Blog Moving with Your Provider Network through the Continuum of Value-Based Payment

Posted January 1, 2017 by Adele Allison and Judith Nelson

Health plans have worked to set up their provider networks strategically for many years. The goal has been to balance quality of care for their members with access to providers while also managing rising costs. The CMS requirements related to provider network adequacy, directories, and provider data have been changing each year for all government programs (including Medicare Advantage, Managed Medicaid, as well as Qualified Health Plans). These changes have created more and more federal oversight in the plan’s administration of these processes. As we consider the interconnectedness between the evolving provider network adequacy requirements and the move toward value-based payment, we see opportunities to begin efficiently operationalizing these requirements.

Here are some highlights to show you how we have come to where we are today:

  • In the early days, the state-based programs typically required plans to self-report. Plans used access maps of their provider network and applied a requirement, such as one provider within 30 minutes or 30 miles. These conditions were very simplistic.
  • Looking back, health plans began to shrink their networks with the goal of improving the quality of care and reducing costs. In early 2014, major national health insurers began to significantly shrink their provider networks for Medicare Advantage consumers, increasing the perception of greater restrictions to provider access. Litigation ensued, and consumers asked for advance notice of provider network changes. 
  • For the 2015 plan year, formal requirements were introduced. CMS expected to be notified by health plans at least 90 days prior to any significant network change. Additionally, members affected by substantial mid-year network changes could go through a special enrollment period and choose a different health plan. CMS reporting requirements include over 50 data elements related to mid-year network changes.
  • CMS is expanding their efforts to oversee the adequacy of Medicare Advantage plans’ provider networks. The guidance for 2016 generated debate around the requirement for health plans to implement a proactive and structured process to monitor their provider networks as well as providing “real time” updates to provider directories. Currently, when health plans request a service area expansion, CMS will review the adequacy of their entire network.
  • Medicare Advantage plans are required to classify their provider payments into the four categories of value-based payment. This classification is typically a manual process requiring plans to monitor multiple systems and data sets of information. Even though CMS doesn’t control the types of reimbursement methods that a health plan uses, CMS is curious about the level of transition to alternative payment models and is requiring plans to submit this data at an aggregate level.

Time and again, policy intent and vision bumps up against resource limitations. Operationalizing these provider network adequacy and reporting requirements is quite challenging. Health plans are digesting these regulations and considering how to efficiently put this into practice. At the same time, our healthcare ecosystem is moving toward value-based care and payment.

The regulatory evolution of provider network adequacy and the move toward value-based payment can be intertwined. As you establish and maintain provider networks to meet adequacy requirements, you can simultaneously plan strategic moves with your providers along the continuum of value-based care and payment.

Other blog posts in this series:

If you are interested in learning more about how DST can help you navigate through this changing environment, please contact us at 800.272.4799.

Pete Titus
Adele Allison
Director, Provider Innovation Strategies
Judith Nelson
Judith Nelson
Director, Medicare Advantage Strategy, DST Health Solutions

The views expressed in this publication are solely those of the author and do not necessarily reflect the position or policy of DST Systems, Inc. or its affiliates, subsidiaries, joint ventures, officers, directors, or management.

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