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Building a Business on Medicaid in the Age of Value-Based Care

Primary practices working today to embrace alternative payment models (APMs) — most notably, value-based care (VBC) and reimbursement — are pushing some large logistical boulders up a precipitously steep hill. 

Operationalizing the transition from fee-for-service to value-based contracting is challenging, especially for those serving the most complex and underserved patients. But value-based models are here to stay, and the ranks of those covered by government programs continues to swell. 

According to CMS, all Medicare payments — and the “vast majority” of Medicaid payments — will be aligned to value-based contracts by 2030. Meanwhile, some 56% of Primary Care Practices (PCPs) are concerned about the impact that VBC programs will have on their earnings. The dual forces of CMS endorsement of value-based models along with provider skepticism about those same mechanisms could impede progress as the concept moves into reality.  

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Value-based contracting requires a different set of business capabilities; however most providers and practice staff have limited experience with these models. Point solution technology is not much help; health plan portals further fragment already overtaxed administrative workflows, and EMR population health tools don’t accurately represent the source of truth when it actually comes time for payment to be issued. 

The sheer number of contracts or arrangements can be overwhelming. Nine APM contracts with nine health plans typically means nine sets of metrics, targets, thresholds, and methodologies for the practice to achieve success, not to mention the nine data integrations and nine annual reconciliation processes that must be navigated to ensure performance is accurately measured and payments are secured. 

A Partner Can Help

Realizing these challenges and practical limitations, a growing number of providers are finding value in partners who not only help simplify the administrative burden of value-based contracts, but also assume the downside risk inherent in those contractual arrangements. This allows PCPs to focus on improved outcomes while the partner supports their advancement along the APM continuum.

There are many shapes and sizes of value-based partners. It’s crucial that the capabilities of the partner align to the unique needs of the practice. For years, many providers have found some administrative relief by signing up with their local Accountable Care Organization (ACO), which disproportionately focus on traditional Medicare members aligned through the Medicare Shared Savings Programs. More recently, primary care aggregators have expanded traditional ACO use cases into the Medicare Advantage line of business, opening lucrative opportunities to participate in delegated MA risk agreements. 

While these solutions offer immediate and turnkey opportunities to participate in value-based agreements, their offerings tend to skew toward practices with the largest Medicare and Medicare Advantage representation. This has had the unintended consequence of further driving health inequities into the system by unlocking incremental value-based income streams for practices with lower-risk and/or more securely insured populations. Meanwhile, practices located in diverse and low-income communities have been largely ignored by the value-based care movement.

One of the primary reasons these practices have been left behind is the disproportionate representation of Medicaid members on their primary care panels. For providers and managed care organizations alike, Medicaid is less lucrative and more challenging to administer. The work is difficult — there are health literacy issues to address, social determinant barriers to overcome, and ongoing challenges related to unmet behavioral health needs, lack of access to care, and more.

Juggling value-based contracts, keeping an eye on social determinants of health (SDoH), and navigating complex concurring physical and mental health challenges, all while attempting to manage the broader needs of a full primary care panel is a tall task for even the most skilled provider. PCPs have the longitudinal relationships with patients and families, and so are very good at identifying and understanding issues with health literacy, social determinants, and barriers to care. But they are often not resourced to manage these issues, and do not know where to turn to address the gaps.  

The secret is finding a value-based partner whose capabilities match the unique needs of the practice, especially a partner proven in managing the most vulnerable and complex contingent of the attributed panel. Said more directly, it is table stakes for practices with a significant contingent of Medicaid members to align with a value-based partner who knows how to manage Medicaid populations and value-based contracts through the lens of addressing SDoH and health equity.

Thankfully, those capabilities are highly transferrable to other populations (especially so in low-income communities) and can be expanded rather easily to drive value-based success in Medicare, Medicare Advantage, and other government payment programs. By anchoring the value-based partnership in the most complex population, the practice can consolidate its entire VBC strategy onto a single platform, incentive model and set of operational workflows that can be applied to the entire population, regardless of payer mix or risk profile. 

If a practice is going to be in value-based contracts, particularly in government business, it needs all its lives under one managed method––one method of addressing quality and coordinating care. That way, providers can go home at the end of the day knowing they are coordinating care for all their patients––regardless of their income, their skin color, or their zip code. 

About the Author

Brandon Clark is Chief Strategy Officer at Equality Health, a VBC leader offering a comprehensive solution set including value-based contract portfolios, financial incentives, a unified technology platform, culturally competent care training and practice performance consulting to help independent PCPs in diverse and historically underserved communities be successful in VBC.

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