For the first time, a private health plan’s episodes-of-care payment model has been designated as an Advanced Alternative Payment Model, giving specialty practices a path to value-based care and payment incentives.

The State of Connecticut Health Plan, which covers more than 220,000 state and municipal employees, retirees and their dependents, received the designation from the Centers for Medicare & Medicaid Services.

CMS created the Advanced Alternative Payment Model as part of its Quality Payment Program. Per the program, providers that achieve a certain threshold of payments or see a certain number of patients through an advanced APM model receive a 5% payment boost.

The goal of the Advanced APM track is to move physicians out of the Merit-based Incentive Payment System track of the Quality Payment Program, which is the track that all physicians default into.

“[MIPS] was purposefully designed to be unappealing,” said Francois de Brantes, senior vice president, episodes of care at Signify Health, which creates and supports value-based payment programs. “[In this track] most of the physicians would essentially get a payment freeze on their Medicare fee-for-service payments.”

CMS wants physicians to leave behind MIPS and engage with Advanced APMs as part of its push toward value-based care. But there is one problem: most of the Advanced APM models being offered by the government are designed for hospitals and health systems, de Brantes said in a phone interview.

Further, no private health plans had episodes-of-care models designated as Advanced APMs. Episodes-of-care models are designed for specialty physician practices as opposed to total-cost-of-care models which are for primary care practices and hospitals.

“If you have a cardiology practice and you’re looking to get into value-based payments and you look at the portfolio of Advanced Alternative Payment Models that are offered by Medicare, you aren’t going to find much,” de Brantes said. “So, for them, having something in the private sector that they can engage with, and they can participate in, is a big deal.”

The State of Connecticut launched its episodes-of-care payment model last October. The model encourages doctors, hospitals and provider groups to deliver coordinated care at competitive prices for all, or nearly all, of the entire treatment for a condition or illness over a defined period of time, said Kevin Lembo, Connecticut state comptroller, in an email.

The model covers clinical procedures, like hip or knee replacements, and other conditions, such as asthma and diabetes.

Signify Health partnered with the State of Connecticut Health Plan to manage the episodes-of-care model.

“Signify helps us negotiate contracts with many providers who are in-network under the episodes-of-care payment program,” Lembo said. “Signify also uses data and analytics to identify the highest quality care providers with the lowest average price and connects our members to these providers.”

Thousands of physicians across Connecticut are participating in the model. Now, with the Advanced Alternative Payment Model designation, these physicians are able to count patients and payments toward the threshold they need to qualify for the 5% pay increase.

“There are very few Advanced Alternative Payment Models in the Medicare portfolio that appeal to specialty care providers, and yet specialty care represents 85% to 90% of all care delivered in the United States,” Lembo said. “It’s a big gap and if private sector payers, including state employee plans, can help fill the gap, that’s good news for everyone.”

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