Value Based Purchasing –
What Health Plans Need from Treatment
Providers
May 5, 2017
Presenter Kelley Grayson
© 2016 Envolve.
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Bridging the Gap: Value Based Payments (VBP)
& Alternative Payment Models (APM)
© 2016 Envolve.
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Washington Health Care Authority (HCA) State
Roadmap 2017 - 2021
 HCA has pledged that 80 percent of HCA provider payments
under State financed health care programs—Apple Health
(Medicaid) and the Public Employees Benefits Board (PEBB)
program—will be linked to quality and value by 2019.
 HCA’s ultimate goal is that, by 2019, Washington’s annual health
care cost growth will be 2 % less than the national health
expenditure trend.
 If the Medicaid 1115 Waiver is approved then HCA pledges 90% of
provider payments will be linked to quality and value by 2021.
© 2016 Envolve.
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HCA: Four Payment Redesign Strategies
Integrated physical and behavioral health care
• This is an initiative under Healthier Washington to bring together the payment
and delivery of physical and behavioral health services for people enrolled in
Medicaid, through managed care.
Encounter-based to value-based payment models
• More than 41 percent of current Medicaid beneficiaries and 1 in 10
Washingtonians are served in a federally qualified health center (FQHC) or a
rural health clinic (RHC) for primary care. Then state has introduced a valuebased alternative payment methodology in Medicaid for FQHCs and RHCs.
Accountable Care Program and multi-purchaser
• Each network (Univ of WA CAN and Puget Sound High Value Network) under the
Accountable Care Program (ACP) will deliver integrated physical, mental health,
and substance use disorder services, and assume financial and clinical
accountability for a defined population of PEBB Program members. ACPs are
reimbursed based on their ability to deliver quality care and keep PEBB Program
members healthy.
Greater Washington multi-payer
• Northwest Physicians Network and Summit Pacific Medical Center are
contracting with the Health Care Authority to pilot the Greater Washington Multipayer model, where providers will coordinate care, share data across multiple
payers and support providers in adopting value-based payment models.
© 2016 Envolve.
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What are Value-Based Payments or Value Based
Purchasing Models?
Payment or Models that reward (pay) for improved
quality, outcomes, and costs. A shift to value-based
reimbursement models creates a new paradigm
where care is delivered by an entire coordinated
care community sharing in the responsibility—
and risk—of outcomes and costs, touching almost
every part of health care delivery operations
© 2016 Envolve.
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What are Alternative Payment Models &
Methodologies?
 Various reimbursement strategies that pay for Value as opposed to
Volume….a shift away from FFS.
 Typically start with FFS + quality incentive and then “RAMP” to more
risk-based models.
 Models that “bundle” reimbursement for multiple services as part of
an episode of care. Example case rate or DRG.
 Models that pay an enhanced encounter rate or even capitated rate
which is inclusive of services outside of the provider’s normal scope
of care ...designed to promote integrated care approach.
 They encourage efficiency by allowing Provider more flexibility on
how the $’s are spent to provide care.
 They always, always, always should include Quality and/or Efficiency
Measures.
© 2016 Envolve.
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Examples of APMs used by Insurance Payers
© 2016 Envolve.
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CMS Framework for Value‐based Payments or
Alternative Payment Models
© 2016 Envolve.
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Are You Ready For A Value-Based World?
• Develop Your Support Team: As utilization/care coordination
moves from payer-led to provider-led, providers will need to
structure how to manage a bundled payment and stay within
financial allowances
• Invest in IT: Providers need to generate and monitor patient
utilization reports, validation of encounter data submissions,
financial utilization reports by member, quality performance targets
• Develop programs around payer needs: Most VBPs will ask for
something extra clinically – timely patient access, outcome
accountability, process measures – and providers should be building
programs that a payer can then purchase
• Understand Risk Stratification: SUD is a big driver in today’s health
care landscape. Payers are using risk stratification tools to “predict”
cost of care and promote pre-emptive treatment protocols.
• Networking/Marketing: Payments will be tied to providing more of
a full array/continuum of services. You will potentially need to
partner with other providers in order to take advantage of the new
models.
© 2016 Envolve.
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Negotiations: What You Should Know
• QUALITY: Almost all value based models will require you to meet
quality/efficiency metrics. You need to understand what these
measures are and how you are performing on them today.
• FINANCIAL RISK: In an APM, you need to understand what if any
risk is being agreed to on your part and whether or not your
organization can tolerate that risk. Learn what terms like “leakage,
shared risk, full risk, upside only, capitation, partial cap, DOFR &
downside risk” mean. Understand what member attribution means
and how that works.
• LEGAL: APMs that are bringing multiple providers together in
order to participate in a shared reimbursement deal will require
legal review. Be sure you understand how patient information will
be protected; how your organization will be paid; what
credentialing and/or contractual requirements need to be met; etc.
• REPORTING: Most if not all of these models will require some type
of reporting. Be sure you understand how this requirement
impacts you and your organization.
© 2016 Envolve.
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Examples of SUD APMs:
 CCBHCs – Certified Community Behavioral Health Clinic
incentivized through an encounter rate for BH services, Physical
Health screening and care coordination, in addition to Substance
Use Disorder services. If no SUD in-house, then designated
collaborating organization (DCO) negotiated with SUD provider.
 ACPs – Accountable Care Program where “select” or “narrow”
network developed to support full continuum of care.
 MAT/OTP – SUD programs designed to promote addiction
recovery. Payer typically will negotiate bundled payment rate
plus include Quality/Efficiency metrics (ex reduction in
Inpatient Detox/Rehab for members treated).
 Quality/Efficiency – Participate in pay for performance (P4P)
programs. Ask payers about them when you are negotiating.
All payers have requirements around encouraging participation
in these programs.
© 2016 Envolve.
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Resource links:
https://www.hca.wa.gov/assets/program/vbp_roadmap.pdf
https://www.hca.wa.gov/assets/program/2016.12.20.Common-Measure-Set-HealthCare-Quality-Cost-Approved.pdf
https://www2.deloitte.com/us/en/pages/life-sciences-and-healthcare/articles/value-based-care-life-sciences-and-health-careservices.html?id=us:2ps:3gl:vbc:awa:lshc:031517:ad1:kwd291392402793:%2Bvaluebased%20%2Breimbursement&gclid=CN_CzP6b1dMCFQqPaQodD2YMUA