Medicaid Value-Based Payment and Quality of Serious Mental Illness Care: Does the Association Vary Across Racial and Ethnic Groups?

Abstract While there is growing interest in the implementation of value-based payment (VBP) policies in Medicaid, there is little evidence on whether their impacts among high-need beneficiaries vary by race and ethnicity. We conducted a retrospective cohort study using Oregon Medicaid data and a pre-experimental, treatment-only repeated cross-sectional panel design, to examine whether the association of Oregon’s Medicaid VBP policy with quality varied by race and ethnicity among the state’s beneficiaries with serious mental illness (SMI), that is, those diagnosed with schizophrenia, bipolar disorder, or severe major depressive disorder. We estimated changes in 12 quality measures, by race and ethnicity, pre (2010–2012) and post (2013–2019) VBP implementation. Seven of the 12 measures were designated as VBP performance metrics, with Follow-up after Hospitalization for Mental Illness, 7-day (FUH-7-day), also designated as a bonus-earning incentive metric. The cohort totaled 232,791 person-years (71,599 beneficiaries), with 89% self-described as White and the balance as Latinamerican or Black. The policy was associated with improved quality on FUH-7-day and FUH-30-day, and decreased quality on three physical healthcare measures. The quality impacts varied by race and ethnicity. The policy was associated with the elimination of a pre-existing schizophrenia-only Latinamerican-White FUH-7-day disparity due to the relatively larger Latinamerican post-VBP increase of 18.4 percentage points (95% CI, 2.2–34.6). However, the minority-White disparities in the Antidepressant Medication Management measures persisted post-VBP, and pre-existing advantages for Latinamerican beneficiaries in Cervical Cancer Screening and Avoidance of All-Cause Readmission disappeared because Latinamerican beneficiaries’ performance worsened post-VBP. This study of Oregon’s mature VBP policy contributes first evidence of the potential impacts of Medicaid VBP policies on quality disparities among beneficiaries with SMI. Findings suggest modest gains, potentially related to targeted financial incentives, while also revealing a potential for stagnant or worsening performance.