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Over 40 U.S. States Pursuing Value-Based Payment Programs, Report Finds

November 14, 2017
by Rajiv Leventhal
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Alternative payment programs are becoming entrenched in state-level healthcare policy, according to a new study from Change Healthcare, which found that at least 40 states are pursuing value-based payment programs, with 15 multi-payer initiatives across those states.

Much attention has been paid to the federal government’s role in accelerating the shift in healthcare payment from volume to value. For example, in 2015, the Centers for Medicare & Medicaid Services (CMS) announced a commitment to tie 90 percent of Medicare payments to value by 2018, and 50 percent of payments to alternative payment models by 2018. Since then, the CMS has introduced numerous value-based programs, and has moved forward implementation of congressionally approved value-based payment initiatives, such as the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).

The report from Nashville-based Change Healthcare found that 23 states have value-based targets or mandates that payers and providers agreed to achieve, 17 have or are considering adoption of ACOs (accountable care organizations) or ACO-like entities, and 12 have or are considering episodes of care programs. Just seven states have little to no activity around value-based payment models. Also, many states have used value-based payment reform to engage with healthcare stakeholders in the redesign of the state healthcare system, identifying unique and innovative strategies that work for their state healthcare market.

The five states that stood out the most for the breadth of their initiatives, their embrace of payment models that involve shared risk, and their willingness to test innovative strategies, were:

  • Arkansas, which has a multi-payer EOC program in place for five years
  • Colorado, which has a well-developed Medicaid ACO program, and is working with payers and large employers to implement value-based payment
  • Minnesota, which was an early adopter of EOC and has now moved into ACOs
  • Tennessee, which is on pace to roll out 76 episodes of care in its Medicaid and state employee programs by 2019
  • Washington, which has committed to tying 80 percent of its state-financed health payments to value by 2021 and is seeking similar commitments from commercial payers in the state

"This report clearly shows that most of the country is committed to value-based payment as a key component of health reform in order to bend the cost curve and ultimately achieve the Triple Aim," Carolyn Wukitch, senior vice president & general manager, network and financial management, Change Healthcare, said in a statement. "To scale these complex payment arrangements, payers and providers will need to rely even more on their healthcare information partners to help them model, automate, and analyze their programs to ensure cost savings, appropriate care, and fast, accurate payment."

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