Value-Based Payment Models

Our quick take

Health plan CMOs use alternative payment models to align provider incentives with Triple Aim principles: lower cost, higher quality, and better experience for members. But many physicians and provider administrators remain resistant to managing downside risk, either because they don’t think they’ll succeed or because they can’t see the benefit in a market that continues to reward fee-for-service.

To change providers’ profit outlook and promote participation in downside risk, plans must look beyond financial incentives to support operational improvements backed by meaningful data that enhances clinician experience.

What motivates physicians to participate in downside-risk arrangements?

In 2018, we surveyed provider leadership and frontline clinicians on what tools and program incentives they need from plans to drive their adoption of risk-based models. Download the full Path to Value survey report.

Below, you will find providers’ ranking of 10 plan-sponsored supports. The top four center around financial support (increase in bonus potential, preferred network status), operational support (removal of select prior authorization), and informational support (analytics tools).

Which of the following would make physicians more willing to participate in downside risk arrangements with private payers?

Downside Risk Arrangements

What support should plans offer provider organizations?

Using provider feedback from the survey, we gathered best practices that plans can deploy to more effectively engage providers under risk-based contracts.

1. Financial support: Enhance the “value” of value-based care

The best way to convince providers that value-based care is beneficial is to frame it in terms of their growth strategy. Show how they can increase market share and use behavioral economics to enhance the perceived
value of incentives. Here are a few examples:

  • Teal Health Plan (pseudonym) uses geographic attribution and staffs FTEs to call members who
    haven’t been seen.
  • Health Partners Plans shows missed earnings in provider reports and packages it with physical bonus checks to ensure delivery and review.
  • L.A. Care adopted flexible quality scoring options for incentive payments that reward both attainment
    and improvement.

Download the financial support tactics

2. Operational support: Reward providers with reduced prior authorization

Providers highly value prior authorization (PA) reform, and would be more likely to accept downside risk if plans reduced PA. By streamlining burdensome processes, CMOs can go a long way in patching frayed relationships with providers. Here are a few examples:

  • HPSJ removes codes for which the processing costs outweigh the benefits of medical management.
  • BCBS VT rewards providers who adhere to plan standards either through automatic PA approval or
  • UHC offers automatic PA approval with decision support to promote evidence-based clinical pathways.

Download the operational support tactics

3. Informational support: Help providers focus on important data

Providers generally view data and analytics as a prerequisite to their willingness to take on risk. Providers fundamentally want to feel like they have the tools and insights they need to succeed as population health managers. Here are a few examples:

  • CareFirst implemented a “completion factor” to claims data to reduce the time lag by estimating
    percent of paid claims to date relative to a prior year’s actual paid claims.
  • BCBS VT offers physician practices in-person support from a plan-employed pharmacist to discuss performance reports and teach meaningful interventions for improvement.
  • Magenta Health Plan (pseudonym) tiers more favorable access to data for partners in downside risk.

Download the informational support tactics

For a comprehensive look at the support plans offer providers under downside risk, download the full whitepaper.

Next, see our downside risk survey insights

The Valued Plan Partner

In October 2018, we surveyed 134 health plan executives, hospital and health system leaders, medical groups, independent physician practices, and clinicians. We asked them what would motivate physicians to participate in downside risk arrangements and how plan offerings compare with what providers want.

Download the infographic

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