Health Plan Quality Improvement Strategy Reporting Under the Affordable Care Act: Implementation Considerations

April 6, 2012

Authors: Emma Hoo, David Lansky, Ph.D., Joachim Roski, Ph.D., M.P.H., and Lisa Simpson, M.B., B.Ch., M.P.H., FAAP
Editor: Martha Hostetter



The Affordable Care Act calls for the U.S. Secretary of Health and Human Services to issue quality improvement reporting requirements for employer group health plans, including self-insured plans, and individual plans, as well as for qualifying plans in health insurance exchanges. Health plans will need to report on their quality improvement activities regarding plan or coverage benefits and provider reimbursement structures that: improve health outcomes, prevent hospital readmissions, improve patient safety and reduce medical errors, and implement wellness and health promotion activities. Mindful of the opportunity to leverage existing plan reporting tools and achieve administrative efficiencies, this report summarizes key features of the eValue8 Health Plan Request for Information, National Committee for Quality Assurance accreditation, and Medicaid’s external quality review process. The authors offer the National Quality Strategy as a framework for quality improvement reporting requirements to align efforts among health plans, health care providers, and health care purchasers.

Executive Summary

A provision of the Patient Protection and Affordable Care Act (Affordable Care Act) requires health plans to submit reports each year demonstrating how they reward health care quality through market-based incentives in benefit design and provider reimbursement structures. By spring 2012, the U.S. Secretary of Health and Human Services (HHS) is expected to develop requirements for health plans to report on their efforts to: improve health outcomes, prevent hospital readmissions, ensure patient safety and reduce medical errors, and implement wellness and health promotion activities. Both employer group health plans, including self-insured plans, individual market plans, and qualified health plans sold through the insurance exchanges are required to submit such reports (Appendix B).

This report outlines key considerations for implementing these provisions of the health reform law. After reviewing health plan strategies that may positively affect health and health care quality, we propose a framework that can be used to identify and develop measures and reporting requirements. Next, we review current health plan assessment methods that may inform specifications to be developed by the HHS secretary. Finally, we offer a set of recommendations for the design of health plan reporting requirements.

Many health plans implement benefit designs that aim to improve health care outcomes, quality, and value. By benefit design, we mean the use of cost-sharing and incentives across a range of product options; these are distinct from coverage rules, which are determined by federal guidance on the definition of essential health benefits. Examples of innovative benefit practices include the selection of high-performing physicians, physician groups, and hospitals based on various quality and efficiency metrics; the use of decision support to guide preference-sensitive treatment choices; and the use of patient reminders and incentives to encourage enrollees to receive preventive screenings.

In addition, some health plans use their contracts with providers to encourage high-quality, high-value care. Such payment models include performance-based contracts that link payment to the achievement of certain quality and/or efficiency thresholds. A limited number of purchasers attempt to bundle payments for episodes of care. Some primary care medical home or accountable care contracts augment a primary care case management fee with prospective gain-sharing for achieving reductions in the total cost of health care or achieving other performance targets. Among hospitals, the Premier program, Medicare Advantage STARS program, and the Centers for Medicare and Medicaid Services’ (CMS) hospital value-based purchasing program have accelerated adoption of quality- and outcomes-based contracts with payments linked to performance, public reporting, or participation in regional and multistate collaboratives.

Framework for Quality Improvement Reporting Requirements
In considering a framework to meet reporting requirements outlined in the Affordable Care Act, there are significant opportunities to align with the National Quality Strategy (NQS) in pursuit of improving population health, improving care experiences, and controlling per capita costs. Common domains across these initiatives and the NQS priorities reflect a broad view of quality improvement:

  • making care safer by reducing harm; 
  • engaging patients and family as partners in their care; 
  • promoting effective communication and care coordination; 
  • promoting the most effective prevention and treatment practices; 
  • working with communities to enable healthy living; and 
  • making care more affordable through new health care delivery models.

As illustrated below, there are relevant benefit design and provider reimbursement features that could be grouped under each priority area as a way to reinforce and implement a health plan’s quality improvement strategies. To guide the selection of quality improvement reporting requirements for health plans’ benefit design and provider reimbursement strategies, the following criteria should be considered:

  1. conforms to statutory requirements;
  2. consistent with the National Quality Strategy and other federal programs; 
  3. likelihood that measured activities and/or reporting will contribute to improvement of health outcomes;
  4. builds upon existing documentation and reporting systems where possible in order to limit additional burden on plan reporting or provider data collection; 
  5. has face validity to consumers, plans, providers, and policymakers; and
  6. submitted information can be verified.