Value Based Purchasing
We want to make sure that providers are compensated for the work they do to keep people healthy. In our current fee-for-service payment system, providers are paid for each service they perform without regard to how their patients fare. VBP, in contrast, links provider payments to patient outcomes, aligning incentives to improve care and reduce costs. In 2017, DHS began holding PH-MCOs accountable to use value-based contracting for a steadily increasing percentage of their provider payments, and in 2018, DHS expanded that requirement to BH-MCOs. Moving forward, we will expand VBP in MA and CHIP, and work with our fellow state agencies to lead VBP coordination across government and private payers to align provider incentives and reduce administrative burden. As we expand VBP across our health system, we will also develop unified, coordinated, value-based models across all payers, so that providers have aligned incentives for improving population health. We will continue to support the Department of Health's (DOH's) implementation of the Rural Health Model, a global budget initiative for rural hospitals. Because providers' success in a VBP environment depends on having timely data to manage their patients' care, we will work to give providers access to the data they need, including by continuing to increase the number of providers and payers participating in Pennsylvania's electronic health information exchange, the Pennsylvania Patient and Provider Network (P3N), and by expanding electronic encounter notification services.