How it Works

The day-to-day experience of care changes less than the payment behind it. A patient who experiences one of the medical episodes still schedules office visits and is seen by a physician or mental health provider exactly as before, and providers still file claims and are reimbursed as usual. The difference is how the care that results is measured, attributed and rewarded.

Care continues, measurement begins

For the patient, nothing about the visit itself is meant to feel different. Providers continue to submit claims under the usual reimbursement arrangements, so the cash flow that keeps a practice running is not disrupted while the programme gathers the data it needs.

What is new is that providers can enter a limited set of additional quality information through the Provider Portal. Combined with claims data, that information lets the payers see the quality of care a provider delivered during a defined period, typically a year, and the average cost of that care.

Finding the accountable provider

Medicaid and the participating private insurers use the portal information together with claims data to determine which provider carries the most responsibility for a given episode. That provider is designated the Principal Accountable Provider, or PAP, meaning the provider with the greatest potential to influence treatment decisions, cost and quality for that type of episode.

At the end of the measurement period, each PAP's average cost per episode is calculated and compared against two benchmarks: an acceptable level and a commendable level. The comparison is made against peers who manage the same kind of episode, so providers are judged against others facing similar clinical situations.

What happens at the two levels

If a PAP's average cost sits above the acceptable level, the provider pays a portion of the excess cost back. If the average cost is acceptable but does not reach the commendable level, there is no change in payment in either direction. If the provider delivers high-quality care at a cost below the commendable level, that provider becomes eligible to share in the savings with the payer.

The two-level structure is what makes the model a reward rather than a penalty at its core. The middle band exists so that ordinary variation in patient complexity does not automatically produce a financial consequence, while the upper band gives providers something concrete to aim for and the lower band protects the payers when care is genuinely more costly than it should be.

Quality matters as much as cost

The financial outcome depends on quality as well as cost. A provider cannot reach the savings-sharing position by cutting corners, because the quality and outcome measures have to be met at the same time. That pairing is deliberate: the programme wants to reward care that is both efficient and good, and to avoid rewarding cheap care that is poor.

Providers see this in the reports they receive through the portal, which show quality, cost and utilisation together. The reports are designed to be read alongside the guides that explain each measure, so that a practice can understand not only where it stands but why.

The steps in the cycle

• The patient receives care for a covered episode as usual.
• The provider files claims and is reimbursed under the existing fee arrangements.
• The provider submits the additional quality data requested through the portal.
• Claims and portal data are combined to identify the Principal Accountable Provider.
• Average cost and quality are compared with acceptable and commendable levels.
• Savings are shared, payment is unchanged, or a share of excess cost is returned.

How a provider's result is determined

The cycle repeats each period, so a provider's position can improve as care is redesigned and coordination improves. Because the exact levels and measures are reviewed and updated, practices should confirm the current rules in the official programme materials before relying on any particular figure.