Value-based payment (VBP), which many payers are already utilizing to encourage improved health outcomes and more efficient care, can be a strong tool to design equity-focused payment and contracting models (payment
approaches). These equity-focused payment approaches can support and incentivize care delivery transformation (i.e. tailored improvements in care delivery) to reduce and eliminate disparities in health and health care, according to CHCS recent report.
- Here are the six strategies and key considerations to guide payers, including Medicaid agencies and managed care organizations, in developing an equity-focused payment approach to support care delivery transformations in collaboration with provider organizations and members.
- Articulate the equity goal.
An equity-focused payment approach must be designed to support an identified health disparity, a related equity goal, and care transformations to reach the goal that can be measured over time.12 Equity goals can address disparities within specific populations, geographic areas, conditions or other issues of interest, and can be measured through access to care, process of care, and clinical or non-clinical outcomes. Engaging all stakeholders, including payers, plans, providers, and members, in identifying the health equity focus area, associated goals, and the necessary care delivery transformations is key to success. Actively engaged enrolled members are critical for identifying disparities and designing care delivery transformations to successfully mitigate disparities.
- Assess the current payment and care delivery environment.
Understanding how an equity-focused payment approach fits into the current payment context and care delivery environment is critical for buy-in and success from leadership and providers. Assessing payer priorities, existing or planned VBP arrangements, and existing or planned state VBP contractual requirements of health plans enables payers and provider organizations to identify a potential starting point (e.g., existing measures within a VBP contract, team-based bonus payments, care management fees, or performance-based bonuses), so new payment arrangements align with existing or planned activities
- Select the performance measures that reflect the equity goal and support the care delivery transformation
In order for a payment approach to be considered value-based, the payment must be linked to performance measures that reflect quality of care, outcomes, and/or patient satisfaction. Payers and provider organizations should assess how progress toward the equity goal will be measured through the selection of performance measures. Ideally, these measures will align with current quality efforts and minimize provider burden.
- Set performance targets that explicitly support the necessary care transformations.
In VBP, provider organizations must meet certain targets to receive quality payments. Under traditional VBP arrangements, quality targets focus on average outcomes at the attributed patient population level. Under an equity-focused VBP arrangement, quality targets focus on reducing health disparities and achieving equity across and within defined populations.
- Design the payment approach.
The HCP-LAN Alternative Payment Models framework is a useful guide to understand how payment approaches can be structured. To be considered value-based, payment must be tied to quality of care (e.g., use of evidence-based processes) and/or health outcomes. Many models also include an element of financial risk. Alternative Payment Models that prioritize value-based care enable providers to be paid for non-traditional medical services and encourage higher-value care, rather than higher volume of care.
- Address operational issues
Finally, payers and provider organizations should consider operational issues that may influence the uptake and impact of an equity-focused payment approach and care delivery transformation. During development and implementation of the payment approach and care delivery transformation, payers and provider organizations should work together and with their members to explore barriers and solutions to implementation.