In 2020, the California Department of Health Care Services (DHCS) implemented a new set of quality performance incentives for Medi-Cal managed care plans (MCPs). Its approach is to implement a Managed Care Accountability Set (formerly the “External Accountability Set”) and require MCPs to perform at least as well as 50% of Medicaid plans nationally (up from 25%). MCPs that do not meet the benchmark will be subject to a financial penalty and will be required to complete a corrective action plan and quality improvement work. DHCS and the California Health Care Foundation (CHCF) jointly sponsored Bailit Health to examine alternative quality incentive methodologies that DHCS could consider for its use, as external evaluations suggest that DHCS has not been generating quality improvement through its purchasing activities.2 Many state Medicaid programs operate quality incentive programs for contracted managed care plans. These programs link some portion of plan revenue and/or nonrevenue consequences to quality performance. States have pursued this strategy based on a common belief that explicit incentives linked to performance will motivate plan behavior that will improve value for states and the beneficiaries they serve. This approach is sometimes referred to as “value-based purchasing.” The application of financial incentives alone is referred to as “value-based payment.” The purpose of this white paper is to provide information on key quality incentive program design decisions and choices made by California purchasers and other states’ Medicaid programs.
Copyright:
Reproduced with permission of the copyright holder. Further use of the material is subject to CC BY-NC-ND license. (More information)