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Performance-Based Contracting Education Center
Performance-based contracting [PBC] (formerly Selective Contracting) refers to a mechanism used in Medicaid programs in the United States to manage and control the delivery of home and community-based services and supports (HCBS). To understand performance-based contracting, it’s important to first understand the broader 1915 waivers.
The term 1915 waivers refers to Section 1915(b) of the Social Security Act, which allows states to waive certain Medicaid requirements to develop and implement home and community-based services (HCBS) programs. These programs are designed to provide alternatives to institutional care, such as nursing homes, by allowing Medicaid beneficiaries to receive long-term services and supports in their homes or community-based settings. This waiver authority grants states more flexibility in designing and delivering services.
Selective contracting within 1915 waivers involves the state Medicaid agency selectively choosing and contracting with specific providers to deliver long-term services and supports to eligible Medicaid beneficiaries. Instead of relying solely on fee-for-service arrangements where providers are reimbursed on a per-service basis, selective contracting allows states to set standards to negotiate contracts with preferred providers. These entities are typically chosen based on various criteria, including their ability to meet quality standards, provide cost-effective care, and ensure access to a range of service options.
Selective contracting aims to achieve several goals:
- Quality Control: States can contract with providers that have demonstrated a commitment to maintaining high-quality care and meeting established performance standards.
- Cost Management: By negotiating contracts, states may be able to manage costs more effectively than in a fee-for-service model while still delivering the best benefits to persons served.
- Access to Services: Selective contracting can help ensure that people and families can access a broader array of service and support options by working with a network of providers.
ODP is pursuing a performance-based contracting policy. At the heart of all policy development at ODP is the Everyday Lives standards. This document is the foundation for all ODP’s program enhancements and changes. It outlines what is important to people with disabilities and their families and the pieces that need to be in place to allow people with disabilities to live everyday life as a community member.
These values support a move to performance based contracting for Residential Services and Supports Coordination — two key services that link waiver participants to a life they choose in the community and at home. Implementing selective contracting for Residential Services and Supports Coordination will allow ODP to ensure that Residential Service Providers and Supports Coordination Organizations (SCOs) are delivering on these values by clarifying expectations and provider requirements, thereby improving the quality of service delivery. In addition to identifying characteristics required of providers, selective contracting allows states to outline quality and care coordination standards and align payment with outcomes. Providers not meeting these requirements are ultimately not offered contracts to perform these services. In this way, selective contracting will allow ODP additional levers to ensure that it administers programs reflective of its values.
To ensure our members and the ID/A Community can follow updates and developments on this important initiative, we’ve compiled resources and information to keep everyone informed.
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