Under the proposed plan, providers will be rewarded or penalized based on how they meet quality-of-care standards. The program will "over time, put at least 6% of reimbursement at risk or subject to a bonus payment based on quality performance" and phase in those incentives over the course of several years.
Covered California officials approved a plan to create quality-of-care standards for providers within its health plans that will include bonuses and penalties based on performance.
"We are creating a market that rewards quality over quantity and moves health reform forward in an impactful way," said Lee. "It's about improving the quality of the healthcare system."
Covered California board members voted to adopt the framework for the quality standards but specific benchmarks and metrics will be developed over the course of several months with input from health plans and hospitals. "The specific metrics still need to be worked out and will be completed this summer," said Covered California spokesperson James Scullary.
Under the proposed plan, providers will be rewarded or penalized based on how they meet quality-of-care standards. According to Covered California, the program will "over time, put at least 6% of reimbursement at risk or subject to a bonus payment based on quality performance" and phase in those incentives over the course of several years.
It also proposes to eliminate hospitals from health plans if they consistently fail to meet quality standards but will include a provision that allows health plans to retain low-performing hospitals through corrective action plans. That provision was included to address concerns that eliminating hospitals in rural areas of the state would create access-to-care issues for patients.
The California Hospital Association (CHA) said it supports the decision to phase in financial incentives over several years rather than implement them all at once. "CHA supports Covered California's decision to phase in financial incentives aimed at encouraging hospitals and physicians to work collaboratively together on improving quality patient care," said CHA vice president of external affairs
The California Association of Health Plans (CAHP) said it was satisfied with how the quality standards have evolved over time. "With many significant issues resolved and the rapidly approaching deadline for health plans to submit next year's rates, it is important to move forward," said CAHP vice president of communications Nicole Evans. "While the contract creates a new approach on quality metrics, we will remain engaged as Covered California works on the specifics on how we implement this new program."
Covered California said its bonus and penalty system will be similar to those used by the Centers for Medicare & Medicaid Services for its Medicare programs but that specific benchmarks will be developed through the summer with input from insurers and health systems.
In a related matter, Covered California staff issued a report recommending that its board pursue a federal waiver that would allow undocumented immigrants to purchase health coverage on Covered California. The request would need to be submitted to the federal government through a federal Section 1332 State Innovation Waiver and would not make the undocumented immigrants eligible for subsidies. The board did not adopt a formal stance on the issue and noted that state lawmakers would first need to approve legislation — Senate Bill 10 from Ricardo Lara (D-Bell Gardens) — before they could move forward with the waiver.
"Allowing undocumented immigrants to buy health insurance through Covered California removes a counterproductive exclusion in the federal law," said Anthony Wright, executive director for advocacy group Health Access California. "This exclusion discourages a crucial part of our economy and society from taking responsibility for their health and finances by purchasing coverage and sends an unfortunate signal to many more."