Rhode Island: Value-Based Payment

Rhode Island: Value-Based Payment

Upshot

  • The Rhode Island All-Payer Health Care Payment Reform Act, S 2994, would establish a workgroup to provide recommendations on adopting advanced value-based payment models.

  • ·The Workgroup would recommend hospital global budgets for at least two provider types.

  • On April 13, 2022, Rhode Island health care leaders entered into a compact to accelerate the adoption of advanced value-based payment models. The compact may have contributed to the bill not moving during the legislative session because the industry is already taking initiative to move towards value-based payment.

Background

Rhode Island currently operates a state-based Marketplace with two carriers. The state also expanded Medicaid and implemented an individual mandate in 2020, meaning all residents must have health care coverage.

The sponsors of this bill assert that the current FFS payment structure creates a financial incentive for increasing the volume of health care services and prevents systemic changes to health care delivery that would promote more affordable and predictable cost growth, improve financial stability, and promote technical innovation. The intent of the general assembly through this bill is to endorse and support the efforts of providers and insurers to increase the adoption of value-based payment models.

On April 13, 2022, Rhode Island health care leaders entered into a compact to develop a detailed plan on how to accelerate the adoption of advanced value-based payment models. The efforts have been led by the Rhode Island Health Care Cost Trends Steering Committee, which is comprised of a variety of stakeholders. The Committee measures trends in health care costs, which the Committee notes grew by about four percent during 2018 and 2019 but decreased in 2020 due to COVID-19. The compact does not detail the types of value-based payment that could be considered, though the following principles will guide their work:

  • Quality-linked prospective budget-based payment should be used whenever feasible;

  • If prospective budget-based payment is not possible, other options could include adjusted FFS payment or retrospectively reconciled budget-based fee-for-service payment;

  • Models should support a financially stable delivery system that supports population health and quality excellence;

  • Payers should provide a common menu of advanced value-based payment arrangements for providers to consider;

  • Robust primary care is essential but specialty care providers should be incorporated;

  • Cross-organizational provider relationships should be encouraged; and

  • Models for child health should have different financing and specific quality measures.

Summary

This legislation would require the Health Insurance Commissioner and the Medicaid Director of Rhode Island to convene an all-payer payment reform working group to develop the structure and terms of advanced all-payer VBP models to be described in reports that would be delivered in 2024 and 2025.

  • Membership: The Workgroup would be comprised of health care providers, health insurers, businesses, consumer advocates, and other stakeholders to work on adoption of advance VBP models. The Health Insurance Commissioner and Medicaid Director could exercise discretion in the selection and sequencing of models by provider type, but must at least develop recommendations for the design of hospital global budgets for at least two provider types.

  • Reports: The Health Insurance Commissioner and Medicaid Director would also be required to submit a series of reports on the following:

  • CMS: The bill also directs the workgroup to engage CMS to explore opportunities for federal financial participation in value-based payment models through Medicare.