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:
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:
Measuring Health Plan Efforts to Improve Quality
Health plan performance is measured through an increasing array of standardized performance measures assessing preventive care, clinical processes, and intermediate outcomes (e.g., blood pressure or cholesterol levels) as well as care experiences and outcomes (e.g., functional status). CMS requires health plans participating in Medicare Advantage to report many such performance measures. In addition, many of these measures are required by states for Medicaid managed care programs or under regulatory requirements promulgated through states’ health departments or insurance commissioners.
Many health plans attempt to improve performance by rewarding and reimbursing providers for a range of activities including care coordination, care and case management, medication reconciliation and compliance, or development of primary care medical homes. In addition, health plans may seek to improve value through benefit designs that provide incentives for members to choose evidence-based treatments (e.g., by waiving copayments) or select providers with higher performance ratings. Health plans may also offer decision-support tools to help members make informed treatment choices.
There are a variety of approaches to assessing health plan performance. An employer-sponsored tool developed and maintained by the National Business Coalition on Health (NBCH), eValue8 gathers information through a standard, annual, request-for-information survey. It gathers information about health plan performance in critical areas such as prevention and health promotion, adoption of health information technology, member and provider support, disease management, provider performance measurement and rewards, patient safety, pharmaceutical management, and behavioral health.
The National Committee for Quality Assurance (NCQA) and URAC accredit health plans, with NCQA accreditation more commonly required by large employers. NCQA-accredited health plans are reviewed against more than 60 standards and must report on their performance in more than 40 areas in order to earn accreditation. NCQA uses a unified set of standards for health maintenance organizations (HMOs), managed care organizations (MCOs), preferred provider organizations (PPOs), and point of service (POS) plans, relies extensively on performance measures in accreditation decisions, and publishes a health plan report card on its Web site.
Medicaid managed care’s external quality review is another health plan assessment approach, although it does not directly report on benefit and provider reimbursement strategies. Furthermore, the structure and content of this assessment may vary considerably, depending on the review organization. While reporting standardized performance measures is common and routine for most HMO and POS plans, and for many PPO plans, detailed assessment and reporting of health plan activities related to provider payment and benefit design strategies are not.
Uses of Reported Information from Health Plans
The various audiences for health plan quality information have unique needs, which should be taken into account in the design and implementation of reporting requirements. These requirements should also address various applications of the information, such as
oversight and monitoring, quality improvement, public reporting, and decision support. The audiences for health plan quality information include:
Purchasers rely on both NCQA accreditation and eValue8 to collect program and service operations data and, to varying degrees, to assess the effectiveness of a health plan’s quality improvement programs. Consumers might use quality information to make decisions about choice of provider, choice of treatment, and potential out-of-pocket costs. The quality reporting system should assess whether health plans make information about the performance of individual physicians and hospital service lines available to their members; such information is becoming more widely available, and research has shown that consumers prefer it to performance information aggregated at physician group or hospitalwide levels.
At a roundtable meeting supported by The Commonwealth Fund and convened by AcademyHealth, experts, stakeholders, and government officials discussed current approaches to health plan quality improvement reporting and generated recommendations
for implementing reporting requirements under the Affordable Care Act (Appendix A).