Providers and provider organizations are increasingly contracting with payors to manage specific patient pools and diseases on a risk basis. They are taking new and increasing financial risk to better align with payors’ interests of increased quality and decreased cost. State regulators are paying increasing attention to these relationships as they become both more common and complex.
This blog series will dive into state oversight for providers and provider organizations engaged in financial risk (risk bearing entities or RBEs) in the sample states of California, Georgia, Massachusetts, New Jersey, and New York. State regulation of RBEs can extend to providers and provider organizations contracting for some level of financial risk with a payor. Payors can be individual and group commercial health plans, employer sponsored health plans, Medicare Advantage, Medicaid Managed Care, or other government health plans.
Risk contracting includes a wide range of different payment models, each of which holds the RBE financially responsible at some level for care delivered to its patients. These models include: Upside Risk Arrangements: providers can earn additional money or benefit from savings if they meet or exceed agreed upon quality and other metrics (e.g.
, high patient satisfaction scores or low readmission rates). Downside Risk Arrangements: providers may be financially penalized if they perform poorly on the agreed upon quality and other metrics (e.g.
, high rate of hospital-ac.