Value-based payment models: 4 best practices from innovative insurers

As the healthcare industry moves away from fee-for-service, community-based health plans have paved the way by designing alternative payment models--and their successes can guide the efforts of other payers, according to a new issue brief.

The brief, from the Alliance of Community Health Plans, describes overall best practices that can apply to both integrated delivery models and plans that contract with outside providers. To show how these strategies helped insurers design innovative payment models, the brief highlights the experience of several high-performing ACHP plans.

Here's the strategies the brief recommends:

  • Introduce risk gradually while investing in care management capabilities. Massachusetts-based Tufts Health Plan, for example, has learned that it takes a practice a minimum of two to three years to move to some degree of risk sharing, and at least five years to move to a full-risk, capitated payment. Michigan-based Priority Health, meanwhile, encourages practices to create a care management infrastructure by including a care management fee in the pay-for-performance element of its model.
  • Base performance improvement measures on the goals of physician practices. For UPMC Health Plan, an integrated system in Pennsylvania, this means working directly with providers to develop custom outcomes measures after a practice has demonstrated its ability to improve care on process measures and patient flow. The brief says this strategy increased providers' satisfaction because they had a part in developing the model.
  • Develop actionable performance data and initiate frequent payer-provider engagement. To aid in this effort, New York-based Capital District Physicians' Health Plan proactively provides practices with reports that recommend specific focus areas, such as reducing emergency department visits or improving medication adherence. And Minnesota's HealthPartners meets with all care team members regularly as it transitions to a value-based model.
  • Target payment to individual physicians as well as at the practice level. Wisconsin-based Security Health Plan, for example, found it initially was not able to achieve its desired results through a Medicare Advantage pay-for-performance program. So it redesigned the program to provide payments to physicians rather than only to clinics, with provider organizations agreeing to distribute a greater portion of the shared savings pool to higher performers.

To learn more:
- read the brief

Related Articles:
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CMS says payers must provide data to support value-based care
Medicare Advantage plans to test value-based insurance design model
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