Tennessee Health Care Innovation Initiative Project

The health status of Tennessee is ranked 42nd among the other States. Tennessee is also ranked very low on national health indicators, such as obesity and diabetes.

The Tennessee health care system has a reputation for being hard for patients to navigate, and it historically has not rewarded providers who work as a team to coordinate care for patients.

Health care spending is growing unsustainably.

Tennessee won initial funding for innovation planning. The purpose of funding is for states to design and implement health care innovation plans.

Innovation plans must:
  • Be governor-led and multi-payer
  • Improve health outcomes and reduce costs
  • Demonstrate broad stakeholder support
  • Tennessee will compete with ~20 states for a second wave of funding to implement its plan
Tennessee’s aim with this project is to create a sustainable patient-centered health system.

Objective:

Accountability for the Triple Aim

  • Improving the health of the population
  • Enhancing the patient experience of care
  • Reducing or controlling the cost of care
Episode-based Payment Model:

Episode-based payment models reward coordinated, team-based high-quality care for specific conditions or procedures.

The goal is to achieve coordinated, team-based care for all services related to specific conditions, procedures, or disabilities (e.g., pregnancy episode does include all care prenatal through delivery).

To demonstrate accountability, a provider Quarterback or Principal Accountable Provider (PAP) is designated as accountable for all pre-specified services across the episode. The Quarterback is the provider in best position to influence quality and cost of care.

As an incentive, high-quality and cost-efficient care is rewarded beyond current reimbursement, based on the Quarterback’s average cost and total quality of care across each episode.

Quarterbacks are rewarded for leading and coordinating services and for ensuring quality care.

The Quarterback Selection:
  • Payers review claims to see which provider’s patients qualify for episode related care
  • Payers select Quarterback based on physician or facility with the main responsibility for the patient’s care
The Quarterback Role:
  • A provider in the best position to influence overall quality, cost of care for an episode
  • Leads and coordinates the team of providers
  • Helps drive improvement across system (e.g., through care coordination, early intervention, patient education, etc.)
  • Rewarded for leading high-quality, cost-effective care
  • Receives performance reports and data to support decision-making
Episodes of Care:

For information on each Episode of Care please go to the State of Tennessee website at: http://www.tn.gov/hcfa/topic/episodes-of-care. There will be 74 Episodes of Care introduced in waves over a 5 year period. This site will give you the Episodes of Care in each wave.

How Episodes work for patients and providers:
  • Patients seek care and select providers as they do today.
  • Providers deliver care as they do today.
  • Providers submit claims as they do today.
Role of Payers:
  • Reimburse for services as they do today.
  • Review claims from the performance period to identify a Quarterback for each episode:
  • Calculate average cost per episode for each Quarterback
  • Compare average costs to predetermined ‘commendable’ and ‘acceptable’ levels

Incentive payment calculations will be based on outcomes after performance period ends.

Quarterbacks receive reports to measure and improve patient care:

Reports provide performance information for quarterback episodes:

  • Overview of quality across Quarterback’s episodes
  • Overview of cost effectiveness (how a Quarterback is doing relative to cost thresholds and relative to other providers)
  • Overview of utilization and drivers of a Quarterback’s average episode cost
Additional Resources and Tools:

State of Tennessee

Method URL
Email Payment.Reform@tn.gov
Web http://www.tn.gov/HCFA/strategic.shtml
Other presentations http://www.tn.gov/HCFA/presentations.shtml

Other

Name More Information
Providers’ Guide THCII Provider Guide
The THCII Provider Guide can be found in our provider manual and includes important information about the design of the program, focusing initially on the Episodes of Care strategy. This guide also offers resources to help health care providers understand how the program impacts their organization.

How to read an episode of care report

Guide to Reading Your Episode of Care Report

Reports provide performance information for quarterback episodes:

  • Overview of quality across Quarterback’s episodes
  • Overview of cost effectiveness (how a Quarterback is doing relative to cost thresholds and relative to other providers)
  • Overview of utilization and drivers of a Quarterback’s average episode cost
FAQs THCII FAQs
Memo, April, 2014 Memo to Providers: Start of Episode
Memo, May, 2014 Memo to Providers
Memo, December, 2014 Memo to Providers: THCII Contract Amendment
State trade associations Most of the State’s major professional medical trade associations are also monitoring this project and may have additional information.

THCII Thresholds 2017 Thresholds
2016 Thresholds
2015 Thresholds
See: Perinatal Thresholds for Episodes of Care
Risk Adjustment Methodology The following document describes how BCBST adjusts costs for a given episode of care based on calculating expected cost per unique member-episode of care occurrence.
Episode of Care Risk Adjustment Methodology
Risk Factors Risk Factors
THCII letter THCII letter
THCII Video THCII Video
THCII Video II(December, 2015)
THCII Video III (February, 2016)
THCII Provider Dispute Resolution Process THCII Provider Dispute Resolution
Value Based Reconsideration Form
Value Based Appeal Form