New York Updates Value Based Payment (VBP) Roadmap for Medicaid Managed Care

The New York State Department of Health (“DOH”) recently published its 2016 update of the Value Based Payment (“VBP”) Roadmap, which establishes guidelines and timelines for the dramatic overhaul of Medicaid managed care reimbursement that was required by CMS in connection with the Delivery System Reform Incentive Payment (DSRIP) program.   Specifically, the State has established guidelines and incentives to drive Medicaid managed care reimbursement from a predominantly fee-for-service model to one that puts more emphasis (and reward) on quality and efficiency.  Over the course of the next 4 years, Medicaid managed care organizations (“MCOs”) are required to aggressively move payment arrangements toward models that entail the assumption of risk by providers, so that by April 1st, 2020, 80% of total MCO expenditures (in terms of total dollars) will have to involve some form of value based payments. Financial incentives and penalties will be used to encourage MCOs to keep up with the timeline.  From the provider side, Performing Provider Systems (PPS’s) are required to submit a “growth plan” to DOH, by no later than April 1, 2017, outlining their own strategy to reach VBP arrangements with MCOs that will account for 80% of  payments for services provided to Medicaid members by the end of that period.  The Roadmap indicates that MCOs will be permitted to “pass on” to providers the impact of financial penalties imposed on the MCOs for failure to meet VBP contracting targets where providers are slow to engage in VBP contracting.

The first version of the Roadmap was published in 2015, but was replaced by a new version in June, 2016, and the Roadmap will be updated annually through 2020.  While the Roadmap only governs expenditures under the Medicaid program, DOH has been working with CMS to coordinate its VBP efforts with the Medicare program’s value-based purchasing and alternative payment models, and CMS’s new “Alternative Payment Model (APM) Framework” aligns very well with the VBP categories.  In addition, although the Roadmap does not apply with respect to commercial business, the move towards value based payments is already well underway in that market segment, and it seems likely that payors will attempt to coordinate their own efforts across all of their lines of business to the extent feasible, so the Roadmap will likely have a broader impact.

GW is working with a number of clients on VBP strategy and negotiations.  If you have any questions about the VBP Roadmap or need assistance, please contact Fred Miller, Deb Silverman, or Bob Schiller.


Categories: Managed Care