Bundling, Benchmarking, and Beyond: Paying for Value in Home- and Community-Based Services

As the US population ages, the demand for long-term care options has grown. Special focus has been on Medicaid programs, which pay for most long-term services and supports (LTSS) in this country. But as public policy has shifted LTSS from institutional settings to home- and community-based settings, new questions arise for policymakers who want to know how Medicaid agencies measure the quality of home- and community-based services (HCBS), how they pay for them, and how to encourage more cost-effective services.

One alternative payment model for HCBS that has attracted attention is “bundled payments,” a package of health care services paid for as a set. They are currently used in Arkansas and Colorado, where assisted-living facilities or contracted home health agencies receive a daily rate to provide HCBS.

To help state policymakers address the challenges of developing HCBS, the Medicaid Evidence-based Decisions Project (MED) commissioned a report focused on alternative payment methods and quality metrics for HCBS. MED is a self-governing collaboration of state Medicaid agencies, based at the Center for Evidence-based Policy (CEBP) at Oregon Health & Science University.

This report, adapted from the MED report, is also authored by CEBP staff and addresses the same questions for a broader audience. It offers tools, resources, and examples for policymakers as they look for innovative ways to reimburse for and assess quality in Medicaid HCBS, a challenge that will grow in the future as Medicaid enrolls more elderly Americans.