1. Contracting Concepts for Value Based Payment
Anesa Brkanovic
Deputy Director,
Division of Health Plan Contracting and Oversight
Office of Health Insurance Programs
NYS Department of Health
March 2018

2. March
Contracting Overview
Key Components of a VBP Contract and MCO- Provider Contracting Life Cycle
Overview of Arrangement Types and Contracting Entities
Patient Centered Medical Home (PCMH) and VBP
VBP Progress and Update

3. Types of VBP Arrangements and Contracting Entities - Overview
March
Types of VBP Arrangements and Contracting Entities - Overview

4. Types of VBP Arrangements
March
Types of VBP Arrangements
Types
Population Based Arrangements
Bundle Or Episode Arrangements
Total Care for General Population (TCGP)
Total Care for Special Need Populations
Care Bundles
Integrated Primary Care (IPC)
Definition
Party(ies) contracted with the MCO assumes responsibility for the total care of its attributed population
Total Care for the Total Sub-pop
HIV/AIDS
MLTC
HARP
Episodes in which all costs related to the episode across the care continuum are measured
Maternity Bundle
Patient Centered Medical Home or Advanced Primary Care, includes:
Care management
Practice transformation
Savings from downstream costs
Chronic Bundle (includes 14 chronic conditions related to physical and behavioral health related)
Contracting Parties
IPA/ACO, Large Health Systems, FQHCs, and Physician Groups
IPA/ACO, FQHCs and Physician Groups
IPA/ACO, FQHCs,
Physician Groups and Hospitals
IPA/ACO, Large Health Systems, FQHCs, and Physician Groups

5. Prospective total budget payments
March
Levels of Value Based Payments There are different levels of risk that the providers and MCOs may choose to take on in their contracts:
Level 0 VBP*
Level 1 VBP
Level 2 VBP
Level 3 VBP
(feasible after experience with Level 2; requires mature contractors)
FFS with bonus and/or withhold based on quality scores
FFS with upside-only shared savings available when outcome scores are sufficient
(For PCMH/IPC, FFS may be complemented with PMPM subsidy)
FFS with risk sharing (upside available when outcome scores are sufficient)
Prospective capitation PMPM or Bundle (with outcome-based component)
FFS Payments
Prospective total budget payments
No Risk Sharing
↑ Upside Risk Only
↑↓ Upside & Downside Risk
*Level 0 is not considered to be a sufficient move away from traditional fee- for-service incentives to be counted as value based payment in the terms of the NYS VBP Roadmap.

6. March
Contracting Parties
Medicaid MCO -- holds a Certificate of Authority from DOH under authority of Public Health Law Article 44.
IPA -- an organization that contracts directly with health care providers. IPAs contract with MCOs to help form the MCOs provider network.
ACO -- An organization of clinically integrated health care providers that provide, manage, and coordinate health care (including primary care) for a defined population
Medicare ACO (approved by CMS) for Medicare population such approval does not make the entity into a Medicaid ACO and vice versa.
IPAs may be certified by DOH as an ACO, but an ACO is not an IPA.
For Medicaid (and for commercial health insurance), an ACO must be approved as an IPA.
Providers -- Individual provider s may contract with MCO directly for provision of care and services.
Individual physicians/practitioners, Medical groups,
Hospital Systems
FQHCs and large medical groups
Smaller providers including community based organizations (CBOs)
Management Contractor -- An entity that an MCO may delegate some of its management functions to. Many management contractors have affiliated IPAs. Pharmacy Benefit Managers and Dental Benefit Managers are examples of management contractors.

7. Two Methods of Contracting
March
Two Methods of Contracting
Shared Savings Agreement OR
Shared Savings Agreement
IPA
MCO
MCO
Provider
Provider

8. March
Structure of a VBP Arrangement: Total Care for General Population (TCGP)
DOH IP
MCO
MCO
MCO
IPA
Provider
BH Providers
Ancillary Providers
Pharmacies
CBOs
Hospitals
Physicians
FQHCs

9. TCGP IPA to IPA Contract
March
TCGP IPA to IPA Contract
DOH
MCO IP
MCO
IPA
MCO
Hospitals
Physicians
FQHCs
IPA
Provider
Provider
Provider

10. March
Key Components of a VBP contract and MCO-Provider Contracting Life Cycle

11. Components of a VBP Contract
March
Components of a VBP Contract
DOH 1
Measurement Period 2
Targeted Medical Budget – Negotiable IP
MCO 3
Arrangement Type/ Services Included 4
Attribution – Negotiable
MCO 5
Shared Savings and Losses – Negotiable 6
Quality Measures 7
Financial Protections - Negotiable 8
Reporting – Negotiable

12. MCO submits signed contract to DOH Contract Execution/ Implementation
March
Contract Life Cycle
DOH
90 – 180 days
Negotiation
Throughout term of agreement IP
Monitor & Evaluate
MCO submits signed contract to DOH
<15 days
MCO
Contract Execution/ Implementation
DOH review and approval
Upon DOH approval
Up to 90 days

13. MCO submits signed contract to DOH Contract Execution/ Implementation
March
Stage 1 - Negotiation
DOH
90 – 180 days
Negotiation
Negotiation
Throughout term of agreement IP
Monitor & Evaluate
MCO submits signed contract to DOH
<15 days
MCO
Contract Execution/ Implementation
DOH review and approval
Upon DOH approval
Up to 90 days

14. Contracting Best Practices
March
Contracting Best Practices
Identify who you are contracting with
MCOs, IPAs, ACOs and individual providers are the ONLY parties that may contract for the delivery of healthcare services under the law. Use the full legal names of the parties in your contract.
Engage downstream providers. VBP Contractors will want a robust network to cover the full care continuum and to ensure that providers that drive attribution are included.
Consider partnerships with Community Based Organizations (CBOs), which are critical for population health and the social determinants of health, but have historically been somewhat siloed from more traditional healthcare systems.*
Negotiate with the right people
The people negotiating should have the authority to make decisions and have a vested interest in making sure the obligations of the contract will be met.
Engage early and often. Coming to an agreement may take time.
DOH
Negotiation
Negotiation
MCO
Negotiate with the right people
Understand your organization’s capabilities
Know your business by understanding your mission, finances, ability to take on risk, data capabilities, your partnerships, and timeline for state approval. Assess your readiness and your capabilities to take on risk.
*For more guidance related to CBO contracting, please see VBP University Semester 3: CBO Contracting Strategy Guidance document

15. Contracting Best Practices (cont’d)
March
Contracting Best Practices (cont’d)
Spell Out All the Details
Get it in writing! Be specific of what each party's rights and obligations are. Define the milestones and timeframes.
Keep the Approach, Format, and Language Straightforward
Use short, clear sentences with simple, numbered paragraph headings without a lot of legalese and leverage existing VBP Roadmap on-menu arrangements as well as quality metrics developed by the CAGs.
Specify Payment Terms
The payment methodology should be clear, especially in relation to the value based components of the contract.
Monitor Progress
Decide how deliverables and data, such as target budget and utilization, will be collected, monitored, reported and exchanged.
Share data when and where feasible. Successfully implementing a VBP arrangement requires a fundamental understanding of the population you serve. A strong partnership will enable a successful implementation.
DOH
Negotiation
Negotiation
MCO
Monitor Progress

16. Contracting Best Practices (cont’d)
March
Contracting Best Practices (cont’d)
Keep It Confidential
As covered entities, the parties must agree to exchange Protected Health Information in accordance with HIPAA.
Since the parties may gain knowledge of each other’s sensitive business information, the agreement should contain mutual promises to keep this information confidential.
Agree on Circumstances That Terminate the Contract
The circumstances under which the parties can terminate the contract must be clear.
Agree on a Way to Resolve Disputes
Write into your agreement what you and the other party will do if something goes wrong. You can decide that you will handle your dispute through arbitration or mediation instead of going to court, which can take up time and money.
DOH
Negotiation
Negotiation
MCO

17. Top 5 Steps for Beginners
March
Top 5 Steps for Beginners
DOH
Negotiation
Assess your readiness for VBP; keep in mind Level 1 is an upside-only arrangement 1
Determine if you have an existing contract that can easily be amended to include VBP 2
Align your VBP arrangement to the strengths of your business model. Keep in mind the types of services that you provide, and consider your attributed population. Remember – outcome measures will impact the potential for shared savings.
MCO 3
Build partnerships – Choose the partners that will help you succeed and that are appropriate for the contracts you choose 4
Familiarize yourself with and utilize available resources (data from the State, technical assistance from potential partnering contractors, etc.) 5

18. Top 5 Steps for Experienced Contractors
March
Top 5 Steps for Experienced Contractors
DOH
Understand current VBP contracts that you may have in place and what adjustments may be made to fulfill the State’s definition of VBP: check definitions, adjust quality measures, check levels of risk, partner with CBOs, etc.
Negotiation 1
Re-assess your capabilities and network partnerships; and gain understanding in readiness for advancement in VBP risk levels and expansion in scope 2
Consider re-investing savings in other innovative interventions to continually improve member health and consequently generate further savings; consider innovative Social Determinants of Health interventions
MCO 3
Keep current with yearly benchmarks and modify strategy and risk arrangements based on performance 4
Where feasible, continue to improve and strengthen your data & analytics capabilities to understand the services you provide and the population you serve 5

19. Stage 2 – Submission of a Contract to DOH
March
Stage 2 – Submission of a Contract to DOH
DOH
90 – 180 days
Negotiation
Throughout term of agreement IP
Monitor & Evaluate
MCO submits signed contract to DOH
<15 days
MCO
Contract Execution/ Implementation
DOH review and approval
Upon DOH approval
Up to 90 days

20. Contracting Checklist
March
Contracting Checklist
Before submitting a contract to DOH for Review, please refer to the VBP On-Menu and Off-Menu Contracting Checklists

21. Contract Review Process
March
Contract Review Process
Tier 1
Tier 2
Tier 3
The DOH Review Tier includes VBP Level 2, VBP Level 3, and all other arrangements that do not trigger Regulation 164, but contain over $1,000,000 of potential payments to providers at risk, exceed more then 15% of providers total Medicaid revenue or constitute an of menu arrangement.
The File and Use Tier includes all VBP Level 1 arrangements (upside only arrangements) and all other arrangements that do not meet the minimum review thresholds for DOH Review (Tier 2) or Multi-Agency Review (Tier 3).
The Multi-Agency Review Tier includes all pre paid capitation contractual arrangements which trigger Regulation 164.
Note: Regardless of which Tier a particular agreement falls in, the financial and/or programmatic reviews referenced here only apply from the State’s perspective to assess financial and programmatic risks to the Medicaid program. The State is not providing legal advice to either plans or providers, nor is the State determining whether the contractual arrangement is a fair business deal between the parties

22. File and Use Review for DOH Tier 1
March
File and Use Review for DOH Tier 1
VBP Level 1 arrangements and all other arrangements that do not meet the minimum review thresholds for DOH Review (Tier 2) or Multi-Agency Review (Tier 3).
3 business days DOH programmatic review
Must have properly filed out and signed DOH Provider Contract Statement and Certification (DOH- 4255)
Must contain Standard Clauses for Managed Care Provider/ IPA/ ACO Contracts
Provider Contract Guidelines for Article 44 MCOs, IPAs, and ACOs

23. Financial Review for DOH Tier 2
March
Financial Review for DOH Tier 2
VBP Contracts which are determined to fall under DOH Review Tier 2 will undergo both programmatic and financial review
Services provided directly by contracting provider
Services paid through a participating provider network (IPA, ACO, etc.)
For all Contracts that fall under the DOH Review Tier, the financial viability of the contracting provider must be demonstrated.
Demonstration of Provider financial viability
FSD only required when providers in this column fail to demonstrate financial viability
FSD required for all arrangements involving participating provider networks
Financial Security Deposit (FSD)

24. On-Menu VBP Arrangement Checklist
March
On-Menu VBP Arrangement Checklist
The following questions must be addressed to meet the VBP contracting requirements outlined in the VBP Roadmap:

25. On-Menu VBP Arrangement Checklist (cont’d)
March
On-Menu VBP Arrangement Checklist (cont’d)
The following questions must be addressed to meet the VBP contracting requirements outlined in the VBP Roadmap:
VBP Contracting Element
Relevant Question
Type of Arrangement (as per the Roadmap)
Does the contract match the Roadmap arrangement definition?
Definition and Scope of Services
Does the contract either state that it matches the VBP Roadmap definition or list all of the services included in the arrangement?
Quality Measures/Reporting
Does the contract commit to reporting on all reportable Category 1 quality measures approved by the State? OR Does the contract list all of the reportable Category 1 quality measures that the MCO will report?
Risk Level
Does the contract describe the level of risk chosen by the contracting parties?
Shared Savings/Losses
Does the risk level correspond with the shared savings/losses minimums? AND
Does the contract list at least one (1) Category 1 P4P quality measure to be used for calculating shared savings and losses?
Attribution
Does the contract describe the attributed population?

26. On-Menu VBP Arrangement Checklist (cont’d)
March
On-Menu VBP Arrangement Checklist (cont’d)
The following questions must be addressed to meet the VBP contracting requirements outlined in the VBP Roadmap:
VBP Contracting Element
Relevant Question
Type of Arrangement (as per the Roadmap)
Does the contract match the Roadmap arrangement definition?
Definition and Scope of Services
Does the contract either state that it matches the VBP Roadmap definition or list all of the services included in the arrangement?
Quality Measures/Reporting
Does the contract commit to reporting on all reportable Category 1 quality measures approved by the State? OR Does the contract list all of the reportable Category 1 quality measures that the MCO will report?
Risk Level
Does the contract describe the level of risk chosen by the contracting parties?
Shared Savings/Losses
Does the risk level correspond with the shared savings/losses minimums? AND
Does the contract list at least one (1) Category 1 P4P quality measure to be used for calculating shared savings and losses?
Attribution
Does the contract describe the attributed population?
Target Budget
Does the contract describe the Target Budget in this arrangement?
Social Determinants of Health
If this is a Level 2 or higher contract, does it commit to implementing at least one intervention to address Social Determinant(s) of Health?
Contracting with CBOs (starting Jan 2018)
If this is a Level 2 or higher contract, does it commit to contract with at least one Tier 1 Community Based Organization?

27. Off-Menu Arrangements
March
Off-Menu Arrangements
MCOs and providers may agree to contract off-menu arrangements*. The following criteria need to be fulfilled to count as VBP arrangements:
Reflect the underlying goals of payment reform as outlined in the Roadmap and sustain the transparency of costs versus outcomes
Focus on conditions and subpopulations that address community needs but that are not otherwise addressed by VBP arrangement in the Roadmap
Patient rather than provider centric
Through sharing savings and/or losses, off-menu VBP arrangements include a focus on both components of 'value': outcomes and cost of the care delivered
‘Off-Menu’ VBP arrangements should utilize standard definitions and quality measures from theRoadmap where possible
*For detailed information please refer to Appendix II of the Roadmap.

28. Stage 3 – DOH Review and Approval
March
Stage 3 – DOH Review and Approval
DOH
90 – 180 days
Negotiation
Throughout term of agreement IP
Monitor & Evaluate
MCO submits signed contract to DOH
<15 days
MCO
DOH review and approval
Contract Execution/ Implementation
Upon DOH approval
Up to 90 days

29. Review and Approval Entities
March
Review and Approval Entities
Department of Health (DOH)
Has statutory / regulatory responsibility and authority* to review and approve MCO-Provider contract arrangements.
Such authority requires DOH to review VBP arrangements, ensuring providers are capable of assuming risk, will not constitute improper incentives, or result in deterioration of access or quality of care to enrollees.
Department of Financial Services (DFS)
Authorized** to regulate pre-paid arrangements for services where the risk for provision of such services is being transferred from an insurance entity (Article 44 or Article 43) to a provider.
*PHL Sec 4402 (2)(a) and 10 NYCRR Part 98
**Insurance Law and 11 NYCRR Part 101 – Regulation

30. March
Stages 4 & 5 – Contract Execution/Implementation and Monitoring & Evaluation
DOH
90 – 180 days
Negotiation
Monitor & Evaluate
Throughout term of agreement
MCO submits signed contract to DOH
<15 days
MCO
Contract Execution/ Implementation
DOH review and approval
Upon DOH approval
Up to 90 days

31. Contract Execution/Implementation, Monitoring & Evaluation
March
Contract Execution/Implementation, Monitoring & Evaluation
Contract Implementation
After DOH review and final approval of a VBP contract, the contract can be implemented
Monitoring & Evaluation
Throughout the term of the agreement, both parties evaluate performance and monitor compliance with the terms and conditions in the contract on an on-going basis
Should any material issues or material changes* arise during the term of the contract, the contract can be renegotiated/amended which would restart the MCO- Provider Contract Lifecycle
*Refer to Provider Contracting Guidelines for amendment process and review

32. March
PCMH and VBP

33. March
PCMH Requirements
Since 2010, NYS has been financing incentives in both Managed Care and Fee-for-Service (FFS) for practices meeting National Committee for Quality Assurance (NCQA)-recognized levels of PMCH.
Over 2,260,993.2 Medicaid Managed Care patients were being served by 6,781 PCPs who were NCQA PCMH recognized (June data)
Medicaid has a goal whereby all MCO-designated PCPs be NCQA PCMH recognized and fully embrace the delivery of more integrated and value-based care.

34. PCMH Requirements (cont’d)
March
PCMH Requirements (cont’d)
Due to the to the fiscal constraints of the current Medicaid Global Spending Cap on the PCMH incentive payments and State efforts to increase participation in the PCMH program.
For the period May 1, June 30, 2018, practices recognized under the NCQA 2014 Level 3 or NCQA 2017 standards will receive a temporarily reduced MMC incentive payment of $2.00 PMPM.
The PCMH FFS incentive add-on amounts will remain unchanged, and will be $29.00 and $25.25 for professional and institutional claims, respectively.
All incentive payments for PCMH-recognized providers under NCQA's Level 2 standards will be permanently eliminated for both MMC and FFS.

35. March
PCMH and VBP
Effective July 1, 2018, the PCMH incentive payments will be modified (increased from the temporary two-month reduction) to align with the principles of Value Based Payments (VBP).
NYS Medicaid will engage key stakeholders to focus on making sustainable fiscal recommendations that are in line with the Medicaid Global Spending Cap for the PCMH program, and explore options to tie the incentive to VBP participation, and quality as well as be tied to whether providers have a VBP contract (Level 1 or higher).
Projected rates for the MMC PMPM range from $5.00-$6.00 for providers with a VBP contract, and around $2 for those without.
Policy and educational materials will be published in the coming months.

36. State VBP Progress Update
March
State VBP Progress Update

37. CMS Reporting Requirements
March
CMS Reporting Requirements
The State has devised a survey tool to measure statewide progress towards both the overall 80-90% VBP Goal and the 35% VBP Target for Levels 2 and 3.
Reference
NYS VBP Roadmap pg. 2
Reported Information
VBP Progress measured in total dollars and outcomes
NYS VBP Roadmap pg. 2
VBP Implementation guidelines, specifications, and changes to the Roadmap
NYS VBP Roadmap pg. 9
Progress and details on the development of any ‘off menu’ VBP arrangements
NYS VBP Roadmap pg. 21
Details on how MCOs reward high or low performing providers, including expenditure trends per VBP arrangement
The annual percentage increase of VBP in the state, providers impacted by alternate payment arrangements, and percentage of provider payments impacted
NYS VBP Roadmap pg. 31

38. March
MCO Year 2 Survey
Year 5 Progress
Starting Point for Statewide and Regional VBP Progress
Year 4 Progress
Year 3
Progress
SFY (DY5)
Year 2 Progress
SFY (DY4)
Year 1 Progress
NYS VBP
Baseline
SFY
Calendar Year (DY2)
(4/1/17-3/31/17)
Calendar Year (DY1)
Calendar Year

39. Value Based Payment Tracking Report (VBPTR)
March
Value Based Payment Tracking Report (VBPTR)
VBPTR is designed to collect MCO progress towards achieving State’s VBP goal of 80-90% of MCO’s payments in VBP arrangements on a quarterly basis aligned with the State Fiscal Year 4/1 – 3/31
VBPTR has four tables for each line of business:
Medical Expense Summary
Medical Expense by Arrangement
Medical Expense by Region
VBP Contract Specific Information

40. Value Based Payment Tracking Report (VBPTR)
March
Value Based Payment Tracking Report (VBPTR)
Report is designed to collecting data for the following managed care lines of business:
Medicaid (MEDICAID) – 16 plans
Health and Recovery Plan (HARP) – 13 plans
HIV Special Needs Plan (HIV SNP) – 3 plans
Medicaid Advantage Dual Eligible (MA DUAL) – 4 plans
Medicaid Advantage Plus (MAP)
Managed Long Term Care (MLTC PARTIAL)
Fully Integrated Dual Advantage (FIDA)
Programs of All-Inclusive Care for the Elderly (PACE)
VBPTR Reporting Schedule
(Cumulative for 4/1/17-3/30/18)
Time period
Issue Date
Return Date
1st
4/1/ /30/17
11/30/2017
1/10/2018
2nd
10/1/17-12/31/17
2/7/2018
3/14/2018
3rd
1/1/18 - 3/31/18
4/5/2018
5/10/2018

41. Broad Overview of Results (Combined MMC, HARP, and HIV SNP)
March
Broad Overview of Results (Combined MMC, HARP, and HIV SNP)
VBP Baseline of Levels for CY 2016: 38.32%
TOTAL MA $
$ 22,009,874,972
FFS
$ 10,637,177,138
48.33%
VBP0
$ 2,938,167,057
13.35%
Level 0/Quality Only
$ 2,673,309,928
12.15%
Level 0/ Cost Only
$ 264,857,129
1.20%
VBP1
$ 1,964,859,305
8.93%
VBP2
$ 6,085,682,321
27.65%
VBP3
$ 383,876,742
1.74%
Level 1-3
$ 8,434,418,368
38.32%

42. Year to Year Comparison Results (Combined MMC, HARP and HIV SNP)
March
Year to Year Comparison Results (Combined MMC, HARP and HIV SNP)
Plan Type
Total
FFS/Other
VBP Level 0
VBP Level 1
VBP Level 2
VBP Level 3
MMC ‘14
$ 17,290,312,058
$ 9,392,580,916
$ 2,429,094,296
$ 549,827,893
$4,441,358,780
$ 477,450,172
MMC ‘15
$19,849,665,409
$9,811,397,293
$3,325,306,318
$873,313,158
$5,492,388,575
$347,260,066
MMC’16
$22,009,874,972
$10,637,177,138
$2,938,167,057
$1,964,859,305
$6,085,682,321
$383,876,742

43. Summary of Arrangements By Type
March
Summary of Arrangements By Type
Medicaid
HARP
HIV SNP
TOTAL
% of Total
Integrated Primary Care
$69,171,883
$1,148,062 $0
$70,319,945
0.32%
Acute Care Bundles (Maternity)
$101,532,517
$272,975
$396,070
$102,201,562
0.46%
Total Care for the General Population
$7,557,438,074
$210,850,396
$178,363,345
$7,946,651,815
35.96%
HIV/AIDS Subpopulation
$297,189,556
$21,765,856 $0
$318,955,412
1.44%
MLTC Subpopulation
0.00%
HARP Sub-population
$427,631,163
1.93%
Off-Menu Arrangements
$517,329,736
$310,178
$517,639,914
2.34%
Fee-for-Service Arrangements
$11,509,495,546
$634,802,926
$202,425,512
$12,346,723,984
55.87%
Other Arrangements
$273,621,286
$60,395,048
$36,730,007
$370,746,341
1.68%

44. VBP By Region VBP FFS Level 0 Level1 Level2 Level3 All Regions 48.33%
March
VBP By Region
VBP
FFS
Level 0
Level1
Level2
Level3
All Regions
48.33%
13.35%
8.93%
27.65%
1.74%
Central
80.82%
18.63%
0.01% --
0.54%
Finger Lakes
75.42%
16.60%
7.84%
0.14%
Long Island
60.55%
13.12%
7.63%
14.78%
Mid-Hudson
76.04%
12.36%
11.61%
New York City
33.74%
9.60%
10.50%
44.32%
1.84%
Northeast
74.72%
21.55%
3.73%
Northern Metro
76.51%
20.63%
0.24%
2.61%
Utica-Adirondack
70.10%
29.89%
0.02%
Western
68.67%
19.25%
12.08%

45. Useful Links Value Based Payment (VBP) Roadmap
VBP University Semesters 1-3
VBP Quality Measure Sets
Provider Contracting Guidelines
VBP On-Menu Contracting Checklist