Advancing VBP

HCA uses a variety of tools and approaches to promote quality and value across the state, including alternative payment models (APMs). APMs are payment approaches that incentivize high-quality and cost-efficient care, rather than volume of care. 

A few of HCA’s APM programs are highlighted below, and you can learn more about different payment models from the APM basics slide deck and HCA’s VBP Roadmap.

Multi-payer models

Community Health Access and Rural Transformation (CHART)

CHART was a federal grant that allowed HCA to explore new payment models with providers in the North Central region of the state (Grant, Chelan, Douglas, and Okanogan counties). CHART was intended to test whether an aligned all-payer capitated model and a community care redesign program could improve health outcomes and access, decrease disparities, and reduce costs. CMMI recently announced the closure of the CHART grant program. HCA is exploring other ways to improve and support rural health. Learn more.

Primary Care Transformation Model (PCTM)

The PCTM is an ambitious effort to achieve the quadruple aim of better patient experience, better health outcomes, lower cost, and better clinician experience by investing in integrated, whole-person primary care. The model aims to align payment incentives and quality measures across payers, improve primary care financing, and support providers in the transition to team-based care, among other goals. View our fact sheet or learn more on the Primary Care Transformation webpage.

Public option

Cascade Select (Washington’s public option)

Cascade Select plans are required to meet affordability standards linked to Medicare and evidence-based, value-driven protocols. Insurers applying to offer Cascade Select plans must demonstrate to the state that at least 30 percent of provider contracts for the public option plan would include VBP. Public option plans entered the Washington marketplace starting January 1, 2021. Learn more.

Public Employees Benefits Board (PEBB) and School Employees Benefits Board (SEBB)

Performance guarantees in Uniform Medical Plans (UMP)

Public and school employees in Washington can choose to enroll in one of several Uniform Medical Plan options, which are designed by HCA and administered by Regence. Regence must pay a financial penalty if it fails to meet standards in areas like customer service, value-based contracting, and rates of preventive care and screenings among UMP members.

Accountable Care Program (ACP)

Public and school employees can enroll in either of two ACP health insurance plans, which are a subtype of UMP. These plans have limited networks (known as Accountable Care Networks, or ACNs) who work together to maximize member health while minimizing cost. Providers are held accountable for total spending, and can earn financial rewards based on quality and performance. Learn more.

Centers of Excellence (COE) Program

PEBB and SEBB members in certain health plans can utilize COEs for knee replacement, hip replacement, and spine care at low to no cost. These centers employ groups of providers that work together to provide the best possible care. Although there is no specific payment for quality, COEs do take on financial risk for preventable complications and infections. All models offered by Centers of Excellence are based on recommendations from the Bree Collaborative, a nonprofit foundation that brings together public and private health care stakeholders to identify specific ways to improve health care quality, outcomes, and affordability in Washington State. Learn more.

Medical Loss Ratio (MLR) performance guarantee

The MLR defines the proportion of the money that a health plan collects in premiums that is spent on claims and quality improvement (as opposed to overhead, administration, and profit). Federal statute sets the ratio at a minimum of 85 percent for fully-funded plans. HCA has a unique agreement with Kaiser Permanente and Premera, two of the insurance companies that provide coverage for the PEBB and SEBB program. These carriers may have their MLRs adjusted up to 90 percent (keeping only 10 percent of premiums for overhead and profits) if they fail to meet certain contract provisions around care quality, VBP adoption, and participation in the individual marketplace. A third carrier, United Health Care, will be accountable to a similar set of performance standards once it reaches an enrollment threshold of 10,000 PEBB and SEBB members. Learn more.

Apple Health (Medicaid)

Managed care withhold

HCA pays managed care organizations (MCOs) a per-member-per-month premium rate that covers all of a client’s care. To connect payment to quality of care and value, HCA withholds two percent of an MCO’s monthly premium, to be returned based on performance and adoption of VBP. Learn more.

Maternal care alternative payment model

Apple Health pays for almost half of all births in Washington State each year. The U.S. has some of the worst perinatal outcomes among developed countries, and the Washington Maternal Mortality Review Panel found that 60 percent of pregnancy-related deaths in the state are preventable. The maternal care model in development aims to increase utilization of prenatal and postpartum care, increase quality of care, reduce morbidity and mortality, improve birth outcomes, and reduce racial and ethnic disparities in perinatal outcomes. Learn more.

Alternative Payment Model 4 (APM4)

Federally Qualified Health Centers (FQHCs) and rural health clinics (RHCs) provide critical care to some of the highest-need patients in our health system. APM4 allows FQHCs and RHCs serving Medicaid Managed Care enrollees to earn rewards based on quality achievement. Under this model, consistent income from capitated payments offered the 16 participating FQHCs flexible yet predictable funds. APM4 ended on December 31, 2022, and HCA is actively evaluating the quality, cost, utilization, and financial impacts of the program. HCA is committed to ongoing development of a VBP program with FQHCs and RHCs. Learn more.

Hep C Free Washington’s drug modified subscription purchasing model

In 2019, CMS approved Washington’s request to negotiate with drug manufacturers for arrangements linking Medicaid payment to value. Under the agreement, Washington negotiated with the drug manufacturer AbbVie to pay a set price for a course of hepatitis C treatment for Medicaid members. If a patient requires more medicine beyond the designated course of treatment, AbbVie has agreed to only charge a nominal amount. Learn more.

VBP in the Medicaid Transformation Project (MTP)

MTP is a multiyear, multibillion-dollar effort to improve Medicaid in Washington. MTP advances VBP through regional Accountable Communities of Health (ACHs). Each ACH supports providers in adopting VBP and is required to develop plans to enable the success of APMs. Learn more.

Where we’re headed

Read about our VBP goals or view the VBP Roadmap, which outlines the road ahead for 2023–2027.