Among the biggest lessons for Arkansas Blue Cross and Blue Shield from its value-based payment initiatives is that multi-payer approaches are key.


Oct. 27—Insurers pushing to expand value-based payment say they are seeing their two-sided payment models drive changes in the way providers approach care.

David Anderson, president and CEO of BlueCross BlueShield of Western New York and BlueShield of Northeastern New York, touted the early success of a revenue-neutral program, called BestPractice, that the insurer launched at the beginning of 2017 to encourage primary care provider accountability.

“It’s early, but where we are seeing it is in referrals for site of service,” Anderson said about early savings from the initiative, which came in a market slow to adopt value-based payment initiatives.

Anderson said providing primary care physicians (PCPs) with comprehensive quality metrics for specialists has allowed physicians to base referrals on substantive cost and quality results, instead of merely personal relationships.

“What is their post-op procedure compared to this person right here? They don’t know any of that,” Anderson said in an interview. “This process is bringing that information forward.”

PCPs are then measured by the payer on their total cost of care, which is affected by referrals to specialists with lagging quality, to drive changes in referral patterns. That measurement affects the monthly care management fee, which the 1,000 participating PCPs receive in addition to fee-for-service payments and which can drive their compensation 10 percent to 20 percent higher than before the program.

“And we’re seeing those changes,” Anderson said.

By the time the program has been operational for a full year, Anderson expects it to produce greater cost transparency at the PCP level, changes in referral patterns, higher provider engagement, better value-based literacy among PCPs, and better improvements in HEDIS scores than occurred under previous pay-for-improvement initiatives.

Arkansas Results

Value-based payment initiatives in Arkansas also have produced positive results in recent years, said Curtis Barnett, president and CEO of Arkansas Blue Cross and Blue Shield.

For instance, episode of care (EOC) bundles of healthcare services, focused on several conditions, cut perinatal costs by 0.3 percent from 2013 to 2016 and total hip and total knee replacement costs by 2.8 percent from 2012 to 2016.

Similarly, a two-year patient-centered medical home model (PCMH) was credited with reducing hospital readmission rates, emergency department (ED) visits, ED-related costs, and inappropriate ED utilization.

Among the keys to success for such initiatives was improved communication with providers and other insurers, including through weekly multi-payer meetings, meetings with the Arkansas Hospital Association and Arkansas Medical Society, and monthly practice support-team meetings.

Also key was implementation of what Barnett called an advanced health information network, which included multi-payer EOC reports, a care management portal, and a PCMH portal.

Lessons Learned

Among the biggest lessons that Arkansas Blue Cross and Blue Shield has drawn from its value-based payment initiatives in recent years was the importance of multi-payer approaches.

“We tend to be the market-share leader in the state of Arkansas, but we realized very quickly that any one private payer would not represent enough volume to get the practices to make the investments that were needed to transform their practices in the way that they needed to,” Barnett said at a Washington, D.C., briefing.

The insurer, other payers, and the state applied that lesson to their participation in the federal government’s Comprehensive Primary Care Plus (CPC+), which launched Jan. 1. Seven payers and 182 practices in Arkansas are participating in CPC+, which centers on implementation of an advanced PCMH model.

“We think this will allow us to have a much greater impact going forward,” Barnett said, referring to a multi-payer approach.

Also important is coming to agreement in the ongoing debate over appropriate quality measures.

“What you need to do is determine your methodology and definition of quality, and that’s probably not going to be identical to the next person’s and that’s OK,” Anderson said.

Quality needs to be “directional” and have a basis in science, he said.

“But if we’re going to wait for some uniform definition and process to determine quality that are going to be applied in every circumstance, nothing will get done,” Anderson said.

On the key question of enticing PCPs to follow a payer’s best practices, Anderson said he was surprised to find that no coercion was needed.

“We’re at well over 90 percent [adoption], so we never had to get to that point,” Anderson said. “They are willingly adopting for a variety of reasons.”

PCPs have accepted the insurer’s BestPractice payment model because it provides them with better data to be more accurate and efficient at the point of service.

Long-Term Trends

The insurance leaders and industry analysts also remain confident that the movement toward value-based payment will continue, regardless of the fate of the Affordable Care Act.

“Alternative payment models and the movement toward value-based care are here to stay,” Barnett. “It’s taken hold in the marketplace. As private insurers, what we hear from our customers is the expectation that we will continue to move down that path.”

Anderson said one challenge with value-based payment models is that the definition of value is changing for consumers along with the rise in consumerism and greater patient responsibility for healthcare costs.

“We will be challenged to make sure the model changes with that,” Anderson said.


Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

Publication Date: Friday, October 27, 2017