Press Release: Virginia Scorecards on Payment Reform

67% of Commercial Payments and 37% of Payments from Medicaid Managed Care Organizations to Doctors and Hospitals in Virginia Now Tied to Value

RICHMOND, VA – October 23, 2018 – Over two-thirds of the health care payments (67%) paid to doctors and hospitals in Virginia by the commercial sector in 2016 contain incentives to improve the cost and quality of care patients receive. Similar to trends nationwide, in the Medicaid sector 37% percent of payments were tied to value in 2016. These are among the findings of The Virginia Scorecards on Payment Reform released today by Catalyst for Payment Reform (CPR), the Virginia Center for Health Innovation and the Virginia Association of Health Plans.

“The scorecards provide useful baseline information for the Commonwealth and show that Virginia is on its way toward a health care marketplace that financially rewards value, and not just volume of services provided,” said Beth Bortz, President and CEO of the Virginia Center for Health Innovation. “Through this analysis we found that value-based payment elements such as shared savings or pay-for-performance are starting to be included in commercial and Medicaid contracts and we want to determine if these payment methods are having an impact. We appreciate the work of our project partners to build this baseline and look forward to continue efforts to further advance payment reform in Virginia.”

Funded through a joint grant from the Robert Wood Johnson Foundation and the Laura and John Arnold Foundation, The Virginia Scorecards on Payment Reform are based on an independent review of data from commercial and Medicaid managed care plans that collectively insured 4.6 million Virginians in 2016, the year on which the report bases its findings.

Daniel Carey, MD, Secretary of Health and Human Resources for the Commonwealth of Virginia commented, “I commend VCHI and VAHP for working with Catalyst for Payment Reform to conduct this study, which helps the health care industry to identify the baseline and see where we can make progress going forward.”

Additional findings from the scorecards include:

• In the commercial market, payments tied to value were more prevalent in hospital contracts (80%), with slightly less than half of payments to primary care providers (47%) and specialists (45%) tied to value
• In the Medicaid market, payments tied to value were more prevalent in primary care ( 41%), with just 12% of hospital and 8% of specialist payments tied to value
• The most common form of value-oriented payment in the commercial market was shared savings (33.7%), which typically creates an upside-only financial incentive for providers to reduce unnecessary health care spending for a defined population of patients, or for an episode of care, by offering providers a percentage of any realized net savings
• In the Medicaid market, pay-for-performance, which is typically traditional fee-for service payment with a bonus for meeting quality or efficiency goals, was the most common form of value-oriented payment at 20%

“The Virginia Scorecards are groundbreaking as it is the first time that any southeastern state has examined the amount of payment reform occurring between health plans and providers,” said Doug Gray, Executive Director of the Virginia Association of Health Plans. “We are proud to co-sponsor this project showcasing the innovative work of our health plan members to improve the value of health care in the Commonwealth, and we thank the participating plans for their significant contribution to this report.”

CPR’s Program Director Andréa Caballero commented, “Similar to the recently released The New Jersey Commercial Scorecard on Payment Reform, the Virginia Scorecards look at payment reform adoption alongside state-level indicators that shed light as to whether the changes in how health care is paid for are delivering on their promise of better quality and more affordable health care. We call this methodology Scorecard 2.0 because CPR is expanding its work tracking payment reform to determine if the broader performance of the health care system is impacted by the sweeping changes occurring in provider payment.”

The scorecards highlight the fact that while Virginia performs well when it comes to caring for patients with hypertension, the state still has work to do related to the cesarean section rate among women with low-risk pregnancies and the percentage of young children under three-years receiving necessary vaccinations.

About The Virginia Scorecards on Payment Reform

Both The Virginia Scorecard on Commercial Payment Reform and The Virginia Scorecard on Medicaid Payment Reform aggregate data from health plans from calendar year 2016. CPR obtained the data through an online survey of health plans, with five commercial health plans responding, who together cover approximately 72% of the commercially-insured lives in Virginia, and four Medicaid managed care organizations responding, who together cover approximately 58% of the Medicaid-insured lives in Virginia. Accompanying methodology reports, available for download, provide additional information.

About the Virginia Association of Health Plans

The Virginia Association of Health Plans (VAHP) gives Virginia’s health plans a voice in promoting quality and affordable health care through advocacy, communications, education, and research services. For more information visit: www.vahp.org and follow on Facebook and LinkedIn.

About the Virginia Center for Health Innovation

Incorporated in January 2012 following a recommendation from Gov. Robert McDonnell’s Virginia Health Reform Initiative, the Virginia Center for Health Innovation (VCHI) seeks to facilitate innovation by convening key stakeholders and securing the resources to accelerate value-driven models of wellness and healthcare throughout Virginia. Among its many innovative projects, the most notable for its alignment with this Scorecard is the 2018 Virginia Health Value Dashboard, which includes three of the Scorecard 2.0 metrics, and seeks to highlight opportunities to improve health care value in the Commonwealth. For more information visit: www.vahealthinnovation.org and follow on Twitter, Facebook and LinkedIn.

About Catalyst for Payment Reform

Catalyst for Payment Reform is an independent, non-profit organization working on behalf of large employers and other health care purchasers to catalyze employers, public purchasers and others to implement strategies that produce higher-value health care and improve the functioning of the health care marketplace. For more information visit: www.catalyze.org and follow on Twitter and LinkedIn.