There has been a sevenfold increase in the number of states implementing value-based payment (VBP) systems over the course of five years, according to a study commissioned by Change Healthcare. The follow-up 50-state review highlighted state governments’ efforts to implement these models.
Today, 46 states, the District of Columbia and Puerto Rico are implementing some sort of value-based model. Thirty-four or more states are two years or more into implementation, and eight states are in the early development of a new model.
Only Georgia, Mississippi, Indiana and West Virginia have yet to launch an official value-based care (VBC) model.
“What we did see is that there was significant growth in the number of states implementing VBP models since 2013,” Angela Evatt, manager of state policy strategy at Change, told FierceHealthcare. “A seven-fold growth between 2013 and 2015, which was around the time federal VBC efforts ramped up, including several programs aimed at hospitals (such as Hospital Value-Based Purchasing Program), as well as CMS Innovation Center SIM awards (beginning when recipients of Round One announced in February 2013) through to MACRA and the Value Modifier Program in 2015.”
So what do these VBC models look like? Half of the programs are multipayer. And 23 states have VBP targets or mandates that payers and providers have agreed upon.
Another 22 states have adopted or are considering the adoption of accountable care organizations (ACOs) to help manage costs and deliver better care, and 16 states are considering adopting episodes of care or bundled payment programs.
“As our report notes, every state is unique. States are the ideal places to test out VBP models, to understand what works and what doesn’t within their diverse environments, in terms of the health of the population, the healthcare workforce, infrastructure, economic environment,” Evatt said.
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According to the data, New York, Pennsylvania and Vermont are leading the transition to VBP.
New York, through a SIM grant and waiver from the Centers for Medicare & Medicaid Services, has tested a Medicaid pay-for-performance model and risk-sharing arrangements with managed care organizations. It’s also at the forefront of testing maternity care, HIV/AIDS and integrated primary care models.
Pennsylvania has complementary strategies for reform such as multipayer bundles for acute care, global payments for enhanced primary care through patient-centered medical homes (PCMHs) and a global budget for rural hospitals.
Vermont began its transition as early as 2011 and started with a PCMH strategy. Today, the state uses strategies such as an all-payer ACO, bundles for Medicaid members and health homes.
“A total of 56 payers participate across the regions including Aetna, BCBS, UnitedHealthcare and other commercial carriers. The multipayer approach allows for more streamline efforts where participating practices are likely to have a diverse payer mix,” Evatt said.
Medicare has been one of the leaders in implementing VBC, rolling out several initiatives including the creation of the Health Care Payment & Learning Action Network (HCP-LAN), a partnership for the healthcare system at large, and Congress had passed legislation that requires VBP in Medicare. However, most of the responsibility still lies at the state level.
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“Politics or policy that could negatively impact CMS’ ability to advance state-specific models that support state innovation and allow state flexibility could also slow down states’ efforts,” Evatt noted.
This analysis finds that more than 40 states are investing in value-based strategies, and six states—Alabama, Alaska, Florida, North Carolina, South Carolina and South Dakota—are pursuing reimbursement entirely outside of the SIM and CPC+ programs.
Overall, 69% of states are pursuing SIM grants to help design innovation plans that involve multipayer reform efforts, and 16 states have implemented bundled payment programs. More than 35% of states have adopted or are considering the adoption of ACOs or ACO-like entities to help manage costs and deliver better care.
Of all of the VBP programs being implemented, Maryland’s stood out for Evatt within this study.
“While a unique state in terms of implementation of VBP models, Maryland, in January of 2019, transitioned to implementing its Total Cost of Care Model,” she said. “The multipayer program seeks moves from a hospital-focused model to a system-wide model; where instead of demonstrating hospital savings Maryland will now be measured on total cost of care; care received outside of the hospital.
"Community practice transformation is essential for total system alignment; therefore, Maryland implemented its Primary Care Program which provides support to practices as they transition to VBC,” she said.
Looking forward, Evatt believes a lot of VBP success will be tied into the progression of social determinants of health.
“We will likely continue to see this grow in the future as states find ways to integrate social supports (i.e., housing stability, food security and transportation) into VBC programs," she said.