NYAPRS Note: DOH recognizes that a five-year shift toward value-based payment in Medicaid and across other payers will be a substantial lift, not only in terms of the actual financial mechanisms and regulatory structure that governs healthcare transactions, but its impact on workforce development, provider networks, and service innovation. NYAPRS along with advocates and stakeholders from every level of the healthcare field—including hospital and long-term care representatives—are working with the state health agency to inform this ongoing process.
Quantifying Payments Tied to Value
Crain’s Health Pulse; 5/1/2015
New York, like the nation, is moving toward value-based payments. But how much have the state’s insurers and providers been weaned off the fee-for-service model? According to a new study funded by the New York State Health Foundation, not much at all. Among New York commercial plans, 94.3% of payments were FFS. In Medicaid, the figure was 72.6%.
The analysis of the commercial and Medicaid markets, conducted by the nonprofit Catalyst for Payment Reform, provides an important baseline assessment of payment reform with 2013 data. Those figures are on par with national averages.
“Both sectors have a long way to go in terms of moving away from fee-for-service, a goal in New York,” said Andréa Caballero, CPR’s program director.
Paul Macielak, president of the New York Health Plan Association, put it more bluntly: “Fee-for-service is still king in New York.”
Instead of value-based payments, CPR favors the term “value-oriented” payments—ones that take quality into account—to distinguish from bundled payments and other reforms that are based on cost savings. About one-third of payments to doctors and hospitals in New York state were value-oriented, calculated CPR: 34% of payments from the 10 commercial insurers surveyed, and 33% from 15 Medicaid plans. (The data excluded plans that specialized in long-term care, dual eligibles and behavioral health.)
The analysis of the commercial and Medicaid markets, online here, shows that for commercial contracts, less than 15% of payments put providers at financial risk for their performance, compared with 46% for Medicaid.
Most of the “flurry of activity” in payment reform was in the area of pay-for–performance contracts that awarded providers for meeting quality and cost goals. In the commercial sector, about 23% of value-oriented payments were PFP. In Medicaid, the most common variation, at 13%, was a non-FFS base payment combined with a shared savings agreement, usually ACO patient-centered medical home models.
Shared-risk contracts were rare. They made up less than 3% of payments from commercial insurers. Many providers weren’t ready to take on the responsibility for potential financial losses as well as the chance to share savings. In Medicaid, about 13% of value-based contracts were shared-risk, a figure skewed by provider-owned Medicaid plans.
The data show that 47% of the value-oriented commercial payments went to hospitals, “so a lot of hospital payments are tied to value,” said Ms. Caballero. But in an outpatient setting, only 15% of commercial payments were value-based. That low figure probably reflects the fact that few specialists opted for the arrangement—and that many may not have accepted insurance at all.
About 15% of commercial health plan members—1.6 million of 12.3 million members—were attributed to a provider in an ACO or PCMH.
http://www.crainsnewyork.com/article/20150501/PULSE/150439972/quantifying-payments-tied-to-value