Value-based Contracts Research Articles

Addressing healthcare disparities and managed care considerations with continuous glucose monitoring.

About 37 million people in the United States have diabetes. Diabetes-related complications are costly and associated with substantial morbidity. By improving glucose control, continuous glucose monitoring (CGM) can reduce costs due to diabetes-related hospitalizations, hypoglycemia, and diabetic ketoacidosis. However, people of color and low socioeconomic status, populations with disproportionately high prevalence of diabetes, face significant inequity in accessing CGM technology. Potential reasons for CGM inequity include implicit bias and differences in coverage between commercial and government insurance. Recent changes to Medicare CGM eligibility criteria have eliminated blood glucose monitoring requirements. However, cost and CGM coverage requirements remain as barriers to the recommended use of this technology as defined in current clinical practice guidelines. Coverage expansion from durable medical equipment to the pharmacy benefit may improve access. Other strategies to optimize CGM utility overall include integrating CGM data directly into electronic health records for population health management and diabetes control performance measures based on CGM data in value-based contracts (VBCs). VBCs may encourage real-world data generation which in turn may bolster stakeholder support for the equitable use and coverage of CGM in diabetes management.

POSA260 Common Drivers in Countries That Are Developing HTA Systems Had Led to Shared Challenges for Innovative Therapies

To understand the drivers and challenges facing countries transitioning towards full implementation of Health Technology Assessment (HTA) in the Asia Pacific, Latin America and Europe. We conducted a literature review focusing on HTA systems of 11 selected countries (Argentina, Columbia, Mexico, South Korea, Singapore, Philippines, Malaysia, Vietnam, Austria, Slovakia, and Greece). The literature review was followed by interviews with reimbursement decision-makers to supplement the findings. One of the most important common drivers that have been associated with the initiation of HTA systems was government initiatives to provide universal healthcare. This driver was common across countries despite different healthcare system structures. In the newly initiated HTA systems that we investigated, some of the HTA frameworks used for assessment have led to problems with access to innovative treatments. For example, conservative and strict application of the World Health Organisation's Incremental Cost-Effectiveness (ICER) threshold based on country GDPs can hinder patients’ access to innovative and irreplaceable treatments, although this practice might help establish fiscal discipline to enable the provision of universal healthcare. We also found that HTA has been used to inform efficient healthcare resourcing, such as value-based contracting, and to identify inexpensive but equally effective alternatives (for example, generics and biosimilars). Using HTA assessments in this way, HTA can open opportunities to create budgetary headroom for innovative medicines. Our analysis of 11 countries that are transitioning towards full implementation of HTA systems indicate that they are also facing budgetary constraints in providing better healthcare to broader populations. Some HTA approaches that these countries use focus narrowly on easing the budgetary burden of drugs. This practice hinders patients’ access to innovative and irreplaceable treatments. Instead, HTA can be used to find creative solutions to create budgetary headroom for all necessary medications. This approach will require collaboration across stakeholders, including governments and manufacturers.

POSC208 The Value-Based Contracting Cookbook: A Recipe for Successful Implementation

Value-based agreements (VBAs) link access, reimbursement or price to the real-world impact of a medicine, thereby enabling patient access while reducing clinical or financial uncertainty. Potential benefits include timely patient access, improved patient outcomes, efficient health systems, and sustainable research and innovation. While uptake is increasing globally, VBAs are not yet fully embedded in most healthcare systems. The objective of this research was to identify factors enabling implementation of VBAs in practice.

Shared Savings Model Risk in the MSSP Program

The Centers for Medicare and Medicaid Services (CMS) introduced the Medicare Shared Savings Program (MSSP) for accountable care organizations (ACOs) as part of the Affordable Care Act. Participating ACOs accept risk for the financial outcomes of their assigned populations and share in gains (and, depending on the ACO model, losses) when these are generated. Gains and losses are calculated by comparing actual costs of the ACO population against a benchmark cost based on the historical performance of members in the ACO. Participating ACOs are at risk of model error. Because of stochastic variance in cost distributions and the imperfect operation of the risk-adjustment process, there is a nontrivial probability that an ACO may experience a false positive (gains are calculated where no gains were actually generated) or false negative (a loss is calculated by the model when no losses were actually generated). Using a sample of Medicare fee-for-service data, we model outcomes for typical ACOs and for ACOs consisting of chronic patients. For a typical ACO, the probability of model error resulting in a false positive or false negative outcome is between 5% and 8%. Chronic populations with higher variance have higher probabilities of model error, between 26% and 28% for a diabetes population, and about 23% for a cancer population. In the case of an ACO that generates gains through increased efficiency, model error can result in the ACO failing to realize gains, or even (in a minority of cases) require a reimbursement to the payer. From the perspective of the payer with a number of ACOs, the average overpayment or recovery will be minor. The percentage overpayment (recovery) increases as the prevalence of chronic patients increases. For a population of cancer patients a payer can expect to pay (or recover) between 1.0% and 2.0% of claims, while for a diabetes population the range is 1.5–2.5%. For an individual ACO the loss or gain is more significant because the ACO gains or loses the full amount, with a relatively high probability. While this study has focused on the Medicare Shared Savings Program, the MSSP is just an example of a class of gainsharing models that is increasingly prevalent in value-based contracts. Payers and providers who negotiate value-based contracts need to be aware of and account for model risk in their contracts, particularly as the sizes of populations under management become smaller.

Payment Accuracy in Value-Based Care Contracts

Reimbursement for health care services is transferring more risk away from payers and toward health care providers in the form of Alternative Payment Models (APMs), also known as Value-Based Care (VBC) models. VBC models cover a wide variety of forms but all include guarantees by providers of services to improve quality of care and/or reduce cost. Types of risk include performance risk, contract design risk or stochastic risk (because of the random variation in health care services and costs). A form of contract risk that can be a significant driver of cost is model risk, defined as the probability that the savings calculated at contract reconciliation will deviate from the actual savings generated. To estimate the degree of risk we quantify the potential variance in outcomes in a naïve population prior to intervention and the components that could affect outcomes, using examples of maternity and type 2 diabetes. This analysis has implications for both participants in, and designers of value-based contracts.

Pioneering a Value-Based Purchasing Initiative for Ambulatory Surgery Centers in TRICARE West.

Pioneering a Value-Based Purchasing Initiative for Ambulatory Surgery Centers in TRICARE West.

Precision reimbursement for precision medicine: the need for patient-level decisions between payers, providers and pharmaceutical companies

Healthcare costs have been dramatically rising in developed economies worldwide. A key driver of cost increases has been high-cost drugs. The current model of reimbursement is not configured for drugs with uncertain outcomes. Future reimbursement will require better allocation of available healthcare system funds. Technological advancements have opened the door to a new type of outcomes-based reimbursement, enabling value exchange between payers and pharmaceutical companies, which we term precision reimbursement. Precision reimbursement extends beyond value-based contracts, with decisions at individual rather than aggregate level. For precision reimbursement to be adopted, there are data, computation and infrastructure requirements. All stakeholders benefit in moving to precision reimbursement for optimal resource allocation, risk sharing and, ultimately, improved outcomes. There are implementation challenges including cost, change management, information governance and development of surrogate markers. The overarching trend in medicine is toward personalised interventions, with precision reimbursement as the logical consequence.

National benchmarks and practice level variation on eight cross cutting quality measures.

255 Background: While there is increased attention on the importance of quality measurement in oncology, especially with the rise of value-based payment, limited data exist on national averages and practice level variation for proposed quality measures to establish benchmarks and targets for quality improvement initiatives or value-based contracts. Methods: UnitedHealthcare (UHC) developed peer comparison reports for eight cross cutting quality measures for practices with an active contract for at least one of its commercial, Medicare or Medicaid health plans and ≥1 provider from the following specialties: gynecologic oncology, hematology/oncology, pediatric hematology/oncology, radiation oncology, or surgical oncology. Adherence to the quality measures below was calculated using a mix of claims data, clinical data from a prior authorization for cancer therapy, and CMS MIPS data. Patients were attributed through an algorithm that selected the most probable physician responsible for the patient’s care - responsible prior authorization provider, servicing provider or most recent visited provider prior to the treatment, varying by each measure. Dates of service differ by measure, ranging from 1/1/2019 through 12/31/2020. Results: We identified 5,828 unique tax identification numbers (TINs) with UHC members with cancer attributed to them during 2019-20. The number of practices included in the measurement cohort per measure varied significantly from 301 to 4,120 (tobacco screening and performance status, respectively). 2,422 TINs met the minimum patient count for at least one measure (≥10 patients or events). Overall performance ranged from 13.5% to 77.3% (hospice admission and PS documented) for measures where higher adherence reflects better quality of care. For measures where lower scores represent higher quality of care the range was 11.4% to 22.6% (hospice < 3 days and ED admission, respectively). Observed adherence was statistically better than expected for 0.5%-5.8% and statistically less than expected for 0.9%-5.6% of TINs in UHC’s network; however, more than half of the practices had insufficient sample size to make a determination. Conclusions: We observed substantial variation in quality across a national cohort of oncology practices. However, even for a large national payer, small sample sizes limited the assessment of a substantial number of practices.[Table: see text]

Barriers to participation and success in value-based care (VBC) models.

70 Background: The enactment of the Medicare Access and CHIP Reauthorization Act (MACRA) in 2015 initiated the transition from a fee-for-service to a fee-for-value payment system in healthcare. Two government-sponsored VBC models (Oncology Care Model [OCM] and Merit-Based Incentive Payment System [MIPS]) were introduced in 2016 and 2017. Several commercial payers followed suit with similar value-based contracts. Implementing and complying with the performance metrics of these models comes with challenges. This qualitative research study sought to assess participation in both government-sponsored and commercial-insurance-sponsored VBC models among oncology providers and their perceptions regarding the ability to perform successfully. Methods: Between February and April 2021, medical oncologists/hematologists (mO/H) from across the U.S. were invited to complete a web-based survey about various trends and critical issues in oncology care. Demographics about the physicians and characteristics of their practices were captured as well in the survey. Responses were aggregated and analyzed using descriptive statistics. Results: A total of 307 mO/H across the U.S. completed the survey: 73% practice in a community setting; 47% identify as hospital employees. The participants spend a median of 90% of their working time in direct patient care, have a median of 16 years of clinical experience, and see a median of 20 patients per day on clinic days. Half participate in a government-sponsored VBC model (21% MIPS and 28% OCM), and 20% participate in a commercial VBC model. A third reported that it is difficult to perform favorably in VBC models (37% government and 35% commercial). Primary challenges deterring favorable performance were navigating the payer landscape and reimbursements (27%), identifying cost-reduction opportunities (20%), tracking costs across an episode (18%), and clinical decision support and compliance (17%). One-third are not satisfied with currently available technology to effectively support their performance in VBC models. Almost half would like to see more seamless integration into practice workflows (49%) and interoperability across platforms including EHRs (42%), and 24% would like artificial intelligence or machine learning features integrated into solutions tools. Conclusions: Oncology practices find it challenging to perform favorably in government and private payer-sponsored VBC models. They are generally dissatisfied with current technology and see an unmet need for interoperability and artificial intelligence to better support their performance in these programs. Further research is needed to determine how best to design and implement VBC programs.

System Integration: Managing Complexity to Advance Health Care Value

Summary Most American hospitals are now part of multihospital systems, and most physicians are now employed by hospitals or large group practices. Payment for care is slowly shifting from fee-for-service to value-based contracts that encourage a holistic approach to care. These fundamental changes have created complex integrated health care systems that operate under new financial imperatives and have introduced corresponding complexities in all areas: clinical, operational, and financial. Baystate Health is the dominant health delivery system in western Massachusetts and also covers a significant percentage of the population as a payer. Baystate’s CEO discusses how it has created an effective continuum of care through ownership, partnership, and innovative relationships with physicians and how it has addressed the management challenges inherent in integrating an organization that is not just greater than, but also fundamentally different from, the sum of its parts.

Stratifying for Value: An Updated Population Health Risk Stratification Approach.

Most risk stratification approaches attempt to predict clinical outcomes rather than value. For a provider organization or health system to have financial success in value-based contracting, future risk models must analyze costs as well as disease burden. The purpose of this study was to create a customized risk stratification algorithm that considered a patient's medical spend alongside disease burden while delivering a scoring system that improves the efficiency of a care coordination program. The authors focused on University Hospitals (UH) Health System's Accountable Care Organization population of 554,805 because this patient cohort is engaged with UH's primary care network and has the most robust data. The 5-category risk algorithm was found to be meaningful and impactful after integrating the foundation of the Minnesota Tiering system with an expanded comorbidity list and weighting the result by the previous 12 months of medical spend. This new technique can identify patients in need of intensive care coordination. The complex risk tier of the stratification system reduces the number of patients from 551,045 to 27,552, or 5% of the patient population, and accounts for 67.9% ($1,107,822,887) of total annual medical spend. Expanding care coordination efforts to patients in the top 2 tiers would account for 15% of the patients and 83.2% ($1,357,545,872) of annual medical spend. The novelty of the new approach allows clinical teams to focus intense resources on a smaller sample of the patient population and to identify chronic conditions contributing to costs, and feel confident that they have greater explanatory power regarding value.

ASHP Foundation's forecast report feels more relevant than ever this year

ASHP Foundation's forecast report feels more relevant than ever this year

How one treatment program uses value‐based contracting

Many parents want to see their young adult children, and even teenagers, in residential treatment. But they may not be able to afford it, especially if their insurance company won't pay. Some treatment providers have figured out how to work with insurance companies to get that payment, and value‐based contracting (VBC) is one way to do it.

Caron praises VBC; is at risk for 90 days post‐discharge

Signing an agreement with a managed care company may not seem like a path to profit and good patient care, but for the legendary Caron, it has been working out. Value‐based contracting (VBC) is what it sounds like: giving the insurance company value for its money. But this is not based on limiting days or type of treatment, just dollars. And as long as those dollars are agreed upon, all is well, according to Joseph Garbely, D.O., chief medical officer at Caron, in an interview with ADAW.

The Road to Value Demands a Smarter Approach to Risk.

As healthcare nears year three of the COVID-19 pandemic, hospitals and health systems should consider accepting significant responsibility for the total cost of care from all sources, per covered life, over time. One place to start: Reduce avoidable spending on chronic conditions, which, combined with mental health conditions, account for most healthcare expenditures. This shift will necessitate investments that strengthen the ability to identify at-risk populations and react in ways that help avoid complications and reduce unnecessary costs.Even before the pandemic, it was clear that there were missed opportunities to reduce costs of care. Failures in care coordination contributed to billions of dollars in waste each year. Now, as payers explore innovative risk-based arrangements for addressing the impacts of social determinants of health and delayed care on health outcomes, healthcare providers should seek opportunities to partner with payers in developing shared-risk approaches to patient engagement and chronic condition management. Steps toward designing a model for risk innovation include rewarding physicians and clinicians for managing the total cost of care, involving physicians in discussions around acceptable levels of risk in value-based contracts, ensuring that the organization's cost accounting approach meets its strategic needs, investing in actuaries to study data that can identify rising-risk patients, and exploring innovative partnerships for funding the infrastructure for value.

PNS164 Payer Assessments of CELL and GENE Therapies: WHEN Is a Drug NOT a Drug?

The objective of this analysis is to identify where reimbursement, HTA, and pricing procedures for cell and gene therapies (CGTs) diverge from those of traditional pharmaceuticals, and to provide recommendations on how manufacturers can best prepare for HTA assessments and pricing negotiations to ensure positive outcomes for these technologies. Policies that several markets (i.e., EU5, CAN, AUS, SWE) have followed for the approval of CGTs were examined in order to identify how, if at all, these procedures diverge from those of traditional pharmaceuticals. Additionally, case studies of the N=5 approved CGTs were conducted to understand how their reimbursement outcomes vary vs. traditional pharmaceuticals (i.e., conditional on short-term re-assessments, real-world evidence (RWE) generation, value-based contracts). While ENG / SWE follow the standard approval procedure and consider CE analysis during CGTs’ HTA assessments, CAN has paved the way and designed a specific CGT assessment process which accounts for how these differ vs. typical pharmaceuticals, and AUS has developed a separate authorization to be applied to gene therapies only. Similarly, DEU is moving toward compassionate use programs for CGTs which will increase the availability of RWE and eventually allow for further data requirements in CGT risk assessments. Additionally, while there is currently no specific CGT HTA / reimbursement assessment pathway, there are some clear deviations vs. traditional pharmaceuticals in some markets such as ESP / ITA (i.e., outcomes-based contracts for tisagenlecleucel / axicabtagene ciloleucel) and FRA (i.e., national CAR T registry required with expected future re-assessment). As payers’ CGT experience increases, manufacturers should prepare for potentially differential assessments vs. typical pharmaceuticals. Manufacturers should plan to generate required data early in the life cycle to maximize the robustness of the evidence package both pre-and post-launch, closely follow CGT pricing agreements, and monitor for policy changes in how CGTs are assessed.

Using the Delphi method to identify meaningful and feasible outcomes for pharmaceutical value-based contracting.

In an effort to demonstrate measurable value of pharmaceuticals in the United States, many payers and drug manufacturers have entered into value-based purchasing contracts that link payment for prescription medications to patient outcomes, creating shared risk between the 2 entities. These agreements have emerged as part of a larger movement within the health care landscape to transition away from volume-based payment models and towards value-based designs that promote high-quality and affordable care. Key to the success of pharmaceutical value-based contracting is agreement on meaningful and measurable outcomes that reflect drug performance. Traditional value-based contracts are developed by pharmaceutical companies and payers and may not reflect values of other important stakeholders, such as patients, providers, and employers (when applicable). One approach to more effectively align the interests of all key stakeholders and to maximize the effect and transparency of value-based pharmaceutical contracts is to use the validated Delphi surveying technique, which can gather information and build stakeholder consensus on key elements before contract development. In this Viewpoints article, we describe our experience conducting Delphi studies in 5 disease contexts to inform pharmaceutical value-based contract development, including insights learned and practical considerations for real-world application. In addition, we outline advantages to using this validated consensus-building tool to solicit vital and underrepresented stakeholder input, foster transparency in the contract development process, and promote shared learning for future value-based initiatives. DISCLOSURES: No outside funding supported this project. All authors are or were employed by UPMC Health Plan at the time of this study and have no other disclosures to declare.

Organizational Costs and Benefits of a Health System Quality Improvement Intervention to Increase Aspirin Use for Primary Prevention of Heart Attack and Stroke.

Performance improvement on clinical quality outcomes typically requires significant effort by personnel in health care organizations. Understanding the cost of quality improvement is important given diffusion of value-based contracting. This study investigates the organizational costs and benefits associated with planning and implementing the Ask about Aspirin intervention to increase use of low-dose aspirin in clinically recommended patient populations. Data from 4 health systems in Minnesota were used to estimate personnel effort and labor resource costs as well as corresponding benefits, measured as the change in aspirin use among eligible candidates during the study period. Overall personnel effort across the 4 systems was approximately 3900 hours with corresponding resource costs estimated to be $214,385. Aspirin use increased 4.7% overall, corresponding to roughly 1530 new users in the aspirin candidate population. Significant variation was observed by system in total hours reported, distribution of effort by activity type, and in benefits realized from the intervention.

Identifying Outcome Measures for Migraine Value-Based Contracting Using the Delphi Method.

To identify meaningful migraine outcome measures among key stakeholders to inform value-based contracts for migraine medications. Value-based contracts linking medication payments to predefined performance metrics aim to promote value through aligned incentives and shared risk between manufacturers and payers. The emergence of new and expensive pharmaceuticals for migraine presents an opportunity for value-based contract development. However, uncertainty remains around which outcomes are most meaningful to all migraine stakeholders. This study utilized a Delphi survey to incorporate views from 82 stakeholders, including patients (n=21), providers (n=23), payers (n=10), employers (n=18), and pharmaceutical company representatives (n=10). A list of 15 migraine-related outcomes was created from a literature review and subject matter expert consultation. Stakeholders reported on the value of these outcomes through a 5-point Likert scale and selection of their top 3 most meaningful outcomes. All participants except patients and employers also used a 5-point Likert scale to rate the feasibility of collecting each outcome measure. Consensus was defined as ≥75% agreement on the importance and feasibility of an outcome (Likert scores ≥4/5 or selection of an outcome as most meaningful). After 2 rounds, consensus was achieved for importance of 9 outcomes on the Likert scale. "Decrease in migraine frequency" reached 100% agreement (82/82), followed by "increased ability to resume normal activities" (96%, 79/82). When asked to choose the 3 most meaningful outcomes, stakeholders selected "decrease in migraine frequency" (88%, 72/82) followed by "decrease in migraine severity" (80%, 66/82). The 2 measures rated as most feasibly collected were "decrease in emergency department/urgent care visits" (95%, 40/42) and "decrease in migraine frequency" (90%, 38/42). There were statistically significant differences between non-patient and patient stakeholders in selection of "decrease in emergency department/urgent care visits" [20% (12/61) vs 0% (0/21), P=.031]; and employer and patient stakeholders in selection of "decrease in work days missed" [44% (8/18) vs 5% (1/21), P=.006] and "decrease in emergency department/urgent care visits" [22% (4/18) vs 0% (0/21), P=.037] as most meaningful outcomes. The measures "decrease in migraine frequency" followed by "decrease in migraine severity" were identified as top priority migraine outcome measures.

Transforming Population-Based Depression Care: a Quality Improvement Initiative Using Remote, Centralized Care Management.

With the growing prevalence of value-based contracts, health systems are incentivized to consider population approaches to service delivery, particularly for chronic conditions like depression. To this end, UW Medicine implemented the Depression-Population Approach to Health (PATH) program in primary care (PC) as part of a system-wide Center for Medicare and Medicaid Innovation (CMMI) quality improvement (QI) initiative. To examine the feasibility of a pilot PATH program and its impact on clinical and process-of-care outcomes. A large, diverse, geographically disparate academic health system in Western Washington State including 28 PC clinics across five networks. The PATH program was a population-level, centralized, measurement-based care intervention that utilized a clinician to provide remote monitoring of treatment progress via chart review and facilitate patient engagement when appropriate. The primary goals of the program were to improve care engagement and increase follow-up PHQ-9 assessments for patients with depression and elevated initial PHQ-9 scores. We employed a prospective, observational study design, including commercially insured adult patients with new depression diagnoses and elevated initial PHQ-9 scores. The pilot intervention group, consisting of accountable care network (ACN) self-enrollees (N = 262), was compared with a similar commercially insured cohort (N = 2527) using difference-in-differences analyses adjusted for patient comorbidities, initial PHQ-9 score, and time trends. The PATH program was associated with three times the odds of PHQ-9 follow-up (OR 3.28, 95% CI 1.79-5.99), twice the odds of a follow-up PC clinic visit (OR 1.74, 95% CI 0.99-3.08), and twice the odds of treatment response, defined as reduction in PHQ-9 score by ≥ 50% (OR 2.02, 95% CI 0.97-4.21). Our results demonstrate that a centralized, remote care management initiative is both feasible and effective for large academic health systems aiming to improve depression outcome ascertainment, treatment engagement, and clinical care.