OHS: Over half of health payments in CT are based on quality, not quantity, of care

Hartford Business Journal – Tuesday, November 5, 2024
By David Krechevsky

A new report from state health regulators finds that more than half of the healthcare organizations in Connecticut have adopted alternative payment models (APMs) that focus on the quality of care rather than on the quantity of services provided.

The state Office of Health Strategy (OHS) said that the 44-page report, titled “Alternative Payment Model Monitoring: 2022” and dated Oct. 22 of this year, is required by a state law that charges OHS with monitoring the adoption of APMs across the state.

The report, which looks at data from 2022, documents progress in adopting APMs, also known as value-based care, which are strategies to pay for better health outcomes and higher quality care that puts patients first, it said.

Healthcare traditionally has been paid for on a fee-for-service basis, which can incentivize the quantity of services without promoting quality, OHS said. APMs base payments on patient outcomes and promote greater value — including higher quality care, equity and cost efficiency — for patients, purchasers, payers and providers, it said.

The report found that over half of payments in Connecticut in 2022 were at least partially linked to the quality of care. According to the report:

• 45.4% of healthcare payments were fee-for-service payments not linked to quality.
• 10.8% of healthcare payments were fee-for-service payments linked to quality.
• 42.4% of healthcare payments were made via alternative payment models linked to fee-for-service architecture, and
• 1.5% of payments were made through population-based models (which pay a standard amount for providing care to a population, incentivizing keeping people healthy).

“Assessing adoption of APMs in our state is one way we have to measure our progression toward patient-first care,” OHS Commissioner Dr. Deidre Gifford said.

The report assessed APM adoption in Connecticut in 2022 using the Healthcare Payment Learning and Action Network (HCP-LAN)’s classification system, which offers a common framework classifying and designing alternative payment models, OHS said. The report demonstrated that overall APM adoption in Connecticut has made gains in some categories and showed only modest growth in others.

Commercial healthcare payments in Connecticut are split, with 45% of payments made in traditional fee-for-service models and 55% linked to quality. Results in Medicare Advantage are similar, with 43% of payments made under a fee-for-service structure and 57% linked to quality.

Generally, the more heavily a payment structure is based on patient outcomes, the fewer payments are made through it. For example, only 16% of Medicare Advantage payments, and only 1.5% of commercial payments, are made through population-based payment agreements.

Compared to national trends, OHS added, Connecticut is moving toward population-based payments more slowly than the rest of the country. The report encourages large providers and payers to expand participation in evidence-based alternative payment models that emphasize quality, efficiency and affordability.

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