Washington State Updates Value-Based Payment Roadmap
Much of the focus on value-based care has been on Medicare-related and commercial accountable care organizations, but a great deal of innovation also is happening on the state level in Medicaid programs. For example, Washington state is working toward a goal of 90 percent value-based purchasing by 2021, and recently released its value-based purchasing roadmap for 2022 through 2025.
The state Health Care Authority’s vision for 2025 is that value-based payment (VBP) arrangements will be aligned across all public purchasing programs and advance multi-payer primary care models where appropriate. In addition, these payment arrangements will be rooted in data-driven policy making, requiring HCA to collect and use actionable data to reinforce accountability among delivery system networks as well as provider and managed care organizations.
The scale of the state’s responsibilities highlights what is at stake from both a healthcare and financial perspective. Washington purchases coverage for more than 2 million people and spends more than $12 billion annually between the Apple Health (Medicaid), the Public Employees Benefits Board (PEBB) and School Employees Benefits Board (SEBB) programs. In 2014, state legislation directed the HCA to increase the use of value-based contracting under state-financed health care programs.
Washington’s State Innovation Models (SIM) grant expired in 2019, and its Medicaid Transformation Project (MTP) waiver expires at the end of 2021. One way in which MTP advances VBP is through regional Accountable Communities of Health (ACHs). Each region’s ACH supports providers in adopting VBP, and each ACH is required to develop plans to enable the success of APMs.
HCA noted that it plans to build on these efforts and that decisions and investments made today will lay a foundation for sustained healthcare transformation in 2022 and beyond.
Like many state healthcare agencies, HCA adopted the Alternative Payment Model framework created by CMS through the Health Care Payment and Learning Action Network (HCP-LAN). The APM framework defines APMs along a spectrum, starting at fee-for-service payments with no link to quality or value and escalating to population-based payments, such as global budgets.
Multi-payer approach
In one innovative approach, Washington is testing integrated data platform capacity to allow providers to coordinate care, share risk and engage a sizeable population across multiple payers. The idea is that by using a claims and clinical data aggregation strategy providers, will be able to enter into value-based payment arrangements and effectively engage in care coordination and population health management. Integrating data across multiple payers and delivery systems is essential to presenting providers with a unified view of their patient population, the roadmap says.
Northwest Physicians Network and Summit Pacific Medical Center are contracting with the HCA to pilot this multi-payer model.
Rural focus
Rural health is a key issue for the state to address. 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. Most of rural Washington is served by federally designated critical access hospitals (CAHs). With support from these clinics and hospitals, HCA introduced a value-based alternative payment methodology in Medicaid for FQHCs and RHCs, and is pursuing flexibility in delivery and financial incentives for participating CAHs. The model will test how increased financial flexibility can support promising models that expand care delivery. The Rural Multi-Payer Model addresses primary care and hospital services under a budgeted approach that rewards for value. The construct aligns payers and providers across rural regions and focuses efforts on improved outcomes for shared benefit.
In another innovation, Washington is working with the University of Washington Accountable Care Network and the Puget Sound High Value Network LLC to test a new accountable delivery and payment model, known as the Accountable Care Program (ACP). Each network under the ACP delivers integrated physical, mental health, and substance use disorder services, and assumes financial and clinical accountability for a defined population of PEBB program members. ACP networks are reimbursed based on their ability to deliver quality care and keep enrollees healthy.
Challenges to address
HCA issues two annual surveys to track health plan and provider progress toward its goals. In 2020, eight health plans and 173 provider organizations responded to the Paying for Value survey, reflecting data from the 2019 calendar year.
When asked about ways to make adoption of VBP possible and appealing, both health plans and providers cited similar enablers centered around trusted partnerships, aligned incentives, and aligned quality measures. Barriers to adoption varied more widely between health plans and providers. For health plans, key barriers included payment model uncertainty and disparate quality measures and incentives. For providers, barriers included the lack of data and insufficient patient volume. Both providers and health plans cited the lack of interoperable data systems as key barriers to success.
The COVID-19 pandemic
In many ways, the pandemic has exposed the challenges Washington’s healthcare system faces, and makes HCA’s work toward a more equitable, affordable, and high-quality health care system even more urgent, the roadmap states. “The VBP program positioned the state to better respond to COVID-19 by allowing managed care organizations (MCOs) to make upfront monthly payments to financially distressed providers. VBP programs could further help providers by providing a more predictable funding stream through global payment and other pre-paid arrangements. Ultimately, the pandemic exposed a critical flaw in fee-for-service (FFS) payment models when many providers found themselves financially vulnerable because of decreased utilization.”
The pandemic may encourage some providers to transition from FFS to VBP models, including, but not limited to, capitated arrangements. In addition, VBP arrangements in the future will have to consider the impact of virtual care on utilization, quality, outcomes, access, equity and patient experience.
The provider survey asked how the pandemic has affected provider practice’s ability or capacity relative to VBP:
• Approximately 40 percent of responding providers noted a reduced willingness to take on additional risk and/or VBP contracts.
• Nearly 90 percent of responding providers cited negative impacts on quality measure reporting and/or quality performance, and over half noted challenges to the sustainability of normal business operations.
HCA asked providers how the health system should adjust VBP strategies in light of the pandemic:
• Approximately 50 percent of responding providers suggested reducing or limiting risk-based payment models until the pandemic is over.
•Nearly 60 percent suggested pausing the expansion of VBP and instead focusing on sustaining access to telehealth services.
A focus on health equity
Addressing social determinants of health (SDOH) is among HCA’s key priorities moving forward. Its approach includes incorporating measures to address SDOH and expanding access to nontraditional services as well as requiring coordinated efforts across Washington’s health and social service agencies.
HCA will address SDOH over the long-term through the following activities:
• Establish appropriate and impactful ways to capture partners’ impact on SDOH, and ultimately incentivize partners to address SDOH.
• Continue to examine the roles of MCOs, ACHs, PEBB, SEBB, and provider partners in advancing SDOH objectives. In addition, establish appropriate strategies to reward and hold partners accountable to supporting clients’ SDOH needs.
• Engage in standardization of SDOH data elements and processes for SDOH data-sharing across public and private partners.
• Explore including nontraditional and evidence-based services that address SDOH in bundled payments. This may include expanding benefits to include upstream, nonmedical interventions in state-financed healthcare programs, and more broadly throughout the healthcare system.
• Explore requiring MCOs to measure and report SDOH intervention impact.
• Actively engage with other Washington health and human services agencies to advance SDOH objectives.
HCA also will use its status as a purchaser to reduce health inequities and work to measure and hold partners accountable to advancing health equity, including segmenting quality data by race, ethnicity, and language categories.
Successful measurement of health equity will require robust data systems that support data disaggregation to reveal meaningful health disparities. HCA will explore opportunities to move beyond risk-adjustment, which can hide inequalities, toward also requiring risk stratification. This additional step can shine a light on and allow for the measurement of disparities.
