OHS Report Documents Progress of Alternative Payment Models in Connecticut Healthcare

NOVEMBER 04, 2024

(Hartford, CT) - The Connecticut Office of Health Strategy (OHS) has published a new report showing Connecticut's progress in adopting new ways of paying for health care. The report documents progress in adoption of so-called "alternative payment models," (APMs) which are strategies to pay for better health outcomes and higher quality care that puts patients first. Traditionally healthcare is paid for on a fee-for-service (FFS) basis, which can incentivize the quantity of services without promoting quality. APMs instead base payments on patient outcomes, and the report shows that over half of payments in CT are now at least partially linked to quality.

The OHS Alternative Payment Model Monitoring Report was prepared pursuant to Conn. General Statute 19a-754awhich charges OHS with monitoring APM adoption across the state. Alternative payment models promote greater value - including higher quality care, equity and cost efficiency - for patients, purchasers, payers and providers.

"Assessing adoption of APMs in our state is one way we have to measure our progression toward patient-first care," said Deidre Gifford, MD, MPH, Commissioner. "Patient-first, or value-based care, incentivizes health care quality and health outcomes in order to create a more affordable path forward than fee-for-service models that incentivize providers to focus on service volume."

The report assessed APM adoption in Connecticut in 2022 using the Healthcare Payment Learning and Action Network (HCP-LAN)'s classification system, which offers a common framework classifying and designing alternative payment models. The report demonstrated that overall APM adoption in Connecticut has made gains in some categories and showed only modest growth in others.

• Commercial healthcare payments in Connecticut are split, with 45% of payments made in traditional fee-for-service models and 55% linked to quality. Results in Medicare Advantage are similar, with 43% of payments made under a FFS structure and 57% linked to quality.

• Generally, the more heavily a payment structure is based on patient outcomes the fewer payments are made through it. For example, only 16% of Medicare Advantage payments, and only 1.5% of commercial payments, are made through population-based payment agreements (these agreements pay a standard amount for providing care to a population, which incentivizes keeping people healthy).

A comparison to national trends suggests that Connecticut is moving towards population-based payments more slowly than the rest of the country and opportunity exists to increase APM adoption in the state. The report encourages large providers and payers to expand participation in evidence-based alternative payment models that emphasize quality, efficiency and affordability.

"The Connecticut AHEADmodel will create more opportunities for hospitals and primary care practices to participate in APMs including hospital global budgets," said Gifford. "Connecticut's selection by the U.S. Center for Medicare and Medicaid Services to participate in this initiative will give us new tools to support providers and help ensure successful implementation of patient-based care initiatives."