How Medicare Successes Inform Medicaid Value-Based Care Progress

CMS has issued a letter to Medicaid directors regarding how states can accelerate their Medicaid value-based care adoption, based largely on lessons learned in CMS efforts toward value-based care in Medicare.

“The Trump Administration has long worked to accelerate the overdue move to value-based care, but for too long these efforts have been piecemeal,” said CMS Administrator Seema Verma in the press release.

“Our health care providers need Medicare, Medicaid and private insurance payers to work in tandem with one another, and I am calling on our state partners to use this guidance to develop a plan to improve quality for their Medicaid beneficiaries by advancing value-based care in their own programs.”

The 33-page document covers a broad spectrum of ways that states and payers can motivate value-based care growth, even within fee-for-service systems.

The agency identified value-based payment models as the primary cause of value-based care progress. According to CMS, there are six key ways in which states can move their Medicaid value-based payment initiatives forward more quickly, based on Medicare’s successes.

First, states need to engage multiple payers in value-based care reforms in order to advance value-based care. CMS recommended that states align their programs with the Innovation Center. Furthermore, aligning performance measures across other state public or private programs may help reduce provider burden and allow providers to participate more broadly.

Second, states should assess the condition of their healthcare delivery system—including community-based organizations—to predict the impacts of various payment models. It may become apparent that not all provider types are ready for value-based care arrangements.

Third, health information exchange and interoperability are key to moving forward state value-based care agendas. In order to ensure that their systems are up-to-date, states can take advantage of 90/10 enhanced system funding through the Advanced Planning Document process, CMS advised.

Fourth, states must implement strategies that enforce transparency in stakeholder engagement.

“The goals of any reform should be clearly articulated and participation requirements should be transparent and predictable for payers, providers, and beneficiaries,” said the letter.

Beneficiaries are included in the circle of stakeholders that states must engage in this process. The impact that value-based care policies would have on beneficiaries should be central to how states develop these policies. For example, CMS underscored that states should not implement policies that fail to encompass beneficiaries due to specific health conditions.

Fifth, states need to implement quality measures that can be used across payers and care sites. For optimal quality incentive, states need to ensure that providers will receive their reimbursement soon after the incentivized action.

Lastly, states should develop a strategy for long-term value-based care growth, not programs that serve merely immediate needs with value-based care solutions.

Throughout the document, CMS emphasized its flexibility.

“CMS understands that states face unique circumstances in their healthcare landscapes, and what works for one state may not necessarily work for another state,” the letter stated.

Private payers and value-based care experts have voiced similar advice. John Bennett, MD, president and chief executive officer of Capital District Physicians’ Health Plan (CDPHP), recommended that payers look into establishing global payment models in order to advance value-based care during the COVID-19 pandemic.

“The level of payment can be risk adjusted and there can be quality and service metrics for bonuses,” Bennett told HealthPayerIntelligence. “We've had that model with our primary care physicians for years and it works very well.”

Like CMS, Jason Woods, vice president of provider network strategies at Priority Health, emphasized longevity as crucial to building momentum with a value-based care model.

“We’re making sure that we've got the right transparency around the economics and that we're making clear to them what's involved in the pricing targets. And we’re making sure that we can really help support them in making the behavioral changes that are necessary in order for those agreements to work long term,” Woods said to HealthPayerIntelligence.

Value-based care adoption has not slowed to a halt despite COVID-19. Payers like Blue Cross and Blue Shield of North Carolina continue to develop value-based care arrangements with providers.

However, Medicaid spending has been much higher than expected for 2020—mostly due to the pandemic.

“Value-based care may also help ensure that the nation’s healthcare system is better prepared and equipped to handle unexpected challenges, including the ongoing COVID-19 pandemic,” CMS noted.