Is the next wave of health outcomes moving to tie C-Level compensation to their pay?
A recent filing by Humana with the Securities and Exchange Commission indicates the insurer is instituting a new compensation model in which bonuses are not just tied to company financial performance, but also to enrollee’s health outcomes.
Humana will base 20% of executives’ bonuses on consumer health metrics, Louisville Business First reports, including the completion of risk assessments, pharmacy usage, engagement in the Humana at Home Chronic Care Program and participation in the Humana Vitality program, which provides rewards for healthy behaviors. The remainder of the bonuses will depend on whether Humana achieves its earnings objectives. The remaining 80 percent will be based on whether the company meets its earnings objectives.
Examples of Payor Value-Based Contracting
Palliative Care – Highmark Value-Based Contract
Highmark is a regional payer organization that serves members throughout Pennsylvania, Delaware and West Virginia. It offers unique palliative care services to its Medicare Advantage members and supports hospital palliative care through value-based contracts.
Highmark utilizes value-based contracts to support palliative care. Highmark’s Quality Blue incentive program supports hospital palliative care by providing incentive payments to hospitals based on these key metrics:
- The percentage of patients receiving a palliative care consult in the hospital (per 100 admissions).
- Patients who have documentation of resuscitation status on or before day one.
- Patients who have documentation of ICU efforts to identify the medical decision maker on or before day one of the ICU admission.
- An interdisciplinary family meeting conducted on or before day five of the ICU admission.
Highmark’s Advanced Illness Services program reimburses hospice agencies to provide interdisciplinary (non-hospice) palliative care home visits for its members at a special fee-for-service reimbursement rate that accounts for the additional time required. The palliative care visits from the hospice agency are reimbursed via procedure codes that permit providers to bill for eligible services. The program includes a lifetime limit of 10 visits by a palliative care-trained social worker or registered nurse, who comes to the home as needed to provide patient and family education, consult about goal setting and care planning, and connect patients and families with community resources. The program provides 24/7 telephonic or in-home access to a palliative care team in case of unmanageable pain and symptoms. The type of outreach chosen is at the discretion of agency staff. Palliative home visits allow for early intervention, ongoing coordination of care with providers, and timely access to information to assist members and families with:
- Communication and complex decision making related to goals of care.
- Advance care planning.
- Control of pain and other symptoms.
- Psychological and practical support for patients and family caregivers.
- Referrals to community services.
Palliative Care – Excellus BlueCross Value-Based Contract
Excellus BlueCross BlueShield is a regional payer serving upstate New York. It is also a regional and national leader in advocating increased use and adoption of advance care plans, and the development of the Medical Orders for Life-Sustaining Treatment (MOLST/eMOLST) forms. Through the funding of the organization Compassion and Support and its website, Excellus provides training and educational resources to providers, medical practices, and patients and their families.
Excellus provides enhanced payment to clinicians – physicians, nurse practitioners and physician assistants – who have completed a MOLST training course for advance care planning discussions for patients with serious illness. The time-based counseling model is applicable for members of all ages identified as appropriate for advance care planning discussions, for all lines of business, in all clinical settings. The model includes coverage of non-face-to-face time needed for telephone calls to distant family members and development of a care plan to support MOLST. The typical requirements of documentation for prolonged service codes are eliminated.
Palliative care measures are included in the Excellus Hospital Performance Incentive Program (HPIP). Quality measures align with the degree of penetration of palliative care provision to at-risk hospitalized patients. Examples include the number of palliative care consults; formalization of a palliative care program to include staff education; facilitation of appropriate early referrals to palliative care; and conducting family meetings for medical ICU patients at the time of admission.
Physician Practices – Aetna Value-Based Contract
Aetna is a national health care benefits company that offers a broad range of traditional and consumer-directed health insurance products and related services. Aetna’s long-standing Compassionate Care program focuses on improving care for those with serious illness. This program incorporates case management, member engagement and clinical partnerships.
For the physician group practices in which Aetna has embedded case managers, it has also implemented value-based contracts. These contracts include a per-member, per-month incentive payment contingent on meeting certain quality outcomes, including the number of hospital admissions and hospital days per 1,000 members, and quality process criteria like follow-up visits for primary care within 30 days of discharge from a hospital.
Physician Practices – Emblem Health Value-Based Contract
EmblemHealth is moving into value-based care. For example, they have more than 60 percent of their HMO health plan members obtaining clinical services through a value-based care reimbursement arrangement. EmblemHealth partnered with physician groups about four years ago to create AdvantageCare Physicians, one of the largest medical practices in the New York City area.
These partnerships have shown to reduce hospital readmission rates as well as the number of emergency room visits. Patient satisfaction is also a major goal among providers of today and pursuing value-based care payment arrangements could go a long way to improving satisfaction scores. A tiered incentive plan has helped Emory Healthcare Network meet these quality performance benchmarks. For instance, primary care physician bonuses depend upon the efficient operation of the ACO and its overall performance.
Population Health Management – Emory Healthcare Network Value-Based Contract
Emory Healthcare Network, which includes 1,800 physicians and six hospitals, moved from contracting via a clinically integrated network (CIN) to a commercial accountable care organization (ACO) model in 2014. Today, Emory’s ACO is piloting population health management agreements with Blue Cross and Blue Shield of Georgia to manage 35,000 members. The ACO demonstrated a 25 percent improvement on 37 quality metrics collectively and cut medical costs by 3 percent in CY14. The health system is piloting a similar program with Aetna that includes 17,000 members.
Emory Healthcare Network has created a tiered incentive plan to reach the goals of population-based contracts for physician practices. Ten percent of the bonus for primary care physicians hinges on overall ACO performance. Approximately 20 percent is based on how the physicians’ local health network performs against quality and cost targets (the ACO is comprised of six local health networks). The remaining 70 percent reflects individual performance based on approximately 25 metrics that are used to calculate an individual score.
Pharmaceuticals Link Drug to Readmissions – Cigna Value-Based Contract
Cigna Corp. and Aetna Inc. have reached pay-for-performance agreements for heart drug Entresto with Swiss drugmaker Novartis AG that tie pricing to patient outcomes.
Cigna said payments will be based on a reduction in the proportion of customers who are admitted to hospital for heart failure. The agreement applies to Cigna’s commercial business and does not apply to its Medicaid or Medicare plans. The deals are among the first publicly announced examples of outcomes-based drug pricing.
Value-Based Reimbursement 2020
More payers and providers are looking to tie high-quality medical care to financial incentives through value-based care reimbursement contracts. In January 2015, an alliance of some of the country’s biggest health systems and payers announced a significant commitment to value-based reimbursement models by the year 2020.
The alliance, which includes large for profit and non-health systems such as Trinity Health, Ascension Health, Partners Health, and Providence Health and Services, as well as large payers such as Aetna, is committing to putting 75 percent of their businesses into a value-based arrangements by the year 2020. The alliance includes six of the nation’s top 15 health systems and four of the top 25 health insurers.
“The formation of this Task Force and its ambitious goal demonstrate that the private sector embraces a value-based approach to improving care and lowering costs,” Richard J. Gilfillan, M.D., CEO of Trinity Health, the Task Force’s chairman, said in a statement. “We are committed to rapid, measurable change both for ourselves and our country that will improve quality and make health care more accessible for all American families.”
The Health Care Transformation Task Force, as it is being called, is planning to work collaboratively to shape policy and program recommendations for the private sector, the Centers for Medicare & Medicaid Services (CMS), Congress and others. Their first take centers on fixing the accountable care organization (ACO) model, developing common bundled payment framework, and improving care for high-cost patients.