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Value Based Programs

An important design element of any Value Based program (VBP) is the performance benchmarks or thresholds that are used to determine which providers will receive an incentive payment for services provided. In some cases, these are absolute, fixed benchmarks, resulting in an absolute percentile score providers are required to reach year to year. Most government and many 3rd party payer’s Value Based Programs reward providers for attaining specific benchmarks, improving over time, or a combination of attainment and improvement.

According to a national study information about the types of benchmarks used is currently only available for about a third of the VBP programs in ACG’s environmental scan. There was no publicly available information about the benchmarks being used by bundled payment programs. Among Performance for Pay (P4P) programs, the most common benchmarks used was an absolute threshold number only, followed by relative thresholds based on the performance of peers in the market, the state, or nationally.

Programs, such as the Centers for Medicare and Medicaid Services (CMS), Value Based Programs, currently have two paths for providers to earn incentives: 1 ) attainment against an absolute threshold or 2) showing improvement over time. Very little information is publicly available about the types of benchmarks being used for Affordable Care Organization (ACO) models, since these are developed in private negotiations between payers and providers. The only exception nationally were three Centers for Medicare and Medicaid Affordable Care Organization (CMS) demonstration models. In its shared savings programs, CMS has established the cost benchmark for each agreement period for each ACO using three-years-prior expenditure data.