Value-Based Payment Models for Medicaid Child Health Services

Read the related press release.

This report, commissioned by UHF and the Schuyler Center for Analysis and Advocacy and written by Bailit Health, sets out a new, child-centered approach to value-based payment in Medicaid. As New York continues to shift Medicaid payments from fee-for-service to value-based payment systems, it raises the question of how these payment changes should apply to the nearly 40 percent of Medicaid enrollees who are children and adolescents.

Given the increased recognition of how profoundly social determinants of health affect childhood development and adulthood health and social productivity, payment models need to consider how to motivate and support attention in this area. The report suggests a combination of payment models when implementing value-based payment for children in Medicaid: a particular combination of capitation, care coordination payments, and performance incentive bonuses, with a different model for the small percentage of children with very complex medical conditions. We believe this is the first published effort to develop a value-based payment approach for children in Medicaid based on research on effective clinical and social interventions for children, research on payment innovations across the country, and Medicaid utilization data. Although the utilization data is New York–specific, the information and models presented have national applicability.

As background for this framework, the authors used expert interviews, a review of literature on children's health and health care, and a recent UHF analysis of data on children's utilization of health care services. The report complements another recent UHF report considering how to best measure performance in pediatric value-based payment systems (You Get What You Pay for: Measuring Quality in Value-Based Payment for Children's Health Care, by Suzanne C. Brundage). It is part of a growing body of work at UHF on child health care, and it is intended to contribute to a conversation in New York and nationally about the importance of addressing children's developmental and psychosocial challenges as value-based payment initiatives are being designed.

This report was supported by a grant from the United Hospital Fund to the Schuyler Center for Analysis and Advocacy.