Washington sets ambitious new goals for value-based care

For the first time, Washington state’s Medicaid program is betting big on value-based payments to hospitals and health care providers by tying financial incentives to the delivery of quality, cost-effective care.

It’s a major departure from the traditional fee-for-service model that was predominant prior to passage of the Affordable Care Act.

One of the core components of the Washington Health Care Authority’s (HCA) new 1115 Medicaid waiver application is paying for value, and the state has set an ambitious set of goals.

Specifically, the state is seeking to tie 30 percent of its health care purchases to value-based arrangement by by next year — and 90 percent by 2019.

HCA is the largest health care purchaser in the state, paying the medical bills for more than 2.2 million Washingtonians through Apple Health and the Washington Public Employees Benefits Board. HCA spends roughly $10 billion between the two programs, giving it significant market power to drive health care system transformation.

Starting with its 2017 contracts, HCA has selected seven performance measures from the Healthier Washington Common Measure Set to introduce that “will be very complementary of the work happening in the waiver process,” said Nathan Johnson, chief policy officer for HCA.

To hold hospitals and providers accountable, HCA will withhold 1 percent of a managed care plan’s premiums based on their performance against these measures. Hospitals have to earn this money back by producing favorable scores for quality, patient experience, and cost of care.

“We believe it is very important to send common signals to provide a common framework to our providers and to our community partners to respond to,” Johnson said.

This new approach shares significant overlap with the Center for Medicare and Medicaid’s new physician reimbursement rule — known as MACRA — that encourages doctors to shoulder more risk by tying Medicare payments to patient outcomes.