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DOH Releases MLTC Value-Based Payment Clinical Advisory Group Report

The Department of Health (DOH) has released the Value-Based Payment Recommendation Report of its Managed Long Term Care Clinical Advisory Group (CAG). The report, together with the Department's New York State Roadmap for Medicaid Payment Reform, offers insights into the Department's plans for value-based payment (VBP) arrangements between managed long term care (MLTC) plans and providers. Based on input derived from four meetings of the MLTC CAG, the report includes a high-level description of MLTC VBP arrangements and a list of the quality measures that will be used to evaluate performance under these arrangements.

The report acknowledges that the bifurcation of Medicare and Medicaid hinders the development of VBP arrangements for the MLTC population:

[A]n evident opportunity to improve outcomes and reduce overall costs is to prevent avoidable hospitalizations or (re)admissions from nursing homes and homecare settings. However, preventing unnecessary hospitalizations results in savings for Medicare that cannot be captured by Medicaid providers unless CMS and NYS set up specific initiatives to make this possible (such as Fully Integrated Dual Advantage (FIDA) plans). Efforts to more fully align with Medicare have thus far been unsuccessful, although they will continue.

To address this barrier, while pursuing the goal of reducing avoidable hospitalizations, the Department will "treat potentially avoidable hospital use as ‘quality outcomes’ . . . improving the quality of life for . . .members, and rewarding MLTC providers when certain levels of reduced avoidable hospital use are reached." These arrangements would qualify as Level 1 VBP arrangements (even though they do not generate Medicaid savings), and would be eligible for financial incentives. The report indicates that the state intends to create "an additional Quality Pool" to reward reductions in avoidable hospital use.

In the absence of Medicare alignment, the report posits that Medicaid "savings could be realized by extending the period the member is able to stay at home (i.e., admission to the nursing home is delayed or avoided all together)" and by "transitioning nursing home residents . . . into the community." Based on input provided by the CAG, the report provides the option for providers and plans to contract separately for members living in the community and those living in nursing homes, under two types of VBP packages:

  • Home Health providers contracting total (Medicaid) costs of care for those members assigned by the MLTC to home care;
  • Nursing Home providers contracting total (Medicaid) costs of care for those members assigned by the MLTC to a Nursing Home.

However, the report encourages VBP contracts that "span the entire spectrum of MLTC care, so as to maximally incentivize LTC providers to optimize costs versus quality of care."

The report anticipates that the risk adjustment methodology used in VBP will be identical to the methodology used by the state to calculate MLTC premiums. It also identifies 37 quality measures, principally derived from the MLTC Quality Incentive Program and the Nursing Home Quality Initiative, to be used to evaluate performance under VBP arrangements and determine the share of savings or bonus payments to be earned.

The Department of Health is seeking long term care providers and MLTC plans willing to enter into pilot VBP arrangements to test and refine models in advance of the statewide rollout. Comments on the report are due by Jan. 9, 2017 and may be submitted here.

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