Positive results from TennCare’s Innovative Payment and Delivery Reform Programs

November 26, 2019

When the health care payment reform movement began, the first thing CPR saw was an uptick in pay for performance.  Payers had some experience with providing bonuses to health care providers that meet certain quality of care standards so they turned to pay for performance first to “move from volume to value.”  With the passage of the Affordable Care Act (ACA) and funding to create the Centers for Medicare and Medicaid Innovation, reformers began to think bigger and in more sophisticated ways about alternative payment methods.

Yet few health care purchasers and payers caught on at the beginning and, still today, not everyone payer has come on board.  The recent findings from the Health Care Payment Learning and Action Network suggest that as of 2018, 39% of payments are still made through traditional fee for service or other legacy payments not linked to quality. A notable exception is TennCare, Tennessee’s Medicaid agency, a leader in this space and, lucky for CPR, a member of our organization.

Starting in 2014, TennCare embarked on an ambitious plan to use episode-based payment with health care providers in Tennessee. By 2020, the Episodes of Care Program will reward high quality and cost-effective acute and specialist-driven care across 48 distinct episodes.  Spending the last five years building up to this long list of episodes, TennCare has been able to align the incentives it offers to health care providers with the outcomes patients want from their care.  The result has been steady or better quality of care across most episodes while saving the state of Tennessee an estimated $38.3 million.

On the quality front, highlights include:

  • Perinatal episode — an increase in prenatal group B streptococcus screening rates from 88% in 2014 to 95% in 2018
  • Asthma acute exacerbation episode — a reduction in acute exacerbations of asthma treated in the inpatient setting from 6% in 2014 to 3% in 2018
  • Oppositional defiant disorder (ODD) episode — a reduction in the number of children with non-comorbid ODD receiving inappropriate medications from 23% in 2015 to 4% in 2018

TennCare also recently shared positive clinical results from two other programs it started in 2016:  the Patient-Centered Medical Home (PCMH) program and Tennessee Health Link (also featured in NPR).  For more details on recent evaluations of all three programs, visit https://www.tn.gov/tenncare/health-care-innovation.html.

CPR’s Executive Director, Suzanne Delbanco, had the chance to chat with Brooks Daverman, Deputy Director of TennCare on our Listening In (With Permission) podcast series back in August. Through that conversation, we learned not only how TennCare was able to implement its bundled payment program with such a wide range of providers, but also the fact that they have free resources available to help other purchasers and payers replicate this model in other markets. Want to learn more about state Medicaid agencies carrying out innovative payment and delivery reform programs? Register for CPR’s FREE Virtual Summit on December 10.

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