The VBP Compact is jointly sponsored by the Oregon Health Leadership Council (OHLC) and the Oregon Health Authority (OHA). The Compact has over 45 signatories including commercial payers, coordinated care organizations (CCOs), Medicare Advantage payers, health systems, hospitals, physician groups and health centers, covering 73 percent of Oregon’s population. The Compact signatories have committed to a set of principles and targets for VBP implementation.
The Compact envisions a transition over the next several years to new payment models, with the principles setting out a target of moving 70% of payers’ payments to an advanced VBP model by 2025. The Compact also makes clear that changes “should be designed to promote health equity, as well as to mitigate adverse impacts on populations experiencing health inequities,” and lays out a variety of strategies to achieve that goal.
Figure 1: VBP Targets adopted by the VBP Compact Workgroup (April 2023)
These statewide targets are incorporated into the VBP Compact and focus on the percentage of provider payments that are within Shared Savings and Shared Risk arrangements as defined by the Health Care Payment Learning & Action Network (LAN), a national effort supported by the Centers for Medicare and Medicaid Services (CMS) to accelerate VBP adoption across the country.
The LAN and Oregon’s VBP Compact are designed as catalysts for payers, provider entities, clinicians, policymakers, and others to work collaboratively to reform payment approaches to support clinical transformations that lower care costs, improve patient experiences and outcomes, reduce barriers to VBP participation, advance equity and promote shared accountability.
Another important driver of VBP implementation in Oregon is the requirement in the contracts OHA has with the CCOs to make at least 70% of CCO payments to providers in the form of a Pay-for-Performance LAN Category 2C or higher by 2024. While this target is not as aggressive as the VBP Compact target, all CCOs have signed the Compact and are working towards its targets. To help CCOs advance VBP, OHA developed a VBP Roadmap which also includes VBP models in key care delivery areas (CDAs), infrastructure payments for Patient-Centered Primary Care Homes (PCPCHs), and strategies to promote equity in VBP design.
LAN APM Category 3 (Shared Savings (3A), Shared Risk (3B)): A population-based payment (PBP) model where providers’ share payments (3A) and/or share losses (3B) with the payer based on a pre-determined total cost of care (TCOC) target for medical expenditures related to attributed members. For example, a payer may pay providers FFS and the providers are retrospectively eligible for Shared Savings or Shared Risk based on a TCOC target for attributed members. Certain very high-cost populations and/or services may be excluded from the TCOC calculations depending on the agreement between the payer and the provider.