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The American Journal of Managed Care November 2019
Population Health Screenings for the Prevention of Chronic Disease Progression
Maren S. Fragala, PhD; Dov Shiffman, PhD; and Charles E. Birse, PhD
Comprehensive Health Management Pharmacist-Delivered Model: Impact on Healthcare Utilization and Costs
Leticia R. Moczygemba, PhD, PharmD; Ahmed M. Alshehri, PhD; L. David Harlow III, PharmD; Kenneth A. Lawson, PhD; Debra A. Antoon, BSPharm; Shanna M. McDaniel, MA; and Gary R. Matzke, PharmD
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Anirban Basu, PhD; Richard Grieve, PhD; Daryl Pritchard, PhD; and Warren Stevens, PhD
Value Assessment and Heterogeneity: Another Side to the Story
Steven D. Pearson, MD, MSc
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Joshua J. Ofman, MD, MSHS
Multimodality Cancer Care and Implications for Episode-Based Payments in Cancer
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Medicare Advantage Plan Representatives’ Perspectives on Pay for Success
Emily A. Gadbois, PhD; Shayla Durfey, BS; David J. Meyers, MPH; Joan F. Brazier, MS; Brendan O’Connor, BA; Ellen McCreedy, PhD; Terrie Fox Wetle, PhD; and Kali S. Thomas, PhD
CKD Quality Improvement Intervention With PCMH Integration: Health Plan Results
Joseph A. Vassalotti, MD; Rachel DeVinney, MPH, CHES; Stacey Lukasik, BA; Sandra McNaney, BS; Elizabeth Montgomery, BS; Cindy Voss, MA; and Daniel Winn, MD
Importance of Reasons for Stocking Adult Vaccines
David W. Hutton, PhD; Angela Rose, MPH; Dianne C. Singer, MPH; Carolyn B. Bridges, MD; David Kim, MD; Jamison Pike, PhD; and Lisa A. Prosser, PhD
Prescribing Trend of Pioglitazone After Safety Warning Release in Korea
Han Eol Jeong, MPH; Sung-Il Cho, MD, ScD; In-Sun Oh, BA; Yeon-Hee Baek, BA; and Ju-Young Shin, PhD
Multipayer Primary Care Transformation: Impact for Medicaid Managed Care Beneficiaries
Shaohui Zhai, PhD; Rebecca A. Malouin, PhD, MPH, MS; Jean M. Malouin, MD, MPH; Kathy Stiffler, MA; and Clare L. Tanner, PhD

Medicare Advantage Plan Representatives’ Perspectives on Pay for Success

Emily A. Gadbois, PhD; Shayla Durfey, BS; David J. Meyers, MPH; Joan F. Brazier, MS; Brendan O’Connor, BA; Ellen McCreedy, PhD; Terrie Fox Wetle, PhD; and Kali S. Thomas, PhD
This study examined how Medicare Advantage plan representatives perceive the alternative financing model Pay for Success and its potential to address members’ social risk factors.

Objectives: To understand how Medicare Advantage (MA) plan representatives perceive the alternative financing model Pay for Success (PFS) and its potential to address members’ social risk factors.

Study Design: Semistructured qualitative interviews designed to understand plan representatives’ priorities regarding addressing nonmedical needs of their members, awareness of and experiences with PFS, and thoughts about implementing PFS as a method to address members’ nonmedical needs.

Methods: Interviews with 38 upper-management representatives from 17 MA plans, which represent 65% of MA beneficiaries nationally, were conducted from July to November 2018. Plans varied in geographic coverage, star rating, and enrollment. Transcripts were qualitatively analyzed to understand overarching themes and patterns of responses.

Results: MA plan representatives were largely unfamiliar with PFS and were interested in learning more about how it could address members’ social needs. When probed about specific requirements of PFS, responses varied: Some reported willingness to share data with project partners and be reviewed by independent evaluators; others expressed their preference to keep data and performance analysis internal to the organization. Although most representatives prioritized innovation, some were more risk averse and preferred to use traditional methods to deliver new services.

Conclusions: MA plan representatives were unfamiliar with PFS, but most expressed interest in it as an alternative model for funding initiatives to address members’ social needs. Education of MA representatives about PFS as an alternative payment model for innovative programming is warranted. However, further guidance from CMS is needed to assuage the concerns raised by these representatives.

Am J Manag Care. 2019;25(11):561-568
Takeaway Points
  • Pay for Success (PFS) is an alternative model of financing innovative services with potentially substantial public health impacts.
  • PFS projects have been implemented in 20 countries, targeting issues such as housing, behavioral health, and chronic disease. However, PFS has yet to be used in Medicare Advantage.
  • Through qualitative interviews with representatives of plans covering 65% of Medicare Advantage beneficiaries nationally, we found that although most were unfamiliar with PFS, they expressed interest in it as a model for funding initiatives to address social risk factors.
  • Further education of plan representatives about PFS is needed, and further guidance from CMS is required to assuage plan representatives’ concerns.
Pay for Success (PFS) is a model whereby investors provide capital to fund an intervention to address social, health, or environmental needs.1,2 In particular, PFS allows for initial financing of evidence-based programs to address social risk factors3 for vulnerable groups.4,5 The success of the initiative is evaluated by an independent entity and the investor is repaid by the outcome funder if the predetermined, contracted outcomes are achieved.6 PFS reduces the financial risk of innovation for funders by shifting up-front payment responsibilities to more risk-tolerant investors. PFS also allows greater evidence and data to be collected to inform future programmatic decision making.7 PFS projects have been implemented in 20 countries to date (including the United States, Canada, the United Kingdom, the Netherlands, and several other European countries), targeting housing, behavioral health, foster youth, early childhood education, and chronic disease, among other issues.4 Twenty-two percent of PFS projects are US-based,4 and although these projects are still in progress, early reporting indicates that many are achieving their predetermined outcomes.8-10

Despite the recent growth of PFS initiatives in public health and their potential to address the historic underfunding of programs to target social risk factors in the United States,11 there has been limited adoption of these initiatives in the healthcare sector. One area of healthcare that could potentially benefit from PFS is the Medicare Advantage (MA) program. MA is the fastest-growing segment of the Medicare market,11 now covering more than one-third of all Medicare beneficiaries.12 MA plans are paid on a capitated basis, receiving a set annual amount to cover the comprehensive needs of their members each year. As a result, MA plans may have an increased incentive to improve outcomes and reduce costs. Unlike traditional Medicare, MA plans may offer supplemental benefits outside of standard medical care, including fitness memberships, vision care, nursing hotlines, and case management. The Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act passed in 2018 expanded the definition of supplemental benefits to include nonmedical services (eg, caregiver support, in-home supportive services, adult day care) and newly allows plans to target these benefits to specific populations beginning in 2020.13,14 This new flexibility for supplemental benefits could be instrumental in addressing upstream social risk factors and presents an opportunity to consider the ways in which MA plans may use PFS as a financial risk mitigation tool to experiment with offering new services and benefits.

PFS may provide MA plans a valuable opportunity to offer expanded benefits and services to their members without assuming additional financial risk. In a PFS model, MA plans could test innovative programming that addresses nonmedical needs, and if program outcomes are successfully achieved, the MA plan could then incorporate those services into their benefits packages. Additionally, PFS projects with well-defined, targeted outcomes measures would contribute to the creation of a larger evidence base to further support the value of addressing nonmedical needs in this population. Despite this potential, little is known about MA plan leaders’ perceptions or awareness of PFS. The purpose of this research was to understand MA plan leaders’ interest in uptake of PFS and the barriers and opportunities that they see to PFS adoption.



This research was an exploratory aim of a larger project that sought to understand the experiences of 1 MA plan, henceforth referred to as plan A, that had considered implementing a PFS project. For more information, see the recent study by several of this paper’s authors.14 We conducted a preliminary interview with representatives of plan A with the goal of understanding the opportunities and barriers to implementing PFS in the MA environment. We then interviewed representatives of 16 additional MA plans in an effort to see if they shared the perspectives revealed by representatives of plan A about the attractiveness of PFS and potential barriers to implementing a PFS project.


We conducted semistructured interviews with representatives from 17 MA plans around the country that represent more than 65% of MA beneficiaries nationally. Following our preliminary interview with the representatives of plan A, we began with a convenience sample of known MA contacts and solicited contact information for representatives of other plans upon completion of each interview. We continued to recruit representatives of plans with varying characteristics (ie, plan enrollment, star rating, age of organization) and geographic locations until saturation was achieved.15 For each plan, we asked to speak with those knowledgeable about the interview topics, and representatives self-identified.


Based on our preliminary interview with representatives from plan A, we designed semistructured interviews to understand MA plan representatives’ knowledge of and receptivity to PFS initiatives. We drafted the interview guide (eAppendix [available at]) and reviewed it among the project team and advisors, including research and industry experts in PFS and MA. In advance of each interview, representatives were emailed the interview guide and information about PFS. This was done to ensure that the most appropriate leaders from each plan participated in the interview and that operational definitions when discussing PFS were universally understood. Interviews were conducted over the phone and recorded (with representatives’ consent), and lasted about 1 hour. This project did not require institutional review board review as it was deemed not to be human subjects research by the Brown University Institutional Review Board.

Qualitative Analysis

Interview transcripts were qualitatively analyzed using a modified grounded theory approach to identify overarching concepts and themes.16-19 We first developed a preliminary coding scheme based on the questions asked in our interview protocol, then adjusted the scheme in an iterative process to add codes and refine code definitions. Initially, all qualitative analysis team members (4 of this paper’s authors: E.A.G., T.F.W., E.M., J.F.B.) read and individually coded the first 2 transcripts. In subsequent team meetings, we discussed and refined the coding scheme and code definitions according to how well the codes fit the transcript data. We discussed preliminary patterns that we perceived in the data and reconciled our interpretations of the first coded transcripts. We continued this process, with at least 2 team members coding each transcript independently, then meeting to reconcile codes, discuss potential themes, track prevalence of these themes across transcripts, and search for competing interpretations. During analysis, we kept a comprehensive audit trail that recorded ongoing team decisions, including selection and definitions of codes and discussion of emerging themes.17,20-23 Coded data were entered into Nvivo (QSR International; Melbourne, Australia) to allow for comparative and relational analyses across themes.


Plan and Representative Characteristics

The 17 participating plans varied in their geographic coverage, enrollment, star rating, and organizational age. Plan characteristics are provided in Table 1. Interviews were conducted with 1 to 6 participants per plan for a total of 38 representative participants. Representatives included those in upper-level management roles (eg, president, chief medical officer, vice president of medical affairs, director of health policy) who had been in their positions between 1 and 30 years.

Findings From the Interview With Plan A

Results from the preliminary interview with representatives of plan A revealed nuanced perspectives regarding PFS. Plan A made efforts to engage in a PFS model to address members’ nonmedical needs. Initially, they met with a community-based organization about providing an intervention to target food insecurity among their members. Representatives from plan A indicated that they “like the Pay for Success model” because it “mitigates [their] risk” in testing innovative services. Ultimately, however, plan A decided not to pursue the PFS approach, instead opting for a more familiar model (plan–vendor contract). Representatives from plan A noted that a major barrier to the PFS model was that the cost of a new benefit might potentially be incorporated into premiums and borne by the plan’s members, before it is known if the outcomes will be achieved: “In a [PFS] model, we don’t have confidence that if it’s not successful, then the cost to [the member] will be zero. And yet, we’ve already priced something into the plan for the end patient to pay. If we pay nothing and they have to pay something, the government’s not going to like that” (plan A).

Representatives from plan A also described hesitancy with regard to sharing data with project partners and having outcomes evaluated by an independent third party. Although such sharing is often a component of plan–vendor contracts, this was highlighted as a potential barrier to PFS. Additionally, representatives from plan A described that although they perceive PFS to be potentially valuable, they would like more of a “blueprint” for how it could be implemented before they engage in it themselves. Plan A representatives further discussed the concept of risk aversion and how uptake of PFS might be limited by the fear of “jeopardiz[ing]” their relationship with CMS—they were concerned about operating within CMS’ existing parameters. For representative quotes, see Table 2.

Findings From the Interviews With Additional MA Plans

The interviews carried out with representatives from 16 other MA plans revealed that representatives were largely unfamiliar with PFS compared with those from plan A, although they were receptive to further exploring its potential value. When probed about specific components of PFS, including willingness to share data and taking on the risk associated with an alternative payment model, representatives had varying responses. These themes are discussed here.

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