Sustainable care management programs for high-need, high-cost (HNHC) individuals are essential to improving value across the U.S. health care system. This relatively small-but-complex population, which typically refers to the top five percent of individuals who account for nearly 50 percent of total health care spend, has been shown to significantly benefit from complex care management programs that integrate medical and non-medical resources. Yet while some excellent and well-established programs exist, many promising programs fizzle after a few years due to lack of sustainable funding. Ultimately, providers and payers must work together to improve contracted reimbursement for these programs.
The Health Care Transformation Task Force (HCTTF) and the Pacific Business Group on Health (PBGH) conducted a research project to help organizations navigate the complexities of contracting for complex care programs. The project, Best Practices in Care Management Contracting for the High Need, High Cost Population, identifies best practices and contracting terms that providers and payers can use to structure sustainable, long-term financing for successful care management programs.
The research draws on in-depth interviews with 11 organizations that have operated sustainable care management for HNHC individuals, as well as expertise from contracting specialists in leading health care organizations across the U.S. The report and accompanying contracting guidance provide strategies and practical recommendations for delivery system executives and operational leaders as they build an internal business case and seek reimbursement from private payers.
The HCTTF and PBGH found that contracting for care management falls into two major categories: whole-population and HNHC-targeted contracting. Whole population contracting refers to the way typical health systems contract for their patients across multiple lines of business. For these organizations, HNHC individuals are typically a small segment of their total patient population. HNHC-targeted contracting generally occurs within more innovative, physician-led organizations that are particularly adept at managing medically complex patients and intentionally target these individuals for contracting.
Though the approaches are different, they both require diligence across four key areas: population identification and segmentation, care management program design, data access, and financial sustainability. Key takeaways in these areas include:
- The difference between patient identification and segmentation. While many organizations initially identify individuals with consistently high-risk profiles and costs through risk stratification, segmentation helps further program success by subgrouping high-risk individuals based on disease-specific needs.
- The value of creating open communication lines between business units so clinical and operational decisions align with contract structures and performance expectations, and the importance of clinical program flexibility to account for varying population needs.
- The importance of building a strong business case and structuring contracts that span enough time for providers to recoup initial investments.
- The need to contractually specify the frequency and type of information, such as daily census reports, that will be shared between payers and providers to support care management.
The research is supported by case studies of organizations such as ChenMed, a physician group dedicated to caring for older, at-risk individuals who have experienced limited access to primary care. ChenMed employs a capitated payment model that is primarily centered around Medicare Advantage. Its high-touch clinical model ensures that providers have relatively small caseloads and that patients receive upwards of a dozen visits per year to address complex and previously underdiagnosed conditions.
The accompanying contracting tool is designed to guide payer and provider contracting leads in structuring a contract that includes management of HNHC individuals. The contracting tool is structured along a risk continuum, with recommendations tailored according to risk tolerance. The tool provides detailed guidance on elements such as data sharing, patient population, consumer protections and engagement, service requirements, quality metrics and performance evaluation, network requirements, confidentiality requirements, and return on investment calculation. Specific considerations, such as accounting for carve-out populations and delegating services, are detailed in the tool.
Adequate financing for services remains a barrier to widespread adoption of HNHC care management programs, but strong contracting strategies and techniques can help. To gain insight into how your organization can more effectively contract for these programs, read our Best Practices in Care Management Contracting white paper and contracting guidance.