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New research documents state of value-based care in all 50 states

The analysis finds that value-based payment is firmly rooted in state healthcare policy.

Susan Morse, Managing Editor

A new study finds 48 states have implemented value-based care initiatives, with half of these programs being multi-payer in scope.

The report, released by Change Healthcare, looks at state-run value-based care initiatives across all 50 states, the District of Columbia and Puerto Rico.

It calls out three states--New York, Pennsylvania, and Vermont--for the broad scope of their initiatives, embracing payment models that involve shared risk, and willingness to test innovative strategies.

In total, six states have had well-developed value-based care strategies in place for four years or longer, 34 are two or more years into implementation, and eight states are in the early stages of value-based development.

Only four states have had little-to-no value-based payment activity.

Accountable Care Organizations and ACO-like entities are in place or are being considered in 22 states, and 16 states have established or are planning bundled-payment programs.


There's been a seven-fold increase in the number of value-based care programs across the U.S. in the past five years, which means a move towards better health outcomes, efficiencies and reduced costs.

Medicare provides coverage for an estimated 21 percent of covered lives, Medicaid 21 percent and employer-based coverage 49 percent.

The Centers for Medicare and Medicaid Services has taken a leadership role in implementing value-based payments. The Centers for Medicare and Medicaid Innovation created the Health Care Payment & Learning Action Network, a public-private partnership aimed at spurring payment innovation in the healthcare system at-large.

Legislation such as MACRA requires value-based payment in Medicare.

But the study found that commercial payers and states are following the government's lead in moving away from fee-for-service payment arrangements.

States retain significant authority over their regional healthcare market, including Medicaid operations and private insurers.

Two CMS sponsored programs--the State Innovation Model (SIM) grants and the Delivery System Reform Incentive Program (DSRIP) waivers for Medicaid--require states as a condition of participation to develop a payment reform strategy.

In addition, a number of states have been approved to participate in Comprehensive Primary Care Plus (CPC+), a medical home model that seeks to strengthen primary care by reforming care delivery and multi-payer payment.

Eighteen states and regions are participating in the program including Arkansas, Colorado, Hawaii, Greater Kansas City Region of Kansas and Missouri, Louisiana, Michigan, Montana, Nebraska, North Dakota, Greater Buffalo Region of New York, North Hudson-Capital Region of New York, New Jersey, Ohio and Northern Kentucky Region, Oklahoma, Oregon, Greater Philadelphia Region of Pennsylvania, Rhode Island, and Tennessee.

State payment reform has historically been influenced by factors including state-focused CMS initiatives, state budget challenges, and state policymakers' interest in healthcare innovation. Not surprisingly, a review of state value-based payment reform initiatives demonstrates significant variation in approach, the study said.


This is the second national study, Value-Based Care in America: State-by-State, published by Change Healthcare. 

In its inaugural study in 2017, Change highlighted state governments' efforts to explore and implement value-based reimbursement models.

Consistent with an annual survey conducted by researchers at the Kaiser Family Foundation, this analysis finds that value-based payment is firmly rooted in state healthcare policy, with more than 40 states investing in value-based strategies and six states including Alabama, Alaska, Florida, North Carolina, South Carolina and South Dakota pursuing value-based reimbursement entirely outside of the SIM and CPC+ programs.

The study is based on analysis of publicly available information first compiled and reported in 2017 and updated in February 2019. Information sources include state and federal government resources, input from contractors that participate in state-initiated value-based programs, and secondary resources including research reports from healthcare industry analysts, think tanks, public policy and research institutes, and the media.


"Much of the public's attention is focused on the federal government's role in catalyzing healthcare payment reform, but the significant work being done at the state level is no less important and meaningful," said Carolyn Wukitch, senior vice president & general manager, Network and Financial Management, Change Healthcare, which works with healthcare organizations. "Based on the report, it's obvious that managed Medicaid programs are actively exploring numerous VBP models, and that states implementing more advanced strategies around healthcare payment transformation will ultimately drive the commercial markets."

Twitter: @SusanJMorse
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