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November 25, 2020

State taps tech firm to help with new bundled-payment healthcare program

HBJ Photo | Matt Pilon An industry group is promoting polling that contradicts findings endorsed by Comptroller Kevin Lembo, pictured above.

The state tapped a healthcare tech firm to help it roll out a new system of payment for medical care for state workers that bundles procedures into “episodes” that will be reimbursed at a fixed price. 

Comptroller Kevin Lembo announced Tuesday that the state would work with Signify Health on its “Network of Distinction” program, which sets competitive fixed prices for medical care for the 200,000 members of the state-employee health plan and the Connecticut Partnership Plan. 

A total of 180 healthcare providers have signed on to the program, including Prospect Medical Eastern CT Health Network, Prospect Medical Waterbury Health and UConn Health-John Dempsey Hospital.

Signify Health, based in Texas and Norwalk, will identify, contract with and support providers in the Network of Distinction, allowing the state to improve patient care and save money, Lembo said.

“This represents a first for the nation in the breadth of conditions and procedures that will be managed collaboratively by network providers and sets a new benchmark for value-based care in the country,”  Signify Health CEO Kyle Armbrester said. Episode-based payment has been proven cost-effective in the Medicare program and is now being tested by employers like the state of Connecticut, he added.

“By prioritizing the highest-quality care and aggressively negotiating comprehensive pricing, we can achieve the dual goals of lowering overall health costs and achieving better outcomes,” Lembo said.

The Network of Distinction program packages 20 procedures and conditions into episodes, including knee replacement, colonoscopy, cataract surgery and care related to pregnancy. A comprehensive “spine episode” is designed to help members avoid surgery. 

Providers receive a lump sum for all the care included in an episode, including readmission, if necessary, incentivizing quality treatment, according to the model.

This model, also called bundled payments, has prompted some hospital systems to push back due to the financial risk and required investments in care management and IT technology, according to Modern Healthcare News.

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