Regence unveils value-based payments for Episodes of Care

November 18, 2019
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By Regence

Regence is helping lead a sea change to pay for consumer-centric health care based not on volume but on what matters most: quality and results.

About 40 percent of Regence’s total payments across its four-state footprint of Oregon, Washington, Idaho and Utah are now in “value-based” arrangements. Regence and providers collaborate to share data, resources and expertise to drive high-value care that improves cost and quality for Regence’s 2.6 million members. Providers are rewarded to look at the full end-to-end continuum of care. 

Regence’s value-based programs range from an inclusive care management model called Total Care, to value-based networks that create a deeper engagement between the patient and the provider.

Regence is continuing its leadership in value-based care today by announcing a new innovative, member-centered program: Episodes of Care.

Regence will pay participating providers for delivering improved patient outcomes and lower costs over a patient’s “episode of care,” which covers all the care a patient receives for a procedure or condition over a defined period of time. This could be a knee replacement, for example, or the delivery of a baby.  

Regence is partnering with Remedy, a developer of software and services that enable payers, employers and at-risk providers to organize and finance health care delivery around a patient’s episode of care.

Episodes of Care is Regence’s first value-based program to focus on clinical procedures.

“We are looking holistically at all the care a member needs to treat a procedure or condition,” said Kristie Putnam, vice president of provider partnership innovation at Regence. “Think of a knee replacement. Traditionally, each component of care, from diagnostic studies to surgery and rehab, was treated as an isolated event. This often led to fragmented and more costly care. Under Episodes of Care, we reward providers for delivering a coordinated experience of care that leads to improved outcomes, cost and patient experience.” 

Regence will start Episodes of Care with orthopedics and maternity, with plans to expand to cardiac and gastrointestinal procedures, as well as chronic conditions.

Episodes of Care will launch in Washington early next year, with plans to expand to Oregon, Idaho and Utah.

Regence will employ a broad network strategy for the new program instead of making it available only to providers that specialize in certain procedures or conditions.

Regence’s partner in Episodes of Care, Remedy, administers episode-based payments and supports providers and payers to improve episode outcomes around the country, including work with the Centers for Medicare & Medicaid Services (CMS).  

"We're honored to support Regence’s groundbreaking Episodes of Care program," said Kyle Armbrester, CEO of Remedy. "Remedy's deep expertise in administering episode-based payments will help lead to better care for patients.”

Episodes of Care puts Regence at the forefront of innovation in how to pay for health care. CMS has prioritized alternative payment methods, including episode-based payments, as a way to address rising health care costs.

Regence’s largest customer in Washington, the state Health Care Authority, is a strong advocate for value-based payments and says it’s happy with Episodes of Care. 

“We applaud Regence for its commitment to purchasing health care for value, not volume,” said Marcia Peterson, benefit strategy and design manager for the Washington State Health Care Authority. “Episodes of Care is a step toward transforming health care in Washington, making it better and more affordable.”  

Regence’s broad network strategy for Episodes of Care will increase the program’s impact on the quality and affordability of care. 

“Regence has implemented more than 75 value-based agreements with providers across our four states, and we expect that number to only grow,” said Dr. Drew Oliveira, senior executive medical director at Regence. “Like our other value-based programs, we want Episodes of Care to cut costs and improve care for as many of our members as possible.”

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