An episode of care includes all of the services provided for a given condition or procedure and any clinically related follow-up services. When most people hear episodes of care, they think bundled payments. However, the State has instead chosen to utilize retrospective payments, which means providers will still be reimbursed via fee-for-service initially. At the end of a performance period, typically one year, the payer will identify through claims data the “quarterback” for each episode, i.e. the provider who supposedly had the most control over the cost of that episode. Payers will then calculate the average cost per episode for each quarterback and compare each provider’s costs to predetermined “commendable” and “acceptable” cost levels. Quarterbacks will then share in savings if they are below commendable levels and achieve the required quality metrics, or, if they fall above the acceptable level, they will pay part of the excess cost back to the payer. If their average costs are between the two levels, their reimbursement will not change.  

Before any cost sharing is calculated, quarterbacks will receive data reports from the payers that include their overall performance to date, comparing them to other quarterbacks in the state. Quarterbacks should begin receiving data reports six months before the performance period and quarterly throughout the performance period. 

Around July 2013, the State recruited clinicians to join three separate Technical Advisory Groups (TAGs) to help craft the details for the first three episodes of care: perinatal, total joint replacement, and acute asthma exacerbations. TAGs are groups of clinicians who identify the services to be included in each episode, the quarterback, necessary quality metrics, and factors that would result in risk adjustment for certain patients. To date, the State has finished designing eight episodes of care. The performance period for the first three episodes began January 1, 2015.