RD715 - Comparable Health Care Service Incentive Program – November 1, 2024


Executive Summary:

Pursuant to § 38.2-3462 of the Code of Virginia (Code), beginning on or after January 1, 2021, each health carrier offering or renewing a health benefit plan in the small group market in Virginia must develop and implement a Comparable Health Care Service Incentive Program (referred to in this report as the “Shared Savings Program") providing incentives for covered persons(*1) (referred to as “enrollees" in this report) to shop for comparable health care services from health care providers that are paid less than the average in-network allowed amounts for that service.

In 2023, eight Virginia health carriers participated in the program. These health carriers reduced their allowed costs of $1,099,492 to paid costs of $485,556, for a reduction of $613,936. They paid $68,280 in incentives to participating enrollees, for a net savings of $545,646. On average, participating enrollees received $38 in incentives, or 11 cents in incentives for every $1 reduction in carrier-paid costs.

When viewed over a 3-year period, carrier savings have increased steadily, reaching 56% of the original allowed in-network amounts before incentive payments in 2023. Participant benefits have declined, with savings passed to participants dropping from 21% to 11%. Participation has fluctuated significantly over the 3-year period, with a sharp decrease in 2022 followed by a rebound in 2023. The program’s penetration averaged 23% of covered persons in the small group market.

Overall, the data from the Shared Savings Program continues to show cost savings for both participating carriers and enrollees, albeit not as much for the enrollees in the most recent year as compared to the previous year.
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(*1) “Covered person" means a policyholder, subscriber, participant, or other individual covered by a health benefit plan. See § 38.2-3461 of the Code.