Tool for Aiding States Developing and Adopting Value-based Medicaid Payment Models for Home- and Community-based Services

By the end of last year, the Medicaid programs in nearly half of all U.S. states had contracted with managed care plans to cover long-term services and supports for adults, children and seniors with chronic illnesses and disabling conditions. The Center for Health Care Strategies, Inc., which has partnered with nearly every state in the country to promote innovations in publicly financed health care over the past 24 years, recently created a tool to help states that are developing and adopting value-based Medicaid payment models for home and community-based services for long-term care.

Over 20 percent of the total Medicaid spending in 2015 was for long-term care services. It is the nation’s primary payer for these services, according to the Medicaid.gov website.

“State Medicaid agencies and their contracted managed care plans are shifting away from fee-for service systems that reward providers for delivering more services to value-based payment models that tie payment to better outcomes,” says Janet Heinrich, DrPH, RN, FAAN, a research professor at George Washington University’s Milken Institute School of Public Health. Prior to coming to GW, she worked as a senior advisor at U.S. Center for Medicare and Medicaid Innovation.

Heinrich commends the new tool for providing key information about four important issues for states embracing value-based Medicaid payment models for home and community-based services. The tool was inspired by a longer guide that examined approaches used by five states — Minnesota, New York, Tennessee, Texas, and Virginia — for promoting high-quality Medicaid managed long-term services that enable beneficiaries to live in their communities.

The four areas identified in the checklist as ones that states may want to explore are:

  • assessing available support from the state policy environment;
  • selecting the right performance measures to reward home- and community-based service providers;
  • selecting payment models that create the right financial incentives for improved value; and
  • addressing operational issues faced by plans and providers.

The tool, Value-based Payment in Medicaid Managed Long-term Services and Supports: A Checklist for States, was created with funding from the West Health Policy Center.