Value Based Payment Update

Millennium Collaborative Care would like to take this important opportunity to begin to provide all PPS Provider Organizations with important information about New York State’s planned transition to a “Value Based Payment” system.

This communication is the first of ongoing opportunities Provider Organizations will have to receive/review updates; attend upcoming educational sessions, and in general, become prepared to transition — per New York State directive — from pay-for-service to Value Based Payment by DSRIP Year 5.

Overall, Millennium’s objective is to provide guidance and resources to our partners as we move forward. Please review the following which has been organized into easy to read sections. Please send feedback and any immediate questions you may have to



According to Jason Helgerson, Medicaid Director, Office of Health Insurance Programs, in a presentation entitled:Implementing Value Based Payments – The Provider Perspective

  • A thorough transformation of the delivery system can only become and remain successful when the payment system is transformed as well.
  • Many of NYS system’s problems (fragmentation, high re-admission rates) are rooted in how the State pays for services.
    • Fee for Service (FFS) pays for inputs rather than outcome; an avoidable readmission is rewarded more than a successful transition to integrated home care.
    • Current payment systems do not adequately incentivize prevention, coordination, or integration.

unnamed (1)


  • By DSRIP Year 5 (April 1, 2019) at least 80 – 90% of all Provider Medicaid payments must be in a Value Based Payment Arrangement.


  • The State will show benchmarks and give guidance, but will not set rates.
  • There are a variety of options outlined in the roadmap, many details to be negotiated between MCOs and providers.
  • The State is committed to ensuring adequate reimbursement aligned with the value provided for the Medicaid population consistent with Federal Statute.
  • Reducing lower value care (ED admissions/re-admissions and ambulatory sensitive admissions) and increasing higher care value in equal portions = higher margins for providers.
  • MCOs may contract with providers directly or through PPS as it evolves. PPS should be utilized as administrative and best practice support moving forward
  • Roadmap pertains only to Medicaid Payment Reform.


This Roadmap is built upon the foundation already put in place by the State’s Medicaid Redesign Team (MRT) Payment Reform & Quality Measurement Work Group. That Work Group concluded that innovative payment reform and quality initiatives should:

  1. Be transparent and fair, increase access to high quality health care services in the appropriate setting, and create opportunities for both payers and providers to share savings generated if agreed upon benchmarks are achieved.
  2. Be scalable and flexible to allow all providers and communities (regardless of size) to participate, reinforce health system planning, and preserve an efficient and essential community provider network.
  3. Allow for a flexible multi-year phase-in to recognize administrative complexities including system requirements (i.e. Information Technology).
  4. Align payment policy with quality goals.
  5. Reward improved performance as well as continued high performance.
  6. Incorporate a strong evaluation component and technical assistance to assure successful implementation.
  7. Engage in strategic planning to avoid the unintended consequences of price inflation, particularly in the commercial market.
  8. Financially reward, rather than penalize, providers and plans who deliver high value care through emphasizing prevention, coordination, and optimal patient outcomes, including interventions that address underlying social determinants of health.


  • The VBP contractor assumes responsibility for the total care of its attributed population.
  • All services covered by mainstream managed care are included with a list of exclusions.


  • A “bundle” or “episode” is a VBP arrangement in which costs of a patient office visit, tests, treatment, and hospitalizations associated with a patient’s illness, medical event, or condition are grouped together.
  • There are different categories of episodes; acute or chronic.


  • For some specific sub-populations, severe co-morbidity or disability, may require highly specific and costly care needs, so that the majority (or all) of the care delivery and costs determined by the specific characteristics of these members, a capitated model (PMPM) is best suited.
  • The following are the sub-populations;
    • HIV/AIDS
    • HARP
    • Managed Long Term Care (MLTC)
    • Care for the Developmentally Disabled

unnamed (2)


  • Risk is complex – gradual change is best.
  • What is your organizational experience with risk beyond P4P and quality incentives?
  • What is your organization’s experience with data analytics and utilization to drive change?
  • What level of clinical integration/population management exists within your organization?
  • What is your organizations financial status?


  1. VBP Pilot Implementation – throughout 2016.
  2. Statewide Readiness Bootcamps – Educational Series, Fall 2016.
  3. Implementation of Work Group recommendations – Medicaid Model Contract & Provider Contract Guidelines will be updated to reflect changes made throughout 2015.
  4. Ongoing Clinical Advisory Groups – goal to finalize all clinical and quality measures by mid-2016.
  5. Formation of new Work Groups.


  • DY 2 — PPS will submit a growth plan outline path of their network toward 90% VBP.
  • End of DY 3 (March 31, 2018) – At least 50% of dollars of total MCO expenditure will be contracted with through Level 1 or above.
    • 15% contracted through Level 2 or above.
  • End of DY 5 (March 31, 2020) – 80-90% of total MCO expenditure at least Level 1.
    • At least 35% of total payments through Level 2 or higher for fully capitated plans and 15% Level 2 or higher for non-fully capitated plans.


VBP in Practice: The VBP Pilot Program

  • Participating pilot organizations are being identified in conjunction with the DOH.


  • Support the immediate adoption of VBP arrangements and the State’s transition to a VBP model.


  • Implement the VBP arrangement for two years, moving to Level 2 by Year Two (pilots may start at Level 1 in 2016).
  • Receive technical and administrative assistance (e.g. target budget assistance, data analysis).
  • Share and discuss lessons learned after Year 1 of the Pilot Program.

Financial Incentives:

  • No downward adjustments for the first two years of the Pilot, for plans and providers.
  • Upward adjustments based on performance, to plans and providers.
  • MCO incentive bonus.


In addition to reviewing the previous brief summary, all PPS partners should access and share the following pdf documents to continue to educate key members of staff.


In specific, review the VBP roadmap in depth, and begin preparing to receive the “Readiness Survey” to come from the PPS.


Begin active discussions on VBP concepts individually and as an organization. Identify how the PPS can help!

Additional information available at:

Please send feedback and any immediate questions you may have


DSRIP e-mail:


Add Comment

Your email address will not be published. Required fields are marked *

ECMC logo

The Erie County Medical Center Corporation (ECMCC) is the parent organization of Millennium Collaborative Care

Millennium Collaborative Care

1461 Kensington Ave
Buffalo, NY, 14215

t:  716-898-5389

© Millennium Collaborative Care.