Payers across the country are launching population-based payment (PBP) models. This upfront, prospective, value-based payment (VBP) approach pays providers based on the number of patients served, as opposed to the number of services performed, and includes provider accountability measures for quality and cost of care. PBP models have the potential to improve health outcomes and promote health equity by incentivizing providers to keep patients well and giving providers greater flexibility in how they deliver services. The Centers for Medicare & Medicaid Services (CMS) Innovation Center and state Medicaid programs have been especially interested in primary care PBP models. As this momentum grows, Medicaid programs may be asking: how can we get started?

Early Decision Points for States Pursuing PBPs

The Center for Health Care Strategies’ (CHCS) Medicaid Primary Care Population-Based Payments Learning Collaborative, made possible by Arnold Ventures and The Commonwealth Fund, is working with five state Medicaid programs in Colorado, Connecticut, Massachusetts, Montana, and New Mexico to design or refine primary care PBP models. Through this work, CHCS identified four decision points for states to consider when getting started on primary care PBP model design to support a successful launch.

1. Collaboration: Who do we need to work with to design and launch an effective PBP model?

State policymaking is strengthened by engaging stakeholders — including provider organizations, individual primary care providers (PCPs), managed care organizations, and people served by Medicaid — early and often when designing payment models. Through strategies including focus groups, working groups, listening sessions, advisory boards, and surveys, states can take a collaborative approach to set goals, strengthen model design, and create buy-in for the model. Though many states have experience working with provider organizations and managed care organizations, they are often still learning how to partner with Medicaid members to shape effective policies and programs and may face barriers to authentic engagement. States should work to overcome these barriers, because member engagement provides many opportunities to improve model design and promote health equity.

Connecticut kicked off its model design process by conducting focus groups with PCPs, Medicaid members, and provider and community advocates. Through these focus groups, the state sought to understand stakeholder priorities for primary care improvement, identify opportunities to promote health equity through a new primary care model, and assess interest in different payment approaches. Results from the focus groups continue to provide valuable guidance to inform the state’s primary care model goals and design.

2. Goals: What do we want to achieve through the PBP model?

While primary care PBP models may support many policy aims, states and their stakeholders can work together to identify a small, defined set of priority goals for their model. Upfront goal setting can drive decision-making during lengthy model design and implementation processes and support efforts to meaningfully assess model performance. A clearly defined set of goals can also help Medicaid programs effectively share their vision with model stakeholders, legislators, and the public.

States might have goals such as streamlining provider incentives, promoting team-based primary care, or stabilizing independent and small primary care practices. As priority goals are developed, states should explore how goals can promote health equity, either directly or indirectly. The state may choose to develop explicit health equity goals, e.g., eliminating racial disparities in access to primary care. Or the state may opt for broad primary care goals that link to health equity, e.g., increasing capacity for advanced primary care functions, such as behavioral health integration, and assessing if this leads to decreased racial disparities in access to behavioral health care.

Regardless of the exact goals, the lesson is the same: states need to know what they’re trying to achieve so they can design their models appropriately and assess if their model is working.

3. Readiness: Are providers prepared to participate in the PBP model?

PBP models are advanced payment models that often require prior experience with VBP, and provider organizations across the state may have varying levels of readiness to participate in a PBP. As part of stakeholder engagement, states can use different tools to assess provider readiness and results of this readiness assessment can drive model design choices. In states where fewer providers are ready for a PBP model, Medicaid programs can design models that support different levels of readiness.

Colorado’s hybrid primary care PBP model allows provider organizations to select the percentage of overall revenue that they receive as a PBP versus fee-for-service (FFS) payment. CMS’ Making Care Primary Model includes three tracks to move providers from FFS payment to PBP, including a track that provides upfront funding to broadly support infrastructure development (e.g., increasing staffing, developing strategies to screen for and address health-related social needs, investing in technology systems to support telehealth) for provider organizations with less VBP experience. Multiple states are also considering how to increase readiness among providers who are less likely to participate in VBP models, but are critically important for advancing health equity, such as federally qualified health centers, Indian health care providers, and rural PCPs.

4. Evaluation: How will we measure success of the PBP model?

While states may have limited funding available for a robust model evaluation, all states should develop a plan to assess if the PBP model is achieving their priority goals. This plan is distinct from the model’s quality incentives — it assesses the model’s statewide impact, rather than how specific provider organizations perform on set quality metrics.

Developing a plan to assess the model early in the design process can help states explicitly link their priority goals, model design decisions, and ideal model outcomes. This process can also help states determine what data they need to collect to understand if the model is succeeding. Results from this assessment can guide refinements to the primary care PBP model over time, as challenges become apparent or opportunities for innovation arise.

States might select multiple ways to measure progress on their goals and collaboration with stakeholders, including Medicaid members, should inform what measures are used. While measures often cover clinical quality, they may also include other metrics, like those in the Comprehensive Primary Care Plus model, such as PCP satisfaction, model uptake, adoption of specific care delivery changes, access to care, or patient experience. To measure health equity impact, states can consider stratifying selected metrics, assessing disparate impacts on priority populations, or understanding the impact of the model on member experience, among other metrics.

Looking Ahead

State Medicaid programs are interested in the promise of primary care PBP models to achieve often elusive health care goals around improved equity, quality, and outcomes; lower costs; and enhanced patient and provider experience. As states pursue this advanced VBP approach, they should address key decision points around collaborating with stakeholders, setting goals, assessing provider readiness, and developing an evaluation plan, which can help to lay the groundwork for success. Starting with these decision points can prepare PBP model designers to develop impactful programs and set them up to make challenging but exciting design choices.

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