Value-Based Payments
To advance the Department’s vision for enhancing quality and to ensure that payments to providers are increasingly focused on improving population health, appropriateness of care and other value-related measures, NC Medicaid encourages the adoption of value-based payment (VBP) arrangements between Prepaid Health Plans (PHPs) and providers.
NC Medicaid defines value-based payment as payment arrangements between PHPs and providers that fall within Levels 2 through 4 of the multi-payer Health Care Payment (HCP) and Action Network (LAN) Alternative Payment Model (APM) framework.
PHPs’ Provider Incentive Programs are required to be aligned with the Quality Strategy and related performance measures to foster a more coordinated and impactful approach to care delivery. By aligning incentives with these measures, the Department aims to drive improvements in the quality and outcomes of care, ultimately improving member health.
Value-Based Payment Requirements for NC Medicaid Managed Care Programs
VBP arrangements offered by PHPs must be related to the aims and goals set forth in North Carolina’s Quality Strategy and in compliance with the requirements set forth in 42 C.F.R. § 422.208 and 422.210.
In addition, there are specific VBP requirements for health plans that impact certain providers.
Advanced Medical Home (AMH) Program
PHPs must offer performance incentive programs to AMH Tier 3 providers based on the AMH measure set and may choose to extend these incentives to AMH Tier 1 and 2 providers.
The AMH program also includes HCP-LAN category 2A payments, with medical home and care management payments paid to providers on a per member per month basis. For detailed information on the AMH program and measure set, refer to the AMH Provider Manual.
Tailored Care Management (TCM) Program
It is currently optional for Tailored Plans to offer performance incentives to TCM providers. Upon the release of a TCM measure set by NC Medicaid, Tailored Plans must offer performance incentive programs for these providers based on the new measure set.
Quality Withholds
A key component of North Carolina’s Quality Strategy includes measuring and incentivizing performance improvement as part of Medicaid transformation. Withhold programs are one mechanism to encourage performance improvement in a variety of domains and have been implemented in other state Medicaid managed care programs.
In a withhold arrangement, a portion of health plans’ expected capitation payment is withheld, and plans must meet targets (e.g., quality measure performance targets) to receive withheld funds from the Department once performance is known at the conclusion of a defined performance period, typically the annual quality measurement cycle.
NC Medicaid launched the withhold program for Standard Plans in 2024, and anticipates developing withhold programs for other PHPs in future years.
For more information on NC Medicaid’s withhold program and links to relevant documents, please visit our Quality Management and Improvement webpage (See “Standard Plan Withhold Program” section).
Making Care Primary
In June 2023, North Carolina was selected as one of eight states to participate in a Centers for Medicare & Medicaid Services (CMS) primary care payment model called Making Care Primary (MCP). MCP aims to strengthen primary care by driving multi-payer alignment across several priority areas including payment reform, quality measures and incentives, data sharing and learning systems.
The Medicare portion of the model began for participating primary care practices in July 2024. Other payers, including Medicaid agencies, have additional flexibility on how and when to launch an explicitly aligned approach. The NC Medicaid AMH program already has significant alignment with Medicare’s MCP model, including emphasis on local care management, addressing health-related social needs and increasing investments in primary care through payments beyond fee-for-service.
Throughout the fall and winter of 2023, NC Medicaid convened community partners, including providers, PHPs) and Clinically Integrated Networks (CINs) to discuss further opportunities for alignment between the AMH model and the MCP Medicaid model.
Based on feedback received, along with analyses of the current state of primary care in North Carolina and VBP arrangements from Medicaid PHPs, NC Medicaid is considering an update to the AMH program to further standardize VBP offerings to primary care providers and align further with Medicare MCP.
For more information, refer to the Medicaid Provider Bulletin article Value-Based Payment Update: Making Care Primary (MCP) Model Alignment in NC Medicaid.
NC State Transformation Collaborative
The North Carolina State Transformation Collaborative (NC STC) is a public-private partnership designed to advance value-based and person-centered care through multi-stakeholder alignment, with federal engagement (CMS) and state leadership (NCDHHS). North Carolina is one of four states, along with Colorado, California and Arkansas, selected to participate in this initiative operated by the Health Care Payment Learning & Action Network (LAN).
In partnership with the Department and the LAN, Duke-Margolis is facilitating technical working groups and gathering strategic feedback to pave the way for achieving NC STC's objectives across key priority areas. These include aligning quality measurement, bolstering integrated and accountable primary care, enhancing health equity data and improving data interoperability.
For more information on the North Carolina State Transformation Collaborative, visit the NC STC webpage.
VBP Reporting Deliverables
NC Medicaid is committed to advancing value-based payment (VBP) initiatives to enhance healthcare quality, outcomes, and efficiency across the state. As part of this commitment, NC Medicaid requires Prepaid Health Plans (Standard Plans, Tailored Plans and PIHPs) to submit annual VBP Reporting Deliverables describing their VBP arrangements, including contracting and payment information.
Reporting Requirements & Guidance
NC Medicaid has updated reporting requirements to enhance data accuracy and comparability across reporting years beginning with 2024 submissions. For guidance on completing the VBP Assessment (QAV03) and VBP Strategy (QAV04) deliverables, please refer to the VBP Reporting Deliverables Guidance.