The trend reflects an overall decline in commercial HMO enrollment more than it does a resurgence in fee-for-service payment, according to the report. But it indicates the difficulty that value-based payment can have gaining a foothold, even in markets where it’s specifically encouraged and supported. The report from the Massachusetts Center for Health Information and Analysis (CHIA) found that APMs — mainly global payment contracting — accounted for 34% of the commercial market in 2013, compared to 35% in 2012. “Adoption rates of global payment contracts — contracts in which medical providers assume a portion of the risk of the cost of caring for a patient population — in Massachusetts have been above national adoption rates,” the CHIA report said. “However, proportionately fewer commercial members were enrolled with primary care providers paid under all APMs in 2013 than in 2012.” APMs are used mainly for patient care within HMO-type insurance plans, and the proportion of commercial members enrolled in HMO-type products decreased by 10.8 percentage points between 2010 and 2013. “This trend was concurrent with a slow but continuing shift toward enrollment in self-insured coverage, in which HMO plan designs are used much less regularly than in fully-insured coverage.”
Of course, not all HMOs involve value-based payment or accountable care, but the state views alternative payment methodologies — almost all HMO-based — as the most effective way to implement and measure value-based payment. For example, Blue Cross Blue Shield of Massachusetts’ Alternative Quality Contract, which has served as a model for ACOs at the national level, currently applies only to providers in the Blues plan’s HMO plans, spokesperson Kathleen Makela tells ABN. The alternative quality contract uses a global budget with a strong quality performance component. Szabo’s analysis of the report shows “continued growth in self-insured accounts, which tend to have PPO designs.” He adds, “contracts like the Blue Cross quality contract are much easier to implement in an HMO.” Until payers develop alternative payment methodology contracts that work well under a PPO umbrella, they’re going to find it more difficult to bend the cost curve substantially, he says.
The Massachusetts Blues plan “has the biggest market share, so they have a big effect on what happens in the market,” Szabo says. In addition, that insurer is a major player in the administrative services only space, he says. Makela says the insurer plans to expand the alternative quality contract to the PPO market “in the near future.”
ACOs Proliferate in Massachusetts. Massachusetts providers remain committed to ACOs and to risk more generally; the major health care systems in Massachusetts “all have some kind of ACO,” Szabo says. At the same time, the smaller providers are considering whether to consolidate with a large health care system or affiliate with other providers to form their own ACO, he says. The Massachusetts cost control legislation includes benchmarks intended to encourage providers in the state Medicaid program and other programs to move into accountable care. Specifically, MassHealth, the state’s Medicaid program, must transition 80% of beneficiaries to value-based payment methodologies, including ACOs, by July 1, 2015.