PHI Study Highlights Promise of Value-Based Payment in Home Care

In 2015, the New York State Department of Health released a roadmap for implementing value-based payment—payment for the value rather than the volume of services provided—across all Medicaid programs. With this roadmap, New York leads many other states in extending value-based payment into long-term services and supports (LTSS)—including into home care, where it has rarely been tested.

A new study from PHI describes New York’s early experiences with implementing the value-based payment roadmap in home care, offering insights for other states. Authored by PHI’s Allison Cook, the study draws on interviews with stakeholders from licensed home care services agencies (LHCSAs) and Medicaid managed long-term care (MLTC) plans across the state, as well as representatives from the New York State Department of Health and national experts on value-based payment.

A central message in this study is that value-based payment holds promise for elevating the value of home care services within the broader health care system—and elevating the role of the home care workforce within the sector. Implementation challenges abound, however, with stakeholders raising concerns about the timeliness and adequacy of performance payments, the limitations of current measures of quality in home care, communication barriers within the sector, a weak technology infrastructure, the overall workforce shortage, and more.

7 Recommendations

Distilling the rich findings from New York stakeholders, the PHI study offers seven recommendations for other states that are developing and implementing value-based payment in home care:

1. Create a strategic plan for value-based payment, like New York’s value-based payment roadmap, which is updated annually to reflect lessons learned during implementation.
2. Build value-based payment capacity to ensure that MLTC plans and home care agencies have the necessary infrastructure to implement value-based payment, including a well-trained trained workforce and effective systems for data collection and communication.
3. Ensure shared rewards, structuring value-based payment models to guarantee that cost savings are shared appropriately with Medicaid MLTC plans and home care agencies and invested back in the home care workforce.
4. Set data- and care-related communication requirements, such as what types of information must be shared and how frequently, to support the achievement of value-based payment goals.
5. Incorporate workforce quality measures that reflect the centrality of home care workers in value-based payment, such as measures related to retention, turnover, training, and more.
6. Compile and share best practices to assist home care agencies and MLTC plans position themselves for success in value-based payment.
7. Address broader workforce challenges through parallel policy reforms aimed at boosting recruitment and retention in the home care workforce.

This research was supported by the Altman Foundation and the Bernard F. and Alva B. Gimbel Foundation. In the year ahead, PHI will continue to study value-based payment and the direct care workforce, and develop guidance for policymakers, payers, and providers.