Humana has reached an agreement to pay five maternity care providers, including three near Louisville, based at least in part on patient outcomes, rather than the number of health-care services they provide.
The agreements represent Humana’s increased focus on moving away from the traditional fee-for-service model, in which health-care providers are paid for each individual care procedure, and toward so-called bundled care or capitation models, in which providers are paid for entire health episode or per patient.
Humana and the maternity care providers expect that their cooperation, which will target low-to-moderate risk pregnancies, will reduce readmissions and complications, thanks in part to data analysis.
Brent Stice, director of value-based strategies for Humana, told Insider that if the clinics can reduce costs below a contracted target, they become eligible to receive part of the savings as a bonus — but only so long as patient outcomes improve.
For example, if the providers reduce costs, but quality declines — based on measures including the share of patients who make it to full term and the share of patients who require a C-section — the providers will not eligible for the bonus.
“We don’t just want them to reduce cost if it doesn’t increase quality,” Stice said.
Humana said the agreement with the maternity care providers will cover the customer’s “entire perinatal episode of care — involving the mother’s prenatal, labor and delivery, and post-delivery care.”
Nearby maternity care providers who are participating include Ob/Gyn Associates of Southern Indiana of New Albany; Seven Hills Women’s Health Centers of Cincinnati; and Tri Health, also of Cincinnati. The other two providers are in Kansas and Texas.
She said that while OBGYNSI already provides high-quality and evidence-based care, she hopes Humana’s detailed analysis of how certain procedures affect outcomes will allow the practice to make adjustments to increase the likelihood of the best outcome: healthy moms and healthy babies.
The practice has eight doctors, four nurse practitioners and 35 other employees. It sees about 3,000 patients per month, primarily from Floyd County. About half of the patients are expectant mothers. About two-thirds of the patients are covered by commercial insurance.
Health-care providers traditionally have received payment per care procedure they’re providing, but the Centers for Medicare & Medicaid Services, for example, has advocated for bundled payments because they “may lead to higher quality and more coordinated care at a lower cost to Medicare.”
Government agencies and insurers are moving away from the fee-for-service model because they say it incentivizes providers to see as many patients and perform as many procedures as possible without focusing on health outcomes, which increases health-care costs both in the short and long terms.
However, they say bundled payment and capitation models incentivize providers to perform as few procedures as necessary and to focus more on long-term health outcomes, which benefits patients and lowers costs.
Humana also is using a bundled payment model for 40 orthopedic groups in 13 states for Medicare Advantage customers undergoing total hip or knee-joint replacement.
Stice said the company is in conversations with other medical providers about such agreements, and he expects Humana’s push away from the fee-for-service model will continue.