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As healthcare stakeholders seek opportunities to
improve patient care and lower costs, health plans have created products and
designs that align with value-based care.
began with a Centers for Medicare & Medicaid Services [CMS] imperative to
implement a value-based provider reimbursement framework, putting some degree
of financial compensation for providers at risk by financially incentivizing
providers to demonstrate high-quality clinical outcomes metrics in patient care,”
says Yele Aluko, MD, chief medical officer at EY’s Americas Advisory
Health. “Commercial payers have followed suit in the design of their own
This activity is increasing, according to a 2016 Health Care Transformation Task Force Report,
which noted that the share of its provider and health plan members’ business
that used value-based payment arrangements increased from 30 percent in 2014 to
41 percent at the end of 2015. In a McKesson white paper, payers reported that 58 percent of their
business has already shifted to some form of value-based reimbursement, a 10
percent increase from two years earlier.
From provider incentives to enrollee cost-sharing to joint ventures, health
plans aim to create more-efficient business models that reduce clinical
variation and enhance the quality of care.
“The expected outcome
is to instill a culture of financial discipline and to hold providers
accountable for objective delivery of quality clinical outcomes, by embracing
the principles of value-driven care,” Aluko says.
BlueCross BlueShield of Western New York has
completed the first year of its BestPractice model, a plan that combines
fee-for-service and monthly capitation payments, with participating physicians
measured on quality (see the exhibit below). The insurer took into consideration pay-for-performance
programs such as the Medicare Access and CHIP Reauthorization Act (MACRA) and
New York State’s Advanced Primary Care model when designing BestPractice.
A Look at the BestPractice Model
“As a reimbursement model for primary care, it
was essentially designed to create alignment between the health plan and
physicians delivering on quality, efficient care,” says Thomas Schenk, MD, vice
president and chief medical officer, BlueCross BlueShield of Western New York.
Over 95 percent of primary care providers that are in the market and
participate with the insurer receive payment through BestPractice.
In 2017, the insurer determined physician payment
based on Healthcare Effectiveness Data and Information Set (HEDIS) compliance,
with 27 measurements ranging from adolescent immunizations to colorectal cancer
screening to osteoporosis management.
While BlueCross BlueShield of Western New York
is awaiting results from the first year, Schenk has noted a positive outcome in
the engagement of participating physicians. “We definitely have had a lot of
interest from the physicians in trying to be as active as they can be in
getting to all of the gap closures they can get,” Schenk (pictured at right) says.
In 2018, the health plan is measuring physician
performance based on HEDIS quality measures (80 percent) and cost of care (20
percent). Examples of cost-of-care measures include inpatient utilization,
emergency department utilization, laboratory services, and specialist services.
Schenk hopes to see this type of model expand
within the western New York market and into other markets. “The more physicians’
patient panels we can get in this kind of model, the more they can
fundamentally change their practice patterns and workflows,” he says.
has created products that focus on improved quality in other parts of the
country as well, such as the Arkansas HealthCare Payment
Improvement Initiative (AHCPII), a collaboration with Arkansas Medicaid and QualChoice. With an
episode-based payment model, AHCPII seeks to move away from a system focused on
volume and toward one that promotes better coordination of care.
A designated Principal
Accountable Provider (PAP) oversees an episode of care and is responsible for
its performance. Each year, the health plan determines a PAP’s performance and
payment based on quality of care and resource use. Other participating
providers receive reimbursement at standard fee-for-service rates and have
access to reports to learn about opportunities for improvement.
"If there are
providers [PAPs] in our state that can demonstrate higher quality of care while
controlling costs, the episodic payment program creates incentives for other
providers to achieve that level of value,” Max Greenwood, director of government
and media relations for Arkansas BlueCross BlueShield, says via email.
On the government side, CMS’s Comprehensive Primary Care Plus (CPC+) model incorporates public and private payers
to improve patient care and reduce clinical variation. Comprising two tracks,
CPC+ supplies educational resources and data to support participants in care
delivery, with practices paid based on performance.
In Round 1 of the model, 2,816 primary care
practices work with 54 aligned payers throughout 14 regions, while in Round 2,
up to 1,000 practices work with seven payers in four regions. Round 1 is
expected to run through the end of 2021 and Round 2 through 2022.
Both payment tracks include a risk-adjusted care
management fee, and practices also receive payment based on performance
measures that are focused on efficient clinical care, patient safety,
communication and care coordination, community/population health, and cost reduction.
CMS also reimburses Track 1 practices with
regular Medicare fee-for-service payments for covered evaluation and management
services. Track 2 practices receive a combination of fee-for-service payments
and a “comprehensive primary care payment” to account for in- and out-of-office
“CPC+ is grounded in
value-based compensation models providing improved payments to practices that
objectively demonstrate capabilities to deliver high-quality, cost-efficient
primary care,” Aluko (pictured at right) says. “One year into its existence, the model has large
potential, but value realization from this novel program is still pending.”
To incentivize consumers to proactively manage
their health, approaches such as the Medicare Advantage (MA)
Value-Based Insurance Design (VBID) Model have created cost-sharing
elements for health plan enrollees. Beginning in 2017, VBID allows MA plans to offer
additional benefits or decrease cost-sharing for enrollees with certain chronic
conditions. CMS tested the model in seven states in 2017 and is rolling it out
to additional states over the next couple of years; the model will run for five
Eligible MA plans that receive CMS approval in
designated states can customize benefit designs for enrollees with diabetes,
congestive heart failure, chronic obstructive pulmonary disease, past stroke,
hypertension, coronary artery disease, mood disorders, or combinations of these
The model examines whether patient cost-sharing and other health plan features
motivate enrollees to use high-value services that can positively impact their
health while lowering costs. Enrollees in the model have the opportunity to lower
their cost-sharing and receive more benefits—and are not at risk of paying
higher costs or receiving fewer benefits than other participants.
This type of payment model—which other payers such as Mayo Clinic,
BlueCross BlueShield of North Carolina, and state employee programs have
explored—has the potential to better involve consumers in
their own health outcomes. Some models may incorporate higher cost-sharing for certain
elective health choices. “It is a
good thing to encourage patient responsibility by way of self-empowerment through
education, and by providing additional insight that financial consequences
might exist for patients who continue controllable adverse lifestyle choices
and behaviors,” Aluko says.
Efforts to reduce clinical variation and
enhance patient care have also manifested in joint ventures between health
plans and providers. By sharing financial accountability and merging resources,
these partnerships have the potential to better manage patient populations
while lowering costs through value-based payment.
For example, Allina Health and Aetna have
created a jointly owned health plan company, Allina Health and Aetna Insurance Company, for
employers and consumers in the greater Minneapolis-St. Paul area, with plans to
launch insurance products in 2018. The company aims to utilize insurer and
provider data, integrated care, benefit design, and administrative support to
improve the consumer experience.
“The joint venture’s goal is to accelerate the
move away from fee-for-service health care to outcomes-based health care,”
Brigitte Nettesheim, Aetna’s president of transformative markets, says via
email. “In part, this helps ensure the more efficient use of healthcare
dollars, including the elimination of waste.”
Aetna and Allina Health will share information
about their members beyond demographics and insurance coverage, such as most
recent details about their health and any therapies. Aetna anticipates that
engagement of members in their own care will be higher in this market, as has
been the case in the four other joint ventures that the insurer has established
throughout the country.
Aetna has been collaborating with physicians
and healthcare organizations to build these products for more than seven years.
As of early 2016, providers in value-based arrangements had delivered care for
nearly 6.2 million Aetna members, representing an estimated 40 percent of the
company’s payments for medical care.
“This 50/50 partnership aligns both Allina
Health and Aetna’s incentives to deliver the best care in the most efficient
way possible,” Nettesheim (pictured at right) says. “Joint ownership of this new company, with
shared-profit-and-loss potential, will accelerate the change that’s necessary
to improve quality and experience while addressing affordability.”
The impact of such efforts on the industry is
uncertain. Many payment models have launched only recently, and approaches vary
across payers. “It’s still a fragmented response to an industry that requires a
more integrated response,” Aluko says. “From a macroeconomic perspective, is it
impacting cost reduction across the industry? We haven’t seen that yet.”
The acceleration of these types of products is
expected to continue, and if nothing else, the alignment of such products with
value-based payment shows the potential to reduce clinical variation and
improve care quality.
Health Care Transformation Task Force members,
including Aetna, established a goal of having 75 percent of business in
value-based arrangements by 2020. With value-based care models being
established in multiple markets, the focus on improved quality and reduced costs
will continue as a key factor in health plan business strategies.
While the industry-wide impact has yet to be
determined, Aluko notes that this approach “has created a culture
transformation within systems and physician enterprises that understand they
could be at financial risk if they
are unable to transparently demonstrate delivery of best practice in clinical
Barker is a digital communications professional and freelance writer in
in this article: Yele Aluko, MD, chief medical officer, Americas Advisory Health, EY; Max Greenwood, director, government and media relations,
Arkansas BlueCross BlueShield; Brigitte Nettesheim, president,
transformative markets, Aetna; Thomas Schenk,
MD, vice president and chief medical officer, BlueCross BlueShield of Western
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