Quality Incentive Program: Medicaid Managed Care Rule

The April 2016 Medicaid Managed Care Rule required providers, including California’s 21 public health care systems, to restructure their supplemental payments. CAPH members took advantage of an opportunity in the new rules to create the Quality Incentive Program (QIP).

What is the Quality Incentive Program?

The Quality Incentive Program (QIP) represents a new pay for-performance program for California’s public health care systems that converts funding from previously-existing supplemental payments into a value-based structure, meeting the Managed Care Rule’s option that allows payments tied to performance. QIP payments are tied to the achievement of performance on a set of established quality measures for Medi-Cal managed care enrollees. If all public health care systems achieved their QIP performance milestones, they would collectively receive between $320- $450 million annually (net) in federal funding.

Public health care systems were required to choose at least 20 measures to report on, from a list of 26 possible measures. These measures are divided into four categories:

  • Primary care – measures align with current health plan reporting efforts and promote higher quality care in the ambulatory care setting
  • Specialty care – measures focus largely on cardiac care, as heart disease is the second-largest cause of mortality in California (behind cancer) and the largest in the U.S.
  • Inpatient care – many of these high-value patient safety measures align with improvement work that public health care systems undertook as part of the 2010-2015 Delivery
    System Reform Incentive Program (DSRIP)
  • Resource utilization – these measures, mostly derived from the Society of Hospital Medicine’s Choosing Wisely campaign, aim to reduce unnecessary utilization and improve quality of care. There is also a utilization measure to help address the current opioid epidemic

Program Year 1 of QIP  started date of July 1, 2017 and ended June 30, 2018. After Program Year 1, the proposal to CMS intends to convert the basis of payment to performance. Performance for Year 1 will be available in late 2018.

The QIP is structured similarly to the Public Hospital Redesign and Incentives in Medi-Cal (PRIME) program, part of the state’s section 1115 Medicaid waiver, called Medi-Cal 2020. The QIP’s measures do not directly overlap with any of the quality measures being used in PRIME, but are designed to be complementary.

For more information, including a full list of measures, check out the Medi-Cal Managed Care Rule brief.