Experiences and Interest in Value-Based Payment Arrangements for Medical Products Among Medicaid Agencies: An Exploratory Analysis

Context: To date, uptake of value-based payment (VBP) arrangements for medical products and knowledge of their design and impact have been mainly concentrated among private payers. Interest and activity are expanding to Medicaid; however, their experiences and approaches to VBP arrangements for medical products are not well characterized.

Methods: This study sought to characterize the use of VBP arrangements for medical products among state Medicaid agencies through the use of a two-staged, mixed-methods approach. A survey and semistructured interviews were conducted to gain an understanding of state experiences with VBP arrangements for medical products. The survey and interviews were directed at senior leaders from nine states through the survey, with respondents from seven of these states additionally participating in the semistructured interviews.

Findings: Although experience with VBP arrangements for medical products among states varied, there were similarities across their motivations and general processes or phases employed in their design and implementation. States collectively identified a number of significant challenges to VBP arrangements, such as manufacturer engagement, outcomes measurement, and the time, expertise, and resources required to design and implement them. We outline a range of strategies to help address these gaps and make it easier for states to pursue VBP arrangements, including more direct engagement from the Center for Medicare and Medicaid Services, state-to-state peer learning and collaboration, data infrastructure and sharing, and additional research to inform fit-for-purpose VBP arrangement approaches.

Conclusions: Findings from this study suggest that it may be easier for states to pursue VBP arrangements for medical products if there is greater clarity on processes employed that support design and implementation as well as effective strategies to address common challenges associated with contract negotiations. As states gain more experience, it will be important to monitor the design and implementation of common VBP arrangements to assess impact on the Medicaid program and the populations it serves.