DOH Submits Value-Based Payment Roadmap Update to CMS

The Department of Health (DOH) submitted its 2019 update of its Value-Based Payment (VBP) Roadmap to the Centers for Medicare and Medicaid Services (CMS) last week. The Roadmap sets forth the State's Medicaid payment reform strategies that are intended to support and sustain the delivery system reforms initiated under the Delivery System Reform Incentive Payment (DSRIP) Program. The 2019 update reports that the State is well on its way to achieving its goal of having 80 to 90 percent of all managed care payments made via VBP arrangements by April 1, 2020, with at least 35 percent of payments made by fully-capitated plans under arrangements that involve two-sided risk and at least 15 percent of payments made by partially-capitated plans under two-sided arrangements. As of State Fiscal Year (SFY) 2018-19, 62 percent of managed care payments were made under VBP arrangements, and 40 percent were made via arrangements that involved both upside and downside risk.

The update makes only modest changes to the existing Roadmap. It offers some clarification of VBP levels for partially-capitated managed long term care (MLTC). For example, it aligns the Roadmap with guidance previously issued by DOH indicating that payment arrangements that offer quality bonuses based on performance on the potentially avoidable hospitalization measure and other approved measures qualify as Level 1 VBP arrangements under the Roadmap. The update describes Level 2 arrangements for partially-capitated plans as those that 'allocate potential risk' to the provider of at least 1 percent of total annual expenditures under the contract between the plan and the provider. Although the language in the update implies that Level 2 arrangements entail shared savings and losses with partially-capitated plans, LeadingAge NY believes that arrangements that involve quality bonuses and penalties will continue to qualify as Level 2 arrangements for partially-capitated plans. To satisfy the Level 2 requirement, plans must also engage in a social determinants of health (SDH) intervention and contract with a community-based organization (CBO).

The Roadmap update continues to treat fully-capitated MLTC plans like mainstream plans for VBP purposes. Level 2 arrangements for fully-capitated MLTC plans, such as Medicaid Advantage Plus (MAP) products, require shared savings and shared losses as well as an SDH intervention and a contract with a CBO. Fully-capitated MLTC plans, like mainstream plans, must make at least 35 percent of their payments to providers under VBP arrangements of Level 2 or higher in order to avoid penalties. Programs of All-Inclusive Care for the Elderly (PACE) are deemed to be engaged in Level 3 VBP arrangements (prospective global payment) because they are hybrid provider-plan entities that receive a prospective payment for a comprehensive benefit package. They are also subject to approved quality measures and are required to engage in an SDH intervention.

In addition to these clarifications, the Roadmap includes additional information regarding children-focused VBP arrangements and encourages data sharing among managed care organizations (MCOs), providers, and CBOs. It further encourages providers and plans to collaborate with third-party "partners" such as philanthropic entities and venture capital funds to support SDH interventions. The update notes that plans may report their expenditures for SDH interventions on their cost reports in the "other medical" category.

According to the update, 12 VBP pilot projects were implemented in 2017 and 2018 to test different types of VBP arrangements. These included Total Cost of Care for the General Population (TCCGP), Integrated Primary Care, and Health and Recovery Plan (HARP) arrangements. The State is convening an advisory group to develop a VBP arrangement focused on individuals with developmental disabilities.

LeadingAge NY will keep members apprised of developments as the update moves through the CMS approval process.

Contact: Karen Lipson, klipson@leadingageny.org, 518-867-8383 ext. 124