powered by LeadingAge New York

DOH Explains Next Steps for MLTC Value-Based Payment

In a Dec. 21st webinar, the Department of Health (DOH) discussed 2019 updates to managed long term care (MLTC) value-based payment (VBP) provider contracts, nursing home VBP, and details on the progression to Level 2 VBP. The webinar also covered penalties and performance adjustments to be imposed on plans based on progress toward VBP targets and VBP tracking reports. Notably, the Department announced that it would provide $1 million in VBP incentive payments to fully-capitated integrated MLTC plans.

Nursing Home VBP: The Department has decided to continue to promote the engagement of nursing homes in Medicaid VBP contracts, notwithstanding the pending waiver amendment to limit the MLTC nursing home benefit. Although the Department had earlier proposed replacing the required potentially avoidable hospitalization (PAH) quality measure in nursing home VBP arrangements with a short-stay discharge to the community measure, it has decided to retain the PAH measure in 2019.

Updates to MLTC VBP Contracts: Level 1 VBP contracts for 2019 must include an updated measurement year for the PAH measure. Due to a delay in publishing the July-December 2017 SPARCS data, 2019 contracts should use January-June 2017 as the base year for PAH performance. Plans and providers that used the Department's template VBP contract in 2018 will have to revise their contracts to reflect this change for the 2019 contract year. The base year for other measures may be the most recent year with complete data.

MLTC Level 2 for Partially-Capitated MLTC Plans: In 2019, at least 5 percent of partially-capitated plan expenditures for nursing home, personal care, and home health services must be made via Level 2 arrangements. The Department will evaluate plans' progress toward Level 2 VBP contracting and impose penalties on plans that do not meet the requisite targets (discussed below). To qualify as Level 2, VBP contracts must impose both a reward and a penalty based, at a minimum, on the provider’s performance on the PAH measure and one other approved measure. Contracts may include additional approved measures. The penalty for poor performance must amount to at least 1 percent of the total expenditures flowing from the plan to the provider; providers and plans may negotiate higher levels of penalties. Total expenditures are to be calculated based on the prior year’s spending or a composite of multiple prior years. Minimum wage expenditures and other dedicated payments from plans to providers are not included in the calculation of total expenditures.

In addition to the possible imposition of a penalty, Level 2 contracts must include a social determinants of health (SDH) intervention and a contract with a Tier 1 community-based organization (CBO). The Department has not published a list of approved SDH interventions applicable to the population served by MLTC plans. However, LeadingAge NY believes that such interventions may include friendly visiting and virtual senior centers to ameliorate social isolation, exercise programs to prevent falls and improve self-care, and elder abuse and exploitation prevention programs. A CBO qualifies for Tier 1 if it is a non-profit human services organization that does not otherwise receive Medicaid reimbursement. Notably, a home-delivered meals provider may be a Tier 1 CBO even though it may receive Medicaid funding through MLTC contracts. However, services that are covered under the MLTC benefit package (e.g., home-delivered meals) do not qualify as SDH interventions. The Department explained that the Tier 1 CBO need not provide the SDH intervention, but that there should be collaboration among the CBO, the plan, and the provider of the SDH intervention.

VBP Performance Adjustments: The Department’s VBP strategy includes a $50 million pool to reward performance on the PAH measure under partially-capitated MLTC contracts and the imposition of penalties on both partially-capitated and fully-capitated plans for failure to reach VBP targets. In addition, the Department announced that it will be making available $1 million for performance incentives for fully-capitated plans.

The $50 million will be made available in 2020-21 based on PAH performance in 2018. The $50 million will be allocated between two pools – a community pool and a nursing home pool – based on member months in each setting. Plans will be arrayed in performance-based tiers within each pool, and awards will be calculated by tier. Only plans in the top three tiers in the community pool will be eligible for an award. Awards from the nursing home pool will be based on both the percentage of payments in VBP arrangements and performance on the PAH measure. Only plans with 50 percent or more of their nursing home payments in VBP arrangements will qualify for an award under the nursing home pool.

VBP Penalty Adjustments: Under the State’s VBP Roadmap, MLTC plans must meet the following VBP goals by 2020:

  • 80-90 percent of payments from all MLTC plans to providers in VBP arrangements;
  • 35 percent of payments from fully-capitated plans to providers in Level 2 or 3 VBP;
  • 15 percent of payments from partially-capitated plans to providers in Level 2 or 3 VBP.

Progress toward these goals is measured annually and compared to incremental milestones. The percentage of spending in VBP arrangements is calculated based only on nursing home, home health, and personal care spending. VBP penetration of fully-capitated plans is measured based on Medicaid expenditures only. Plans that do not reach incremental milestones are subject to a penalty of 2 percent of the difference between the amount of payments in VBP arrangements and the target. Penalties will be imposed for the first time in SFY 2018-19 based on performance in SFY 2017-18.

In addition to these penalties, VBP stimulus funds paid to partially-capitated plans in 2017 will be recouped proportionately from any plan that did not pay out 100 percent of its nursing home, home health, and personal care reimbursement via VBP contracts.

VBP penetration is determined by data collected through the VBP tracking reports (VBPTR) submitted by all managed care plans. Programs of All-Inclusive Care for the Elderly (PACE) are also required to submit VBPTR data.

The Department welcomes questions and comments on these policies here. According to the Department, slides from the webinar should be made available soon.

Contact: Karen Lipson, klipson@leadingageny.org, 518-867-8383 ext. 124