Catalyst for Payment Reform

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

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

When the health care payment reform movement began, the first thing CPR saw was an uptick in pay for performance.  Because payers had some experience with providing bonuses to health care providers that met certain quality of care standards, it made sense that they turned to pay for performance first as their way to “move from volume to value.”  With the passage of the Affordable Care Act (ACA) and funding to create the Center for Medicare and Medicaid Innovation (CMMI), 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.  Last year’s 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 program, 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. Flash forward to 2020, the Episodes of Care Program now rewards high quality and cost-effective acute and specialist-driven care across 48 distinct episodes.  Spending the last six 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 $45.2 million in 2019.

On the quality front, highlights include:
  • Perinatal episode — an increase in prenatal group B streptococcus screening rates from 88% in 2014 to 96.7% in 2019
  • Chronic obstructive pulmonary disease (COPD)— an increase in patients receiving follow-up care within the post-trigger window from 45% in 2015 to 48% in 2019.  
  • Otitis Media with Effusion (OME) — an increase in OME episodes without antibiotics filled from 27.7% in 2017 to 31.6% in 2019

TennCare has also 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

Want to learn more?

There are many opportunities to hear directly from TennCare through CPR’s platform.

  • Watch the on-demand webinar recording from our Fall 2020 Innovative Purchasers Series. During the lively webinar, Jessica Hill, TennCare’s Director of Strategic Planning and Innovation, spoke to the Episodes of Care 2019 Cost and Quality results and answered countless questions from the audience.
  • Jessica Hill provided thoughtful commentary on what it took to build the Episodes of Care program from scratch during CPR’s July 2020 Bundled Payment Virtual Summit.
  • Back in August of 2019, CPR’s Executive Director, Suzanne Delbanco, had the chance to chat with Brooks Daverman, Former Deputy Director of TennCare, on our Listening In (With Permission) podcast series.
  • Last December, Jessica Hill presented on the topic of “Creating Bold Reforms & Consistent Provider Experience” during our Virtual Summit: Medicaid MCOs as Agents of Change in Payment Reform. Watch the free Summit recording and download the accompanying toolkit here.

We hope to see you at this Thursday’s webinar as we kick off our FREE Innovative Purchaser Webinar Series for 2020.

CPR first published this blog on November 26, 2019, and updated it in October 2020. Photograph by Chad Madden on Unsplash.

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