Value-based care payment models

Humana recognizes that each physician's need is different, that every practice is unique. We listen to physicians and other healthcare professionals, and we understand there are many factors that can affect their readiness to transition to a value-based care model. Awareness of these differences drove the design of our value-based continuum.

The value of the value-based care model

Dr. Pepe Armas, MD, CEO of MCCI, shares how he views the different stages of value-based payment.

So, let me show you—let me show you how I think about this and how you would move from traditional fee-for-service medicine towards more value-based and global risk contracting. You start off as fee-for-service. You get paid for episodic care and you get incentivized and are paid when your patient has acute events and is—and is actually ill. And you submit your payment—your bill—to CMS, Medicare, government payer, public or private insurance plan. And you get your reimbursement accordingly, depending on the contract that you negotiated. You move from that to a primary care cap. And a primary care cap usually comes along with some sort of incentive bonuses. And in today’s market, it’s usually related to quality incentives, first and foremost, which include HEDIS and Star Ratings of your universe of patients. So, you basically move from fee-for-service alone to a primary care cap, which is a monthly fee that can range, depending on the market you’re in, of $40 to $75 per member per month. And then you are incentivized, usually on a biannual basis. Sometimes, on a quarterly basis. And then, you move from there to a primary care cap and a percent of shared savings. So, they give you whatever savings you produced for the universe of patients that were assigned to you, if there were savings in Part A or hospital costs, in Part B, or provider outpatient costs, and in the Part D or pharmacy cost. And then, you’re given anywhere from 10% to 40% or 50% of the savings. So, you move from a typical primary care cap of $40 or $50 and then, a biannual bonus check, depending on how you hit on all of these indicators that you agreed to beforehand. You move from that to a limited risk agreement, which is no primary care cap and then, savings—sharing on the savings of Part A, Part B and Part D. And you move from there to a full—what is known as a “full risk agreement,” which is, once you understand the data—once you understand, you have your own data analytics—once you understand how to manage the patients—how to move away from episodic encounters only with your patients—how to get into wellness and preventive and screening of your patients, you move to a full risk agreement. And a full risk agreement usually entails that you’re 100% at risk for all Part B expenses, which is everything that would be—have to do with primary care, medical claims, specialty claims, etc. And then, you have a sharing of Part A risk. And what that means is that, up or down, depending how you do and if there are savings on the Part A, which is the hospital-based component, you get a percentage of that. And the typical agreement can range from 40% of the savings to 60% of the savings. And then, in the Part D, it’s a combination of both. Depending on the different insurance company or the different market, there could be shared savings or complete risk on the Part D. And from there, you move to global risk, where you’re 100% at risk for Part A hospital cost, Part B specialty, and primary care costs, all medical claims and pharmaceutical or Part D costs. So, you move—you start from fee-for-service and you get accustomed to understanding the systems, establishing a relationship based on loyalty and trust with the different payers or payer that you may partner up with. And as you go getting more comfortable and more sophisticated and more mature, you move up the ladder until you’re at complete global risk. This is my understanding of what value-based medicine is. And, at the end of the day, what value-based medicine is, is that you get the best possible healthcare outcome for a dollar. At the end of the day, that’s what it is. So, everybody’s aligned, trying to get the same possible—possibly, the best healthcare outcome at the most efficient or in the cheapest way.

Value-based care payment models

Our value-based care continuum is tailored for primary care physicians (PCPs) who are focused on increasing their population health management capabilities. As a PCP increases these capabilities, he or she gains additional opportunities to advance along the continuum.

Available programs

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Star Recognition

The Humana Star Recognition program is an integral part of Humana's value-based continuum. As the first level of our pay-for-value programs, the Star Recognition program focuses on achievements for specific quality measures. The 2019 Star Recognition program provides incentives to PCPs who meet six out of eight quality metrics. Practices that meet these metrics receive an annual bonus payment. Participating Humana PCPs who are in good standing automatically receive an invitation to participate in our Star Recognition program (unless they are already contracted for Humana's Model Practice, Medical Home or Shared Savings programs). Physicians contracted in a full-value arrangement at the end of the reporting period are not eligible for Star Recognition.

Model Practice

The second level on the continuum is our Model Practice program. Physicians earn incentives for each quality metric they meet. Additionally, groups can earn incentives for meeting specific clinical initiative targets. Recognition for achievements in the Model Practice program are paid out quarterly. Physician practices that see at least 75% of their attributed patients 2 or more times a year will receive an additional annual bonus. Participating PCPs with 250 or more Humana-covered patients are eligible to participate in Humana’s Model Practice program. This is a Humana-contracted program.

Medical Home

The next level of Humana’s value-based care continuum is the Medical Home program, which is offered to practices that are either patient-centered medical-home (PCMH) recognized or in the process of gaining recognition. These practices have taken certain steps to ensure they fulfill the role of population health managers. For example, PCMH program participants have implemented electronic medical records and likely use electronic prescribing systems. Additionally, they have made other infrastructure changes, including using a care coordinator in the practice.

Medical Home program participants have to meet the same quality measures as those in the Model Practice program. However, the Medical Home program offers a per-member-per-month (PMPM) payment for providing necessary care coordination services to achieve quality metrics and maintain PCMH certification. To remain eligible for the care coordination fee, practices must complete the reward measures on a quarterly basis. Participating PCPs with 250 or more Humana-covered patients who are medical home-certified or are in the process of becoming certified may be eligible to participate in Humana’s Medical Home program. This is a program for Humana-contracted physicians.

Full Value

Humana’s full value model offers shared savings opportunities, with physicians taking full accountability and managing a patient’s total cost of care with a set capitation.

Additional opportunities include a global arrangement in which the physician is 100% accountable for the surplus or deficit related to a patient’s total cost of care. Global arrangement offers potentially higher compensation for taking on increased accountability.

The full value model and global arrangement opportunity require a broad set of capabilities (technology and infrastructure). The full value model is the most advanced model within our value-based continuum.

Episode-based models

Humana developed its first episode-based models for total joint replacement in Ohio's and Tennessee's TJR programs. After expanding in 2017, the program was made available nationwide in 2018.

Also in 2018, Humana added a maternity model, and in 2019, we launched a spinal fusion model. Both of these models are available nationally as well.

Visit our episode-based models page to learn more about the program and the states and episodic conditions into which we are expanding.

Humana’s episode-based models