Ohio becomes Medicaid's first value-based purchaser

Ohio is transforming its Medicaid program by tying payments to quality, value-based outcomes, as the first in the nation to take such a step, the state announced Monday.

The Office of Ohio Health Plans (Ohio Medicaid) is working with Catalyst for Payment Reform, a large private organization that includes General Electric and Walmart as members, to develop new language for 2013 contracts that ties managed care payment to quality outcomes, reported the Dayton Daily News.

"Today, we pay the same for care, whether it's good or bad, free of mistakes or full of mistakes," Catalyst for Payment Reform Executive Director Suzanne Delbanco told the Daily News. "We want to have a payment system that's more connected to the care that people receive."

The new contracts will require managed care plans develop provider incentives to improve patients' health. Essentially, Ohio Medicaid will offer higher payments to providers who are able to keep their patients healthy and lower payments to providers whose patients get and stay sick more often.

Although Ohio Medicaid aims to decrease its spending--it currently accounts for $14 billion of Ohio's $17 billion spent on healthcare--it hasn't yet determined actual cost savings that may result from the initiative, according to ABC6.

"We are not trying to predict exactly what this might save," Ohio's Office of Health Transformation Director Greg Moody told WVIZ/PBS. "We're doing this because we want to see quality and performance improve, and I'm confident that if we're able to do that then there will also be savings down the road for Ohio taxpayers." 

CareSource, Ohio's largest managed care plan, is receptive to the new payment reform; however, CareSource Executive Vice President of External Affairs Janet Grant noted that 1 percent of payments it receives (totaling $35 million) already hinge on health outcomes, the Daily News noted.

To learn more:
- read the Dayton Daily News article
- see the ABC6 article
- check out the WVIZ/PBS article

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