Making the Business Case for Maternity APMs

The MAC held its first virtual meeting on February 8 on the topic “Making the Business Case for Maternity APMs with MAC members from all stakeholder groups attending. Brooks Daverman, Director of Strategic Planning and Innovation at the Tennessee Division of Health Care Finance and Administration (TennCare), shared his state’s experiences related to the decision to pursue episode-based payment and the costs of designing and implementing the episodes.

Some highlights from the session include:

  • When making “the pitch” to senior leadership, Daverman stressed the importance of articulating that it can take several years to move from an idea to seeing results with episodes, with a likely timeframe of 6 months designing the episode, 6 months implementing, 6 months in a preview period, and 1 year in the performance period with a 6-month wait for claims data (on which to evaluate the results) due to the claims data collection lag.
  • Tennessee aimed to launch a model that would cover the full spectrum of care that a patient needs, from primary and preventive, to acute and specialty. Thus, they decided to design both an episode model and a patient-centered medical home model, to work in a complimentary fashion. In this scenario, it was more important to create a model that made sense for the state’s goals and demographics, and less important to have a deep evidence base for maternity care episode payment.
  • The state found that by reimbursing maternity care via an episode model, providers are motivated to increase the use of underutilized services, such as early and frequent prenatal care, and avoid over-utilized services, such as avoidable emergency room use or unnecessary imaging studies.
  • Tennessee’s top-line analytics indicate a savings. The average cost of an episode dropped by $224 between 2014 and 2015, which is a 3.4% reduction and significant given that TennCare has a high volume of maternity patients, and Medicaid covers half of the births in the state.

MAC members engaged in the discussion by asking their own questions, and a summary of the entire session is available on the MAC web portal. The draft Making the Business Case brief was also reviewed during this session, and members provided their feedback, with suggestions to include more information on upfront costs and information on other APMs – such as blended case rates for maternity – in order to allow a comparison of investment costs and ROI between episodes and other APMs. The finalized Making the Business Case brief, with participant feedback incorporated, will be posted on the MAC web portal.

The next virtual convening session on Quality Measurement will be held on Friday, March 3, from 1:00 – 2:30 pm ET. To find more information about this session, please visit the events page on the MAC web portal.

To achieve the goal of better care, smarter spending, and healthier people, the U.S. health care system must substantially reform its payment structure to incentivize quality, health outcomes, and value over volume. The Health Care Payment Learning and Action Network (LAN) was established as a collaborative network of public and private stakeholders, including health plans, providers, patients, employers, consumers, states, federal agencies, and other partners within the health care community.

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