvements in readmission rates, including a 15%-20% reduction in some organizations. And she has seen 3%-10% improvements in the ambulatory follow-up rate for HEDIS.
Achievements in Clinical Excellence (ACE) program – Clinicians
Eligible provider type – Clinicians in the Optum national network (with the exception of CA, CO, MD, NY, MO and TX) will receive feedback regarding effectiveness and efficiency using nationally-recognized, evidenced-based measures.
Performance measures – An effectiveness measure is compiled from the clinician Severity Adjusted Effect Size (SAES) metric from submitted ALERT Wellness Assessments. An efficiency metric is the difference between the predicted Average Number of Visits (ANOV) and the expected ANOV. This difference is what Optum refers to as the residual Average Number of Visits per treatment episode.
Incentives – Platinum clinicians and groups will be eligible for a twelve-month, across-the-board fee in-crease. Platinum clinicians and groups will also be able to take advantage of free, Optum-sponsored continuing education units through Relias Learning.
Current participation – 45 states, with over 6,800 providers have met the quality and cost metrics to qualify as “platinum” level outpatient providers.
This new program uses case-mix adjusted cost and quality measures similar to the inpatient program, and includes a 24-item member reported wellness assessment tool. Ms. Adler noted, “The provider gets a star rating, which is transparent to members through an on-line provider directory. The provider earns one star if the quality metric threshold is achieved and a second star if the cost metric is achieved. It’s a quality first program because you get no stars if you don’t earn the quality rating.” To participate, providers must have at least 10 members to qualify for the ACE ratings, so that they have enough data points to evaluate the cost and quality metrics. “By providing feedback to providers regarding their performance, we hope to see that number continue to rise each year,” said Ms. Adler.
Facility performance-based contracting
Eligible provider type – Facility-based programs.
Performance measures – 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).
Incentives – Participating facilities will share in savings if performance is within targeted range; earn an additional escalator through greater sharing of savings if performance exceeds range (up to a cap); and an enhanced payment for exceeding effectiveness metrics.
Current participation – 21 states, representing nearly 20% of Optum’s inpatient medical expenditure.
The future sees more developments for Optum’s ACE program, including some diagnostic specialty programs that include an eating disorder designation program that is expected to launch sometime in the middle of 2015, and will use the same ACE tiering construct, but different measures to identify preferred eating disorder programs.
For more on working with payers under new reimbursement models and value-based arrangements, check out these great resources from the OPEN MINDS Industry Library: Up The Food Chain – From FFS To Preferred & Exclusive Status, How To Create Successful Partnerships With Managed Care Organizations: The New Rules For Service Provider Organizations, and What Do Payers Want? They Want You To Define Your Value! Be sure to join us in New Orleans for The 2015 Strategy & Innovation Institute, where my colleague Steve Ramsland, Ed.D., Senior Associate will present Marketing To Medicaid Managed Care & Commercial Insurance Plans.