Payment Models

Fee for Service (FFS)

  • A system of health care reimbursement where health care organizations are paid for the number or volume of the services they deliver.

Capitation

  • Fixed amount of money per patient per unit time is paid to the physician in advance for delivering healthcare services

WHY IT MATTERS TO US:

MassHealth is proposing that on January 1st, 2023 LCHC no longer operate in a fee for service environment.

Value-Based Payment (VBP)

  • Reimburses healthcare providers based on the quality of care they provide, rather than providing payment for each test or procedure
  • Health care providers are rewarded with incentive payments for the quality of care they deliver not the volume as in FFS.
  • The budget that health care facilities receive is based on the number of patients they service, and the levels of patient complexity
  • Associated with both upside and downside risk

WHY IT MATTERS TO US:

VBP works best for health care organizations that serve a disenfranchised population. As LCHC will be recognized for our complex patients under this model, we will now have the financial flexibility to provide better quality of care, and better care integration between primary care, behavioral health, and substance use disorder. This will help us transition our focus from an illness perspective to a wellness perspective.

ACOs and C3, our ACO

Accountable Care Organization (ACO)

  • A group of doctors, hospitals, and other health care providers (ie. community health centers!) that share financial and medical responsibility for providing coordinated care to patients in hopes of limiting unnecessary spending.

WHY IT MATTERS TO US:

MassHealth is proposing that on January 1st, 2023 LCHC no longer operate in a fee-for-service environment.

Community Care Cooperative (C3)

  • The ACO that LCHC belongs to
  • The only community health center based ACO in Massachusetts

WHY IT MATTERS TO US:

C3 will be helping LCHC with our transition into value-based care.

Upside VS. Downside Risk

Upside Risk Model Payments

  • Health centers share in the savings when the total cost of care is lower than projected budgeted costs.

WHY IT MATTERS TO US:

  • Under a value-based system, the most LCHC could receive is $2 million per year in shared savings.

Downside Risk Model Payments

  • Health centers incur actual care costs for a patient or care episode or that goes over the financial benchmark set forth for that year.

WHY IT MATTERS TO US:

  • Under a value-based system, the most LCHC could incur is $2 million per year if we spend over the benchmark.

Public Insurance Plans

Medicaid

  • A federally funded health program that covers people who are below a certain income level
  • Partially funded by the federal government, partially funded by individual states
  • Will be under a Value Based Care model starting January 1st, 2023

WHY IT MATTERS TO US:

  • Medicaid represents roughly 18,000 LCHC patients (45% of our population).

MassHealth

  • Massachusetts state funded health care that covers patients for both Medicaid & Medicare
  • Will be under a Value Based Care model starting January 1st, 2023

WHY IT MATTERS TO US:

  • MassHealth represents roughly 20,000 of LCHC patients (50% of our population)

Medicare

  • A federally funded health program that covers people who are older than 65 or disabled.
  • Will be under a Value Based Care model starting January 1st, 2023

WHY IT MATTERS TO US:

  • Medicare represents roughly 5,000 LCHC patients (12.5% of our population).

CCA: Commonwealth Care Alliance

  • Represents LCHC’s SCO and One Care patients
  • SCO is long term care insurance for the elderly
  • One Care offers combined MassHealth and Medicare benefits
  • CCA is not yet under a value-based care contract, but LCHC will work towards this in the future.

WHY IT MATTERS TO US:

  • CCA represents about 6,400 LCHC patients (16% of our patient population).

CMS & Policies

1115 Waiver

  • A policy from CMS that grants the state a way to pay for delivering Value Based Care

Focuses of the 1115 Waiver

  • Increase investment in behavioral health integration
  • Address disparities and social determinants of health
  • Focus on children and adolescents

CMS Centers for Medicare & Medicaid Services

  • Oversees programs including MassHealth & Medicaid