Health Care Payment Learning and Action Network: Alternative Payment Methods Framework and Measurement Presented to Minnesota Health Action Group December 2015 Julie Sonier Director, State Employee Group Insurance Program Minnesota Management and Budget

Health Care Payment Learning and Action Network (HCP LAN) Accelerate the health care system’s transition to alternative payment models (APMs) by combining the innovation, power, and reach of the public and private sectors. Goals: 30% of U.S. payments by 2016, 50% by 2018. Develop a framework for categorizing APMs and an approach to measuring adoption of APMs Clinical episodes payment (bundled payments) Population-based payment https://publish.mitre.org/hcplan/ Alternative Payment Models Framework and Progress Tracking Workgroup Other HCP LAN Workgroups For More Information

APM Framework and Progress Tracking Workgroup Membership Physicians/Health Care Providers Private Payers CMS Consumer Groups Employers State Government

Seven Key Work Group Principles It’s not just about payment strategies – patient engagement is also key. The goal is to drive change toward models with greater accountability for quality and value. Incentives should flow through to individual providers to the extent possible. The link between payment and quality is essential. Incentives must be large enough to be meaningful. Hybrid approaches should be categorized using the dominant model. There is an important distinction between delivery models and payment models. 1 2 3 4 5 6 7

Workgroup’s Draft Framework Categories Category 1: Fee for service, no link to quality Category 2: Fee for service, link to quality 2A: Payments for infrastructure/ operations 2B: Pay for reporting 2C: Rewards for performance 2D: Rewards and penalties for performance Category 3: APMs Built on Fee for Service Architecture* 3A: APMs with upside risk 3B: APMs with upside and downside risk Category 4: Population-Based Payment* 4A: Limited Population-based payments 4B: Comprehensive population-based payments *Additional category denoted “3N” or “4N” for payment models with no link to quality. October 2015 draft white paper is available at: https://publish.mitre.org/hcplan/wp-content/uploads/sites/4/2015/10/2015-10-23-APM-Framework-White-Paper-FPO.pdf

How Might Employers Use the Framework? Accountability/reporting from health plans and third-party administrators Direct contracting with providers Use purchasing leverage to drive the market Employers/purchasers have important roles to play in multi-stakeholder efforts Multi-stakeholder efforts to improve health care & health outcomes Measurement methodology still in development SEGIP is building similar concepts into its administrative services contracts to better understand current practices & set goals/strategies for the future Prevalence of APMs Intensity of incentives and what quality measures they are tied to Measure progress over time toward goals

White paper released in late October for public comment Workgroup Status White paper released in late October for public comment Currently incorporating comments into a revised white paper/framework Anticipated release of final paper: January 2016 Measurement framework being developed simultaneously Data collection from payers in early 2016