The Roadmap Ahead: New York’s Value-Based Payments Reward Communities and Providers for Addressing the Social Determinants of Health

pin in map of new yorkMedicaid payment models in many states are shifting away from rewarding providers for the quantity of care they provide to models that reward high-quality, coordinated care that addresses some of the broader social factors that influence health and well-being. One example is New York’s Value-Based Payment (VBP) Roadmap, which rewards Medicaid providers and community-based organizations for addressing the social and economic impacts on health — such as access to healthy food, safe housing, and reliable transportation — that make up 80 percent of the factors affecting people’s health.

In New York’s model, Medicaid VBP contractors — such as accountable care organizations (ACOs), hospitals, or individual providers and their partnering networks — enter into value-based payment arrangements with Medicaid managed care organizations (MCOs). Those arrangements take one of three forms. In the Level One VBP arrangement, a traditional fee-for-service arrangement is augmented by a shared savings payment to the VBP contractor when quality scores are met. Level Two is similar to Level One, but the VBP contractor is responsible for losses if care costs more than expected and if quality targets are not met. In Level Three VBP, the MCO gives VBP contractors a set amount — a capitated or per patient, per month  payment — to cover the total cost of care while meeting quality targets.

For example, a Medicaid MCO can pay a VBP contractor a flat rate or capitated payment for all the care and services required by a person with diabetes, including assistance meeting health-related social needs. VBP contractors can also develop innovations to support their VBP models. For example, one ACO in western New York partnered with a ride-sharing company to take people to urgent care or after-hours primary care as needed.

As part of the National Academy for State Health Policy’s (NASHP) accountable health models workgroup, Ryan P. Ashe, director of Medicaid Payment Reform at the New York State Department of Health, explained in a recent interview how his state’s Value-Based Payment Roadmap addresses social determinants of health.

What is your state’s value-based payment roadmap?

It is a plan to move New York Medicaid’s payment system toward a VBP model that emphasizes value instead of volume, in order to ensure the long-term sustainability of investments in clinical improvement, system transformation, population health, and community engagement, among other things. The roadmap, which charts a path toward making at least 80 percent of Medicaid managed care provider payments contracted in a VBP model, was approved in July, 2015 and updated in June 2016 and given final approval by the US Centers for Medicare & Medicaid Services (CMS) as part of the state’s Section 1115 demonstration project. The shift to value-based payment is intended to improve health and well-being of people and populations, increase the quality of clinical care, and reduce costs.

Ryan Ashe
Ryan Ashe

Did patients, providers, community members, and other stakeholders provide input into the roadmap’s design?

Yes. The roadmap was developed through a comprehensive and significant stakeholder engagement process. A VBP workgroup served as the advisory body guiding all major policy decisions that shape the model. The VBP workgroup was composed of providers as well as individuals from advocacy groups, community-based organizations, MC0s, and representative associations (including health plan, hospital, and physician-focused associations), among other groups. Clinical advisory groups were developed to inform clinical and behavioral health-related VBP arrangements. They also provided expertise and thought leadership, especially in relation to the design of the individual VBP arrangements such as integrated primary care and the total cost of care arrangements, for example. Subcommittees were developed to tackle specific opportunities within the VBP model. For example, a social determinants of health (SDH) subcommittee tackled a number of topics, including how the state can incentivize providers and MCOs to invest in the social factors affecting health. Comprehensive stakeholder engagement has been a cornerstone of our VBP model, and enabling a channel for public comment on the roadmap was a very important element as we moved forward. In fact, it is a practice we continue today and will continue tomorrow.

How does the roadmap motivate payers and providers to address the social determinants of health?

The VBP model requires VBP contractors — such as ACOs, hospitals, or individual providers and their partnering networks — to implement at least one intervention that addresses an SDH. The model also requires investment in interventions and rewards contractors for addressing social determinants of health, depending on the level of risk adopted in the VBP arrangement.

VBP contractors contract with MCOs under one of three arrangements:

  • Level 1 is an upside-only shared savings arrangement
  • Level 2 is an upside and downside risk-sharing arrangement
  • Level 3 is a prospective per-member, per-month payment and/or prospective bundled payments
“… effectively addressing social determinants of health gets to the root cause of poor health. For example, establishing stable housing helps individuals manage their medication, and access to healthy food helps address complications related to obesity or diabetes.”

VBP contractors in Levels 2 or 3 must address at least one social determinant of health.

VBP is a mechanism to stimulate innovation and sustain transformation where it occurs. The idea is that by establishing a target goal based on overall spend and incentivizing quality, health care providers at all levels, including MCOs, will work together to provide the absolute best level of care, achieving the highest level of quality in a manner that avoids complications or emergency rooms visits that otherwise results in higher costs. In many instances, effectively addressing social determinants of health gets to the root cause of poor health. For example, establishing stable housing helps individuals manage their medication, and access to healthy food helps address complications related to obesity or diabetes. VBP creates a framework where investments in SDH interventions becomes much more important and a foundation for successful arrangements between provider partners and MCOs.

Community organizations have important insight into the needs of the communities they serve. How are they involved in implementing and guiding the roadmap?

Community based organizations are a key stakeholder in the our VBP model. It’s the community-based organizations that often have the direct line into the communities. VBP contractors in Levels 2 or 3 are required to contract with at least one community-based organization. The roadmap also recommends that MCOs and providers work with community-based organizations on interventions targeting SDH. There is a template that MCOs and community-based organizations must use when contracting with one another to implement an intervention targeting a social determinant of health. The template asks the MCO and community-based organization why they selected the intervention. For example, did they leverage an existing assessment of community needs? Or, was the decision informed by existing information sources such as the 211 service database, which tracks calls to the state’s health and human services information line? The template is a way for the state to operationalize the inclusion of CBOs in VBP arrangements. Moreover, it helps us to begin to collect information on best practices that explain why SDH interventions are being selected and how their success is being measured.

Does the state have any say over which social determinants of health that MCOs, providers, and community-based organizations address?

We want to give MCOs and community-based organizations the flexibility to design their interventions to meet the needs they see, and we want to emphasize and support opportunities to achieve the true value of the interventions. The VBP model accepts interventions that focus on five key social domains. To that end, the social determinants of health subcommittee developed a menu of evidence-based interventions that target these five key areas:

  • Economic stability;
  • Education;
  • Health and health care;
  • Neighborhood environment; and
  • Social, family, and community context.

The menu identifies the specific social determinants affecting each area, and lists evidence-based interventions providers can use to address them. For example, prescriptions for fruits and vegetables and nutritional counseling are possible VBP-funded interventions for food insecurity. Rental assistance, respite care, and legal services are interventions for people experiencing homelessness and housing instability. VBP contractors can pay for such interventions with savings from their Medicaid MCO payments.

Can you share any examples of how partners have used the menu of interventions to address the social determinants of health?

Yes. One provider partnered with a ride-sharing company to provide better access to medical appointments for low-income patients, because evidence shows that a lack of reliable transportation is often the main cause for missed appointments.

Another community-based organization subcontracts with some Medicaid plans to deliver medically-tailored meals to people with life-threatening illnesses. The organization says it has reduced health care costs by 28 percent compared to the costs incurred by people with similar diagnoses who did not receive medically-tailored meals, and evidence suggests such programs can improve health by reducing spending.

What is next for the roadmap?

The roadmap is a “living document,” that is updated annually and reviewed with CMS. Updates to the roadmap reflect the evolution of the model, which includes feedback from the stakeholder community. We continue to refine our arrangements and overall approach and those updates are included in the annual submission to CMS. The VBP model will continue to look at all areas of health care within Medicaid, including pharmacy, dental and transportation.

The state is committed to achieving the goal of transitioning at least 80 to 90 percent of total MCO expenditures into Level I or higher VBP arrangements. It is important to establish a framework where innovative models of care delivery can move  forward, and once refined, can be sustained. This is a transformation about the way we deliver care, and also about the way we think about care, and that is where social determinants become very important. The roadmap establishes the way forward, but it also seeks to achieve a key goal — improving health outcomes for people — and that is important to remember.

Support for this work was provided by the Robert Wood Johnson Foundation. The views expressed here do not necessarily reflect the views of the foundation.