OIG reviews program integrity in value-based purchasing

Over the last decade, the federal government has prioritized the use of value-based purchasing (VBP) in the provision of health care services. VBP models tie payments for care delivery to the quality and efficiency of care provided. Federal requirements allow states flexibility to develop and implement their own requirements, measures and programs to promote value in provider reimbursement models in Medicaid and CHIP.

Texas has linked Medicaid and CHIP health care payments to quality and efficiency by enacting legislation and implementing VBP programs and alternative payment model (APM) requirements to improve health care quality and outcomes while containing costs.

The primary vehicle in Texas to link health care payments to quality and efficiency measures has been through managed care. All Medicaid and CHIP MCO contracts include policies and programs to align financial incentives with member health outcomes. For fiscal year 2021, MCO contracts target payments tied to APMs constitute 50 percent, and payments tied specifically to risk-based APMs 25 percent, of all MCO-reported medical and pharmacy expenditures.

Program integrity considerations

Program integrity refers to ensuring taxpayer dollars are spent appropriately on quality, necessary care and preventing fraud, waste and abuse (FWA). With the introduction of VBP and associated complex contractual arrangements, there are new program integrity considerations for both MCOs and regulators to examine.

Based on targeted research and programmatic observations, the OIG outlines two areas of operational challenge and related program integrity considerations within value-based contracting:

  1. Data Sharing and Integrity – The impacts and program integrity considerations tied to accurate and complete data and timely sharing between providers, MCOs and the state.
  2. Payment Integrity – Behaviors or schemes that may result from VBPs and APMs and the potential integrity issues tied to the complexity of these models.

OIG work in VBP

To prevent, detect and deter FWA in managed care VBP and APM arrangements, the OIG is working to address these program integrity considerations to ensure taxpayer dollars are spent appropriately on quality and necessary services for Texas Medicaid and CHIP managed care members.

VBP and APM payment arrangements are designed to improve member health outcomes while containing costs, and it is the OIG’s responsibility to independently validate payments and if the stated outcomes were achieved in compliance with

federal and state statutes, regulations and contract requirements. These payment arrangements continue to become more numerous and complex, presenting new program integrity challenges for the OIG to consider in its VBP-related work.

Read the OIG’s full report on VBP considerations on ReportTexasFraud.com.