University Partnership: Prepping for Value-Based Payment FY19 - 50/50

Understanding value-based payment/purchasing (VBP) will be critical to Kentucky healthcare providers' organizational survival and ability to meet patient needs. The University of Kentucky proposes to use KY Medicaid claims to construct VBP quality metrics for all hospitals in the Commonwealth, formulate hospital-specific quality reports to support shared learning, and prepare de-identified analyses for publication in a peer-reviewed journal that focus on variation in quality metrics, drivers of variation, and hospital readiness for VBP. There is an urgent need for both public and private payers to find sustainable healthcare cost growth rates. While many payers have met this challenge through cuts to payments, benefits or eligibility, increasingly, they have tried to reframe these efforts to focus on reducing waste and Increasing value in healthcare. The Centers for Medicare and Medicaid Services (CMS), through its Medicare program, has been a market leader In the pursuit of value-based programs. Many payers are following Medicare's lead. Kentucky's own State Health System Innovation Plan encourages payers to increase episode of care (EOC) payments, one form a value-based payment. The shift from fee-for-service to value based payment has the potential to fundamentally alter patterns of health care delivery.