Experts Share 5 Pivotal Payer Industry Trends To Watch in 2021

Strengthening value-based care partnerships

The pandemic underscored the strengths in value-based contracting and alternative payment models.

Experts have pointed out that provider practices in value-based contracts had greater financial stability through the pandemic. In particular, capitated payment models ensured that providers would continue receiving an income even when revenue plummeted due to deferred elective care.

Mike Polen, senior vice president and chief executive officer of Medicare at Centene, told HealthPayerIntelligence that value-based care partnerships would continue to evolve in 2021.

“Value-based care really sits on a continuum all the way from pure fee-for-service to your most complex value-based arrangements where you have fully delegated, fully capitated arrangements with providers,” explained Polen.

“We'll continue to see that model mature and you'll see more of it move up the continuum towards more of those sophisticated, more complex value-based arrangements.”

He attributed this continued evolution to the fact that both payers and providers are growing more comfortable with value-based care models. They are identifying how to exchange data, share responsibilities, and improve care coordination.

But beyond stress-testing alternative payment models, the coronavirus pandemic reminded payers and providers that they should strengthen their relationships in value-based care.

Blue Cross Blue Shield North Carolina (Blue Cross NC) continued to develop its value-based care contracts in 2020, exceeding its goal of having 50 percent of all eligible members in value-based care arrangements by the end of this year.

Von Nguyen, chief medical officer of Blue Cross NC, told HealthPayerIntelligence that he expected this trend to continue into 2021 for the health plan, but that increasing value-based care membership was not the only aim for next year.

“It's really about how we partner to strengthen that partnership so that we really make care more affordable as well as improving the quality of care for our members,” said Vaughn.

That relationship is key to the success of any value-based care agreement, a recent Insights report from Xtelligent Healthcare Media revealed.

Trust is a major stumbling block for payers and providers. Eleven percent of the private payer participants had a lot of trust in physician groups, but zero payers had high levels of trust in hospital or health system partners. On the other side of the table, only four percent of provider participants said that they had a lot of trust in their private payer partners.

Not only is there room for expansion, but also there is still room for improvement.

“There's going to be—or there needs to be—a lot more transparency and simplicity in terms of what things cost and why, that the payers are providing their own members,” said Paul Crnkovich, managing director at Kaufman Hall.

“It is kind of interesting that the pressure is on the providers to deliver to their customers detailed estimates of what things are going to cost and what the charges are going to be, but by and large they're just filtering through what their plans are from individual payers.”

Integrating behavioral, physical healthcare

In December 2019 before the coronavirus outbreak, the Path Forward Initiative released a list of five methods for securing behavioral healthcare reform. Among these, the organization recommended that employers and payers promote integrating behavioral healthcare into primary care services via collaborative care.

One year later, this reform goal still rings true and has gained even more evidence in its favor.

The need for mental and behavioral healthcare is undeniable. For example, in the first months of the pandemic, Blue Cross Blue Shield of Massachusetts found that its significant surge in telehealth claims was largely driven by visits for mental healthcare. Almost half of all of its claims during the early months of 2020 were related to mental healthcare.

Such high demand emphasized the need for a seamless solution, one that payers will continue to pursue in 2021.

“The pandemic is absolutely the right thing that we've been focused on for 2020—and for much of that early part of 2021 as well, as I suspect COVID is not going away,” said Nguyen. “But thinking really hard about how we continue to support and integrate physical and behavioral health will be critical in 2021 as well. It will be a priority for us.”

Telehealth has proven to be a major asset in that endeavor.

Integrating telehealth into the healthcare system

Telehealth became the only available solution for non-urgent care needs during the onset of the pandemic, forcing potentially years’ worth of cultural and technological adaptation in a matter of months.

Through this experience, industry leaders found that telehealth worked well in primary care, particularly in its diagnostic and follow-up capabilities.

“You end up with conditions resulting from not being able to do the appropriate follow-up that land you back in a higher cost environment. Telehealth is a perfect solution to make sure that those follow-ups can occur,” Polen explained.

Although telehealth answered many problems for healthcare in 2020, payers will need to answer several questions about its future in 2021.

“Telehealth is here to stay, but how it is actually integrated within the provider side has a lot of work to do yet,” said Nguyen.

“Leading payers will see this as just greater flexibility because ultimately it's going to be a cheaper and less invasive way to deliver care. So we have to make sure that it doesn't get too restrictive and that we're looking at it just in a pure transaction as opposed to the total cost of care.”

Leveraging Medicare Advantage flexible benefits, dual eligible managed care

Over the past couple of years, Medicare Advantage plans have received greater flexibility for benefit coverage.

In 2021, payers will continue to leverage these flexibilities to serve Medicare Advantage members. For open enrollment, health plans expanded on their chronic disease management and supplemental benefits.

One of the biggest changes will be the addition of coronavirus-related benefits. Over a third of health plans (34 percent) reported that they will be offering coronavirus benefits for the new year.

“I commend CMS for allowing plans to become a little bit more innovative and thoughtful around social determinants of health,” stated Polen. “That will be a continued trend, to identify what did the members really value? What can help them in the course of their daily lives to help support their overall health and wellbeing?”

Another trend in this space will be the increased integration of Medicare and Medicaid services for dual eligibles, Polen predicted.

Dual eligibles are well-suited to Medicare Advantage because they often have multiple chronic conditions. Medicare Advantage plans can target their needs through care management.

However, Medicare Advantage plans will need to better integrate care for dual eligible individuals. Care for this population can be fragmented since these individuals qualify for both Medicare and Medicaid.

“Duals are unique: they have to work with the state, they have to work through federal,” Polen explained. “What you're continuing to see is the need to integrate those two programs together so that the member has a seamless overall experience. Again, the focus is on being able to coordinate their care better than they currently are today, looking for solutions where you're integrating the various state and federal programs together, which ultimately should reduce costs and improve quality for the member.”

Accelerating cell gene therapy usage

Pandemic-era progress in cell gene therapy will be crucial for members with rare and unique diseases and will impact payers’ coverage and care management in this area of healthcare.

“Right now a whole genome sequence next year will be 700 bucks,” said Chris Carlson, UnitedHealthcare senior vice president of complex health solutions at United Healthcare. “And the ability to create a drug or a therapy tailored to a unique individual is going to rapidly accelerate. Even in 2021, we'll see transformational changes. This population would be directly affected and payers are going to be in this interesting space.”

Early on in 2020, payers were using value-based care contracts to trim gene therapy costs.

CVS Health and Aetna conducted research on the subject and found that payers can decrease their costs by using specialty pharmacies to obtain gene therapies and establishing outcomes-based payment metrics in the value-based contracts with contractual riders. Care coordination around the member will help lower costs even further.

Later in the year, technology companies developed and made available whole genome sequencing capabilities for COVID-19. This underscored the evolving role of gene therapies and gene sequencing for treatment.

In 2021, these therapies will continue to develop, Carlson emphasized. Payers will have to hone their strategies for making gene therapies accessible and affordable.

As the country enters a new year with unusual challenges, these themes will remain consistent: payers will need to strengthen their value-based care partnerships, integrate behavioral healthcare, solidify the role of telehealth, expand on Medicare Advantage benefits, and strategize around accelerating gene therapies.