TMA Persuades State to Delay Payment Reform Expansion

February 17, 2017

Tennessee’s largest professional organization for doctors has helped convince state officials to delay expanding the use of a value-based healthcare payment model being tested under TennCare into commercial health insurance plans.

After a series of discussions culminating in a meeting at the Capitol this week, the Tennessee Medical Association was able to notify its more than 9,000 members that healthcare providers will not be required to participate in additional episodes of care-based payment programs in the upcoming enrollment year. Participating insurance companies will offer value-based programs for providers who choose to voluntarily participate. The TennCare episode initiative will continue to roll out as scheduled this year.

The state’s episodes of care payment model focuses on the total healthcare delivered in acute events like surgical procedures or inpatient hospitalizations. The state collects data through its managed care organizations – Amerigroup, BlueCross BlueShield of Tennessee and UnitedHealthcare – and uses it to determine value. Healthcare providers are subject to financial rewards or penalties based on how they measure against average cost, quality and other benchmarks set by the MCOs. The model is part of the Tennessee Healthcare Innovation Initiative was designed in 2012 and introduced in the market in 2015, funded by a grant from the Centers for Medicare and Medicaid Innovation.

TMA has supported the concept of creating alternative payment mechanisms that help contain costs. At the same time, TMA has repeatedly expressed concerns to state administrators about significant defects with respect to episode design, and data collection, data reporting and data accuracy during the program implementation.

“Generally speaking, doctors are on board with the move toward value-based reimbursement. We have to move away from fee-for-service and find ways to make healthcare more efficient without negatively affecting quality of care,” said TMA President Keith G. Anderson, MD, a Memphis cardiologist. “But we’ve been saying for years that the design and implementation has to be accurate, fair and transparent for the program to work, and we are still not there.”

TMA officials were disappointed with the state’s plan to move forward with the program in the commercial markets even though many aspects of the project are still flawed and need more work. TMA immediately began urging state officials to reconsider.

“There are lingering issues with the program in its current TennCare implementation that must be fixed before expanding to the commercial market. We want to make sure it has a chance to be successful in all areas,” added Dr. Anderson.

Since 2012, when the state used its first federal grant to design the episodes of care program, TMA has worked directly with the Governor, the Bureau of TennCare, the Tennessee General Assembly and others to advocate for changes that help achieve the goal of cutting costs without adversely affecting patient care, or adding unnecessary administrative burden or financial strain on healthcare providers. The Association considers this most recent development a step in the right direction.

“We appreciate the opportunity to dialogue with TMA. Physician input has been and is very important to the health care innovation initiative. We are taking this year to allow more time to engage with physicians and other providers and address their concerns and suggestions about episodes in the commercial market. Ultimately we believe that bringing all the stakeholders together will help us get to our common goal of more efficient, cost-effective ways to deliver high-quality healthcare for Tennesseans. Working together, we can achieve that aim,” said Deputy Governor Jim Henry.

TMA is among the most influential healthcare voices in the Tennessee General Assembly, actively advocating for physicians and their patients. Payment reform is one of the organization’s top priorities, and TMA’s leadership will remain active and vocal in protecting physicians’ interests as it works with all stakeholders to help improve the episodes of care program.

TMA recently partnered with the Tennessee Hospital Association and Tennessee Medical Group Management Association to develop an online feedback portal for the episodes of care program.

Learn more about TennCare payment reform and TMA’s resources at