Executive Briefing | by Monica E. Oss | June 22, 2017
We’ve covered the evolution of changing reimbursement – from volume to value – over the past two years (see The Value-Based Reimbursement Steeplechase, What Health Plans Are Looking For? Hint: It’s Not A Bigger Provider Network, and Five Questions To Ask To Build A Health Plan Proposal). And regardless of what is in the Senate health care bill released today, nothing short of a single payer system with cost-based provider reimbursement is going to change this reimbursement tidal wave. But in this glacial change in reimbursement, there have been a few developments in the past couple months that have surprised me in terms of their scope and implications.
Anthem Goes Long On VBR – In April, Anthem Blue Cross announced that nearly 60% of its health plan spending during the first quarter of 2017 had been through value-based care arrangements, such as accountable care organization (ACO) agreements. Anthem’s value-based program includes contracts with over 64,000 provider organizations through ACOs and patient-centered medical homes (PCMH), who are accountable for the cost and quality of care for 5.7 million commercial members (for the complete story, see Anthem Blue Cross Nears 60% Value-Based Care Spending).
California Capitating FQHC Primary Care – The California Department of Health Care Services (DHCS) announced it is creating a capitated payment methodology for its federally qualified health centers (FQHCs). Under the proposed payment model, California’s Medicaid program (Medi-Cal) managed care plans will pay the FQHCs a capitated rate for each Medicaid beneficiary served. Each FQHC will be responsible for providing all services for the member that falls under its scope of services (for more, see California Medicaid Developing Capitated Payment Model For FQHCs).
Minnesota Medicaid ACOs Increase Risk Options – In May, Minnesota Medicaid rebid its Integrated Health Partnerships (IHP) program, a type of ACO, to include new risk sharing options for the participating entities. The state is offering two tracks, one with upside and downside risk, and the other with no risk sharing at all. Both offer the participating entities a population-based payment for care coordination and infrastructure development (for the full story, see Minnesota Adds New Risk Sharing For Medicaid ACOs In Expanded Integrated Health Partnerships Program).
Value-Based Pharmacy Contracting In The Offing – Also in May, Optum and Merck announced the launch of a multi-year collaboration to study value-based pharmacy contracting. Specifically, they will evaluate Outcomes-Based Risk Sharing Agreements (OBRSAs), a pay-for-performance model in which payers link reimbursement to outcomes of consumers using specific medications (for more on this story, see Optum & Merck Partner To Advance Value-Based Contracting Of Pharmaceuticals).
These examples show that this fundamental change in health care service reimbursement (which is a fundamental change in business model for provider organizations) is being expanded across entire payers and systems of care – and even into use of pharmaceutical agents. For provider organization executives, the key is to monitor the likely reimbursement changes in your key markets and develop a strategy (and infrastructure) for success.
For more of our recent coverage of the VBR trend and how it should also shape your strategic planning, check out these resources from the OPEN MINDS Industry Library:
For more, Elite-level OPEN MINDS Circle members can join me on June 29 at 1:00 pm (EST) for a special webinar, Value-Based Purchasing & Complex Consumers Market Update. In this exclusive webinar, I will explore how the value-based care market is changing service delivery and financing for behavioral health organizations and discuss the key competencies organizations need to gain the competitive advantage in the era of population health management.