VALUE BASED PAYMENTS UPDATE
By Christine Blidy, Chief Network Officer, DSRIP
New York State continues to emphasize the importance of transitioning Medicaid payments away from the traditional fee-for-service model to payments that are based on high quality and cost effective care. There is renewed recognition of the importance of the primary care office and community-based care to keep patients out of the emergency room or hospital for conditions that should ideally be managed in an ambulatory setting.
Value Based Payments (VBPs) are no longer a vague or futuristic concept. The following regulations require this transition to begin in 2018 and be fully implemented by 2020.
High level summary of NYS requirements for Value Based Payment Transition:
- Every Medicaid managed care organization (MCO) must submit a growth plan outlining their path towards 90 percent value-based payment.
- Plans will be compared to each other and be weighted based on speed of implementation, level of risk, total dollars at risk, and approach.
- MCOs with more ambitious growth plans will receive a premium bonus.
- At least 10 percent of NYS MCO expenditures must be contracted through Level 1 VBPs or higher.
- At least 50 percent of NYS MCO expenditures must be contracted through Level 1 VBPs or higher.
- At least 15 percent of NYS MCO expenditures must be contracted through Level 2 VBPs or higher.
- At least 80–90 percent of NYS MCO expenditures must be contracted through Level 1 VBPs or higher.
- At least 35 percent of NYS MCO expenditures must be contracted through Level 2 VBPs or higher.
- MCOs who fail to comply will be penalized resulting in reductions in their payments from NYS.
Important — Be Proactive
We recognize managed care companies are under tremendous pressure to comply with these regulations and are being offered financial incentives to adopt Value Based Payments sooner rather than later. This will result in significant changes in payment policies and methods in the market.
It is important to proactively prepare for these changes and be ready to negotiate advantageous Value Based contracts.
Initially, if your practice is new to value based payment arrangements, a contract should be structured to protect an entity from any unanticipated decreases in revenue expectations.
At the same time, the new contract should offer the opportunity to share in a portion of any cost savings and include additional incentives for improving quality metrics.
Important – New VBP Contracts Should Offer ‘Upside Only’ To Start
It is important to ensure that the contract offers “upside only” opportunities during the transition to payments based on value. This will give the practice time to determine how best to manage patients and implement programs that result in optimal cost and quality performance. Shared savings may also represent a new source of revenue that can be used to fund the changes that will be necessary to prepare providers for the inevitable move to risk based contracting.
Always keep in mind during this transitionary period, that failure to meet established goals, quality standards and cost thresholds will inevitably result in revenue reductions as Value Based Payment contracts mature. It is imperative that practices begin to prepare now for the reality of the new value based payment system.
Next Steps: VBP Needs Assessment Survey Results
Millennium is currently in the process of compiling the results of the Value Based Payment needs assessment survey that was sent out to our provider partners in the Fall.
Aggregate results will be shared on our website and a comprehensive plan will be developed around training, education and other types of support that will assist our partners in this transition.
The staff at Millennium stand ready to assist you. Please feel free to email us with any questions, concerns or suggestions at Value-Based-Payment@millenniumcc.org