Impact of COVID-19 on Medicaid Managed Care Performance Incentives: Policy Options for States

May, 19, 2020

Impact of COVID-19 on Medicaid Managed Care Performance Incentives: Policy Options for States

Erin Taylor, Bailit Health

The COVID-19 pandemic continues to evolve and bring about significant– and rapidly occurring–changes in care delivery. Hospitalizations, as well as emergency department, primary care, and specialty care utilization for non-COVID-19 related concerns have dropped. Some outpatient visits are being conducted virtually or being postponed. As a result, states are examining their Medicaid managed care incentive arrangements to evaluate the impact of COVID-19 on their health care quality and cost performance requirements. State Medicaid agencies are exploring options and modifying arrangements with managed care organizations (MCOs) or accountable care organizations (ACOs) that include financial consequences for performance.

This expert perspective identifies actions federal and state policymakers have taken to address the impact of COVID-19 on their managed care performance incentive programs, including for 2019 Healthcare Effectiveness Data and Information Set (HEDIS) and Consumer Assessment of Healthcare Providers and Systems (CAHPS) reporting, and 2020 quality and total cost of care performance. These illustrative examples can be used to inform state decisions on whether and how to modify Medicaid managed care reporting and performance incentives as a result of COVID-19.

For a list of policy options states may wish to consider for their Medicaid managed care performance incentive programs, specifically for 2019 quality reporting and 2020 performance measurement for quality and total cost of care, please view the SHVS webinar Impact of COVID-19 on Medicaid Managed Care Performance Incentives.

2019 Quality Measurement

Health plan and provider performance for the 2019 measurement year would typically be evaluated during the spring of 2020 through purchaser review of medical records and visits to physicians’ offices; however, concerns about staff health and safety and social distancing guidelines inhibit onsite review. In addition, provider staff that is usually involved in quality reporting may be needed for patient care. As of May 6, 2020, the Centers for Medicare & Medicaid Services (CMS) and state Medicaid agencies have issued new guidance for 2019 quality reporting, including but not limited to these examples:

CMS eliminated requirements for collecting and reporting of HEDIS 2020 and CAHPS 2020 data that would otherwise occur for Medicare Advantage (MA) plans. CMS is also encouraging state Medicaid and Children’s Health Insurance Program (CHIP) programs to rely on methods of data collection for 2019 measurement year that do not require in-person reviews.
Medicaid programs in Florida and California are permitting managed care plans to report their audited HEDIS 2019 hybrid rate if it is better than their HEDIS 2020 hybrid rates as a result of low chart retrieval. This is consistent with the National Committee for Quality Assurance (NCQA) guidance. The states will not assess penalties (e.g., corrective action plans, sanctions, liquidated damages) for failing to meet 2019 performance on certain hybrid measures.
CMS has extended the quality reporting deadlines for the Medicare Shared Savings Program (MSSP), clinicians participating in the Merit-based Incentive Payment System (MIPS) program, and other Medicare quality incentive programs.
CMS will assign a performance weight of zero percent to clinicians eligible for MIPS who do not submit 2019 quality measurement data. This means there will be no payment adjustment for quality for the year.

2020 Quality and Total Cost of Care Performance

COVID-19 will affect 2020 health plan and provider performance on many quality and total cost of care metrics. Cost and utilization targets have been set based on prior experience, and 2020 expenditures will be skewed, impacting both performance year and future year comparisons. This will have implications for accountable care organizations with agreements to share savings or losses. Select examples of state and federal action pertaining to 2020 quality and cost performance as of May 6, 2020 include:

The Oregon Health Authority (OHA) is suspending its 2020 quality withhold during the public health emergency. OHA may reinstate the withhold later in the year if the emergency has passed. OHA took this step to ensure funds are immediately available to health plans to support patient care and the response to COVID-19. The state’s Coordinated Care Organizations (CCOs) will be asked to report to OHA how the funds were distributed.
CMS will apply an adjustment to the calculation of shared losses for ACOs participating in MSSP. Additional information about modifications CMS is making to MSSP financial and performance benchmarks can be found here.
CMS will modify its calculation of gains and losses for clinicians participating in the MIPS program.
Under CMS’ Skilled Nursing Facility (SNF) Value-Based Payment (VBP) program, qualifying claims will be excluded from claims-based SNF 30-day All-Cause Readmission (ACR) measure for quarter one and quarter two of 2020 thereby mitigating the impact of COVID-19 on quality performance.

Next Steps

COVID-19 requires a re-examination of Medicaid performance incentive programs. A review of approaches taken by CMS and state purchasers may help to inform decisions by states to address unanticipated challenges in both utilization and reporting. States seeking to make modifications should engage their Medicaid MCOs and providers in deliberations and ensure final decisions on performance incentives support access to high-quality care.