Provider Bonuses Begin To Pay Off For TennCare

Incentive payments appear to be working for Tennessee’s Medicaid program. TennCare began offering bonuses to doctors and other providers for saving money while giving more appropriate care. In a recently released analytics report, the agency deems the effort a success.

One of the programs, known as Tennessee Health Link, pays mental health providers to make sure their patients are not only coming to them for counseling, but also keeping tabs on their blood pressure and going to follow-up appointments after surgery. Two years in, that effort has almost completely stopped the runaway expense of caring 70,000 complex patients — from annual growth of 17% down to 1%.

Much of the savings comes from reduced visits to the emergency room. Their mental health provider is notified each time they appear in an ER.

“We don’t have a target, but when we see that they’re getting more of the care that they need and less of the care that they don’t, we’re happy about both parts of that equation,” says TennCare chief operating officer Brooks Daverman.

The bonuses are paid out by Health Link and a similar, patient-centered medical home program, which focuses more on physical health. The two programs are now paying for themselves, according to TennCare’s analysis.

In addition, a broader effort to pay doctors for their performance on common procedures like delivering a baby, treating an asthma attack, or performing a joint replacement saved the state nearly $40 million last year. The financial success even led Humana to adopt some of the program elsewhere.

TennCare innovation director Jessica Hill says care coordination has always been the goal of providers. They just needed a nudge.

“I think that they’ve wanted to move in this direction for a long time,” she says. “We’ve seen that when you move away from the historical fee-for-service payment for health care towards really incentivizing better care, you can see changes in behavior.”