Multi-Payer Alignment Key to Advancing Value-Based Care in Medicaid

In a new letter to Medicaid directors, CMS called for multi-payer alignment in value-based care arrangements run by the state healthcare programs.

The Sept. 15th letter providers guidance to the Medicaid leaders on how to advance value-based payment, which is a key driver of value-based care according to CMS, by identifying appropriate alternative payment models and aligning financial incentives across payers.

“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. “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.”  

Many states have already made progress with moving toward value-based payment, which is a key driver of value-based care since fee-for-service incents “higher volume and greater spending, rather than accountability for costs and outcomes,” CMS said in the guidance in state Medicaid directors.

However, Medicaid made more fee-for-service payments to healthcare providers in 2018 compared to any other payer (66.1 percent versus the industry average of 39.1 percent), according to the latest data from the Health Care Payment Learning & Action Network.

Additionally, Medicaid had the least amount of payments through an alternative payment model that year (23.3 percent versus 30.1 percent for private payers, 53.6 percent for Medicare Advantage, and 40.9 percent for traditional Medicare).

“States have the opportunity to learn from Medicare and private payers in implementing VBC and should strongly consider aligning payment incentives and performance measures across their healthcare systems to reduce the burden on providers who participate in multiple programs,” CMS stated in the letter.

“Alignment may also serve to improve the healthcare experience for individuals across their states, including those covered under Medicaid, Medicare, and commercial insurance products,” the agency continued.

The guidance also addressed other considerations for state Medicaid directors, including delivery system readiness, stakeholder engagement, and the scope of financial risk to providers. It also describes ways for Medicaid programs to implement value-based care models, such as bundled payments and capitation, using Medicaid managed care organizations or direct reimbursement to providers.

But multi-payer alignment will be the key to pushing forward sustainable value-based care models, CMS emphasized.

“Multi-payer participation amplifies the impact of new innovative models and drives care transformation across the healthcare system. States should consider, when designing their programs, aligning the incentives employed in their Medicaid program with those developed by the Innovation Center, as well as those available in other public and private programs,” the agency stated in the guidance.

Aligning quality metrics, financial incentives, and other model components across different payers can accelerate the transition to value-based care by simplifying the shift in payments and reducing the administrative burden of implementing more complex payment models.

CMS has already seen this in with the Comprehensive Primary Care Plus, a multi-payer advanced primary care medical home model. The agency is also launched Primary Care First, another multi-payer model for primary care starting in 2021.

Medicaid programs can align their value-based efforts with models in Medicare to support primary care delivery, CMS told state Medicaid directors.

Alternatively, they can take an “incremental approach” that aligned performance and outcomes measures in Medicare value-based care models with those used in other public or private programs, such as Medicare’s Merit-Based Incentive Payment System.

“Such alignment may ease the administrative burden on providers as they choose to participate in multiple programs,” CMS stated.