By Monica E. Oss, Chief Executive Officer, OPEN MINDS
In the midst of an uncertain market, a new statewide initiative in California is rolling out an interesting approach to moving community-based care beyond fee-for-service (FFS). The new model, the California Advanced Primary Care Initiative, is a multiple-payer initiative to move to a common value-based primary care payment model that includes assessing and addressing consumersā behavioral health and social needs.
Aetna, Blue Shield of California, and Health Net, among others, formalized through a 2022 memorandum of understanding, a common performance-based reimbursement model structured around four strategic pillars: practice transformation, investment in primary care, flexible and equitable payment design, and data transparency. The current model uses a three-part value-based payment framework: a hybrid payment (capitation + FFS) for direct services; a population health management per member per month (PMPM) payment and a performance-based payment based on the Advance Primary Care Measure Set.
The Advance Primary Care Measure Set has five domains of performance. A group of chronic disease management measures, patient-reported outcomes on depression, and to-be-determined consumer safety measures. This Measure Set also includes consumer experience measures and three common measures of cost of careāemergency room use, inpatient use, and total cost of care. In the evolution of the reimbursement model, the plan is to move to a full performance-based payment methodology some time this year.
This California initiative is one of a number of recent developments in value-based reimbursement. Some of these new initiatives that weāve covered in the past few months include:
- Amerigroup DC Launches Medicaid Value-Based Agreement With DC Connected Care Network
- AbsoluteCare & Aetna Better HealthĀ® Of Illinois Launch Comprehensive Value-Based Health Care Services In Chicago
- Delaware Medicaid Launches New Pediatric Global Payment Model With Nemours Childrenās Health
- Integral Health Network Of Southern Arizona Achieves 12.1 Point Reduction In 2023 Medical Loss Ratio For Medicaid MCO BannerāUniversity Family Care
These developments are important for community-based provider organization strategy for two reasons. First, the proportion of health care revenue paid through value-based arrangements continues to increase. And a recent survey of health care executives found that six in 10 said they expect their organization to see higher revenue from value-based care arrangements this year than in 2024. And 30% of executives said a quarter of their revenue is tied to value-based care contracts and more than 20% indicated at least half of their revenue is derived from fully capitated or downside risk contracts.
These executives cited four primary impediments to value-based reimbursement adoption at their organization. The key issue was the ability to accept financing riskā87%āwith provider readiness concerns relevant to 80% of organizations. On the infrastructure side, 75% of executives cited data interoperability as a major impediment, with 67% having concerns about technology costs.
The second issue is that the number of arrangements with blended primary care and behavioral health reimbursement is on the increase. This poses unique strategy issues for both specialty provider organizations and primary care practices as executive teams developed plans for addressing clinical and administrative infrastructure: āInsights from care coordination, utilization trends, and disparities in outcomes must directly inform contract performance strategies.ā
To gain additional insight into value-based care strategies in a shifting market, I spoke with OPEN MINDS Senior Associate Christy Dye. She noted that health plans are increasingly seeking turnkey partnersāorganizations that can demonstrate integrated care delivery and measurable impact from day one. āOrganizations should be advancing a whole person care approach to their services now to move quickly on value-based contract opportunities.ā
But she was quick to add that making the transition to value-based care isnāt just about contractingāitās a system-wide transformation that starts inside the organization. Success under value-based reimbursement requires aligning leadership, staff, and technology infrastructure around shared population health goals. This includes implementing interoperable electronic health records (EHRs), developing real-time decision-support dashboards, and assembling care teams that address both clinical and social drivers of health.
āI have evaluated multiple integrated care programs over the past two years, and organizations that adopt these models are well-positioned for value-based reimbursement. Theyāve invested in technology and reporting, refined their workflows, and developed care coordination processes and teams as part of their integration model. The pay-off is being first to the contracting table when a health plan is looking for partners that understand how integrated, coordinated care reduces health care costs and already has the internal systems set up to make that happen.ā
To assess your organizationās āreadinessā for new models of integrated, value-based care, check your score with The OPEN MINDS Value-Based Reimbursement Readiness Assessment.