Payment Reform in Diverse Practice Settings: Making Patient-Centered Medical Homes and Episodes of Care Work for Low-Volume Medicaid Providers in Tennessee

This report assesses the Patient-Centered Medical Home (PCMH) and episodes of care strategies that are being implemented as part of the Tennessee Healthcare Innovation Initiative. It specifically focuses on the challenges the two strategies face in engaging low-volume health care providers to encourage their effective participation. The report is based on a series of stakeholder interviews conducted in the fall of 2015 and claims data provided by TennCare. The interviews and data were used to guide a literature review that focused on the challenges faced by low-volume providers in successfully participating in such strategies, as well as best practices for implementing the strategies for these providers. A set of challenges for the PCMH strategy were identified around payment structure, eligibility and reporting requirements, health IT, practice resource pooling, and behavioral health integration. A separate set of challenges for the episodes of care strategy were identified regarding lack of risk-adjustment alignment, provider downside risk, and the data reports given to physicians and other providers. The challenge and importance of appropriate physician education and outreach for both strategies are also discussed. The report ultimately provides a series of recommendations for TennCare to consider to address each of these challenges with the goal of improving the implementation of the PCMH and episodes of care initiatives in order to increase the successful participation of low-volume providers and help Tennessee achieve the full promise of the Innovation Initiative.