1. Value Based Payments: Transforming the Medicaid Payment System
October 26, 2015
John Ulberg, Director
Division of Finance and Rate Setting
October 2015

2. Provider Network (DISCO/ACO)
April 17
An Alternative Medicaid Managed Care Model for People with Developmental Disabilities
MC Plan
Provider Network (DISCO/ACO)
Residential Hab
Day Hab
Employment
Respite
Other OPWDD Services
Plan pays providers based on Provider Network direction
Performs Assessment of Need and develops initial Plan of Care / Support and budget
Service Plan Development (within budget for plan of support), Care Coordination, establish payment methods – pay for performance for better outcomes

3. April 17
An Alternative Medicaid Managed Care Model for People with Developmental Disabilities
ADMINISTRATIVE LEVEL – MANAGED CARE PLAN – FULL CAPITATION
Performs individual needs assessments
Develops total support budget for individualized plan
Pays providers per DISCO direction
Helps to enroll individuals with developmental disabilities on a voluntary basis
Establishes independent advocacy in conjunction with provider networks
NETWORK LEVEL – OPWDD PROVIDER NETWORKS (DISCO/ACOs) – SUB CAPITATION
Obtains services & supports according to individualized plan under agreement with Managed Care Plan
Coordinates services with member provider agencies
Establishes value-based payment agreements (tied to outcomes) with providers according to provider ability
Authorizes provider payment for Managed Care Plan
PROVIDER LEVEL – MEMBER AGENCIES
Provides services according to individualized plan
Achieves individualized outcomes/ creates value
Receives payment per terms of value-based payment agreement with Network

4. System Advantages of the Alternative Model
April 17
System Advantages of the Alternative Model
Lower Start-up/Administrative Costs By Using Existing Managed Care Plans
Accumulated reserves & administrative systems in place
Expertise of existing plans in care management
Timely Avenue For Implementation OPWDD Transformation Agenda
Potentially less cumbersome federal approval using 1115 Waiver
Streamlined approval / reporting requirements
Regulatory flexibility for community-based, individually tailored services & person-centered planning process
Leverages Care Coordination Preparation / DD Expertise Of DISCOs
Most knowledgeable to coordinate high-quality care & maximize resources
Builds on DISCO development work done to date
Better “Upside” For Reinvestment With Integration Of Acute Care
Potentially utilizing a mainstream Managed Care Organization integrates acute care (MMC for acute, DISCO/ACO/IPA for OPWDD specialty services coordination)
Better potential to capture Medicare cost savings in future

5. April 17

6. April 17
Example: If the total cost of care for the top 25 percent of individuals was brought down to the 75 percentile for each respective ISPM grouping for Voluntary, $893M annually would be freed up for reinvestment in the OPWDD system.
ISPM Group
Group
Direct Care
Behavior 1
Low 2
High 3
Medium 4 5 6
90%
75%
50%
ISPM Group 1 3 2 5 4 6
Total
Adjusting to 75%
$237,744,923
$396,793,367
$11,951,701
$104,610,680
$101,883,034
$39,803,010
$892,786,714

7. April 17

8. Value Based Payment (VBP) Reform
April 17
Value Based Payment (VBP) Reform
Transforming the Payment System
A thorough transformation of the delivery system can only become and remain successful when the payment system is transformed as well

9. Transforming the Payment System
April 17
Transforming the Payment System
Many of our system’s problems (fragmentation, variations in spending, high (re)admission rates, poor primary care infrastructure, lack of behavioral and physical health integration) are rooted in how we pay for services
Paying providers Fee For Service incentivizes volume over value, pays for inputs rather than outcomes; an avoidable readmission is rewarded more than a successful transition to integrated home care
Our current payment system does not adequately incentivize prevention, coordination or integration

10. Value Based Payment (VBP) is the Path to a Stronger System
April 17
Value Based Payment (VBP) is the Path to a Stronger System
Goal – Pay for Value not Volume

11. Payment Reform: Moving Towards Value Based Payments (VBP)
April 17
Payment Reform: Moving Towards Value Based Payments (VBP)
By MRT waiver Year 5, the goal is to have:
≥80-90% of total MCO-provider payments (in terms of total dollars) to be captured in Level 1 VBPs
≥ 50-70% of total managed care payments tied to VBP arrangements at Level 2 or higher
35% of total managed care payments (full capitation plans only) tied to Level 2 or higher
Required by the Special Terms & Conditions of the Waiver
Required to ensure that realized transformations in the delivery system will be sustainable
Required to ensure that value-destroying care patterns (avoidable admissions, ED visits, etc.) do not simply return when the waiver funding stops in 2020

12. What VBP is NOT A new rate setting methodology One size fits all
April 17
What VBP is NOT
A new rate setting methodology
One size fits all
Backing away from adequate reimbursement
An attempt to make provider do more for less

13. The Path towards Payment Reform
April 17
The Path towards Payment Reform
There will not be one path towards ≥80-90% Value Based Payments. Rather, there will be a menu of options that MCOs and Performing Provider Systems (PPSs) can jointly choose from
PPSs and MCOs will be stimulated to discuss opportunities for shared savings arrangements (often building on already existing MCO/provider initiatives)
In addition to choosing what integrated services to focus on, the MCOs and PPSs can choose different levels of Value Based Payments. There are many options to choose from

14. Our Current Proposed Roadmap Contains a Menu of Options for Reform
April 17
Our Current Proposed Roadmap Contains a Menu of Options for Reform
Options
Level 0 VBP
Level 1 VBP
Level 2 VBP
Level 3 VBP (only feasible after experience with Level; requires mature PPS)
All care for total population
FFS with bonus and/or withhold based on quality scores
FFS with upside-only shared savings when outcome scores are sufficient
FFS with risk sharing (upside available when outcome scores are sufficient; downside is reduced when outcomes scores are high)
Global capitation (with outcome- based component)
Integrated Primary Care
FFS (plus PMPM subsidy) with bonus and/or withhold based on quality scores
FFS (plus PMPM subsidy) with upside-only shared savings based on total cost of care (savings available when outcome scores are sufficient)
FFS (plus PMPM subsidy) with risk sharing based on total cost of care (upside available when outcome scores are sufficient; downside is reduced when outcomes scores are high)
PMPM Capitated Payment for Primary Care Services (with outcome-based component)
Acute and Chronic Bundles
FFS with upside-only shared savings based on bundle of care (savings available when outcome scores are sufficient)
FFS with risk sharing based on bundle of care (upside available when outcome scores are sufficient; downside is reduced when outcomes scores are high)
Prospective Bundled Payment (with outcome-based component)
Total care for subpopulation
FFS with upside-only shared savings based on subpopulation capitation (savings available when outcome scores are sufficient)
FFS with risk sharing based on subpopulation capitation (upside available when outcome scores are sufficient; downside is reduced when outcomes scores are high)
PMPM Capitated Payment for total care for subpopulation (with outcome-based component)

15. August 27th
April 17 15
The VBP Roadmap Starts from DSRIP Vision on How an Integrated Delivery System Should Function …
Integrated Physical & Behavioral Primary Care
Includes social services interventions and community-based prevention activities
Chronic care (Diabetes, CHF, Hypertension, Asthma, Depression, Bipolar …)
Multimorbid disabled / frail elderly (MLTC/FIDA population)
Severe BH/SUD conditions (HARP population)
Developmentally Disabled population
Maternity Care (including first month of baby) ….
AIDS/HIV
Episodic
Continuous
Population Health Focus on Overall Outcomes and Total Costs of Care
Sub-Population Focus on Outcomes and Costs Within Sub-Population / Episode

16. DD VBP Advisory Group Timeline
August 27th
April 17 15
DD VBP Advisory Group Timeline
Meeting 1
Creating the Right Incentives – Paying for Value (November 15)
Working group agenda overview
DD Services in transition
The role of VBP in achieving high quality, cost effective care
High value care in a DD context - Total care, total population models with DISCOs, ACOs, and/or IPAs
Meeting 2
A Deeper Dive – the DD Population and Total Cost of Care (November 30)
Overview total cost of care for DD population
The Traditional HCI3 Model
A more nuanced view of use patterns of acute and LTSS
Meeting 3
Defining High Value Care for the DD population (December 15)
Defining the value premise
Special considerations for the DD population
Traditional medical and clinical intervention logic
Nontraditional intervention logic
Outcome measures to consider – an overview of “food for thought”
Meeting 4
Defining High Value Care for the DD population (continued) (December 30)
Goal is to select quality measures to incentivize strategic goals
Process and method for selection
Detailed review of quality measures – definition and method for collection and calculation
Facilitated quality measure selection
Meeting 5
Wrap-up Remaining Issues & Considerations (January 15)
Agenda TBD