Contracting Concepts for Value Based Payment Anesa Brkanovic - - PowerPoint PPT Presentation

Contracting Concepts for Value Based Payment

March 2018 Anesa Brkanovic Deputy Director, Division of Health Plan Contracting and Oversight Office of Health Insurance Programs NYS Department of Health

Overview of Arrangement Types and Contracting Entities

Contracting Overview

March 2018 1

Key Components of a VBP Contract and MCO- Provider Contracting Life Cycle Patient Centered Medical Home (PCMH) and VBP VBP Progress and Update

Types of VBP Arrangements and Contracting Entities - Overview

March 2018 2

Types of VBP Arrangements

March 2018 3

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

Levels of Value Based Payments

There are different levels of risk that the providers and MCOs may choose to take on in their contracts:

March 2018 4

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 FFS Payments FFS Payments Prospective total budget payments No Risk Sharing ↑ Upside Risk Only ↑↓ Upside & Downside Risk ↑↓ 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.

Contracting Parties

March 2018 5

• 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

• f management contractors.

Two Methods of Contracting

March 2018 6

MCO

IPA

Provider

MCO

OR

Provider

Shared Savings Agreement Shared Savings Agreement

Structure of a VBP Arrangement:

Total Care for General Population (TCGP)

March 2018 7

MCO

IP

Provider

MCO

DOH MCO IPA Hospitals Physicians FQHCs BH Providers Pharmacies CBOs Ancillary Providers

TCGP

IPA to IPA Contract

March 2018 8

MCO

IP

Provider

MCO

DOH MCO IPA Hospitals Physicians FQHCs IPA Provider Provider

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

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Components of a VBP Contract

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MCO

IP

MCO

DOH

1

Measurement Period

2 3 4 5 6 7 8

Targeted Medical Budget – Negotiable Arrangement Type/ Services Included Attribution – Negotiable Shared Savings and Losses – Negotiable Quality Measures Financial Protections - Negotiable Reporting – Negotiable

Contract Life Cycle

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IP

MCO

DOH Negotiation 90 – 180 days

MCO submits signed contract to DOH

<15 days

DOH review and approval

Up to 90 days

Contract Execution/ Implementation

Upon DOH approval

Monitor & Evaluate

Throughout term

• f agreement

Stage 1 - Negotiation

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IP

MCO

DOH Negotiation 90 – 180 days

MCO submits signed contract to DOH

<15 days

DOH review and approval

Up to 90 days

Contract Execution/ Implementation

Upon DOH approval

Monitor & Evaluate

Throughout term

• f agreement

Negotiation

Contracting Best Practices

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MCO

DOH Negotiation

Negotiation

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.
• 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

Understand your organization’s capabilities Negotiate with the right people

Contracting Best Practices (cont’d)

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MCO

DOH Negotiation

Negotiation

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.

Monitor Progress

Contracting Best Practices (cont’d)

March 2018 14

MCO

DOH Negotiation

Negotiation

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

• f going to court, which can take up time and money.

Top 5 Steps for Beginners

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MCO

DOH

Negotiation Assess your readiness for VBP; keep in mind Level 1 is an upside-only arrangement Determine if you have an existing contract that can easily be amended to include VBP 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. Build partnerships – Choose the partners that will help you succeed and that are appropriate for the contracts you choose Familiarize yourself with and utilize available resources (data from the State, technical assistance from potential partnering contractors, etc.)

1 2 3 4 5

Top 5 Steps for Experienced Contractors

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MCO

DOH

Negotiation

1 2 3 4 5

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. Re-assess your capabilities and network partnerships; and gain understanding in readiness for advancement in VBP risk levels and expansion in scope 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 Keep current with yearly benchmarks and modify strategy and risk arrangements based on performance Where feasible, continue to improve and strengthen your data & analytics capabilities to understand the services you provide and the population you serve

Stage 2 – Submission of a Contract to DOH

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IP

MCO

DOH Negotiation 90 – 180 days <15 days

DOH review and approval

Up to 90 days

Contract Execution/ Implementation

Upon DOH approval

Monitor & Evaluate

Throughout term

• f agreement

MCO submits signed contract to DOH

Contracting Checklist

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• Before submitting a contract to DOH for Review, please refer to

the VBP On-Menu and Off-Menu Contracting Checklists

Contract Review Process

March 2018 19

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

Tier 1 Tier 2 Tier 3

• 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.

• The DOH Review Tier

includes VBP Level 2, VBP Level 3, and all other arrangements that do not trigger Regulation 164, but contain

• ver $1,000,000 of potential

payments to providers at risk, exceed more then 15% of providers total Medicaid revenue

• r constitute an of menu

arrangement.

File and Use Review for DOH Tier 1

March 2018 20

• 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

Financial Review for DOH Tier 2

March 2018 20

• 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.) Demonstration of Provider financial viability For all Contracts that fall under the DOH Review Tier, the financial viability of the contracting provider must be demonstrated. Financial Security Deposit (FSD) FSD only required when providers in this column fail to demonstrate financial viability FSD required for all arrangements involving participating provider networks

On-Menu VBP Arrangement Checklist

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The following questions must be addressed to meet the VBP contracting requirements outlined in the VBP Roadmap:

On-Menu VBP Arrangement Checklist (cont’d)

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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?

On-Menu VBP Arrangement Checklist (cont’d)

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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?

Off-Menu Arrangements

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• MCOs and providers may agree to contract off-menu arrangements*. The

following criteria need to be fulfilled to count as VBP arrangements:

1. Reflect the underlying goals of payment reform as outlined in the Roadmap and sustain the transparency of costs versus outcomes 2. Focus on conditions and subpopulations that address community needs but that are not otherwise addressed by VBP arrangement in the Roadmap 3. Patient rather than provider centric 4. 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 5. ‘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.

Stage 3 – DOH Review and Approval

March 2018 25

IP

MCO

DOH Negotiation 90 – 180 days <15 days Up to 90 days

Contract Execution/ Implementation

Upon DOH approval

Monitor & Evaluate

Throughout term

• f agreement

MCO submits signed contract to DOH

DOH review and approval

Review and Approval Entities

March 2018 26

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

Stages 4 & 5 – Contract Execution/Implementation and Monitoring & Evaluation

March 2018 27

MCO

DOH Negotiation 90 – 180 days <15 days Up to 90 days Upon DOH approval Throughout term

• f agreement

MCO submits signed contract to DOH

DOH review and approval Contract Execution/ Implementation Monitor & Evaluate

Contract Execution/Implementation, Monitoring & Evaluation

March 2018 28

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

PCMH and VBP

March 2018 29

PCMH Requirements

March 2018 30

• 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 2017 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.

PCMH Requirements (cont’d)

March 2018 31

• 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, 2018 - 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

2014 Level 2 standards will be permanently eliminated for both MMC and FFS.

PCMH and VBP

March 2018 32

• 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.

State VBP Progress Update

March 2018 33

CMS Reporting Requirements

March 2018 34

• 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

MCO Year 2 Survey

March 2018 35

Starting Point for Statewide and Regional VBP Progress

NYS VBP Baseline

CalendarYear 2014

Year 1 Progress

CalendarYear 2015 (DY1)

Year 2 Progress

CalendarYear 2016 (DY2)

Year 3 Progress

SFY 2 17-18

(4/1/17-3/31/17)

Year 4 Progress

SFY2018-19 (DY4)

Year 5 Progress

SFY2019-20 (DY5)

Value Based Payment Tracking Report (VBPTR)

March 2018 36

• VBPTR is designed to collect MCO progress towards achieving State’s VBP goal
• f 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

Value Based Payment Tracking Report (VBPTR)

March 2018 37

• 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

VBPTR 2017-18 Reporting Schedule (Cumulative for 4/1/17-3/30/18) Time period Issue Date Return Date 1st 4/1/2017 - 9/30/17 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

• Medicaid Advantage Plus (MAP)
• Managed Long Term Care (MLTC

PARTIAL)

• Fully Integrated Dual Advantage

(FIDA)

• Programs of All-Inclusive Care for

the Elderly (PACE)

Broad Overview of Results (Combined MMC, HARP, and HIV SNP)

March 2018 38

VBP Baseline of Levels 1 - 3 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%

Year to Year Comparison Results (Combined MMC, HARP and HIV SNP)

March 2018 39

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

Summary of Arrangements By Type

March 2018 40 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 $0 $0 $0 0.00% HARP Sub-population $0 $427,631,163 $0 $427,631,163 1.93% Off-Menu Arrangements $517,329,736 $310,178 $0 $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% OtherArrangements $273,621,286 $60,395,048 $36,730,007 $370,746,341 1.68%

VBP By Region

March 2018 41

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% 0.01%

• 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%

Useful Links

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