The Arkansas Payment Improvement Initiative: Early Perceptions of Multi-Payer Reform in a Fragmented Provider Landscape

As efforts to move away from fee-for-service payment have accelerated on both federal and state levels, public and private payers have been experimenting with different payment models. There is tremendous heterogeneity in approaches across states1-3; for example, some of these reforms only focus on Medicaid, while some include additional payers. Some rely on global payments and some on bundled payments for selected episodes.

Arkansas’ approach is novel in several ways. The Arkansas Payment Improvement Initiative (APII) is a multi-payer model combining patient-centered medical homes (PCMHs) with episodic payments for certain acute and chronic conditions. Provider participation in the PCMH is voluntary, and the episode payments system is mandatory for most populations and all providers. A health home component for individuals with more complex care needs is planned but not yet implemented.