HCA releases revised Value-based Purchasing Roadmap

The Washington State Health Care Authority (HCA) recently released a revised version of its Value-based Purchasing (VBP) Roadmap. The roadmap outlines the agency’s plans, strategies, and goals related to increasing value-based contracting in Washington’s health care system.

HCA spends over $12 billion every year, purchasing care through Medicaid, Public Employees Benefits Board (PEBB), and School Employees Benefits Board (SEBB). HCA began setting annual VBP targets in 2016, with the goal of 90% of state-financed health care payments occurring under VBP contracts by 2021.


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HCA’s updated roadmap says HCA’s work toward advancing VBP should be informed by the COVID-19 pandemic.

“In many ways, the pandemic has exposed the challenges Washington’s health care system faces, and makes HCA’s work toward a more equitable, affordable, and high-quality health care system even more urgent. The challenges associated with the COVID-19 pandemic present a rare opportunity to transform Washington’s health care system and further re-imagine health care delivery for the people of Washington,” reads the roadmap.

The report notes that the pandemic “exposed a critical flaw” in fee-for-service payment models. At the start of the pandemic, non-essential procedures and appointments were put on hold as the state attempted to slow the spread of COVID and keep beds and personal protective equipment available. For many providers, this decrease in utilization caused significant financial strain.

HCA says it will make several short-term changes to its VBP program in response to the pandemic. For example, the agency is adjusting the 2021 VBP target adoption rate from 90% to 85%.

Other considerations related to COVID-19 include:

  • Telehealth and virtual care: the pandemic catalyzed a dramatic increase in the use of telehealth and virtual care throughout the state. While policies that fostered rapid adoption—including allowances for payment for a wide variety of services—will change as the pandemic subsides, telehealth and the provision of virtual care should continue to be a significant modality of care delivery beyond COVID-19. VBP arrangements in the future will consider the impact of virtual care on utilization, quality, outcomes, access, equity and patient experience.
  • Primary care model: HCA’s work with providers and health plan stakeholders on primary care redesign predates the pandemic. Washington’s emerging primary care model may include new payment mechanisms that prioritizes value and equity. In the short term, as the model is implemented, HCA will confront the challenges providers, patients, and MCOs face as a result of the pandemic.
  • Provider engagement: COVID-19 will impact provider interest and capacity to enter into new VBP arrangements. In the more immediate term, VBP arrangements may need to be modified to help support distressed providers.”

The roadmap also includes data from HCA’s most recent provider and health plan survey which measures VBP adoption and related challenges or barriers. The 2020 survey utilizes data from the 2019 calendar year.

Both providers and health plans reported that having trusted partnerships, aligned quality measures, and aligned incentives/contract requirements make VBP adoption easier and more appealing.


Image: Health Care Authority


For health plans, top barriers to VBP adoption include payment model uncertainty, a lack of interoperable data systems, and disparate quality measures and incentive requirements. Providers cite misaligned incentives, lack of timely cost data, and insufficient patient volume by payer to take on clinical risk as top barriers.


Image: Health Care Authority


Due to the pandemic, about 40% of providers said they were experiencing a reduced willingness to take on additional risk and/or VBP contracts, and almost 60% suggested pausing the expansion of VBP and instead focusing on maintaining access to telehealth services.

In looking to the road ahead, the roadmap lays out HCA’s VBP priorities for 2022-2025. Top priorities include improving access to care, managing the total cost of care, addressing social determinants of health, advancing health equity, supporting primary care, and focusing on accountability and alignment.

The full roadmap is available here.