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New Resource: Key Strategies for Leveraging Value-Based Payment Approaches to Advance Health Equity

January 19, 2021

New Resource: Key Strategies for Leveraging Value-Based Payment Approaches to Advance Health Equity

Value-based payment (VBP) models are widely used across Medicaid managed care organizations. Based on findings from IMI’s 2020 annual Medicaid managed care survey report, 93% of Medicaid health plans had a VBP arrangement in 2019 with half of the health plans implementing VBP arrangements with primary care providers. Given Medicaid’s role in delivering care to individuals with low-income, the program is uniquely situated to address health-related disparities. Value-based payment (VBP), which many state Medicaid agencies and health plans are already using to improve health outcomes and support more efficient care, can be an effective tool in designing equity-focused payment and contracting models. The development of equity-focused VBP approaches to support care delivery transformation is an important lever that can help payers advance health equity and eliminate disparities in health care with their provider organizations and members.

The new report, authored by the Institute for Medicaid Innovation (IMI), a non-profit, nonpartisan research and policy organization, and the Center for Health Care Strategies (CHCS) identifies six connected strategies to guide payers, including state Medicaid agencies and managed care organizations, in developing equity-focused VBP approaches to mitigate health disparities. These strategies include: (1) articulating an equity goal; (2) assessing the payment and care delivery environment; (3) selecting performance measures; (4) setting performance targets; (5) designing the payment approach; and (6) addressing operational challenges.

This resource is a product of Advancing Health Equity: Leading Care, Payment and Systems Transformation, a national program based at the University of Chicago and operated in partnership with IMI and CHCS, and made possible by the Robert Wood Johnson Foundation.

About the Institute for Medicaid Innovation

The Institute for Medicaid Innovation (IMI) is a 501(c)3 nonprofit, nonpartisan research and policy organization that provides independent, nonpartisan information and analysis that informs Medicaid policy and improves the health of the nation.

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Lydia Tonkonow