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Gauging Payment Reform in New York State

  • By: NYSHealth
  • Date: July 2017
  • Priority Area: Advancing Primary Care
  • Type: Grant Outcome Reports
  • Category: Grant Outcome Report
  • Grantee Name: Catalyst for Payment Reform, Inc.

Overview

Today’s prevailing fee-for-service payment system can result in unnecessarily high levels of care, tests, and treatments. However, consensus is growing in the health care sector that alternative payment methods can reduce unnecessary health care costs by creating incentives for a lower volume of care. One such example is the Delivery System Reform Incentive Payment (DSRIP) program that New York State has undertaken to shift the majority of Medicaid managed care reimbursements to value-based arrangements. Although providers and payers across the State have experimented with various arrangements to develop a value-oriented health care system, it has not been clear which methods could most effectively replace the traditional fee-for-service model. Additionally, there had been no systematic information available about the current payment landscape to set goals and measure progress. In 2014, NYSHealth awarded a grant to Catalyst for Payment Reform (CPR) to create the first-ever New York State scorecards for the Medicaid and commercial markets to help provide insight into payment reform in the State.

Grantee: Catalyst for Payment Reform, Inc.

Dates: March 2014 – February 2015

Grant Amount: $279,047

Grantee Website: https://www.catalyze.org/

Grant ID: 14-03106


Outcomes and Lessons Learned:

  • Identified health care expenditures in New York State that are paid using fee-for-service and alternative payment methods (e.g., bundled payments, shared savings, and global payments).
     
  • Created the New York Scorecard on Commercial Payment Reform and the New York Scorecard on Medicaid Payment Reform, which included such findings as:
    • Although both the Medicaid and commercial markets have significantly relied on fee-for-service arrangements, Medicaid plans and providers have shifted away from this model to a greater extent;
    • In the commercial market, 94% of payments were based on fee-for-service, 15% of value-oriented payments placed doctors and hospitals at financial risk for their performance, and 34% of total payments made to doctors and hospitals were value-oriented as compared with 40% of total payments nationwide; and
    • In the Medicaid market, nearly 73% of payments were based on fee-for-service, 46% of value-oriented payments placed doctors and hospitals at financial risk for their performance, and nearly 33% of total payments made to doctors and hospitals were value-oriented.
  • Hosted a public release of the scorecards and disseminated findings to payers, providers, State policymakers, businesses, the media, and other stakeholders.


During the course of the grant, the New York State Department of Financial Services stepped in to require participation from all commercial and Medicaid health plans, as a way to create a baseline for State efforts to spur payment reforms in DSRIP and the State Health Innovation Plan. As the scorecard project required substantial data collection to develop comprehensive and accurate information, health plans submitted data through an existing collection tool, eValue8, which was developed by the National Business Coalition on Health. CPR’s New York State scorecards built upon eValue8 by adding additional metrics to more precisely benchmark expenditures. CPR and the National Business Coalition on Health leveraged their team of experts and several external partners to conduct data validation, analysis, aggregation, and reporting.

CPR has since released the first-ever Medicare scorecard on payment reform, and it is collaborating with the Robert Wood Johnson Foundation and the Laura and John Arnold Foundation to produce a new scorecard with data from three additional states in 2018 and identify payment methods that have had the most significant impact on health care costs and quality.

Co-Funding and Additional Funds Leveraged: N/A