While Medicare may be top of mind when it comes to value-based payment models, state-led managed Medicaid programs are gaining ground in the move to adopting reimbursements based on quality and outcomes. Of Medicaid’s 78 million beneficiaries, 69% receive care through risk-based managed care organizations (MCO). A Kaiser Family Foundation survey found that in 25 states with MCOs, more than 75% of their Medicaid beneficiaries are covered by those programs. Further, nearly all states with MCOs reported they used at least one Medicaid managed care quality initiative in fiscal year 2019. That year, more than half of MCO states set targets in their MCO contracts for the percentage of provider payments, network providers or plan members that MCOs must cover via alternative payment models (APM).
APMs incent and reward outcome quality instead of service volume. The Centers for Medicare & Medicaid Services (CMS) is encouraging states to adopt APMs for Medicaid beneficiaries. Many states have set targets for increasing growth in those programs. New York wants to make 80% to 90% of its Medicaid payments under outcomes-based programs; California, which had zero dollars tied to performance in 2009, has $2.8 billion tied to value-based care today.
Measuring quality is critical as states shift more enrollees to outcomes-based models — and states are using an array of metrics. That makes it increasingly complicated for payers to track and meet the quality measures that help them manage APM risk and prove they are delivering high quality care. Solving the challenge of collecting, managing and reporting outcomes per each state’s requirements is a prerequisite for payers to grow their Medicaid value-based programs.
No single set of Medicaid quality measures exists. As per the National Quality Forum, more than 150 “measure steward” organizations exist, each of which has designed its own quality metrics. CMS has its own Core Sets — Adult and Child. The National Committee for Quality Assurance (NCQA) has its Healthcare Effectiveness Data and Information Set (HEDIS®). There are measures published by the Agency for Health Research and Quality (AHRQ), Physician Consortium for Performance Improvement (PCPI), Pharmacy Quality Alliance (PQA), and also population-specific measures like the Long-Term Services and Supports measures by NCQA and CMS. Less well-known organizations, such as the Bree Collaborative, have yet others.
CMS established the Child and Adult Core Sets in response to congressional directives and consulted states, quality measurement experts and stakeholders in the development process. Reporting still varies by state but has increased overall since voluntary reporting began. As of 2019, 28 states reported more than 75% of Child Core Set measures and 34 states reported more than 50% of Adult Core Set measures.
For FY 2020, there are 24 measures in the Child Core Set, and 33 measures in the Adult Core Set. In the Child Core Set, 18 measures are process related and 20 measures can be calculated using an administrative data collection methodology. In addition, beginning in 2024, CMS will require states to report on its core set of quality measures for children enrolled in Medicaid and the Children’s Health Insurance Program (CHIP), and also a core set of behavioral health measures for adult Medicaid members.
States also create custom measures. Maryland’s Value-Based Purchasing Initiative primarily uses HEDIS measures and its own lead screening and ambulatory care measures. Pennsylvania’s MCO Pay-for-Performance program similarly includes its own metrics along with HEDIS. Rhode Island adopts metrics from several organizations plus two custom measures.
Healthcare organizations will need robust data collection and analytics capabilities to satisfy these myriad reporting requirements now and as they evolve. Here are some of the capabilities that a Medicaid value-based care reporting strategy should encompass:
Payers clearly need to build these capabilities with multiple states and programs in view. Plans can choose to build and maintain their own libraries and reporting capabilities. They may also evaluate third-party tools that support metrics from multiple measure stewards and state-created measures. These solutions should carry NCQA’s HEDIS Certified Measure status to ensure that they are qualified.
Additional steps that healthcare organizations can take to succeed as Medicaid value-based programs expand include:
Slightly more than 17% of Medicaid payments are being made under value-based programs, so there is room for growth and an incentive to catalyze it from various CMS programs. These include the Delivery System Reform Incentive Payment (DSRIP) program and the State Innovation Model (SIM), which reward healthcare organizations for experimenting with programs that improve outcomes while reducing costs through coordinated care delivery, and for focusing on population health outside of traditional clinical care pathways. As of April 2020, $55.4 billion in state and federal funds was approved for such efforts. Twelve states have implemented DSRIP or DSRIP-like programs that invest in provider-led projects designed to advance statewide delivery system reform goals: Arizona, California, Kansas, Massachusetts, New Hampshire, New Jersey, New Mexico, New York, Oregon, Rhode Island, Texas and Washington.
With CMS indicating that it may not approve new DSRIP programs or renew existing ones, states are also exploring directed payment arrangements under 42 CFR 438.6(c) to continue supporting these payment reforms.
Payer organizations that are able to collect and report quality data required by APMs and value-based reimbursements will be in a strong position to partner with states on these initiatives and create new sources of revenue even as they change how care is delivered.