Value-Based Purchasing for Managed Long- Term Services and Supports (MLTSS)

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1 Value-Based Purchasing for Managed Long- Term Services and Supports (MLTSS) Erin October 24, 2017 Contents MLTSS Program Growth Value-Based Purchasing and Payment Reform Value-Based Care in MLTSS Programs Challenges State Activity Payment Models Quality Measurement Levers to Encourage Adoption of VBP Arrangements 2 1

2 MLTSS Program Growth Medicaid is the primary payer of LTSS Managed care spending on LTSS increased from 5% in 2009 to 15% in 2014, driven by an increase in state implementation of MLTSS programs 3 Value-Based Purchasing and Payment Reform Value-Based Purchasing: A business strategy to maximize the benefit received when buying a good or service bank for the buck States must define value in clear, measurable terms VBP is working actively and collaboratively with contractors VBP requires coordinated activity across agency functions (contracting, clinical, quality, finance, analysis) A common focus of value-based purchasing of health care is value-based payment Slen J, Bailit M and Houy M. Value-Based Purchasing and Consumer Engagement Strategies in State Employee Health Plans: A Purchaser Guide AcademyHealth, Washington, DC, April

3 Value-Based Purchasing and Payment Reform (cont d) Holding providers or contracted health entities accountable for both the cost and quality of health care provided to individuals is a common focus of value-based purchasing of health care services. Value-based payment explicitly rewards health care providers for performance relative to cost, quality, access, and/or service utilization objectives Value-based payment models change the financial incentives to reward high-value, cost-effective care and minimize the volume incentive of FFS Image courtesy of Healthier Washington 5 Value-Based Care in MLTSS Programs Same general principles apply Unique challenges for VBP in MLTSS programs MLTSS programs need to consider Strategies for populations that use LTSS services VBP strategies for LTSS services and providers An increasing number of states are applying value-based contracting strategies to their MLTSS programs 6 3

4 MLTSS VBP Challenges LTSS providers are not well positioned to enter into many forms of value-based payment models Small providers serving small numbers of patients LTSS providers feel that lack of data analysis capability and value-based payment contracting expertise are barriers Health plans point to provider lack of understanding of value-based contracting, lack of resources and small size as barriers to entering into agreements with LTSS providers Measurement issues: heterogeneity of the population makes measurement challenging, as does lack of standardized measures and benchmarks 7 Value-Based Care in MLTSS: State Activity Arizona and Texas have implemented value-based payment targets for MLTSS programs Virginia will require MLTSS plans to report on and increase the use of APMs Minnesota MLTSS contracts include provision for valuebased purchasing of long-term care, primary care, and/or behavioral health care services Tennessee QUILTSS (Quality Improvement in Long-Term Services and Supports) Nursing facility pay-for-performance HCBS pay-for-performance program under development 8 4

5 MN Integrated Care System Partnerships Goals Improve quality of care for seniors and individuals with disabilities Tie payment of services to financial performance and quality metrics Improve care coordination Flexibility for MCOs to design payment model Measurement work group of providers, MCOs and state officials developed measure sets Motivated some plans and providers to try new payment arrangements Increased communication between plan and providers Shared savings contributing to changes in delivery system Investments in care coordination and community health workers Common Value-Based Payment Models in MLTSS Programs Pay-for-Performance (most frequently implemented) Easier to design and implement Appropriate to encourage entry and for problems with small numbers Can initially reward for reporting on specific measures and then for improvement/achievement Supplemental payments for care coordination Often payments to PCPs that serve large numbers of members receiving LTSS Payment must be linked to performance for it to be value-based Population-based payments Shared savings / risk (less common) Total cost of care arrangements typically exclude LTSS More appropriate for larger, integrated health organizations with sufficient financial reserves and capacity Financial and delivery system alignment create opportunities 10 5

6 Quality Measurement for LTSS LTSS measurement strategies need to consider domains that are difficult to measure, including: Quality of life Functional status Independence Limited relevant LTSS measures in existing measure sets, so states have been innovators in developing measures HCBS CAHPS National Core Indicators-Aging and Disabilities (NCI-AD) CMS Star Ratings Minimum Data Set (MDS) HEDIS Care of Older Adults* CMS Special Needs Plans (SNP) Other NQF-Endorsed Measures State-Specific Measures *Four-part measure: assessment of functional status, advance care planning, medication review and pain assessment 11 State Levers to Encourage VBP Adoption Grants or capacitybuilding investments to support entry and readiness Structure MLTSS contracts to direct or encourage value-based payment models (e.g., data and reporting requirements, payment targets) Waiver terms and requests for DSRIP funds to support LTSS infrastructure development Special Needs Plans contracting authority to further integrate and align financing and delivery 12 6

7 Additional Resources State Strategies: Value-Based Payment for Medicaid Populations with Complex Care Needs : Tricky Problems with Small Numbers : Design Considerations for Nursing Facility Quality Improvement Initiatives in Medicaid Managed Long-Term Services and Supports Programs : 13 Thank you! 14 7