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Paying for value

Paying for value is a primary Healthier Washington strategy to achieving the triple aim of better health, better care, and lower costs. Meeting this goal will require shifting health care reimbursement strategies away from a system that pays for volume of service to one that rewards quality and outcomes. To that end, Washington will drive 90 percent of state-financed health care to value-based payment by 2021.

Washington will use its position in the marketplace to drive transformation as both a first mover and market convener. The state will use its purchasing power to lead by example and accelerate the adoption of value-based reimbursement and alternative payment strategies in the commercial market.

Washington purchases health care coverage for more than 2 million people through Washington Apple Health (Medicaid) and the public employee and retiree benefits. 

What are the four payment redesign strategies?

This is an initiative under Healthier Washington to bring together the payment and delivery of physical and behavioral health services for people enrolled in Medicaid, through managed care. Learn more about integrated health care.

More than 41 percent of current Medicaid beneficiaries and 1 in 10 Washingtonians are served in a federally qualified health center (FQHC) or a rural health clinic (RHC) for primary care. Most of rural Washington is served by federally designated critical access hospitals (CAH). These providers offer some of the most innovative and integrated delivery models in the state, yet their reimbursement structure is tied to each encounter with a client, which stifles care delivery innovation. In these settings, payment changes are especially difficult given statutory and regulatory barriers and business models that rely on encounter-driven, cost-based reimbursement.

With strong support from these clinics and hospitals, the state has introduced a value-based alternative payment methodology in Medicaid for FQHCs and RHCs and is pursuing flexibility in delivery and financial incentives for participating CAHs. The model will test how increased financial flexibility can support promising models that expand care delivery.

Washington is working with the University of Washington Accountable Care Network and the Puget Sound High Value Network LLC to test a new accountable delivery and payment model, known as the Accountable Care Program (ACP). The ACP provides “best in class” patient service and experience and access to high-quality and timely service at a lower cost.

Each network under the ACP delivers integrated physical, mental health, and substance use disorder services, and assumes financial and clinical accountability for a defined population of PEBB Program members. ACP networks are reimbursed based on their ability to deliver quality care and keep enrollees healthy.

In addition to the Healthier Washington-sponsored VBP initiatives, HCA has launched a bundled payment program for a hip and knee joint replacement for public employees where Virginia Mason serves as the Center of Excellence.  

HCA is working with other private and public health care purchasers to replicate the payment model and further accelerate market transformation. The purchaser's guide offers guidance and resources to employers to support adoption of value-based purchasing. The HCA's Quality Improvement Score Calculator shows on a customizable financial spreadsheet how quality metrics can lead to shared savings or deficit payments.

Washington is testing integrated data platform capacity to allow providers to coordinate care, share risk and engage a sizeable population across multiple payers. Using a claims and clinical data aggregation strategy will allow providers to enter into value-based payment (VBP) arrangements and effectively engage in care coordination and population health management. Integrating data across multiple payers and delivery systems is essential to presenting providers with a unified view of their patient population.

Northwest Physicians Network and Summit Pacific Medical Center are contracting with the Health Care Authority to pilot the Washington Multi-payer model, where providers will coordinate care, share data across multiple payers and support providers in adopting value-based payment models.

These health care providers have committed to engaging multiple payers in this aligned strategy focused on population health management, while HCA will share attributable claims data from a state employee health plan and Apple Health (Medicaid), provide technical assistance around care transformation, and incentivize broader participation in the model test.

Annual value-based payment survey

HCA issues two annual value-based payment (VBP) surveys to track both health plan and provider progress toward Washington State's goal of paying for value, and to identify barriers impeding desired progress. Responses were collected through August 31, 2018.

What is the value-based roadmap?

The HCA Value-based Roadmap lays out how HCA will fundamentally change how health care is provided by implementing new models of care that drive toward population-based care.


Name: Rachel Quinn
Title: Special Assistant for Health Policy and Programs
Email: Rachel.Quinn@hca.wa.gov

Name: J.D. Fischer
Title: Healthier Washington Senior Health Policy Analyst
Email:  JD.Fischer@hca.wa.gov

Name: Gary Swan
Title: Healthier Washington Senior Health Policy Analyst
Email: Gary.Swan@hca.wa.gov