September 23, 2019

Value-Based Payment

Sam Werdel, Director of Practice Transformation

Value Based Payment (VBP) contracts continue to be at the forefront for healthcare. J.D. Fischer, Value-based Purchasing Manager for the Health Care Authority presented at the September 19th Leadership Council meeting on the outcome of VBP provider surveys, and VBP contracting percentages and timelines for the state. In addition, a panel consisting of the four Managed Care Organizations led to in-depth discussions around innovative and customized VBP contracts, the importance of data and understanding the data in relation to contracting, how interoperability drives VBP, and how organizational culture drives practice transformation.
In the predominant fee-for-service model, payers reimburse providers a fixed fee per service rendered from a contracted list of approved services. Value-based payment (VBP) models hold providers financially accountable for the cost and the quality of care they provide. VBP models reward providers financially for delivering better, more cost-effective care, and can penalize the provider/organization for failing to do so.
VBP models come in different flavors, varying in the level of provider accountability they require. The level of payment a provider receives is attached to cost and quality metrics. These metrics, which may be developed are imposed by government agencies such as the Centers for Medicare and Medicaid Services, state health departments, and/or health systems themselves. These metrics ensure that providers do not cut costs at the expense of patient outcomes.
Examples of quality measures include post-hospitalization readmission rates, provider-to-patient ratios, in-patient follow-up, and percentage of patients receiving preventative care (such as immunizations). VBP contracts can also be innovative outside of the normal target metric system.
The MCO’s encourage providers to build relationships to discuss data and metrics that meet their organizational needs.
Additionally, J.D. provided the audience with the stakeholder roles related to defining, delivering, measuring, and reinforcing VBP.  According to the following table, ACHs support VBP through investing in practice transformation for clinics, facilitating population health partnerships, and allocating DSRIP funds to support and reward VBP adoption.  MCOs enable VBP through contracting arrangements with providers, and providing them timely and actional data and attribution information.