2.0 DESCRIPTION
LVC is defined as services
that are medically unnecessary and provide no health benefits to
patients. In some cases, LVC can even be harmful to the patient
and/or lead to further unnecessary testing or treatment. To manage
low-value medical interventions; two forms of alternative payment
models will be used: capitation and risk-sharing.
2.1 Annually,
beginning with Option year 1, the contractor shall identify the
top five low value services within their beneficiary population
using the prior year’s claims data and submit this information to
DHA for approval. The contractor shall establish an annual capitation
amount or risk-sharing methodology for these services with DHA’s coordination
and approval. Low-value services that were capitated or risk-sharing
in the previous year may be subject to continued capitation or risk-sharing
in subsequent years.
2.2 The contractor shall ensure
that care is provided only when medically necessary and appropriate
in accordance with established statute, regulation, and policy,
while identifying opportunities to reduce the utilization of LVC
services that are not medically necessary, harmful to the patient,
or lead to further unnecessary testing or treatment.
2.3 The contractor
shall manage the utilization of LVC services as follows:
• Implement policies, procedures
and systems for tracking the utilization of the LVC services and
associated interventions;
• Purchase or develop an LVC
grouper software package that identifies LVC services. Develop a
program to scrub claims and identify where LVC is occurring.
• Incorporate industry standard
resources (e.g., Medicare’s 31 evidence based measures, Choosing
Wisely, Hayes, etc.) to develop a tiered list of services;
• The top five LVC services will
be determined as those LVC services with the highest frequency of
utilization;
• For every low-value service
provided, the contractor shall have a mechanism to determine and
track whether that service was medically necessary and appropriate;
and
• The contractor shall analyze
this information on a quarterly basis to determine whether the LVC
interventions are effective at reducing non-medically necessary
utilization of the LVC services.
2.4 DHA will review and approve
the contractor’s policies, procedures, groupers and systems related
to LVC and for determining the medical necessity and appropriateness
of low-value services provided to prior to contract implementation.
DHA will require the contractor to submit an analysis of the effectiveness
of the LVC interventions and outcomes on an annual basis. The annual
report should include a synopsis of the contractor’s quarterly analysis and
interventions.
2.5 DHA will develop a population-based
utilization target (e.g., utilization per 1,000 beneficiaries) for
each LVC service. If contractors meet the set target for the specific
LVC service; the contractor will be entitled to gain-sharing. If
contractors do not meet the target, contractors are subject to loss-sharing.
3.0 CAPITATION
3.1 DHA will
establish a population-based utilization-target and over the course
of the three option years, will capitate the contractor in decreasing
amounts for those LVC services until such time that the target is
achieved.
3.2 DHA will
utilize the contractor’s historical data (baseline year paid claims)
to determine the benchmarks to utilize when establishing target
utilization rates for selected services in the option years. Target
utilization will be based upon reliable clinical evidence. Contractors
will receive the capitated payments on a [semi-annually/quarterly]
basis. The contractors shall submit all TRICARE Encounter Data (TED)
claims for these capitated services in accordance with standard
claims submission time frames. Each TED claim must include amount
billed, amount allowed and the amount paid to the provider. Note:
If the contractor has capitation agreements with the network providers
for these same services, the allowed amount should reflect the shadow
price for that service and the paid amount should be $0.
3.3 The contractor
shall have multiple opportunities to suggest interventions and utilization
targets, and to comment on Government-approved interventions and
utilization targets for the upcoming year as outlined in the LVC
Review Process outlined in
paragraph 3.2.
3.4 The capitated
amount will be negotiated between DHA and the contractor in advance
of the start of the plan year, once the population-based utilization
targets and interventions have been approved by the DHA. DHA will
include in the negotiations:
• The population-based utilization
target.
• The current TRICARE fee-for-service
rate for the selected service (either the national rate or an average
rate based on the contractor’s region when there is compelling information
that the acuity of the population in the contractor’s region differs
in a statistically significant way from national benchmarks).
Figure 18.2-1 Low-Value
Care (LVC) Review Process
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date
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government
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contractor
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January 1
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Provide the Government with
top five LVC services, proposed interventions and suggested utilization
targets to be targeted in the next plan year based on LVC grouper, utilization
reviews, reliable evidence, and best business practices.
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April 1
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DHA will provide an initial
disposition, questions, and comments for consideration by contractor.
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|
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July 1
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Final top five LVC services
and proposed interventions shall be submitted each year for approval
for the next plan year. For LVC services that were capitated in
the prior year, the contractor should provide updated interventions
and recommended utilization targets.
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October 1
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DHA will notify the contractor
of the approved list of LVC services, interventions and utilization
targets. DHA will provide proposed capitation or risk-sharing rates
for negotiation.
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December 1
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Finalize capitation/risk-sharing
rates.
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Finalize capitation/risk-sharing
rates.
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January 1: Plan Year Start
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Provides first cycle of capitation
payments to contractor for identified services and utilization targets
for upcoming plan year.
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Begins submitting TED claims
for identified services as outlined in paragraph 3.0. |
Note: DHA recognizes that some
utilization of these services are medically necessary and appropriate; thus,
targets will never be set to zero. The objective for capitating
these LVC services is to spur conversation between the provider
and the beneficiary about what is appropriate and necessary treatment.
DHA recognizes that each beneficiary situation is unique and that
providers and beneficiaries should use the recommendations as guidelines
to determine an appropriate treatment plan together. LVC services
for which reliable evidence exists that these interventions are
of minimal value in many patients, that alternative approaches (including
more conservative therapies or enhanced focus on high-value care)
are more appropriate and effective, and that reliable evidence exists
to establish utilization targets.
3.5 The contractor
shall receive the capitation payments for the LVC services approved
by DHA, and will not be subject to shared savings adjustments if
the contractor’s utilization is lower than the target utilization
rate in that option year. Conversely, if the contractor pays more
than the capitated rate for the identified care, they are entirely
at-risk for the costs associated with these services. Thus, it is
incumbent upon the contractor to actively participate in the development
of annual interventions and utilization targets utilizing their
utilization management criteria, their independent reviews of reliable
evidence, and their best business practices.
3.6 The contractor
shall reimburse for medically necessary and appropriate care in
accordance with timeliness and quality standards; they may not arbitrarily
deny care, nor may they place a blanket denial on all care in these
categories. The contractor may, and are encouraged, to use all other
resources at their disposal to better manage care, to include prior-authorization
for non-emergency care; pre- and post-pay review; patient and provider
education; and enhanced use of alternative payment methodologies
with providers to encourage high-value care.
3.7 Once a
population-based utilization target is established, if reliable
evidence shows that the standard of care has changed (e.g., if,
for example, the United State Preventive Services Task Force (USPSTF)
in option year 5 of the contract recommends that all adults receive
Vitamin D testing), the contractor may submit a request to DHA for recalculation
of the utilization target. DHA may elect to renegotiate any utilization
target prospectively, or may elect to terminate the capitated arrangement
and defer to standardized claims payment procedures.
3.8 Examples
of targeted low-value interventions that may be considered include
(list is not binding, nor is it all-inclusive):
• Diagnostic testing and imaging
for low-risk patients prior to low-risk surgery.
• Vitamin D testing.
• Use of more expensive branded
drugs when generics with identical active ingredients are available
for high cost physician-administered drugs (e.g., immunosuppressive
therapies).
• Stents for stable coronary
artery disease or stable angina.
• Cesarean deliveries in low-risk
maternity patients.
• Emergency room (ER) visits
for chronic and/or non-emergent conditions such as: upper respiratory
infections, asthma, diabetes, behavioral or substance use disorder
(SUD) care, Chronic Obstructive Pulmonary Disease (COPD), heart
failure, or hypertension.
Figure 18.2-2 Example
Calculation of Capitated RateThe contractor identifies Vitamin
D testing as an LVC intervention with overuse in the TRICARE population.
Reliable evidence (e.g., clinical practice guidelines, peer-reviewed
studies) show that, based on analysis of calendar year (CY) 2018
data, only 24.88 tests per 1,000 beneficiaries were ordered for
an indication potentially supported by the reliable evidence. In
the year prior to the start of health care delivery (SHCD), across
TRICARE, 44.6 tests were ordered per 1,000 beneficiaries. For purposes
of this example, the Fee-For-Service (FFS) rate for Vitamin D testing
will be nationally considered as $26 per test.The contractor in this example
has 3.0 million TRICARE beneficiaries enrolled to either a TRICARE
Prime or TRICARE Select plan. DHA recognizes that it will take time
and effort to reduce utilization of this test, and thus does not
capitate at the start of the health care delivery contract. Instead,
the contractor shall be capitated as follows:
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DATE
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TOTAL COVERED LIVES
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UTILIZATION TARGET
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AVERAGED FFS RATE**
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Capitated Rate*
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Note: Numbers,
unless cited, are examples and should not be considered to be validated
or accurate of current data, rates, or figures.
* Less any claims
processing or other adjustments.
** FFS rate shall
be established by DHA, and shall reflect an estimate of contractor’s/region’s
prior-years CMAC rate or allowed amount. If the contractor disagrees
with the weighted allowed amount based on actual claims data, and
no solution is found by December 1, the national rate in place on
October 1 shall be used.
*** The utilization
target shall be held steady for the duration of the contract once
the overall target utilization rate is reached.
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SHCD (Baseline Year - Actual Utilization)
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3.0 million
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35 tests per 1,000 beneficiaries
(determined by actual utilization during base year)
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$26.00
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Not applicable
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Option 1
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3.2 million
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30 tests per 1,000 beneficiaries
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$27.17
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$2,608,320
|
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Option 2
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3.1 million
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28 tests per 1,000 beneficiaries
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$28.39
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$2,464,482
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Option 3
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3.0 million
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24.88 tests per 1,000 beneficiaries
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$29.67
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$2,214,593
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Option 4***
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3.2 million
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24.88 tests per 1,000 beneficiaries
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$31.01
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$2,463,533
|
3.9 The contractor
shall:
3.9.1 Report annually: Utilization
of specific LVC services, the interventions to decrease utilization,
along with the total reimbursement. This comprehensive report should
detail the procedures used to reduce use of LVC (e.g., provider
education, prior-authorization requirements) and their efficacy.
3.9.2 Termination
of capitated arrangement: If at any time the Government determines
that it is not in the best interest of beneficiaries or the Department
to continue a capitated arrangement, the capitation arrangement will
be ended with at least 30 calendar days of notice, and the contractor
shall reimburse the Government a prorated amount of the full capitated
amount calculated on the basis of the number of days covered by
the capitation arrangement. If the capitated arrangement is terminated,
payment shall defer to standard claims payment/TED record processing
procedures. Once the capitated amount is negotiated, the contractor
may not exit the capitated arrangement without Government approval.
4.0 RISK-SHARING
4.1 There
may be some types of LVC services for which DHA determines that
capitation of the contractor as described herein is not the most
appropriate method for incentivizing the reduction of LVC. For such
cases, DHA may instead develop incentive provisions specific to
the circumstances for that type of care. Possible examples of such
alternatives include, but are not limited to, a target cost with
risk-sharing or a positive or negative incentive based on specified
metrics relevant to the type of care in question.
4.2 Further,
risk-sharing may be used in cases where one procedure may be capitated,
but the contractor and/or provider substitutes the service with
another procedure that is not capitated; hence resulting in DHA’s overall
costs for these services being higher than projected.