Special Commission on the Health Care Payment System

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Special Commission on the Health Care Payment
System

• Health Care Quality and Cost Council
• March 25, 2009

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Overview

• The Special Commission on the Health Care Payment
  System was created under Section 44 of Chapter
  305 of the Acts of 2008.
• Goal Investigate reforming and restructuring
  the payment system to provide incentives for
  efficient and effective patient-centered care and
  to reduce variations in the quality and cost of
  care.

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Membership of Commission

• Ten-member Commission consisting of
• Ex-Officio Members
• Leslie Kirwan, Secretary, Executive Office for
  Administration and Finance (co-chair)
• Sarah Iselin, Commissioner, Division of Health
  Care Finance and Policy (co-chair)
• Dolores Mitchell, Executive Director, Group
  Insurance Commission
• Legislative Appointments
• Senator Richard T. Moore (appointed by the Senate
  President)
• Representative Harriett Stanley (appointed by the
  Speaker of the House)
• Gubernatorial Appointments
• Deborah C. Enos, President and CEO, Neighborhood
  Health Plan, Inc.
• Representing the Massachusetts Association of
  Health Plans, Inc.
• Andrew Dreyfus, Executive Vice President, Health
  Care Services
• Representing Blue Cross and Blue Shield of
  Massachusetts, Inc.
• Lynn Nicholas, President and CEO
• Representing the Massachusetts Hospital
  Association, Inc.
• Dr. Alice Coombs, Vice President
• Representing the Massachusetts Medical Society

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Responsibilities

• Examine payment methodologies and purchasing
  strategies, including, but not limited to
  alternatives to fee-for-service models
• Recommend a common transparent payment
  methodology and
• Recommend a plan for the implementation of the
  common payment methodology across all public and
  private payers in the Commonwealth, including a
  plan for MA to seek a waiver from federal
  Medicare rules to facilitate implementation.

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Payment Models Referenced in Statute

• Episodes-of-care payments
• Blended capitation rates
• Global budgets
• Pay-for-performance programs
• Medical home models
• Tiering of providers
• Evidence-based purchasing strategies

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Draft Principles for Health Care Payment Reform
Vision The Commission seeks to develop
recommendations for fundamental reform of the
Massachusetts health care payment system that
will support safe, timely, efficient, effective,
equitable, patient-centered care and
significantly and sustainably slow the high rate
of health care cost growth.

• As currently implemented, fee-for-service payment
  rewards service volume rather than outcomes and
  efficiency, and therefore other models should be
  considered.
• At a minimum, payments should be adequate to
  cover the costs of efficient providers, support
  investments in system infrastructure, and ensure
  timely access to high quality, patient-centered
  care.
• Provider payment systems should reward and
  promote the delivery of efficient, coordinated,
  patient-centered, high quality health care that
  aligns with evidence-based guidelines, where
  available, and produces superior outcomes and
  improved health status. Performance measurement
  should rely upon reliable information and utilize
  uniform, nationally accepted quality measures.
• Provider payment systems should balance payments
  for cognitive, preventive, behavioral, chronic
  and interventional care, support the development
  and maintenance of an adequate supply of primary
  care practitioners and respond to the
  cross-subsidization occurring within provider
  organizations as a result of the current lack of
  balance in payment levels by service.

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Draft Principles (continued)

• Health care payments should be uniform on a
  risk-adjusted and socio-economic-adjusted basis
  wherever technically possible, and regardless of
  payer and provider, to the extent that this is
  financially feasible.
• If not financially feasible, then differences
  should be transparent.
• Payments above the uniform rate should be based
  on performance.
• Costs associated with desired investments in
  teaching, research and desired special stand by
  capacity should be paid outside of the uniform
  rate, and should require provider accountability
  for how such payments are spent. 
• The health care payment system should be
  organized in such a way as to minimize provider,
  payer and patient administrative costs that do
  not add value.
• Payment reform must consider how a) some payment
  methods may require certain organization of the
  service delivery system, and b) health benefit
  designs either support or limit payment reform.
• Health care cost growth should be reduced, and
  providers, payers, private and public purchasers
  and patients should all share in the savings
  arising from payment reform.
• The health care payment system should be
  transparent to patients, providers and
  purchasers.
• It will be necessary to consider the diversity of
  populations, geography and providers across the
  Commonwealth when designing payment reform to
  ensure high quality, patient-centered care to all
  populations and geographic regions in the
  Commonwealth.
• Implementation should be phased over time with a)
  clear and attainable deadlines, b) planned
  evaluation for intended and unintended
  consequences and c) mid-course corrections.

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Meeting Schedule