Value-Based Contracting in the Era of COVID-19

Over the last decade or more, valued-based managed care incentive programs have truly taken off in both the governmental and commercial health care sectors. Providers are increasingly paid for quality, performance, outcomes, and patient safety instead of strictly for the volume of care provided. However, the success of such programs and, not to mention, the financial incentives for health care providers, are all conditioned on following care coordination protocols and/or evidence-based medicine guidelines, recording and reporting various quality measures, and, of course, achieving applicable financial and/or clinical performance benchmarks.

These requirements are cumbersome, to say the least, in ordinary times. So, with the onset of the COVID-19 pandemic, where our health care providers are being asked to dedicate nearly all energy, resources, and focus on the frontline battle to slow the spread of the virus, what are health care providers to do in terms of meeting their valued-based contracting obligations?

In response to such concern, on March 22, 2020, CMS announced substantial relief for physicians, hospitals, facilities, and other health care providers engaged in one or more Medicare incentive programs that require quality reporting (e.g., Merit-based Incentive Payment System, Medicare Shared Savings Program, Hospital Inpatient/Outpatient Quality Reporting Programs, Hospital Value-based Purchasing Program, various post-acute quality reporting programs, etc.). View the full CMS press release.

As a general matter, CMS extended, or, in some cases, made optional/flexible, upcoming quality data reporting deadlines (most with respect to 2019 data) and further provided relief in case such data is ultimately not provided, such as by excluding such missing time periods from incentive calculations or by providing neutral payment adjustments. In addition, with respect to hospital and post-acute provider programs, CMS generally dropped the requirement that quality data be reported for the first two quarters of 2020.[1]  These measures will allow providers to focus on combatting the pandemic without worrying about quality reporting and without being financially penalized for non-reporting or the inevitable deterioration of clinical and financial performance measures while the COVID-19 pandemic bombards our national health system.

However, little has been communicated to date as to whether commercial managed care organizations, many of whom administer quality reporting programs that often mirror CMS’ programs, would be willing to extend similar relief. Understandably, implementing care protocols and measuring/reporting performance data is not currently a high priority for providers who are focused on the pandemic’s threat to their patients’ (and their own) health and wellbeing.

To the extent they have not already, managed care organizations implementing quality reporting programs should seek to answer the following questions, at a minimum, to provide clarity, reassurance, and financial security to their participating providers, many of whom are fighting on the front lines of this unprecedented COVID-19 battle:

  1. Must providers submit 2019 quality data that is not yet due or that has not yet been submitted? If so, by when? If not, how will payment models and incentive calculations be adjusted to account for the missing data?
  2. Will incentives for 2019 performance be paid in full and on time?
  3. How will 2020 quality data (specifically for those time periods likely to be gravely impacted by the COVID-19 crisis) be considered, if at all, in connection with 2020 performance incentives?
  4. How will 2020 data be used in connection with establishing clinical and/or financial benchmarks on a go-forward basis?
  5. What changes, if any, are being made to the program enrollment processes and timelines currently (or shortly) underway for upcoming performance periods?

[1] CMS is currently evaluating how to handle 2020 data reporting with respect to physician-centric quality reporting programs (e.g., Merit-based Incentive Payment System and, Medicare Shared Savings Program).