Report: Most States Have Their Own Value-Based Payment Program

A new report from Change Healthcare found that more than 40 states have initiated a plan or strategy involving value-based payment programs.

About half of those programs include multiple payers. Others focused on Medicaid, and a handful of states have programs involving both Medicaid and state employees. Change Healthcare said seven states have “little or no activity around value-based payment.”

Though much attention recently has been on the CMS’ value-based programs, the state-by-state study found that most states are developing their own strategies.

Change Healthcare, a revenue, payment cycle management and clinical information exchange provider, said many states created value-based programs to work with healthcare stakeholders to redesign the healthcare system.

Most of the state initiatives started within the past few years. Change Healthcare said six states launched valued-based payment programs four or more years ago, 23 states started their programs two or more years ago and 10 states are still in the early stages of rollout.

Drilling down further, Change Healthcare said:

• 17 states adopted or are considering creating accountable care organizations (ACO) or similar entities to manage cost and deliver better care.
• 12 states adopted or are considering episodes of care programs.
• 23 states created value-based payment targets or mandates, which payers and provider must achieve.

In addition to state initiatives, the CMS and private payers are looking for ways to shift healthcare payments from volume to value. The CMS hopes to connect 90% of Medicare payments to value by next year, including half of them to alternative payments models (APM) through programs like MACRA.

Most healthcare stakeholders agree that paying for value is a natural progression, but the road to get there has not been smooth. At the federal level, the HHS has moved away from the payment reforms of the previous administration. The CMS said it still wants to shift to value, but its recently finalized Quality Payment Program rule for 2018 paints a different picture.

CMS Administrator Seema Verma recently said the agency is revising current quality measures across all quality payment programs and wants to cut regulatory burdens for providers.

RELATED: New ‘Meaningful Measures’ Initiative Announced

“Our vision is to develop models that promote a patient-centered system of care within a market-driven healthcare system. Models should empower consumers to make decisions that are right for them and providers should compete around value and quality,” she said.

While the CMS works on revising quality measures, those inside the industry aren’t waiting for the feds’ next move.

Speaking at the News & World Report’s Healthcare of Tomorrow conference, Dr. Jason Spangler, executive director of value, quality and medical policy at Amgen, said partnerships between payers and other stakeholders toward a value-based system are where the industry should head.

“One area I think we need to move toward is value-based insurance design,” Spangler said. “We should pay and incentivize patients toward high-value care and disincentivize them against low-value care.”

Organizations are moving into APMs regardless of whether the federal government stalls value-based payments. Payers and providers are partnering on initiatives, including ACOs, patient-centered medical homes, pay for performance and bundled payments.

A recent Health Care Payment Learning & Action Network (LAN) report found that 29% of U.S. healthcare payments were connected to APMs in 2016. That was an increase from 23% the previous year. The public-private partnership that HHS created to promote APMs said it hopes the percentage will reach 50% by next year.