Determining Performance Benchmarks for a Medicaid Value-Based Payment

This brief describes approaches that state Medicaid programs can consider when developing the benchmarks, or standards against which to judge performance, for value-based payment programs. It provides considerations for determining a benchmark when (1) a performance measure lacks a benchmark, or (2) an existing benchmark is not appropriate for the intended use or setting. For example, the National Committee for Quality Assurance develops Healthcare Effectiveness Data and Information Set (HEDIS®) measures; each of these measures and its corresponding benchmark targets a specific setting, such as health plan, physician, preferred provider organization, or other organizational setting. If a value-based payment program does not apply a HEDIS measures to the intended setting, the benchmark might also not apply. An existing benchmark can also require adjustment based on state-specific considerations, such as those shown in the box at right. With this purpose in mind, the brief begins with a short introduction, followed by a discussion of benchmarking methods and approaches to setting benchmarks.