Episode-Based Payment Model

The Episode-Based Payment Model is a retrospective payment model based on expected costs for clinically defined “episodes of care.” Providers will be eligible for gain and risk sharing based on their average financial and quality performance for each episode. This is part of the State Innovation Model (SIM), designed to reform health care in the state of Ohio. Per Ohio Administrative Code (OAC) 5160-1-70, episode-based payments are considered part of the standard payment methodology. Over the next few years, we expect new waves of episodes will be rolled out for reporting and monitoring.

Q: Who is required to use this payment model?

A: Medicaid Managed Care Plans (MCPs) and all Medicaid providers, both par and non-par. Commercial plans, Anthem, Aetna, United and Medical Mutual, are also participating. Existing Molina Healthcare contracts will not require amendments to participate in this program.

Q: Which episodes are being reported?

A: The first wave of episodes launched in 2015 for Asthma, COPD, Perinatal, Acute and Non-Acute PCI and Total Joint Replacement. MCPs are responsible for monitoring and reporting Asthma, COPD and Perinatal episodes only. During calendar year 2015, MCPs provided reporting to impacted providers. Calendar year 2016 will be the first performance period for which gain and risk sharing will be calculated. The second wave of episodes launched in early 2016 for reporting. These episodes and future episodes will be monitored and reported by the Ohio Department of Medicaid (ODM) on behalf of all MCPs. For a complete list of Episodes and their descriptions, please visit ODM’s website.

Q: How will this affect my claims reimbursement?

A: This is a retrospective program and will not affect normal claims payment. Plans will analyze paid claims data for all services provided during a defined episode. Each episode of care is defined by a unique set of parameters and code sets to ensure all plans use the same algorithms for analyzing data. Plans will then use this data to calculate the average spend for each episode and if the required quality metrics were met.

Q: How is the gain and risk sharing determined?

A: Each episode will be attributed to a Principle Accountable Provider (PAP). PAPs may be eligible for a gain/risk share, based on their average episode cost compared to the defined spend threshold. Most providers will fall within the average spend threshold and, therefore, will not be eligible for gain or risk sharing.

PAPs with a higher-than-average episode spend may be required to repay a portion of the extra cost back to the plan and/or ODM as a risk sharing payment. PAPs with a lower-than-average episode spend who also meet all quality benchmarks will be eligible to receive a gain sharing payment.

Q: When and how will I receive the reports?

A: PAPs will receive quarterly reports with detailed information on each episode of care. The reports also include data related to quality outcomes. All plans will use a standard report format so providers receive uniform and consistent information from each plan.

After a full calendar year of performance, PAPs will receive a final report for each episode of care. This report will be sent after the first quarter following the performance period and indicate whether the PAP is eligible for gain/risk sharing.

Q: Where can I find more information?

A: Learn more about the Episode-Based Payment Model on ODM’s website.

Your Molina Healthcare Provider Services Representative is available to answer questions about your reports. You can also call Provider Services at (855) 322-4079.

Providers can find additional information about Ohio’s payment innovation initiatives by visiting the Governor's Office of Health Transformation website.