Humana launches value-based payment program for hospitals

Humana building
Following industry calls for CMS to do more with value-based arrangements, Humana is taking matters into its own hands. (Humana)

The private insurance market is pushing forward with outcomes-based pricing programs amid calls for the Centers for Medicare & Medicare Services (CMS) to ramp up efforts to shift toward value-based care models.

Louisville, Kentucky-based Humana announced Wednesday the launch of the Hospital Incentive Program , intended to reduce duplicative services and hospital readmissions, which can be costly.

Under the program, which is available to hospitals with an active commercial contract with Humana, payments will be made to general acute care hospitals based on how they improve patient experience, safety and outcomes compared to other hospitals in their region or nationally. Measures in the program for care coordination and palliative care were developed in partnership with The Joint Commission.

Free Daily Newsletter

Like this story? Subscribe to FierceHealthcare!

The healthcare sector remains in flux as policy, regulation, technology and trends shape the market. FierceHealthcare subscribers rely on our suite of newsletters as their must-read source for the latest news, analysis and data impacting their world. Sign up today to get healthcare news and updates delivered to your inbox and read on the go.

The announcement is the latest attempt by the insurer to invest more in value-payment arrangements, following its decision to implement bundled-payments for maternity care

RELATED: Humana dives into value-based care for maternity health

“This program expands Humana’s reach in value-based care as we broaden our efforts to provide a better experience for our members and help them achieve their best health," Caraline Coats, vice president of Humana’s Provider Development Center of Excellence, said in a statement. 

The insurer's announcement comes as the industry is calling on the federal government to expand value-based programs under Medicare and reduce barriers that prevent such models from being implemented in the private sector. 

RELATED: Future CMS innovation center initiatives could include outcomes-based drug pricing

As part of a request for information to the Medicare agency, insurers and hospitals urged the agency to implement more value-based programs to try and curb ever-increasing healthcare spending

Humana's program, however, does not come with any financial risk to hospitals, like some Medicare programs do. Under risk-based models, providers could be subjected to financial penalties if they fail to improve outcomes or curb spending. 

Such contracts have proved successful in reducing spending compared to non-risk contracts, which have been less fruitful.