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Coming Up With The Next Big Thing

Structural changes in the health and human service value chain will make many services obsolete (or at least in need of a serious remake) over time. The growing shift in stakeholder roles—tech and pharma companies offering services, health plans providing clinical services, health systems managing health benefit plans, and national specialty contracting—is changing the “value chain.” And with it the demand for (and margins of) traditional services. For long-term sustainability, executive teams will need to look ahead and come up with the market positioning and service offerings that are in high demand and have profitability in the emerging market—the “next big thing.”

Some of the market effects of these structural changes are service specific—primary care will be redefined with new functions and delivered by different professionals in new settings. Behavioral health services will be increasingly virtual. Social services will have more funding dependent on consumer impact. Consumerism will drive transparency of price and experience information and growing non-fee for service value-based reimbursement (VBR) models will open the flood gates for tech substitution. Thinking through these changes for undiscovered market opportunities is the stuff of identifying the new market opportunities.

How does one accomplish this? Metrics-based strategy development and strategy implementation with two different areas of focus: First, optimizing the performance of current services lines and, second, developing new or enhanced services for the emerging market. Optimizing current services involves improving performance for customers and knowing when to “retire” any particular service line when it is non-performing in the portfolio. At the same time, organizations need to develop that new sustainable service line for the future.

Developing this strategic road map for future success is a challenge and implementing it even more challenging. Leading an organization that is making the shift from one business model to the next requires an executive team with the ability to manage complexity; leading operational activities and entrepreneurial initiatives at the same time. Managing in this environment requires executives who are comfortable with risk taking and uncertainty, are comfortable with tension, and—to quote Peter Drucker—”are comfortable making sacrifices of parts of the organizations for the broader enterprise.”

There are many elements to “organizational readiness” for this shift in reimbursement. OPEN MINDS Senior Associate Ken Carr provided a deep dive into that subject during a recent presentation. During the session, Mr. Carr zeroed in on one of the key elements to preparing organizations for VBR arrangements: how to build the financial management competencies needed for success. His four essentials include revenue cycle effectiveness, encounter reporting, value-based payment capabilities, and financial performance monitoring. He explained:

Assessing financial readiness for value-based reimbursement is important because moving from the fee-for-service business model to new forms of reimbursement that are tied to outcomes involves taking on new risks. Provider organizations are no longer reimbursed just for providing services. Documenting an encounter and linking it to a CPT payment code is necessary. For instance, in a pay-for-performance agreement, they need to demonstrate that they have achieved agreed upon outcomes in order to receive the maximum payment for their services, and the final payment may be delayed until the outcomes are verified by the payer. This requires the implementation of new skills sets and tools for financial managers: assessing risk, projecting cash based on new payment mechanisms, and working with the organization to support performance management around the contracted outcome goals. These four key competencies play a key role in supporting this new focus on managing financial risk:

Revenue cycle effectiveness—The ability to align operational and financial processes to assure adequate cash flow. Success relies on practicing effective processes for reconciliation of authorizations and payment verification to credentialed provider organizations. The kicker: it’s often a new and alien process to submit invoices to payers for services delivered under value-based reimbursement agreements (see Adapting Revenue Cycle Management For A VBR-Driven World).

Encounter reporting—The ability to capture, analyze, and report granular utilization data to payers and to internal teams for management. Success relies on electronically capturing and reporting reliable encounter data in the format and timeframe required by payers. The kicker: the data needs analyzed to also manage service outcomes and utilization from an in-house performance standpoint (see The Hospital Perspective On ‘Owning’ Value-Based Reimbursement and The Value Train Has Left The Station).

Value-based payment capabilities—The ability to track and manage contractual outcomes and payments. Success relies on reporting actual performance data (in the form of outcomes and financial performance) against budgets and contractual targets. The kicker: there are many types of value-based reimbursement models and different contracts require different capabilities (see Successfully Managing Bundled Rates—The Voice Of Experience).

Financial performance monitoring—The ability to monitor actual financial results against contracts, budgets, and forecasts. Success relies on a comprehensive set of key performance indicators and the ability to report incurred but not reported liabilities while monitoring service utilization and costs; with the additional ability to reconcile to service and revenue projections. The kicker: real success takes adopting a system to link population health management and value-based contracting strategies to resources planning and reporting.

For a deep dive into the many ways to understand VBR and its relationships to your current and future strategy, check out these resources from the PsychU Resource Library.

  1. The Strategic Challenges On The Road To Value-Based Reimbursement
  2. Preparing For Value-Based Reimbursement—Even Before The Contracts Are Signed
  3. Your Organization Is Ready For VBR, Now What?
  4. The Strategic Challenges On The Road To Value-Based Reimbursement

On June 17, 2019, the Centers for Medicare and Medicaid Services (CMS) approved Missouri’s application to add Certified Community Behavioral Health Organization (CCBHO) services to the state Medicaid plan. Missouri had been participating in the two-year grant-funded federal Certified Community Behavioral Health Clinic (CCBHC) demonstration program, which was to end on June 30, 2019, but was extended to September 30, 2019. Missouri submitted a Medicaid state plan amendment (SPA) to continue operating the CCBHO model. The difference between the CCHBC Demonstration project and the CCBHO SPA is mainly a change in terminology from the word “clinic” to “organization.”

The state agency will reimburse CCBHOs a clinic‐specific fee schedule rate applicable to provider organizations affiliated with the CCBHO. This funding will allow the current 15 CCBHOs to continue to receive a prospective payment for behavioral health services provided to certain Medicaid enrollees.

The CCBHO services include the following:

  1. Crisis mental health services
  2. Screening, assessment, and diagnosis
  3. Patient-centered treatment planning
  4. Outpatient mental health and substance use disorder treatment services
  5. Screening and monitoring of health risks and status
  6. Targeted case management
  7. Psychiatric rehabilitation
  8. Peer and family support services

PsychU last reported on this topic in “CCBHCs In 8 States Projected To Serve 380,000 Individuals In First Year” which published on November 26, 2019. The article is available at https://www.psychu.org/ccbhcs-8-states-projected-serve-380000-individuals-first-year/.

For more information, contact: Debra Walker, Director of Public and Legislative Affairs, Missouri Department of Mental Health, 1706 East Elm Street, Jefferson City, Missouri 65101; 573-751-1647; Email: debra.walker@dmh.mo.gov; Website: https://dmh.mo.gov/ or https://dmh.mo.gov/CertifiedCommunityBehavioralHealthClinics.htm.

On August 5, 2019, the Louisiana Department of Health (LDH) announced that it selected AmeriHealth Caritas Louisiana, Community Care Health Plan of Louisiana (Healthy Blue), Humana Health Benefit Plan of Louisiana, and United Healthcare Community Plan of Louisiana for Medicaid managed care organization (MCO) contracts for the Healthy Louisiana program. The contracts begin January 1, 2020. The initial term ends on December 31, 2022, followed by a 24-month extension option.

LDH released the request for proposals (RFP 3000011953) on February 25, 2019. Proposals were due by April 29, 2019. This is the third procurement cycle for the state’s Medicaid managed care program. The incumbents are Aetna Better Health, AmeriHealth Caritas Louisiana, Healthy Blue, Louisiana Healthcare Connections (a Centene subsidiary), and United Healthcare Community Plan of Louisiana. During fiscal year 2018, Medicaid paid the five incumbents $7.6 billion to manage care for more than 1.7 million enrollees. Their contracts expire on December 31, 2019.

On May 1, 2019, LDH stated it received six responses from the following organizations: Aetna Better Health of Louisiana, AmeriHealth Caritas Louisiana, Healthy Blue, Humana, Louisiana Healthcare Connections, and UnitedHealthCare Community Plan of Louisiana. Incumbents Aetna and Louisiana Healthcare Connections were not selected for new contracts. LDH anticipates completing negotiations and executing contracts on or about August 23, 2019. Open enrollment will begin in November 2019.

In the procurement, LDH asked the bidders to identify baseline health outcome measures and targets for health improvement; explain how they intend to measure population health status and identify sub-populations; and indicate how they would identify determinants of health outcomes and strategies for targeted interventions to reduce disparities. Additionally, LDH requested information about the proposer’s recent experience using data regarding social determinants of health to improve the health status of targeted populations. LDH asked them to describe their data collection approach and how this approach can be applied to one or more of the state’s population health priorities. LDH increased MCO requirements in terms of access to and the use of primary care, as well as the integration of physical and behavioral health care services. Additionally, LDH sought proposals for an optional community health worker pilot program with the larger focus of improving population health.

In the “Healthy Louisiana RFP 3000011953 Summary Score Sheet” the state presented each bidder’s score for each of the evaluation components. Of a maximum 1,500 points, the scores from highest to lowest were as follows:

  1. AmeriHealth Caritas Louisiana earned 867.507 points.
  2. Humana earned 818.766 points.
  3. Healthy Blue earned 711.944 points.
  4. UnitedHealthCare Community Plan earned 705.800 points.
  5. Aetna Better Health of Louisiana earned 668.601 points.
  6. Louisiana Healthcare Connections earned 621.000 points, which did not meet the minimum score. This proposal did not proceed to the Louisiana Veteran and/or Hudson Initiative evaluation, and was rejected.

PsychU last reported on this topic in “Louisiana Rebids Medicaid Managed Care Contracts,” which published on April 1, 2019. The article is available at https://www.psychu.org/louisiana-rebids-medicaid-managed-care-contracts/. For more information, contact:

  • Bob Johannessen, Communications Director, Bureau of Media & Communications, Louisiana Department of Health, Post Office Box 629, Baton Rouge, Louisiana 70821-0629; 225-342-5275; Fax: 225-342-5568; Email: robert.johannessen@la.gov; Website: http://ldh.la.gov/
  • Corporate Communications, Amerihealth Caritas Louisiana, Post Office Box 83580, Baton Rouge, Louisiana 70884; 215-863-6780; Website: https://www.amerihealthcaritasla.com/index.aspx
  • Healthy Blue Louisiana Medicaid, 4425 Corporation Lane, Virginia Beach, Virginia 23462; 757-490-6900.; Email: MPSInquiries@healthybluela.com; Website: https://www.myhealthybluela.com/la/louisiana-home.html
  • Mitch Lubitz, Corporate Communications Lead, Humana, 1863 Hendersonville Road, Asheville, North Carolina 28803; 828-772-3093; Email: mlubitz@humana.com; Website: https://www.humana.com/
  • United Healthcare Community Plan of Louisiana; 866-675-1607; Website: https://www.uhccommunityplan.com/contact-us

On July 9, 2019, MVP Health Care announced that beginning in early 2020, it will directly administer case management, utilization review, claims payment, and network management for all of its New York members that use behavioral health services. MVP Health Care currently contracts with Beacon Health Options to manage behavioral health benefits for MVP members; this contract will end. By directly managing behavioral health benefits, MVP Health Care anticipates that the new structure will best support the coordination and integration of primary care and behavioral health services.

MVP is working collaboratively with Beacon Health Options to ensure that all areas of care delivery are transitioned seamlessly, with continuity of care for members being a primary focus. Member benefits during 2019 will not be affected. During the transition period, MVP is building its own behavioral health network comprised of Beacon’s current provider organization network and other services deemed essential to MVP’s integrated health vision.

The new in-house behavioral health management will complete this launch in early 2020. MVP believes that by managing the services itself, it will be able to establish policies to strengthen coordination between medical and behavioral services, improve access to behavioral health care, provide more personalized services and supports, and streamline provider organization reimbursement.

MVP has 700,000 members across New York and Vermont. MVP Health Care’s lines of business include Medicaid, Medicare, and insurance for employer groups as well as individuals and families.

Beacon Health Options is a leading behavioral health services company that serves approximately 36 million individuals across all 50 states. Beacon works with employers, health plans and government agencies to provide robust mental health and addiction services through innovative programs and solutions that improve the health and wellness of people every day. Beacon is a national leader in the fields of mental and emotional well-being, addiction, recovery, and employee health. On June 6, 2019 Anthem Inc, announced plans to acquire Beacon Health Options from Bain Capital Private Equity and Diamond Castle Holdings. The acquisition is expected to close in the fourth quarter of 2019.

For more information, contact:

  • Michelle Golden, Public Relations Professional, MVP Health Care, Inc., 625 State Street, Schenectady, New York 12305; 518-386-3467; Email: mgolden@mvphealthcare.com; Website: https://www.mvphealthcare.com/
  • Tina Beckwith, Senior Vice President, Marketing & Communications, Beacon Health Options, 200 State Street, Boston, Massachusetts 02109; 860-338-0164; Email: tina.beckwith@beaconhealthoptions.com; Website: https://www.beaconhealthoptions.com/anthem-to-acquire-beacon-health-options/

Well, the results are in. A survey of the health plans focused on their management approaches for better serving consumers with behavioral health disorders and complex support needs brought a few results that surprised even me. The big takeaways? Specialty care coordination, access, and value-based partnerships are at the top of the list.

The survey results were published in a new report, Trends in Behavioral Health: A Population Health Manager’s Reference Guide on the U.S. Behavioral Health Financing and Delivery System, issued from the collaborative efforts of Otsuka America Pharmaceutical, Lundbeck, and our team at PsychU Resource Library. This is the second survey of every U.S. health plan—commercial, Medicaid, and Medicare—and for strategists, a great snapshot of where health plans are now compared to just 24 months before. Here is a summary of some of the “big picture” findings.

Innovative approaches to care coordination are growing—Health plans are investing in specialized approaches to managing the care coordination of consumers with complex needs. The proportion of health plans reporting specialty care coordination programs increased from 23% to 73% in two years. There were also increased use of behavioral health readmission prevention programs (from 15% to 89%) and emergency department diversion programs for (from 15% to 58%).

Moving beyond pay-for-volume—Value-based benefit reimbursement for behavioral health and for complex consumers continued to increase. The health plans reporting using some pay-for-performance reimbursement increased from 86% of all health plans to 93%. But the more important development was in the use of reimbursement models with more risk. Bundled payments have increased from 39% to 59%; 60% of health plans reported using case rates and 64% had some form of provider capitation.

Consumer access to behavioral health is key—Developing access strategies that help consumers get behavioral health services faster is high on the list. Eighty-five percent of health plans are using telehealth and 70% have instituted “quick access” programs; 78% are providing support for appointment scheduling.

And, beyond improving access for consumers who self-identify with behavioral health needs, 84% of health plans reported having strategies to identify consumers with behavioral health needs (compared to 16% in 2017) and promote early intervention. This reflects a growing trend to use analytics to identify those consumers, with 90% of health plans making an investment in population health-focused analytic systems.

For consumer engagement, think technology—Health plans are increasing their investment in consumer engagement, with significant increases in engagement-focused technologies. Fifty-nine percent have adopted some type of engagement strategy for consumer with complex needs, 35% of health plans reported investing in on-line tools (up from 21% in 2017). Investment in mobile apps went from 9% to 38% in the same time period, and consumer self-management tools are up from 15% to 23%.

Investment in initiatives to improve quality of care for consumers with behavioral health conditions growing—In addition to these investments in care coordination, access, and engagement, health plans also reported investing in several programs to improve quality of care. Health plans reported exploring a number of concepts: behavioral health centers of excellence (85% of plans), patient-centered medical homes (86%), peer-directed service credentialing (51%), peer-directed service network inclusion (51%), provider rating transparency (53%), provider cost transparency (52%); and narrow tiered network designs (63%).

At this point in time, the programs that health plans put in place to serve consumers with chronic conditions and complex needs are critical to provider organization strategy. There are two related reasons—most of those consumers get their health services through a health plan and those consumers use about 90% of the service resources.

So, what are the implications for provider organizations strategy? First, consumer performance metrics are critical to be a preferred health plan partner—how easily (and fast) can consumers get appointments? How engaged are those consumers in managing their health? And, the ability to accept non-traditional reimbursement (performance-based, value-based, etc.) is a requirement—particularly for competing for contracts for the more innovative programs. Lastly, the impact of technology on the consumer care continuum continues, with more disruption to traditional services models ahead.

For a very deep dive, download your own copy of the new survey results—Trends in Behavioral Health: A Population Health Manager’s Reference Guide on the U.S. Behavioral Health Financing and Delivery System. And for more on marketing to and managing your relationships with health plans, check out these resources from the PsychU Resource Library:

  1. The Impact Of Opioid Use Disorders & The National Response
  2. Adjust Your Strategic Sails!
  3. The Five-Step Process To Demonstrate Your “Performance” To Health Plans
  4. Becoming A ‘Blue Chip’ Provider Organization

Forty states and the District of Columbia (D.C.) have passed laws that expanded telemedicine coverage or reimbursement since 2017. Those states that have not expanded coverage include Alabama, Colorado, Idaho, Michigan, Montana, New Mexico, Ohio, Oklahoma, South Carolina, and West Virginia.

These findings were presented in “2019 State of the States Report: Coverage and Reimbursement,” by the American Telemedicine Association (ATA). Researchers for the ATA reviewed consumer settings, different technologies, provider organization types, and unique policies regarding reimbursement and coverage of telehealth services in the 50 states and D.C. The goal was to determine trends in telehealth coverage, parity policies, provider organization restrictions, and telehealth limitations in the U.S.

Additional findings include:

  • 36 states and D.C. have parity policies for private payer coverage; only 21 states and D.C. have coverage parity policies in Medicaid.
  • 13 states have not adopted private payer parity policies: Alabama, Florida, Idaho, Illinois, Louisiana, Massachusetts, North Carolina, Ohio, Pennsylvania, South Carolina, West Virginia, Wisconsin, and Wyoming.
  • 28 states have Medicaid payment parity policies; only 16 mandate payment parity for private payers.
  • 19 states have not adopted parity policies: Alabama, Alaska, Arizona, Connecticut, Florida, Georgia, Idaho, Illinois, Louisiana, Michigan, Montana, New Hampshire, Ohio, Oklahoma, Pennsylvania, Rhode Island, Virginia, Washington, and West Virginia.
  • The majority of states have no restrictions around eligible provider types: 10 states (Arizona, Connecticut, Delaware, Georgia, Idaho, Kansas, Kentucky, Minnesota, New York, and Wyoming) have authorized six or more types of provider organizations to treat consumers through telehealth. Some of the more common telehealth provider types include: physicians, physician assistant, nurse practitioner, licensed mental health professional, occupational therapist, physical therapist, psychologist, and/or dentist.
  • Only 16 states limit telehealth to synchronous technologies (the delivery of health information in real-time), while most of the country recognizes the benefits of remote patient monitoring (RPM) and store and forward (S&F). RPM is a technology to enable monitoring of consumers outside of conventional clinical settings. S&F is the collection of clinical information to send electronically to another site for evaluation.

The full text of “2019 State of the States Report: Coverage and Reimbursement” was published July 18, 2019 by the American Telemedicine Association (ATA). An abstract is available online at https://www.americantelemed.org/initiatives/2019-state-of-the-states-report-coverage-and-reimbursement/ (accessed August 12, 2019).

PsychU last reported on telemedicine payment coverage in “Health Plan Telemedicine Visit Volume Increased 52% Per Year Between 2005 & 2017,” which published on May 6, 2019. The article is available at https://www.psychu.org/health-plan-telemedicine-visit-volume-increased-52-per-year-between-2005-2017/.

For more information, contact: Amy Gaddis, Director, Marketing and Communications, American Telemedicine Association, 901 North Glebe Road, Suite 850, Arlington, Virginia 22203; 703-373-9600; Email: agaddis@americantelemed.org; Website: https://www.americantelemed.org/

Copayments and deductibles used to be a small issue. The $1 here or $20 there. Not anymore. Consumers now pay 30% of total health care costs.1 There are now health plans with $7,150 deductibles for individuals and twice that for families.2

3Overall consumer out-of-pocket (OOP) for hospital services rose 12% during 2018 across inpatient, outpatient, and emergency department services; average OOP costs rose from $1,813 in the fourth quarter of 2017 to about $2,030 in the fourth quarter of 2018. The share of consumers with average per-visit OOP costs above $501 also rose, from 51% in 2017 to 64% in 2018. The rising costs for all three settings were:

    1.  Inpatient OOP costs averaged $4,659 in 2018, up 14% from $4,086 in 2017.
    2.  Outpatient OOP costs averaged $1,109 in 2018, up 12% from $990 in 2017.
    3.  Emergency department visit OOP costs averaged $617 in 2018, up 7% from $577 in 2017.

One of the results of these rising consumer costs has also surprised me—Americans are using crowdfunding to pay their bills. The Los Angeles Times recently reported on one family that resorted to “T-shirt sales, a home run tournament, a benefit concert and an online GoFundMe campaign” to raise funds for a boy who needed 53 surgeries and 800 days in the hospital.4

The rise in consumer payments has also gotten the attention of legislators and policy makers, including a push in Congress “to end surprise medical bills, curb high prices for medicines, and limit prescription copays for people with Medicare”.5 The Trump Administration has also proposed new rules to provide consumers more transparency about the prices hospitals charge insurers6, while a new California policy has stopped surprise medical bills7, which are defined by The Brookings Institution as when consumers “receive care from out-of-network providers that they did not choose” and “receive a “surprise” out-of-network bill”.8

The question for many provider organization executives is how to factor a larger proportion of revenue coming from consumer OOP? How do you ensure that you can collect the payments? Most executive teams don’t think about consumers paying for services because we have long had a health care financing system that relies on third-party payment. In an environment that relies more heavily on consumer OOP, provider organizations need the ability to estimate those expenses, present a bill at the point of service, and collect immediately. Success relies on having policy and procedures in place that recognize why consumers might not pay, and identifying the right timing for the right assertiveness in collecting those payments.

How to prepare? Joseph P. Naughton-Travers, Senior Associate at OPEN MINDS noted that provider organization managers need to focus on three key elements:

Invest in a good electronic health record and billing system—Provider organizations can’t be successful at collections if they can’t keep track of exact amount consumers owe for their portions of payment.

Collect in real time—Policy and practice should be focused on collecting payment; in advance if possible, or immediately at the time of service.

Cash isn’t the only payment option—Invest in the infrastructure necessary to accept credit cards or other forms of payment. Provider organizations can also partner with a company that offers credit services to aid consumers in paying for services (this is commonly done in dentist and other doctor settings).

For more, check out these resources from the PsychU Resource Library:

    1. Integration, Interoperability & Consumer Engagement
    2. The Next Wave Of Consumer Price Shopping For Health Care
    3. Make Change Or Be Changed
    4. The Big Rewards Of Health Care Through The Consumer Lens
    5. Answering The Question – Who Can Afford Their Health Services?

Since the signing of the Patient Protection and Affordable Care Act (PPACA), accountable care organizations have grown in popularity, with 17.2 million beneficiaries in commercial ACOs and 14.6 million in Medicare ACOs. But there is another category that, while slower in growth, has gained an increasing amount of support at the state level—Medicaid ACOs.

At the start of 2018, there were 1,000 ACOs covering 32.7 million consumers—approximately 11% of the U.S. insured population (294.6 million)—under 1,477 different.1 According to a new report from Leavitt Partners, by the end of 2018 there were 1,013 ACOS, 86 of which were Medicaid ACOs and covering 3.7 million lives (or 5% of the Medicaid population.2 While this doesn’t seem like much, in the last three years the number of Medicaid ACOs has grown by 40% and are now present in 13 states.

And a quick scan of the environment finds examples of states continuing to make big investments in this model. This summer, the Oregon Health Authority (OHA) announced its intent to award 15 organizations contracts, valued at $6 billion, to serve as Medicaid coordinated care organizations (CCO) for the Oregon Health Plan. If you are unfamiliar with it, the CCO model was established in 2012; the CCOs were required to subcontract with the public behavioral health system in each county, and by 2024, 70% or more of CCO payments will be through value-based reimbursement. CCOs will also be required to spend 12% of total medical expenditures on primary care by 2023.3

In Minnesota, the Department of Human Services (DHS), Health Care Administration issued a request for proposals (RFP) to expand Medicaid Integrated Health Partnerships (IHP) with new care delivery models in new geographic regions (see Minnesota To Expand Medicaid Integrated Health Partnerships With New Care Delivery Models In New Geographic Regions). Now in its sixth year, the IHP program has grown from 11 sites and 100,000 beneficiaries, to 24 sites and 460,000 beneficiaries, as well as achieved $213 million in savings.4

Why this push? It’s in the numbers. 5According to a recent report from RTI International on states participating in the SIM Initiative, ACO programs in Maine, Vermont, and Minnesota had a positive impact on emergency department visits:

  1. Reduced the rate of overall emergency department visits by 3% (Maine), 5% (Vermont), and 7% (Minnesota)
  2. Reduced the rate of emergency department visits for beneficiaries with behavioral health conditions by 2% (Maine), 6% (Vermont), and 5% (Minnesota)

There is specific market challenge for specialty provider organizations with a high proportion of revenue from Medicaid in those states with pending Medicaid ACOs. ACO models are largely driven by hospital systems—and have a history of “building” specialty services rather than “buying” them. Executives of these specialty provider organizations will need to understand the ACO “roadmap” in their state and develop a strategy to “plug into” that new consumer service system.

For more specifics on Medicaid ACO models, see Helping ACOs Fill In The Complex Consumer Blanks. And for more on the market impact of ACOs and related market strategy, check out these resources in the PsychU Resource Library:

  1. How To Build Successful ACO Health Plan Partnerships
  2. Building The ‘Next Generation’ Behavioral & Social Service ACO
  3. New ACO Developments, Same Challenges
  4. 62% Of ACOs Launched In 2012 Implemented Behavioral Health Initiatives
  5. 61% Of ACO Contracts Only Include Upside Financial Risk
  6. Most ACOs Not Ready For Two-Sided Risk Model
  7. Half Of ACOs Consider Exiting MSSP Over New Downside Risk Rules

1 https://revcycleintelligence.com/news/after-a-slow-2017-acos-grow-and-expand-their-contracts-in-2018

2 https://leavittpartners.com/press/leavitt-partners-releases-the-medicaid-aco-landscape-white-paper/

3 https://www.chcs.org/we-need-more-data-on-medicaid-acos-to-determine-drivers-of-success/

4 https://tincture.io/sdoh-doncha-know-innovation-lessons-from-minnesotas-medicaid-aco-program-30f5ed7e6ed6

5 https://downloads.cms.gov/files/cmmi/sim-rd1-mt-fifthannrpt.pdf

In 2018, one-third of accountable care organizations (ACOs) had at least one contract with downside risk of loss if they failed to meet savings targets. In 2012, 28% of ACOs had contracts with two-sided risk. The ACOs taking on downside risk were less likely to be physician-led, and were more likely to have previous experience with risk-bearing contracts in the past.

These findings were reported in “ACO Contracts With Downside Financial Risk Growing, But Still In The Minority” by Kristen A. Peck, Benjamin Usadi, Alexander J. Mainor, Elliott S. Fisher, and Carrie H. Colla. The researchers are affiliated with Dartmouth’s Geisel School of Medicine; the study was published in the July 2019 issue of Health Affairs. The researchers analyzed the National Survey of ACOs to identify trends in ACO structure and contracts for 2012 through 2018. The survey was sent to 862 ACOs of the 1,011 operating in 2018; about 55% responded to the survey.

According to a press release issued by the Dartmouth Institute about the study findings, “In 2018, there were more than 1,000 ACOs nationally, covering an estimated 33 million lives and including more than 1,400 different payment arrangements.” The researchers found that the ACOs with two-sided risk contracts were more likely to have participating provider organizations experienced with other types of alternative payment agreements.

Between 2012 and 2018, the number of Medicare ACOs rose from 154 in 2012 to 561 in 2018. However, the share accepting downside risk has not grown at the same pace. The researchers concluded that success of the ACO model may need stronger financial incentives. They noted that the proportion of ACOs taking on downside risk is likely to increase because the Pathways to Success program requires ACOs to move toward risk bearing more quickly.

The full text of “ACO Contracts With Downside Financial Risk Growing, But Still In The Minority” was published in the July 2019 issue of Health Affairs. An abstract is available online at https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2018.05386?journalCode=hlthaff (accessed August 5, 2019).

PsychU reported on the new Pathways to Success model in “CMS ‘Pathways To Success’ Medicare ACO Overhaul Limits ACO Time Without Risk” on January 28, 2019. The article is at https://www.psychu.org/cms-pathways-success-medicare-aco-overhaul-limits-aco-time-without-risk/.

For more information, contact:

  • Tim Dean, Research Communications Manager, Office of Communications and Marketing, Geisel School of Medicine, 1 Rope Ferry Road, Hanover, New Hampshire 03755-1404; 603-650-1225; Email: timothy.s.dean@dartmouth.edu; Website: https://geiselmed.dartmouth.edu/
  • Sue Ducat, Director of Communications, Health Affairs, 7500 Old Georgetown Road, Suite 600, Bethesda, Maryland 20814; 301-841-9962; Email: sducat@projecthope.org; Website: healthaffairs.org/1520_staff.php

The Centers for Medicare & Medicaid Services (CMS) has changed how it will manage the overlap between the Bundled Payments for Care Improvement (BPCI) Advanced program and the Medicare Shared Savings Program (MSSP) accountable care organizations (ACOs). For Model Year 3, which starts on January 1, 2020, provider organizations participating in both an Enhanced ACO (Track 3) and BPCI Advanced (BPCI-A), when they treat a beneficiary receiving services in a BPCI Advanced bundle, the reconciliation will attribute the beneficiary to the owner of the bundle, not to the ACO. Previously, overlap beneficiaries were attributed to the ACO.

The revision accounts for changes to ACOs due to the Pathways to Success ACO initiative and addresses how Medicare will avoid overlap and “double counting” of beneficiaries attributed to an ACO as well as who receives a BPCI-A clinical episode of care from a provider organization participating in BPCI-A. This change only affects Enhanced ACOs; NextGen ACOs will still take precedence over the BPCI-A program.

CMS discussed the changes in “Medicare Bundled Payments For Care Improvement Advanced Model Year 3: General Frequently Asked Questions (FAQ) –Update June 2019.” For purposes of Model Year 1 and 2 Reconciliation calculations, BPCI Advanced includes expenditures for items and services furnished to beneficiaries assigned to SSP Tracks 1, 1+, 2, and the Pathways to Success ACO BASIC track (all levels A through E). Items and services furnished to beneficiaries aligned to Pathways to Success Enhanced track ACOs (formerly known as Track 3) will be excluded from reconciliation calculations.

For participants with clinical episodes, the span between BPCI model years 2 and 3, CMS will apply the BPCI Advanced Model Year 1 and 2 MSSP overlap policy to clinical episodes with a date of discharge from the anchor stay or completion of the anchor procedure on or prior to December 31, 2019. BPCI clinical episodes that have a date of discharge from the anchor stay or completion of the anchor procedure on or after January 1, 2020, will fall under the BPCI Advanced Model Year 3 MSSP overlap policy.

Prior to this, clinical episodes in BPCI Advanced were excluded for Medicare beneficiaries aligned to Next Generation ACOs, ACOs participating in the Vermont Medicare ACO Initiative, Track 3 MSSP ACOs, or organizations participating as Comprehensive End Stage Renal Disease Care (CEC) Seamless Care Organizations with downside risk. The BPCI clinical episodes were not excluded for beneficiaries attributed to an ACO in tracks previously called Tracks 1, 1+, and 2.

In BPCI Advanced Model Year 3, ACOs can participate in BPCI Advanced as a Convener Participant. Health care provider organizations participating in BPCI may also add ACOs to the BPCI financial arrangements list (FAL) as an organization with which the BPCI participant has a financial arrangement. Beginning January 1, 2020, health care provider organizations participating in BPCI Advanced model year 3 will take precedence over Medicare ACOs in the enhanced track, which has the most downside risk.

Under BPCI Advanced, risk-bearing entities called Convener Participants or Non-Convener Participants enter into direct agreements with CMS. Individual “Participating Practitioners” are Medicare-enrolled physicians and non-physician clinical professionals who participate in BPCI Advanced by furnishing direct care for Medicare fee-for-service beneficiaries during a BPCI clinical episode. The Participating Practitioners enter into agreements with the Convener and Non-Convener Participants. A clinical episode generally triggers the start of the bundle.

However, not every Medicare beneficiary triggers a clinical episode because of beneficiary eligibility exclusions. BPCI Advanced excludes clinical episodes for Medicare beneficiaries covered under United Mine Workers or managed care plans; beneficiaries eligible for Medicare because they have end stage renal disease (ESRD); beneficiaries for whom Medicare is not the primary payer; and beneficiaries who die during the episode Anchor Stay or Anchor Procedure.

PsychU last reported on the ACO changes in “CMS ‘Pathways To Success’ Medicare ACO Overhaul Limits ACO Time Without Risk,” which published on January 28, 2019. The article is available at https://www.psychu.org/cms-pathways-success-medicare-aco-overhaul-limits-aco-time-without-risk/.

For more information, contact: Office of Communications, Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244; 202-690-6145; Email: press@cms.hhs.gov; Website: https://www.cms.gov/

Many executive teams of specialty provider organizations are working to iron out preferred relationships with health plans – relationships that are most often anchored in some type of pay-for-performance or value-based model. Getting contracts for these new relationships is only part of the story, actually successfully managing the contracts is other half of equation.

So what is involved with success with value-based arrangements? Ken Carr, a Senior Associate at OPEN MINDS explains how to build an infrastructure that supports performance management. Mr. Carr outlines four types of outcomes that every organization needs to focus on to build a performance management infrastructure that is capable of supporting VBR.

Contract-Specific Performance Measures – These measures are the floor for success in measuring value. They will vary based on contracts with payers—and reflect what those payers see as the most important and most costly. Health plans and accountable care organizations will be focused on the outcomes they are accountable for to achieve to receive maximum reimbursement, making these measures paramount to the contact’s success. This may appear to be the most straightforward type of performance outcomes for a provider organization to track, but most organizations are working with multiple payers, health plans, and programs—each with their own set of measures. For an organization that contracts with multiple health plans and accountable care organizations; has multiple contracts with each of those health plans; manages a health home; receives grants with program-specific measures; and/or participates in other state programs—these standard contract-specific measures quickly add up. To manage these requirements, organizations need to have a robust technology and operational infrastructure in place for tracking and reporting on all these measures.

Routine Services & Transactions – Routine performance measures are about fulfilling the baseline expectations of running a successful business—making services convenient and affordable. Over the past decade, consumers have come to view health care like any other service, and this has shifted expectations. Organizations need to have services and programs that are easily accessible and meet the needs of consumers—the traditional processes and programs may no longer be what consumers want, making it necessary to adapt and meet consumers “where they are,” not where you think they should be. Organizations can measure their service offering by tracking the number of inquiries, inquiry response time, inquiry conversion rates, time to appointment, and service/program costs.

Great Customer Service – The health and human service market is increasingly driven by consumerism. As consumers are responsible for more of their health care costs, consumer price transparency is becoming the standard and consumer experience and engagement have become an essential component of service delivery. For provider organizations management teams, measuring good customer service is about keeping consumers satisfied in all their interactions with your organization so that you can create “passionate advocates” of your brand. To do this, organizations need to develop a written service strategy to ensure consistency of consumer experience and cultivate consumer loyalty. Start this process by reviewing processes and procedures to ensure that workflow is designed from a consumer experience perspective. The goal is to make consumers feel valued and satisfied in their interactions with your organizations—not like they are simply another “transaction.”

Cutting-Edge Expertise – As the “expert”, consumers expect provider organizations to be their advisor on the latest medical science and best practices. Organizations and clinical professionals have a responsibility to understand the new science in their area of specialization and to evaluate emerging treatment models and technologies in a timely manner, and wherever possible integrate those innovations into their program models. Clinical expertise and innovation is the foundation for all clinical outcome measures, with the ultimate goal that organizations can deliver a consistent treatment model that produces consistent results without unexplained variability in clinical performance outcomes.

Is your organization ready to measure and manage under this new value equation? For most specialty provider organizations, the answer isn’t simple. Many organizations have put forth a lot of effort into getting up to speed on contract-specific performance measures, leaving behind the others. But all four of these types of outcomes fold together and build on one another—and you can’t successfully manage a value-based contract without a focus on the four as a unit.

Check out some of our new resources on performance-based contracting:

  1. Successfully Managing Bundled Rates-The Voice Of Experience
  2. Where Wellness & Prevention Fit In A Value-Based World
  3. Implementing Measurement-Based Care-From Idea To Action
  4. Developing Case Rates? Better Find Your ‘Single Source Of Truth’
  5. Why Clinical Guidelines Matter More With Risk-Based Contracting
  6. Most Common Data Exchange For Office-Based Physicians – Referrals, Lab Results & Medication Lists
  7. Ready For Risk? How Would Your Team Answer That Question?

Last year, PsychU reported that voters in three states—Idaho, Nebraska, and Utah—passed ballot initiatives to fully expand Medicaid to individuals up to 138% of the federal poverty level (see Voters In Idaho, Nebraska & Utah Passed Ballot Measures To Expand Medicaid). Despite what appears to be similar initiatives, each state has chosen their own path to implement the Medicaid expansion. And what this means for provider organizations is a continued bifurcation of state Medicaid programs, bringing along its own set of challenges.

What exactly is happening?

Nebraska

Nebraska plans to extend benefits to the Medicaid expansion population beginning in October 2020. Although the state submitted a state plan amendment to the Centers for Medicare & Medicaid Services (CMS) to expand Medicaid, the state also intends to submit a 1115 waiver application. The application will create a non-traditional Medicaid expansion program based around two benefit packages – a Basic benefit package and a Prime benefit.

The Basic benefit package will include most Medicaid services except vision, dental, and over-the-counter medications. The Prime package will include these services. In order to qualify for Prime after the first year, enrollees will have participated in active care and case management, selected a primary care provider, and had a wellness check-up. In year two, individuals will need to continue to meet these requirements, as well as 80 hours of community engagement activities to retain Prime coverage. Individuals who do not meet the requirements will return to the Basic benefit.

Idaho

Idaho also intends to expand Medicaid to individuals up to 138% of the federal poverty level (FPL), but plans to allow the expansion population the choice of financing and delivery systems. The state is in the process of collecting public comments on a 1115 demonstration waiver that will allow individuals with income between 101-138% of the FPL to choose between enrolling in a health insurance marketplace plan and receiving tax credits or enrolling in traditional Medicaid. Medicaid expansion will occur on January 1, 2020 and if the waiver is not approved, everyone will be enrolled in traditional Medicaid.

Utah

Utah has a multi-step expansion plan that began on April 1, 2019 with the Bridge Plan. The state legislature chose to only expand Medicaid to individuals up to 100% of the FPL instead of the full 138% and if enrollment exceeds the state budget targets, enrollment can be closed. Currently these individuals are receiving full coverage through the fee-for-service (FFS) system. Individuals will be enrolled in the Medicaid health plans where available starting in January 2020. The state is also considering testing the integration of physical and behavioral health financing for this population. In January 2020, the state will also implement community engagement/work requirements.

This month, the state will also submit a 1115 waiver to CMS known as the Per Capita Plan. The plan will continue the expansion of Medicaid coverage to adults up to 100% FPL and will request the following provisions: work/self-sufficiency requirement, authority to cap expansion enrollment, up to 12-month continuous eligibility, required enrollment in employer’s plan with premium reimbursement, lock-out for intentional program violation, use federal funds for housing supports, and use of federal funds limited by per capita cap. If this request is not approved by CMS by January 2020, the state will submit the Fallback plan, which expands coverage up to 138% of the FPL and includes a self-sufficiency requirement, require enrollment in employer’s plan with premium reimbursement, and lock-out provision for intentional program violations. Finally, if this is not approved by July 2020 then the state will implement a traditional expansion.

While these approaches may seem disparate what they all have in common is that they put an above average administrative burden on consumers and provider organizations. In Idaho, the onus is put on the consumer to educate themselves and understand the difference between the health insurance marketplace and Medicaid. In Utah and Nebraska, not only do consumers have to apply for and maintain eligibility for services, they have to report meeting work requirements. And in Nebraska, they have to understand the point of participating in care coordination and how it effects their benefits.

Because of this increased complexity, consumer education in the selection of and use of benefit plans is needed. While the state will be required to provide some education, most of the burden will fall on provider organizations. Provider organizations first need to educate staff on these new requirements and then provide coaching and materials to staff to help explain the programs to consumers.

Finally, in the case of Utah, we are seeing the first test of a cap on the per person contribution the federal government will take towards Medicaid. Some may even argue, that is the first move towards transitioning Medicaid from an entitlement program. Whether or not the per capita cap will be approved remains to be seen (and its likely to be challenged). But, it represents the increasing bifurcation among state thinking on Medicaid and some states are pressing models that limit spending and enrollment in state Medicaid programs. For example, Tennessee is planning to seek federal approval to turn their program into a Medicaid block grant (see Tennessee To Seek Medicaid Block Grant). This will likely increase the uninsured/underinsured population and result in a higher need for safety-net services.

During the first year of the federal Comprehensive Primary Care Plus (CPC+) demonstration, which began in 2017, the median supplemental care management payments from the 63 participating payers to the 2,905 participating practices, with 13,209 clinical professionals, exceeded $32,000 per professional. For primary care practices participating in Track 1, the median care management fees exceeded $88,000, or about $32,000 per primary care professional. For practices participating in Track 2, the median care management fees exceeded $195,000, or about $53,000 per primary care professional.

For both tracks, about 76% of care management fee payments were for about 2.2 million Medicare fee-for-service (FFS) beneficiaries who represented about 36% of consumers served by the CPC+ practices. The remaining 24% of total care management fees were paid by state Medicaid plans or commercial insurers. In addition to care management fees, CMS and most other payers also provided CPC+ practices with payments to reward performance on utilization of service, cost, and/or quality-of-care measures.

These findings were reported in “Independent Evaluation of Comprehensive Primary Care Plus (CPC+): First Annual Report” by Deborah Peikes, Grace Anglin, Mary Harrington, Arkadipta Ghosh, Kristin Geonnotti, et al. This is the first-year CPC+ report submitted to CMS. The researchers focused on practice and provider organization participation, supports the practices received, how practices implemented CPC+ and changed the way they delivered services, and the impact of CPC+ on cost, service use, and limited claims-based quality-of-care outcomes for attributed Medicare FFS beneficiaries.

CPC+ is a five-year nationwide, multi-payer primary care medical home (PCMH) model that launched in January 2017. In total, 3,070 primary care practices located in the 18 CPC+ regions have joined CPC+ as well as 79 payers. During the first year, 2,905 practices participated; these practices have 13,209 primary care professionals who serve about 15 million consumers, including about 2.2 million Medicare FFS beneficiaries, and 3.3 million attributed by other payers. The remaining 9.7 million consumers were not attributed by a CPC+ participating payer, were covered by a non-participating payer, or were uninsured. The participating practices range in size from one to 80 primary care professionals.

The CPC+ participating practices help consumers, including those with serious or chronic diseases, achieve their health goals; provide consumers with 24-hour access to care and health information; deliver preventive care; engage consumers and families in self-care; and collaborate with hospitals and other clinicians, including specialists, to provide better-coordinated care. The payers have agreed to use a similar methodology to reimburse the CPC+ participants for delivering the PCMH services. The payers provided the CPC+ practices with enhanced and alternative payments, data feedback, and learning activities to support primary care transformation.

There are two CPC+ tracks. In Track 1, the participating primary care provider organizations received a per beneficiary per month (PBPM) care management fee averaging $15. In Track 2, the PBPM care management fee averaged $28, and Track 2 also receives a Comprehensive Primary Care Payment (CPCP) which replaces a proportion of their payments for some evaluation and management services upfront. Both tracks continue to receive Medicare FFS as usual. Provider organizations in either track are eligible for prospective performance-based incentive payments based on utilization, quality, and experience of care components. Compared to Track 1, practices in Track 2 are required to make more advanced care delivery changes to improve the care of complex consumers. In support of this, practices in Track 2 receive more financial support and a greater shift from FFS toward population-based payment. Track 2 requires advanced health IT capabilities.

The CPC+ practices also partnered with one or more of 66 health information technology vendors to help them use health IT to improve primary care. The five largest health IT vendors partnered with about 80% of Track 2 practices.

CMS and 90% of the other payers provided data feedback to practices on utilization of services, quality of care, and/or cost of care. The payers committed to developing a common approach to quality measurement and data feedback. By the end of 2017 payers in three regions (Colorado, Ohio/Northern Kentucky, and Oklahoma) were providing CPC+ practices with a single report or tool that presented all payer-data for the region.

CMS and 84% of the other payers provided learning support to practices. The CMS learning activities sought to provide information and resources, and to promote peer learning among the practices. These activities included webinars, a social networking platform, in-person meetings, and tailored one-to-one and small group practice coaching. CMS group learning was offered to all CPC+ practices, and in-person practice coaching was provided to 74%.

The CPC+ practices started changing care delivery during 2017. Many focused on risk stratifying consumers to identify those who needed more intensive care management, and they focused on hiring and deploying care managers, as well as integrating behavioral health into primary care. To meet the goal of providing comprehensive services, many practices used strategies consistent with the Primary Care Behaviorist model in which a behavioral health professional (psychologist or clinical social worker) is integrated into the primary care workflow through warm handoffs and co-location. Integrated behavioral health services were optional for Track 1 practices, and mandatory for Track 2 practices. Track 2 practices were also required to work on identifying and addressing consumer social needs. During 2017, 67% of the Track 2 practices reported that they incorporated screenings for social needs, such as housing, food insecurity, and transportation, into their electronic health records.

The researchers noted that as expected, during the first year, CPC+ had minimal effects on Medicare FFS beneficiaries during 2017. Compared to the prior year, and relative to a comparison group of similar practices, beneficiaries served by CPC+ practices had 1.2% to 1.6% fewer outpatient emergency department visits. They had slightly slower rates of growth in primary care ambulatory visits, at 1.6% to 1.8%. They had slightly larger improvements in claims-based quality of care measures for recommended services for beneficiaries with diabetes and for breast cancer screening compared to beneficiaries served by comparison practices. CPC+ had no statistically significant effects on acute hospitalizations, ambulatory visits to specialists, 30-day readmissions, or the proportion of beneficiaries who had hospice use or an advance care plan visit. CPC+ did not alter total Medicare FFS expenditures without the enhanced CPC+ payments. Because these findings reflect only the first year of the model, more time is needed to determine the ultimate effects of CPC+

The full text of “Independent Evaluation of Comprehensive Primary Care Plus (CPC+): First Annual Report” was published April 22, 2019, by Mathematica. An abstract is available online at https://www.mathematica-mpr.com/our-publications-and-findings/publications/independent-evaluation-of-comprehensive-primary-care-plus-cpc-first-annual-report (accessed July 29, 2019).

PsychU last reported on this topic in “CMS Selects 14 Regions For All-Payer Comprehensive Primary Care Plus Demonstration,” which published on September 7, 2016. The article is available at https://www.psychu.org/cms-selects-14-regions-payer-comprehensive-primary-care-plus-demonstration/.

For more information, contact: Deborah Peikes, Ph.D., MPA, Senior Fellow, Mathematica Policy Research, 600 Alexander Park, Suite 100, Princeton, New Jersey 08540; 609-750-2005; Email: dpeikes@mathematica-mpr.com; Website: https://www.mathematica-mpr.com/.

On July 9, 2019, the Oregon Health Authority (OHA) announced its intent to award 15 organizations contracts, valued at $6 billion, to serve as Medicaid coordinated care organizations (CCO) for the Oregon Health Plan (OHP). OHA is now conducting a readiness evaluation before finalizing the contracts in the fall of 2019. Eleven of the organizations were selected for five-year contracts, and four were selected for one-year contracts. The new CCO contract services start January 1, 2020. The CCOs function as Medicaid managed care organizations (MCOs) that provide coordinated physical, behavioral, and oral health care. Nearly 87% of Oregon’s 1 million OHP members are enrolled in CCOs.

OHA established the CCO model in 2012. In those contracts, the CCOs were required to subcontract with the public behavioral health system in each county. OHA released the CCO 2.0 request for applications on January 25, 2019; applications were due by April 22, 2019. The service areas in these next CCO contracts have different boundaries than the previous contracts, which followed ZIP Codes. The new CCO contracts will be primarily based on county line boundaries, which is intended to align the CCO services with the county behavioral health and public health infrastructure, school districts, and the justice system. However, OHA did allow exceptions to the county-wide service areas when applicants could demonstrate that there were benefits to members, providers and the community in granting the requested service area. Under the next CCO contracts, every county will have at least one CCO to coordinate OHP member health care. The CCOs will be fully accountable for the behavioral health benefit, including developing a person-centered mental health and addiction disorder system.

The four organizations selected for one-year contracts will initially be placed on remediation plans and will have up to one year to show they can meet the higher expectations of the new contracts; each will receive technical support from OHA. Those that meet the new contract goals will be offered extensions. The five-year contracts will run through 2024.

Oregon CCO 2.0 Contract Awardees
Awardee Contract Length Service Area
AllCare CCO, Inc. 1 year Curry, Jackson, and Josephine; partial Douglas
Cascade Health Alliance 1 year Partial Klamath County
Columbia Pacific CCO, LLC 5 years Clatsop, Columbia, and Tillamook
Eastern Oregon Coordinated Care Organization, LLC 5 years Baker, Gilliam, Grant, Harney, Lake, Malheur, Morrow, Sherman, Umatilla, Union, Wallowa, and Wheeler
Health Share of Oregon 5 years Clackamas, Multnomah, and Washington
InterCommunity Health Network, dba, InterCommunity Health Network Coordinated Care Organization 5 years Benton, Lincoln, and Linn
Jackson County CCO, LLC, dba, Jackson Care Connect 5 years Jackson County
PacificSource Community Solutions – Central Oregon 5 years Crook, Deschutes, and Jefferson; partial Klamath County
PacificSource Community Solutions – Columbia Gorge 5 years Hood River and Wasco
PacificSource Community Solutions – Lane 5 years Lane County
PacificSource Community Solutions – Marion Polk 5 years Marion and Polk
Trillium Community Health Plan Inc. (Trillium) 5 years Clackamas, Lane, Multnomah, and Washington; partial Douglas and Linn
Umpqua Health Alliance, LLC 1 year Partial Douglas County
Western Oregon Advanced Health, LLC abn Advanced Health 5 years Coos and Curry
Yamhill County Care Organization 1 year Yamhill; partial Polk and Washington

OHA rejected the application submitted by current CCO PrimaryHealth due to concerns reported in the organization’s financial review. Three new applicants were also denied contracts.

OHP members in all or part of Clackamas, Jackson (partial), Lane, Multnomah, Polk (partial), and Washington counties will have changes to their CCO choices. Current CCO Willamette Valley Community Health (WVCH), which serves OHP members in Marion and Polk counties and parts of Benton, Clackamas, Linn, and Yamhill counties, did not seek a new contract. WVCH’s contract will end December 31, 2019, and members will transfer to a new CCO.

The new CCO 2.0 contracts will focus on integrating physical, behavioral, and oral health. OHA will implement policies that expand programs that integrate primary care into behavioral health settings. Additionally, the CCOs will be required to support electronic health record adoption and access to electronic health information exchange.

The new contracts will also increase development of value-based payments (VBPs) to improve health outcomes, specifically in the areas of hospital care, maternity care, behavioral health, oral health, and children’s health care. By 2024, 70% or more of CCO payments should be through VBP arrangements, and each CCO will be required to meet annual VBP growth targets.

The CCOs will increase their investments in strategies to address social determinants of health and health equity, with the goal of eliminating systemic barriers to better health outcomes. For this effort, the partners will include the CCO members, local non-profit organizations, hospitals, local schools, and local public health departments. CCOs will be encouraged to increase their financial support of non-clinical and public health provider organizations. OHA will develop measurement and evaluation strategies to track outcomes for these investments. Community health assessments will be aligned with community health improvement plans to increase impact.

PsychU last reported on this topic in “Oregon Announces Next Medicaid Coordinated Care Organization Contracts Will Establish Service Areas Based On Counties,” which published on January 7, 2019. The article is available at https://www.psychu.org/oregon-announces-next-medicaid-coordinated-care-organization-contracts-will-establish-service-areas-based-counties/.

For more information, contact: Allyson Hagen, Strategic Communications Manager, Oregon Health Authority, 500 Summer Street NE, E-20, Salem, Oregon 97301-1097; 503-449-6457; Fax: 503-947-5461; Email: allyson.hagen@dhsoha.state.or.us; Website: https://www.oregon.gov/oha/ and https://www.oregon.gov/oha/OHPB/Pages/CCO-2-0.aspx.

On June 28, 2019, the Michigan Department of Health and Human Services (MDHHS) said it would cancel its pre-paid inpatient health plan (PIHP) contract with the Lakeshore Regional Entity (LRE) as of September 30, 2019. LRE is the PIHP for Allegan, Kent, Lake, Mason, Muskegon, Oceana, and Ottawa counties. MDHHS intends to keep the region intact, and will initiate temporary state management when the contract with LRE ends. MDHHS intends to establish a new PIHP in the region via a formal procurement process for fiscal year 2021; the estimated contract value is about $250 million.

For fiscal year 2020, which begins on October 1, 2019, MDHHS will contract with LRE’s behavioral health management subcontractor, Beacon Health Options (Beacon), to continue to provide managed care functions, such as service authorizations and utilization management support to the community mental health services programs (CMHSPs) in the region.

The Michigan PIHPs are managed care entities that administer Medicaid and other public behavioral health specialty services. LRE has contracted with Beacon since February 2019 to take over the managed care functions, while LRE provides administrative claims management, receives payments from the state, and submits service and cost data back to MDHHS.

MDHHS notified LRE of its intent to cancel the contract on April 25, 2019. MDHHS later received a response from LRE and met with multiple stakeholders in the region. However, after reviewing the response, MDHHS decided to terminate the contract. LRE expenses have exceeded its budget since 2015. MDHHS provided supplemental funding for fiscal years 2017 and 2018 when the shortfalls were $23.6 million and $15.9 million, respectively. LRE’s predicted budget shortfall for fiscal year 2019 is $16 million, which would require additional state funds. MDHHS said LRE also had performance problems that remained uncorrected, and its member outcomes were weaker than those of other regions in terms of inpatient hospitalization.

For the interim contract with Beacon, an MDHHS spokesperson said MDHHS intends to contract in a manner that would establish Beacon as a PIHP under federal regulations. The contract would include all public policy requirements currently in place for PIHPs, including consumer protections. MDHHS will establish a public board to oversee Beacon’s contract and ensure compliance and service delivery, in conjunction with MDHHS, which will hold the contract. Board membership will include representation from the community mental health centers, the counties, advocates, and individuals receiving services. The public board will ensure quality, timeliness of payments, and work with MDHHS to flag any issues as they emerge. MDHHS intends to support the board in fulfilling its oversight role for the region and quickly address any issues that may arise.

On June 28, 2019, LRE issued a critique of the MDHHS proposal and offered an alternative. LRE believes that its fiscal distress (and that of other PIHPs) is the result of systemic underfunding. It cited an analysis by the Community Mental Health Association of Michigan which found that PIHPs experiencing financial crises over the past four years received only a modest appropriation increase, although Michigan’s Medicaid expansion increased enrollment. LRE proposed that MDHHS establish a three-way contract with LRE and Beacon. The three-way contract would result in changes to the board of directors and the role of LRE staff relative to Beacon. This approach achieves MDHHS’s stated goals, and maintains the positive momentum achieved by LRE, Beacon, and the community mental health centers.

For more information, contact:

  • Lynn Sutfin, Public Information Officer, Michigan Department of Health and Human Services, Post Office Box 30195, Lansing, Michigan 48909; 517-284-4772; Email: SutfinL1@michigan.gov; Website: https://www.michigan.gov/mdhhs/
  • Marion Dyga, Executive Assistant, Lakeshore Regional Entity, 5000 Hakes Drive, Suite 250, Norton Shores, Michigan 49441; 231-769-2052; Fax: 231-769-2071; Email: mariond@lsre.org; Website: http://www.lsre.org/

Overall consumer out-of-pocket (OOP) for hospital services rose 12% during 2018 across inpatient, outpatient, and emergency department services. Average OOP costs rose from $1,813 in the fourth quarter of 2017 to about $2,030 in the fourth quarter of 2018. The share of consumers with average per-visit OOP costs above $501 rose from 51% in 2017 to 64% in 2018.

These findings were reported by TransUnion Healthcare in a presentation given at the 2019 Healthcare Financial Management Association Annual Conference, and covered in TransUnion Healthcare’s “Out-of-Pocket Costs Rising Even as Patients Transition to Lower Cost Settings of Care.” Researchers for TransUnion studied costs associated with hospital visits (inpatient, outpatient, and emergency department). The goal was to determine how hospital costs affect consumer OOP costs for consumers. Costs rose for all three settings, as follows:

  • Inpatient costs averaged $4,659 in 2018, up 14% from $4,086 in 2017.
  • Outpatient costs averaged $1,109 in 2018, up 12% from $990 in 2017.
  • Emergency department costs averaged $617 in 2018, up 7% from $577 in 2017.

The share of consumers with average per-visit OOP costs below $500 dropped from 49% in 2017 to 36% in 2018. The share  with average per-visit OOP costs between $501 to $1,000 rose from 39% in 2017 to 59% in 2018. The share with average per-visit OOP costs of $1,001 or higher rose from 5% in 2017 to 12% in 2018.

The researchers concluded that, due to the greater cost burden, consumers are now making more decisions about where they receive care based on costs instead of just the quality of care they receive. The researchers noted that consumers may face difficulties in paying their larger health care bills, and recommended that hospitals implement strategies to maximize reimbursement.

The full text of “Out-of-Pocket Costs Rising Even as Patients Transition to Lower Cost Settings of Care” was published July 22, 2019, by TransUnion Healthcare. A copy is available online at https://newsroom.transunion.com/out-of-pocket-costs-rising-even-as-patients-transition-to-lower-cost-settings-of-care/ (accessed July 9, 2019).

PsychU last reported on this topic in ”More Americans Are Underinsured In Terms Of Out-Of-Pocket Costs,” which published on March 28, 2019. The article is available at https://www.psychu.org/more-americans-are-underinsured-in-terms-of-out-of-pocket-costs/.

For more information, contact: David Blumberg, Senior Director, Public Relations, TransUnion, Post Office Box 1000, Chester, Pennsylvania 19022; 312-985-3059; Email: David.Blumberg@transunion.com; Website: https://newsroom.transunion.com/out-of-pocket-costs-rising-even-as-patients-transition-to-lower-cost-settings-of-care/

On June 28, 2019, the Centers for Medicare & Medicaid Services (CMS) approved Minnesota’s 1115 Medicaid demonstration waiver to expand addiction treatment via enhanced mental health services provided by both the state’s Certified Community Behavioral Health Clinics (CCBHCs), and short-term residential treatment benefits. The waiver allows the state Medicaid program to continue to reimburse for CCBHC services, although the federal CCBHC demonstration ended on June 30, 2019. The CCBHCs will integrate with community health care provider organizations to increase rates of identification, initiation, and engagement in treatment for addiction disorder. Minnesota’s demonstration project started on July 1, 2019, and will end on June 30, 2024.

Additionally, the provisions of Minnesota’s Section 1115 Demonstration Project Substance Use Disorder System Reform allow Medicaid reimbursement for short-term residential addiction treatment services provided by Institutions for Mental Disease (IMDs). The federal definition of an IMD is a hospital, nursing facility, or assisted living facility with more than 16 beds in which more than half of the residents between the ages of 21 through 64 have a primary or secondary mental health diagnosis. The determination about whether a facility is an IMD rests on the facility’s overall purpose, client mix, and licensing. Medicaid will not reimburse for residential medical or behavioral health care services provided by IMDs. Minnesota will aim for a statewide average length of stay of 30 days in residential treatment settings considered IMDs. To establish broader state reform efforts for a more integrated and coordinated addiction treatment delivery system, Minnesota will model its levels of care after the levels of care recommended by the American Society of Addiction Medicine (ASAM) for treating addiction, addiction-related, and co-occurring conditions.

Within 90 days after the demonstration approval date, Minnesota must submit its Opioid Use Disorder/Substance Use Disorder (OUD/SUD) Implementation Plan. The state cannot claim federal financial participation (FFP) for services provided in IMDs until CMS has approved the OUD/SUD Implementation Plan. Within 150 calendar days after the demonstration approval date, Minnesota must submit a separate monitoring protocol for the addiction treatment programs authorized by the demonstration.

The OUD/SUD Implementation Plan must address the following:

  1. Set service delivery for new benefits including residential treatment and withdrawal management.
  2. Establish a requirement that provider organizations assess treatment needs based on addiction-specific, multidimensional assessment tools, such as the ASAM Criteria or other comparable assessment and placement tools that reflect evidence-based clinical treatment guidelines.
  3. Establish a utilization management approach so that beneficiaries have access to addiction treatment services at the appropriate level of care and that the interventions are appropriate for the diagnosis and level of care, including an independent process for reviewing placement in residential treatment settings.
  4. Establish residential treatment provider organization qualifications in licensure, policy or provider manuals, managed care contracts or credentialing, or other requirements or guidance that meet program standards in the ASAM Criteria or other comparable, nationally recognized, addiction disorder-specific program standards.
  5. Establish a provider organization review process to ensure that residential treatment provider organizations deliver care consistent with the specifications in the ASAM Criteria or other comparable, nationally recognized addiction disorder program standards. The review process should address guidelines for types of services, hours of clinical care, and credentials of staff for residential treatment settings.
  6. Establish requirements that residential treatment provider organizations offer medication assisted treatment (MAT) on-site or facilitate access to off-site MAT.
  7. Assess the availability of provider organizations in the key levels of care throughout the state, or in the regions of the state participating under this demonstration, including those that offer MAT.
  8. Implement opioid prescribing guidelines along with other interventions to prevent prescription drug abuse and expand coverage of and access to naloxone for overdose reversal as well as implementation of strategies to increase utilization and improve functionality of prescription drug monitoring programs.
  9. Establish and implement policies to ensure residential and inpatient facilities link beneficiaries with community-based services and supports following stays in these facilities.

Minnesota is one of the eight states that participated in the CCBHC demonstration program, which expired on June 30, 2019. Six Minnesota CCHBCs have been delivering an enhanced set of mental health services to Medicaid beneficiaries. Within one year after the waiver approval date, Minnesota must submit the necessary state plan amendments (SPAs) and other documentation to add CCBHC services to the state’s Medicaid plan. The state must also submit a SPA to pay CCBHCs the established prospective payment system (PPS) rate through its fee-for-service (FFS) system and a preprint directed payment for managed care organization payments. In the interim, CMS granted Minnesota expenditure authority to pay the CCBHCs for services that are not currently included in the Minnesota state plan. The goal is to avoid disruption of services for people currently receiving CCBHC services.

With Minnesota’s waiver, 24 states have been approved to conduct Medicaid 1115 demonstration projects focused on treatment for addiction disorder. States with previously approved demonstration approvals include Alaska, California, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Nebraska, New Hampshire, New Jersey, New Mexico, North Carolina, Pennsylvania, Rhode Island, Utah, Vermont, Virginia, Washington, West Virginia, and Wisconsin.

For more information, contact:

  • Neerja Singh, Deputy Director, Behavioral Health Division, Minnesota Department of Human Services, 540 Cedar Street, Saint Paul, Minnesota 55151; Email: neerja.singh@state.mn.us; Website: https://mn.gov/dhs/
  • Nathaniel Dyess, Human Services Program Consultant, Minnesota Department of Human Services, 540 Cedar Street, Saint Paul, Minnesota 55151; Email: nathaniel.dyess@state.mn.us; Website: https://mn.gov/dhs/

About 39% of the 626 health care systems in the United States offered a health insurance product in 2016. Of those that offered an insurance product, about 31% offered a health maintenance organization (HMO), 31% offered a preferred provider organization (PPO), and 16% offered an indemnity fee-for-service plan.

These findings were reported in “Provider-Offered Insurance Products Among U.S. Health Systems, 2016” by the Agency for Healthcare Research and Quality (AHRQ) Comparative Health System Performance Initiative. The analysis is based on the AHRQ Compendium of U.S. Health Systems, 2016. Developed as part of the Comparative Health System Performance (CHSP) initiative, the Compendium is a resource for data and research on health systems. For the purpose of the Compendium, a health system is defined as including at least one hospital and at least one group of physicians that provide comprehensive care (including primary and specialty care) and are connected with each other through common ownership or joint management. The researchers used the 2015 American Hospital Association (AHA) Annual Survey Database to construct the measure of assessing whether a system offered any insurance product. The overall survey population included 626 health systems: 207 had one hospital, 191 had two or three hospitals, and 202 had four or more hospitals.

Additional findings were as follows:

  • The larger systems – and systems with the most physicians – were more likely to offer an insurance product. About 20% of the 207 systems with only one hospital offered an insurance product. Among the 191 systems with two-or-three hospitals, 28% offered an insurance product. Approximately 69% of the 202 systems with four or more hospitals offered an insurance product.
  • The systems that included at least one children’s hospital were more likely to offer an insurance product. Of the 549 systems without a children’s hospital, 38% offered an insurance, compared to 46% of the 50 systems that had one or more children’s hospital.
  • The systems that operated in two or more states were more likely to offer an insurance product. About 32% of the 499 systems that operated in only one state offered an insurance product. Of the systems that operated in two or more states (101 systems), 73% offered an insurance product.

For more information, contact: Lorin Smith, Health Communications Specialist, Office of Communications, Agency for Healthcare Research and Quality, 5600 Fishers Lane, Rockville, Maryland 20857; 301-427-1864; Email: lorin.smith@ahrq.hhs.gov; Website: https://www.ahrq.gov/

On June 3, 2019, the U.S. Supreme Court ruled that in 2014 the Centers for Medicare & Medicaid Services (CMS) impermissibly changed the reimbursement formula for disproportionate share hospital (DSH) payments for fiscal year 2012. The policy retroactively reduced Medicare DSH payments to hospitals serving a higher proportion of low-income individuals because CMS simply issued a policy change that counted Medicare Part C beneficiaries as Medicare Part A-entitled beneficiaries for purposes of DSH payment calculations. Previously, the calculation included only Part A beneficiaries. The new calculation reduced hospital DSH payments. The ruling vacated the policy; CMS has not released information about the next steps.

The Medicare DSH payments are intended to offset the cost of providing uncompensated care, and the payments are targeted to hospitals that serve a high percentage of indigent consumers. For federal fiscal year 2012, Medicare DSH payments were estimated at $10.8 billion. Federal Medicaid DSH allotments are calculated differently than the Medicare DSH; in 2012, Medicare DSH allotments to states totaled $11.3 billion.

The Medicare DSH beneficiary percentage is equal to the sum of the percentage of Medicare inpatient days attributable to beneficiaries eligible for both Medicare Part A and Supplemental Security Income (SSI), and the percentage of total inpatient days attributable to patients eligible for Medicaid but not Medicare Part A. The CMS website cites the DSH calculation as: “DSH Patient Percent = (Medicare SSI Days / Total Medicare Days) + (Medicaid, Non-Medicare Days / Total Patient Days).” In an exception, DHS payments are also available to large urban hospitals that can demonstrate that more than 30% of their total net inpatient care revenue comes from state and local governments for indigent care (other than Medicare or Medicaid).

In 2004, the agency overseeing Medicare issued a final rule declaring that it would count Part C beneficiaries in the DSH calculation. However, the rule was vacated after hospitals filed legal challenges. In 2013, CMS issued a new rule prospectively readopting the policy of counting Part C beneficiaries in the DSH calculation. However, by 2014 the rule had not been finalized. CMS posted on its website the Medicare fractions for fiscal year 2012 and noted that the calculation included Part C beneficiaries. The hospital plaintiffs, Allina Health Services and others, sued. The district court upheld the federal position; the plaintiffs appealed. On July 25, 2017, the United States Court of Appeals for the District of Columbia Circuit upheld the hospitals’ position that CMS failed to provide a notice and comment period as required by the Medicare Act. It reversed the district court judgement and sent the case back to the district court for reconsideration. The federal government appealed to the Supreme Court.

In Azar v. Allina Health Services, the plaintiff hospitals argued that the policy change to include Medicare Part C beneficiaries in the calculation altered a “substantive legal standard.” They said CMS should have used a formal notice-and-comment rulemaking required by the Medicare Act. By failing to use the notice-and-comment process, CMS received no feedback on how the change might affect hospitals, consumers, and other provider organizations. The Supreme Court agreed that this represented a change to “substantive legal standard” that required CMS to engage in formal notice and comment rulemaking. The decision has a potential impact on DSH payments to hospitals. It will also affect other changes CMS has made and will affect how CMS changes “substantive legal standards” in the future.

For more information, contact:

  • Office of Communications, Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244; 202-690-6145; Email: press@cms.hhs.gov; Website: https://www.cms.gov/
  • American Hospital Association, D.C. Office, 800 10th Street, Northwest, Two CityCenter, Suite 400, Washington, District of Columbia 20001-4956; 202-638-1100; Website: https://www.aha.org/press-releases/2019-06-03-aha-statement-supreme-court-decision-azar-v-allina-health-services and https://www.aha.org/about/contact

The average cost of an emergency department visit rose by 176% between 2008 and 2017, from $503 to $1,389. During this period, overall annual emergency department utilization did not change. The average out-of-pocket cost to consumers rose from $70 in 2008 to $239 in 2017, and as a share of the overall cost rose from 18% to 26%.

These findings were reported in “10 Years Of Emergency Room Spending For The Commercially Insured” by John Hargraves and Kevin Kennedy of the Health Care Cost Institute (HCCI) in a presentation at the AcademyHealth 2019 Research Meeting in early June 2019. They analyzed insurance claims for hospital emergency department professional and outpatient facility services provided to commercially insured people under age 65 with employer-sponsored insurance enrolled in a non-capitated health plan. The data was from the HCCI claims database for 2008 through 2017. The analysis focused on claims that had one (or more) of five successive Current Procedural Terminology (CPT) codes (99281 to 99285) for an emergency department visit. These codes are used to capture the level of severity and complexity of the visit. The researchers created an estimate of emergency department visits for each of the five CPT codes. The researchers estimated spending per-person, average price, negotiated price, average charge, and average consumer out-of-pocket.

The mix of CPT codes billed for emergency department visit complexity changed during the decade to reflect greater use of high severity codes. The share of visits with a low complexity code declined, although the average prices rose for low complexity visits.

HCCI holds data on over 50 million commercially insured individuals per year (2008 to 2016), and as a Qualified Entity (QE), HCCI also has 100% of Medicare fee-for-service claims data on roughly 40 million individuals per year (2012 to 2016). The commercial health plan data is from four large insurers: Aetna, Humana, Kaiser Permanente, and UnitedHealthcare.

The full text of “10 Years Of Emergency Room Spending For The Commercially Insured” was published June 3, 2019 by the Health Care Cost Institute. A free copy is available online at https://www.healthcostinstitute.org/news/entry/hcci-will-be-presenting-at-academyhealth-s-2019-annual-research-meeting (accessed July 9, 2019).

PsychU last reported on this topic in “Employer-Sponsored Health Insurance Spending Rose 4.2% To $5,641 Per Person In 2017,” which published on March 25, 2019. The article is available at https://www.psychu.org/employer-sponsored-health-insurance-spending-rose-4-2-to-5641-per-person-in-2017/.

For more information, contact: Sally Rodriguez, Chief of Staff, Health Care Cost Institute, 1100 G Street NW, Washington, District of Columbia 20005; 202-803-5200; Email: srodriguez@healthcostinstitute.org; Website: https://www.healthcostinstitute.org/.

Montana Medicaid is exploring ways to design and implement innovations that could lead to a supportive housing services benefit as a way to reduce costs for homeless beneficiaries with the highest, 10%, of Medicaid expenditures. The Montana Department of Public Health and Human Services (DPHHS) is currently receiving technical assistance from the federal Centers for Medicare & Medicaid Services (CMS) to align policies across Medicaid and housing programs. The DPHHS Medicaid State Plan currently includes federal Medicaid reimbursement for many of the services that are provided as part of supportive housing, such as services intended to help the individual obtain and maintain tenancy. The state has released no further details about a target date for making additional improvements.

National supportive housing cost studies have documented that after one year of entering supportive housing, the participants have fewer emergency department visits, hospital overnight stays, ambulance transports, and detoxification visits. Implementing supportive housing for the high cost homeless Montana Medicaid beneficiaries is projected to have a 100% to 300% return on investment (ROI).

The 2017 point-in-time count of Montana’s homeless population identified 157 individuals ages 18 to 64 with chronic homelessness. Among the 10% (16 individuals) with the highest Medicaid costs, their average annual Medicaid costs was $53,463 per person, at $4,455 per member per month (PMPM). Additional details are as follows:

  • Supportive housing is projected to potentially reduce their Medicaid costs by up to 45%.
  • The monthly cost of supportive housing services known as “tenancy supports” is projected at $500 per person; Medicaid costs are projected to fall by $2,005 per month, with net savings at $1,505 PMPM.
  • The $500 monthly cost for tenancy supports is projected to be offset by a $2,005 reduction in Medicaid costs due to supportive housing, a 300% ROI.
  • Annual savings are estimated at $18,058 per person.

Another 1,708 individuals ages 18 to 64 were identified in the point-in-time count as having short-term homelessness. Within this group, the top 10% (171 individuals) with the highest Medicaid costs had average costs of $49,906 per person annually, and $4,159 PMPM. Additional details are as follows:

  • Supportive housing is projected to reduce their Medicaid costs by up to 24%.
  • The monthly cost of tenancy supports is projected at $500 per person; Medicaid costs are projected to fall by $998 per month, with net savings at $498 PMPM.
  • The $500 monthly cost for tenancy supports is projected to be offset by a $498 reduction in Medicaid costs due to supportive housing, a 100% ROI.
  • Annual savings are estimated at $5,977 per person.

During 2017, this group of 187 homeless Montana Medicaid beneficiaries with health care costs in the highest 10% had average annual Medicaid claims totaling $49,906 per person. If these 187 individuals had been stably housed, the state could have avoided a total of $445,766 net annual Medicaid costs, even after reimbursing supportive housing provider organizations for supportive housing services. Combined state and federal savings were estimated at $1.3 million, annually.

These findings were reported in “The Montana Business Case for a Supportive Housing Services Benefit” by the Corporation for Supportive Housing (CSH). This report and a companion, “Medicaid Supportive Housing Services Crosswalk,” were commissioned by the Montana Healthcare Foundation (MHCF) and the Montana Department of Public Health and Human Services (DPHHS). During August 2018, DPHHS analysts matched data from individuals entered into the Homeless Management Information System (HMIS) in 2017 with their accompanying 2017 Medicaid claims data to determine the annual costs for each person enrolled in both Medicaid and the HMIS system in 2017. The cost data was stratified into 10 cost groups. About 82% of 4,050 homeless individuals ages 18 to 64 experiencing chronic or short-term homeless whose names are logged in HMIS are already enrolled in Medicaid, represented 3,312 people.

The data was further divided into two groups, one that included 157 individuals experiencing chronic homelessness and the other with 1,708 individuals experiencing non-chronic homelessness. The state data analysts shared deidentified population data with CSH in order to determine if paying for supportive housing services would be more cost-effective than usual care for individuals with the highest 10% of costs.

In the companion report, “Medicaid Supportive Housing Services Crosswalk,” the researchers also analyzed Medicaid reimbursements in local communities, and local health care provider organization knowledge of Medicaid benefits. They found that Montana Medicaid covers many services that are often provided as part of supportive housing interventions. The state currently reimburses for targeted case management for individuals with severe disabling mental illness (SDMI). For individuals living with physical and developmental disabilities, the state uses a variety of waivers to provide services needed to support community living and contribute to better health outcomes. However, these services do not fully cover pre-tenancy and tenancy support services. Additionally, waiver services are not available to individuals with addiction disorder as a primary diagnosis; targeted case management for chemical dependency does not offer the full range of intensive pre-tenancy and tenancy sustaining services necessary in supportive housing.

CSH recommended that the Montana state Medicaid plan explicitly include supportive housing services to align with guidelines of pre-tenancy and tenancy-sustaining services for a 1915i State Plan Amendment as released by the federal Centers for Medicare & Medicaid Services (CMS). DPHHS should examine state program standards that could be more comprehensive in addressing social determinants of health (SDOH) needs of program participants, specifically housing. State agencies and provider organizations will need non-Medicaid funded support to engage persons who are unsheltered and who can be difficult to consistently locate. Such funding will be needed to cover staff travel and transportation time and outreach efforts that do not result in finding the individual. Additionally, CSH recommended that the state continue to work with Tribal Nations to more fully understand how Tribal Nations are funding and operating supportive housing, and to work together to explore opportunities.

Statewide, DPHHS should build capacity for behavioral health and housing service provider networks by promoting training and technical assistance to help supportive housing provider organizations bill Medicaid and to help behavioral health and waiver service provider organizations understand the quality standards in supportive housing and service partnerships unique to supportive housing in rural areas. Community mental health centers should be included in conversations about supportive housing.

Acting on the findings in these two reports, DPHHS applied for and was accepted to participate in a CMS “Innovation Accelerator Program,” which helps states align policies across Medicaid and housing programs to improve outcomes and efficiency. DPHHS has assembled a group of partners that will work together for the duration of this project, including the Department of Commerce, Montana Continuum of Care, and MHCF. Participation in this program provides a direct path to allow DPHHS to design and implement innovations in the supportive services benefit package.

The full text of “Medicaid Supportive Housing Services Crosswalk” was published June 18, 2019, by the Corporation for Supportive Housing. A free copy is available online at https://mthcf.org/resources/supportive-housing-crosswalk/ (accessed July 9, 2019).

The full text of “The Montana Business Case for a Supportive Housing Services Benefit” was published June 18, 2019, by the Corporation for Supportive Housing. A free copy is available online at https://mthcf.org/resources/supportive-housing-benefit-business-case/ (accessed July 9, 2019).

For more information, contact:

  • Robert W. Friant, Managing Director, External Affairs, Marketing & Communications, The Corporation for Supportive Housing, 61 Broadway, Suite 2300, New York, New York 10006; 212-986-2966; ext. 245; Email: robert.friant@csh.org; Website: https://www.csh.org/
  • Job Ebelt, Montana Department of Public Health and Human Services, 111 North Sanders, Room 301, Helena, Montana 59620; 406-444-0936; Email: jebelt@mt.gov; Website: https://mt.gov/
  • Melinda Buchheit, Montana Healthcare Foundation, 777 East Main Street, Suite 206, Bozeman, Montana 59715; 406-451-7060; Email: melinda.buchheit@mthcf.org; Website: https://mthcf.org/

The Virginia Joint Legislative Audit and Review Commission (JLARC) recommends that the state allow more time to effectively deploy its System Transformation Excellence and Performance -Virginia (STEP-VA) mental health initiative, which would push back full implementation from July 2021 to July 2022. The nine-step initiative, which began in 2017, requires Virginia’s 40 local community services boards (CSBs) to implement the following: same day assessments, primary care screening, behavioral health crisis services, outpatient behavioral health, psychiatric rehabilitation, peer/family support services, veteran’s behavioral health, care coordination, and targeted case management. Between 2017 and 2019, all CSBs implemented the first step: same day assessments, and were on schedule to begin step two by July 2019: providing primary care blood pressure and body mass index screening to consumers with serious mental illness (SMI) or serious emotional disturbance (SED). After implementing the primary care screening for consumers with SMI or SED, the CSBs will expand the screenings to all consumers. The JLARC recommended that the Virginia Department of Behavioral Health and Developmental Services (DBHDS) extend the timeline for the remaining seven steps so that DBHDS can complete the requirements, performance measures, and funding allocation plans for each. Additionally, DBHDS should also conduct a pilot of the step two expanded primary care screening at a subset of CSBs before initiating it at all 40 CSBs.

STEP-VA is a long-term initiative designed to improve the community behavioral health system by expanding the services provided by the CSBs. The goals for STEP-VA focus on simplifying access to a uniform set of public mental health services and increasing CSB accountability. All 40 CSBs are required to implement STEP-VA. Currently, Virginia has appropriated a total of $60 million through fiscal-year 2020 to begin implementation, with full implementation expected by July 2021.

This recommendation was made in “Report To The Governor And The General Assembly Of Virginia: Implementation Of STEP-VA, 2019” by the Virginia JLARC. In 2018, the JLARC directed staff to review the initial implementation of the STEP-VA initiative. JLARC staff evaluated implementation through early June, 2019 and assessed CSBs’ overall preparedness to implement the remaining steps by July 2021. For this report, the JLARC staff conducted structured interviews and focus groups with Virginia Department of Behavioral Health and Developmental Services (DBHDS) leadership and staff, CSB leadership, stakeholders, and representatives from other states’ behavioral health systems. The staff also participated in site visits to seven CSBs, conducted a survey of CSB executive directors and chief executive officers, and reviewed state documents and research literature.

In their evaluation of implementation thus far, the researchers found that:

  • Nineteen of the 20 CSBs that currently track assessment data reported assessing at least 70% of individuals on the day they walk in during designated hours.
  • The number of hours and locations available for same-day assessments varied across CSBs, and it is not clear whether the availability of same-day assessments meets community needs.
  • In preparation for step two, in February 2019 DBHDS began providing funds so that CSBs could begin providing primary care screening by July 2019 to check the blood pressure and body mass index of consumers with SMI or SED.
  • CSBs are concerned that the effort needed to expand primary care screenings to all consumers will detract from other, higher priority STEP-VA services, such as expanded outpatient and crisis services.

Going forward in the implementation, the JLARC staff recommended the following regarding the roll-out:

  • DBHDS should work with CSBs to develop metrics that will measure if consumers are able to be assessed on the same day they visit a CSB, and whether same-day access hours are sufficient at each CSB.
  • DBHDS should pilot phase two of primary care screening at a subset of CSBs before initiating it at all 40 CSBs.

The JLARC staff made the following recommendations regarding the role of DBHDS and funding:

  • Require DBHDS to complete the requirements, performance measures, and funding allocation plans for each step before the Department of Accounts releases funding
  • Dedicate a full-time senior staff position to oversee and coordinate STEP-VA implementation
  • Prioritize the implementation of remaining steps based on CSB needs
  • Allow DBHDS to use a portion of future STEP-VA funding to support central oversight and coordination functions at DBHDS

STEP-VA is loosely based on the federal Certified Community Behavioral Health Clinic (CCBHC) model. Virginia was awarded a CCBHC planning grant; however, in October 2016, Virginia opted not to submit a proposal for a demonstration grant due to cost and infrastructure concerns. The STEP-VA model was developed as a sustainable Virginia-specific solution. The CSBs began working on STEP-VA after the 2017 Governor and the General Assembly provided $4.9 million in general fund dollars for an initial group of CSBs to implement same day access. The General Assembly required the remainder of STEP-VA services to be implemented over the next two biennia, with additional funding to be allocated in the coming years. The 2018 Governor and the General Assembly provided $5.9 million for a second group of 22 CSBs to implement same day access in fiscal year 2019. Each CSB will receive $270,000 in ongoing state mental health funds. Nine CSBs had already implemented some form of same day access and received funding on July 1, 2018 to address their implementation costs. By the end of the 2018 calendar year, all but five CSBs had implemented same day access. The remaining CSBs were on-track to implement same day access in early 2019 and did so in March.

PsychU last reported on this topic in “Virginia Community Services Boards Reach STEP-VA Goal Of Same-Day Access,” which published on June 17, 2019. The article is available at https://www.psychu.org/virginia-community-services-boards-reach-step-va-goal-of-same-day-access/.

For more information, contact: Jeff Lunardi, Unit Director, Health and Human Resources, Joint Legislative Audit and Review Commission of Virginia, 919 East Main Street, Suite 2101, Richmond, Virginia 23219; 804-371-4581; Email: jlunardi@jlarc.virginia.gov; Website: http://jlarc.virginia.gov/.

On May 8, 2019, South Carolina submitted a Medicaid waiver to the Centers for Medicare & Medicaid Services (CMS) requesting permission to impose work and community engagement requirements on Medicaid beneficiaries ages 18 to 64. The state seeks to require Medicaid beneficiaries to work, be enrolled in job training, or be in school for an average of 80 hours per month. South Carolina has not expanded Medicaid. According to a South Carolina Department of Health and Human Services (SCDHHS) spokesperson, the agency projects a maximum of 0.59% of the state’s Medicaid population will be impacted during the first year following implementation of the community engagement requirements. If CMS approves the waiver, South Carolina plans to roll out a five-year demonstration as soon as July 2020. CMS is accepting comments on the waiver through July 10, 2018.

SCDHHS intends to issue guidelines that would accept participation in and compliance with medically necessary substance use disorder (SUD) treatments for certain individuals with SUD that would otherwise impair an individual’s ability to participate in employment, education, or other community engagement activities. The provisions of South Carolina’s Community Engagement Section 1115 Demonstration Waiver Application are as follows:

  1. Participation in an adult secondary education program through a public school district or technical college: SCDHHS intends to support certain out-of-pocket costs for adult students not otherwise covered by other state- or federally funded adult education programs, including the cost of general education development (GED) testing.
  2. Full-time participation in a degree- or certificate- seeking program in an accredited institution of higher education, as defined by the South Carolina Commission on Higher Education
  3. Compliance with unemployment insurance (UI) work-search requirements (during the first 16 weeks of UI benefits)
  4. Demonstrated compliance with SNAP community engagement standards for dual Medicaid beneficiaries in either the Supplemental Nutrition Assistance Program (SNAP) or Temporary Assistance for Needy Families (TANF) programs
  5. Employment for no less than 80 hours per month
  6. Community or public service, including verifiable volunteerism with public entities or qualified charitable corporations
  7. Remove financial disincentives for work: This will be done through increasing the income threshold for individuals with Parent Caretaker Relative (PCR) status from 62% of the federal poverty level (FPL) with a 5% income disregard, to 95% FPL with a 5% income disregard, closing what is commonly called the “Parent Caretaker Relative (PCR) gap.” The state will seek waivers to cover pregnant women and support new mothers returning to employment; the waivers will allow the extension of coverage for pregnant women who make up to 194% FPL, with a 5% income disregard, from 60 days postpartum to one-year postpartum; and align transitional medical assistance (TMA) with these new income thresholds by seeking such waivers and amendments as necessary to provide individuals who lose Medicaid coverage due to employment, who are also not eligible for employer-sponsored insurance, with the financial assistance necessary to purchase a qualifying health plan on the federal marketplace administered in South Carolina.

If Medicaid enrollees fail to prove they are exempt from the requirements or are not reporting their work status for more than three months, their Medicaid benefits will be suspended. Populations exempt from the reporting requirement are as follows:

  1. Children enrolled in Medicaid or the Children’s Health Insurance Program (CHIP)
  2. Members of federally recognized tribal organizations
  3. Pregnant women
  4. Disabled individuals, including individuals who have a medical condition that would prevent them from participation in this project
  5. Individuals over the age of 65
  6. Individuals who are the primary caregiver of a child or someone who is disabled
  7. Individuals receiving Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI)
  8. Individuals participating in a Medicaid covered treatment program for alcohol or substance abuse addiction, including opioid addiction;
  9. Individuals receiving treatment for cancer, including those receiving treatment through Medicaid’s Breast and Cervical Cancer Program;
  10. Individuals compliant with, or exempt from, the SNAP or TANF requirements related to employment; and individuals who are determined by SCDHHS to be exempt on a case-specific basis. This includes certain individuals with medically complex conditions that require multidisciplinary specialized care or would otherwise be precluded from employment or community engagement activities due to their health status.

Individuals who are not in one of the above categories and who are enrolled in South Carolina Medicaid as a PCR will be included in this demonstration project. Based upon current program enrollment, Census, and other adjunct data, SCDHHS estimates a mid-range average monthly enrollment estimated increase of 32,300 individuals added into the PCR category; 2,000 pregnant women per month receiving coverage for 10 additional months; and 4,350 individuals transitioning from the current to revised TMA program. PCR individuals will be required to participate in community activities to maintain an active Medicaid enrollment status.

For more information, contact: Communications Office, South Carolina Department of Health and Human Services, Post Office Box 8206, Columbia, South Carolina 29202-8206; 803-898-2580; Email: communications@scdhhs.gov; Website: https://www.scdhhs.gov/

Consumer occupancy of skilled nursing facility (SNF) beds reached a four-quarter high of 83.7% as of the end of March 2019. Over the previous four quarters, SNF occupancy was approximately 82.5% in Q1 2018, 83.0% in Q2 2018, 82.9% in Q3 2018, and 83.5% in Q4 2018. The highest recent occupancy rate was 88.5% in 2014.

These findings were reported in “Skilled Nursing Data Report: Key Occupancy & Revenue Trends, Based on Data from January 2012 Through March 2019” by the National Investment Center for Seniors Housing & Care (NIC). Researchers from NIC collected and analyzed sample population data from 48 states (all but Alaska, Colorado, the District of Columbia, Pennsylvania, and South Carolina), and compared current data with historic data similarly collected. Overall, 26 contributors and 1,402 SNF properties were represented in the data. Historical data is deflated using same-store month-month changes. The goal was to determine current trends in skilled nursing facility occupancy and revenue.

Additional findings include:

  • Skilled mix, or the percentage of those receiving “skilled services” increased 84 basis points, to 26.0%, from the fourth quarter 2018. Skilled services is short-term rehabilitation through Medicare and a health maintenance organization (HMO) divided by total actual patient days.
  • Managed Medicare revenue mix increased to 12.1%, from the fourth quarter of 2018. Managed Medicare revenue mix is the total revenue for each payer source divided by the total revenue.
  • Managed Medicare revenue per patient day (RPPD) decreased about 1.6%, from $439 from the fourth quarter of 2018, to $432 as of March 2019. RPPD is total revenue divided by actual patient days for each payer source.
  • Medicaid patient day mix decreased from 66.4% in the fourth quarter of 2018, to 65.8% as of March 2019. Patient day mix is the actual patient days of each payer source divided by the total actual patient days.

The full text of “Skilled Nursing Data Report: Key Occupancy & Revenue Trends, Based on Data from January 2012 Through March 2019” was published June 10, 2019 by the NIC. A free copy is available online at http://info.nic.org/skilled_data_report_pr (accessed July 9, 2019).

For more information, contact: Bill Kauffman, Senior Principal, National Investment Center for Seniors Housing & Care, 1997 Annapolis Exchange Parkway, Suite 480, Annapolis, Maryland 21401; 410-267-0504; Email: communications@nic.org; Website: https://www.nic.org/

Approximately 72% of executives believe their organizations have the capabilities needed to support increased risk, and plan to take on additional risk in the next one to three years. About 64% of the same executives reported that they would assume additional risk through commercial payer contracting models. Roughly 57% said they would assume risk through Medicare contracting models, and 51% said they would assume risk through Medicare Advantage.

These findings were reported in “Providers Prepared to Increase Risk Model Participation” by Navigant. The report is based on a survey conducted by Navigant and the Healthcare Financial Management Association (HMFA) of 170 hospital and health system senior finance executives. The survey documents the readiness of health care provider organizations to assume increased levels of risk through commercial payer and Medicare contracting as well as the share of responding provider organizations that are partnering on or launching provider-sponsored health plans (PSHPs) as part of their risk-assumption strategy.

Of the provider organizations that were surveyed, the researchers found that 56% were not participating in PSHP plans, while 25% already were part of a PSHP, and 19% plan to launch a PSHP. In addition to assuming risk through commercial and Medicare payment models and participating in PSHP’s, the researchers surveyed provider organizations strategies for fee-for-service (FFS) and value-based revenue and margin growth. Strategies of the respondents included:

  • Engaging physicians to drive clinical standardization through a Hospital Quality and Efficiency Program, a contract between a health system and an accountable-care organization (ACO) or clinically integrated network
  • Focusing on cost reduction in more discrete areas, such as post-acute care, pharmacy care, and management of high-risk health care consumers
  • Emphasizing in-network customer retention by building tight provider network relationships through technological connectivity, a share referral management infrastructure, and common standards for access, quality, and cost

The full text of “Providers Prepared to Increase Risk Model Participation” was published in June 2019 by Navigant and HFMA. A free copy is available online at https://www.navigant.com/insights/healthcare/2019/risk-readiness (accessed July 9, 2019).

PsychU last reported on this topic in “25% Of Health Care Provider Organizations Ready To Take On Risk-Based Contracts,” which published on May 6, 2019. The article is available at https://www.psychu.org/25-of-health-care-provider-organizations-ready-to-take-on-risk-based-contracts/.

For more information, contact:

  • David P. Zito, Healthcare Segment Leader, Navigant, 1200 19th Street Northwest, Suite 700, Washington, District of Columbia 20036; 202-973-2400; Website: https://www.navigant.com/
  • Healthcare Financial Management Association, 3 Westbrook Corporate Center, Suite 600, Westchester, Illinois 60154-5732; 708-531-9600; Fax: 708-531-0032; Email: inquiry@hfma.org; Website: https://www.hfma.org/

The opioid crisis in the U.S. has been well documented over the past several years. Sections of the country have been ravaged by drug overdoses and families are being torn apart by opioid addiction. The healthcare system continues to be strained through a combination of opioid related emergency department visits and other health conditions associated with heroin use such as Endocarditis and Hepatitis C. In 2017, there were 70,237 fatal opioid overdoses in the U.S. and 142,557 nonfatal opioid-related hospital visits.¹ The increase in ED visits represents a 30% increase from 2016 to 2017.²Opioid Use Disorder Case Study Cover Page

As opioid deaths increased in parts of the country, youth entering the foster care system increased as well. A study by the Office of the Assistant Secretary for Planning and Evaluation found that a 10% increase in opioid deaths was associated with a 4.4% increase in entries into the child welfare system.5 While the impact of the opioid epidemic has caused the issue to come to the forefront of the national and state dialogue, alcohol use disorders continues to have a significant impact on individuals and families, the healthcare system and legal system. Over 15 million Americans suffer with an alcohol use disorder and between 2006-2010, an estimated 88,000 people died annually from alcohol related deaths.6

The Second Edition of Trends in Behavioral Health: A Population Health Manager’s Reference Guide on the U.S. Behavioral Health Financing & Delivery System, (The Guide) highlighted the ongoing impact of the opioid epidemic and its impact on the national behavioral health landscape. Federal legislation, such as the 21 Century Cures Act, contain provisions specifically targeting the opioid crisis.¹ Additionally, other previous passed federal legislation has provided tools and resources needed to address the issue. Medicaid expansion under the Patient Protection and Affordable Care Act, provides an avenue for funding needed for individuals to access treatment.¹ The flexibility of the 1115 Medicaid waiver has promoted system delivery and payment reform that can be used by states to expand and improve treatment.¹ The Mental Health Parity Act has promoted access to care and has resulted in payers enhancing their networks with a focus on evidence-based medication assisted treatment.¹

One of the primary provisions of the 21st Century Cures Act was the State Targeted Response to the Opioid Crisis grants which provided states with funding to develop and/or expand their local responses to the crisis. The Cures Act initially provided roughly $1 billion to the states that could be used for activities, such as prescription surveillance programs, reducing the availability of opioids through changes in prescribing guidelines and practice, and increasing prevention and treatment efforts.¹ Some of the common ways that states have been utilizing the funding include efforts around prescriber education and workforce development, expanding access to medication assisted treatment, and treatment delivery innovation, such as hub and spoke programs and expanded use of peer support.¹ In March 2019, the Department of Health and Human Services released an additional $487 million to continue these efforts.7

Other recent federal initiatives included $400 million in funding awarded to community health centers, inclusive of federally qualified health centers, in 2018 to increase access and improve the quality of substance use disorder treatment services provided through these centers.¹ CMS, through the Center for Medicare and Medicaid Innovation has created the Maternal Opioid Misuse Model. The model aims to improve the care delivery system for pregnant and postpartum Medicaid beneficiaries with opioid use disorders.8 States had the opportunity to submit a grant application in early May 2019.

Beyond legislative activities, national level advocacy around stigma reduction; the need to expand access to evidence-based, medication assisted treatment and the need to remove barriers to treatment is beginning to arise and shape public and payer policy. Shatterproof, a national non-profit organization, founded by a father who lost his young adult son to an opioid overdose, has brought together a taskforce of treatment and policy experts, providers, public and private payers, and advocates to help improve the access and quality of addictions treatment. They have developed national principles for high quality care, including promoting routine substance use disorder screenings across all medical settings, removing barriers to MAT, such as prior authorization process, promoting access to fully trained and accredited behavioral health professionals and the need for long-term outpatient care and monitoring.¹ Payers are also playing a key role in addressing the crisis. Payers are implementing a number of strategies to address access, quality of care and the rising treatment costs associated with the increased rate of opioid use disorders. The Second Edition of the Guide, which contains survey results from over 1,000 public and private payers, highlighted the focus on access. Across all health plans surveyed, 84% are engaged in activities to expand their MAT network. Additionally, health plans are focusing on social determinants of health which is an important component of comprehensive opiate treatment.¹

By way of example, UnitedHealth Groups Optum Division has developed a nationwide, multipronged approach for addressing access, improving quality and addressing cost. Their strategy includes the development of a specialty MAT network and partnering with providers to expand treatment sites across the country in areas of need, and deploying a bundled payment model that addresses cost and quality while decreasing administrative burden on substance use disorder treatment providers.9

Nationally, BlueCross BlueShield have made successful efforts to decrease the number of prescriptions filled and have decreased the number of their members who have filled at least one opioid prescription in a year based on a five-year study of medical claims.10 Additionally, The BlueCross BlueShield Association is launching Blue Distinction® Centers for Substance Abuse Treatment and Recovery. To receive this designation a provider, hospital or health care facility must demonstrate that they provide quality care, treatment expertise and better overall patient results.11 Blue Distinction® Centers for Substance Abuse Treatment and Recovery must be able to provide MAT as part of an integrated substance use disorder treatment approach. These centers will launch in 2020.

Additional information on the national, state and payer response to the opioid epidemic can be found in the Second Edition of Trends in Behavioral Health: A Population Health Manager’s Reference Guide on the U.S. Behavioral Health Financing & Delivery System.

About The Guide

The Second Edition of Trends in Behavioral Health: A Population Health Manager’s Reference Guide on the U.S. Behavioral Health Financing & Delivery System (The Guide) provides information
and insights into the multi-layered United States behavioral health system. The Guide includes an in-depth view of current statistics, prevailing issues, and emerging trends in order to inform the
discussions, debates and decision-making of policy-makers, payers, providers, advocates and consumers. The Guide addresses current behavioral health care trends topics, including:

  • A look at the national policy that is shaping the U.S. health and human services market
  • A view of the state behavioral health delivery systems that were created by a combination of historical practices, federal and state policy, and market factors over recent years
  • An examination of the practices of 1,265 health plans that manage both physical and behavioral health care for the vast majority of the U.S. population
  • A deep-dive into behavioral health care access and delivery of care from the consumer perspective

Sources

  1. Otsuka America Pharmaceutical, Inc. & Lundbeck, LLC. (2019). 2019 Trends In Behavioral Health: A Reference Guide On The U.S. Behavioral Health Financing & Delivery System, 2nd
    Edition. Rockville, MD: Otsuka America Pharmaceutical, Inc. Retrieved from PsychU.org.
  2. Centers for Disease Control and Prevention. (2018, March 6). Emergency department data show rapid increases in opioid overdoses. U.S. Department of Health and Human Services.
    Retrieved from https://www.cdc.gov
  3. Chang, H. Y., Kharrazi, H., Bodycombe, D., Weiner, J. P., & Alexander, G. C. (2018). Healthcare costs and utilization associated with high-risk prescription opioid use: a retrospective cohort
    study. BMC medicine, 16(1), 69. doi: 10.1186/s12916-018-1058-y
  4. Centers for Medicare & Medicaid Services. (2019, April 26). National health expenditure data: NHE fact sheet 2015. Baltimore, MD: CMS; 2017. Retrieved from https://www.cms.gov
  5. Radel, L., Baldwin, M., Crouse, G., Ghertner, R., & Waters, A. (2018). Substance use, the opioid epidemic, and the child welfare system: Key findings from a mixed methods study. Office of the Assistant Secretary for Planning and Evaluation. Retrieved from https://bettercarenetwork.org
  6. National Institute on Alcohol Abuse and Alcoholism. (2018, August). Alcohol facts and statistics. Retrieved from https://www.niaaa.nih.gov
  7. HHS Press Office. (2019, March 20). HHS releases additional $487 million to states, territories to expand access to effective opioid treatment; 2019 SOR grants will total $1.4 billion. U.S.
    Department of Health & Human Services. Retrieved from https://www.hhs.gov
  8. Centers for Medicare & Medicaid Services. (2018, October 23). CDC fact sheet: Maternal opioid misuse (MOM) model. Department of Health and Human Services. Retrieved from
    https://www.cms.gov
  9. UnitedHealth Group. (n.d.). Addressing the opioid epidemic. Retrieved from https://www.unitedhealthgroup.com
  10. Thomson, T. (2018, July 12). Blue cross and blue shield companies make landmark decision to advance better treatment options for opioid use disorder. Blue Cross Blue Shield Association.
    Retrieved from https://www.bcbs.com
  11. Blue Cross Blue Shield. (n.d.). Blue distinction specialty care. Retrieved from https://www.bcbs.com

So much happened in the past 90 days in the health and human market space. But what really matters? What are the “stop the presses” developments that executive teams need to incorporate in their strategic thinking? The themes were two-fold: One, the push for “whole person” approaches to care and, two, the integration/consolidation of organizations, functions, and financing. Here are five developments that have the potential to unravel the best laid plans of many organizations.

Among the many developments that can reshape strategy are payers increasing focus on social determinants. In the past quarter, the Centers for Medicare & Medicaid Services (CMS) announced that Medicare Advantage plans in 2020 will be able to offer supplemental social service benefits if they diagnose, compensate for physical impairments, diminish the impact of injuries or health conditions, and/or reduce avoidable emergency room utilization (see Medicare Advantage To Offer Supplemental Benefits For Social Determinants In 2020). The second was UnitedHealthcare’s announcement that it expects its provider organizations to use the International Classification of Disease, Tenth Revision, Clinical Modification (ICD-10-CM) Z-codes, in categories Z55 to Z65, to capture information about the consumer’s reasons for a health care visit that further explain the need for the social support services. The idea is to expand efforts to identify consumers with social service needs (see UnitedHealthcare Expands Initiative To Use Diagnostic Codes To Capture Social Determinants Of Health).

The implications? There will be a new market for “packaged” social services. But these won’t be the social service of the past – they will be “prescribed” packages of support services for specific consumers with a carefully calculated return on investment (ROI). The availability of these new payment streams means that new competitors will enter the market space, forcing traditional social service provider organizations to ramp up their measurement of cost and outcomes.

Long-term questions: Will public social service budgets shrink as these services become “medicalized”? And, will the types of social services available to an individual vary by their health plan members (and whether they are insured)? These are big issues to watch.

There are now 23 states and the District of Columbia with health homes and more states are developing. And almost more importantly, the health home construct is now common in the commercial health insurance market and with accountable care organizations.

At the same time, retail pharmacy, and soon-to-be-insurer, CVS announced their own approach to whole person care in the form of one-stop-shopping HealthHubs. In 1,500 of its current retail locations, CVS plans to dedicate 20% of retail space to health care services like urgent care, telehealth, chronic disease management, and wellness. The HealthHUBs will offer a care concierge professional, seminars, kiosks, and iPads for wellness apps.

The implications? New competition for a number of provider organizations. Obviously, traditional primary care practices face a competitor with a consumer-centric approach and wide range of services. But specialty provider organizations face new competition as well. The model will include chronic care management and Minute Clinics already have telehealth services for specialty consultation. The HealthHub concept—if successful—is perfectly positioned to compete for care coordination, medical home, and health home contracts.

At the same time, the push to value-based forms of reimbursement entered Medicare primary care – with CMS unveiling five new models for value-based primary care reimbursement. CMS primary care payments will likely fall in one of two models.

The first model is called Primary Care First and will utilize a risk adjusted professional population-based payment with a flat primary care reimbursement fee. The second model is a direct contracting model that will pay a capitated, risk adjusted payment for enhanced primary care services. Overall, CMS estimates that 25% or 11 million Medicare FFS enrollees will be served under the new model.

The implications? This is reflective of the overall movement of Medicare away from fee-for-service reimbursement. There will be opportunities for specialty provider organizations to collaborate with primary care practices that, under this model, will be more likely to refer high-needs and complex consumers for specialty care – depending on the performance incentives. But certainly, this change in financing is going to drive the purchase of a host of digital health options by primary care practices who will be substituting tech-enabled interventions for staff time.

Finally, there are two notable mergers among health plans. Wellcare is being acquired by Centene and Anthem is acquiring Beacon Health Options (see Centene To Buy WellCare For $17.3 Billion and Anthem To Acquire Beacon Health Options). These mergers represent the continuation of two trends that have noted before—the consolidation of membership among a small number of health insuring organizations and the dwindling of the use of the horizontal carve-out for care financing and service delivery.

The implications? Centene will continue to be the largest insurer of Medicaid beneficiaries by far and Magellan and New Directions remain the only major national behavioral health carve-out companies (and New Directions is affiliated with the Blues system). The bigger picture is that the standardization of health service delivery will happen within national health insuring systems and not necessarily within geographic regions. While the health insuring organizations do have local plans with local control and local provider networks, we are seeing the advent of national contracts for a wide range of specialty services. This trends poses a market share threat to local provider organizations delivering those specialty services.

Strategy is more important than ever – but that strategy needs to be constantly adjusted with the changing market. What to do? William Arthur Ward quote, ” The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.” It’s all about adjusting the strategy sails, so to speak.

There is a lot of discussion of bundled rates, case rates, and other forms of episodic payments. But it was very enlightening to hear from two executives who have “been there and done that”—the experience of Elizabeth Woike-Ganga, Chief Operating Officer, BestSelf Behavioral Health; and Tony Rajiv Juneja, M.D., Founder/Chief Executive Officer of Manage Addiction Lifeline, Oriah Behavioral Health, was front and center in the session, How To Develop Alternative Payment Models: A Guide To Building Successful Bundled Payment Models, at The 2019 OPEN MINDS Strategy & Innovation Institute session.

Dr. Juneja presented his work at Oriah Behavioral Health, which develops and offers a telehealth platform and optimizes recovery outcomes for people suffering from addiction and mental health issues—Manage Addiction Lifeline. Manage Addiction Lifeline is an opioid addiction app based on the bio-psycho-socio-spiritual model, that is combined with MAT, Individual Therapy (IT), Group Therapy (GT), and a Digital Curriculum (DC) for a comprehensive and evidence-based approach. This 52-week long treatment program is covered by Optum and Oxford (both under United Healthcare Group) and Aetna insurance plans through a bundled rate. The reimbursement is an all-inclusive monthly rate per member enrolled in MAT; costs for enhanced services are included in the monthly rate.

BestSelf Behavioral Health is the largest community-based behavioral health organization serving 20,000 consumers (children, adolescents, and adults) in Western New York state, with an annual budget of $60 million. They are a certified community behavioral health clinic (CCBHC) and in the middle of a two-year pilot program, which provides fully integrated behavioral health care for children, adolescents, and adults under strict criteria, certified by the state. BestSelf CCBHC Clinics provides immediate access, personalized care, a “No Wrong Door” approach, and focuses on evidence-based practices. The CCBHCs are reimbursed through a cost-based prospective payment system (PPS) with a fixed daily rate payment. Under the fixed daily rate, CCBHCs receive the same fixed payment for all services provided to a Medicaid beneficiary on a given day, regardless of the intensity of services provided.

Any type of alternative payment model will present its own unique challenges, but there are some key best practices that can help any provider organization that is moving away from fee-for-service. After listening to Dr. Juneja’s and Ms. Woike-Ganga’s presentations, I have five key take aways for successfully developing and managing alternative payment models:

  1. Understand Your Costs
  2. Focus On Building Accurate Estimates
  3. Build An Optimal Infrastructure For New Payment Models
  4. Scale Slowly & Incrementally
  5. Develop A Plan To Demonstrate Value

Understand Your Costs—Before you can build an accurate financial model, you need to understand your unit costs. Your unit costs should include all direct program costs, direct administrative expenses, and an allocated portion of organizational overhead. This demands accurate data and reporting from your team and a clear definition of the program or service requirements. Without a true understanding of your costs, you will never be able to accurately manage an alternative reimbursement model.

Focus On Building Accurate Estimates—To be successful with an alternative payment model, you need to be able to estimate your volume and predict your until costs for the future. Use your current experience to project service utilization. Build a model based on average utilization, but plot out your utilization patterns to assure you understand the distribution of your high and low utilizers. Once a bundled model in implemented monitor utilization closely, watch for adverse shifts in utilization. Both overestimating and underestimating what you can do and how much it will cost is a major risk. Overestimating runs the risk of takebacks, and underestimating runs the risk of deficits.

Build An Optimal Infrastructure For New Payment Models—Managing bundled rates demands a shift in organizational infrastructure—both in operations and culture. Your team needs technology and data management to track and report on clinical outcomes and costs; new workflow processes will need designed and optimized; staff will need to understand changing expectations and undergo new training; and your organization’s culture needs to shift to a data-driven management model (see Making Your Clinical Team Data Driven).

Scale Slowly & Incrementally—Scaling too quickly and in “leaps and bounds” carries with it unnecessary risk. When negotiating a new contract and building relationships with payers, be careful not to over promise when determining the bundled rate; start slow and take the necessary time to scale correctly and proceed serially with your innovations and advancements. Continuously, plan, roll out, measure, tweak your plan, remeasure, roll out again. To innovate and scale relies on having room for improvement and to make adjustments as feedback and data is received. You may want to modify your processes as you learn from roll out what offers the best return on your investment both in terms of efficacy and financially. Dr. Juneja noted, “If you start with a Maserati, you won’t be able to scale.”

Develop A Plan To Demonstrate Value—The point of alternative payment models is to align cost and quality by delivering on a pre-agreed upon value equation. After you’ve contracted, you need to demonstrate with data how you are delivering on that value equation. A major component of this is to control costs, otherwise payers may shy away from expanding or continuing your arrangement. You’ll need real-time data analysis to address issues with cost and clinical outcomes as they arise, and the ability to share cost and outcomes data with payers as needed.

In the end, bundled rates can allow for innovation and positive treatment outcomes—but only if you have key components covered in your rate. For more, check out these resources in the PsychU Resource Library:

  1. Options For Alternative Payment Models For Behavioral Health
  2. Developing Case Rates? Better Find Your ‘Single Source Of Truth’
  3. Alternate Payment Models – Strategy Implications Of The CMS Roadmap
  4. Preparing For Value-Based Reimbursement-Even Before The Contracts Are Signed
  5. Four Ps For Leading A VBR Evolution (Or Any Change)
  6. Pay For Value-The Glass Half Full, The Glass Half Empty?
  7. VBR Jumping From Hospital-Centric ACOs To Community-Based Players
  8. Crawl, Walk, Run To VBR
  9. The Hospital Perspective On ‘Owning’ Value-Based Reimbursement
  10. Building A Workforce For Value-Based Reimbursement = Advice From Four Executives

Most respondents treated under Medicare bundled payment programs reported positive perceptions of care quality. While respondents participating in the Bundled Payments for Care Improvement (BPCI) initiative were significantly less likely to report favorable feedback on several measures, differences were small in magnitude.

BPCI respondents were 1.90 percentage points less likely to indicate that they were “quite a bit” or “extremely” satisfied with their overall recovery since leaving the hospital than were comparison respondents, at 70.31 for the BPCI group versus 72.21 for the comparison group. However, the BPCI survey respondents reported the same functional status months after their hospitalization as those not in BPCI, indicating that the efficiency incentives in BPCI did not jeopardize functional recovery. More than 95% of both BPCI and comparison survey respondents felt their health needs were manageable after returning home. Nearly 95% of both BPCI and comparison survey respondents agreed that medical staff clearly explained how to take medications, and what follow-up appointments would be needed.

These findings were reported in “Association Of Medicare’s Bundled Payments For Care Improvement Initiative With Patient‐Reported Outcomes” by Matthew J. Trombley, Ph.D.; Sean R. McClellan, Ph.D.; Daver C. Kahvecioglu, Ph.D.; Qian Gu, Ph.D. et al. The researchers analyzed data from a random sample of BPCI beneficiaries, matched with comparison beneficiaries. Date were collected from nine rounds of surveys between 2014 and 2017 which yielded 29,193 BPCI, and 29,913 comparison respondents. All BPCI beneficiaries were treated by hospitals participating in BPCI Model 2. Both groups were similar in characteristics of age, Medicaid eligibility, function, pain, and condition treated. They then estimated risk‐adjusted differences in patient‐reported measures of care and changes in functional status, for beneficiaries treated by BPCI and the comparison hospitals. The goal was to determine whether the BPCI initiative affected patient‐reported measures of quality.

The Centers for Medicare and Medicaid (CMS) implemented the Bundled Payments for Care Improvement (BPCI) initiative to encourage providers to deliver care more efficiently with equal or better quality. A bundled payment model focuses on outcomes rather than staffing, procedural reimbursement, or prescription reimbursement. Under a bundled payment model, individual episodes are reconciled to the target price and then netted with other episodes. Typical services included in the episode are physicians’ services, inpatient or outpatient hospital services that comprise of the Anchor Stay or Anchor Procedure (respectively), other hospital outpatient services, inpatient hospital readmission services, long term-care hospital (LTCH) services, inpatient rehabilitation facility (IRF) services, skilled nursing facility (SNF) services, home health agency (HHA) services, clinical laboratory services, durable medical equipment (DME), Part B drugs, and hospice services. After adjusting for quality measures, participants will either receive or owe a payment to CMS. A qualifying clinical episode is typically triggered by a claim submitted to Medicare by an Episode Initiator. Four different models exist within the BPCI initiative, each with different rules and incentives. Each BPCI participant can choose to enroll in one Model and any combination of 48 clinical episodes or groups of Medicare Severity Diagnosis Related Group (MS‐DRG).

Because of the slight difference in BPCI responses from consumers, the researchers concluded that better communications and better shared decision-making between consumers and BPCI care teams may result in favorable care experience across several measures. However, similar changes reported in functional status from before to after care episodes for the two groups should reduce concerns about the potential for BPCI incentives to result in harm to consumer health.

The full text of “Association of Medicare’s Bundled Payments For Care Improvement Initiative With Patient‐Reported Outcomes” was published April 30, 2019, by Health Services Research. An abstract is available online at https://onlinelibrary.wiley.com/doi/10.1111/1475-6773.13159 (accessed June 24, 2019).

On June 13, 2019, the Ohio Department of Medicaid (ODM) released a request for information (RFI) seeking comments in preparation for its next Medicaid managed care organization (MCO) procurement, which is scheduled for release on January 1, 2020. The RFI seeks comments from consumers, their advocates, and health care professionals and provider organizations. The RFI poses 39 questions in seven broad topic areas to elicit stakeholder comments. Responses to the RFI are due by July 31, 2019.

Ohio Governor Mike DeWine directed ODM to rebid the Medicaid MCO contracts to change the terms related to pharmacy benefit managers. Additional goals are to improve the quality of services and care to those served; use best practices to expand quality services and improve health outcomes; and improve the provider organization experience in managed care. The new contracts are tentatively scheduled to go live in January 2021.

ODM contracts with five MCOs selected in 2012: Buckeye Health Plan, CareSource, Molina Healthcare, Paramount Advantage, and UnitedHealthcare Community Plan. The MCOs are at risk for all medical benefits, behavioral health, and prescription medications. About 90% of Ohio Medicaid beneficiaries are enrolled in a Medicaid MCO. The MCOs also provide additional benefits, such as member services and care management. The reprocurement will not affect the MyCare Ohio program for adults age 18 and older who are eligible for both Medicare and Medicaid. The MyCare Ohio MCOs serve about 120,000 dual eligibles. The MyCare MCOs coordinate physical, behavioral, and long-term care services.

ODM seeks responses in the following topic areas:

  1. Communication and engagement with individuals: How easy is it for individuals to access health care and find a provider, and stay engaged in their health care efforts?
  2. Grievances and appeals: There are times an individual or provider may disagree with a decision made by the individual’s managed care organization; ODM is seeking first-hand experience and ideas regarding the grievance and appeals process.
  3. Provider organization support: What administrative processes or functions make it easier or more difficult to do business in a managed care environment? How might sharing data be improved?
  4. Benefits and delivery system: In what ways can the managed care program improve access to services, and what unique arrangements should ODM consider in place of a one-size-fits-all model of managed care?
  5. Care coordination and case management: As ODM focuses on improving outcomes for individuals with complex health needs, how can MCOs and partners work to ensure appropriate care coordination and case management?
  6. Population health: How can the managed care program improve health outcomes such as infant mortality, adult smoking, and cardiovascular disease?
  7. Performance measurement and management: How should ODM be measuring the performance of the managed care program and the individual managed care plans regarding both processes and outcomes?

The questions directed to provider organization support cover standardization across plans, communications, support, data sharing, workforce development, and payment innovation, as follows:

  1. Standardization across managed care plans: ODM seeks suggestions about how it could promote greater consistency of prior authorization requirements across managed care plans, other functions that should be standardized across managed care plans, the pros and cons of standardizing functions, potential barriers and ideas for addressing them.
  2. Communication about policy updates: Ideas for improving managed care plan communication with network providers about updates and changes to plan policies.
  3. Support for administrative requirements: How could managed care plans could help provider organizations navigate the plans’ administrative requirements, such as submitting clean claims and resolving billing issues.
  4. Data sharing: How could data sharing between the state, managed care plans and providers be improved? What data do provider organizations want access to that they do not have access to today; how would provider organizations use that data? What is the most effective way of providing data to provider organizations? Are there barriers to providing the requested data; how could those barriers be overcome? How could data be shared and used by provider organizations that have limited resources and technology?
  5. Supporting primary care provider organizations: How could managed care plans could support primary care providers in integrating care for individuals enrolled with them. What kind of primary care infrastructure may be needed? What kind of training or coaching may be needed? How could the state/managed care plans incentivize primary care providers to improve access to care? What kind of primary care models should be encouraged by the state/managed care plan?
  6. Workforce development: How could the state/managed care plans support workforce development for different types of professionals and provider organizations, including dentists, pediatric psychiatrists, primary care professionals, in-home caregivers and licensed or unlicensed behavioral health professionals?
  7. Payment innovation: What are some ways the state/managed care plans could prepare and assist providers to move through the continuum of shared accountability models that reward providers for quality and improved health care outcomes? How could the state or managed care plans support and increase the establishment of comprehensive primary care practices and/or accountable care organizations? Are there other payment innovations that the state should consider incorporating into the Medicaid managed care program?

For more information, contact: RFI response, Ohio Department of Medicaid, 50 West Town Street, Suite 400, Columbus, Ohio 43215; Email: MCProcurement@medicaid.ohio.gov; Website: https://medicaid.ohio.gov/FOR-OHIOANS/Managed-Care-Procurement; or Melissa Ayers, Director of Communications, Ohio Department of Medicaid, 50 West Town Street, Suite 400, Columbus, Ohio 43215; 800-324-8680; Email: Melissa.Ayers@medicaid.ohio.gov; Website: https://medicaid.ohio.gov/.  

The Second Edition of Trends in Behavioral Health: A Population Health Manager’s Reference Guide on the U.S. Behavioral Health Financing & Delivery System (The Guide) provides information and insights into the multi-layered United States behavioral health system. The Guide includes an in-depth view of current statistics, prevailing issues, and emerging trends in order to inform the discussions, debates and decision-making of policy-makers, payers, providers, advocates and consumers. The Guide addresses current behavioral health care trends topics, including:

    • A look at the national policy that is shaping the U.S. health and human services market
    • A view of the state behavioral health delivery systems that were created by a combination of historical practices, federal and state policy, and market factors over recent years
    • An examination of the practices of 1,265 health plans that manage both physical and behavioral health care for the vast majority of the U.S. population
    • A deep-dive into behavioral health care access and delivery of care from the consumer perspective

The Detroit-Wayne Mental Health Authority (DWMHA) is moving forward with a plan to contract with a Medicaid health maintenance organization (HMO) to integrate behavioral and physical health services for DWMHA members. On May 10, 2019, DWMHA released a request for information (RFI #0000215080) to regional HMOs, with proposals due by June 14, 2019. The goal is to start the integrated care program in the fall of 2019.

The RFI seeks willing Medicaid partner(s) to provide coordinated care of mental and physical services for members of the DWMHA. Currently, the DWMHA operates a prepaid inpatient health plan (PIHP) that manages Medicaid behavioral health services on an annual overall budget of $780 million to provide services for more than 73,000 consumers with serious mental illness (SMI), serious emotional disturbance (SED), intellectual and developmental disabilities (I/DD), and substance use disorder (SUD) in the greater Detroit area. It is the largest regional behavioral health PIHP in the state. The services include hospital-based services, residential services, community-based programs for consumers with SMI/SED, community-based programs for consumers with I/DD, and prevention and treatment services for consumers with SUD.

DWMHA intends to co-design up to two pilot projects. The project(s) will focus on holistic care, which includes behavioral, physical, economic, social, and spiritual well-being of the people being served. DWMHA will work with as many Medicaid health plans (MHPs) as are interested in partnering on an integration model that is based on the DWMHA model of care, core values, and pilot goals. DWMHA is targeting implementation for the fall of 2019.

Approximately 40% of DWMHA behavioral health expenditures are directed to individuals who are not already enrolled in a MHP. This specific population includes a higher percentage of individuals with significant behavioral health needs receiving multiple services. DWMHA is currently analyzing multiple options for the management of specialty behavioral health benefits for this population during the pilot(s).

The MHP(s) and DWMHA will jointly develop tools to augment care management services for shared members/consumers. Development of these tools will be informed by experience with the SMI, SED and I/DD populations as well as experience with the MI Health Link program and national best practices.

  • DWMHA serves a number of SMI and SED patients who are currently unenrolled in an MHP and who could potentially be eligible to enroll in an MHP. This population is projected to be as high as be 7,000 consumers. DWMHA is interested in working with partnered health plans to enroll this population in a MHP.
  • An additional 10,000 consumers served by DWMHA are currently receiving services in the fee for service system. DWMHA is also interested in working with partnered MHP(s) to provide augmented care management services to this population if additional funding is available from the state.

The proposal calls for DWMHA to provide the participating MHPs a network of physical health satellite offices. Each office will provide dental, vision, preventative health care, and other services. Mutual credentialing of providers will also be necessary. DWHMA intends to coordinate and integrate care by developing a medical records exchange system and streamlining referral processes in tandem with making these satellite offices available to MHPs.

DWMHA’s President and Chief Executive Officer Willie Brooks, estimated savings of up to $25 million may come from reducing unnecessary hospital emergency room visits and inpatient and catastrophic care. Currently, DWMHA spends $55 million annually on hospital costs for its 73,000 members. Financing methods for the services provided by the HMO are still in discussion, according to officials.

The DWMHA intends to announce its HMO selection after evaluation and interviews of potential partners in the coming weeks. As of June 16, 2019, the first round of responses from potential partners was received by the DWMHA. The go-live date for managing health care services from DWHMA members is predicated on how quickly the DWHMA comes to an agreement regarding key components of the partnership.

PsychU last reported on this topic in “Detroit Wayne Mental Health Authority To Phase Out Managed Care Network Contracts,” which published on July 13, 2018. The article is available at https://www.psychu.org/detroit-wayne-mental-health-authority-phase-managed-care-network-contracts/.

For more information, contact: Tiffany Devon, Director of Communications, Detroit Wayne Mental Health Authority, 707 West Milwaukee Avenue, Detroit, Michigan 48202; 313-344-9099; Email: tdevon@dwmha.com; Website: https://www.dwmha.com/contact-us/

Following the 2014 Medicaid expansion, the share of psychiatrists who accepted Medicaid declined from 47.9% in 2010-2011 to 35.4% in 2014-2015, as weighted by the National Ambulatory Medical Care Survey’s national weights and adjusted for practice ownership status. There was no similar change among primary care or other specialties.

These findings were reported in “Medicaid Acceptance by Psychiatrists Before and After Medicaid Expansion” by Hefei Wen, Ph.D.; Adam S. Wilk, Ph.D.; Benjamin G. Druss, M.D., MPH; and Janet R. Cummings, Ph.D. The researchers analyzed information from the 2010 to 2015 National Ambulatory Medical Care Survey (NAMCS), a nationally representative survey of physicians who were not federally employed, were based in offices, and were primarily engaged in direct care of consumers; the research was limited to physicians who reported accepting new consumers for care. The goal was to determine trends in Medicaid acceptance over time. These estimates were weighted by the National Ambulatory Medical Care Survey’s national weights and adjusted for individual-level covariates.

The 11,521 NAMCS respondents who reported seeing new consumers for care included 584 psychiatrists; 4,400 primary care physicians; and 6,537 other specialists. Additional findings include:

  • In expansion states only, the adjusted difference for Medicaid acceptance increased 4.7% for other specialists, decreased 1.9% in primary care physicians, and did not change for psychiatrists.
  • In non-expansion states only, the adjusted difference for Medicaid acceptance increased 7.8% for psychiatrists, decreased 10.2% for other specialists, and did not change for primary care physicians.

The researchers concluded that consumer gains in insurance coverage under Medicaid expansion may not improve access to office-based treatment by psychiatrists. However, due to patterns discovered through different weighting mechanisms, Medicaid expansion did not have a large effect on differences in Medicaid acceptance for psychiatrists. They suggest further studies to determine reasons for the decline in Medicaid acceptance for psychiatrists after Medicaid expansion.

The full text of “Medicaid Acceptance by Psychiatrists Before and After Medicaid Expansion” was published June 5, 2019, by JAMA Psychiatry. An abstract is available online at https://jamanetwork.com/journals/jamapsychiatry/fullarticle/2735109 (accessed June 18, 2019).

PsychU last reported on this topic in “35% Of Psychiatrists & 70% Of All Physicians Accept New Appointments For Medicaid Beneficiaries,” which published on April 15, 2019. The article is available at https://www.psychu.org/35-of-psychiatrists-70-of-all-physicians-accept-new-appointments-for-medicaid-beneficiaries/.

For more information, contact: Hefei Wen, Ph.D., Department of Health Management and Policy, University of Kentucky College of Public Health, 111 Washington Avenue, Lexington, Kentucky 40536; Email: hefei.wen@uky.edu; Website: https://cph.uky.edu/people/hefei-wen

Billing-related administrative costs in the United States health care system are estimated at about 8.3% of the $3.36 trillion total health care spending in 2016. During 2019, billing-related administrative costs are projected to reach $496 billion annually. Excess billing-related administrative costs are estimated at $248 billion annually for 2019.

The billing-related administrative cost estimate includes annual costs for health insurers and provider organizations to submit claims, reconcile claims, and process payments. The 2019 estimate of $496 billion for billing-related administrative costs excludes medical record-keeping; hospital management; initiatives that monitor and improve care quality; and programs to combat fraud and abuse.

Billing-related administrative costs that were categorized as “excess” are caused by inefficiencies. This includes the cost of handling duplicate intake forms, transferring medical records between provider organizations, and ensuring accuracy in insurance bills. The $248 billion estimate of excess costs excludes costs associated with retail sales of medical products, such as sales of prescription drugs and durable medical equipment.

Annual billing-related administrative costs for 2019 incurred by physicians, hospitals, and other provider organizations are estimated at $282 billion. Up to 50% may be excess administrative costs.

Annual billing-related administrative costs for 2019 incurred by private insurers are estimated at $158 billion. Up to 66% may be excess administrative costs. Annual billing-related administrative costs for 2019 incurred by public programs are estimated at $56 billion. For public programs, the share of excess administrative costs is unknown.

These statistics were reported in “Excess Administrative Costs Burden the U.S. Health Care System” by Emily Gee and Topher Spiro for the Center for American Progress. The researchers used recent projections of U.S. health expenditures from the Centers for Medicare and Medicaid Services (CMS), and 2015 and 2016 data from the Organisation for Economic Co-operation and Development to obtain spending information for other countries. They analyzed the National Academy of Medicine’s estimations of billing-related administrative costs (13% of physician care spending; 8.5% of hospital care spending; 10% of spending by other provider types; 12.3% of spending on private insurance; and 3.5% of public program spending, including Medicare and Medicaid). The goal was to provide an overview of administrative expenditures in the U.S. health care system, in the context of proposals to reduce administrative costs and/or implement single-payer health care.

With estimated billing-related administrative costs at 8.3% in 2016, the United States has a higher burden of administrative costs than other developed countries. Those with the next highest percentage of administrative costs are France (5.7%), Austria (4.8%), and Germany (4.2%). In contrast, Norway (0.6%), Finland (0.8%), and both Sweden and Japan (1.6%) have the lowest percentages of administrative costs.

The researchers presented analyses of proposals to reduce administrative costs through a variety of strategies, including implementing a single-payer program. They reported that the estimates of savings varied widely.

The researchers concluded that a large body of evidence shows that the United States has much higher health care administration costs than other countries and may be spending twice what is needed for governance, billing, and insurance. They noted that other nations have high quality health care systems and spend a fraction of what the United States spends. They recommended that a structural overhaul of how the United States finances and prices health care could include key features used in other countries. Simplifying the payment system should be a key focus on future health reform in the United States to make the system work better for taxpayers and for consumers.

The full text of “Excess Administrative Costs Burden the U.S. Health Care System” was published on April 8, 2019, by Center for American Progress. An abstract is available online at https://cdn.americanprogress.org/content/uploads/2019/04/03105330/Admin-Costs-brief.pdf (accessed June 3, 2019).

PsychU last reported on health plan administrative costs in “2018 National Health Expenditure Projected At $3.65 Trillion, Up 4.4%,” which published on April 8, 2019. The article is available at https://www.psychu.org/2018-national-health-expenditure-projected-at-3-65-trillion-up-4-4/.

For more information, contact: Colin Seeberger, Press Contact, Center for American Progress, 1333 H Street Northwest, Floor 10, Washington, District of Columbia 20005; 202-682-1611; Email: cseeberger@americanprogress.org; Website: https://www.americanprogress.org/

The Colorado Department of Human Services (CDHS) awarded contracts to four organizations to operate the state’s existing crisis behavioral health system. On March 26, 2019, CDHS awarded six of its seven regional crisis behavioral health services contracts. The seventh and last contract was awarded on May 7, 2019. The seven regional crisis contractors, called administrative services organizations (ASOs), will provide a network of walk-in crisis centers, crisis stabilization centers and respite and mobile crisis services in their regions.The crisis system aggregate contract value is more than $31 million, which includes the regional contracts and the crisis call line. The contracts go live on July 1, 2019.

The new ASOs for the crisis system and the contract values are as follows:

  • Region 1: Rocky Mountain Health Maintenance dba Rocky Mountain Health Plans, $7,770,860
  • Region 2: Beacon Health Options, $2,655,108
  • Region 3: Signal Behavioral Health Network, $6,060,930.00
  • Region 4: Health Colorado, $2,836,820
  • Region 5: Signal Behavioral Health Network, $3,026,727
  • Region 6: Signal Behavioral Health Network, $3,799,308
  • Region 7: Beacon Health Options, $3,197,726

Another part of the system is the statewide crisis call line. The crisis line contract was awarded to the incumbent Rocky Mountain Crisis Partners, which has operated the state’s crisis line since inception. The crisis line has a budget of $3,068,291 and served 54,826 individuals last year through text, online chat, and call services.

CDHS released the request for proposals (RFP 2019000043) on September 4, 2018, with responses due by November 5, 2018. The unsuccessful bidders were Colorado Crisis Modalities (which applied for Regions 1, 2, 4, 5,6 and 7) and Beacon Health Options (which applied for Region 1). Beacon also applied and was awarded Regions 2 and 7. The incumbents under the previous contracts that started July 1, 2014, were Community Crisis Connection; West Slope Casa, LLC; AspenPointe, Inc.; and Northeast Behavioral Health, LLC. Their contracts ran through June 30, 2015, followed by four one-year renewal options.

The new contracts reflect a change in the number of behavioral health crisis service regions, which are now aligned with the state’s Medicaid regions. The realignment is intended to simplify the process for consumers seeking care, and help the state better analyze and track community health and wellness. The Colorado Crisis System is available to all Coloradans, regardless of insurance or ability to pay. If an consumer has insurance coverage, the regional ASO will bill for covered services. For services not covered by insurance the contracted amount for each region is expected to cover this portion of the care through these contracts.

The RFP and a copy of the winning proposals are available for download at https://www.openminds.com/rfp/colorado-seeks-mobile-crisis-walk-in-crisis-crisis-stabilization-and-crisis-respite-services/.

For more information, contact:

  • Elizabeth Owens, Director, Communications, Colorado Department of Human Services, 1575 Sherman Street, Floor 8, Denver, Colorado 80203-1714; 303-866-7505; Fax: 303-866-5563; Email: elizabeth.owens@state.co.us; Website: https://www.colorado.gov/pacific/cdhs
  • Christopher Miller, Program Assistant, Community Behavioral Health, Colorado Department of Human Services, 3824 West Princeton Circle, Building 15, Denver, Colorado 80236; 303-866-7498; Email: Christopher_miller@state.co.us; Website: https://www.colorado.gov/pacific/cdhs

On April 25, 2019, the Sacramento, California, the City Council announced it will open four low barrier shelters; as a result of these projects, the city will close Railroad Drive shelter, its 200-bed city-run homeless shelter. The Railroad Drive shelter cost $5 million in city and private funds to operate from its opening in December of 2017 to its closing in April of 2019. Since 2017, the city’s unsheltered population has nearly doubled. In December 2018, Mayor Darrell Steinberg presented a plan for developing approximately 800 shelter beds over two years, using City funds as well as state grants and private donations. The City Council members each pledged to find one or more sites within their districts that could be used to shelter 100 homeless people.

In February 2019, the City Council approved $15.7 million for overall sheltering activities and $1 million for rehousing options for women with families and children. On March 25, 2019, the City Council voted unanimously to pursue plans for a new homeless shelter, the Ethan Way Rehousing Shelter, with approximately 100 beds located in the California Exposition complex. If an agreement is reached with Cal Expo, the City would be allocated the use of Lot P, where a pre-fabricated building and low-barrier shelter called “Sprung Shelter” could be placed.  The Ethan Way shelter would serve people experiencing homelessness who already live in the neighborhood and are referred there by the Sacramento Police Department’s IMPACT team or by outreach workers. Ethan Way would have on-site case managers to connect individuals with social and health services and help them move into permanent housing. The total estimated cost of the design, construction, and operation of Ethan Way for a two-year period is estimated at approximately $9.4 million. The county anticipates that State Homeless Emergency Aid Program (HEAP) funds would cover approximately $4.2 million of the shelter’s operations, with the remaining $5.2 million in funds coming from reserve Measure U funds extracted from a temporary city tax used to restore essential city services. The Ethan Way shelter could be operational as soon as six months after the City and Cal Expo reach an agreement. The City will be contracting out for services to run the Ethan Way shelter but did not disclose any information on potential bidders.

The Council voted to use a portion of the remaining $11.6 million of the $25.6 million available for homeless services during the 2019 year to create a 180-bed downtown shelter located in the Capitol Park Hotel. The Capitol Park Hotel Shelter will cost more than $23 million, though the city will be reimbursed $13 million from Mercy Housing when the shelter closes, before Mercy converts it to permanent supportive housing. The shelter is expected to open during the summer of 2019. Operations of the new shelter will be overseen by the Sacramento Housing and Redevelopment Agency (SHRA).

The Council also allocated funds for four “scattered site shelters.” The “scattered site” program will rely on community non-profits to lease homes, which will be in different neighborhoods around the city. These shelters, located in single-family homes, are ideal for special populations including the elderly, members of the LGTQ community, and single women. The scattered site shelters can be created quickly and closed when no longer needed. The City Council also approved plans for a 12-bed shelter for LGBTQ youth, as well as a new “Host Homes” pilot program with the LGBT Community Center, in which host families help house young people experiencing homelessness.

Should more funding become available, the City will prioritize two new potential shelters in this order: South-area Rehousing Shelter, and the Broadway/X Rehousing Shelter. The soonest work could start on either of these potential sites (if they were approved by the City Council) would be more than a year away.

For more information, contact: Office of Media & Communications, City of Sacramento, 300 Richards Boulevard, Floor 3, Sacramento, California 95811; Email: citypublicinformation@cityofsacramento.org;  Website: https://www.cityofsacramento.org/

On April 17, 2019, the Alabama Medicaid Agency issued intent to award notices for the state’s seven regions of the Alabama Coordinated Health Network (ACHN). My Care Alabama was awarded three regions: Northwest, Central, and East. Alabama Care Network was awarded two regions: Midstate and Southeast. North Alabama Community Care was awarded the Northeast region. Gulf Coast Total Care was awarded the Southwest region. If approved by the federal government, the networks are expected to be implemented on October 1, 2019. The aggregate value of the first-year contracts is about $40.9 million; the maximum contract values for the seven regions range from $5.5 million to $6.6 million.

The Alabama Medicaid Agency issued a request for proposals (RFP 2019-ACHN-01) on January 9, 2019, with proposals due by February 25, 2019. Bidders could submit proposals on one or all seven regions in the state but were required to submit a separate proposal for each individual region.

The ACHN is intended to streamline its current roster of care coordination programs through four programs: Family Planning Care Coordination services, Patient 1st State Plan Amendment (SPA) Care Coordination services, Health Home (SPA) functions, and Maternity Care (1915(b) Waiver) functions. Currently care coordination is provided by 12 maternity programs, six health home programs, and services provided by Alabama Department of Public Health staff in 67 counties. The ACHN creates a single care coordination program with seven region-specific managing entities, at one per region. The regional managing entities are called Primary Care Case Management Entities (PCCM-Es). The PCCM-Es will coordinate transportation needs for assigned recipients, as needed. Delivery of medical services is not part of the ACHN; Medicaid will continue to pay provider organizations directly.

The ACHN will serve full-benefit, non-institutionalized children, pregnant women, and aged/blind/disabled beneficiaries in the Patient 1st population, maternity care population, and Plan First (family planning) population. Excluded populations include people dually eligible for Medicare and Medicaid, those in an institutional setting (including prison or jail), those enrolled in the state’s home- and community-based services waiver, children in custody of the Department of Youth Services, and people using hospice services.

Primary care physician (PCP) groups are required to complete an ACHN enrollment agreement with the Alabama Medicaid Agency before July 1, 2019 to avoid any delay in receiving bonus and participation payments. The goal is to incentivize PCPs with additional compensation for developing individualized, comprehensive care plans for Medicaid beneficiaries. Care coordination referrals may be requested by provider organizations, recipients, or community sources. The care coordination services can be provided in a setting of the recipient’s choice, to include provider organization offices, hospitals, ACHN-entity offices, public locations, or in the recipient’s home.

A copy of RFP 2019-ACHN-01 is available for download at https://www.openminds.com/rfp/alabama-seeks-coordinated-health-network-services/. The winning proposals have been requested and will be available at the same page.

PsychU last reported on this topic in “Alabama Medicaid Releases RFP For Regional Care Coordination,” which published on February 3, 2019. The article is available at https://www.psychu.org/alabama-medicaid-releases-rfp-regional-care-coordination/.

For more information about RFP 2019-ACHN-01, contact: Varonica Wagner, Alabama Medicaid Agency, Lurleen B. Wallace Building, 501 Dexter Avenue, Post Office Box 5624 , Montgomery , Alabama 36103-5624; Email: achnrfp@medicaid.alabama.gov; Website: http://www.medicaid.alabama.gov/content/2.0_Newsroom/2.4_Procurement.aspx

For more information the program, contact: Alabama Coordinated Health Network, Alabama Medicaid Agency, 501 Dexter Avenue, Montgomery, Alabama 36104; Email: ACHN@medicaid.alabama.gov; Website: https://www.medicaid.alabama.gov/content/2.0_Newsroom/2.7_Special_Initiatives/2.7.6_ACHN.aspx; or Melanie Cleveland, Communications Director, Alabama Medicaid Agency, 501 Dexter Avenue, Montgomery, Alabama 36104; 334-353-9363; Email: Melanie.cleveland@medicaid.alabama.gov; Website: http://medicaid.alabama.gov. 

On May 13, 2019, attorneys general in five states – California, Connecticut, Massachusetts, Oregon, and Washington – sued the U.S. Department of Health and Human Services (HHS) seeking to overturn an HHS final rule, issued May 6, barring states from making Medicaid payments to third parties on behalf of individual home care direct support professionals (DSPs). The rule applies to voluntary payroll deductions made to pay union dues, as well as deductions to pay for worker benefits obtained through collective bargaining, such as health care coverage.

The reason for the lawsuit is a newly finalized federal rule issued on May 6, 2019, that prohibits states from diverting Medicaid payments away from the DSPs providing services to HCBS participants directing their own services. As a result, states cannot deduct payments for worker benefits obtained through collective bargaining or voluntary union dues from home care workers’ paychecks. The complaint alleges that the rule disrupts well-established collective bargaining relationships authorized for decades by state labor laws. States that fail to comply with the rule may lose their federal Medicaid funding for personal care services.

The lawsuit, California v. Azar, alleges that in California the HHS final rule undermines the state’s In-Home Supportive Services (IHSS) Medicaid program; the other states make similar allegations relative to their consumer-directed Medicaid home- and community-based services (HCBS) programs. In California, more than 500,000 DSPs provide IHSS services; in the other states, several hundred thousand more DSPs provide similar services. In the plaintiff states, the DSPs have the right to collectively bargain for better wages, benefits, and training. The states believe this creates more stable, and higher quality HCBS programs. In California, only DSPs who elect to join the union pay dues to the union. Those who decline to join are not required to pay “fair share” or “agency” fees to cover the costs of collective bargaining.

DSPs who provide consumer-directed home care are employed by the beneficiary (or a guardian). The beneficiary/guardian can direct the beneficiary’s care through the hiring, firing, and day-to-day supervision of the DSPs delivering services. States and/or local authorities are responsible for general conditions related to Medicaid DSP home care employment. Each of the plaintiff states has permitted collective bargaining as a key component of these responsibilities. The states or local authorities negotiate with unions with respect to issues such as determining training requirements, referral programs, and optimizing wage and benefit packages to allow the states and local authorities to recruit and better retain a talented pool of home care workers.

The federal rule rescinded a federal Medicaid regulation confirming the established practice of direct deductions. HHS said the reason was the change is a 47-year-old provision of the Medicaid Act that prohibits assignment of rights to collect payment for Medicaid services to third parties. At that time, HCBS and consumer-directed home care services, such as IHSS, did not exist. Congress enacted that provision to prohibit a fraudulent medical financing scheme unrelated to legal payroll deductions for union dues, health insurance premiums, or other benefits.

After the proposed rule was released on July 10, 2018, California’s Attorney General sent a letter to HHS in opposition. That letter noted that HHS provided no evidence to suggest that Medicaid payments were being inappropriately diverted and that the rule would disrupt established collective bargaining arrangements.

For more information, contact: Press Office, Office of the Attorney General, State of California Department of Justice, Post Office Box 944255, Sacramento, California 94244-2550; 916-210-6276; Email: agpressoffice@doj.ca.gov; Website: https://oag.ca.gov/home.

A review of Medicaid 1115 demonstration waivers and amendments submitted by states between January 2017 and May 2018 found lack of consistency and transparency in the Centers for Medicare & Medicaid Services (CMS) processes. The review was conducted by the Government Accountability Office (GAO), which analyzed 11 CMS approvals of new demonstrations and extensions and 21 amendments submitted by 17 states. CMS conducted inconsistent reviews to determine whether the new applications and renewal requests complied with federal transparency requirements; some applications were deemed complete although they lacked expected changes in enrollment, which is required. CMS was inconsistent in its transparency reviews of state changes to pending applications, even when the changes were major because no criteria exists for determining when a change is major enough to warrant a new transparency review. The transparency review process for waiver amendments does not require states to provide information on expected changes in enrollment and costs, even for amendments to implement work requirements. The rationale for approvals has not been transparent, and it is unclear how public comments inform CMS requirements for monitoring and evaluating waivers.

The 1115 Medicaid waivers allow states to receive federal Medicaid matching funds for experimental, pilot, or demonstration projects that are likely to promote Medicaid objectives. The Patient Protection and Affordable Care Act (PPACA) required the federal Department of Health and Human Services (HHS) and CMS to establish procedures to ensure transparency in approvals of new Medicaid waiver demonstrations and extensions to existing demonstrations. The PPACA did not address waiver amendments, which are subject to long-standing guidance issued in 1994 on public input. HHS issued regulations in 2012 to address transparency in the approval of applications for new demonstrations and extensions.

These findings were reported in “Medicaid Demonstrations: Approvals of Major Changes Need Increased Transparency” by the GAO. The U.S. Senate’s Committee on Finance, and the U.S. House of Representative’s Committee on Energy and Commerce had requested that the GAO examine the public transparency of CMS’s demonstration approvals. The GAO reviewed 11 approvals of new demonstrations and extensions and 21 amendments approved in 17 states to their existing demonstrations. The review focused on transparency policies and procedures. In-depth reviews were performed on four of the 11 approvals and on three of the 21 amendments. Documentation for these seven “in-depth review” subjects were also reviewed to examine CMS’s use of the public input it receives to make demonstration approval decisions and for ongoing monitoring and evaluation.

Transparency requirements for demonstration applications

The 2012 transparency regulations dictate the information states must include in the application and require states to seek public input on their proposals prior to submitting an application to CMS. The regulations present the procedures that CMS will follow upon receiving the application. CMS reviews the submitted application to check for compliance with these regulations, before seeking additional public input through a 30-day comment period at the federal level. The regulations also provide CMS discretion to engage in additional transparency activities on a case-by-case basis. CMS’s regulations also include monitoring and evaluation requirements to ensure that the outcomes of demonstrations are transparent. CMS has developed procedures for assessing states’ applications for new demonstrations and extensions against the transparency requirements established in 2012 by reviewing incoming applications for new demonstrations or extensions against detailed checklists the agency designed to align with transparency requirements in the regulations. CMS completed checklist reviews for each of the 11 applications for new demonstrations or extensions that CMS approved from January 2017 through May 2018.

CMS also developed and implemented procedures for seeking public input at the federal level and making that input publicly available, including sending email notifications to individuals who have registered on the agency’s website when demonstration applications are open for public comment; posting the application on the website where the public can post comments during the 30-day comment period; and maintaining the public comments on the website, which are maintained indefinitely. CMS also offers a record of key decisions and documents for each demonstration on its website. The GAO found weaknesses related to the transparency of major changes made to pending applications, and the transparency of changes to approved spending limits. The GAO found inconsistency in CMS’s review of applications for compliance with transparency requirements, as follows:

  • CMS lacks criteria for determining when a change to a pending application is considered major and warrants an additional state comment period.
  • CMS does not have a policy for reassessing pending applications against transparency requirements when states make changes mid-review.
  • Expected changes in enrollment were not always included in state public notices.
  • Evaluation information was not always included in state applications.

Transparency requirements in approving states’ amendments to existing demonstrations

Applications for amendments to Medicaid section 1115 demonstrations are also subject to requirements for seeking public input. This requirement was outlined in guidance that HHS issued in 1994. The GAO found that CMS applies limited transparency requirements to states’ applications to amend existing demonstrations, despite the fact that states may propose significant changes to demonstrations through amendments, including failure to place limits on what changes can be made through amendments:

  • There is no requirement to hold a state public comment process or provide CMS a summary of public input received.
  • There is no requirement to include expected changes in enrollment and costs.
  • There is no minimum requirements for information to be included in the public notice.
  • Transparency requirements for amendment applications were inconsistently applied to amendment applications across states.

Using public input in making demonstration approval decisions

CMS reviewed state descriptions of issues raised during the state public input process and the state’s response as part of its application review. However, the level of detail in state summaries of their responses to these comments varied considerably. The extent to which CMS used public comments to inform monitoring and evaluation decisions was also not always clear. CMS officials said requirements for evaluations have been evolving as they have gained experience in understanding the public’s concerns. Officials also said they were developing robust evaluation guidance that they plan to use consistently going forward for states implementing work and community engagement requirements. As of January 2019, officials said this guidance was in draft form and under review.

The GAO recommended that, based on the findings in their report, the Administrator of CMS should develop and communicate a policy that defines when changes to a pending section 1115 demonstration application are considered major and should prompt a new review of the application against the transparency requirements applicable to the pending application. They also recommend that the Administrator of CMS should develop and communicate a policy whereby applications for section 1115 demonstration amendments that may have significant impact are subject to transparency requirements comparable to those for new demonstrations and extensions.

PsychU last reported on this topic in “MACPAC Asks HHS To Pause Arkansas Medicaid Work Requirement Disenrollments,” which published on December 24, 2018. The article is available at https://www.psychu.org/macpac-asks-hhs-pause-arkansas-medicaid-work-requirement-disenrollments/.

PsychU also reported on this topic in “From June To November 2018, 17,000 People Lost Arkansas Medicaid Benefits Over Failure To Meet Work Requirements,” which published on February 18, 2019. The article is available at https://www.psychu.org/june-november-2018-17000-people-lost-arkansas-medicaid-benefits-failure-meet-work-requirements/.

For more information, contact:

  • Tom Corry, Director, Office of Communications, Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244; 202-690-6145; Fax: 202-260-1462; Email: press@cms.hhs.gov; Website: https://www.cms.gov/.
  • Jacqueline M. Nowicki, Public Affairs, U.S. Government Accountability Office, 10 Causeway Street, Room 575, Boston, Massachusetts, 02222; 617-788-0580; Email: nowickij@gao.gov; Website: http://www.gao.gov/

On June 6, 2019, Anthem Inc., announced plans to acquire behavioral health organization Beacon Health Options from Bain Capital Private Equity and Diamond Castle Holdings. Financial terms of the transaction were not disclosed. The acquisition is expected to close in the fourth quarter of 2019. Via this acquisition, Anthem, a large health benefits company, seeks to expand its focus on behavioral health solutions as part of whole person care.

Specifically, Anthem intends to combine its existing behavioral health business with Beacon’s model and support services to fully scale integrated behavioral and physical health capabilities to customers and consumers nationwide. After the acquisition closes, Beacon will be combined with Anthem’s behavioral health business and they will operate as an integrated team within Anthem’s Diversified Business Group. Russell C. Petrella, Ph.D., Beacon Health Options president and chief executive officer (CEO), as well as other key members of Beacon’s senior team, will join Anthem’s Diversified Business Group to lead the efforts to offer innovative behavioral health solutions and further expand this business.

Beacon Health Options was formed in a 2014 merger between Beacon Health Strategies and ValueOptions. Beacon Health Options became a portfolio company of Bain Capital Private Equity the same year. Beacon currently serves more than 36 million individuals across all 50 states, including nearly 3 million individuals under comprehensive risk-based behavioral programs. Beacon’s CEO Dr. Petrella said, “We are excited to partner with Anthem to serve the behavioral health needs of more than 60 million Americans. Our member-focused, integrated clinical care model helps individuals and their families cope with their physical and behavioral health challenges. Together, we will expand access and enhance the quality of care for our mutual members.”

Anthem serves more than 78 million people, including over 40 million within its family of health plans. Anthem’s President and CEO Gail K. Boudreaux said, “With an extensive track record in behavioral health, Beacon fits well with our strategy to better manage the needs of populations with chronic and complex conditions, and deliver integrated whole health solutions. Together with Beacon, we will enhance our capabilities to serve state partners, health plans and employer groups as they seek to address consumer behavioral health needs.”

PsychU last reported on Beacon Health Options in “Beacon Care Services Launched With Texas Walmart Mental Health Practice,” which published on January 7, 2019. The article is available at https://www.psychu.org/beacon-care-services-launched-texas-walmart-mental-health-practice/.

For more information, contact:

  • Tina Beckwith, Senior Vice President, Marketing & Communications, Beacon Health Options, 200 State Street, Boston, Massachusetts 02109; 860-338-0164; Email: tina.beckwith@beaconhealthoptions.com; Website: https://www.beaconhealthoptions.com/
  • Jill Becher, Media Relations, Anthem Inc., 120 Monument Circle, Indianapolis, Indiana 46204; 414-234-1573; Email: jill.becher@anthem.com; Website: https://www.anthem.com

Greetings from New Orleans, where on the first day of The 2019 OPEN MINDS Strategy & Innovation Institute; we had the opportunity to hear from a lot of great organizations that are implementing new innovative programs such as specialty primary care programs at Woods Services, Intermountain’s social determinants of health, Compass Health’s on-site pharmacy program, and SummitStone’s medication adherence program.

But while we heard from these “‘ahead of the curve” organizations, the big question is how widespread is the adoption of innovations in specialty provider organizations? This question was answered with the release of The 2019 OPEN MINDS National Innovation Survey: 2019 Innovation Adoption Among Specialty Provider Organizations. The survey results were presented today by Monica E. Oss, OPEN MINDS Chief Executive Officer, at the opening of the institute. Some of the key findings include:

  1. Peer support was the top innovation adopted by specialty provider organizations. Fifty-four percent of organizations currently offer peer support. However, as more organizations offer peer support, we may be reaching a saturation point. The use of peer support only increased one percentage point over 2018.
  2. Telehealth/telepsychiatry remains the second most adopted innovation at 50% of organizations. The use of telehealth increased slightly more than peer support from 2018 – five percentage points.
  3. The innovation that saw the biggest increase between 2018 and 2019 was medication adherence technologies and programs. The use of this innovation increased 21 percentage points.

From a strategy perspective, there were a couple developments that caught our attention. The first was the new innovations among providers of intellectual/developmental disabilities (I/DD) and long-term services and supports (LTSS) services. As a group, these provider organizations had the largest increases in telehealth use and medication adherence programs. This market segment also reported an 18% increase in establishing “center of excellence” contracts with payers.

The second was the adoption of innovations by primary care provider organizations. This market segment had a 45% increase in co-location programs providing behavioral health services and an 18% increase in offering medication assisted treatment (MAT) for addiction treatment. Primary care organizations also reported 25%+ increases in offering medical home programs and readmission prevention/hospital diversion programs.

The challenge for health and human service organizations remains the slow implementation of innovations to scale. Specialty provider organization management teams are great at pilot programs but slow to take successful innovations from the pilot stage to scale. The keys to speeding this process are best practice change management processes and making sure there is buy-in at every level of the organization. Second, organizations need to have the data on the performance of innovative in order to respond to problems before it’s too late (see Five Rules For Building An Effective KPI System).

On May 24, 2019, Tennessee Governor Bill Lee signed legislation directing the state’s Division of Finance and Administration (DFA) to request federal approval to transition the Medicaid program to a block grant. The legislation, Tennessee House Bill 1280 of 2019 directs DFA to submit a waiver amendment to the existing TennCare II waiver, or to submit a new waiver to the federal Centers for Medicare & Medicaid Services (CMS) within 180 days after the bill is signed.

Currently, Tennessee’s federal funding for fiscal year 2018 to 2019 totals $7.5 billion. If approved by the federal government, the level of federal funding that would be approved for the Medicaid program is unknown. Nearly 1.4 million people are enrolled in TennCare.

The legislature added an amendment to require that the block grant convert the federal share of all medical assistance funding for Tennessee into an allotment that—according to the legislature—is tailored to meet the needs of the state. The block grant must include the following nine elements:

  1. Factor in, for the base amount, what the legislature said was a “current inaccurate reflection of the state’s labor costs in the state’s Medicare Wage Index and the index’s negative impact on health care delivery in this state.” The bill did not provide additional information about the nature, cause, or degree of the alleged inaccuracy.
  2. Is indexed for population growth.
  3. Is indexed for inflation and other costs.
  4. Excludes from the block grant financing amount any expenses that are not included in the state’s existing 1115 demonstration waiver.
  5. Excludes administrative costs from the block grant financing amount and permits the state to continue to draw federal matching funds for administrative costs
  6. Provides the state with maximum flexibility with regard to existing federal mandates and regulations and with implementing cost controls as determined appropriate by the state, and either exempts the state from the requirements of any new mandates, regulations, or federal court orders during the period of block grant financing or increases the amount of block grant financing to offset any cost increases to the state from such mandates, regulations, or federal court orders.
  7. Provides the state with maximum flexibility regarding pharmacy benefits including fluctuation of prescription drug costs, diabetic testing supplies, and over-the-counter medications.
  8. Provides the state with maximum flexibility to serve other needy populations with distinct financial or healthcare needs.
  9. Remains at the level set according to the block grant without any decrease in the federal share of all medical assistance funding for this state based on deflation or a reduction in population..

For more information, contact:

  • Sarah Tanksley, Deputy Director of Communications and Employee Relations, Division of TennCare, Tennessee Division of Health Care Finance and Administration, 310 Great Circle Road, Nashville, Tennessee 37243; 615-507-6450; Email: sarah.tanksley@tn.gov; Website: https://www.tn.gov/tenncare.html
  • Paul Bailey, Senator, Tennessee General Assembly, 425 5th Avenue North, Suite 736, Cordell Hull Building, Nashville, Tennessee 37243; 615-741-3978; Email: sen.paul.bailey@capitol.tn.gov; Website: http://www.capitol.tn.gov/

On May 13, 2019, Washington State Governor Jay Inslee signed Senate Bill 5526 into law, creating a “public option” health insurance plan for Washington residents. The plan, titled “Cascade Care,” will make Washington the first state in the nation to offer a voluntary public option for health insurance. Under Cascade Care, the Washington State Health Care Authority (HCA) will contract with private health insurers to administer the plans but will control the terms to manage costs. The idea is for the government to create a health insurance program to compete with the private marketplace and to expand coverage and affordability for all Washington residents.

Beginning in January 2021, consumers seeking individual coverage will have the option to buy a state-sponsored plan on the Health Benefit Exchange, Washington State’s online insurance market place. The HCA will contract with private health insurance carriers to offer three levels of plans through the exchange—bronze, silver, and gold. The plans will cap total provider organization and facility reimbursement rates at 160% of Medicare rates for all covered benefits in the statewide aggregate, excluding pharmacy benefits. For services provided by rural hospitals the legislation caps rates at 100% of the Medicare rate. Reimbursement for primary care services provided by a physician with a primary specialty designation of family medicine, general internal medicine, or pediatric medicine are capped at 135% of the amount that would have been reimbursed under Medicare for similar services.

Under Cascade Care, the state will not subsidize or help cover the cost of premiums beyond federal subsidies that are already available on the Exchange based on income levels. The legislation directs state officials to devise a plan by November 2020 to subsidize individuals who earn up to 500% of the federal poverty level — roughly $62,500 for an individual and $129,000 for a family of four.

Approximately 200,000 Washington residents, or less than 3% of the population, currently buy individual coverage on Washington’s Exchange. Between 2018 and 2019, enrollment in the individual market dropped by more than 13,000 people, according to data provided by the Exchange. The state’s most recent uninsured rate was 5.5%.  Pam MacEwan, CEO of the Exchange, commented on the decrease in enrollment, saying that the individual insurance market has been buffeted by a series of Trump administration policies, including the end of federal reinsurance and cost sharing payments and the end of penalties for individuals who don’t buy coverage. By offering the Cascade Care plans, Washington officials hope to increase enrollment through the exchange and decrease the uninsured rate.

In addition to increasing enrollment and affordability, a goal of the Cascade Care plan is to offer public option plans in all 39 of Washington’s counties. Currently, 14 counties offer only one individual health insurance plan option on the exchange. In previous years, the state has struggled to find a single carrier to provide coverage in rural areas labelled as “bare counties.” However, participation by health insurers in Cascade Care is voluntary, and there’s no requirement that they offer statewide coverage.

For more information, contact: Amy Blondin, Chief Communications Officer, Washington State Health Care Authority, Post Office Box 45502, Olympia, Washington 98504-5502; 360-725-1915; Email: amy.blondin@hca.wa.gov; Website: http://www.hca.wa.gov/.

One of the big cultural changes happening in health care is moving from “volume” to “value” in reimbursement. The volume of services is still the focus of provider organization management teams when it comes to profitability and sustainability. But, with the increasing use of value-based reimbursement models (VBR), the metrics for sustainability and profitability are shifting. Value-based reimbursement and other alternate payment models increase the “financial return” of achieving other goals—reduced total cost of care, reduce readmission rates, and reduced use of emergency rooms, to name a few.

This is a sea change in financial sustainability models, and it affects every aspect of the organization from the front desk, to clinical programming, to billing. And the effect is particularly pronounced for health systems and organizations with acute care and residential treatment beds—see The Future Has Arrived For VBR. If you’re a manager in an organization with a large amount of revenue (or profitability) tied to beds, the challenge ahead is making the shift from fee-for-service to value-based purchasing landscape-and surviving the transition period.

So, what do executives of these bed-based provider organizations need to do to map a successful trajectory from volume-based payment to VBR? For the answer to that question, we asked some executives with experience in these settings. They had four recommendations: Understand that hospitals play an important “short-term” role; develop a standards-based continuum of services; leverage unique services and expertise; and focus on quality and performance.

Understand that hospitals play an important “short-term” role—The days when hospitals were the undisputed center of the health care delivery experience are over and trying to use this resource as the main lever to meet the demands of value-based care and wellness focused population-based management simply won’t deliver the desired results. OPEN MINDS Senior Associate George Braunstein, noted:

While acute hospitals and residential treatment facilities are still a vital part of the health care continuum, they are no longer the center of gravity. They play an important short-term role and need to design their service system in that manner. If not, they will not only lose money, but will not be very effective at providing overall services and thus find it impossible to meet new standards and reimbursement realities in value-based health care.

Develop a standards-based continuum of services—Populations with complex health needs can’t get those needs met in one place. The solution is to build the provider organization relationships and infrastructure across the whole care continuum so that all those needs can be met with an agreed upon and shared standard of care. Mr. Braunstein, also noted:

Any hospital or residential facility not only needs to find effective community-based partners, they need to work with their partners to develop a standards-based continuum of services. Even if a hospital or residential facility has services available or has contracted partners, their team needs to work in a systematic way to address the service and care coordination needs of the various populations they serve. It is critical to have decision support tools to make these standards uniform across care coordinators in a system of care.

Brandon W. Danz, Director of Government Risk Programs at WellSpan Heath and OPEN MINDS Advisory Board Member, also explained the importance of partnerships across the continuum of care, noting:

Value-based reimbursement requires stronger partnerships across sites of care and across a consumer’s continuum of care – and especially when the consumer has complex medical needs. We are seeing new informal partnerships between hospitals and post-acute providers to institute seamless transitions of care and more importantly, meaningful coordination and communication surrounding patient-centered care. Health systems are recruiting preferred provider organizations who can meet these new population health opportunities. They’re looking for partners who offer solid care management, successfully manage medication adherence, and have in place continual performance improvement strategies to reduce infections and optimize length of stay.

Leverage unique services and expertise—In addition to great care coordination across the health care continuum, specialty services for specialty populations are critical for success in VBR arrangements. There should be a constant lookout for new models, innovations, or education to help maximize the effect these services can have on complex health needs. Mr. Danz explained:

Treatment facilities, skilled nursing facilities, and inpatient rehab facilities are well-positioned to leverage their unique set of services and expertise to succeed in value-based care. They should regularly monitor new models being developed by government and commercial payers. They can start by proactively addressing their organizational culture to be agile and ready to act on an opportunity when it is presented. Governing boards and leadership need to be educated and ready to adapt a value-based mindset. Thinking outside the box is critical here – these organizations must re-imagine their future in new ways. Under value-based models, post-acute facilities are seen as points of admission to divert consumers from hospitals when they can be better served by the unique expertise and set of services offered in the facility. This not only saves money and contributes to value-based success, but it also offers better care at a better location and often, with better outcomes for consumers and their caregivers.

Focus on quality and performance—Above all, the shift from volume to value must be about quality of care and performance of the service delivery system. Simply saving money isn’t good enough if the health outcomes aren’t also improved. When all competitors in a given market have shifted to value-based care and costs have come down across the board, the quality of care will also serve as a powerful market differentiator. Mr. Danz noted:

These types of facilities also need to keep an eye on quality. It is becoming more strongly tied to financial outcomes and is also being reported publicly. In competitive environments, being the second-highest quality provider organization in your region might mean being the second choice of well-informed consumers. It is only a matter of time until app developers commoditize on Medicare’s increased performance transparency data to provide consumers with transparency and choice.

For more on managing the shift from volume to VBR, check out these resources from the PsychU Library:

  1. How Do We Automate Population Health Management?
  2. No Whole Person Care Without Person-Centered Organizations
  3. Using Population Health Tools For Competitive Market Advantage
  4. Population Health Management Strategies – The Hospital Perspective & Beyond
  5. Leadership Evolution Needed For Successful Population Health Management
  6. Behavioral Health Evidence-Based Practices As Population Health Management Tools
  7. Improving Population Health Management With Public Health Approaches

As of March 2019, all 39 of Virginia’s local Community Services Boards (CSBs) and the Richmond Behavioral Health Authority (RBHA), which provide access to public mental health services had implemented same day access, a provision of the state’s larger System Transformation Excellence and Performance (STEP-VA). The Virginia Department Of Behavioral Health and Developmental Services (DBHDS) developed STEP-VA to provide easier access to public mental health services; ensure a uniform set of services across all CSBs, and ensure accountability across CSBs. STEP-VA requires CSBs to implement same day access, primary care screening, behavioral health crisis services, outpatient behavioral health, psychiatric rehabilitation, peer/family support services, Veteran’s behavioral health, care coordination, and targeted case management.

For same day access, the CSBs provide a clinical assessment that same day to any individual who comes to the CSB during open access hours. If the assessment determines that the person needs services, the first appointment will be offered within 10 days. The goal is to improve consumer satisfaction and engagement, as well as avoiding “no shows” in the assessment process. Before implementing same day access, people needing an assessment potentially waited weeks for their first clinical appointment, and some CSBs reported 40% no-show rate.

Now that all CSBs have implemented same day access, they will focus on implementing the next STEP-VA provisions: primary care screening and monitoring at all CSBs, phasing in a statewide expansion of outpatient services, and planning for more comprehensive crisis services at all CSBs.

STEP-VA is loosely based on the federal Certified Community Behavioral Health Clinic (CCBHC) model. Virginia was awarded a CCBHC planning grant, but in October 2016 opted not to submit a proposal for a demonstration grant due to cost and infrastructure concerns. The STEP-VA model was developed as a sustainable Virginia-specific solution. The CSBs began working on STEP-VA after the 2017 Governor and the General Assembly provided $4.9 million in general fund dollars for an initial group of CSBs to implement SDA. The General Assembly required the remainder of STEP-VA services to be implemented over the next two biennia, with additional funding to be allocated in the coming years. The 2018 Governor and the General Assembly provided $5.9 million for the second group of 22 CSBs to implement same day access in fiscal year 2019. Each CSB will receive $270,000 in ongoing state mental health funds. Eight CSBs had already implemented some form of same day access and received funding on July 1, 2018, to address their implementation costs. By the end of calendar year 2018, all but five CSBs had implemented same day access. The remaining CSBs were on-track to implement same day access in early 2019 and did so in March.

CSB progress on same day access was reported in March 2019 by the Virginia Association of Community Service Boards, Inc., a trade association for the CSBs. Additional information about same day access and STEP-VA was reported by the Virginia Department Of Behavioral Health and Developmental Services (DBHDS) in a December 2018 year-end report to the legislature, and was also mentioned in June 2018 in the CSB contract requirements for fiscal years 2019 and 2020. During fiscal year 2018, CSBs reported receiving more than $1.3 billion from all sources to provide community-based services for 218,894 individuals

For the fiscal year 2019 and 2020 CSB contracts, DBHDS implemented new reporting requirements that are focused on the continuity of care and utilization, as follows:

  1. Continuity of care for local psychiatric inpatient discharges: The population includes individuals for whom the CSB purchased or managed local inpatient psychiatric services from a private psychiatric hospital or psychiatric unit in a public or private hospital who keep a face-to-face (non-emergency) mental health outpatient service appointment within seven calendar days after discharge. The benchmark is 70%.
  2. Continuity of care for state hospital discharges: The population includes individuals for whom the CSB is the identified case management CSB and who keep a face-to-face (non-emergency) mental health outpatient service appointment within seven calendar days after discharge from a state hospital. The benchmark is 80%.
  3. Residential crisis stabilization unit utilization (RCSU): The measure focuses on the percent of all available RCSU bed days for adults and children utilized annually. The target annual utilization rate is 75%. This measure applies to CBS that operate an RCSU.
  4. Regional discharge assistance program (RDAP) service provision: The measure focuses on the share of total annual state RDAP fund allocations to a region obligated and expended by the end of the fiscal year. The benchmark: CSBs in a region shall obligate at least 95% and expend at least 90% of the total annual ongoing state RDAP fund allocations on a regional basis by the end of the fiscal year. The benchmark does not include one-time state RDAP allocations provided to support ongoing DAP plans for multiple years.
  5. Local inpatient purchase of services (LIPOS) provision: The measure focuses on the share of the total annual regional state mental health LIPOS fund allocations to a region expended by the end of the fiscal year. The benchmark: CSBs in a region shall expend at least 85% of the total annual regional state mental health LIPOS fund allocations by the end of the fiscal year.
  6. Program of assertive community treatment (PACT) caseload: The measure applies to the average number of individuals receiving services from the PACT team during the preceding quarter. The benchmark calls for CSBs that operate PACT teams to serve at least 75% of the number of individuals who could be served by the available staff providing services to individuals at the ratio of 10 individuals per clinical staff on average.
  7. Frequency of developmental enhanced case management (ECM) services: The percentage of individuals who receive Developmental Disability Waiver services who meet the criteria for receiving ECM who receive at least one face-to-face case management service monthly, with no more than 40 days between visits, and who receive at least one face-to-face case management service visit every other month at their residence. The benchmark: The CSB shall provide the face-to-face visits on time to at least 90% of individuals receiving DD Wavier services who meet the criteria for ECM.

The requirements were outlined in “Virginia Department Of Behavioral Health & Developmental Services Administrative Requirements For Community Service Boards For Fiscal Years 2019 & 2020.” The CSB Administrative Requirements include or incorporate by reference ongoing statutory, regulatory, policy, and other requirements that are not expected to change frequently. Reporting requirements are included for financial management; procurement; reimbursement; human resource management; information technology; planning; forensic services; interagency relationships, and access to services for those who are deaf, hard of hearing, late deafened, or deaf-blind. The document also outlines treatment block grant requirements for federal substance abuse prevention and treatment.

The VACSB notice, “All CSBs Have Implemented the Same Day Access Model,” is posted at https://vacsb.org/wp-content/uploads/2019/03/Same-Day-Access-at-CSBs-March-2019-.pdf (accessed May 14, 2019).

PsychU last reported on this topic in “Virginia Opts To Avoid CCBHC Demonstration,” which published on December 14, 2016. The article is available at https://www.psychu.org/virginia-opts-avoid-ccbhc-demonstration/.

For more information, contact:

  • Maria Reppas, Freedom of Information Act and Media Relations, Virginia Department of Behavioral Health and Developmental Services, Post Office Box 1797, Richmond, Virginia 23218-1797; 804-786-3921; Email: maria.reppas@dbhds.virginia.gov; Website: http://www.dbhds.virginia.gov/developmental-services/step-va
  • Hilary Piland, Public Policy Manager, Virginia Association of Community Services Boards, 10128 West Broad Street, Suite B, Glen Allen, Virginia 23060; 804-330-3141; Fax: 804-330-3611; Email: hpiland@vacsb.org; Website: https://vacsb.org/

Is your organization ready for a contract with down-side financial risk? Perhaps a bundled rate? A care coordination contract paid on a per-member per month basis? A six-month case rate for residential services?

Only 25% of executives answered “yes” (sort of) to that question in recent survey led by the Jefferson College of Population Health and conducted by Numerof & Associates (see 25% Of Health Care Provider Organizations Ready To Take On Risk-Based Contracts). Only 4% are “completely” ready, and only 21% are “very” ready. What we also found interesting was that 64% claim to be “somewhat” or “moderately” ready—and that could mean they aren’t really ready at all.

The same survey of physician group executives or vice presidents, as well as individuals working in U.S. provider organizations including health care systems, hospitals, and academic medical centers found that about three-quarters of the organizations have at least one payer agreement that includes upside gain and/or downside risk—but less than 20% of revenue is at-risk. The median amount of revenue at-risk was 10% and the median amount of revenue in capitated contracts was 5%. For 31%, the risk-based agreement is one-sided and has no downside risk.

This squares with the results of OPEN MINDS recent national survey—about 58% of specialty provider organizations are getting some revenue from value-based reimbursement agreements, and 9.3% have 20% or more of their revenue coming from VBR.

And The Centers for Medicare and Medicaid Services (CMS) push for ACOs to accept downside risk is going to move the field (see The ACO ‘Savings Confusion’. In addition, health plans are also starting pilot programs with value-based reimbursement (VBR) arrangements that include downside risk (see Health Plan Contracting Opportunities – More Consistency Emerging).

The “million-dollar question”? What are the most important organizational competencies needed to accept downside financial risk? We reached out for perspectives from the field and came up with a short list:

  1. An integrated tech platform with clinical data, interoperability, performance management analytics, and care coordination functionality
  2. Real-time performance data for real-time decision making
  3. An understanding of service delivery cost variables and the risk-based contracting process
  4. An organizational culture focused on performance metrics and performance management

An integrated tech platform with clinical data, interoperability, performance management analytics, and care coordination functionality—One of the most common competencies needed to work effectively with a VBR contract is sufficient data management skills to address the financial risk. This starts with adopting an integrated tech platform and investments in tech infrastructure and data analytics so that you can integrate data from multiple sources, meaningfully analyze data for business intelligence, and inform stakeholders from front-line, to clinicians, to management, to payers, to health plans. OPEN MINDS Senior Associate George Braunstein noted:

In my experience with managed care as well as service delivery it would be unusual for any organization to enter into a risk-based contract without those basic tools. This does not mean that they always manage to effective outcomes, but they can ensure that they can monitor performance and manage the risk sufficiently to have a positive bottom line.

OPEN MINDS Senior Associate Ken Carr also noted how poorly many organizations do this:

Based on our analysis of VBR readiness assessment results so far, the lowest scoring competency has been technology infrastructure. I think that this is one of the most important competencies for VBR-implementing the right technology in the most effective manner is the foundation for using data to drive quality outcomes and operating performance.

Real-time performance data for real-time decision making—Even if your organization has the right tech platform, it doesn’t mean you know how to use the data for decisionmaking. OPEN MINDS Senior Associate John Talbot explained:

You must have the ability to track VBR performance measures in as close to real time as possible. And then you need a team that can use that information to act quickly. This involves timely root cause analysis and being willing to change processes as needed.

An understanding of service delivery cost variables and the risk-based contracting process—One element that is often overlooked in preparing organizations is understanding the cost of your current services and the drivers that would increase or decrease those costs. Success in a VBR arrangement relies on developing and maintaining contractual partnerships with payers and health plans and that can’t happen in a mutually beneficial way unless you know how to come to the table and can discuss your costs and the cost assumptions. OPEN MINDS Senior Associate Deb Adler noted:

The most common VBR competency needed is understanding your current unit costs so as you enter into alternative payment arrangements, you must know your current costs to confirm the financial modeling matches up to your business practices.

An organizational culture focused on performance metrics and performance management—Another important competency needed is an organizational culture that values the use of timely data and responds with effective improvements in performance when needed. This cultural competency is usually built upon the use of evidence-based practices, open communication among staff at all levels, and aligning the measures of performance with great consumer care. This culture is essential for long-term sustainability because the relationship between health plans and provider organizations is shifting from vendor to partner, from volume to value. This means, to quote OPEN MINDS Senior Associate Peggy DeCarlis, that the key is “the ability for health plans and provider organizations to create authentic, transparent, mutually beneficial relationships.”

For more, check out these resources in the PsychU Resource Library:

  1. Preparing For Value-Based Reimbursement-Even Before The Contracts Are Signed
  2. Four Ps For Leading A VBR Evolution (Or Any Change)
  3. Pay For Value-The Glass Half Full, The Glass Half Empty?
  4. The Future Has Arrived For VBR
  5. VBR Jumping From Hospital-Centric ACOs To Community-Based Players
  6. Crawl, Walk, Run To VBR
  7. Building A Workforce For Value-Based Reimbursement = Advice From Four Executives

There has been lots of activity by health plans around the social determinants of health—and arranging and/or paying for social services. The question is whether this a passing interest by health plan managers or will this become a permanent shift in health plans service array which will provide a sustainable funding stream for provider organizations.

What has been happening? Eighty percent of health plans moving to make social support part of their service array. The Health Care Service Corporation (HCSC) and the Blue Cross Blue Shield (BCBS) Institute launched foodQ, a six-month food delivery pilot program (see Blue Cross Launches Food Delivery Program To Address Social Determinants), and the Humana Foundation Dedicating $7 Million To Address Social Determinants Of Health. The American Medical Association (AMA) and UnitedHealthcare (UHC) announced a collaboration to support the creation of 23 new ICD-10 codes related to social determinants of health (see AMA & UnitedHealthcare Partner To Propose New ICD-10 Codes To Identify & Address Social Determinants Of Health) and Anthem is making a push to whole person care, as well as person-centered care (see No Whole Person Care Without Person-Centered Organizations).

There are several initiatives coming out of the Kaiser system. Kaiser Permanente last year announced they are investing $200 million in housing projects with the goal of supporting more housing projects in the future and recently announced a $5.2 million investment in a 41-unit affordable housing complex in East Oakland, California (see Kaiser Permanente Invests In Affordable Housing Complex In Oakland, California For $5.2 Million As Part Of Initiative To Improve Community Health By Addressing Housing Insecurity). And the organization just unveiled plans for a partnership with social coordination platform Unite Us as part of their comprehensive health network-Thrive Local. The goal of this new network is “to connect health care and social services providers to address the pressing social needs including housing, food, safety, utilities and more for millions of people across the United States”. The goal is to begin the roll out this summer and expand to Kaiser Permanente’s 12.3 million members and the 68 million people in the communities Kaiser Permanente serves, within three years. The network will track community partner referrals and service outcomes to measure if consumer needs are being met.

The big question—will this be “referrals only” to already overburdened social service programs or will the health plans pay health and human service provider organizations for selected types of social services? And, if health plans are to pay for “non-medical” social support services, this assumes they can get past the immediate hurdle—that the U.S. does not consider certain social services as part health care expenses. The recent changes to the Medicare Advantage plan rule (see The Thinning Line Between Health Care & Social Services) indicate that there may be new funding available for under-funded social services.

A concern is that the health plan interest in social determinants of health has been driven by a decade of the provisions of the Patient Protection & Affordable Care Act (PPACA). No preexisting conditions clauses, behavioral health parity, no annual and lifetime limits, and nearly universal health care coverage has changed the risk management practices of health plans from cost shifting to other service systems to managing the long-term health and well being of enrolled consumers. This could all change if the PPACA is overturned.

The long-term role of social service initiatives in health plans has yet to be determined. OPEN MINDS Senior Associate Sharon Hicks is cautiously optimistic about the potential—but raises the issue of the decades-long systematic underfunding of social services. She said:

If these recent notices about social determinants of health is signaling a permanent change in the way that we think about taking care of acute and chronic illness, then the money that flows into the supportive services, which are important to the success of the medical care received, will serve to increase the capacity for service delivery.

If, however, the medical/insurance community continues to question the value of the supportive services and refuses to pay a fair value for the delivery of the services, then we are likely to experience a tremendous shortage of availability of these types of services. The market for the services has been inappropriately deflated by the current models of compensation for staff. If that doesn’t change, then the addition of these SDH-focused services will likely fail to realize significant improvements in outcomes for this country.

Deb Adler, OPEN MINDS Senior Associate, links the future of these initiatives to the ability to demonstrate return-on-investment (ROI)—a topic we’ve covered before. She noted:

I do think payers will go beyond a referral only model, but I suspect it may take some time to transform payer thinking. I suspect the Medicaid managed care programs or divisions within large payers are already leading the pack. It’s wise guidance to demonstrate value to payers as there are social service disruptors out there who may be more nimble, effective (read: less caught up in the “way things have always been done”), and willing to compete with traditional social service providers for the opportunity to provide these services as part of their business model and social mission.

I wouldn’t underestimate the time it will take to prove a return-in-investment and the challenges. Social service needs are complex and not binary (it’s not like you have unstable housing and then “flip a switch” and have stable housing). And statistically there can be a high mortality or “drop-out rate” of the population that is the target focus, which makes the analysis that much more difficult.

A recent payer was hesitant to enter into a shared savings arrangement tied to implementing interventions tied to SDH because they felt it would be difficult to determine if the improvement was a “regression to the mean” or actual improvement. A charitable backer of the program wanted to have a simple “start” and “stop” point for the program to more easily measure impact when the reality is it was unrealistic to use the same “point in time” for individuals targeted to move from a homeless situation to stable housing. Statistically this all can be managed but it illustrates that barriers remain in moving to payment for social service interventions.

For those social support services that health plans may pay for, provider organization business development teams need the same type of approach used for any payer contract development. The key-get your proof of return-on-investment (ROI) for your social service supporting services ready (see Social Services ROI Essential To Social Determinants Wave). Any provider organization management team out there that thinks their “social services-infused approaches” to health care will become a long-term market differentiator need to get their “proof” ready now. Without it, the long-term programmatic approaches adopted by payers and health plans will use someone else. As stated before-this is a big opportunity for someone (see A Big Opportunity For Someone).

For more information to get your team thinking about new programming integrating social services, check out these resources from the PsychU Resource Library:

  1. Addressing Social Determinants-The Measurement Challenge
  2. Social Determinants Today, Social Determinants Tomorrow
  3. Addressing The Social Determinants Of Health With Income Assistance
  4. Medicare’s Path To Incorporating Social Determinants Into Value-Based Payment
  5. Screening Humana Medicare Advantage Members For Social Determinants Of Health Reduced ‘Unhealthy Days’ By 2.7%

California-based provider organizations sharing financial risk through a capitated payment model had better health outcomes and performance on quality measures than provider organizations reimbursed using a fee-for-service (FFS) model. In addition, average consumer out-of-pocket (OOP) costs were 60% lower for consumers under the care of a risk-sharing provider organization, at $268 OOP annually, compared to $672 OOP per year for those under the care of a FFS provider organization.

These findings were reported in “Health Care Cost & Quality Atlas” by the Integrated Healthcare Association (IHA). The researchers analyzed data from seven California health plans that cover 7.2 million lives via health maintenance organization (HMO), preferred provider organization (PPO), and accountable care organization (ACO) products, both fully insured and self-insured. The data set represents about 55% of the statewide commercial enrollment of 13.1 million, excluding Kaiser Permanente. The researchers excluded Kaiser Permanente data from the analysis, because its more than 6 million commercial lives would skew the results. The prevalence of provider organizations participating in risk-sharing varies from 24% in Northern California, 18% in Central California, and 45% in Southern California. The analysis compared three risk-sharing arrangements:

  • Full risk, which was defined as capitation for both professional and facility costs
  • Professional-risk only, which was defined as capitation for non-facility clinical professional and ancillary services such as outpatient lab tests
  • No risk, which was defined as FFS

Quality was defined as clinical quality scores based on a composite of eight measures, and on preventive screening rates. Provider organizations participating in a risk-sharing arrangement had higher scores than those in FFS. Quality scores for provider organizations in a full-risk arrangement had an average composite quality score of 67.1%. Provider organizations with professional risk only had an average quality score of 65.6%. Provider organizations paid FFS had an average quality score of 57.9%. Preventive screening rates were 11 percentage points higher for full-risk provider organizations compared to FFS provider organizations.

The total cost of care was up to 3.5% lower for risk-sharing provider organizations. The total cost of care for members under the care of a FFS provider organization averaged $4,589; the average cost was $4,428 for members under the care of a full-risk provider organization. The total cost of care averaged $4,501 for members under the care of a provider organization sharing professional services risk.

Pharmacy costs were up to 13% lower for risk-sharing provider organizations. Pharmacy costs per member per year (PMPY) averaged $970 for FFS provider organizations and averaged $840 PMPY for those under the care of a full-risk provider organization. Pharmacy PMPY averaged $882 for members under the care of a provider organization sharing professional services risk. The researchers noted that clinical risk was very similar across the three risk sharing levels (within 1% to 2% of the others) and did not account for the differences.

In each of the three geographic regions (Northern, Central and Southern), provider organizations participating in risk arrangements had higher clinical quality scores compared to FFS-only provider organizations. The researchers noted similar associations between risk sharing, quality scores, and cost of care in the 19 Covered California regions. They concluded that risk sharing is associated with higher value, defined as better clinical quality at lower cost. They proposed that the provider organizations participating in risk arrangements may be using the capitated payment to invest in care management programs and other infrastructure to support population health and quality improvement.

The full text of “Health Care Cost & Quality Atlas” was published April 11, 2019 by the Integrated Healthcare Association. A copy is available online at https://atlas.iha.org/story/risk (accessed May 3, 2019).

For more information, contact: Akhila Nanduri, Media Contact, Integrated Healthcare Association, 500 12th Street, Suite 310, Oakland,California 94607; 510-585-7422; Fax: 510-444-5842; Email: akhila.nanduri@ogilvy.com; Website: https://www.iha.org/

On April 9, 2019, Cuyahoga County, Ohio approved a $42.3 million contract with The MetroHealth System (MetroHealth) to provide correctional health care services for the Cuyahoga County Jail system. The contract began May 9, 2019 and runs through May 8, 2022. MetroHealth previously provided physicians and advanced practice providers for the County Jail system, and the County provided nursing staff.

Under the agreement, Cuyahoga County will pay MetroHealth up to $12.75 million annually for all staffing, plus other expenses for medical supplies, pharmaceuticals, insurance, administrative duties, and accreditation. Medical staffing will be based on an average of 2,000 inmates per day at the Cuyahoga County Corrections Center (CCCC). If the average daily population increases, MetroHealth and the County would work together to adjust staffing levels.

The contract specifies that MetroHealth must fully staff operations at the county’s three jails by October 31, 2019. The three jails include the downtown Justice Center, Bedford Heights City Jail, and Euclid City Jail. However, MetroHealth agreed to fully staff administrative positions by June 30, 2019. Additional specifics in the contract include:

  1. The corrections officers providing security for medical staff will receive specialized health care training and will be dedicated to the medical unit.
  2. The county is required to work with MetroHealth toward accreditation from the National Commission on Correctional Health Care. Health care in the jail must meet the national organization’s standards by January 2020.
  3. The county is not able to select or remove any medical staff member and has no control over clinical operations. The county is required to promptly carry out any medical directives issued by MetroHealth’s jail medical director, as long as those directives do not impact the safety and security of staff and inmates.
  4. The county is required to staff the jail with an adequate number of corrections officers, and the county is required track how often inmates are locked in their cells.
  5. Legally required medical intake screenings are required to occur at the sally port, which is the first place inmates go when they are brought into the jail.
  6. At additional cost, MetroHealth will provide a dietitian to plan healthy and appropriate meals.
  7. MetroHealth will provide input on the county’s choice for a new jail administrator.
  8. MetroHealth will provide staff to administer a medically assisted treatment (MAT) program for those with addiction issues.
  9. Within 30 days of contract approval, the county will work with MetroHealth on a new system to process health-related requests from inmates.
  10. The county will be required to submit jail policies that impact inmates’ health and safety to MetroHealth for review and feedback.
  11. The county will be required to collaborate with MetroHealth in a variety of ways, including attending a daily safety briefing to resolve safety concern; participating in a monthly leadership meeting held to address any systems issues with the medical unit; and conduct a detailed review in the case of an inmate death, serious injury, or an injury to medical staff.
  12. The county is required to provide inmates with adequate hygiene supplies.
  13. Medical staff are required to have proper licenses.

The contract comes following a November 2018 report by the U.S. Marshals Service that summarized “inhumane” conditions at the jails. The conditions described included a lack of adequate medical and mental-health care. Many provisions in the MetroHealth contract correspond to problems identified in 2018 by the marshals, common pleas judges, and jail medical officials.

In December 2018, Cuyahoga County and MetroHealth were named as defendants in a class-action lawsuit resulting from the conditions at the CCCC. The civil rights lawsuit claims that conditions at the facility violate the First, Fourth, Fifth, Sixth, Eighth, and Fourteenth Amendments to the U.S. Constitution. The lawsuit, filed in the U.S. District Court Northern District of Ohio, seeks an independent monitor to oversee changes at the jail, and calls for an immediate fix to the crowding of inmates and understaffing of corrections officers. Specific allegations in the lawsuit that may be alleviated through the updated contract with MetroHealth include poor hygienic conditions, and “regular denial” of inmate medical and mental health care.

PsychU last reported on prison health care in “Milwaukee County Contracts With Wellpath For Correctional Health Care, Develops Plan To Self-Operate By 2021,” which published on May 13, 2019. The article is available at https://www.psychu.org/milwaukee-county-contracts-with-wellpath-for-correctional-health-care-develops-plan-to-self-operate-by-2021/.

For more information, contact:

  • Tina Shaerban-Arundel, Manager, Public & Media Relations, MetroHealth System, 2500 MetroHealth Drive, Cleveland, Ohio 44109; 440-592-1334; Email: tarundel@metrohealth.org; Website: https://www.metrohealth.org/
  • Rich Luchette, Communications, Information Office, Cuyahoga County, 2079 East 9th Street, Cleveland, Ohio 44115; 216-443-7000; Email: questions@cuyahogacounty.us; Website: https://cuyahogacounty.us/

For more information regarding the lawsuit, contact:

  • Terry H. Gilbert, Partner and Attorney, Friedman & Gilbert, 55 Public Square, Suite 1055, Cleveland, Ohio 44113-1901; 216-241-1430; Fax: 216-621-0427; Email: tgilbert@f-glaw.com
  • Caroline H. Gentry, Attorney, Porter Wright Morris & Arthur, LLP, 1 South Main Street, #1600, Dayton, Ohio 45402; 937-449-6748; Fax: 937-449-6820; Email: cgentry@porterwright.com

James Hardiman, Attorney, National Association for the Advancement of Colored People – Cleveland Branch, 12200 Fairhill Road, Suite 401, Cleveland, Ohio 44120; 216-256-6544; Email: attyjhard@aol.com

The Arizona Health Care Cost Containment System (AHCCCS) is planning to allow one Arizona Complete Care (ACC) plan for the general Medicaid population in each geographic service area (GSA) to expand their service lines to include certain specialty services currently provided by the Regional Behavioral Health Authorities (RBHAs). The expansion would take place no earlier than October 1, 2020. To select the ACCs to provide RBHA services, during August 2020, AHCCCS anticipates releasing a request for proposals (RFP) to the current ACC plans/ vendors. AHCCCS intends to expand the provision of services for at least one ACC plan in each GSA, in lieu of a public RFP for the solicitation of unique RBHA services. Awards would be announced by October or November 2020. The plans would launch the new service implementation by October 2021.

As of January 1, 2019, AHCCCS provided coverage to approximately 1.9 million members. The ACC managed care organizations (MCOs) are: Banner – University Family Care Plan; Care1st Health Plan Arizona; Health Choice Arizona (Steward Health Choice Arizona); Health Net Access (a Centene subsidiary); Magellan Complete Care of Arizona; Mercy Care; and UnitedHealthcare Community Plan. The ACC MCOs serve about 1.6 million members.

The RBHAs provide integrated Medicaid physical and behavioral health (including specialty services) and non-Medicaid services for members determined to have serious mental illness (SMI). The RBHA contractors are Arizona Complete Health (South GSA – 13,352 members), Mercy Care (Central GSA – 21,597 members), and Steward Health Choice Arizona (North GSA – 5,725 members). Each also has an ACC contract to provide integrated care for the general population in the same region.

In addition to providing integrated care for individuals with SMI, the RBHAs provide behavioral health services for foster children enrolled in the Department of Child Safety/Comprehensive Medical and Dental Program and provide behavioral health services for members enrolled with the Department of Economic Security/Division of Developmental Disabilities (DES/DDD). The RBHAs also provide crisis services, grant funded, and state-only funded services. The crisis services include telephone, community-based mobile, and facility-based stabilization (including observation not to exceed 24 hours).

In preparation for this transfer of services from the RBHAs to the ACCs, AHCCCS released a request for information (RFI) on February 12, 2019. Responses were due by March 14, 2019. The RFI explained the background, provided a rough timeline for the initiative, and sought feedback on specific questions, as follows

  1. Should AHCCCS allow choice of plan by allowing more than one ACC plan to address unique RBHA services for Central and Pima?
  2. Individuals with an SMI who have not received behavioral health services in two years are allowed to decertify as SMI to receive services through another ACC Plan. Should this remain?
  3. Should there be a single statewide vendor for crisis services? Single regional vendor?
  4. Should there be a single statewide telephone number for crisis services?
  5. Other thoughts to improve the first 24 hours of crisis service delivery?
  6. What feedback do you have on AHCCCS coordinating crisis services with the 22 Tribes across Arizona?
  7. Payment for court-ordered evaluations (COE): Currently each RBHA pays for some or all COE services within one county of their service area. COE costs are shared by the county, AHCCCS, and the plans. As of October 1, 2021, how should COE payment per county be delegated?
  8. AHCCCS, RBHAs and ACC Plans are required to have an Office of Individual and Family Affairs (OIFA) administrator and unit including a member liaison for adults and children. Any thoughts?
  9. SMI-specific responsibilities: What should AHCCCS consider to maintain focus on the needs of individuals with an SMI as the responsibilities are blended within one plan?

PsychU last reported on this topic in “Arizona Awards Integrated Health Plan Contracts To UnitedHealthcare & Mercy Care,” which published on March 30, 2018. The article is available at https://www.psychu.org/arizona-medicaid-awards-ahcccs-complete-care-contracts-seven-mcos/.

For more information, contact: Heidi Capriotti, Public Information Officer, Arizona Health Care Cost Containment System, 801 East Jefferson Street, Phoenix, Arizona 85034; Email: Heidi.Capriotti@azahcccs.gov; Website: https://www.azahcccs.gov.

On May 1, 2019, Capital BlueCross and WellSpan Health announced a strategic partnership to coordinate financing and delivery of health care, with a focus on population health management. The two organizations have agreed to enter into a long-term agreement to be finalized in the coming months, a partnership that will leverage WellSpan’s system-wide electronic health record and Capital BlueCross’ data systems.

According to Melissa Fox, public relations representative for Capital BlueCross, “This agreement is different than other agreements in the service area. This is a partnership that will benefit Capital BlueCross members who use WellSpan doctors and hospitals. This is not a partial or full ownership model, nor will either company have seats on the board of the other. The companies have a like-minded vision for using data, innovation and products that drive down the cost of care and increase the overall health of individuals.”

The two companies anticipate that the partnership will result in a variety of new product offerings and tools. The partnership will also give WellSpan Health enhanced access to a data and analytics toolset for population health management through Genia, LLC, a Capital BlueCross subsidiary. Discussions are in progress; the early targets are as follows:

  1. New product offerings and care coordination programs for employers.
  2. Expanded Medicare offerings in Adams, Franklin, northern Lancaster, Lebanon, and York counties.
  3. Innovative digital health strategies.
  4. Navigation tools to help consumers find the most appropriate medical or pharmacy care for their needs.
  5. Payment arrangements that are focused on improved quality and outcomes.
  6. Ways to better use data and analytics to improve patient experience.

WellSpan President and Chief Executive Officer (CEO) Roxanna L. Gapstur, Ph.D., R.N. said, “As we look for a multitude of ways to enhance the value of the care we deliver, we see great benefit in working more closely with organizations that provide health care coverage to the patients we serve, especially those that share WellSpan’s commitment to transforming the care experience. We look forward to working closely with the Capital BlueCross family of companies to improve the health of the people we mutually serve.” Gary D. St. Hilaire, president and CEO of Capital BlueCross said, “Capital BlueCross and WellSpan Health have a shared history of offering consumers access to high quality care. This partnership enables us to create even more innovative and affordable solutions for our members and our community.”

For more information, contact:

  • Melissa Fox, Supervisor, Public Relations and Social Media, Capital BlueCross, 2500 Elmerton Avenue, Harrisburg, Pennsylvania 17177; 717-541-6843; Email: melissa.fox@capbluecross.com; Website: https://www.capbluecross.com/
  • Brett Marcy, Senior Director, Public Relations & Communications, WellSpan Health, 912 South George Street, York, Pennsylvania 17403; 717-851-5122; Email: bmarcy@wellspan.org; Website: https://www.wellspan.org/

On April 10, 2019, UnitedHealthcare (UHC) announced plans to launch the UnitedHealthcare Care Bundles program for its Medicare Advantage contracted provider organizations. The program provides tools and support to help participating provider organizations manage bundled payments for 10 procedures for UHC Medicare Advantage members. These tools can also be used by those provider organizations serving Medicare fee-for-service (FFS) beneficiaries in the Centers Medicare & Medicaid Services (CMS) Bundled Payment for Care Improvement Advanced (BPCI-A) bundled payment program. The program will begin on January 1, 2020.

The Care Bundles program is a retrospective shared risk model. The program is intended for UHC contracted network provider organizations that participate in both original fee-for-service Medicare and in UHC Medicare Advantage plans. The 2020 UHC Medicare Advantage Care Bundles program will include the following 10 procedures:

  • Four cardiac bundles: inpatient cardiac valve, inpatient coronary bypass, and inpatient and outpatient percutaneous coronary intervention.
  • An inpatient spinal fusion (non-cervical) bundle.
  • Five orthopedic bundles: inpatient hip (double) joint replacement, inpatient knee (double) joint replacement, inpatient and outpatient knee (single) joint replacement, and inpatient hip (single) replacement.

For both the UHC Care Bundles program —and for the CMS BPCI-A program, a target price is established based on historical claims data for each episode of care. The historical claims costs are based on all acute and post-acute services associated with the bundle. The participating provider organizations will be eligible for shared savings (up to a gain-share limit) if their performance is below the target price and meets quality metrics. A repayment up to a stop-loss limit is required if the target price is exceeded.

The duration of the bundle is the same across all bundle types. For an inpatient bundle, the duration includes a trigger period (lasts from admission to discharge), plus the 90 days following discharge. For an outpatient bundle, the duration includes the trigger period plus 90 days following completion of the outpatient procedure. The trigger period includes physician services, and inpatient or outpatient hospital services. The post-trigger period includes other outpatient services, inpatient hospital readmission services, long term care hospital (LTCH) services, inpatient rehabilitation facility (IRF) services, skilled nursing facility (SNF) services, home health agency (HHA) services, clinical laboratory services, durable medical equipment (DME), Part B drugs and hospice services.

The provider organizations that participate in Care Bundles will receive assistance with the following from UHC:

  • Care management for consumers from pre-operative education through post-acute care, to include consumer identification and risk stratification, care plan creation and end-to-end management and tracking medication review, a post-acute care network by market, site of care optimization, and length-of-stay care management.
  • Technology to improve pre and post-operative interactions with consumers by connecting them with their care teams through an automated, personalized digital experience. The technology includes: a consumer mobile app, a provider organization web and mobile application, secure messaging, care plan design, and dashboard reports.
  • Data and analytics to help provider organizations better understand risk and to know how the care bundles are performing. The tools include real-time clinical and claims-based bundle analytics; predictive modeling and selection bundles prior to program launch; claims data intake, processing, analytics, and distribution; a portal for provider organization partners; and financial reconciliation and provider organization performance.
  • Financial administration to support financial performance reporting, risk delegation services and reconciliation services. The services include comprehensive tracking and reporting of shared savings; provider funds distribution; and payment of full savings earned within 30 days after UHC receives it from CMS.
  • Business administration to help participating provider organizations transition to value-based care. The services include bundled payment operations oversight, all recruitment of new provider organizations, development of strategic operating models, and performance improvement and strategy consulting with provider partners

Currently, more than 110,000 physicians and 1,100 hospitals participate in UHC value-based care programs. More than 15 million UHC members access care from physicians in value-based arrangements, including more than three million UHC Medicare Advantage members. By the end of 2020, UHC expects to have $75 billion in provider organization reimbursements tied to value-based arrangements annually.

For more information, contact: Jeff Meyerhofer, President, Bundled Payment Solutions, Medicare & Retirement, UnitedHealthcare, 9800 Healthcare Lane, Minnetonka, Minnesota 55436; Email: carebundles@uhc.com; Website: https://uhgcarebundles.com/; or Steven Shivinsky, Vice President of Corporate Communications, UnitedHealthcare, 9800 Healthcare Lane, Minnetonka, Minnesota 55436; 763-361-2882; Email: stephen.shivinsky@uhc.com; Website: https://www.uhc.com/; or Taylor Joseph, Media Contact, Medicare and Retirement, UnitedHealthcare, 12501 Whitewater Drive, Hopkins, Minnesota 55343; 952-931-5430; Email: taylor.joseph@uhc.com; Website: https://www.uhc.com/.

In March the California Department of Health Care Services (DHCS) released draft value-based payment (VBP) performance measures for the state’s Medicaid managed care program (in California, the Medicaid program is called Medi-Cal—for more on the California Medicaid system, see California Mental Health System Guidebook. The measures are grouped into four domains: behavioral health integration; chronic disease management; prenatal/post-partum care; and early childhood preventive care. Each domain has five performance measures. These measures will be tied to risk-based incentive payments and are aimed at improving care for certain high-cost or high-need populations (see California Releases Proposed Medi-Cal Value-Based Payment Program Measures).

What is interesting about the draft VBP measures is that DHCS focused the measures on screening, prevention, and integration of physical health care and behavioral health. Many states and national measures have incentivized screening for depression or substance abuse in primary care settings, but these measures go one step farther. The measures include an additional incentive payment to provider organizations per visit for services delivered in an environment that has co-located primary care with behavioral health care.

Why do these measures matter if you’re not serving consumers in the state of California? Just keep in mind the adage: “As California goes, so goes the nation.” California is the most populous state in the country and has the largest Medicaid population of any state by far, at about 10.5 million total enrollees—or about 16% of the total Medicaid population. While they are not alone in requiring their Medicaid health plans to utilize value-based reimbursement (VBR) models, with such a huge portion of the Medicaid population they are often a bellwether for innovation in Medicaid and the results of their program changes can provide a significant data set for other states to analyze when making their own program modifications.

What do these measures tell us? First, primary care-led integration will continue to be a priority for payers and health plans. In California and elsewhere, performance measures related to behavioral health tend to be aimed at primary care—not behavioral health care provider organizations. Measures like screening for depression or alcohol use are about improving behavioral health, but they are intended for the primary care setting. With California adding additional incentives for services to be delivered in an integrated care setting, we will see health plans give priority in referrals to co-located programs. If so, this presents an incentive for provider organizations to form new partnerships with primary care practices and health systems. In a co-located system of care, behavioral health screening measures are easier to meet. The right changes in workflow ensure that consumers who may screen positive can see the right clinical professionals on site as needed.

Second, integration measures, particularly screening measures, are a new opportunity to use technology tools to streamline processes. Online or tech-based screening systems are a convenient and efficient way to ensure that every consumer has their screening either before they come into the office for their visit utilizing on online tool or in office while waiting for their appointment using a tablet device or kiosk. Studies have shown that online screenings can be just as effective as in-person screening (see Computer-Based Suicide Risk-Assessment Tool As Accurate As In-Person Psychiatric Assessment), and with screening being such a huge part of VBR performance measures, we can expect the use of these tools to grow.

California was accepting comments on their draft performance measures through the end of March, with the final measures expected this year. We’ll continue to monitor the effectiveness of California’s new performance measures and how other states are utilizing VBR to prioritize integration.

The Illinois legislature is considering three bills to change the practices of managed care organizations (MCOs) operating under HealthChoice Illinois, the state’s Medicaid managed care program. The proposed legislation comes in response to news that during the first three months of the statewide HealthChoice Illinois implementation, January 2018 through March 2018, the MCOs denied 10.6% of Medicaid hospital claims.

The bills were introduced on February 15, 2019, to change MCO business practices and performance as a result of the denial rate. The bills address MCO rates, appeals processes, and timely payment. The MCO rates, and timely payment bills specifically concern medically necessary treatment that was provided without obtaining prior approval. The appeals process bill guarantees a third-party review of denials.

The denial rate was reported in “Illinois Medicaid MCO Hospital Denial Claims Report,” by the Illinois Department of Healthcare and Family Services (HFS) in November 2018. HFS analyzed the MCO claims processing and payment performance regarding hospital claims under the redesigned mandatory managed care program. HealthChoice Illinois expanded Medicaid managed care from just 30 counties to all 102 counties in the state. As of the end of fiscal year 2018, HealthChoice Illinois covered about two million people and cost the state about $10.7 billion during fiscal year 2018.

The 10.6% denial rate represented more than $630 million in denied revenue for the hospitals. About 43.6% of these were benefit denials; about 21.7% were denials for missing information; and about 17% were denials for not meeting the MCO’s authorization policy on provider network status, service limits, medical necessity, non‐emergency services, or missing/invalid authorization form/record.

As of May 1, 2019, all three proposed state senate bills were still in committee. The three bills currently in front of the state senate include:

Senate Bill 1697: The bill assures fair Medicaid managed care rates. The bill was first read in the Senate and filed on February 15, 2019. Specifically, the bill:

  • Requires MCOs to ensure that contracted provider organizations shall be paid for any medically necessary service rendered to any of the MCO’s enrollees, regardless of inclusion on the MCO’s published and publicly available roster of available provider organizations.
  • Requires that all contracted provider organizations are contained on an updated roster within seven days of entering into a contract with the MCO and that such roster be readily accessible by all medical assistance enrollees for purposes of selecting an approved health care provider.
  • Requires HFS to develop a single standard list of all additional clinical information that shall be considered essential information and may be requested from a hospital to adjudicate a claim.
  • Provides that a provider organization shall not be required to submit additional information, justifying medical necessity, for a service which has previously received a service authorization by the MCO or its agent.
  • Contains provisions concerning a timely payment interest penalty; an expedited payment schedule; a single list of standard codes to identify the reason for nonpayment on a claim; payments under the HFS fee-for-service system; a 90-day correction period for provider organizations to correct errors or omissions in a payment claim; service authorization requests; discharge notification and facility placement; and other matters.

Senate Bill 1703: The bill assures a fair appeal process for denied Medicaid claims. The bill was first read in the Senate and filed on February 15, 2019. Specifically, the bill:

  • Provides that a provider organization that has exhausted the MCO written internal appeals process shall be entitled to an external independent third-party review of the MCO’s final decision that denies, in whole or in part, a health care service to an enrollee or a claim for reimbursement to a provider organization for a health care service rendered to an enrollee of the Medicaid managed care organization.
  • Requires a MCO’s final decision letter to a provider organization to include: a statement that the provider organization’s internal appeal rights within the MCO have been exhausted; a statement that the provider organization is entitled to an external independent third-party review; the time period granted to request an external independent third-party review; and the mailing address to initiate an external independent third-party review.
  • Provides that a party shall be entitled to appeal a final decision of the external independent third-party review within 30 days after the date upon which the appealing party receives the external independent third-party review.
  • Provides that a final decision by the Director of HFS shall be final and reviewable under the Administrative Review Law. Contains provisions concerning fees to help defray the cost of the administrative hearings; the specific claims of services that are appealable; and the HFS rulemaking authority.

Senate Bill 1807: The bill assures timely payment by MCOs for any medically necessary service provided to health care consumers. The bill was first read in the Senate and filed on February 15, 2019. Specifically, the bill:

  • Requires HFS to require MCOs to ensure that any provider organization under contract with an MCO on the date of service shall be paid for any medically necessary service rendered to any of the MCO’s enrollees, regardless of inclusion on the MCO’s published and publicly available roster of available providers; that all contracted provider organizations are listed on an updated roster within seven days of entering into a contract with the MCO; and that the roster is readily accessible by all medical assistance enrollees for purposes of selecting an approved health care provider organization.
  • Requires HFS to require MCOs to expedite payments to provider organizations based on specified criteria (rather than providing that HFS may establish a process for MCOs to expedite payments to providers based on criteria established by HFS)
  • Contains provisions concerning discharge notifications and facility placements and other matters.

PsychU last reported on this topic in:

For more information, contact: John Hoffman, Director of Communications, Illinois Department of Healthcare and Family Services, 401 South Clinton Street, Chicago, Illinois 60607; Email: John.K.Hoffman@illinois.gov.

On March 18, 2019, the North Carolina Department of Health and Human Services released final policy guidance on eligibility and enrollment for the upcoming Medicaid Behavioral Health Intellectual/Developmental Disability (BH/IDD) Tailored Plans. Nine consumer populations will automatically included in the BH/IDD Tailored Plans. The Tailored Plans will be designed to meet the needs of beneficiaries with complex care needs due to I/DD or with higher intensity behavioral health needs due to serious mental illness (SMI), severe substance use disorder (SUD), or a traumatic brain injury (TBI).

This final guidance outlines the eligibility criteria for Tailored Plans and describes how people will enroll in these plans, how transitions between Standard Plans and Tailored Plans will work, and what benefits will be covered in Tailored Plans. The guidance was issued as part of the Department’s transition to integrated managed care. The Standard Plans are for the general Medicaid population, with exceptions for those also enrolled in Medicare and other special populations excluded or delayed by legislation.

The following Medicaid and Health Choice beneficiaries will automatically be included in the BH/IDD Tailored Plan, based on available data:

  1. Enrollees in the Innovations waiver and those on the waiting list as well as any beneficiaries with a qualifying I/DD diagnosis code
  2. Enrollees in the TBI Waiver and those on the waiting list
  3. Transition to Community Living Initiative (TCLI)-qualified beneficiaries; any beneficiary who has used a Medicaid service that will only be available through a Behavioral Health I/DD Tailored Plan; and any individuals who has used a behavioral health, I/DD, or TBI service funded with state, local, federal or other non-Medicaid funds
  4. Children with complex needs (as that term is defined in the 2016 settlement agreement between the NC DHHS and Disability Rights of North Carolina)
  5. Any beneficiary who has a qualifying SMI or serious emotional disturbance (SED) diagnosis code or qualifying
    SUD diagnosis code who used a Medicaid-covered enhanced behavioral health service during the look-back period
  6. Beneficiaries who have had two or more psychiatric hospitalizations or readmissions within 18 months, or two or more visits to the emergency department for a psychiatric problem within 18 months, or two or more episodes using behavioral health crisis services within 18 months
  7. Beneficiaries who have had an admission to a state psychiatric hospital or alcohol and drug abuse treatment center (ADATC), including, but not limited to, individuals who have had one or more involuntary treatment episode in a state-owned facility

The guidance was outlined in the “North Carolina Behavioral Health & Intellectual/Developmental Disability Tailored Plan Eligibility & Enrollment.” DHHS said this guidance document is the first in a series that will be released over the next year as part of the Department’s commitment to transparency throughout the Tailored Plan design and implementation process. On November 2019, most North Carolina Medicaid beneficiaries, in two of six regions, will begin to transition to managed care, enrolling in Standard Plans designed to meet the needs of most people in the Medicaid program. The remaining four regions will begin the transition to managed care in February 2020. When BH/IDD Tailored Plans launch in 2021, beneficiaries who meet the eligibility criteria will be automatically enrolled in the BH/IDD Tailored Plan in their region, unless they actively select a Standard Plan.

DHHS is reviewing encounter, claims, and other data to identify beneficiaries eligible for the BH/IDD Tailored Plans. DHHS does not intend to cap enrollment in the BH/IDD Tailored Plans. However, enrollment caps will remain for the Innovations and TBI waivers. Based on its review of past data, DHHS estimates that about 25,000 to 35,000 dual eligible beneficiaries and 80,000 to 100,000 Medicaid-only beneficiaries will meet the eligibility criteria for enrollment in a BH/IDD Tailored Plan. DHHS intends to regularly review encounter, claims and other relevant and available data to identify beneficiaries enrolled in Standard Plans and new Medicaid beneficiaries who meet BH/IDD Tailored Plan eligibility criteria. For beneficiaries who are not identified as meeting the eligibility criteria through the data review process, there will be a process for requesting eligibility.

In early summer 2019, DHHS will notify individuals eligible for Tailored Plan enrollment in the first two regions of their status; the other four regions will be notified in fall 2019. They will not be eligible to enroll in a Standard Plan unless they are on Innovations or TBI waiver. Until the Tailored Plan enrollment begins in July 2021, they will remain in their current delivery system, receiving behavioral health services through the Local Management Entity/managed care organizations (LME/MCOs) and other Medicaid services through the current fee-for-service structure.

An individual who qualifies for Medicaid and who believes they meet the eligibility and wishes to be in the BH/IDD Tailored Plan can make that request with the help of their provider organization. DHHS will address transitions of care from the Standard Plan to the BH/IDD Tailored Plan on the following schedule:

  • Auto enrollments will be processed on a monthly, or more frequent basis based on available data
  • Standard BH/IDD Tailored Plan enrollment requests made to the Enrollment Broker will be approved or denied within five to seven calendar days
  • Expedited transfers for urgent medical needs will be reviewed and approved or denied within 24 to 48 hours from when the beneficiary makes the request to the Enrollment Broker

At the time of the BH/IDD Tailored Plan launch, beneficiaries participating in the Innovations and TBI waiver must enroll in the BH/IDD Tailored Plan to receive services under the waiver. Medicaid beneficiaries who are eligible for the Innovations waiver but are waiting for a slot will be able to enroll under the Standard Plan while on the waiting list without losing their place on the list.

However, other beneficiaries eligible for a BH/IDD Tailored Plan who choose to enroll in a Standard Plan will not have access to benefits offered through LME-MCOs that are not part of the Standard Plan benefit package. Accordingly, an Innovations or TBI Waiver beneficiary must disenroll from their waiver program to transition to a Standard Plan.

Foster children up to age 21 and those who were formerly foster children up to age 26, or receiving Title IV-E Adoption Assistance will have a choice in 2021. They will stay in the current delivery system until 2021, at which point they can choose between a Specialized Foster Care Plan—if available, the Standard Plan, or the BH/IDD Tailored Plan.

Long-stay nursing home residents (90 days or longer) are excluded from managed care. Nursing home residents with shorter stays who are eligible for the BH/IDD Tailored Plan when it begins could be included. However, dual eligibles will not be included in managed care until 2023.

The following populations are excluded from Medicaid managed care. They will remain in fee-for-service.

  • Beneficiaries with limited Medicaid benefits, such as those enrolled in the Health Insurance Premium Payment program or the family planning program; beneficiaries eligible for emergency services only; and partial dual eligibles.
  • Medically needy beneficiaries who are subject to a deductible or spend-down.
  • People enrolled in the Community Alternatives Program for Children (CAP/C) and Community Alternatives Program for Disabled Adults (CAP/DA) waiver.

PsychU last reported on this topic in the following articles:

For more information, contact: Division of Health Benefits, Department of Health and Human Services, 1950 Mail Service Center, Raleigh, North Carolina 27699-1950; 888-245-0179; Email: Medicaid.Transformation@dhhs.nc.gov.

On April 24, 2019, the Centers for Medicare & Medicaid Services (CMS) urged governors and state Medicaid directors to implement financing and service delivery models to integrate care for people dually eligible for Medicare and Medicaid. In addition to inviting states to launch or continue capitated financial alignment initiative (FAI) demonstration projects, or managed fee-for-service model for high-risk beneficiaries, CMS invited state-developed proposals.

As of December 2018, more than 12 million individuals nationwide were enrolled in both Medicare and Medicaid – and 561,295 were enrolled in fully-integrated dual eligible Medicare Advantage Special Needs Plans (FIDE SNPs) or in capitated FAI demonstration program Medicare-Medicaid Plans (MMPs). The FIDE SNPs and capitated FAI program MMPs operate in 16 states. However, in 2017, only about 29% of eligible individuals enrolled in MMPs.

The capitated FAI demonstration models: CMS is offering the nine states already participating in this model a potential multi-year extension and is interested in partnering with new states. The nine participating states are: California, Illinois, Massachusetts, Michigan, New York (two programs), Ohio, Rhode Island, South Carolina, and Texas. This model involves a three-way contract between the state, CMS, and MMP. As of June 2016, 364,334 dual eligibles were enrolled in an integrated MMP. This represented about 3% of the total 9.9 million full dual eligible population in 2016.

The managed fee-for-service demonstration models: CMS proposes working with additional states to test the model on a similar cohort of individuals to Washington State’s demonstration group. The Washington demonstration provides a high-intensity intervention for high-risk beneficiaries. In the demonstration project, health homes act as the central point to integrate primary and acute care, behavioral health, and long-term care services for beneficiaries with the highest risks. The program was implemented in 14 counties in July 2013, 23 additional counties were added in October 2013, and the remaining two counties (King and Snohomish) joined in April 2017.

State-specific demonstration models: Additionally, states can submit concept papers or proposals, or to reach out to the CMS Medicare-Medicaid Coordination Office (MMCO) with their ideas for state-specific initiatives. In the letter, CMS said it is open to a wide range of initiatives. CMS also noted that there are a number of opportunities available to states that do not require demonstration authority or waivers to better serve dually eligible individuals. On December 19th, 2018, CMS released a State Medicaid Director Letter outlining 10 such opportunities, including integrating care through dual eligible special needs plans (D-SNPs), using Medicare data to inform care coordination and program integrity initiatives, and reducing administrative burden for dually eligible individuals and the provider organizations who serve them.

The 2017 MMP enrollment rate was reported in “The Complex Art Of Making It Simple: Factors Affecting Enrollment In Integrated Care Demonstrations For Dually Eligible Beneficiaries,” by Debra J. Lipson, Erin Weir Lakhmani, Alena Tourtellotte, and Danielle Chelminsky, of Mathematica Policy Research. The goal was to examine program elements, state policies, and MMP characteristics, and strategies to identify factors associated with enrollment. The researchers interviewed state Medicaid officials in the 10 states and representatives from 15 MMPs.

The topic was further discussed in “Care Coordination in Integrated Care Programs Serving Dually Eligible Beneficiaries – Health Plan Standards, Challenges and Evolving Approaches” by Sarah Barth, Sharon Silow-Carroll, Esther Reagan, Mary Russell, and Taylor Simmons of Health Management Associates. The researchers examined care coordination requirements for several types of integrated care models for duals. The models included managed long-term services and supports programs that require integration with Medicare Advantage dual eligible special needs plans, fully integrated dual eligible special needs plans, and the FAI. The researchers found that few states have prescriptive contract standards regarding care coordination, and that most states provide plans with a great deal of flexibility. Stakeholders noted that it could be difficult to engage primary care provider organizations in care coordination, but opportunities existed for plans to more effectively partner with consumer advocates and organizations providing home and community-based services (HCBS) to improve care coordination for duals.

A link to the full text of “The Complex Art Of Making It Simple: Factors Affecting Enrollment In Integrated Care Demonstrations For Dually Eligible Beneficiaries” may be found at the MACPAC website at https://www.macpac.gov/publication/the-complex-art-of-making-it-simple-factors-affecting-enrollment-in-integrated-care-demonstrations-for-dually-eligible-beneficiaries/.

A link to the full text of “Care Coordination In Integrated Care Programs Serving Dually Eligible Beneficiaries – Health Plan Standards, Challenges And Evolving Approaches” may be found at the MACPAC website at https://www.cms.gov/Medicare-Medicaid-Coordination/Medicare-and-Medicaid-Coordination/Medicare-Medicaid-Coordination-Office/Downloads/MMCO_Factsheet.pdf.

PsychU last reported on this topic in the following articles:

For more information, contact:

  • Tom Corry, Director, Office of Communications, Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244; 202-690-6145; Fax: 202-260-1462; Email: press@cms.hhs.gov.
  • Kathryn Ceja, Medicaid and CHIP Payment and Access Commission, 1800 M Street NW, Suite 650 South, Washington, District of Columbia 20036; 202-350-2000; Fax: 202-273-2452; Email: Ceja@macpac.gov.

The San Diego County Health and Human Services Agency (HHSA) is planning a pay-for-results project that provides housing and community development services to help low-income families become financially self-sufficient. HHSA seeks to apply for funding through the federal Social Impact Partnerships to Pay for Results Act (SIPPRA) demonstration project.

The county’s project is an existing program serves the communities in the North County and supports low income families with housing and offers trainings/solutions to help the participants become financially self-sufficient. The documents announcing the plans to apply for the SIPPRA funds provided no information about how the program is currently funded or what might change if it is selected for SIPPRA.

Many of the project participants have history of addiction and have completed addiction treatment programs. Most of the participants also have children and/or are in process of reuniting with their children as they enter a stable housing environment and working towards financial stability. All the participants enter the program at the extremely low-income category.

As part of its preparations, on April 17, 2019, HHSA issued a request for proposals (RFP 9498) seeking a contractor to help the county apply for SIPPRA funding and then evaluate the project outcomes. Responses were due by April 26, 2019. HHSA described the project in an addendum responding to questions. The contract term is anticipated to be an initial (base) period from the May 22, 2019 through November 30, 2019 with seven one-year options.

The evaluation will focus on program outcome measures to determine whether the intervention group outcomes are better than those of a comparison group. If the intervention group outcomes are better, the evaluation will calculate the amount of federal savings. Value to the federal government will be estimated from the public sector savings (decrease in federal outlays) and federal tax receipts (potential increase in revenue) that are the result of the intervention.

SIPPRA was signed into law on February 9, 2018. It is intended to improve the effectiveness of certain social services. The federal government will pay for a project only if predetermined project outcomes have been met and validated by an independent evaluator, a system called a “pay for results partnership.” Congress appropriated $100 million for the SIPPRA program to implement “Social Impact Partnership Demonstration Projects” and feasibility studies to prepare for those projects. The SIPPRA program is largely administered by the Department of the Treasury (Treasury). Only state and local governments are eligible to apply for SIPPRA funding.

The purpose of SIPPRA is to facilitate creation of public-private partnerships that bundle philanthropic or other private resources with existing public spending to scale up effective social interventions already being implemented, with the goal of establishing the use of social impact partnerships to address pressing national social service problems. SIPPRA also seeks to redirect funds away from programs that, based on objectives data, are ineffective, and into programs that achieve demonstrable, measurable results; ensure federal funds are used effectively on social services to produce positive outcomes for both service recipients and taxpayers.

Treasury released the SIPPRA Notice Of Funding Availability on February 21, 2019. Applications are due by May 22, 2019. The funding will be awarded in November 2019. The first SIPPRA demonstration period will begin on December 1, 2019 and run through November 30, 2020. There will be six additional option years, plus an additional six months of funding. Treasury anticipates making between five and 15 awards under this first Notice of Funding Availability. However, the number of project awards will depend on the quality and viability of the project applications and the amount of funds requested by individual applicants. The project outcomes can vary from a single outcome with one federal payment to be made at the end of the project to multiple outcomes and milestone payments. Each outcome and related payment will be evaluated independently.

For more information, contact:

  • Sarah Sweeney, Communications Officer, Health and Human Services Agency, San Diego County, 5560 Overland Avenue, Suite 270, San Diego, California 92123; 619-685-2522; Email: Sarah.Sweeney@sdcounty.ca.gov.
  • David Dominguez, Procurement Contracting Officer, San Diego County Department of Purchasing and Contracting, 5560 Overland Avenue, Suite 270, San Diego , California 92123-1204; 858-505-6367; Fax: 858-715-6452; Email: David.Dominguez@sdcounty.ca.gov

The New Jersey Department of Human Services (DHS) will provide coverage for a new Medicaid office-based addiction treatment (OBAT) benefit starting July 1, 2019. OBAT is limited to primary care offices, and is part of a larger initiative, called MATrx, to increase access to medication-assisted treatment (MAT) for addiction disorder.

MATrx consists of three tiers of treatment to be provided by primary care provider organizations, federally qualified health centers (FQHCs), and clinic-based Opioid Treatment Providers (OTPs) and Centers of Excellence (COEs). These settings will serve as a resource for treatment, training, and mentoring. All three tiers will work together to promote evidence-based and integrated care, as follows:

  • The COEs, to be created at Rutgers New Jersey Medical School and Cooper Medical School of Rowan University, will provide training, consultation, and peer services in addition to primary care for complex cases.
  • Premier provider organizations, such as OTPs, FQHCs, and Certified Community Behavioral Health Clinics (CCBHCs), and independent substance abuse licensed independent clinics that have the ability to provide integrated physical health and counseling services in addition to MAT services. Currently they receive a bundled rate. Under OBAT, they will receive an enhanced primary care rate to provide intake and assessment, and will be able to bill for navigator services.
  • OBAT primary care provider organizations will provide initiation, stabilization, and maintenance treatment. The services must be provided by physicians and non-physician clinical professionals whose scope of practice and benefit category include the services described by the applicable CPT code. The primary care professionals must be able to prescribe specific MAT medications.

OBAT is for any chemical dependency. The covered benefit includes MAT with FDA-approved medications, care coordination provided by navigators, plus peer services to be provided by the COEs. The OBAT program consists of three phases of addiction disorder treatment: initiation, stabilization, and maintenance. As part of this initiative, the state Medicaid program will remove prior authorization requirements for MAT. Additional details are as follows:

  • Care coordination is a required component for individuals receiving MAT. The navigators will work with the individuals receiving OBAT to establish a comprehensive, individualized treatment plan that addresses the non-medical factors that have an impact on addiction disorder treatment and recovery, such as housing, transportation, or employment. This includes connecting the individuals with social service organizations, recovery supports, family education, and referrals to alternate levels of care as needed. The navigator will work together with the primary care professional who is managing the clinical aspects of care, to ensure that all of the individual’s treatment needs are being addressed and to ensure integrated care.
  • Peer services will be covered starting July 1, 2019. Peers are individuals who had an experience with addiction disorder and are now certified to provide support and assistance to individuals with addiction disorder seeking help transitioning from treatment to recovery.

OBAT services may be billed by CCBHCs OTPs, FQHCs, the COEs, or physician and non-physician clinical professionals. Primary care OBAT practices will receive an enhanced office rate and new reimbursement for navigator services billed by the practice. The enhanced office rate will apply to primary care intake and assessments for individuals with opioid use disorder or other chemical dependency. The OBAT practices will initiate and manage MAT, provide navigator support services, and provide access to peer services, which were not previously reimbursable. Fully integrated OBAT primary care provider organizations will be able to offer and be reimbursed for peer services, which will be newly reimbursable under the OBAT program after July 1

To launch OBAT, DHS submitted a state plan amendment (SPA) in December 2018. The OBAT program received about $14.5 million in funding from the Governor’s budget initiative, plus the services will be eligible for federal matching funds. DHS discussed early details of the new MATrx model in focused presentation, “MATrx Model” and in a larger presentation “New Jersey DHS Listening Session: Strengthening Medicaid: Alignment & Redesign Through Integration.”

For more information, contact: Tom Hester, Director of Communications, New Jersey Department of Human Services, Post Office Box 700, Trenton, New Jersey 08625-0726; 609-292-3717; Email: Tom.Hester@dhs.state.nj.us.

All but four states —Georgia, Indiana, Mississippi, and West Virginia—are using value-based care (VBC) and alternative payment models. The remaining 46 states, the District of Columbia, and Puerto Rico are implementing some sort of value-based model. About 50% of those programs are multi-payer in scope.

These findings were presented in “Value-Based Care in America: State-by-State,” by Change Healthcare. Researchers with Change Healthcare analyzed publicly available information, compiled in 2017 and updated in 2019, with a focus on statewide VBC and payment programs for the 50 states, the District of Columbia, and Puerto Rico.

The analysis focused on publicly acknowledged and promoted initiatives, including: Comprehensive Primary Care Plus (CPC+), State Innovation Models Initiative (SIM) Grants, accountable care organizations (ACOs) or ACO-like entities, and episodes of care programs. The goal was to determine how VBC is being delivered across the U.S., and to provide a state-by-state update of subsequent VBC progress made in the past 18 months.

State participation in the various models was as follows:

  • 18 states are approved for Comprehensive Primary Care Plus (CPC+): Arkansas, Colorado, Hawaii, Kansas, Kentucky, Louisiana, Missouri, Montana, Nebraska, New Jersey, New York, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, and Tennessee.
  • 38 states are pursuing State Innovation Models Initiative (SIM) Grants: Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Hawaii, Idaho, Illinois, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.
  • 22 states have adopted, or are considering the adoption of, ACOs or ACO-like entities to help manage costs and deliver better care: Alaska, Colorado, Delaware, Illinois, Iowa, Louisiana, Maine, Massachusetts, Minnesota, Missouri, Nebraska, Nevada, New Hampshire, New Jersey, New York, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island, Vermont, and Washington.
  • 16 states have implemented episodes of care programs: Arkansas, Colorado, Connecticut, Illinois, Iowa, Maine, Minnesota, Nevada, New York, Ohio, Pennsylvania, Puerto Rico, South Carolina, Tennessee, Vermont, and Washington.

Key findings about the adoption rate were as follows:

  • At least 34 states are two years or more into implementation, and eight states are in the early development of a new model.
  • Three states—New York, Pennsylvania, and Vermont—are considered “standout states” which have a broad scope in their breadth of initiatives, embrace of payment models that involve shared risk, and are willing to test innovative strategies in VBC models.
  • Six states—Arkansas, Colorado, Maryland, Minnesota, Oregon, and Vermont—have well-developed VBC strategies that have been in place four years or more.

The full text of “Value-Based Care in America: State-by-State” was published April 16, 2019, by Change Healthcare. A copy can be requested online at https://inspire.changehealthcare.com/stateVBRstudy (accessed April 29, 2019).

PsychU last reported on this topic in:

For more information, contact: Kerry Kelly, Vice President of External Communications, Change Healthcare, 3055 Lebanon Pike, Suite 1000, Nashville, Tennessee 37214; 339-236-2756; Email: kerry.kelly@changehealthcare.com or Angela Evatt, State Health Policy Strategy, Change Healthcare; Email: angela.evatt@changehealthcare.com.

On April 4, 2019, the Florida Agency for Health Care Administration (AHCA) announced plans to launch a Medicaid Behavioral Health and Supportive Housing Assistance Pilot during the summer of 2019. The pilot will take place in Region 5 (Pasco and Pinellas counties) and Region 7 (Brevard, Orange, Osceola, and Seminole counties). Enrollment would be limited to homeless beneficiaries age 21 and older with addiction disorder, serious mental illness (SMI), or co-occurring addiction disorder and SMI. The pilot will provide participants with access to pre-tenancy and tenancy maintenance services, plus mobile crisis centers and peer support. The pilot will not pay for room and board, rent, or mortgage; although it could cover housing-related activities such as one-time moving expenses, or home furnishings such as bedding or lighting.

On March 26, 2019, the Centers for Medicare & Medicaid Services (CMS) approved AHCA’s Medicaid 1115 waiver request for the pilot. AHCA will implement an enhanced capitation rate for participating Medicaid health plans. The waiver is effective through June 30, 2022. The Florida Legislature appropriated $10 million annually for the pilot services. The pilot sets an annual enrollment limit of 42,500 member months for each demonstration year.

Services to be provided through the pilot include the following:

  • Transitional housing services: This includes a variety of services that support an individual to prepare for and transition into housing. Services could include: conducting a tenant screening and housing assessment that identifies preferences and barriers related to successful tenancy developing an individualized housing support plan based upon the housing assessment that addresses identified barriers, assisting with the housing application process, and developing a housing support crisis plan that includes prevention and early intervention services when housing is jeopardized.
  • Individual housing and tenancy sustaining services: This includes services that help the participant be a successful tenant in a housing arrangement and able to sustain tenancy. Services could include: education and training on the roles, rights and responsibilities of the tenant and landlord; coaching on developing and maintaining key relationships with landlord/property managers; assistance in resolving disputes with landlords and/or neighbors to reduce risk of eviction; advocacy and linkage with community resources to prevent eviction; and coordinating with tenant to review, update, and modify their housing support and crisis plans.
  • Mobile crisis management: This includes intensive on-site intervention to recipients experiencing a behavioral health crisis provided by a team of behavioral health professionals who are available 24/7/365. These services will be available for eligible enrollees regardless of residence, except for individuals who are residing in an institution of mental disease (IMD) or who are inmates in a correctional institution.
  • Self-help/peer support: This includes person centered service promoting skills for coping with and managing symptoms while utilizing natural resources and the preservation and enhancement of community living skills with the assistance of a certified peer support specialist. These are mental health substance abuse recovery peer specialists and recovery support specialists; both are required to complete a 40-hour curriculum that covers four content learning areas identified by the state: mentoring, advocacy, recovery support, and professional responsibility.

AHCA has not released any details about reimbursement rates or how the Medicaid managed care organizations (MCOs) will select provider organizations for the pilot. MCOs participating in the pilot must be either a Managed Medical Assistance (MMA) standard plan or an MMA specialty plan serving individuals diagnosed with an SMI, addiction, or co-occurring SMI and addiction, and who are homeless or at-risk of homelessness due to their disability. The MCOs must also meet all the following requirements:

  • Provide services in Regions 5 and/or 7
  • Include in-network addiction treatment provider organizations that furnish services in accordance with Chapters 394 and 397 of Florida Statues Substance Abuse Services
  • Have the capability to provide supportive housing assistance services as specified in the waiver’s Special Terms and Conditions (STC) through housing provider organizations and must have relationships with local housing coalitions.

AHCA must develop performance measures within 90 days (early July 2019) following CMS approval of this waiver amendment. The performance measures must address the following:

  1. Service plans must address participants’ assessed needs. They must be updated annually. The person’s choices of services and provider organizations must be documented.
  2. Evaluation requirements must be appropriate to determine need for determining transitional housing services and tenancy support services.
  3. Provider organizations must meet qualifications specified in the STC.
  4. AHCA will retain authority and responsibility for program operations and oversight by MCOs as required in the MCO contract. AHCA will maintain financial accountability through payment of claims by MCOs for services that are authorized and furnished to participants by qualified provider organizations.
  5. AHCA will identify, address, and seek to prevent incidents of abuse, neglect, and exploitation.

During the demonstration period, the state must conduct an evaluation to accomplish the following: assess if the pilot program can be transitioned to 1915(c) and 1915(i) Medicaid waivers, and submit a plan to CMS by July 1, 2021 for transitioning the pilot to 1915(c) and 1915(i) authority. The evaluation design must be submitted by early August 2019 (120 days from April 4).

PsychU last reported on this topic in “CMS Approves Florida Plan Adding Community Behavioral Health To The Low-Income Safety Net Pool,” which published on January 21, 2019.

For more information, contact: Mallory McManus, Communications Director, Florida Agency for Health Care Administration, 2727 Mahan Drive, Tallahassee, Florida 32308; 850-412-3623; Email: AHCACommunications@ahca.myflorida.com.

“Backward integration.” This is a business strategy concept – “when a company expands its role to fulfill tasks completed by organizations in its supply chain.”

In health care, we’re seeing backward integration by health plans, particularly into primary care. Most recently, Blue Cross and Blue Shield of Texas announced a partnership with Sanitas USA to open 10 advanced primary care medical centers in Dallas and Houston. These locations will offer weekday and weekend hours, some will be open 365 days per year, and all will provide primary care, urgent care, lab and diagnostic imaging services, care coordination, and wellness and disease management programs.

In this same vein, the Aetna/CVS merger has the attention of health care analysts. After acquiring Aetna, CVS has “vowed to change the way U.S. health care is delivered,” including plans to decrease consumer’s need for hospital services by focusing on wellness and preventative care. In February, CVS Health introduced three redesigned health-focused HealthHub® stores in the Houston market. The new stores offer a broader range of health care services, new product categories, digital tools and on-demand health kiosks, and personalized care. And in January, CVS Health Foundation and the Aetna Foundation announced a $100 million commitment to support community health initiatives over the next five years through the company’s “Building Healthier Communities” initiative (see CVS Health Invests $100 Million Over 5 Years In Community Health Initiatives).

Humana, Inc. and Walgreens announced a partnership in the Kansas City, Missouri area to open in-store primary care health clinics at two Walgreens pharmacy locations. Humana representatives will be available in these stores to assist Humana Medicare members, and other customers, with information and assistance in accessing a range of health-related services. Humana and Walgreens indicated that they are considering expanding this collaboration into other markets (see Humana Partners With Walgreens To Provide ‘Senior-Focused’ Primary Care In Missouri). Humana also entered into a partnership with telehealth provider organization Doctor on Demand to create a new health plan centered on virtual primary care and charging between $150 and $200 a month, with no copayments for video visits. And earlier, Humana has purchased Kindred, the long-term care provider organization, operating home health, hospice and community care businesses, long-term acute care hospitals, and inpatient rehabilitation facilities.

And, as we’ve written about before, United Healthcare and Kaiser Permanente are now among the largest employers of primary care physicians in the U.S

It is obvious that these developments are going to “remake” the primary care market landscape. Referral patterns, reimbursement, economies of scale, and more will be reinvented by large chains of primary care clinics tied to health plans. If you are with an organization providing primary care services—whether a private practice model, a federally-qualified health center (FQHC), or some affiliated health clinic—your strategies for sustainability are being rewritten by these large and looming outside forces. But, if you are an executive of an organization, you may assume that primary care backward integration has little to do with your strategy. This may be a dangerous assumption, from a strategy perspective.

It is possible that this emerging primary care infrastructure will become the hub for consumer care management, reshaping specialty services along the way. Newly available technologies will enable these new primary care clinics to become purveyors of a range of specialty services—case management, mental health counseling, addiction treatment aftercare, applied behavioral analysis (ABA) services, women’s health services, administration of infusion therapies, and much more.

The counter argument is that primary care professionals don’t do a great job with specialty care—in terms of expertise, treatment planning, and more. There is ample evidence supporting that view. But the countervailing force is that tech-enabled specialty care platforms, rising telehealth reimbursements, and consumer convenience will drive consumers to primary care centers for some specialty care. Backward integration may continue at the primary care center level—adding specialty care staff as demand grows. This evolution will the change the role of specialist provider organizations in the health and human service system—with options for “complete care” models for special populations (like the emerging vertical carve-out plans) or for special niches in acute/urgent specialty care.

Oss, M.E. (2018)., Using ‘best practice’ models to reinvent health & human service organizations for a value-based world. [Presentation Slides]. Gettysburg, PA: OPEN MINDS. Retrieved from https://www.openminds.com/wp-content/uploads/081618ClosingKeynote.pdf

We’ll continue to track the clinical care delivery trends of payers, health plans, and accountable care organizations (ACO). For some of our recent coverage, check out:

  1. Centene To Acquire Community Medical Group To Expand Its Provider Assets
  2. Centene To Acquire MHM Services, Expanding Correctional Health Care Reach
  3. OptumRx Acquires Genoa Healthcare

And for more on strategy in a disruptive market, check out these resources in the PsychU Resource Library:

  1. No System Too Big? No Niche Too Small? Strategy Challenges Ahead
  2. If 1 In 8 Community-Based Organizations Are Insolvent, The Answer Is?
  3. David Versus Goliath?
  4. Value-Based Reimbursement—The Numbers Are In

Rural health care—or at least the closure of hospitals in rural areas—has gotten a lot of attention. Rural hospital closures more than doubled between 2013 through 2017, from 31 to 64 closures (see 64 Rural Hospitals Close In Past Five Years). Delivering health care services to isolated populations across broad geographies has always been a logistical challenge. And, getting a critical mass of consumers and driving distances to do home-based care is a financial challenge—with the traditional fee-for-service (FFS) reimbursement model at the heart of financial sustainability problems. Largely as a result of the reliance of rural hospitals on FFS admissions, many of them (41% by some counts) have negative operating profit margins.

The net effect of these longstanding consumer access and financial challenges is apparent in the health care statistics. Rural populations (roughly 46 million people) lead the country in five leading causes of death including heart disease, cancer, unintentional injuries, chronic lower respiratory disease, and stroke.

One possible solution is the use of telehealth, which surprisingly, rural populations have not embraced as thoroughly as they should. According to the United States Department of Agriculture, while 11% of urban residents used telehealth for health maintenance activities—such as “make appointments, examine and maintain medical records and accounts, pay medical bills, communicate with their health providers, and have direct online interaction with medical staff”—only 7% of rural consumers used telehealth for health maintenance. Those percentages drop to 2.5% of urban consumers and 1.3% of rural consumers who use health monitoring tools, or “medical devices ranging from simple self-actuated or automated medical alert devices.”

It is critical to increase the use of tech-enabled services but that won’t bring financial sustainability for rural hospitals. But a new reimbursement model on the horizon holds potential for stabilizing the finances of rural care delivery. In 2017, the Centers for Medicare & Medicaid Services (CMS) and the Commonwealth of Pennsylvania announced the formation of the Pennsylvania Rural Health Model that will allow rural hospitals to transition from a FFS reimbursement system based on volume to a multi-payer global budget payment method (see Pennsylvania Rural Hospital Financing Model Announced In CMS/State Collaboration).

The financial underpinnings of the Pennsylvania model? A global budget—a fixed amount set in advance and funded by participating payers. The global budget in this model is a fixed annual prospective payment that is calculated based on historic net patient revenue data (either the average of the past three years or the most recent year, whichever is highest) and paid to the hospitals on a monthly basis. The global budget is adjusted annually for transformation-related changes in service utilization. The model is simple in its construct:

  1. Each performance year of the model, Pennsylvania will prospectively set the all-payer global budget for each participating rural hospital, based primarily on hospitals’ historical net revenue for inpatient and outpatient hospital-based services from all participating payers.
  2. Each payer will then pay the participating rural hospitals for all inpatient and outpatient hospital-based services based on the payer’s respective portion of this global budget.
  3. In the first two years, participating hospitals will retain 100% of the realized savings. In the third year, participating hospitals will retain 75% of the savings. In the fourth and fifth years, the payers and hospitals are expected to share an equal portion of the savings.

The global payment also hinges on whether the hospitals meet performance expectations. Specific performance targets haven’t been announced yet, but will be centered on “increasing access to primary and specialty care; reducing rural health disparities through improved chronic disease management; and decreasing deaths from substance use”.

What is most important about this model is that it allows rural hospitals and health systems to participate in value-based reimbursement, with a model that doesn’t jeopardize financial stability. And, the model allows flexibility and promotes innovation in programming. An example of this in practice is the Geisinger Jersey Shore (Pa.) Hospital, which has used this model to hire a health coach and an emergency department care manager, and is currently developing telehealth access to pulmonologists and cardiologists for its consumers.

We’ll be covering the challenges and successes of this model over time, which could be a reimbursement approach that could be applied to other geographies or consumer groups where the “fit” of traditional value-based reimbursement models don’t work well. For an update on rural health issues, check out our recent coverage:

  1. Texas Blues & Texas A&M University To Test Drones & Self-Driving Cars For Rural Health Delivery
  2. About 5% Of Medicare Psychiatrists Provide Telemental Health Services
  3. Top Recruiting Targets Of Rural Behavioral Health Provider Organizations – Occupational Therapists, Pharmacists & Nurse Practitioners
  4. Indian Health Service Announces New Policy To Expand MAT For Opioid Treatment In Remote Locations

On March 22, 2019, the Centers for Medicare & Medicaid Services (CMS) clarified that Medicaid home- and community-based services (HCBS) settings assumed to be “presumptively institutional” will be subject to heightened scrutiny. Presumptively institutional settings are those that have the qualities of an institution and/or isolate beneficiaries receiving HCBS. Medicaid will not cover HCBS provided in institutional settings. The goal of heightened scrutiny is to determine if the setting overcomes the presumption that it is an institution, or if remediation is needed. CMS defines HCBS settings that have the qualities of an institutions as: settings that are located in a building that is a publicly- or privately-operated facility that provides inpatient or residential institutional-treatment; settings that are located on the grounds of, or adjacent to, a public institution; any other settings that have the effect of isolating individuals receiving Medicaid HCBS.

By March 17, 2019, states were required to ensure that all Medicaid HCBS waiver services are provided in integrated community-based residential and non-residential settings. For settings that the state has deemed to be isolating, the provider organizations must implement remediation by July 1, 2020. For some settings, an extended transition period is available; for those settings, states must ensure provider organization compliance by March 17, 2022.

If a state determines that a presumptively institutional setting meets the HCBS community-setting requirement, CMS will use a list of such settings provided by the state to compile a random sample of settings to review. CMS will review all information presented by the state and other parties on settings selected for the review sample and will either: approve the state’s assertion that the setting overcomes the presumption that the setting is an institution; or provide the state feedback on missing information. The state will use CMS feedback to remediate settings that have the qualities of an institution.

The clarification about how CMS will impose heightened scrutiny on presumptively institutional settings was issued on March 22, 2019, in a State Medicaid Director (SMD_#19-001). The letter clarifies CMS responses to frequently asked questions regarding guidance issued in 2014 on HCBS settings, specifically regarding which settings are identified as having the qualities of an institution. The guidance in SMD_#19-001 replaces or supplements the 2014 guidance. However, any content not specifically referenced in the 2019 guidance as being replaced remains in effect. The following provisions replace or supplement the guidance issued in December 2014:

  1. CMS will determine whether a setting may have the effect of isolating individuals receiving Medicaid HCBS from the broader community on account of various factors. These factors include the design or model of service provision in the setting; the opportunities for interaction in and with the broader community; restrictions of beneficiary choice to receive services or to engage in activities outside of the setting; and location of the setting in relation to the broader community
  2. CMS does not automatically presume settings located in rural areas to have qualities of an institution, and more specifically, does not consider these locations as automatically isolating to HCBS beneficiaries.
  3. The state may notify the individuals living in a non-residential setting determined to overcome an institutional presumption of isolation, and if permitted by applicable law, may also notify family members, and guardians of the following: that the state has determined that the settings overcomes the institutional presumption of being isolating, the state’s justification for that determination, and how these individuals may offer comments in response.
  4. During periods of public comment, states should provide strategies to identify settings falling into the three categories of settings presumed to have qualities of an institution and the approaches to be used for flagged settings. Once these settings have been flagged, the state should organize the settings into a numbered list which is divided into categories of settings that the state believes overcome the presumption that the settings are institutions. A list of settings that the state does not believe can overcome the “institutional setting” presumption by the end of the transition period should also be included.
  5. CMS has implemented the following review strategy for state requests for heightened scrutiny of settings that the state believes overcome the presumption of having the qualities of institutional settings: The numbered list of settings identified for each category of presumptively institutional setting will be made available to CMS. CMS will use the list provided by a state to compile a random sample of settings to review. CMS will review all information presented by the state and other parties on settings selected for the review sample and will either: approve the state’s assertion that the setting overcomes the presumption that the setting is an institution; or provide the state feedback on missing information. The state will use CMS feedback to remediate settings that have the qualities of an institution. CMS will then make final heightened scrutiny review determinations of each setting.
  6. Individual, privately-owned homes are presumed to be in compliance with the regulatory criteria of a home and community-based setting. States are not responsible for confirming this presumption for purposes of ensuring compliance with the regulation. States should, however, include private residences as part of their overall quality assurance framework when implementing monitoring processes for ongoing compliance with the federal HCBS requirements.

Provisions pertaining to all presumptively institutional settings are as follows:

  1. When submitting to CMS for a heightened scrutiny review of a setting selected for the review sample, states should provide evidence of how they determined that the setting overcomes the presumption that it has the qualities of an institution. Information should focus on the qualities of the setting and how the setting is integrated in and supports access of individuals receiving HCBS into the broader community via the organization’s policies and practices as well as in ow the setting supports individuals consistent with their person-centered plans.
  2. CMS intends to utilize different mechanisms to ensure that settings presumed to be institutional are compliant with regulatory home and community-based setting criteria by the end of the transitional period. A key component of a state’s Statewide Transition Plan is a description of the process the state will use to ensure identified remediation is completed for all settings presumed to have qualities of an institution. The description of this process should also include an articulation of the steps and associated timelines for bringing provider information into compliance with the regulatory criteria.
  3. States are responsible for ensuring compliance with HCBS criteria for those settings in which Medicaid beneficiaries receive HCBS. If Medicaid is only funding non-residential HCBS for an individual, then the state is not responsible for ensuring compliance with the settings criteria for the setting in which that individual receives.

To remediate settings that have been identified as isolating, CMS offered states and provider organizations a list of promising practices. States are advised to seek technical assistance to transform the long-term services and supports systems to fully implement person-centered thinking, planning and practices. CMS also suggested increasing engagement with the broader community by implementing a broad range of services and supports to facilitate access to the community; states should expand strategies that increase beneficiary access to transportation.

Further, the guidance noted that the Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule restricts covered entities, such as state Medicaid agencies and providers that meet the definition of covered entities, from publicly disclosing protected health information (PHI) without authorization of the individual, unless disclosure is expressly permitted under the Rule. Examples of PHI include an HCBS beneficiary’s name and health condition. The state should not include any personally identifiable information of beneficiaries in the submission of the Statewide Transition Plan or in any notification or information disseminated to the public.

PsychU last reported on this topic in “CMS Approves First Three State Plans For New HCBS Person-Centered Settings – Kentucky, Ohio & Tennessee,” which published on July 20, 2016.

For more information, contact: Office of Communications, Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244; 202-690-6145; Fax: 202-260-1462; Email: press@cms.hhs.gov.

It was five years ago that Monica E. Oss wrote about the “totally accountable care organization” or “TACO” described in a Health Affairs blog. Health Affairs wrote:

Within state-run Medicaid programs, [there are now] ACOs tailored to the care needs of Medicaid’s beneficiaries, many of whom have multiple chronic health and social challenges … [TACOs] offer the potential to push accountability for Medicaid populations, including those with complex needs, to a new level … beyond just medical care (for example, mental health, substance abuse treatment and other social supports).

Roll forward five years, and there are approximately 1,000 ACOs covering 32.7 million consumers under 1,477 different contracts. But, the potential for using the ACO model to serve consumers with chronic conditions and complex support needs is still a work in progress; that according to a recent report from HealthAffairs—”An Initial Assessment Of Initiatives To Improve Care For High-Need, High-Cost Individuals In Accountable Care Organizations”, that stated:

ACOs are keenly aware of the need to focus targeted interventions and care management on HNHC [High-Need, High-Cost] individuals, and most have implemented strategies to do so … and consider it an area of high priority … While some ACOs reported they have effective approaches, most survey respondents are in the early stages of program development. In most cases, their interventions have not been rigorously evaluated for effectiveness or scalability across settings.

What are the challenges for ACOs to address the needs of this population? The recent survey identified six factors:

ACOs can identify HNHCs, but need better methods—ACOs rely on several claims-based and clinical-data-based methods for identifying these high-cost consumers, as well as referrals from clinical professionals and staff identification. While adequate in the short-term, many ACOs “expressed frustration with the capabilities of existing tools” and need better, more efficient, more accurate methods.

ACOs don’t rely on one initiative, so bring options—The top five service approaches ACOs rely on are traditional care management, nurse care coordinators embedded in physician offices, patient-centered medical homes, centrally-located nurse care coordinators, and post-acute/skilled nursing programs. The biggest hurdles to achieving this were limited consumer engagement, limited access to data, and difficulty scaling successful programs.

ACOs need help with social determinants of health (SDH)—While most ACOs take SDH into account when assessing the needs of consumers, few can identify HNHC consumers in need of services by identifying SDH indictors. The needed competencies are the ability to collect and/or identify SDH data, make referrals based on this data, and work with consumers to identify social service gaps.

ACOs need more community-health workers—While most ACOs have a long history of using registered nurses, social workers, and physicians, the biggest trend was the increased need for non-clinical staff, including community health workers. These positions are needed to visit consumers in the home and provide non-clinical assessments and services, including “collecting information about social determinants of health, helping individuals make medical appointments, securing transportation, helping individuals enroll in social services, addressing social isolation, or even setting up home-monitoring devices.”

ACOs need provider organizations that can operate in shared savings arrangements—Shared savings payments are a principal source of program funding for ACOs, and most use this funding mechanism for HNHC consumer populations. Because of the financial uncertainty of these contracts, ACOs are highly selective about which programs to fund. In addition, most funding of any kind is fee-for-service (FFS), which limits the amount of care coordination that is available.

ACOs need help measuring program “impact”—Even though measuring inpatient admissions, emergency department visits, re-admissions, or skilled nursing facility stays is important to most ACOs, few can identify which services have the greatest effect on spending or service use. The result is the inability to accurately gauge return-on-investment (ROI).

These six challenges are areas where analytics experts and entrepreneurial provider organization management teams can help in expanding ACO ability to successfully serve complex consumers. The first challenge—better methods for identifying HNHC consumers—is one that can be best addressed by models using big data and augmented intelligence (see Yes, There Are Organizations Using Augmented Intelligence).

The other five factors are the opening that entrepreneurial managers of clinical organizations have been waiting for—a range of programs options with demonstrated cost savings that are focused on community health and social determinants, paid on shared savings basis. Our team has written before about addressing “pain points” of payers (see Pain Points Matter) and demonstrating the ROI of new programs (see Social Services ROI Essential To Social Determinants Wave and Five Keys To ‘Partnering’ With Health Plans On Social Determinants). And there are a group of specialty provider organizations who are ready for value-based reimbursement (VBR) arrangements—data shows that 69% of those provider organizations are already getting more than 58% of their revenue from VBR contracts (see Adapting Revenue Cycle Management For A VBR-Driven World).

For more on the ACOs, check out these resources from the PsychU Resource Library:

  1. How To Build Successful ACO Health Plan Partnerships
  2. Building The ‘Next Generation’ Behavioral & Social Service ACO
  3. New ACO Developments, Same Challenges
  4. 62% Of ACOs Launched In 2012 Implemented Behavioral Health Initiatives
  5. 61% Of ACO Contracts Only Include Upside Financial Risk
  6. Most ACOs Not Ready For Two-Sided Risk Model
  7. Half Of ACOs Consider Exiting MSSP Over New Downside Risk Rules

On April 2, 2019, the American Medical Association (AMA) and UnitedHealthcare (UHC) announced a collaboration to support creation of 23 new ICD-10 codes related to social determinants of health (SoDH). The codes would be used to trigger referrals to social and government services so that health care professionals can help connect consumers to local and national resources in their communities.

The ICD-10-CM is a system used by physicians and other health care provider organizations to classify and code all diagnoses, symptoms and procedures recorded in conjunction with health care in the United States. However, many ICD Diagnosis Codes are used for the purposes of reimbursement. Previously, UnitedHealthcare had used, and recommended using, Z codes Z55 through Z65 to address social determinants of health. However, the two organizations are supporting the creation of 23 new ICD-10 codes related to social determinants which combine traditional medical data with self-reported social determinants of health data. Social factors that the new codes would capture include:

  • Access to nutritious food
  • Adequate and safe housing
  • Available transportation
  • Financial ability to pay for medications
  • Financial ability to pay for utilities
  • Caregiver needs

The new codes have not yet been released.

The 2019 edition of the ICD-10-CM Official Guidelines for Coding and Reporting were released by the National Center for Health Statistics (NCHS) on July 26, 2018. The ICD-10-CM Official Guidelines for Coding and Reporting identify which codes can be assigned as principal or first-listed diagnosis only, secondary diagnosis only, or principal/first-listed or secondary (depending on the circumstances). In a key update, the 2019 edition allows codes from categories Z55 through Z65 to be reported based on information documented by any clinical professionals (not only the physicians) involved with the consumer’s care.

The ICD-10 is copyrighted by the World Health Organization (WHO) External, which owns and publishes the classification. WHO has authorized the development of an adaptation of ICD-10 for use in the United States for U.S. government purposes. On October 1, 2015, the Centers for Medicare & Medicaid Services (CMS) began using ICD-10-CM to replace ICD-9-CM, volumes 1 and 2. The transition to ICD-10 meant that physicians would be able to use much more specific diagnosis and symptom codes to document health care encounters. The ICD-10 code set added information relevant to ambulatory and managed care encounters; expanded injury codes; and use of combination diagnosis/symptom codes to reduce the number of codes needed to fully describe a condition.

The joint AMA and UCH effort is made possible through the AMA’s Integrated Health Model Initiative™ [IHMI], a collaborative effort across health care and technology stakeholders that seeks to improve health outcomes by empowering physicians with the clinically valid health care data needed to make informed clinical decisions. Its work focuses on market-driven needs in health care data interoperability through the development of common data portability standards that enhance information sharing and work to improve consumer outcomes.

PsychU last reported on this topic in “UnitedHealthcare Expands Initiative To Use Diagnostic Codes To Capture Social Determinants Of Health” which published April 1, 2019.

For more information, contact: Steve Shivinsky, Vice President of Corporate Communications, UnitedHealthcare, 9800 Healthcare Lane, Minnetonka, Minnesota 55436; 763-361-2882; Email: stephen.shivinsky@uhc.com or Robert J. Mills, Media Relations Coordinator, American Medical Association, 330 North Wabash Avenue, Suite 39300, Chicago, Illinois 60611-5885; 312-464-5970; Email: robert.mills@ama-assn.org.

On April 5, 2019, the Centers for Medicare & Medicaid Services (CMS) finalized policies intended to allow Medicare Advantage plans to include expanded telehealth benefits starting in plan year 2020. Beneficiaries living in urban or rural areas will be able to receive telehealth services at home, as well as at a health care facility. The new policies will allow Medicare Advantage plans to offer telehealth services as a standard benefit, rather than only a supplemental benefit accessible at a health care facility. Additionally, Medicare Advantage plans will be able to offer supplemental benefits that are not covered under original Medicare via remote access technologies and/or telemonitoring for services that do not meet the requirements for coverage under original Medicare or the requirements for Medicare Advantage additional telehealth benefits.

The changes are due to the Bipartisan Budget Act of 2018 (BBA).  Before the BBA changes went into effect, telehealth services for fee-for-service (FFS) Medicare beneficiaries were available only to those living in rural areas. The services are available only at designated facility sites, and are limited to a set of specific services covered under Medicare Part B that have been identified as clinically appropriate to furnish through electronic information and telecommunications technology. Medicare Advantage plans have historically been able to offer more telehealth services than were available through FFS Medicare, but only as part of the plan’s supplemental benefits.

For 2019, the BBA changes allowed FFS Medicare to pay for “virtual check-ins” for all FFS beneficiaries regardless of their location. Medicare Advantage plans will now be permitted to offer – as part of the basic benefit package –additional telehealth benefits beyond what is currently allowable under the original Medicare telehealth benefit. CMS anticipates that the finalized new policies will encourage Medicare Advantage plans to offer additional telehealth benefits outside of supplemental benefits. However, members must have the option whether to receive such service through an in-person visit or, if offered by the Medicare Advantage plan, through electronic exchange.

The final rule was published in “Medicare & Medicaid Programs: Policy & Technical Changes To The Medicare Advantage, Medicare Prescription Drug Benefit, Etc.” on April 16, 2019. The rule updates the Medicare Advantage (Part C) and Medicare Prescription Drug Benefit (Part D) programs. CMS is implementing two other BBA sections, as follows

  • BBA Section 50311 requires increased integration of Medicare and Medicaid benefits and appeals and grievance processes for Medicare Advantage Dual Eligible Special Needs Plans (D-SNPs)
  • BBA Section 50354 requires the CMS Secretary to establish a process to allow Part D plan sponsors to request standard extracts of Medicare Parts A and B claims data regarding their enrollees

The final rule provisions for D-SNPs create a single appeals process for beneficiary complaints. The new appeals process will used across Medicare and Medicaid. The goal is to simplify how D-SNP enrollees navigate the health care system. D-SNPs will be required to more seamlessly integrate Medicare and Medicaid benefits across the two programs, such as notifying the state Medicaid agency (or its designee) of hospital and skilled nursing facility admissions for certain high-risk beneficiaries, to promote coordination of care for these patients.

CMS finalized an update to the methodology for calculating Medicare Advantage and Part D Star Ratings. The goal is to give consumers more information on plan quality to help them identify high-value plans. The new Star Ratings methodology is intended to improve the stability and predictability for plans, and CMS will adjust how the ratings are set in the event of extreme and uncontrollable events such as hurricanes.

PsychU last reported on the Medicare Advantage call letter in “Medicare Advantage To Offer Supplemental Benefits For Social Determinants In 2020,” which published on May 6, 2019.

For more information, contact: Office of Communications, Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244; 202-690-6145; Fax: 202-260-1462; Email: press@cms.hhs.gov.

In December of last year, the Centers for Medicare and Medicaid Services (CMS) released guidance to state Medicaid programs on how to better serve consumers who are dually eligible for Medicare and Medicaid. The guidance recommended that states leverage managed care models to better ingrate care for dual eligible populations, including existing dual eligible special needs plans (D-SNPs) and Programs of All-Inclusive Care for the Elderly (PACE). The guidance also referenced new opportunities for states to improve data exchange and streamline the enrollment.

But the general direction of these recommendations seems to run counter to the market numbers. One example is PACE, a program that has been part of Medicare in some form since the 1990’s. Though PACE programs have been able to show some positive results, in 2019, there were about 49,000 consumers enrolled in PACE programs in 31 states—that’s just 0.04% of the 12 million consumers who are dual eligibles. PACE programs in many states only have a few hundred enrollees.

Another example: enrollment in the much-touted dual eligible demonstration projects are not growing. Started in 2012, 13 states tested integrated financing models for their dual eligible populations through a waiver program. Though several states extended their original demonstration programs and shown some positive outcomes, only three states have been extended their projects through 2020—Massachusetts, Minnesota, and Washington. The other states have opted to end their programs, and there is little comprehensive data about the return on investment for these models (see Dual Eligible Demonstrations: Where Are We 4 Years Later?).

Why does this matter? The dual eligible population is one of the most expensive populations to serve. The dual eligible population represent 20% of all Medicare enrollees and accounted for 34% of all Medicare spending. In Medicaid, the dual eligible population represented 15% of all Medicaid enrollees and 32% of all Medicaid.

It appears that the path forward for provider organizations serving the dual eligible population will continue to involve navigating separate health plans for the same consumer, with separate health plans for Medicare and for Medicaid long-term services and supports. For provider organization administrative and clinical team members, this was simpler when both Medicare and Medicaid were fee-for-service plans. But we now have an increasing number of consumers in Medicare managed and of the 21 states with Medicaid managed long-term services and supports (MLTSS), 19 have included dual eligibles in their population.

If your organization serves dual eligible consumers—whether you are with a provider organization, a care coordination entity, a health plan, or a government agency—there will likely be more administrative complexity for more consumers. There are three administrative competencies that will become more critical as we see fewer dual eligible consumers in a single integrated health plan and more of the services for these consumers in separate managed care plans. First, there is the ability to “braid” services at the consumer level—making services paid by different health plans a seamless consumer experience. Second, there is the ability to participate in multiple approval processes for the same consumer—from prior authorizations, to care coordination, to coordination of benefits and more. Finally, organizations with health information exchange capabilities with the multiple organizations financing or delivery services for dual eligible consumers have a distinct advantage—clinically, financially, and in consumer experience.

On April 1, 2019, Milwaukee County, Wisconsin, launched a two-year contract with Wellpath, LLC, valued at $39 million, to provide medical, dental, and mental health services to all inmates residing in the Milwaukee County Jail and House of Correction. By 2021 when the contract ends, the county intends to transition to a self-operated model of inmate medical care. Previously, the county contracted with Armor Correctional Health Services to provide correctional medical services; that contract ended March 31, 2019.

The county issued a request for proposals (RFP 98180020) on July 20, 2018, to rebid the contract. Initially, responses were due by September 7, 2018, but the deadline was extended to account for increased complexity in responses. The county ultimately received five responses, which included a bid from the incumbent. The county has not named the other unsuccessful bidders. On December 19, 2018, based upon the scoring and recommendation of the RFP evaluation committee, the County issued notice of intent to award the contract to the winning respondent, Wellpath.

On February 1, 2019, the Finance and Audit Committee of the Milwaukee County Board of Supervisors rejected options for a five-year contract and a one-year agreement with a new vendor, and instead approved a two-year, $39 million contract with Wellpath, LLC. The Committee also recommended approval of a $373,000 contract with National Commission on Correctional Health Care Resources, Inc. (NRI), an independent, third-party medical monitor, to provide oversight of the provision of care through Wellpath. The NRI contract went into effect on April 1, 2019, and runs through March 30, 2020; the initial term is followed by four one-year renewal options.

Before the county contracted with Armor Correctional Health Services, county employees had provided inmate medical care. On May 21, 2013, a court ordered the county to enter into a contract with Armor Correctional Health Services to provide medical care to people housed in the Milwaukee County Jail and House of Correction. The contract was slated to run through December 31, 2018. However, in November 2016, the county’s Chairman of the Board of Supervisors requested an audit of Armor, which found that over 22 months, Armor never achieved the minimum staffing levels required by the contract. The audit was publicly released in the fall of 2018.

At a meeting on December 6, 2018, the Milwaukee County Board of Supervisors voted to explore using county employees to provide jail medical services. The resolution had been introduced by the Board of Supervisors’ Committee on Finance and Audit to request a report on the feasibility of Milwaukee County directly providing inmate medical health services. The goal is to give the county greater accountability and transparency over the care provided, and ensure that the care is high quality. On February 7, 2019, the Board of Supervisors created the Correctional Health Care Self-Operation (CHCSO) Project. At the March 7, 2019, meeting of the county’s Committee on Judiciary, Safety, and General Services, the Director of the county Department of Administrative Services provided its initial decision paper on self-operation. The paper outlines the working definition of self-operation and potential governance model alternatives.

PsychU last reported on this topic in “Audit Finds Persistent Health Staffing Issues In Milwaukee Corrections Contracts,” which published on October 29, 2018.

For more information, contact:

  • Theodore Lipscomb, Sr., Chairman, Milwaukee County Board of Supervisors, 901 North 9th Street, Courthouse, Room 201, Milwaukee, Wisconsin 53233; 414-278-4282; Email: theodore.lipscomb@milwaukeecountywi.gov.
  • Judy Q. Lilley, Vice President, Communications & Public Affairs, Wellpath, LLC, 1283 Murfreesboro Road, Suite 500, Nashville, Tennessee 37217; 615-324-5766; Email: JQLilley@Wellpath.us.

To increase the adoption of value-based reimbursement (VBR) models, the Centers for Medicare and Medicaid (CMS) Administrator Seema Verma announced extensive proposed changes to the federal Stark Law. What is the Stark Law? It is a series of federal laws that regulate the financial relationships between health care professionals and provider organizations, with the goal of prohibiting relationships that may influence clinical decision-making based on financial incentives.

The first piece of legislation was enacted in 1989, when reimbursement was primarily on a fee-for-service (FFS) basis. Since that time, while the legislation has grown in scope, it has not been adapted in any way for new reimbursement models—including VBR. Under VBR models, incentive payments are made for meeting cost and quality targets. But these arrangements could violate rules of the Stark Law. How? Under the provisions of Stark, physicians delivering care to Medicare or Medicaid beneficiaries are specifically prohibited from referring to an entity performing health services if that physician, or his/her immediate family member, has any financial relationship with that entity. This could mean that several fundamentals of VBR are potential violations of Stark.

Due to the evolution of the Stark Law over time and the changes to health care from not only reimbursement model changes but also technological innovation, there is ample opportunity for violations. For example, incentive payments to providers based on cost and quality targets may violate the Stark Law if a physician is compensated for meeting targets that are in any way related to volume or value of referrals. Second, shared savings payments to provider organizations based on actual cost savings may be problematic if the way to achieve savings is by reducing medical necessity criteria or substituting a health care product based on cost savings alone. Third, another area under consideration for reform is when infrastructure payments of in-kind assistance occur between a provider organization and a physician. For example, this may include a hospital supplying a physician with televideo equipment for that physician to provide services via televideo that results in a referral to the hospital for health care services, i.e. admission.

Specifically, Ms. Verma has indicated that the current ban on paying physicians for value or volume of referrals will be addressed. CMS had requested and received public comments in 2018. Additionally, she noted that the new regulations will standardize the definition of payments that are commercially reasonable and represent fair market value. These two areas of Stark have hindered the development of more robust care coordination within provider organizations. Ms. Verma has also indicated that documentation issues, electronic health requirements, and cyber security will be addressed in the new regulations.

Health care provider organization executives have struggled with seeking legal safety in a mixture of waivers that have been written by CMS to address some of the conflicts of Stark and VBR. The Medicare Shared Savings Program and bundled payment models have the most broadly written waivers with wide applicability to avoid violation of Stark. For health care executives, it is a challenge to navigate compliance with Stark, monitoring which provisions have waivers and which do not, and while making a VBR contract financially viable. Add into this mix the emerging recognition of social determinants of health, and opportunities to offer remedies such as housing, nutrition, and transportation assistance, and it becomes nearly impossible to create a system built on collaboration that is without violations.

As we look forward to a wide range of alternative payment models—models that include more than physicians and hospitals and beyond those currently covered by waivers—clear rules around the Stark Law will be welcomed by health and human service executives. And I think this regulatory relief will speed up adoption of VBR models by the largest of health plans and provider systems. According to a speech given by Ms. Verma in March, CMS is planning to issue updated regulations this. We’ll cover the changes to the rules, and their implications, when they are released.

Approximately 50% of surveyed Medicare accountable care organizations (ACOs) say they are moderately likely, or very likely, to exit an existing Medicare and Medicare Shared Savings Program (MSSP) if they are required to take on downside risk.  Starting July 1, 2019, the Centers for Medicare & Medicaid Services (CMS) will launch the new “Pathways to Success” rule that limit how long ACOs can participate in the program without downside risk.

Under the new “Pathways to Success” rules, ACOs will be able to participate in the program without downside risk for only two years. Physician-led ACOs considered “low revenue” ACOs and some rural ACOs will be permitted to remain in a model without downside risk for three years. Previously, ACOs could remain in an upside-only model for six years. CMS predicted that the Pathways model would significantly reduce the number of years ACOs can participate in the ACO program with upside-only risk. CMS expected this change would result in fewer total ACOs participating in the program, but that a higher number of ACOs that accept downside risk.

The survey findings were presented in “The 2018 ACO Survey: Unique Paths to Success,” by Kerstin Edwards, Robert Richards, and David Muhlestein for Leavitt Partners. Leavitt Partners, and the National Association of ACOs (NAACOS), collaborated to conduct the 2nd Annual ACO Survey. Responses were submitted by 203 ACOS, representing about 20% of all 1,016 ACOs in the United States. The survey covered topics related to contracting, risk, organizational structure, program initiatives, challenges, and priorities and was sent to all known ACOs. The goal was to better understand current trends and predict future developments of ACOs in order to help ACOs adapt to changes in the industry and proliferate new ideas and best practices.

Additional findings include:

  • About 52% of ACOs reported that they are currently considering or planning to enter into a shared savings with downside risk or capitated contract.
  • About 12% of ACOs reported that they are not considering a shared savings contract with downside risk
  • Integrated/hospital-led ACOs were much more likely (69%) than physician-led ACOs (36%) to say they were at least moderately likely to exit the program if required to take on downside risk.
  • More experienced ACOs and ACOs that have taken on downside risk have adopted medication management initiatives at a higher rate than less experienced ACOs. These include requesting that health care professionals minimize the frequency of medication administration (39% for those with downside risk, versus 20% for those with upside risk only), and requesting that health care professionals minimize medication dosages (36% for those with downside risk, versus 11% for those with upside risk only).

The full text of “The 2018 ACO Survey: Unique Paths to Success” was published on March 28, 2019, by Leavitt Partners. A copy can be requested online at https://leavittpartners.com/whitepaper/2018-aco-survey-unique-paths-to-success/ (accessed April 15, 2019).

PsychU last reported on this topic in the following articles:

For more information, contact: Robert Richards, Senior Data Analyst, Leavitt Partners, 299 South Main Street, Suite 2300, Salt Lake City, Utah 84111-2278; Email: robert.richards@leavittpartners.com or Kerstin Edwards, Research Manager, Leavitt Partners, 299 South Main Street, Suite 2300, Salt Lake City, Utah 84111-2278; Email: kerstin.edwards@leavittpartners.com.

A quarter of more than 500 health care executives responding to a survey said their organizations are either completely (4%) or very (21%) prepared for risk-based population management contracts. The majority (64%) said their organizations were somewhat (26%) or moderately (38%) prepared. About 1% said their organizations were not at all prepared, 4% said their organizations were very unprepared, and 6% said their organizations were somewhat unprepared.

About three-quarters of the organizations have at least one payer agreement that includes upside gain and/or downside risk. However, for 66% of the organizations in a risk-based agreement, less than 20% of revenue is at-risk. The median amount of revenue at-risk was 10%; the median amount of revenue in capitated contracts was 5%. For 31%, the risk-based agreement is one-sided and has no downside risk.

These findings were reported in “State of Population Health, Fourth Annual Numerof Survey Report” by Numerof & Associates, Inc., in collaboration with David Nash, Dean of the Jefferson College of Population Health. The researchers conducted an online survey with more than 500 health care executives, and with a subset, conducted open-ended interviews. The target audience was defined as physician group executives or vice presidents, as well as individuals working in U.S. provider organizations including health care systems, hospitals, and academic medical centers. The researchers analyzed the respondents’ global perspectives about population health, their reported progress on implementing supporting management processes, and their reported assumptions about risk-based contracts. The key findings were as follows:

  1. About 23% said the threat of financial losses was a primary barrier to pursuing at-risk population health contracts. About 14% said difficulties changing the organization’s culture was a key difficulty. Another 14% said their key barrier was issues with their internal information technology, tracking, and management systems. About 11% cited uncertainty about when to make the transition from their current model. About 10% said they had difficulty modeling the cost of care across the continuum.
  2. Less than half of the respondents said their organizations routinely used a process to identify physician-level outliers in cost and quality, most lacked a process to address such variation. Less than 40% said their organization linked clinical professional compensation to cost and quality performance.
  3. Large hospital and/or health systems were more likely than smaller institutions to report having at least one risk-based contract. Risk based contracts were reported by 90% of large institutions (850+ beds), 76% of mid-sized institutions 9300 to 849 beds), and 71% of smaller institutions (less than 300 beds). Among the institutions with risk-based contracts, smaller hospitals tended to have more revenue at risk than medium or large hospitals.
  4. Most respondents, 61%, rated their organization’s ability to manage variation in cost as average or worse than average, which is better than the previous three years. About 35% of the respondents said their organization’s ability to manage variation in quality was average or worse than average.
  5. About 80% of the respondents viewed their benchmarks and metrics for tracking quality of care (82%) and clinical outcomes (81%) as average or above. However, only 51% view their ability to track the cost of care as average or above. About 43% view their ability to monitor consumer-reported outcomes (such as returning to an activity or work) as above average or better.
  6. About 74% of the respondents said their organization has established connections between health care provider organizations, payers, and community resources to address non-medical social determinants of health (SoDH). About 72% said they follow-up with consumers to discuss adherence to discharge recommendations.

In previous years, the group of survey respondents had predicted that they would have greater abilities to manage risk-based contracts than the current group said existed. The earlier survey respondents also predicted that they would have a greater share of revenue in risk-based contracts. In previous years (2016 and 2017) the organizations projected that in two years they would have 30% of revenue in risk-based contracts. In the 2018 survey, the respondents downgraded slightly; they predicted that they would have 25% of revenue in risk-based contracts.

The researchers concluded that slow progress toward implementing population health as a model for organizing health care delivery is “predictable given the magnitude of the change the industry is experiencing.” Additionally, they said that at the same time provider organizations struggle with managing variation in cost and quality at the individual physician level, which are key prerequisites for population health management. The researchers said that the fear of loss is “not likely to abate anytime soon as most organizations remain fairly limited in their exposure to these agreements. In addition, despite their predictions two years ago, institutions have not increased the amount of revenue they have at risk.”

The full text of “State of Population Health” was published in March 2019, by Numerof & Associates. An abstract is available online at http://nai-consulting.com/numerof-state-of-population-health-survey/ (accessed April 2, 2019).

For more information, contact: Alexa Schultz, Marketing Communications Specialist, Numerof & Associates, Four CityPlace Drive, Suite 430, St. Louis, Missouri 63141-7062; 314-997-1587; Fax: 314-997-0948.

Starting in 2020, Medicare Advantage plans will be able to offer supplemental benefits that are not necessarily health-related to address members’ non-medical needs considered social determinants of health (SoDH). The supplemental benefits can be offered to targeted groups of members. On April 1, 2019, the Centers for Medicare & Medicaid Services (CMS) released the details in the 2020 Medicare Advantage Rate Announcement and Final Call Letter.

In 2019, CMS expanded the definition of health-related supplemental benefits that Medicare Advantage plans could offer to enrollees, where the primary purpose of the benefits would be daily maintenance of health. Under the 2019 definition, Medicare Advantage plans can offer supplemental benefits not covered under Medicare Parts A or B, if they diagnose, compensate for physical impairments, diminish the impact of injuries or health conditions, and/or reduce avoidable emergency room utilization. The expanded definition meant that Medicare Advantage plans can now offer adult day health services, and/or in-home support services as supplemental benefits.

Starting in 2020, Medicare Advantage plans will be able to offer supplemental benefits that have a reasonable expectation of improving or maintaining the health or overall function of the enrollees, especially those with chronic health conditions. Under this expanded definition, Medicare Advantage plans can offer the following:

  • Meal delivery. For example, a plan could cover delivery of meals with healthy food or produce for a member with heart disease.
  • Transportation for grocery shopping or health-related appointments, such as a physician office, a nutritionist, or a chronic condition education program (such as diabetes education).
  • Home environment services to improve health or overall function related to a chronic illness. For example, for a member diagnosed with asthma, a plan could cover home air cleaners and carpet shampooing to reduce irritants that may trigger asthma attacks.

Additionally, Medicare Advantage plans will be able to offer these supplemental benefits to targeted groups of members based on health status and can provide different member groups with access to different supplemental benefits. Beginning with the 2019 plan year, CMS allowed Medicare Advantage plans to provide members with chronic illness with targeted benefits not offered to the general pool of members. These targeted benefits could even include reductions from fee-for-service (FFS) Medicare-equivalent cost sharing.

A fact sheet about the Call Letter noted that for the 2020 plan year, CMS will adjust the risk adjustment model to account for the number of conditions individual beneficiaries have. The risk adjustment changes were required by the 21st Century Cures Act. In 2019, CMS began implementing the changes with a model that included additional factors for substance use disorder, mental health, and chronic kidney disease (CKD) diagnoses. For 2020, CMS is finalizing an alternative payment condition count model that includes additional condition categories for pressure ulcers and dementia, as well as additional variables that count the number of conditions a beneficiary may have (among those that are in the risk adjustment model, or “payment conditions”), and makes an adjustment as the number increases. The 21st Century Cures Act requires that CMS fully phase in the required changes to the risk adjustment model by 2022. In 2020, CMS will begin phasing in the new model, starting with a blend of 50% of the risk adjustment model used for payment in 2017 and 50% of the new risk adjustment model.

CMS calculates risk scores using diagnoses submitted to the Risk Adjustment Processing System (RAPS) by Medicare fee-for service (FFS) provider organizations and by Medicare Advantage organizations. Since 2016, CMS has been phasing in the use of encounter data from Medicare Advantage organizations, which includes diagnostic information. For 2020, CMS intends to calculate risk scores by blending 50% of the risk score calculated using diagnoses from encounter data, RAPS inpatient diagnoses, and FFS diagnoses with 50% of the risk score calculated with diagnoses from RAPS and FFS. Consistent with the phase-in of the model in 2019, for 2020 CMS is also finalizing the proposal to implement the phase-in of the new risk adjustment model by calculating the encounter data-based risk scores exclusively with the new risk adjustment model, while continuing use of the risk adjustment model first implemented for 2017 payment for calculating the RAPS-based risk scores.

PsychU last reported on the 2019 and 2020 plan years in “Medicare Advantage Plans Allowed To Expand Access To Telehealth In 2020 Plan Year,” which published on April 1, 2019.

For more information, contact: Office of Communications, Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244; 202-690-6145; Fax: 202-260-1462; Email: press@cms.hhs.gov.

Clinical practice patterns in the U.S. have always had great variance. Over the past 35 years, since The Dartmouth Atlas Study, research has documented great geographic variations in health care practices. These variances do not necessarily correlate with quality of care. These issues are magnified for consumers with complex care conditions and chronic conditions—with often unstudied complications of comorbid conditions and unmet social support needs.

This variance, and how actual service delivery varies from clinical guidelines, has always been of concern to policymakers—because of the implications for quality of care and cost. Two recent changes in the health and human service delivery landscape are bringing new attention to clinical practice patterns and clinical guidelines. The first is the move to include financial risk in the reimbursement contracts of health plans, health systems, and provider organizations—particularly risk that is focused on reducing duplicative and unnecessary care delivery. The second is the addition of consumers with behavioral and cognitive conditions, and consumers with more complex social support needs, to these risk-based and value-based contracting models.

The challenge is one of incentives. In fee-for-service (FFS) and cost-based reimbursement models, while there was significant variance in clinical practices, there was only a financial incentive to provide too many services to consumers. As we move to more financial risk borne by health plans and provider organizations, the financial incentives skew to providing too few services. While “over treatment” is not great for consumers, “under treatment” can be life threatening.

I think this means we can’t continue to separate clinical practice guidelines from risk-based and value-based reimbursement models. When the management team of an organization develops rates for any type of alternate payment model, they make assumptions about the needs of the consumers they will serve—and the number and types of services those consumers will use. Essentially, the clinical practice guidelines become part of their pricing methodology. And, if the payers don’t specify the clinical guidelines to be used, the organization will use their own clinical guidelines as assumptions in that rate development.

The results of the disconnect around clinical guidelines are bubbling up in press coverage and lawsuits (see To Improve Consumer Care In Medicaid & Beyond: Define Value & Make It Public and Judge Rules United Behavioral Health Medical Necessity Criteria More Restrictive Than Accepted Standards). I think this conflict will continue and grow more acute. The Patient Protection & Affordable Care Act (PPACA) requires health plans to publish their clinical guidelines. Are they easy to understand or specific enough about clinical decisionmaking? Take a look at these examples:

  • UnitedHealthCare’s clinical guidelines for the treatment of bipolar disorder refer clinical professionals to the American Psychiatric Association’s practice guidelines.
  • Aetna’s clinical policy for the treatment of Autism Spectrum Disorders (ASD) relies on information from the American Academy of Child And Adolescent Psychiatry and the National Academy of Sciences and outlines specific services that may be included in treatment and assessment.
  • Cigna’s clinical practice guidelines for the treatment of depression refer clinical professionals to the American Psychiatric Association’s practice guidelines for the treatment of depression and the U.S. Preventive Services Task Force guide for screening for depression.

The question is how to get clinical practices in sync with the emerging VBR models. When I asked my colleagues, the consensus was the financial incentives that go beyond cost reductions are critical—as well as public performance data that is available to consumers, advocates, and clinical professionals. OPEN MINDS Senior Associate, David Young noted:

States and sometimes the Feds talk about quality care but in reality, health plans and provider organizations provide ‘legally’ acceptable care; they meet the terms of the contracts. Despite what that means to end users, that care is what we get.

OPEN MINDS Senior Associate Ken Carr went on to talk about incentivizing consumer outcomes and quality of care. He noted:

I agree that commonly accepted standards of care, or those standards included in contracts, may not represent “best practice” outcomes, especially for unique situations. With most politically charged issues like this, understanding the root causes of what causes unacceptable results is key. It is easier to blame bad people and organizations—and they do exist. But the issues are often a result of how resources flow, who has the power to make decisions, and whether fair, efficient processes (with an element of compliance) have been established.

The question is what the best approach for is driving results—implementing strict regulatory controls or aligning funding with incentives to motivate and empower results.

From a value-based perspective, aligning how resources flow to motivate health plans and provider organizations to achieve agreed upon results—care coordination, integrated services, consumer access, for instance—has been shown to deliver results. There are many examples of how this incentivized approach has increased quality services and driven down service costs. I like the concept of making health plan and provider organization results public because transparency addresses the compliance element. While we will always need regulations and compliance committees for those who lack ethical behavior, transparency of results motivates most of us (health plans and provider organizations alike) who really want to do the right thing for the consumers that we serve.

“Standards of care”—medical necessity, clinical appropriateness, social/legal necessity, consumer entitlement, community standards—are certainly not agreed upon across the health and human service field. But, even with agreement on a set of clinical guidelines doesn’t end the challenges for consumers. Published guidelines don’t necessarily change clinical practice patterns and the clinical decision support tools needed to do just that are not in common practice. As we see more “pay for performance” across the health and human service systems, managers of every organization will be looking for tools to measure clinical practice variance in their own organizations—and tools make the use of “best practices” the rules, rather than the exception.

A series of news stories released over the past year out of Texas has caught my attention—and the attention of legislators and advocates in Texas. Last year The Dallas Morning News published a series of investigative reporting articles, Pain & Profit, on the services delivered under the state’s Medicaid health plans. The series is extensive, but the overall theme was that the state’s Medicaid consumers suffer from “poor state oversight” allowing “companies to skimp on essential care for sick kids and disabled adults” and that “8,000 and 14,000 people were probably not receiving the care they needed.”

The article ends with a series of recommendations, including pushing state policymakers to address the problems with capitated funding (specifically medical loss ratio requirements), mandating care coordination, addressing access issues, approving medical guidelines, standardizing the appeals process, providing opt outs of bad health plans for vulnerable populations, and tracking performance. As is common in the wake of investigative journalism that publicizes problems, there is now a bipartisan groundswell to revamp the Texas Medicaid system, with more than a dozen bills.

I think there are two issues at play here: One, there needs to be some standards of care that are uniformly agreed to by policymakers, payers, health plans, and provider organizations. And two, it is important to have standardized systems for incentivizing health plans and provider organizations to meet and exceed those standards of care.

The first issue comes down to the challenge of defining what constitutes “good care.” One of the ubiquitous challenges across the U.S. health and human service system is in definitions. This is not limited to Medicaid health plans. Determining what is “legally acceptable care” is one issue—this relates to the contract terms when states and counties buy health care systems and services from health plans, ACOs, provider organizations, and individual professionals. Less clear is what the “commonly accepted standards of care” are and whether these “commonly accepted standards of care” are what we want. Finally, there is the question of what “guidelines” (for medical/clinical necessity, appropriateness, and/or entitlement) should be incorporated in service contracts. These issues are some of the most fundamental to health and human service policy, budgeting, operations management, and consumer experience. Performance cannot be measured until it is defined.

The second issue is about incentives and accountability. I’m all for incentivizing health plans and provider organizations to deliver “value”, however it is defined. But the usual caveats apply: Aligning measures to performance objectives is key. The cost of tracking and measuring performance must be taken into consideration. And, incentives (particularly financial incentives) do change behavior, which means states, counties, and health plans must “choose wisely” when it comes to those incentives. Our team has designed enough value-based contracting systems that we have created a standard development process that starts with objectives, focuses on priorities and feasibility testing, and requires structured implementation testing. Measuring performance should be a given—and paying for that performance should be incorporated in contracting plans.

In addition, states and counties buying health and human services should move beyond measuring and paying for performance—and introduce consumerism into the equation with public performance reporting. Making performance metrics public—in a format that allows easy comparisons between health plans or provider organizations by both consumers and professionals—is key to creating a continuously improving delivery system. Even if the state, county, or health plan doesn’t pay financial incentives, public performance data is powerful. I once worked for a state Medicaid director who created a public performance dashboard for mental health service provider organizations in his state. When I asked why he did this, since he wasn’t allowed to pay penalties or bonuses, he said it changed the behavior of the worst performers. His exact phrase: “No CEO wants to be on the bottom of the list for more than one quarter.” That lesson has stuck with me.

I’m not hopeful that there is an easy path to resolving the issue of health and human service “best practice” guidelines. There is great work going on for some disease states, in some geographies—but there appears little agreement about how best to make decision support a reality across the system of care. I do think that payers can agree on some minimum metrics of what constitutes good performance. And, I think that the payers can speed the discussion of “best practices” by making their performance data comparable and public. I believe that most people working in the health and human service field—at every level, in most types of organizations—want to do well for the consumers they serve. Making performance data available (for their own organization and others) is a fundamental piece of making that happen.

For more on public performance reporting in the health and human service field, check out our coverage of these performance-based programs:

  1. CMS To Resume Terminating Medicare Advantage Plans With Low Quality Star Ratings
  2. ACOs Saved Medicare $660 Million Over Four Years
  3. CMS Awards 7 Agreements For Performance Measure Development For Medicare’s Quality Payment Program
  4. Nearly 11,000 Skilled Nursing Facilities Receive Medicare Rate Cut Due To Hospital Readmission Rates
  5. New Hampshire Medicaid Implements MCO Capitation Rates Linked To Performance
  6. New York Medicaid Releases Revised 2019 Health & Recovery Plan VBP Quality Measure Set

Last week, we wrote about the importance of determining the financial impact, in terms of return-on-investment (ROI), for payer and health plan investments in social services (see Social Services ROI Essential To Social Determinants Wave). This is an important step in moving the payment for social services from a “charitable act” to an investment in better consumer health and lower health care costs.

We outlined our recommended approach for measuring ROI for executives of provider organizations that are providing social service-integrated services for health plan consumers; however, there is no standardized process for this evaluation. That is apparent when you look at the early reporting of the financial impact of a variety of programs focused on social determinants of health—these are a few recent examples:

The “Newark Initiative”: Robert Wood Johnson Barnabas Health (RWJBH) & Horizon Blue Cross Blue Shield Of New Jersey (Horizon)—Horizon and RWJBH assembled a care team with a Horizon care transformation specialist, nurses, a personal health assistant, a health system-based social worker, and community health workers who all met with the identified Horizon members to learn about the non-medical barriers preventing the individuals from receiving care for their chronic health conditions. This care team worked to connect consumers to health care professionals and to non-medical resources provided by other community entities.

To measure the financial impact of this initiative, there were multiple measures, including total cost of care, hospital admissions, and use of emergency rooms. During its first year, a SDH pilot project in Newark cut the participants’ total cost of care by 25%, including 20% fewer hospital inpatient admissions, and 24% fewer emergency department visits (see New Jersey Horizon Blues Social Determinants Pilot Cut Total Cost Of Care By 25%).

HealthConnections: WellCare Health Plans—WellCare launched HealthConnections, a nationwide call center-based program for WellCare beneficiaries, in 2014 to provide free referrals to a network of local, community-based public assistance programs for support services. These social support service referrals included housing, transportation, food insecurity, and financial assistance for utilities. The program representatives tracked referrals and then followed up with beneficiaries to see if the social support referrals helped to meet their needs.

To measure the return from this program, a 2018 study measured the change in mean total health care expenditures in the year before and after a social service referral from the program. The study reviewed the WellCare claims data for beneficiaries who participated in the program over a two-year time period (claims data included all professional services, inpatient, outpatient, emergency department, and prescription drug services). Program representatives referred participants to social services, then followed up, typically within two weeks, to see if the participant reported that their social needs were met. Participants who reported that all their social needs were met had a reduction of 11% in total health care costs one year post-referral.

The Better Health Through Housing Initiative: The University of Illinois & The Center For Housing & Health—University of Illinois Hospital & Health Sciences System (UI Health) and community-based housing organization, Center for Housing and Health, partnered in 2015 to develop a Housing First program targeted at chronically homeless consumers. In addition to UI Health, Northwestern Memorial Hospital, Rush University Medical Center, and Swedish Covenant Hospital also participate in the program, referring homeless consumers from their emergency rooms. After the consumer is accepted into the program, an outreach worker is sent into the community to contact the consumer and connect that consumer to the necessary housing services.

To measure the return from this program, UI Health examined overall health care costs and emergency room utilization. In the original pilot program, which included 27 consumers, UI Health found that after consumers had been placed in housing, health care costs fell 42% immediately. Follow-up assessments of the data shows that some consumers’ costs fell as much as 61%.

Hospital Nutrition Care Program: Advocate Health Care—Advocate Health Care launched a nutrition initiative in 2014. All consumers were screened at the point of hospital admission for malnutrition risk. Consumers identified as “at risk” received an oral nutritional supplement within 24 to 48 hours of admission. These same consumers also received inpatient nutrition education, post-discharge instructions, coupons for additional supplements, and follow-up telephone calls from the hospital call center personnel.

To measure the return from this program, studies examined average length of hospital stay and hospital readmission rates. Follow-up studies reported that the program reduced 30-day readmission rates by 27% compared to a control group baseline and reduced the average length of stay in hospital by almost two days when compared to a control group baseline. These reductions were used to calculate potential cost savings based on a model from the Center for Applied Value Analysis, a web-based budget impact model. Using this model, the reductions in readmissions and length of stay are estimated to produce a savings of $3,800 per consumer when compared to a control group baseline.

These four studies illustrate the wide variety of social service interventions emerging in the market and the methodologies being utilized to measure their effectiveness. For more, check out resources in the PsychU Resource Library:

  1. Tending To The Social Determinants Of Health – Or Not
  2. Poverty Really Does Matter When It Comes To Health Care Spending
  3. Helping Consumers With Food Insecurity: What Services Are Available?
  4. A Question Of Permanent Supportive Housing
  5. The Social Service Factor In The Health Care Value Equation

By January 1, 2020, state Medicaid programs must be using electronic visit verification (EVV) to document provision of personal care services (PCS). Within four years, by January 1, 2023, state Medicaid programs must be using EVV to document provision of home health care services (HHCS). Failure to implement EVV will result in a reduction to the state’s federal medical assistance percentage (FMAP) for each quarter that the state is not in compliance. For PCS, in 2020, states that are not in compliance will experience an FMAP cut of 0.25 percentage points. The penalty will gradually increase to 1.0 percentage point in 2023 and beyond. For HHCS, the reduction for not meeting the EVV requirements will be 0.25 percentage points for 2023, gradually increasing to 1.0 percentage point in 2027 and beyond.

EVV is an electronic system that verifies when service encounters occur and documents the precise time services begin and end. A provision of the 21st Century Cures Act (Cures Act), signed into law on December 13, 2016, mandates that states implement EVV for all Medicaid PCS and HHCS that require an in-home visit by a provider organization. In-home visits do not apply to congregate facilities offering 24-hour services or to Programs of All-inclusive Care for the Elderly (PACE) programs.

On January 30, 2019, the Centers for Medicare & Medicaid Services (CMS) informed states that starting in November 2019 they must self-report their progress implementing EVV. The goal is to ensure that states are prepared to launch EVV on time. CMS will use the self-reported survey data to determine if the states are in compliance. States that are not in compliance will be asked to review their survey information on a quarterly basis to ensure it is up-to-date and to update their survey responses as needed until they come into compliance.

PCS are generally defined as all services supporting activities of daily living or providing support for instrumental activities of daily living. Home health services generally includes nursing services; home health aide services; or medical supplies, equipment, and appliances that are delivered via an in-home visit under the state’s home health benefit.. Regardless of what states call PCS or HHCS services, if claims are reported under the PCS or HHCS category on the CMS-64 form than the service is subject to EVV.

States are not restricted to specific EVV vendors or a particular EVV system. However, whatever system the state chooses must collect:

  1. The type of service performed
  2. The individual receiving the service
  3. The date of the service
  4. The location of service delivery
  5. The individual providing the service
  6. The time the service begins and ends

Please note that the final version of the survey that will be publicly available after the conclusion of the PRA approval process may include differences from the version linked to here due to edits made as a result of public comment.

PsychU last reported on this topic in “Medicaid Penalties For States Over Electronic Visit Verification Delayed One Year,” which published on September 10, 2018.

For more information, contact: Office of Communications, Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244; 202-690-6145; Fax: 202-260-1462; Email: press@cms.hhs.gov.

Denver’s pay-for-success, supportive housing social impact bond (SIB) has seen an 85% success rate from its creation in January 2016 through December 2017. During that period, the five-year program had served 285 individuals experiencing chronic homelessness, and 241 (85%) of these individuals had successfully retained their housing from the time that they signed their lease.

The Denver SIB program was created in a partnership of the City and County of Denver and Denver PFS LLC, an entity established by the Corporation for Supportive Housing and Enterprise Community Partners. The program’s goal is to assist those in a homelessness-jail cycle by providing them with supportive housing and accompanying services. Individuals are referred to the SIB through the Colorado Coalition for the Homeless (CCH) and Mental Health Center of Denver (MHCD) by the Denver Police Department (DPD). CCH and MHCD then go through a location process to offer individuals the chance to take part in the SIB program. If individuals elect to participate, assistance is given to locate a housing option and submit a housing application. Once an individual’s housing application is approved, they can choose to start a lease and continue to fully participate in the program. The housing stability outcomes are based on a measure of total adjusted days in housing. Success is achieved when the participant remains in housing for at least 365 days without any episodes away from housing for greater than 90 days or has a planned exit from housing at any point.

The SIB combines two assistance methods to help those with permanent supportive housing (PSH) needs:

  • Housing First: a homeless assistance approach that prioritizes providing permanent housing to people experiencing homelessness. The approach combines immediate housing with supportive services to both offer a sense of security, and the ability to pursue personal goals and improve their quality of life. A Housing First approach can benefit both homeless families and individuals with any degree of service needs.
  • Assertive Community Treatment (ACT): a mental illness assistance approach that aims to eliminate or reduce the symptoms of severe mental illness and to enhance the individual’s quality of life. ACT offers education about an individual’s illness; individualized treatment in either health care facilities, or an individual’s own home; long-term services; vocational assistance, and integration into the community.

Specifically, the Denver SIB program provides the following services:

  1. Subsidized housing
  2. An Assertive Community Treatment (ACT) team
  3. Behavioral health services, including psychiatric services, individual and group therapy, and substance use treatment
  4. Links to community resources (e.g., food resources, legal referrals and advocacy) and to integrated health services (e.g., medical, dental, vision, and pharmacy services)
  5. Transportation assistance and referrals

These findings were presented in “From Homeless to Housed: Interim lessons from the Denver Supportive Housing Social Impact Bond Initiative,” by the Urban Institute, The Evaluation Center at the University of Colorado Denver, and The Burnes Center on Poverty and Homelessness at the University of Denver. The evaluators used a randomized, controlled trial design, assigning eligible individuals to a treatment group and a 361-person control group. Analysis is restricted to the treatment group so that engagement patterns can be tracked for the six months after referral. To measure outcomes and impact for these individuals, the evaluators collected administrative data from a number of sources of interest, such as jails, courts, detox units, homeless shelters, and hospitals. The goal was to determine the success of Denver’s SIB.

Additional findings of the report include:

  • Between January 2016 and December 2017, 363 individuals were referred to supportive housing.
  • During this time, it took an average of 20 days to engage participants in the program. This includes locating those referred to the program, and the time it took for the individuals to agree to participate in the program.
  • Within six months of referral, 68% of individuals had approval to move forward with supportive housing. About 63% of individuals signed a housing lease within these six months.
  • During the three years before referral to the program, individuals in the program had an average of 14 arrests per person between 2013 and 2015: on average, 12 of these arrests happened when the individual identified as transient.

The social impact bond was created after the discovery that the cost of providing safety-net services to 250 of Denver’s homeless individuals is approximately $7 million per year. This includes 14,000 days in jail, 2,200 visits to detox facilities, 1,500 arrests, and 500 emergency room visits. These services add up to an average yearly cost to taxpayers of $29,000 per individual served. The SIB program was put in place through a $23.7 million total investment. About $15 million of this investment was from federal resources, while the other $8.7 million was provided by eight local organizations, which have received repayments totaling $1,025,968 from the city, based on the program’s outcomes so far:

  1. The Denver Foundation
  2. The Piton Foundation
  3. Ben and Lucy Ana Walton Fund of the Walton Family Foundation
  4. Laura and John Arnold Foundation
  5. Living Cities
  6. Nonprofit Finance Fund
  7. The Colorado Health Foundation
  8. Northern Trust Company

In launching the program, the City and County of Denver developed an agreement with Denver PFS LLC, an entity established by the Corporation for Supportive Housing and Enterprise Community Partners, to execute the Denver SIB. In the first year, CCH provided supportive housing services. Along with CCH, Mental Health Center of Denver (MHCD) provided supportive housing services in the second year of the program. Denver Crime Prevention and Control Commission provided staff for the program referral process, and the Denver Police Department (DPD) provided administrative data for the evaluation. The Urban Institute is conducting a five-year randomized controlled trial evaluation and implementation study in collaboration with partners from the Evaluation Center at the University of Colorado Denver and the Burnes Center on Poverty and Homelessness at the University of Denver.

The full text of “From Homeless to Housed: Interim lessons from the Denver Supportive Housing Social Impact Bond Initiative” was published in November, 2018 by the Urban Institute. A copy is available online at https://www.urban.org/research/publication/homeless-housed-interim-lessons-denver-supportive-housing-social-impact-bond-initiative/view/full_report (accessed April 2, 2019).

PsychU last reported on this topic in “Denver Supportive Housing Social Impact Bond Initiative Earns The First ‘Success Payment’ For Project Investors,” which published on June 13, 2018.

For more information, contact:

  • Cathy Alderman, J.D., MSPH, Vice President of Communications and Public Policy, Colorado Coalition for the Homeless, 2111 Champa Street, Denver, Colorado 80205; 303-312-9638; Email: calderman@coloradocoalition.org
  •  Kiki Turner, Communications Associate, Department of Finance, City and County of Denver, 201 West Colfax Avenue, Denver, Colorado 80202; 720-913-1589; Email: Kiki.Turner@denvergov.org
  • Dan Fowler, Senior Media Relations Manager, Urban Institute, 2100 M Street NW, Washington, District of Columbia 20037; 202-261-5554; Email: DFowler@urban.org

The Kansas Medicaid program is preparing to launch the OneCare Kansas (OCK) care coordination program on January 1, 2020. OCK is a Medicaid health home model that will provide coordination of physical and behavioral health care with long term services and supports for people with chronic conditions. The state previously operated Medicaid health homes starting in 2014, but terminated the option in 2016. In 2018, the Kansas legislature directed the Kansas Department of Health and Environment (KDHE) to reinstate the Medicaid health home program. On March 25, 2019, KDHE issued an application for provider organizations seeking to participate the OCK launch. Applications are due by June 1, 2019. KDHE will continue to evaluate later applications, but would not guarantee participation by the OCK launch date.

The OCK program is intended for adults and children with a behavioral health diagnosis or chronic disease physical health condition. KDHE has not yet determined the size of the target population. Enrollment will be on an opt-in basis. The lead entities will be the KanCare Medicaid managed care organizations (MCOs). Members can be referred by the MCOs, hospital emergency rooms, community-based social service provider organizations, or they can self-refer.

According to a Kansas Medicaid “Health Home Comparison Handout” that compares OCK to the previous model, under the previous health home model, about 36,000 Medicaid members were enrolled; the target population included adults and children diagnosed with serious mental illness. The state had intended to launch health homes for individuals with chronic physical health conditions, but the program ended before that phase started. Enrollment was automatic for referred members; individuals were permitted to opt-out. The KanCare MCOs were the lead entities; they contracted with provider organizations to deliver the six core health home services defined by the Centers for Medicare & Medicaid Services (CMS).

OCK will provide the six core health home services defined by CMS: comprehensive care management, care coordination, health promotion, comprehensive transitional supports, individual and family supports, and referral to community and social supports. To participate, provider organizations must apply and agree to contract with one or more of the three KanCare MCOs: Aetna Better Health of Kansas, Sunflower State Health Plan, or United HealthCare. An operational electronic health record is required at the time of application. The provider organizations must have four mandatory staff positions for OCK, with the option of one additional position.

The KanCare MCOs will pay the OCK provider organizations a per-member per month payment for any month in which one service is provided. KDHE has not yet determined the rates. The OCK provider organizations will be eligible for a one-time bonus payment for initial completion of the members’ Health Action Plan (HAP). The HAP clarifies the roles and responsibilities of the lead entity, OCK partner, member, family/support persons/guardian, and health services social service staff.

PsychU last reported on this topic in “Kansas Medicaid To End SMI Health Homes Initiative June 30, 2016,” which published on March 18, 2016.

For more information, contact: Gerald Kratochvil, Communications Director, including OneCare Kansas, Kansas Department of Health and Environment, 1000 Southwest Jackson Street, Curtis State Office Building, Topeka, Kansas 66612; Email: Gerald.Kratochvil@KS.gov.

A group of addiction treatment provider organizations are suing Anthem Blue Cross to recoup more than $1.3 million in underpayments and reimbursements made directly to beneficiaries because the provider organization was out-of-network. The plaintiffs include Adeona, Dual Diagnosis Treatment Center, Medlink, Satya Health, Sovereign Health, and Sovereign Phoenix. The complaint, Dual Diagnosis Treatment Center, Inc., et al., v. Blue Cross of California, was initially filed on May 8, 2015. On March 31, 2019, the judge began considering the plaintiffs’ request to file a Fourth Amended Complaint. Trial is currently set for April 7, 2020.

The original complaint stated claims against 159 employee welfare plans and 49 Blue Cross entities to recover benefits and damages related to 274 different individuals from whom the plaintiffs received an assignment of benefits. However, the defendants instead reimbursed the individuals rather than the provider organizations who are the plaintiffs.

On May 1, 2018 the court issued its order concerning the plaintiffs’ Third Amended Complaint (TAC) dismissing the plaintiffs’ claim for relief under California law, but let stand the plaintiffs’ claims against many of the defendants for benefits under the federal Employee Retirement Income Security Act of 1974 (ERISA). At a scheduling conference on September 24, 2018, the parties were ordered to participate in mediations, which took place over eight days in October and November 2018. Between August and November 2018, the plaintiffs received over 32,000 pages of documents from the defendants, including claim forms, Explanations of Benefits (EOBs) documents, cancelled checks, and plan-related documents. These documents gave the plaintiffs a better understanding of the extent to which certain claims were paid or underpaid.

The plaintiffs allege that about 34 claims were substantially underpaid. The plaintiffs maintain that these benefits should have been paid pursuant to the terms of the insurance plans, and that as assignees, the plaintiffs have the right to recover these unpaid benefits. The plaintiffs also asserted breach of contract claims against certain defendants.

On January 31, 2019, the plaintiffs filed a motion for permission to file a Fourth Amended Complaint. On February 25, 2019, the defendants filed opposition to the motion. The defendants asked the court to deny the plaintiffs’ request to assert allegations of underpayment because the plaintiffs “unduly delayed in seeking such amendment” and the amendment is sought in bad faith. The defendants noted that for nearly four years, the court and the parties have managed the case as one of “direction of payment,” not underpayment. The court has previously characterized the case as one in which the actual amount paid by the defendants was not in dispute.

For more information about the plaintiffs’ position, contact: Lisa Kantor, Founding Partner, Kantor & Kantor, LLP, 19839 Nordhoff Street, Northridge, California 91324; 818-886-2525; Email: lkantor@kantorlaw.net.

For more information about the defendants’ position, contact: Hieu Nguyen, Communications, Anthem Blue Cross and Blue Shield, 1001 Pennsylvania Avenue Northwest, Suite 710, Washington, District of Columbia 20004; 202-510-8848; Email: hieu.nguyen2@anthem.com.

 

On March 7, 2019, the California Department of Health Care Services (DHCS) released draft Medi-Cal value-based payment (VBP) performance measures. The measures are grouped into four domains, and each domain has five measures. The Governor’s budget for fiscal year 2019 -2020 proposed that DHCS implement VBP through Medi-Cal managed care health plans (MCPs) to provide incentive payments to provider organizations for meeting specific measures aimed at improving care for certain high-cost or high-need populations. These risk-based incentive payments will be targeted at physicians who meet specific achievement on metrics targeting areas such as behavioral health integration; chronic disease management; prenatal/post-partum care; and early childhood preventive care. To address and consider health disparities, DHCS proposes to pay an increased incentive amount for events tied to beneficiaries diagnosed as having a substance use disorder or serious mental illness, or who are homeless.

In the draft VBP notice, “California Medi-Cal Value Based Payment Program Performance Measures, March 2019: Proposal For Comment,” DHCS noted that the final set of VBP measures may include some or all of the proposed measures. DHCS also sought comment on additional measures that should be considered for inclusion. When determining these draft measures, DHCS took into consideration several factors including: whether a measure aligned with other DHCS quality efforts; the number of affected beneficiaries; and whether or not the measure could be run administratively, among others. The four domains and the proposed measures eligible for incentive payments are as follows:

  • Prenatal/Postpartum Care, with five measures: prenatal pertussis vaccinations, first trimester prenatal visits, completion of two postpartum care visits, postpartum depression screening within 12 weeks after delivery, and provision of postpartum birth control methods or devices for women between three and 60 days after delivery.
  • Early Childhood, with five measures: Completion of eight well child visits by age 15 months, completion of four well child visits between ages three and six years, completion of full vaccinations for two-year-olds, blood lead screening for children up to age two, and applying dental fluoride varnish for children ages six months to five years.
  • Chronic Disease Management, with five measures: Each event of adequately controlled blood pressure for members ages 18 to 85 years being seen for a diagnosis of high blood pressure, each event of diabetes HbA1c glucose testing that shows better than poor control for members ages 18 to 75 years diagnosed with diabetes, control of persistent asthma for members between age five and 64 years, tobacco use screening provided to members age 18 and older, and influenza vaccine administered to members 19 years and older for individuals with a chronic disease diagnosis.
  • Behavioral Health Integration, with four measures: screening for clinical depression among members age 12 and older, antidepressant medication adherence among members age 18 and older diagnosed with major depression who take an antidepressant for at least 12 weeks, screening for unhealthy alcohol use among members age 18 and older, and member visits to co-located primary care and behavioral health services.

DHCS intends to release additional details about the proposed measure specifications after the measure set has been finalized. The Governor’s budget proposal funds the measure at $360 million annually. The VBP program is to be implemented for at least three years in the managed care delivery system. In the draft VBP proposal, DHCS did not propose dollar values for each program or measure. DHCS intends to set the value of incentive payments after finalizing the measure set and assessing projected achievement. Comments were accepted through March 22, 2019.

PsychU last reported on this topic in “California Revises Medi-Cal Managed Care RFP Schedule; Moves Release Of All RFPs To 2020,” which published on April 22, 2019.

For more information, contact: California Department of Health Care Services; Email: DHCS_PMMB@dhcs.ca.gov.

On March 27, 2019, Centene Corporation (Centene) and WellCare Health Plans, Inc. (WellCare) announced that Centene will acquire WellCare in a cash and stock transaction for $17.3 billion. The transaction is expected to be completed in the first half of 2020. The combined company will serve approximately 22 million members, with 12 million enrolled in Medicaid managed care plans, about 5 million enrolled in Medicare Advantage plans or Medicare Part D Prescription Drug Plans, and the remaining 5 million individuals served in the Health Insurance Marketplace or the TRICARE program. With the addition of WellCare’s markets, and its health care plans in Hawaii, Kentucky, and New Jersey, and enhanced presence in Michigan, the combined company will operate nationally in all 50 states. The combined company will operate 31 NCQA accredited health plans across the country. Centene estimates that the combined company will have pro forma 2019 revenues of approximately $97 billion, with $5 billion in earnings before income tax, depreciation, and amortization.

Centene will complete the acquisition in a cash and stock transaction for $305.39 per share based on Centene’s closing stock price on March 26, 2019. When the transaction is complete, Centene shareholders will own approximately 71% of the combined entity, with WellCare shareholders owning approximately 29%.

The purchase of Wellcare will create a health care enterprise focused on government-sponsored health care programs in Medicaid, Medicare and the Health Insurance Marketplace. The new company will be headquartered in St. Louis, Missouri. The board of the combined company will consist of 11 members: nine of the members will be from the board of Centene, and two will be from the board of WellCare. After the close of the transaction, Centene’s current Chairman and Chief Executive Officer (CEO) Michael Neidorff will lead the combined company as chairman and CEO. WellCare’s CEO Ken Burdick and Drew Asher, currently executive vice president and chief financial officer, are expected to join the Centene senior management team in new positions created following the acquisition.

Founded in 2004 in Delaware, WellCare provides managed care health plans primarily through Medicaid, Medicare Advantage, and Medicare Part D Prescription Drug plans. As of December 31, 2018, WellCare served approximately 5.5 million members. The company focuses on providing government-sponsored managed care services to families, children, seniors, and individuals with complex medical needs. The company partners with more than 407,000 contracted provider organizations and has more than 8,900 employees. Wellcare is the holding company for several subsidiaries, including WellCare, Staywell, HealthEase, Harmony, and ‘Ohana. According to the OPEN MINDS report, “WellCare Health Insurance Payer Portfolio, 2017,” WellCare operated health plans in 25 states. At that time, it had 3.2 million members, and nearly 80% of WellCare members were enrolled in Medicaid managed care plans in 13 states, and the company held a 3% share of the national Medicaid managed care market. About 20% of WellCare members were enrolled in a Medicare Advantage plan, and the remining 2% were enrolled in a commercial health plan.

Centene is a diversified, multi-national health care enterprise that provides services to government-sponsored and commercial health care programs, focusing on under-insured and uninsured individuals. The company serves approximately 16.5 million members. Many receive benefits provided under Medicaid, including the State Children’s Health Insurance Program (CHIP), as well as Medicaid aged, blind or disabled (ABD) plans, specialized plans for children in foster care, managed long-term services and supports (LTSS), in addition to other state-sponsored programs. Centene operates Medicare Advantage plans, including Medicare Part D plans and Special Needs Plans for dual eligible individuals, and programs with the U.S. Department of Defense. Centene also contracts with other health care and commercial organizations to provide specialty services including behavioral health management, care management software, correctional health care services, dental benefits management, commercial programs, home-based primary care services, life and health management, vision benefits management, pharmacy benefits management, specialty pharmacy and telehealth services.

Cenene is the parent organization for Ambetter, Cenpatico, Health Net, and many state-specific health plans. In April 2018, Centene acquired MHM Services to expand its reach in the correctional health care sector. According to the OPEN MINDS report, “Centene Corporation Health Insurance Payer Portfolio, 2017,” Centene operated health plans in 34 states. At that time, it had 11.8 million members, and nearly 62% of Centene members were enrolled in Medicaid managed care plans, and the company held a 10% share of the national Medicaid managed care market. About 3% of Centene members were enrolled in a Medicare Advantage plan, about 24% were enrolled in TRICARE, and the remining 11% were enrolled in a commercial health plan.

For more information, contact: Marcela Manjarrez-Hawn, Senior Vice President And Chief Communications Officer, Centene Corporation, 7700 Forsyth Boulevard, St. Louis, Missouri 63105; 314-445-0790; Email: mediainquiries@centene.com or Charles N. Talbert, Manager, External Communications, WellCare Health Plans, Inc., 211 Perimeter Center, Suite 800, Atlanta, Georgia 30346; 770-913-2181; Email: charles.talbert@wellcare.com.

On March 11, 2019, the California Department of Health Care Services (DHCS) released a revised Medi-Cal managed care request for proposal (RFP) schedule. The new schedule moves the release of each RFP to 2020. Previously the state planned to stagger the release of the RFPs from 2019 to 2021. The new schedule also delays some of the implementations of the new contracts until 2023.

According to California DHCS spokesperson Anthony Cava, DHCS assessed the Medi-Cal managed care RFP schedule, based upon projected expended work effort, and determined that the original schedule was not reasonable due to the number of counties being procured and the necessary readiness activities that would have to occur prior to a managed care health plan going live. Therefore, the RFP implementation dates were adjusted in line with past experiences with plan readiness activities and the time needed for such a procurement. The updated schedule also allowed for the release of the RFP to all non-County Organized Health System counties at once versus releasing the RFP in two different timeframes. The revised implementation schedule is subject to change based upon health plan readiness.

The state plans to release nine RFPs for the reprocurement of the state’s Medicaid health plans. The release of the RFPs is broken out by managed care model and further by counties or regions.

County(s) & Managed Care Model RFP Release Potential Implementation Date
Two Plan Commercial
Alameda, Contra Costa, Fresno, Kings, Madera, San Francisco, Santa Clara 2020 January 2023
Los Angeles 2020 January 2023
Riverside, San Bernardino 2020 January 2023
Kern, San Joaquin, Stanislaus, Tulare 2020 January 2023
Geographic Managed Care (GMC)
Sacramento 2020 January 2023
San Diego 2020 January 2023
Imperial
Imperial 2020 January 2023
Regional
Alpine, Amador, Butte, Calaveras, Colusa, El Dorado, Glenn, Inyo, Mariposa, Mono, Nevada, Placer, Plumas, Sierra, Sutter, Tehama, Tuolumne, Yuba 2020 January 2024
San Benito
San Benito 2020 January 2024

 

California operates six managed care models, which are implemented on a county-by-county basis. Under all models, the treatment of mild to moderate mental illness is included in the health plan’s capitation rate. Services for persons with SMI are excluded from the health plan’s capitation rate and are the responsibility of the county mental health plans. Medicaid addiction treatment services are also excluded from the health plan’s capitation rate and delivered through Drug Medi-Cal (DMC), the Medicaid addiction treatment program.

The six models include:

County Organized Health System (COHS) – The county operates the only available Medicaid health plan. This model is not undergoing re-procurement.

Geographic Managed Care (GMC) – The county and DHCS contract with two or more commercial health plans.

Two Plan – A hybrid of the COHS and GMC model where the county operates one health plan and contracts with a commercial health plan to offer the second heath plan.

Imperial – The county and DHCS contract with two or more commercial health plans.

Regional – DHCS contracts with two commercial health plans for the entire region. A third plan is available in some counties.

San Benito – The county and DHCS contract with one commercial health plan for the region.

The state has not issued a procurement for Medicaid health plans since 2012. In 2012, the state released an RFP for the rural expansion counties in 2012. The contracts were implemented in 2013.

PsychU last reported on this topic in “New California Governor Orders Medi-Cal To Move Pharmacy To FFS Carve-Out Model,” which published on February 25, 2019.

For more information, contact: Office of Medi-Cal Procurement, Department of Health Care Services, 1000 G Street, 4th Floor, Sacramento, California 95814; 916-552-8006; Email: omcprfp0@dhcs.ca.gov.

Since I started writing this article, the developments surrounding Medicaid work requirements have changed half a dozen times. It’s enough to give a person whiplash. It’s also (perhaps unfortunately) an illustrative example of turbulence in real-time.

A couple of weeks ago, I wrote about the number of states with Medicaid work requirements, those states with proposed work requirements, and the large amount of speculation related to these requirements in Managing The New Medicaid Work Requirements. Now in a matter of weeks, we have yet more news to report. On the one hand, the Centers for Medicare & Medicaid Services (CMS) is pushing states to implement work requirements. On the other hand, there are an increasing number of challenges to those work requirements.

What is happening at CMS?

On March 14, CMS published a blog post from Seema Verma which doubles down on the importance of allowing states to implement local innovations—specifically calling out work requirements. As part of the blog, CMS also released new guidance on monitoring and evaluating these new.

On Friday March 15, CMS approved Ohio’s request to implement work requirements. The rules, which won’t go into effect until 2021, will require able-bodied adults (with some exceptions) to work at least 80 hours a month to maintain Medicaid coverage. Ohio is the ninth state to receive approval for work requirements (one state Maine received approval from CMS, but later withdrew their waiver.

Finally, although less certain, the President’s budget includes language to implement work requirements nationwide for able-bodied adults.

On the other side of the equation:

Just this week, a federal judge struck down the implementation of work requirements in Kentucky and ordered a halt to the enforcement of work requirements in Arkansas. The ruling was based on the idea that states and CMS have not sufficiently demonstrated how work requirements meet the core goal of Medicaid—providing health care coverage. Despite the ruling, many health care experts believe the fight is far from over and will likely result in the case going to the Supreme Court.

In New Hampshire, the state senate voted a bill forward that could “potentially eliminate, the work requirement for Medicaid expansion recipients”. At the same time, a lawsuit has been introduced challenging the work.

Finally, two new reports have been released countering the claims of work requirements. A Commonwealth Fund report found that Medicaid work requirements could weaken hospitals’ financial positions in states that implement those requirements. Another report from the Center of Budget and Policy found that claims that most individuals, who lost Medicaid coverage due to compliance with work requirements, did not find jobs.

What is clear from this debate is that consumers and provider organizations get stuck in an uncertain state. Without a clear path forward in either direction, executive teams don’t know where to dedicate resources or whether to invest in consumer education and engagement initiatives. Executive teams need to hedge their bets and at least have conversations on how they will address these requirements if they come to fruition. A great place to start is with scenario-based planning process, which allows organizations to envision multiple futures.

On March 12, 2019, UnitedHealth Group announced that OptumRx and UnitedHealthcare will start requiring their new employer-sponsored health plans clients to pass pharmaceutical rebates directly to consumers. The consumer point-of-sale prescription drug discount programs will apply to all new employer-sponsored plans beginning January 2020. For these plans, OptumRx and UnitedHealthcare will only support new employer clients that incorporate point-of-sale discounts to consumers as part of their plan design. Commitments made to support existing clients prior to this date will be grandfathered, including those currently in the sales cycle for January 1, 2020 effective dates.

This expansion builds on the existing point-of-sale discount programs that were announced in 2018, which deliver pharmacy discounts to UnitedHealthcare’s fully insured members at the point-of-sale. Those programs went into effect January 1, 2019 and are projected to serve more than 9 million consumers during 2019. During the first two months of 2019, OptumRx and UnitedHealthcare members have saved an average of $130 per eligible prescription due to the pharmacy discount program. UnitedHealthcare claims that when consumers do not have a deductible or large out-of-pocket cost, medication adherence improves by between 4% and 16%, depending on plan design.

These efforts come at a time when the U.S. Department of Health and Human Services has also proposed “American Patients First: The Trump Administration Blueprint To Lower Drug Prices & Reduce Out-of-Pocket Costs.” The blueprint proposed, among other ideas, reducing out-of-pocket costs related to pharmaceuticals.

For more information, contact: Daryl Richard, Vice President, Corporate Communications, UnitedHealthcare, 185 Asylum Street, Hartford, Connecticut 06103; Email: daryl_richard@uhg.com; or News Room, Optum, 11000 Optum Circle, Eden Prairie, Minnesota 55344; 888-445-8745; Email: newsroom@optum.com.

On March 11, 2019, Kaiser Permanente announced it will provide $3 million over a three-year period to Community Solutions’ “Built for Zero” data initiative to end homelessness in 15 communities. Community Solutions’ Built for Zero initiative is designed to end chronic homelessness and homelessness for veterans by using real-time data to help community leaders understand the dynamics of veteran homelessness in their respective communities. Built for Zero enables communities to adopt problem-solving tools and technologies to end homelessness, and the conditions that create it.

The Built for Zero initiative implements a four-pronged strategy approach: adopt proven best practices and efficiently deploy existing resources more efficiently; implement transparent data and performance management; engage leadership from government, private, and philanthropic sectors to secure resources and remove policy roadblocks; and connect communities to one another through an online platform. Since its January 2015 inception, the Built for Zero initiative has ended veteran homelessness in nine communities and chronic homelessness in three communities. The initiative has also housed more than 65,00 veterans and 38,500 chronically homeless individuals in 73 communities.

The $3 million from Kaiser Permanente will be used to support Community Solutions’ efforts to help its partner communities adopt tools and technologies to help fight veteran homelessness and its related causes. The funding will be used to support Community Solutions’ efforts in the following 15 communities within Kaiser Permanente’s national footprint in which the Built for Zero initiative is already at work:

  1. Sacramento & Sacramento County, California
  2. Marin County, California
  3. Richmond & Contra Costa County, California
  4. Fresno & Madera Counties, California
  5. Santa Cruz, Watsonville, & Santa Cruz County, California
  6. Bakersfield & Kern County, California
  7. Riverside County, California
  8. Washington, District of Columbia
  9. Baltimore, Maryland
  10. Arlington County, Virginia
  11. Fairfax County, Virginia
  12. Denver, Colorado
  13. Atlanta, Georgia
  14. Honolulu, Hawaii

Community Solutions helps communities adopt problem-solving tools to end homelessness and the conditions that create it. CS works by helping communities end it where it happens and improve the conditions of inequality that make it more likely to happen in the future, especially in neighborhoods of concentrated poverty.

Non-profit Kaiser Permanente provides health care services for more than 12.2 million members in eight states and the District of Columbia. Additional community health initiatives by the company include several healthy eating, active living, health education, and policy direction efforts for health improvement.

PsychU last reported on this topic in “Kaiser Permanente To Invest $200 Million Into Community-Based Efforts To Tackle National Homeless Crisis,” which published on June 21, 2019.

For more information, contact: Sara Vinson, National Media Relations, Kaiser Permanente, One Kaiser Plaza, Oakland, California 94612; 510-271-5953; Email: National-Media-Relations@kp.org.

On March 5, 2019, Pennsylvania Governor Tom Wolf announced the first insurer and hospital participants in the Pennsylvania Rural Health Model. The model transitions hospitals from a fee-for-service (FFS) model to a multi-payer global budget payment. The initial insurance payers for the model are Gateway, Geisinger, Highmark, and UPMC. Medicare is participating. Some of the state’s physical HealthChoices Medicaid managed care plans are participating; the Behavioral HealthChoices managed care plans are not participating. The Pennsylvania Department of Health (DOH) said traditional FFS medical assistance is not included at this point due to low volume.

The first five hospitals participating in the model are Barnes Kasson in Susquehanna, Susquehanna County; Endless Mountains in Montrose, Susquehanna County; Jersey Shore in Jersey Shore, Lycoming County; UPMC Kane in Kane, McKean County; and Wayne Memorial in Honesdale, Wayne County. The goal of the Rural Health Model is to ensure the financial viability of hospitals in rural areas across the state. As required by the model’s Rural Health Transformation Plans, hospitals will develop plans to invest in quality and preventive care, to obtain support and continuous feedback from stakeholders in the community, and to tailor the services they provide to the needs of their local community.

Under the Rural Health Model, the participating hospitals will receive a prospective payment from the participating payers, rather than reimbursement when an individual covered by one of the payers visits the hospital. Each performance year of the model, Pennsylvania will prospectively set the all-payer global budget for each participating rural hospital, based primarily on hospitals’ historical net revenue for inpatient and outpatient hospital-based services from all participating payers.  Each payer will then pay the participating rural hospitals for all inpatient and outpatient hospital-based services based on the payer’s respective portion of this global budget. These contributions from insurers will be used by the hospitals towards value-based care, including preventive services. Pennsylvania is committed to achieving targets related to population health outcomes and access under this Model, and may tie financial incentives for participating rural hospitals to Pennsylvania’s performance on the following three goals: increasing access to primary and specialty care, reducing rural health disparities through improved chronic disease management, and decreasing deaths from addiction disorder.

In an April 2018 presentation to the legislature, “PA Rural Health Model: Accelerating Health Care Innovation In Pennsylvania,” the DOH said the global budget is calculated based on historic net patient revenue (NPR) data, adjusted for transformation-related annual service changes for acute care hospitals and critical access hospitals (CAHs). The NPR data includes inpatient hospital services; outpatient hospital services; and CAH swing-bed services. The following outpatient hospital services are included in the NPRD: emergency department, laboratory services, imaging, evaluation and management services, same-day surgery, and other outpatient services. Behavioral health inpatient admissions or outpatient services at acute hospitals or CAHs are included in the global budget; however, those at stand-alone behavioral health facilities (e.g. community mental health centers, psychiatric hospitals) are excluded.

The global budget excludes post-acute care institutions, dialysis facilities, and ambulatory surgery centers or other special facilities. The NPR data excludes professional services, dental services, durable medical equipment, home health services, acute care swing-bed services, and clinic services (including rural health clinics, community mental health clinics, and federally qualified health centers). The global budget excludes operating revenue outside of NPR such as existing earned quality, pay-for-value, or value-based payments or other supplemental payments, such as Disproportionate Share Hospital payments.

The Rural Health Model was originally announced on January 12, 2017, with the performance period slated to run from January 13, 2017, to December 31, 2024. The seven-year performance period began in January, 2017, when the Centers for Medicaid & Medicare (CMS) made funding available to Pennsylvania to begin Model operations, obtain participation from rural hospitals and payers, aggregate data from participating payers, and calculate global budgets. Global budget payments for Medicare began in January 2019, and commercial payers began contributing between January and March.

To provide participating hospitals with transformation support, CMS intends to provide Pennsylvania with $25 million dollars through a Rural Health Redesign Center (RHRC). The RHRC is expected to provide technical assistance to the rural hospitals, including oversight of the model, review and approval of the hospitals’ global budgets and transformation plans; and also provide data collection, analytics, and practice transformation support. The 2019 Pennsylvania state legislature is still considering legislation to create the RHRC. By the end of the seven-year performance period, Pennsylvania is looking to have 30 participating hospitals and has committed to having each participating rural hospital’s global budget represent at least 90% of that hospital’s net revenue for inpatient and outpatient hospital-based services by 2024.

PsychU last reported on this topic in “Pennsylvania Rural Hospital Financing Model Announced In CMS/State Collaboration,” which published on May 9, 2018.

For more information, contact: April Hutcheson, Office of Communications, Pennsylvania Department of Health, 925 Health and Welfare Boulevard, Harrisburg, Pennsylvania 17120; 717-787-1783; Email: ra-dhpressoffice@pa.gov.

Physicians generate an average of $2,378,727 (per physician) in annual revenue for hospitals. This includes $2,133,273 generated by each primary care physician; and $2,446,429 generated by each specialist physician. This is an increase of about 52% over average annual net revenue generated by all specialties in 2016. Primary care is defined as family practice, general internal medicine, and pediatrics. Specialist care is defined as care in a specific field of medicine.

Revenue generation generally came from direct hospital admissions, procedures performed, lab tests and treatments ordered, and prescriptions written. Indirect revenue that primary care physicians may have generated from patient referrals to specialists utilizing the hospital was not included in the study. While the study collected no solid evidence regarding the large increase from 2016 numbers, researchers propose that the increase may be from:

  • The growing number of employed physicians.
  • The growing volume and cost of hospital services, many of which are provided by physicians or are ultimately derived from physician activities (such as hospital admissions).

These findings were reported in the “Merritt Hawkins’ 2019 Physician Inpatient/Outpatient Revenue Survey.” Merritt Hawkins emailed the 2019 Physician Inpatient/Outpatient Revenue Survey to approximately 3,000 hospital chief financial officers (CFOs) and other financial managers in the U.S. The survey for this report was conducted to track the average annual net revenue that physicians generate for their affiliated hospitals. A total of 62 completed surveys were returned, which provided data on 93 separate hospitals. The goal was to offer benchmark data for hospitals to use to analyze their physician recruiting programs.

Additional findings for the 2019 survey include:

  • The specialty in which physicians generate the most average net annual revenue generated by physicians for their affiliated hospitals is cardiovascular surgery ($3,697,916), followed by invasive cardiology ($3,484,375) and neurosurgery ($3,437,500).
  • The specialty in which physicians’ average annual salaries are highest is neurosurgery ($687,000), followed by invasive cardiology ($590,000), and orthopedic surgery ($533,000).
  • In 2018, 49.1% of physicians were employed by a hospital, a hospital owned group, or physician owned group; 31.4% were independent employment, and 19.5% identified themselves as having “other” employment. No information was given about what constituted “other” employment.

The full text of “Merritt Hawkins’ 2019 Physician Inpatient/Outpatient Revenue Survey” was published February 25, 2019, by Merritt Hawkins. An abstract is available online at https://www.merritthawkins.com/news-and-insights/thought-leadership/survey/2019-physician-inpatient-outpatient-revenue-survey/ (accessed March 8, 2019).

For more information, contact: Phillip Miller, Vice President, Communications, Merritt Hawkins and Staff Care, 8840 Cypress Waters Boulevard, Suite 300, Dallas, Texas 75019; 469-524-1420; Fax: 972-983-0707; Email: phil.miller@amnhealthcare.com.

On February 15, 2019, the New Hampshire Department of Health and Human Services (DHHS) announced the next New Hampshire Medicaid Care Management (MCM) managed care organization (MCO) contracts with AmeriHealth Caritas, New Hampshire Healthy Families, and Well Sense. The plans will be at-risk for physical and behavioral health, as well as pharmacy services, and will feature capitation rates linked to performance. The state’s performance measures seek to ensure MCO accountability for results in addressing addiction disorder, integrating physical and behavioral health, providing robust care management, and reducing unnecessary use of high-cost services.

As of March 19, 2019, the contracts were still pending approval. Once signed, the four-year contracts are collectively valued at $924.1 million over the contract term. The contracts are slated to begin July 1, 2019 and run through June 30, 2024.

The contracts will feature performance measures and a withhold and incentive program; several measures are focused on behavioral health. According to “New Hampshire Medicaid Care Management Program 2020 Withhold & Incentive Guidance,” during the first year the MCOs’ performance will be assessed in three performance categories: Quality Improvement (six measures), Care Management (three measures), and Behavioral Health (two measures).

New Hampshire DHHS Medicaid Care Management Program 2020 Withhold & Incentive Performance Measures
Quality Improvement Care Management Behavioral Health
Frequent (4+/year) emergency department users age 6 and older The percent of MCM members that received a health risk assessment within 90 days of enrollment The percent of community mental health program eligible MCM members that receive Assertive Community Treatment (ACT) services consistent with a fidelity score of 85 or more
Timeliness of prenatal care (HEDIS PPC) The percent of newborns diagnosed with neonatal abstinence syndrome (and parents) who receive care management from the MCO directly, or via a designated local care management entity The percent of MCM members in an emergency department or a hospital setting that are awaiting psychiatric placement for 24 hours or more
Percent of members with polypharmacy who completed a comprehensive Medicaid review and counseling The percent of MCM members that received care management from the MCO directly, or via a designated local care management entity
Adolescent well-care visits (HEDIS AWC)
Follow-up after emergency department visit for alcohol and other drug abuse or dependence – 7 day (HEDIS FUA)
Follow-up after hospitalization for mental illness – 7 day (includes members discharged from NH hospital) (HEDIS FUH modified to include unreimbursed NH hospital stays)

The state intends to withhold 2% of the MCO capitation rate that the MCOs can earn back. The withhold percentages will not be applied to directed payments, such as the MCO capitated payments to community mental health programs. The incentive program, based on the MCO’s performance, will provide an additional payment of up to 5% of the MCO’s qualifying capitation revenue. The MCO performance against the measures in each performance category will be assessed based on the following:

  • The minimum performance standard, which is used to determine whether the MCO is eligible to earn back the withhold payment. The 2020 Withhold & Incentive Guidance document reports the performance measures but does not report the minimum performance standards.
  • The earned withhold performance standard, which will be used to determine the earned withhold amount. To qualify for an earned withhold, the MCO must meet all the minimum performance standards for all measures within a performance category. Failure to meet the minimum performance standards will disqualify the MCO from receiving any earned withhold for the contract year in the relevant performance category. Each performance measure will be score from 0 to 3 points; the measure points will be weighted by performance category and totaled across all measures. The MCOs will be scored relative to the maximum possible points. The earned withhold will be calculated as the total withhold amount in dollars times the percent of possible total points.
  • The incentive payment performance standard, which will be used to determine if the MCO is eligible for any incentive payment. If any MCO does not meet any of the minimum performance standard or all the earned withhold performance standards, DHHS will use the unearned withhold funds to fund an incentive pool through which each MCO that met all the minimum performance standards can earn an incentive payment. The incentive payment will be calculated based on the MCO’s performance relative to its peers in each performance measure for measures where the MCO exceeded the earned withhold performance standard.

PsychU last reported on this topic in “New Hampshire Medicaid Selects Three Health Plans – AmeriHealth Caritas, New Hampshire Healthy Families & Well Sense,” which published on March 25, 2019.

For more information, contact: Public Information Office, New Hampshire Department of Health and Human Services, 129 Pleasant Street, Concord, New Hampshire 03301; 603-271-9389; Fax: 603-271-4332; Email: PIO@dhhs.nh.gov.

Between 2006 and 2014, emergency department visits attributed to International Statistical Classification of Diseases and Related Health Problems, ninth edition (ICD-9) codes related to opioids rose 217% among those aged 65 and older. The adjusted emergency department visit rate for opioid-related ICD codes from 37.8 per 100,000 population in 2006 to 119.9 visits per 100,000 in 2014. Opioids were associated with an increased number of chronic conditions, greater injury risk, and higher rates of alcohol dependence, and mental health diagnoses for this group.

These findings were reported in “Increasing Rates of Opioid Misuse Among Older Adults Visiting Emergency Departments” by Mary W Carter, Ph.D.; Bo Kyum Yang, Ph.D., RN;  Marsha Davenport, M.D., MPH; and Allison Kabel, Ph.D. The researchers analyzed data from the Nationwide Emergency Department Sample, specifically for adults aged 65 years and older with diagnostic codes related to opioid misuse disorder. A total of 28,167 unweighted (126,931 weighted) observations were identified as opioid-related emergency department visits by older adults. The goal was to determine factors associated with opioid misuse-related emergency department visits among older adults changes in outcomes associated with these visits.

Over time, the number of adults aged 65 to 84 years per 100,000 population who visited the emergency room due to opioid misuse was at least double that of the rate for those aged 85 or older. The rate rose 218% among adults ages 65 to 84, and rose 203% among those age 85 and older.

Number Of Older Adults With Emergency Room Visits Due To Opioid-Related ICD-9 Codes Per 100,000 Population
Age 2006 2009 2011 2014
65 to 84 40.5 63.4 89.1 129.0
85 and older 20.0 26.9 44.6 60.6

Additional findings about older adults with emergency room visits due to opioid-related reasons include:

  • The percentage of these visits that resulted in hospitalization decreased from 71.2% in 2006, to 66.0% in 2014 (with a slight increase to 72.3% in 2009).
  • The percentage of these visits that resulted in death remained constant (averaging about 1.4%) for all years.
  • Medicaid and self-pay rates were higher among opioid-related emergency department visits than Medicaid and self-pay rates for emergency department visits that were not opioid related. Medicaid was the primary expected payer for 3.3% of opioid-related visits. Self-pay was the expected payer for 6.7% of opioid-related visits compared to 1.1% of other visits. Medicare was the primary payer for 87.2% of opioid-related visits and other emergency department visits. Other payers (such as commercial health insurance) were the primary payer for 2.9% of opioid-related visits and 10% of other visits.

The researchers concluded that emergency department visits due to opioid misuse by older adults increased from 2006 through 2014. They said the rise indicates the need to better understand the scope and impact of opioid misuse among older adults. It also indicates a need to better inform policy responses to meet the needs of this age group.

The full text of “Increasing Rates of Opioid Misuse Among Older Adults Visiting Emergency Departments” was published March 7, 2019, by Innovation in Aging. A copy is available online at https://academic.oup.com/innovateage/article/3/1/igz002/5369972?preview=true (accessed March 18, 2019).

PsychU last reported on this topic in “Opioid-Related Hospitalizations Among 65+ Population Increased 34% Over Five Years,” which published on November 5, 2018.

For more information, contact: Todd Kluss, Director of Communications, The Gerontological Society of America, 901 1220 L Street Northwest, Washington, District of Columbia 20005; 202-587-2839; Email: tkluss@geron.org; Mary W. Carter, Ph.D., Gerontology Program Directory, Towson University, 8000 York Road, Towson, Maryland 21252; 410-704-4643; Email: mcarter@towson.edu.

Last week, I wrote about the states with approved work requirements and more generally, the effect of the non-traditional Medicaid expansion (see Managing The New Medicaid Work Requirements). While completing our research on this topic, our market intelligence team noticed another trend affecting eligibility and covered services—the increased approval of 1115 demonstration waivers that include a waiver of Medicaid retroactive eligibility.

Before, we dive too far into the trends, I want to provide a quick overview of retroactive eligibility. Under federal statute, all states are required to provide Medicaid retroactive eligibility. Retroactive eligibility pays for Medicaid-covered services furnished 90 days before a Medicaid application was submitted (or the month submitted, depending on the state) if an individual can show they would have been eligible for Medicaid during that period. The original intent of Medicaid retroactive eligibility was to safeguard individuals who may have experienced a catastrophic illness, or who may need long-term services and supports (LTSS). Retroactive Medicaid eligibility differs from presumptive eligibility, which allows hospitals (and other designated entities, in some cases) to immediately enroll low-income individuals in Medicaid who are presumed to be eligible based on income. Individuals then submit a full application to Medicaid for a final determination on eligibility.

Waivers of retroactive eligibility are not new. For example, Arizona had a waiver of retroactive eligibility from 2001 to 2013. What is new, however, is the number of states that are choosing to pursue these waivers, typically as part of a non-traditional Medicaid expansion.

We took a look at the 1115 demonstration landscape and found that there are currently 17 states with waivers of Medicaid eligibility for at least some populations. More strikingly, all seven states which have implemented work requirements have a waiver of retroactive eligibility that applies at a minimum to their Medicaid expansion population. Across the 17 states, the waivers vary – both in terms of the populations included under the waiver of retroactive eligibility and the length of time for which the retroactive eligibility is waived.

For example, some states have completely eliminated retroactive eligibility. States such as Arkansas and New Hampshire limit the waiver of retroactive eligibility to the Medicaid expansion population. Other states, like Iowa and Florida, have much more comprehensive waivers that include the aged, blind, and disabled population. The length of time for the waiver also varies with Arizona completely eliminating the 90-day retroactive eligibility period, while Hawaii and Massachusetts limit retroactive eligibility to 10 days prior to submission of the Medicaid application.

The good news is that, according to the Kaiser State Medicaid Survey, 40 states were able to make real-time Medicaid eligibility determinations in 2018. And for consumers whose eligibility is determined by modified gross adjusted income (MAGI), about 30% of applications are actually processed in less than 24 hours.

What do these waivers of retroactive eligibility mean? For provider organization management teams, the changes in waiver rules have implications for the consumer benefits eligibility verification process, charitable care policies, and organizational finances. The eligibility verification process for consumers seeking treatment needs to be adjusted for the state-specific Medicaid policies regarding both presumptive eligibility and retroactive eligibility. As the window for retroactive eligibility narrows, assumptions about possible third-party (Medicaid) coverage for services delivered before Medicaid eligibility is granted need to be adjusted and the financial implications communicated to consumers. Provider organizations in states with these waivers should be prepared to educate consumers about their health care options and help them fill out Medicaid applications because coverage is backdated to the day the application was filed.

These changes also affect provider organization policies about charitable care. If consumers are not currently eligible for Medicaid and retroactive eligibility is not possible or unlikely—and the consumer indicates they cannot pay for services—will the organization provide services at no charge? And for what services and what consumers? This change in policy is going to put the pressure on provider organization to absorb the cost of more services. The financial implications are clear. In states that limit retroactive eligibility, provider organization revenue is likely to drop and demands for free services are likely to increase. For mission-focused non-profit organizations in states that are rolling back Medicaid retroactive eligibility, the financial and policy implications need to be addressed at executive team and board level.

Over the past few years, payer and health plan interest in social support services—housing, transportation, nutrition, and more—has reached a new peak. A quick scan of the headlines illustrates the wave of health plan investments in social support services:

  1. Blue Cross Launches Food Delivery Program To Address Social Determinants
  2. Kaiser Permanente Invests In Affordable Housing Complex In Oakland, California For $5.2 Million As Part Of Initiative To Improve Community Health By Addressing Housing Insecurity
  3. Health Partners Plans Shows Positive Outcomes From “Food As Medicine’ Nutrition Program

In addition to these health plan-specific program examples, there are also more systematic approaches afoot. A recent reports show that 80% of health plans now use one or more methods to identify and address social determinants of health—with 42% of payers integrating referrals to community-based social service programs and resources; 33.7% integrating consumer medical information with consumer financial, census, and geographic data; 31.1% offering a “social needs” assessment along with health risk assessments; and 70% of payers are integrating awareness of social determinants of health directly into clinical processes. A good example of more systematic health plan initiatives include the recent announcement from UnitedHealthcare to expand its efforts to identify consumers who have non-medical needs considered social determinants of health (see UnitedHealthcare Expands Initiative To Use Diagnostic Codes To Capture Social Determinants Of Health).

But coverage of a recent conference on the issues surrounding social determinants put this interest in perspective for me—and solidified the challenge for provider organizations that are looking for long-term sustainable service opportunities addressing social determinants. The health plan presenters described their current initiatives as “a smattering right now” and “random acts of kindness.” They said that the current social determinant initiatives are “too fragmented” to have an impact and “a strategic challenge most health systems encounter is trying to build a business case showing a return-on-investment (ROI) based on reduced cost or improved health outcomes.”

This is a call to action for any provider organization management team that hopes that their social services-infused approaches to health care will become a long-term market. Without proof of ROI, these initiatives will become one-time public relations investments, rather than long-term programmatic approaches adopted by payers and health plans.

So, like any new service approach, management teams with a “great new idea” need to embrace the need for a proof of concept, a measure of ROI, and a plan to take the service to scale. There are a few basic steps:

  1. Assess your organization’s ability to deliver social support programs—services, geographic reach, consumers, and more
  2. Review health plan/ACO enrollment in your the geographic service area to identify target consumers
  3. Develop a concept statement about your social support services that are appropriate to the health plan consumers—services, costs, and performance metrics
  4. Meet with health plan/ACO managers to start the dialogue and present your service line concept
  5. Refine your concept statement based on the conversation with health plan/ACO managers
  6. Continue the dialog until you get to the demonstration pilot stage

But getting to the demonstration pilot stage is just the first step on this journey. The pilot project needs to be designed to measure performance and conduct an ROI analysis for your organization’s proposed approach. Without a solid ROI, your approach runs the risk of becoming another one-time interesting experiment without long-term adoption. This is a tall order—and one that I think will need to be led by entrepreneurial provider organization executives.

For more on ROI, check out For Telehealth, The ROI Is Where You Plan For It and More Tools For Tech ROI from the PsychU Resource Library.

In the upcoming New Hampshire Medicaid managed care organization (MCO) contracts, the state will require the MCOs to support community mental health centers (CMHCs) and addiction treatment provider organizations. To support CMHCs, the new contracts call for the MCOs to enter capitated payment arrangements with community mental health programs and provider organizations. To support addiction treatment provider organizations, the MCO reimbursements must be no less than the state’s fee-for-service Medicaid rate. Additionally, the MCOs must contract with any willing peer recovery provider organization.

Under the current contracts, starting in 2015, the MCOs were to pay the 10 CMHCs a capitated rate to cover an expected number of service encounters. However, for the 2016 contract year, the MCOs reduced the rate and the CMHCs rejected the offered rate; they returned to fee-for-service rates. In the next MCO contract year, the dispute was somewhat resolved and the CMHCs accepted the current capitated rate, which is based on a maintenance-of-effort model. The CMHCs provide the following services:

  1. Case management
  2. Long term support service
  3. Partial hospital
  4. Psychotherapy
  5. Evidence based practice
  6. Medication management
  7. Emergency service 24/7
  8. Community based acute psychiatric residential treatment program
  9. Supported employment

The New Hampshire Department of Health and Human Services (DHHS) is in the process of finalizing its selection of three MCOs following a competitive procurement for the Medicaid Care Management (MCM) program. On February 15, 2019, DHHS announced it had selected bids from AmeriHealth Caritas New Hampshire, New Hampshire Healthy Families, and Well Sense Health Plan for the next Medicaid Care Management program contracts. The new contracts, valued at $924.1 million, are slated to begin July 1, 2019, and run through June 30, 2024.

Under the new contracts, the plans will be at-risk for physical and behavioral health, and pharmacy services. The contracts feature provisions that require the plans to address social determinants of health, provide additional care coordination and care management, reduce member emergency room wait times especially for psychiatric boarding, support the state’s behavioral health system, and help members understand qualifying activities and exemptions for the state’s new Medicaid community engagement and work requirements.

The new contracts also include provisions to support integration of behavioral and physical health care and provisions to implement the DHHS 10-Year Mental Health Plan issued in January 2019. These provisions require the MCOs to take into account each member’s physical and behavioral health, as well as their social and economic needs. The MCOs will be required align their alternative payment models (APMs) to promote integrated care. The contract includes provisions focused on reducing the incidence of psychiatric boarding.

Additionally, the contract features performance measures and a withhold and incentive program; several measures are focused on behavioral health. According to “New Hampshire Medicaid Care Management Program 2020 Withhold & Incentive Guidance,” during the first year the MCOs’ performance will be assessed in three performance categories: Quality Improvement (six measures), Care Management (three measures), and Behavioral Health (two measures).

New Hampshire DHHS Medicaid Care Management Program 2020 Withhold & Incentive Performance Measures
Quality Improvement Care Management Behavioral Health
Frequent (4+/year) emergency department users age 6 and older The percent of MCM members that received a health risk assessment within 90 days of enrollment The percent of community mental health program eligible MCM members that receive Assertive Community Treatment (ACT) services consistent with a fidelity score of 85 or more
Timeliness of prenatal care (HEDIS PPC) The percent of newborns diagnosed with neonatal abstinence syndrome (and parents) who receive care management from the MCO directly, or via a designated local care management entity The percent of MCM members in an emergency department or a hospital setting that are awaiting psychiatric placement for 24 hours or more
Percent of members with polypharmacy who completed a comprehensive Medicaid review and counseling The percent of MCM members that received care management from the MCO directly, or via a designated local care management entity
Adolescent well-care visits (HEDIS AWC)
Follow-up after emergency department visit for alcohol and other drug abuse or dependence – 7 day (HEDIS FUA)
Follow-up after hospitalization for mental illness – 7 day (includes members discharged from NH hospital) (HEDIS FUH modified to include unreimbursed NH hospital stays)

The state intends to withhold 2% of the MCO capitation rate that the MCOs can earn back. The withhold percentages will not be applied to directed payments, such as the MCO capitated payments to community mental health programs. The incentive program, based on the MCO’s performance, will provide an additional payment of up to 5% of the MCO’s qualifying capitation revenue. The MCO performance against the measures in each performance category will be assessed on the basis of the following:

  • The minimum performance standard, which is used to determine whether the MCO is eligible to earn back the withhold payment. The 2020 Withhold & Incentive Guidance document reports the performance measures but does not report the minimum performance standards.
  • The earned withhold performance standard, which will be used to determine the earned withhold amount. To qualify for an earned withhold, the MCO must meet all the minimum performance standards for all measures within a performance category. Failure to meet the minimum performance standards will disqualify the MCO from receiving any earned withhold for the contract year in the relevant performance category. Each performance measure will be score from 0 to 3 points; the measure points will be weighted by performance category and totaled across all measures. The MCOs will be scored relative to the maximum possible points. The earned withhold will be calculated as the total withhold amount in dollars times the percent of possible total points.
  • The incentive payment performance standard, which will be used to determine if the MCO is eligible for any incentive payment. If any MCO does not meet any of the minimum performance standard or all of the earned withhold performance standards, DHHS will use the unearned withhold funds to fund an incentive pool through which each MCO that met all the minimum performance standards can earn an incentive payment. The incentive payment will be calculated on the basis of the MCO’s performance relative to its peers in each performance measure for measures where the MCO exceeded the earned withhold performance standard.

For more information, contact:

  • Public Information Office, New Hampshire Department of Health and Human Services, 129 Pleasant Street, Concord, New Hampshire 03301; 603-271-9389; Fax: 603-271-4332; Email: PIO@dhhs.nh.gov
  • Roland Lamy, Chief Executive Officer, New Hampshire Community Behavioral Health Association, 1 Pillsbury Street, Suite 200 Concord, New Hampshire 03301; 603-225-6633; Fax: 603-225-4739; Email: info@helmsco.com

On February 28, 2019, the Louisiana Department of Health (LDH) released an initial implementation plan to end overuse of nursing homes for people with serious mental illness (SMI). This is the first phase of an implementation plan resulting from a DOJ review that ended in December 2016. Following this review, the DOJ claimed that Louisiana was unnecessarily relying on nursing facilities to serve people with serious mental illness. The Americans with Disabilities Act (ADA) requires these individuals receive services in the most integrated setting appropriate to their needs. Based on assessments, this may mean in a setting that is less restrictive than a nursing facility such as care in a home or community-based setting. Following the review, the DOJ and LDH entered an agreement directing that the state create a new process to ensure mental health services for Medicaid beneficiaries diagnosed with serious mental illness (SMI) receive the most appropriate care in the least restrictive setting. The plan for this process focuses on making system improvements that will support ADA provisions, and outlines the department’s goals, plans and actions for the first 18-month period of the agreement of June 2018 to December 2019.

Under the DOJ agreement, LDH has two goals. The first is to provide transition planning and support, as well as screening and evaluations to all individuals with serious mental illness who are currently living in a nursing facility. The second is to assist individuals who may face nursing home placement in receiving the care they need in a more appropriate, community-based setting. At a high level, the implementation plan outlines the 18-month goals for assigning agency and division responsibility, and for establishing collaborative problem solving among State and local government agencies and entities for achieving goals identified by the agreement. The plan was developed with feedback from local and state entities, providers and advocacy groups, and in conjunction with consumer meetings. LDH has not indicated if or when requests for proposals (RFPs) might be released for the following services needed to meet the goals:

Workflow and tracking system development: Define requirements for the system as a whole and working with our Office of Technology Services (OTS) to build the first phase of the system. The goal is to have the first phase of the system built by the end of the Initial Implementation phase (December 2019).

Medicaid managed care organization (MCO), LDH employee, and provider training: Initial implementation goals include developing and delivering training to LDH staff and providers concerning both the DOJ agreement provisions, and LDH’s commitment to ending unnecessary institutionalization of people in the target population, consistent with Olmstead principles. LDH will complete a survey of the existing adult behavioral health system in Louisiana, assess the results to determine training needs, perform a gap analysis between our existing manuals that include training and the DOJ Agreement, utilize technical assistance to determine best practices for training, qualifications, and curriculum, and then implement training to be completed by the end of the Initial Implementation plan phase.

Transition system development: Initial implementation goals include establishing annual targets for transition of target population members to successful placements in the community; and identify nursing facility residents in the target population who have the fewest barriers to transition and continue to transition those residents to the community using existing community-based services. LDH will ensure staffing, tools, policies, and processes are in place to begin assessing and transitioning nursing facility residents in the target population.

Diversion system development: Initial implementation goals include establishing annual targets for diversion of target population members to successful placements in the community; and establish annual targets and strategies for decreasing referrals for individuals with SMI to nursing facilities. LDH will develop the diversion system plan and improve processes for the pre-admission screening prior to nursing facility placement and resident review (PASRR) processes.

Community support services development: LDH will conduct a gap analysis that identifies the gaps in services and proposes goals and timeframes to remedy gaps in services; assess Medicaid services, rates, managed care contracts, and billing structures to identify barriers to the provision of community-based services for the target population; and identify and implement incentives through Medicaid waiver, managed care, and provider contracts to increase use of community-based services and reduce reliance on institutional long-term care for the target population.

Quality assurance and continuous improvement: LDH will develop and implement the quality assurance system required in section 8 of the agreement.

Stakeholder engagement, outreach, and in-reach: LDH will utilize any opportunity possible to create awareness of the DOJ agreement; create stakeholder engagement, outreach and target population in-reach plans over the first six months; and implement and improve those plans over the remaining 12 months.

PsychU last reported on this topic in “Louisiana Agrees To Create Community-Based Mental Health Capacity To Reduce Nursing Home Use,” which published on July 13, 2018.

For more information, contact: Elizabeth Adkins, Chief of Staff, Office of Aging and Adult Services, Louisiana Department of Health, Post Office Box 629, Baton Rouge, Louisiana 70821-0629; Email: MyChoiceLA@LA.GOV

Over the past couple of months there has been lots of news—and lots of speculation—related to Medicaid work requirements (often referred to as community engagement). But figuring out what the landscape of work requirements means for the consumers you serve and your organization can be tricky.

Before we dive into what states have and don’t have work requirements, I think it is important to level-set on what we mean when talking about work requirements and how they operate. Work requirements are an outgrowth of the non-traditional Medicaid expansion model under the previous administration that allowed states to require Medicaid expansion adults to pay premiums, complete healthy behaviors, and generally, “have skin in the game.” Under the current administration, guidance was released that allowed states to build on this model adding the requirement that able-bodied adults complete work requirements.

In general, work requirement programs allow able-bodied adults to not only comply by working, but through several other activities—such as education, job training, job search, and volunteering. Exemptions exist for various populations including the medically frail, those who are disabled (but are not eligible for Medicaid through the disability pathway), individuals acting as a caregiver, domestic violence survivors, and those completing addiction treatment. Importantly, states are required to design strategies that connect enrollees to job supports but may not use Medicaid dollars to pay for these support services.

Currently there are seven states that have work requirements approved by the Centers for Medicare & Medicaid Services (CMS). Of these states, six require enrollees to work 80 hours a month, while one New Hampshire, requires enrollees to work 100 hours a month. All seven states suspend enrollment for individuals who fail to meet the requirements, although the ability to “cure” missed hours and the number of non-compliant months that result in suspension vary by state. Additionally, six of the seven states require individuals to also pay premiums, which in some cases will also result in suspension for failure to comply. On top of this, an additional nine states have submitted proposals to CMS to implement work requirements.

What are the results of these programs? It may be a little earlier to tell. Of those states with approvals only two—Arkansas and New Hampshire—have implemented their programs. New Hampshire implemented their program on March 1, 2019 and beneficiaries have a three-month grace period before the state enforces compliance with the requirements. Arkansas implemented their program in June 2018 and thus far more than 17,000 able-bodied adults have lost coverage.

To understand what all these changes mean for provider organizations, I reached out to Vic Topo, Chief Executive Officer of Center for Life Management in New Hampshire. He explained that work requirements, even when approved bring a lot of uncertainty:

Yes March 1st is the date being used as start of the transition toward the new requirement. However the detailed requirements as of this writing are in the process of being debated and revised by our legislature. We expect amended legislation intent on loosening the requirements such as reducing the hours down from 100 to 80, increasing the variety of circumstances that would result in dramatic decreases in enrollment, counting self-employment, among others. Although not yet decided it’s more likely then not that some or many of these changes will happen given the party swing from the November election.

And he noted that the impact that the events will have on staff and consumers:

Regarding impact to us as a provider, significant number of people currently being served are disabled and/or medically frail which are considered exempt from the requirements. For the others, the net effect of this policy shift at the federal level via the waiver places additional burden on the enrollee in the name of “personal responsibility.” And providers are already enormously challenged with workforce capacity and endless administrative paperwork burden experienced by our staff. 

My takeaway? Executive teams of provider organizations should consider the possibility of work requirements as part of the scenario-based planning. Executives should know how many of their current consumers are likely to be effected by the requirement and put in place the outline of a plan of action to deal with the increased regulations. That plan of action should involve staff engaging consumers and making sure they have an exemption, assisting them in setting their account to report hours, and connecting them to community resources that can help them meet the requirements.

On March 5, 2019, a federal court ruled that United Behavioral Health (UBH), a division of UnitedHealth Group, used internally developed medical necessity guidelines to deny coverage for behavioral health treatment that were more restrictive than generally accepted standards for mental health and addiction treatment. The court found that the UBH criteria focused on covering short-term or crisis-focused acute care, but did not account for ongoing, long-term services needed for chronic or complex mental health conditions. The ruling affects people with employer-sponsored health plans for which UBH managed behavioral health benefits from 2011 to 2017 and who were denied coverage for outpatient, intensive outpatient, or residential treatment. A status conference hearing has been scheduled for March 29, 2019, to begin addressing remedies.

The ruling was in Wit et al. v. United Behavioral Health, Findings of Fact and Conclusions of Law, which encompassed two consolidated class-action lawsuits, Wit et al. v. United Behavioral Health and Alexander et al. v. United Behavioral Health. Both complaints were brought under the Employee Retirement Income Security Act of 1974 (ERISA) in 2014, certified in 2016 and tried in October 2017. The complaints protested barriers to mental health and addiction treatment in United Healthcare’s commercial plan policies, as implemented by UBH. The class includes about 50,000 members covered by health benefit plans administered by UBH and governed by ERISA, as well as a smaller group of members covered by the state laws of Connecticut, Illinois, Rhode Island, or Texas. Each member had requested coverage for behavioral health care services (including residential treatment, intensive outpatient services, and outpatient services for mental health and substance abuse disorder issues), and the requests were denied by UBH in whole or in part based upon UBH’s internal Level of Care Guidelines or UBH’s Coverage Determination Guidelines.

The class period for the ERISA claims are for denials of resident treatment which were issued between May 22, 2011 and June 1, 2017; and denials of intensive outpatient and outpatient treatment that were issued between December 4, 2011 and June 1, 2017. The class periods for the four State Mandate Classes vary by state. In Texas, the class period includes denials that occurred between May 22, 2011, and June 1, 2017. In Illinois, it includes denials between August 18, 2011, and June 1, 2017. In Connecticut, it includes denials that occurred between October 1, 2013, and June 1, 2017. In Rhode Island, it includes denials that occurred between July 10, 2015, and June 1, 2017.

The plaintiffs asked the court to declare UBH’s use of its Guidelines improper under ERISA and the relevant state law mandates, to find that UBH violated its duties as a fiduciary under ERISA by creating and applying such invalid Guidelines, and to order UBH to use appropriate guidelines going forward which are consistent with generally accepted standards of care and the relevant state law mandates. Further, the plaintiffs asked the court to order UBH to reprocess the class members’ claims for benefits using the appropriate guidelines.

In the ruling, the court expressed concern about UBH’s lack of specific coverage criteria for children and adolescents. Denied claims for minors are estimated to number in the thousands in the certified classes. The court noted that although generally accepted standards of care do not require that UBH create an entirely separate set of guidelines to address the needs of children and adolescents, they do require that the UBH Guidelines instruct decision-makers to apply different standards. Coverage decisions for children and adolescents can include criteria for admission and continued stay that consider the child’s stage of development and the slower pace at which children and adolescents generally respond to treatment. UBH failed to meet this requirement for all years addressed in the complaint.

The court found that UBH mischaracterized the guidelines to state insurance regulators in Connecticut by stating that the UBH guidelines were consistent with the American Society of Addiction Medicine (ASAM) criteria. In Texas, for a portion of the class period, UBH failed to apply Texas-mandated substance use criteria.

The ruling in Wit, et al., applies only to ERISA participants and beneficiaries. It does not apply to people covered by non-ERISA plans (such as government employees) for which UBH administered behavioral health benefits using the same guidelines that are the subject of the ruling in Wit, et al. Only state insurance regulators enforce compliance of non-ERISA plans.

For more information about the plaintiff’s concerns, contact: Chantal Allan, Information Officer, Psych-Appeal, Inc., 8560 Sunset Boulevard, Suite 500, West Hollywood, California 90069; 310-598-3690, ext. 201; Email: callan@psych-appeal.com; or Zuckerman Spaeder, LLP, 1800 M Street NW, Suite 1000, Washington, District of Columbia 20036-5807; 202-778-1800; Email: ReceptionistDC@zuckerman.com.

For more information about the defense, contact: Tyler Mason, Vice President of Communications, Corporate Communications, UnitedHealth Group, Post Office Box 1459, Minneapolis, Minnesota 55440-1459; 424-333-6122; Email: tyler.mason@uhg.com.

During 2017, 130 health insurers offering plans sold through the Health Insurance Marketplace denied an average of 19% of claims. These insurers denied 42.9 million of the 229.8 million in-network claims received for the 2017 plan year. The denial rates for in-network claims ranged from 1% for a Celtic Insurance Company plan in Indiana to 45% for a Celtic Insurance Company plan in Texas. About 30.7% of insurers had a 10% or lower denial rate, about 33.1% of insurers had denial rates between 11% and 20%; and about 36.2% denied more than 20% of in-network claims in 2017.

For the 2016 plan year, health insurers offering plans through healthcare.gov about 17% of in-network claims were denied. That year, denial rates across all issuers ranged from less than 1% to more than 65%. For 2015, about 19% of in-network plans were denied. That year, denial rates across all issuers ranged from less than 1% to more than 90%.

These findings were reported in “Claims Denials and Appeals in ACA Marketplace Plans,” by Karen Pollitz, Cynthia Cox, and Rachel Fehr for the Henry J. Kaiser Family Foundation (KFF). The researchers analyzed Affordable Care Act (ACA) Transparency Data for 2015, 2016, and 2017 from the Centers for Medicare & Medicaid Services (CMS). The researchers analyzed these public files, with a focus on major medical plans and issuers that primarily offered stand-alone dental coverage. They excluded plans and issuers with incomplete data. For the 2017 plan year, of the total 180 major medical issuers offering plans through healthcare.gov, 130 had complete data on in-network claims received and denied. The goal was to examine claims denials and appeals among issuers offering individual market coverage on healthcare.gov from 2015 through 2017.

Transparency data is periodic data reported by group health plans and by health insurance issuers in the individual and group markets to provide transparency on how coverage works in practice. The law requires this data to be available to state insurance regulators and to the public. Plans should report on:

  1. Claims payment policies and practices
  2. Periodic financial disclosures
  3. Data on enrollment
  4. Data on disenrollment
  5. Data on the number of claims that are denied
  6. Data on rating practices
  7. Information on cost-sharing and payments with respect to any out-of-network coverage
  8. Information on enrollee and participant rights under this title
  9. Other information as determined appropriate by CMS

In February 2019, CMS announced in a transparency data collection notice that it will require reporting of plan level (rather than issuer level) claims data beginning with the 2019 collection year. Issuers offering plans on healthcare.gov will be required to report six denial reason categories beginning with the 2019 data collection, as follows:

  1. Referral or prior authorization required
  2. Out-of-network
  3. Services excluded or not covered
  4. Not medically necessary, excluding behavioral health
  5. Not medically necessary, behavioral health
  6. All other

The researchers noted that the wide range in denial rates across the 130 issuers and markets in 2017 could be due to differences in the following factors:

  • The plan’s determination of medical necessity
  • The plans limits, such as day or visit limits on covered services
  • The degree to which issuers’ automated claims processing systems routinely deny certain claims
  • Provider organization knowledge about which claims will be covered and how to properly submit claims
  • Issuer reporting methods, for example, in how to count partial approvals

They further noted that the impact of a denial varies. For some, the consumer is held harmless and would not realize that a claim had been denied. For others, the consumer might not be held harmless and could face a large medical bill. Consumers rarely appealed a denied claim. During 2017, consumers appealed 200,000 (0.5%) of the more than 42 million denied claims. Data for 2015 and 2016 show even lower consumer appeal rates, at 0.1% and 0.2%, respectively.

Appeals have a low success rate, and in 2017, only 14% of the 200,000 appeals resulted in overturning the denial. Across 118 insurers whose appeals outcomes were reported, the overturn rate ranged from 1% to 88%. The data does not indicate reasons for the low appeals rate which could include: validity of an initial denial, the consumer was unable to pursue the appeal or deficiency in consumer notices. State Consumer Assistance Programs, created by the Patient Protection and Affordable Care Act are charged with helping consumers file appeals for denied claims. However, Congress has not appropriated funding for the programs since 2010.

The full text of “Claims Denials and Appeals in ACA Marketplace Plans” was published February 25, 2019 by the Henry J. Kaiser Family Foundation (KFF). A copy is available online at www.kff.org.

PsychU last reported on this topic in “Pennsylvania Fines Aetna $190,000 Over Coverage Violations Involving Autism & Addiction Treatment,” which published on March 11, 2019.

For more information, contact: Craig Palosky, Director of Communications, The Henry J. Kaiser Family Foundation, 1330 G Street Northwest, Washington, District of Columbia 20005; 202-347-5270; Email: cpalosky@kff.org.

On June 14, 2019, the Michigan Department of Health and Human Services (MDHHS) announced that the Medicaid pilots under Section 298 to integrate physical and specialty behavioral health services would be delayed by a year, until October 1, 2020. The pilots had been slated to begin by October 1, 2019, but the announcement said more time is needed to complete design of the financial integration pilot model. In March 2018, MDHHS selected four community mental health services programs for the pilots: Genesee Health System; Saginaw County Community Mental Health Authority; and a joint pilot to be conducted by Muskegon County Community Mental Health (HealthWest) and West Michigan Community Mental Health.

To date, MDHHS said pilot participants have completed the following tasks needed to implement the pilots:

  • Developing a proposed care management workflow
  • Identifying an approach to public policy needs
  • Defining data sharing requirements critical to whole-person care

By October 1, 2019, MDHHS anticipates pilot participants will have reached agreements on risk-management; ownership of the specialty behavioral health provider network; utilization management, claims processing and other managed care responsibilities; and rates and payment structures. After the agreements are in place, MDHHS and pilot participants will proceed with implementation, including seeking approval from the federal Centers for Medicare & Medicaid Services (CMS), establishing new contracts, finalizing technology and reporting changes, establishing new payment flows and potentially creating new legal structures and undergoing accreditation reviews.

Psychu last reported on this topic in “Michigan Medicaid Picks Regional Pilot Organizations For Coordinated Behavioral & Physical Health Services,” which published on March 28, 2018. The article is available at https://www.psychu.org/michigan-medicaid-picks-regional-pilot-organizations-coordinated-behavioral-physical-health-services/.

For more information, contact: Lynn Sutfin, Public Information Officer, Michigan Department of Health and Human Services, Post Office Box 30195, Lansing, Michigan 48909; 517-284-4772; Email: SutfinL1@michigan.gov; Website: https://www.michigan.gov/mdhhs/ and https://www.michigan.gov/mdhhs/0,5885,7-339-71550_2941_76181—,00.html.

Among hospital chief financial officers (CFOs), 13% believe their organizations are prepared to adapt to new payment and delivery models in 2019 with their current financial planning processes and tools. About 23% of CFOs said their teams would be able to quickly and easily adjust during 2019 to their strategies and plans using evolving payment and delivery models. The share of hospital CFOs expressing confidence in their organizations’ readiness for new payment models dropped by two percentage points between 2017 and 2018. In 2017, about 15% believed their organizations were prepared, and 25% were confident that their teams could quickly and easily adjust.

These findings were reported in “2019 CFO Outlook: Performance Management Trends and Priorities in Healthcare” by Jay Spence and Jason H. Sussman of Kauffman Hall. The authors surveyed hospital CFOs, vice presidents of finance, directors of finance, and other senior finance executives representing more than 160 hospitals, health systems, and other health care organizations. Nearly half (48%) of the respondents worked for systems with two to nine hospitals, and 19% were in a system with ten or more hospitals. The online survey took place in September and October 2018. Some key areas of import in the report include managing organizational performance, budgeting processes, and reporting challenges.

The core dimensions of organizational performance managed by the CFOs included a wide range of organizational activities. About 85% identified financial health as a key responsibility, closely followed by managing consumer experience and quality of care outcomes, which were each identified by 80% as a key responsibility. About 69% identified operational efficiency; 62% identified strategic growth; and 52% identified employee growth and retention.

According to the survey, CFOs believe budget processes need to change to allow for more rapid budget development and the ability to adjust budgets within a shorter time frame. About 37% of CFOs reported having a budget process that takes six or more months from initial rollout to board presentation, up from 27% in 2018. About 46% said their budgets cannot be easily adjusted when new strategic information or analyses are available.

CFOs also think their organizations should be doing more to leverage financial and operational data to inform strategic decisions and initiatives. Outdated and insufficient processes and tools warrant redesign and organizational resources. This includes creating better dashboards and visuals (67%), pulling data from multiple sources (64%); and accessing trusted data sources (52%). About 47% said reports should be easier to create.

The full text of “2019 CFO Outlook: Performance Management Trends and Priorities in Healthcare” was published by Kaufman Hall. A copy can be requested online at https://www.kaufmanhall.com/ideas-resources/research-report/2019-healthcare-cfo-outlook-performance-management-trends-and (accessed February 18, 2019).

For more information, contact: Anu Singh, Managing Director, Kaufman, Hall & Associates, LLC, 5202 Old Orchard Road, Suite N700, Skokie, Illinois 60077; 847-441-8780; Email: info@kaufmanhall.com.

On February 6, 2019, the Centers of Medicare & Medicaid Services (CMS) announced that an 18-month moratorium on its ability to terminate Medicare Advantage (MA) organization contracts based on low star ratings in the Five-Star Quality Rating System has ended. Contracts may be terminated if they fail to receive at least a three-star drug or health plan Summary Star Rating for three consecutive years. The 2020 Star Ratings for MA and Part D plans, which are slated for release in the fall of 2019, will be the first set of ratings where performance below three stars would be counted toward qualification for termination. The first contract terminations would occur after the 2022 Star Ratings are released.

The Star Ratings system is intended to help people with Medicare, their families, and their caregivers compare the quality of health and drug plans being offered. Medicare Advantage and Part D prescription drug plans are given a rating on a 1- to 5-star scale, with 1 star representing poor performance and 5 stars representing excellent performance.

According to the “Medicare Advantage Part C & Part D 2019 Star Ratings Fact Sheet,” for the 2019 plan year, about 3.27% of the 376 Medicare Advantage plans with prescription drug (MA-PD) coverage in 2019 achieved a rating of less than three stars. In 2018, about 3.64% of the 385 MA-PD plans were rated below three stars. In 2017, about 2.48% of the 363 MA-PD plans were rated below three stars. In 2016, about 2.98% of the 369 MA-PD plans were rated below three stars. In each year, more than 70% of enrollees were enrolled in a MA-PD that achieved four or five stars.

The 21st Century Cures Act of 2016 prohibited CMS from terminating MA organization contracts through December 31, 2018. The Medicare Part C and Part D regulations allow CMS to terminate an MA contract for failing to achieve a Part C summary rating of at least three stars for three consecutive years. The Part D sponsor contract can be terminated for consistently low Part D summary ratings.

For more information, contact: Office of Communications, Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244; 202-690-6145; Fax: 202-260-1462; Email: press@cms.hhs.gov.

A tobacco quit line program for low-income individuals was 7.9% more effective among Medicaid participants who received financial incentives for engaging with tobacco treatment. Paying financial incentives to low-income individuals participating in a smoking cessation program resulted in higher participation in quit line calls, and a higher likelihood of abstinence at a six-month follow-up. About 21.6% of those who received financial incentives were abstinent at the six-month follow-up, compared to 13.8% of those who did not receive incentives.

These findings were reported in “Paying Low-Income Smokers to Quit? The Cost-Effectiveness of Incentivizing Tobacco Quit Line Engagement for Medicaid Recipients Who Smoke” by Marlon P. Mundt, Timothy B. Baker, David L. Fraser, Stevens S. Smith, Megan E. Piper, and Michael C. Fiore of the University of Wisconsin School of Medicine and Public Health. The researchers recruited and paid 948 participants to take calls from a tobacco quit line counselor, with a biochemical test that verified tobacco abstinence at six months. An unpaid control group of 952 individuals was also used. The researchers then analyzed costs and effectiveness from a health-care systems perspective over a six-month follow-up, based on the incremental cost-effectiveness ratio (ICER), a statistic used in cost-effectiveness analysis to summarize the cost-effectiveness of a health care intervention. The goal was to determine the cost-effectiveness of an incentive-based stop-smoking intervention that paid Medicaid recipients who smoke to take calls from a tobacco quit line.

The researchers concluded that the use of financial incentives to engage with tobacco quit-line treatment was a cost-effective option to enhance smoking cessation rates for low-income smokers. The key findings were as follows:

  • The ICER of the financial incentives for tobacco treatment engagement was $2,316 per additional person who quit.
  • The study ICER of $2,316 compares favorably with the ICER other smoking treatments, such as varenicline combined with proactive telephone counseling. The ICER for varenicline plus telephone counseling has been estimated at $2,600 per additional smoker who quit.

The full text of “Paying Low-Income Smokers to Quit? The Cost-Effectiveness of Incentivizing Tobacco Quit Line Engagement for Medicaid Recipients Who Smoke” was published in the February 2019 issue of Value in Health. An abstract is available online at https://www.ispor.org/publications/journals/value-in-health/abstract/Volume-22–Issue-2/Paying-Low-Income-Smokers-to-Quit–The-Cost-Effectiveness-of-Incentivizing-Tobacco-Quit-Line-Engagement-for-Medicaid-Recipients-Who-Smoke (accessed March 4, 2019).

For more information, contact: Marlon P. Mundt, Ph.D., Associate Professor, Department of Family Medicine and Community Health, University of Wisconsin School of Medicine and Public Health, 110 Delaplaine Court, Madison, Wisconsin 53715; 608-268-1419; Email: marlon.mundt@fammed.wisc.edu; or Betsy Lane, Chief Marketing and Communications Officer, International Society for Pharmacoeconomics and Outcomes Research, 505 Lawrence Square Boulevard South, Lawrenceville, New Jersey 08648; 609-586-4981,ext. 112; Fax: 609-586-4982; Email: blane@ispor.org.

On January 7, 2019 UnitedHealthcare (UHC) announced an initiative to expand its efforts to identify consumers who have non-medical needs considered social determinants of health. In a memo to its provider organization network UHC asked them to consider using a set of non-diagnostic codes in the International Classification of Disease, Tenth Revision, Clinical Modification (ICD-10-CM) called Z-codes, in categories Z55 to Z65, to capture information about the consumer’s reasons for a health care visit that further explain the need for the services. These codes identify people with potential health hazards related to their socioeconomic and psychosocial circumstances. The memo said that UHC claims data indicates that most of the network provider organizations do not currently use these codes.

The ICD-10-CM is a system used by physicians and other health care provider organizations to classify and code all diagnoses, symptoms and procedures recorded in conjunction with health care in the United States. However, many ICD Diagnosis Codes are used for the purposes of reimbursement. The Z codes highlighted in the UHC memo were as follows:

  1. Z55 Problems related to education and literacy
  2. Z56 Problems related to employment and unemployment
  3. Z57 Occupational exposure to risk factors
  4. Z58 Problems related to physical environment
  5. Z59 Problems related to housing and economic circumstances
  6. Z60 Problems related to social environment
  7. Z62 Problems related to upbringing
  8. Z63 Other problems related to primary support group, including family circumstances
  9. Z64 Problems related to certain psychosocial circumstances
  10. Z65 Problems related to other psychosocial circumstances

The 2019 edition of the ICD-10-CM Official Guidelines for Coding and Reporting were released by the National Center for Health Statistics (NCHS) on July 26, 2018. The ICD-10-CM Official Guidelines for Coding and Reporting identify which codes can be assigned as principal or first-listed diagnosis only, secondary diagnosis only, or principal/first-listed or secondary (depending on the circumstances). In a key update, the 2019 edition allows codes from categories Z55 through Z65 to be reported based on information documented by any clinical professionals (not only the physicians) involved with the consumer’s care.

The ICD-10 is copyrighted by the World Health Organization (WHO) External, which owns and publishes the classification. WHO has authorized the development of an adaptation of ICD-10 for use in the United States for U.S. government purposes. On October 1, 2015, the Centers for Medicare & Medicaid Services (CMS) began using ICD-10-CM to replace ICD-9-CM, volumes 1 and 2. The transition to ICD-10 meant that physicians would be able to use much more specific diagnosis and symptom codes to document health care encounters. The ICD-10 code set added information relevant to ambulatory and managed care encounters; expanded injury codes; and use of combination diagnosis/symptom codes to reduce the number of codes needed to fully describe a condition.

Between January 2016 and May 2018, UHC collected self-report data from more than 600,000 of its Medicare Advantage beneficiaries about their social barriers to receiving health care goods and services. These findings were reported in “UnitedHealthcare Community Plan: Coding For Social Determinants Of Health,” by the Better Medicare Alliance in partnership with UHC. The most prevalent barrier was beneficiaries’ inability to pay for care. However, UHC also found evidence of beneficiaries who were socially isolated, had issues with adequate food and drinking water, had transportation issues, had housing issues, or had personal safety issues.

In January 2017, UHC began using the codes from ICD-10 categories Z55 through Z65 for its Medicare members. Over the two-year period from January 2017 through December 31, 2018, UHC referred 560,000 beneficiaries to social services. UHC now seeks to expand use of the codes into its Medicaid contract populations.

The full text of “UnitedHealthcare Community Plan: Coding For Social Determinants Of Health” was published in November 2018. A copy is available online at https://www.uhcprovider.com/content/dam/provider/docs/public/commplan/pa/bulletins/PA-Coding-for-Social-Determinants-of-Health-11012018.pdf (accessed March 4, 2019).

PsychU last reported on this topic in “Payers Approaches To Addressing Social Determinants Vary,” which published on March 30, 2018.

For more information, contact: Christina Witz, Media Contact, Community & State, UnitedHealth Group, 12501 Whitewater Drive, Hopkins, Minnesota 55343; 952-931-4645; Email: christina.witz@uhc.com; or Adjoa Adofo, Communications, Better Medicare Alliance, 1090 Vermont Avenue Northwest, Suite 1250, Washington, District of Columbia 20005; 202-735-0037; Email: aadofo@bettermedicarealliance.org.

On January 18, 2019, the Centers for Medicare & Medicaid Services (CMS) announced a change to the Medicare Advantage Value-Based Insurance Design (VBID) model, allowing participating Medicare Advantage plans to offer telehealth services if an in-person option remains. Telehealth services can be offered under two models—offered to all plan members or offered to those members with specific health conditions. Currently Medicare allows telehealth only when the beneficiary lives in a rural area. The participating plans can test how telehealth can augment and complement current Medicare Advantage networks. For rural areas with fewer network professionals, CMS believes that telehealth should serve to expand access to care and increase beneficiary choice of Medicare Advantage organizations.

Medicare Advantage organizations participating in VBID can propose two different approaches to telehealth. In one approach, the Medicare Advantage organization can propose telehealth networks that comprise up to one-third of the required in-network professionals for a specialty or specialties. This approach assumes that the telehealth services are clinically appropriate and that the plan has adequate in-network options for in-person care. Where deemed clinically appropriate, and where telehealth medical professionals serve to extend and expand access to care, such as in rural communities with few to no health care professionals, a Medicare Advantage organization can propose how telehealth services would allow for a broadened service area, including for counties where a plan may not currently be available.

All Medicare Advantage plans participating in VBID will be required to develop a strategy to offer wellness and health care planning. This planning includes timely, coordinated approaches to wellness and health care planning, including advance care planning. All VBID interventions will run through 2024 to allow time for enough cost and quality impact evaluation. Additional VBID interventions that will be tested include:

  • Plan design with special features for members with targeted health conditions, socioeconomic status or both: a non-uniform benefit design to provide reduced cost-sharing or additional supplemental benefits for enrollees based on condition and/or certain socioeconomic (i.e. low-income subsidy eligibility or dual-eligible) status. Will be tested in 2020.
  • Medicare Advantage and Part D Rewards and Incentives Programs: improving the rewards and incentives programs that plans can offer beneficiaries to take steps to improve their health, permitting plans to offer higher value individual rewards than were previously allowed. Will be tested in 2020.
  • Medicare Advantage hospice benefit: increase access to hospice services and facilitate better coordination between patients’ hospice providers and their other clinicians. Will be tested in 2021.

On February 14, 2019, CMS released an evaluation report for the first year of the VBID model.  Plans in only seven states (Arizona, Indiana, Iowa, Massachusetts, Oregon, Pennsylvania, and Tennessee) could participate in the model for the first year (2017). Eligible conditions included chronic obstructive pulmonary disorder (COPD), congestive heart failure (CHF), coronary artery disease (CAD), diabetes, hypertension, mood disorders, and past stroke. Conclusions from the evaluation include:

  • Participants valued the chance to develop innovative benefit designs that may improve health and reduce costs.
  • Many provider organizations viewed care management as a high-value service, and they saw VBID as a tool to increase beneficiary engagement.
  • Participants with more complex VBID designs experienced more implementation challenges. However, it is not yet clear how their intervention outcomes will be affected.

Interested organizations must apply through the online CMS application portal through March 15, 2019. The 2020 application portal will be made available to applicants in early February 2019 through the same link. The online application portal is at https://app1.innovation.cms.gov/hpicustom.

PsychU last reported on this topic in “Bipartisan Budget Act Included The CHRONIC Care Act, Expanding Medicare Telemedicine, Home Care, & Value-Based Care,” which published on March 28, 2018.

For more information, contact: Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244; 202-690-6145; Fax: 202-260-1462; Email: press@cms.hhs.gov.

On February 25, 2019, the Louisiana Department of Health (LDH) released a request for proposals (RFP 3000011953) seeking bids to provide statewide Medicaid managed care organization (MCO) services for the Healthy Louisiana program. Proposals are due to April 29, 2019, and awards announcements are anticipated by June 28, 2019. The five current MCO contracts with Aetna Better Health, AmeriHealth Caritas Louisiana, Healthy Blue, Louisiana Healthcare Connections and United Healthcare Community Plan expire on December 31, 2019. This is the third procurement cycle for the State’s Medicaid managed care program. The new contracts are slated to begin January 1, 2020 and the initial term ends on December 31, 2022, followed by a 24-month extension option. LDH intends to make up to four awards.

Louisiana expanded Medicaid on July 1, 2016. As of May 2, 2016, the state renamed its LaCHIP and Bayou Health Medicaid programs together as Healthy Louisiana as of July 1. The LDH estimated that from 300,000 to 450,000 state residents would be eligible to enroll in the expansion program. As of February 2019, more than 500,000 adults have become eligible under expansion, bringing total Medicaid enrollment to 1.5 million state residents. The MCOs receive a capitated rate, and are at-risk for Medicaid physical health, pharmacy, and behavioral health services. The behavioral health services include basic and specialized behavioral health services, such as mental health rehabilitative services, therapeutic group homes for youth under age 21, medication-assisted treatment, and applied behavior analysis.

In the current procurement, the LDH seeks to improve the consumer experience of care and to increase the focus on health equity and social determinants of health. Rather than specifying which social determinants of health the next contracts must address, LDH asked the proposers to identify baseline health outcome measures and targets for health improvement; explain how they intend to measure population health status and identify sub-populations; and indicate how they would identify determinants of health outcomes and strategies for targeted interventions to reduce disparities. Additionally, LDH requested information about the proposer’s recent experience using data regarding social determinants of health to improve the health status of targeted populations. This description should include the data collection approach, and how this approach can be applied to one or more of the state’s population health priorities. The Department of Health also increased MCO requirements in terms of access to and the use of primary care as well as the integration of physical and behavioral health care services. The state also seeks proposals for an optional community health worker pilot program with the larger focus of improving population health.

Each proposal component will be scored out of 1,500 total possible points. The business proposal will be evaluated as pass/fail. The technical proposal includes 14 items.

Louisiana Department Of Health RFP 3000011953 Scoring For The Technical Proposal, Total Points 1,500

 

Domain Maximum Points
Proposer Organization & Experience 120
Enrollee Value-Added Benefits 60
Population Health 90
Care Management 90
Case Scenarios 90
Provider Network 150
Network Management 70
Provider Support 70
Utilization Management 80
Quality 200
Value-Based Payment 100
Claims Management and Systems and Technical Requirements 100
Program Integrity 100
Veteran/Hudson Initiative (12%) 180

The scoring for value-added benefits will be based on the proposer’s decisions to offer one or more of the following six optional benefits:

  1. Dental benefits for adults, including exams, preventive services, and restorative services, but excluding extractions
  2. Evidence-based non-pharmacologic alternatives to opioids for chronic pain management services for adults
  3. Respite care model targeting homeless persons with post-acute medical needs. The model shall address strategies for counseling, nutrition, housing stabilization, transitional care, and other services necessary for successful community reintegration
  4. Newborn circumcision benefits
  5. Tobacco cessation benefits, not including medications
  6. Vision benefits for adults, including annual exam and glasses or contacts

For the population health component, the score will be based on the proposer’s understanding of, and experience with, improving population health for Medicaid populations. LDH requested a description of how the proposers will use principals of a population health approach to inform and guide its managed care program in Louisiana. This should describe how the required components of the procurement and the proposer’s other initiatives are integrated to represent a comprehensive approach to population health. LDH asked the proposers to describe their first-year milestones and time-frames. LDH also invited proposers to respond to a series of optional questions to be considered for piloting a Community Health Worker (CHW) demonstration project. The responses relevant to the pilot will not be considered in scoring for the population health component.

In the section for provider organization network management, LDH asked each bidder to demonstrate how it will ensure timely access to culturally competent primary and specialty care services, necessary to promote the state’s goals. The proposals should include an identification of network gaps in terms of time/distance standards, after-hours clinic availability, and closed panels. The proposals should also include strategies that will be deployed to increase provider capacity and meet the needs of enrollees where network gaps have been identified. The RFP directed bidders to explain their strategies for monitoring compliance with the provider organization network standards for the following 10 specialties:

  1. Cardiologists (pediatric and adult)
  2. Dermatologists
  3. Endocrinologists
  4. Licensed mental health specialists (pediatric and adult)
  5. Neurologists (pediatric and adult)
  6. Obstetricians/gynecologists (adult)
  7. Orthopedists (pediatric)
  8. Primary care professionals (pediatric and adults)
  9. Psychiatrists (pediatric and adult)
  10. Pulmonologists (pediatric and adult)

The state requested information about the bidder’s plans to implement value-based payment (VBP), and asked each proposer to submit a VBP strategic plan with a timeframe that identifies specific VBP models and goals for implementation. The models should be based on the Health Care Payment Learning and Action Network (HCP-LAN) Alternative Payment Method (APM) Framework. The strategy should place emphasis on the evolution of provider organizations along the APM model continuum, and should clearly state which APMs for different provider organization types will be in place by the contract execution date.

PsychU last reported on Louisiana’s Medicaid managed care ecosystem in the following articles:

For more information, contact:

  • Ali Bagbey, Contact Point For RFP 3000011953, Bureau of Health Services Financing, Louisiana Department of Health, Post Office Box 91283, Bin 32, Baton Rouge, Louisiana 70821-9283; 225-342-9500; Email: ali.bagbey@la.gov.
  • Robert Johannessen, Communications Director, Louisiana Department of Health, Post Office Box 629, Baton Rouge, Louisiana 70821-0629; 225-342-5275; Fax: 225-342-5568 Email: robert.johannessen@la.gov.

Knowing how to develop bundled payments and case rates is an executive team skill set that will become more important as value-based reimbursement models mature. While the majority of VBR contracts remain in fee-for-service models with a bonus or penalty, the use of case rate reimbursement is on the rise, and this brings a new level of financial risk to provider organizations (see VBR @ Scale—Changes Required).

As we learned at a recent institute, these reimbursement models are not “one size fits all”—the models require new approaches in both developing the rates and managing them successfully. That was the primary message from the session, Rate Setting For Value-Based Reimbursement: A Guide To Developing Capitated Payment Models, featuring Debbie Cagle Wells, Chief Marketing Officer at Centerstone, and Maggie Labarta, Ph.D., President and Chief Executive Officer at Meridian Behavioral Healthcare.

The panelists both have working experience with VBR. Centerstone—a large non-profit behavioral health provider organization—currently has 97 contracts in negotiation and 17 that are value-based. The contracts include pay-for-coordination (upside risk only), pay-for-performance, bundled payments, and shared savings (upside and downside risk). Dr. Labarta provided a brief review of Meridian Behavioral Healthcare, which has clinics in 11 Florida counties, covering a combined 500,000 consumers in a high-health disparity population.  Meridian is currently negotiating VBR, after its most recent capitated contract ended last year. Meridian has had several capitated arrangements under carve-in and carve-out scenarios, and the contracts covered the range of behavioral health services.

They offered five key pieces of advice developing case rates, and then managing to those rates.

Develop a “roadmap to capitation”—In a lot of ways, adopting risk comes down to understanding revenue predictability and a clear understanding of the scenarios that will help the organization sustain the necessary work under VBR contracts. This means understanding the “roadmap” that will let you build on a payer relationship, and work through the process to develop the necessary contract and then manage to that contract. Ms. Wells shared this roadmap:

Figure 1. Threnhauser, S. Developing Case Rates? Better Find Your ‘Single Source Of Truth’ [PowerPoint Slide] Retrieved from www.openminds.com

Start ahead and stay ahead—Managing VBR contracts effectively means that you must hit the ground running as effectively and efficiently as possible. This is not a scenario where you can figure out your services, costs, performance, or process as you go. All these things need to be balanced within the “risk corridor” that the organization needs to operate within. Dr. Labarta explained:

You must start ahead and stay ahead if you are going to manage these contracts effectively. You can’t provide too many services, or you are spending more than you bring in, but you also can’t offer too few if you want to meet the contract requirements and achieve the needed outcomes.

The data needs to be agreed upon—This is the “single source of truth” that the provider organization and the payer will agree upon. This means coming together to select and/or develop key performance indicators (KPI) that will best reflect the outcomes needed to achieve cost savings and population health management. Dr. Labarta explained.

What we discovered was that the data can’t be siloed in separate IS systems. You need to get to a place where there is a single source of truth that everyone agrees on. Pull all the data into a ware house. From there, develop the KPIs. Then make decisions about who needs access to what. The line staff, management staff, and executive staff will need something different, and the data must be available to you to help make decisions, in almost real time.

Internal champions are key—When Ms. Wells thinks of VBR success, she doesn’t immediately think of operations, or incentive bonuses, or quality outcomes. Those are all important, but the first thing that comes to mind are the people on the team who are leading those initiatives. Having commitment and support from both the leadership, as well as the staff who are leading those programs is mandatory. Ms. Wells noted:

Are you ready? I can talk about processes, but really you must be honest with yourself on your staff capabilities so that together you can be successful. And you must recognize that this is a new culture that touches both the staff and the consumers. I think of success, and I see the faces of the people who lead this.

Every cost counts—The new approach to finances means putting much greater importance on costs, including a focus on cost accounting, cost management, understanding population-based payment mechanisms, and unit costs. This is all about managing each service line, and each of these service line costs needs to be factored into risk in a very granular way (as detailed as possible). Ms. Wells explained:

You must take a good hard look at every cost that goes into your model. You need to stratify risk for the kinds of services and benefits you will manage. You can’t manage risk if you can’t manage the services and benefits you are at risk for. An example of a key incentive measurement that we control is every treatment plan contains a health care goal, and we document to that goal. Sounds easy? It is not easy.

On February 7, 2019, the Pennsylvania Attorney General filed a petition to modify the Commonwealth’s Consent Decree with UPMC because the Commonwealth believes UPMC is violating Pennsylvania’s charities laws. The Attorney General’s petition maintains that the charities laws requires facilities to participate in other insurer networks. The state’s goal is to prevent UPMC from ending its business relationship with a competing insurer, Highmark Health, which would mean that UPMC facilities and professionals would not be part of the Highmark provider organization network. Both UPMC and Highmark Health are structured as non-profit organizations; they are vertically integrated and operate insurance divisions and health system facilities in western Pennsylvania. On February 21, 2019, UPMC filed a motion in state court to dismiss the Attorney General’s Petition to modify the Consent Decrees and filed a motion in federal court.

The Attorney General believes that the following activities are in opposition to UPMC’s stated charitable mission:

  • Requiring out-of-network consumers to pay all estimated charges up front and in full before receiving treatment for non-emergency room services (including Medicare beneficiaries)
  • Refusing to contract with employers who also have contracts with a competing health care provider organization
  • Refusing to negotiate reasonable payment terms with self-insured employers, resulting in UPMC’s unjust enrichment through excess reimbursements for the value of its services

In 2011, Highmark became a competitor to UPMC in western Pennsylvania. UPMC then announced that its facilities would stop participating in Highmark’s provider organization network. In 2014 the Commonwealth intervened and entered five-year Consent Decrees with both UPMC and Highmark. The goal was to preserve access to physicians and hospitals for consumers. Between 2014 and 2019, the Attorney General said UPMC and its divisions violated parts of the consent decree and were “not living up to their obligations as charities.” On July 18, 2018, the Pennsylvania Supreme Court unanimously reversed a January 29, 2018 Commonwealth Court ruling and re-affirmed that contracts between UPMC and Highmark for in-network Medicare Advantage access in the Greater Pittsburgh and Erie areas will end on June 30, 2019, concurrent with the expiration of the 2014 Consent Decrees. As a result, UPMC facilities will no longer participate in Highmark’s Security Blue or Freedom Blue Medicare Advantage networks. UPMC said in an announcement about the ruling, “In-network access to UPMC’s world-class primary and specialty care doctors and hospitals for the entire 2019 plan year and future years will be available to seniors through UPMC Health Plan and a multitude of Medicare Advantage insurers other than Highmark.”

The UPMC and Highmark Health Consent Decrees expire June 30, 2019. The Attorney General seeks to modify the consent decrees with UPMC and Highmark Health to ensure that residents in western Pennsylvania have in-network access to as many health care facilities as possible. Highmark Health agreed to the changes. UPMC did not.

The Attorney General’s petition asks the Commonwealth Court to require UPMC to participate in negotiated contracts with any health plan, and asked the court to require “last, best-offer arbitration” if contract negotiations fail. The Attorney General also asked the court to prohibit UPMC from engaging in “excessive and unreasonable” billing practices, which the state believes are inconsistent with UPMC’s status as a non-profit charity formed to provide health care to the public.

UPMC operates 40 academic, community, and specialty hospitals, 700 doctors’ offices and outpatient sites, employs 4,800 physicians, and offers an array of rehabilitation, retirement, and long-term care facilities. UPMC’s Insurance Services Division, the largest medical insurer in western Pennsylvania, has 3.5 million members. In a statement, UPMC said the five-year transition as provided for by the Consent Decrees expiring June 30, 2019 has allowed businesses and consumers substantial time to prepare for the end of the UPMC-Highmark relationship in western Pennsylvania. During that period, the western Pennsylvania insurance marketplace became much more competitive. The statement said, “Consumers have greatly benefitted from the heightened competition. Nearly all businesses now offer alternative, affordable plans so their employees can choose insurance products that allow them full, unfettered in-network access to the UPMC hospitals and physicians they desire. As for Medicare Advantage, a federally regulated program, seniors now have more options and enjoy the benefits increased competition provides in terms of low pricing and more expansive plan design. To the extent there remains any confusion, seniors with Medicare Advantage plans have another opportunity, from January 1 through March 31, to clarify their options and switch their coverage so they have the in-network access to the providers they prefer.”

Highmark Health is the parent of Highmark Inc., which offers health insurance plans, and Allegheny Health Network, an integrated health care delivery network that includes eight hospitals; more than 2,500 affiliated physicians; and additional facilities, institutions, and services. In 2013, Highmark Inc. affiliated with Jefferson Regional Medical Center, including Jefferson Hospital; Saint Vincent Health System, including Westfield Memorial Hospital; and West Penn Allegheny Health System, including Allegheny General, Allegheny Valley, Canonsburg, Forbes and West Penn Hospitals. In a statement issued on February 7, 2019, Highmark Health said it supports the Attorney General’s proposed modified Consent Decree between Highmark and UPMC. Highmark Health and Highmark Inc. remain committed to executing their strategy at the Allegheny Health Network. The Consent Decree does not change its strategic focus; new facility investments announced over the past 18 months are slated to become operational in 2019 or in early 2020.

For more information, contact:

  • Carolyn M. Simpson, Deputy Director of Communications, Pennsylvania Office of Attorney General, Strawberry Square, 16th Floor, Harrisburg, Pennsylvania 17110; 717-787-7157; Email: csimpson@attorneygeneral.gov
  • Paul Wood, Vice President & Chief Communications Officer, University of Pittsburgh Medical Center (UPMC), 600 Grant Street, Pittsburgh, Pennsylvania 15219; 412-647-3555; Email: WoodPC@upmc.edu
  • Aaron Billger, Director of Public Relations, Western Pennsylvania Division, Highmark Health, Fifth Avenue Place, 120 Fifth Avenue, Pittsburgh, Pennsylvania 15222; 412-544-7826; Email: aaron.billger@highmarkhealth.org

On February 15, 2019, the New Hampshire Department of Health and Human Services (DHHS) selected bids from AmeriHealth Caritas New Hampshire, New Hampshire Healthy Families, and Well Sense Health Plan for the next Medicaid Care Management program contracts. The plans are at-risk for physical and behavioral health, and pharmacy services, and feature provisions that require the plans to address social determinants of health, provide additional care coordination and care management, reduce member emergency room wait times, support the state’s behavioral health system, and help members understand qualifying activities and exemptions for the state’s new Medicaid community engagement and work requirements. Once signed, the four-year contracts are collectively valued at $924.1 million over the contract term. The contracts are slated to begin July 1, 2019 and run through June 30, 2024. The incumbents are New Hampshire Healthy Families and Well Sense Health Plan.

On November 29, 2018, the federal Centers for Medicare and Medicaid Services approved New Hampshire’s request to implement community engagement and work requirements. According to the approval document, “New Hampshire’s Granite Advantage Health Care Program 1115 Demonstration,” non-exempt beneficiaries will be required to participate in qualifying activities for at least 100 hours per month. Such activities include paid employment; attending school, vocational, or post-secondary education; or participating in community service. If Granite Advantage beneficiaries fail to meet these requirements for two consecutive months, their Medicaid eligibility will be suspended.

The following Granite Advantage beneficiaries are exempt from the community engagement requirements:

  1. Beneficiaries who are temporarily unable to participate due to illness or incapacity as documented by a licensed professional.
  2. Beneficiaries who are participating in a state-certified drug court program.
  3. Beneficiaries who are a parent or caretaker where care of a dependent is considered necessary by a licensed professional
  4. Beneficiaries who are a custodial parent or caretaker of a dependent child under 6 years of age (only applies to one parent or caretaker in case of a 2-parent household).
  5. Beneficiaries who are a parent or caretaker of a dependent child of any age with a disability (only applies to one parent or caretaker in the case of a 2-parent household).
  6. Beneficiaries who are pregnant or 60 days or less post-partum.
  7. Beneficiaries identified as medically frail.
  8. Beneficiaries with a disability as defined by the Americans with Disability Act (ADA), Section 504, or Section 1557, who are unable to comply with the requirements due to disability-related reasons.
  9. Beneficiaries residing with an immediate family member who has a disability as defined by the ADA, Section 504, or Section 1557, who are unable to meet the requirement for reasons related to the disability of that family member.
  10. Beneficiaries who experience a hospitalization or serious illness.
  11. Beneficiaries residing with an immediate family member who experiences a hospitalization or serious illness.
  12. Beneficiaries who are exempt from Supplemental Nutrition Assistance Program (SNAP) and/or Temporary Assistance for Needy Families (TANF) employment requirements.
  13. Beneficiaries who are enrolled in New Hampshire’s voluntary Health Insurance Premium Program (HIPP).

DHHS released the request for proposals (RFP-2019-OMS-02-MANAG) on August 30, 2018, with proposals due on October 30, 2018. The state received four bids; the unsuccessful bidder was WellCare Health Plans, Inc. The state projects that by July 1, 2019, the managed care plans will have 180,000 members statewide. The covered population includes traditional Medicaid categories: people with disabilities, pregnant women, children, and parent/caretakers. It also includes about 51,000 Medicaid members that were enrolled in New Hampshire’s Granite Advantage Health Care Expansion program that transitioned on January 1, 2019, from coverage in the Health Insurance Marketplace to the Medicaid Care Management program.

New Hampshire Medicaid Care Management Capitation Rates For 2019 & 2020

Population January 2019 To June 2019 Capitation Rate State Fiscal Year 2020 Capitation Rate Percent Change
Standard Medicaid
Base Population $303.54 $315.15 3.8%
Children’s Health Insurance Program $188.36 $196.71 4.4%
Behavioral Health Population $1,294 $1,386.51 7.1%
Total Standard Medicaid $371.26 $389.03 4.8%
Granite Advantage Health Care Program
Medically Frail $993.36 $1.025.07 3.2%
Non-Medically Frail $423.21 $482.80 14.1%
Total Granite Advantage Program $532.03 $586.30 10.2%
Average $416.29 $444.28 6.7%

According to “New Hampshire Contracts For Medicaid Care Management – For Presentation At The February 20, 2019 Governor & Council Meeting,” the procurement focused on improving the program for beneficiaries and provider organizations. Key goals are to improve member care, improve health outcomes, reduce inpatient hospitalization and readmission rates, improve continuity of care across the full continuum of care, improve transition planning, improving medication management, and reducing unnecessary emergency services. The state seeks to decrease the total cost of care, increase member satisfaction, and improve provider organization participation. To achieve these goals, the contract includes the following provisions:

  • MCOs must provide care management for at least 15% of high-risk/high-need members, and they must conduct local care management or contract with a designated care management entity for at least 50% of such members.
  • Behavioral health, inclusive of mental health and addiction disorder treatment, just be integrated with physical health. The MCOs are required to take into account each member’s physical health, behavioral health, and social and economic needs. The MCOs will work with members, provider organizations, integrated delivery networks, and community mental health programs to integrate physical and behavioral health and address social determinants of health that affect health outcomes and the cost-effectiveness of care.
  • Emergency room wait time measures require the MCOs to provide additional clinical staff to support provision of services in hospital emergency department.
  • The MCOs must support the state’s community mental health centers and addiction disorder treatment provider organizations by entering into capitated payment arrangements with the community mental health programs, and must reimburse addiction treatment provider organizations at a rate no less than the DHHS fee-for-service rate. The MCOs must contract with any willing peer recovery provider organization.
  • To improve provider organization relationships, the MCOs must implement prompt and accessible credentialing and re-credentialing processes that will be used to conduct outreach and support. They must standardize work processes to ensure efficient implementation and minimal burden on provider organizations relative to claims billing processes, reporting, and prior authorizations. They must meet prompt payment requirements, and establish a grievance and appeals process for provider organizations.
  • To encourage beneficiaries to participate in healthy behaviors, the MCOs must provide incentives and opportunities.
  • For members subject to the community engagement requirements, the MCOs must help members understand qualifying activities that fulfill the community engagement requirement, and understanding exemptions.
  • A share of the MCO capitation rate will be linked to their performance to ensure accountability for results in addressing addiction disorder, integrating physical and behavioral health, providing robust care management, and reducing unnecessary use of high-cost services.

PsychU reported on the incumbent MCOs in “New Hampshire Medicaid Health Plans In Compliance With Federal Behavioral Health Parity Requirements,” which published on March 30, 2018.

For more information, contact:

  • Public Information Office, New Hampshire Department of Health and Human Services, 129 Pleasant Street, Concord, New Hampshire 03301; 603- 271-9389; Fax: 603- 271-4332 Email: PIO@dhhs.nh.gov
  • Kerry L. Pascetta, Media Contact, New Hampshire Healthy Families, 2 Executive Park Drive, Bedford, New Hampshire 03110; 1-866-769-3085; Email: Kerry.L.Pascetta@Centene.com
  • Jawanza Keita, Director, Corporate Communications, AmeriHealth Caritas, 200 Stevens Drive, Philadelphia, Pennsylvania 19113; 267-298-5702; Email: jkeita@amerihealthcaritas.com
  • Richard Wolosz, Communications Supervisor, Corporate Communications, Well Sense Health Plan/Boston Medical Center (BMC) HealthNet Plan, 529 Main Street, Suite 500, Charlestown, Massachusetts 02129; 617-748-6364; Email: Richard.Wolosz@BMCHP-wellsense.org

Annual per-person spending for people covered by employer-sponsored health insurance (ESI), including amounts paid for medical and pharmacy claims, rose by 4.2%: from $5,416 in 2016 to $5,641 in 2017. Of per-person spending in 2017, 33.6% was for professional services (services that are performed and billed by private-practice medical doctors, and other medical providers), 28.0% was for outpatient visits and procedures, 19.5% was for inpatient procedure costs, and 18.9% was for prescription drugs. Service utilization was equivalent for both years.

These findings were reported in the “2017 Health Care Cost and Utilization Report” by the Health Care Cost Institute (HCCI). Researchers for HCCI analyzed health care claims of more than 40 million Americans through four of the country’s largest insurers: Aetna, Humana, Kaiser Permanente, and UnitedHealthcare. The goal was to determine trends in health care spending, use, and prices for individuals under 65 covered by employer-sponsored insurance (ESI).

Increases in Cost Categories From 2013 to 2017
Cost Category Increase In Average Prices Increase In Per-Person Spending
Prescription Drugs 25.0% 28.9%
Outpatient Visits & Procedures 18.9% 19.3%
Inpatient Admissions 15.6% 9.8%
Professional Services 12.4% 12.7%

Additional findings include:

  • Between 2016 and 2017, the annual share of out-of-pocket spending for consumers decreased 0.3 percentage points, from 15.7% in 2016, to 15.4% in 2017.
  • Between 2016 and 2017, per-person spending associated with inpatient admissions rose $26 (2.4%). The subservice category that accounted for the largest share of this spending was surgery (49%).
  • Between 2016 and 2017, per-person spending on outpatient facility visits and procedures rose $76 (5.1%). The subservice category that accounted for the largest share of this spending was surgery (36%).
  • Between 2016 and 2017, per-person spending on prescription drugs rose $47 (4.7%). The prescription drug category that accounted for the largest share of this spending was hormones (19%).
  • Between 2016 and 2017, per-person spending on professional services increased $76 (4.2%). The subservice category that accounted for the largest share of this spending was office visits (21%).
  • In 2017, average per-person spending on those with two or more chronic conditions ($20,257) was more than twice the spending for those with one chronic condition ($8,921), and more than five times the spending for those with no chronic conditions ($3,603).

The full text of “2017 Health Care Cost and Utilization Report” was published February 12, 2019, by Health Care Cost Institute. The full report is available online at healthcostinstitute.org

For more information, contact: Sally Rodriguez, Chief of Staff, Health Care Cost Institute, 1100 G Street NW, Washington, District of Columbia 20005; 202-803-5200; Email: srodriguez@healthcostinstitute.org.

On February 11, 2019, the Massachusetts Executive Office of Health and Human Services (EOHHS) issued a request for responses (RFR BD-18-1039-EHS01-EHS02-20518) to rebid the One Care Plans for its demonstration program for people dually eligible for Medicare and Medicaid. The One Care Plans provide integrated Medicare and Medicaid services for dual eligibles with disabilities who enroll between ages 21 and 64. Responses are due by May 24, 2019. To be a One Care plan, organizations must both be selected through the MassHealth procurement process; and meet all application and contracting requirements established by the federal Centers for Medicare & Medicaid Services (CMS) to be eligible to participate with Medicare as a Medicare-Medicaid Plan (MMP).

The current One Care Plans are Commonwealth Care Alliance and Tufts Health Unify.  As of December 2018, the two One Care plans served a total of 22,500 adults living in nine counties. EOHHS expects to select at least three bidders in total to enter into contract negotiations with EOHHS and CMS as One Care Plans. The goal is to expand One Care to all 14 Massachusetts counties.

Awards announcements are anticipated in early fall 2019. The contracts would be executed during the summer of 2020, and the services would go live on January 1, 2021, and run through December 31, 2025.

One Care Plans procured under this RFR will be accountable for the delivery and management of all covered medical services, behavioral health services, long-term services and supports (LTSS), additional community support services (CSS), and care management for their enrollees. One Care Plans will be required to provide the full array of Medicare and Medicaid services, but also will have significant flexibility to provide a range of CSS as alternatives to higher cost traditional services. The One Care Plans also will have the flexibility to promote enhancement of the health care workforce through the use of community health workers and qualified peers. However, these flexibilities must be tailored to the needs of the individual enrollees.

The One Care Plans serve people in the following populations:

  • Adults with physical disabilities
  • Adults with intellectual or developmental disabilities (I/DD)
  • Adults with serious mental illness (SMI)
  • Adults with substance use disorders (SUD)
  • Adults with disabilities who have multiple chronic illnesses or functional or cognitive limitations
  • Adults with disabilities who are homeless

Massachusetts launched One Care on October 1, 2013, as a Medicaid 1115A waiver Duals Demonstration. It is both a capitated model Demonstration under the financial alignment initiative and a state demonstration to integrate care for Dual Eligible Individuals. In July 2018, the Massachusetts Medicaid program, MassHealth, provided coverage to 117,200 individuals eligible for One Care, including those who lived outside the service areas of the two One Care plans. As of December 2018, the two One Care plans served a total of 22,500 adults living in nine counties. Commonwealth Care Alliance is available in Bristol, Essex, Franklin, Hampden, Hampshire, Middlesex, Norfolk, Suffolk, and Worcester counties, and is available in parts of Plymouth (not available in the towns of East Wareham, Lakeville, Marion, Mattapoisett, Wareham, and West Wareham). Tufts Health Unify is available in Suffolk and Worcester counties, and in parts of Middlesex County (specifically the towns of Billerica, Chelmsford, Dracut, Lowell, North Billerica, North Chelmsford, Tewksbury, Tyngsborough, and Westford). The two One Care Plans are Medicare-Medicaid Plans. They receive capitated payments from MassHealth and the federal Medicare program. The MMPs provide care management and all Medicare Parts A, B, and D services, all MassHealth services, and other services.

On August 20, 2018, EOHHS submitted a proposal to the Centers for Medicare & Medicaid Services (CMS) “Massachusetts Medicare-Medicaid Integration Demonstration: Duals Demonstration 2.0” which would provide additional federal authorities and flexibility for both One Care and the Senior Care Options (SCO) program. EOHHS and CMS expect to finalize a memorandum of understanding (MOU) in early Fall 2019, to describe the terms of Duals Demonstration 2.0. The MOU will coincide with the timing for One Care Plan selection from the RFR and give the selected plans sufficient time to complete a Readiness Review. Organizations that do not currently operate a One Care Plan in Massachusetts will need to follow the CMS-defined process to become an MMP, including submission of a nonbinding Notice of Intent to Apply (NOIA) in November 2019 by the date specified by CMS for a January 1, 2021 Medicare implementation date for MMPs.

In “Massachusetts Medicare-Medicaid Integration Demonstration: Duals Demonstration 2.0,” the state proposed changes to One Care and to Senior Care Options (SCO), a fully-integrated Medicare Advantage Special Needs Program for dual eligibles age 65 and older. The goal is to increase beneficiary participation in the programs, because currently 76.9% of dual eligibles still receive Medicaid services through the fee-for-service system. EOHHS seeks to increase enrollment in the One Care and SCO managed care programs, extend the One Care program, and to improve the programs’ fiscal stability. To increase enrollment, the state is seeking authority to expand the use of passive enrollment in SCO and will set fixed enrollment periods. The proposal would move the SCO program under the same demonstration authority of One Care. Additionally, the state seeks to extend the One Care program, which is slated to expire on December 31, 2019. To improve fiscal stability, the state intends to set Medicaid rates using a methodology that appropriately accounts for the enrolled population and their complex service needs. Further, the state intends to enter a shared savings agreement with the Centers for Medicare & Medicaid Services, and to increase the use of value-based purchasing for the One Care and SCO populations.

PsychU reported on this topic in “Massachusetts Medicaid Proposes Changes To One Care Duals Demo Program,” which published on August 15, 2018.

For more information, contact: Lou DeLena, Procurement Coordinator, Massachusetts Executive Office of Health and Human Services, 1 Ashburton Place, Boston, Massachusetts 02108; 617-573-1686; Email: louis.delena@state.ma.us.

Rutherford County, North Carolina is switching to align with a new behavioral health local management entity-managed care organization (LME/MCO) — Partners Behavioral Health Management (Partners) — effective July 1, 2019. LME/MCOs are governmental entities unique to North Carolina that manage county, state, and Medicaid funds for mental health, intellectual/developmental disability (I/DD) and substance use disorder services. The county is currently aligned with Vaya Health. On December 28, 2018, the county was notified that the North Carolina Department of Health and Human Services (DHHS) had approved its request to disengage from Vaya Health to align with Partners.

The Rutherford County Board of County Commissioners (BCC) began planning this change in April 2018. On April 9, the BCC voted unanimously to disengage from Vaya Health to realign with Partners. The BCC prefers the Partners way of managing local maintenance of effort contributions. Additionally, the BCC believes that Rutherford County has a greater sense of connection to neighboring Cleveland County, which is served by Partners in that most Rutherford County residents travel east to Cleveland County, rather than north or west for goods and services, including health care.

On April 18, the county released details in “Rutherford County LME/MCO Disengagement Plan.” On September 4, 2018, the BCC passed a resolution affirming their decision. In its approval letter, DHHS said its review determined that the county met the requirements for disengagement, and all 11 factors set out in state rules. DHHS said the disengagement and realignment would not adversely affect the quality, variety, and amount of services for the residents of Rutherford County. DHHS directed the county to expand its Realignment Committee to include representatives from the executive leadership of Vaya and Partners, as well as members of both LME/MCO’s Consumer and Family Advisory Committees and provider organization networks. The county will develop a collaborative strategy and a joint work plan to ensure that there are no gaps in service coverage for recipients and to ensure a smooth transition.

Vaya currently serves about 55,000 members across its 23-county catchment area in the western part of the state. In Rutherford County, Vaya is responsible for providing services to the county’s 15,000 Medicaid enrollees and another 7,200 people in Rutherford County who are uninsured. Rutherford County shares a border with a county in the Partners catchment area. Partners serves about 185,000 Medicaid enrollees across its current eight-county catchment area in the central and western part of the state, and over the past year, 43,000 individuals in Partners communities have received Medicaid, state and county-funded mental health, I/DD, or substance use disorder treatment services.

PsychU reported on this topic in “North Carolina Medicaid Selects Five Health Plans—One Regional & Four Statewide,” which published on March 4, 2019.

For more information, contact:

  • Media Office, North Carolina Department of Health and Human Services, 101 Blair Drive, Adams Building, 2001 Mail Service Center, Raleigh, North Carolina 27699-2001; 919-855-4840; Email: news@dhhs.nc.gov
  • Steve Garrison, County Manager, Rutherford County, 289 North Main Street, Rutherfordton, North Carolina 28139; 828-287-6060; Email: steve.garrison@rutherfordcountync.gov
  • Rutherford County Services Question Line, Partners Behavioral Health Management, 901 South New Hope Road, Gastonia, North Carolina 28054; 704-884-2505; Email: Rutherford_Questions@partnersbhm.org
  • Rachel Leonard-Spencer, Director, Marketing and Communications, Vaya Health, 200 Ridgefield Court, Suite 206, Asheville, North Carolina 28806; 828-225-2785; Email: rachel.leonard-spencer@vayahealth.com; or Allison Inman, Senior Director, Office of Communications, Vaya Health, 200 Ridgefield Court, Suite 206, Asheville, North Carolina 28806; 828-225-2785, ext. 5364; Email: Allison.Inman@vayahealth.com

Last week, we spent the week taking a deep dive into the changing landscape of performance and its link to value-based reimbursement.

One of my big takeaways from the many discussions I had at the event is that the current landscape is creating a new role for chief financial officers (CFO). Best practice strategy development and planning for sustainability require robust internal performance metrics—and benchmarks to customer expectations and competitor performance. This changes the role of financial management to one with a broader and more strategic function.

How ready are CFOs for this new performance-driven landscape? If recent findings are any indication, there’s work to do. Only 13% of CFOs say their organizations are “very prepared” to manage evolving payment models and only 23% are very confident in their team’s ability to quickly and easily adjust strategies and plans. These were the findings of the recently-published “2019 CFO Outlook: Performance Management Trends and Priorities in Healthcare.” And, these statistics reflect a deterioration in CFO confidence from the last survey period.

I think some of the perceived problems result from a few new capability requirements that have been discussed before. First, “performance” is a broader concept and leadership teams should consider having all required information reside in one system accessed by all managers and leaders. In the survey, CFOs identified “financial health” as the most important (85%) performance measure. But consumer experience and quality outcomes followed closely.

Figure 1. Threnhauser, S. CFO Version 3.0. [Powerpoint Slide] Retrieved from www.openminds.com

Second, new cost accounting tools are a must. There is the need for new cost accounting tools and models to re-engineer service delivery. In addition, the field will need specialized cost accounting tools to re-engineer and manage service delivery within value-based payment arrangements that span across service continuums.

Third, budget processes need to change—allowing for more rapid budget development and the ability to adjust budgets within a shorter time frame. In the survey, 37% of CFOs reported having a budget process that takes six or more months from initial rollout to board presentation, up from 27% in 2018. And, 46% say their budgets cannot be easily adjusted when new strategic information or analyses are available.

Finally, CFOs need to lead the push for better performance reporting across their organization. This includes creating better dashboards and visuals (67%), pulling data from multiple source (64%); and accessing trusted data sources (52%).

Figure 2. Threnhauser, S. CFO Version 3.0. [Powerpoint Slide] Retrieved from www.openminds.com

About 15 years ago, we wrote about the need for “reinventing the CFO”. It’s probably time for CFO Version 3.0.

For more on the changes surrounding your CFO in response to the era of VBR and added financial pressures, check out these resources from the PsychU Resource Library:

  1. Income Statement Vs. Balance Sheet? The CFO Dilemma
  2. Can You Tell If Your Organization Is On The Financial Brink?
  3. ‘Surprise!’ A Word You Don’t Want To Hear From Your CFO
  4. Digital Transformations Demand Digital Dexterity
  5. Do You Have A Leadership Strategy For Tech ROI?
  6. Income Statement Vs. Balance Sheet? The CFO Dilemma
  7. The Art & Science Of Replacing Key Executives
  8. VBR @ Scale-Changes Required

About 58% of specialty provider organizations are getting some revenue from value-based reimbursement agreements, and 9.3% have 20% or more of their revenue coming from VBR—a big change (see VBR @ Scale-Changes Required). The health plan speakers at The 2019 OPEN MINDS Performance Management Institute all spoke about the push to increase VBR arrangements in both number and degree of risk sharing.

The question for most executive teams is, as VBR arrangements become more common and riskier (financially, speaking), how do you know if your organization is ready? That was the topic of the session, Have You Optimized Your Organization For Value-Based Reimbursement? The OPEN MINDS VBR Assessment, featuring Donald J. Dauman, Senior Vice President of Finance & Chief Financial Officer, Spectrum Health & Human Services, and OPEN MINDS Senior Associate John F. Talbot, Ph.D.

Dr. Talbot spoke about the common domains in assessing VBR readiness—clinical management and clinical performance optimization, client access, financial management, technology reporting infrastructure, strategic alignment, a culture of innovation, and workforce adequacy. From a preparation perspective, these domains can be measured as part of pre-planning.

Mr. Daumann spoke to the on-going issues of managing VBR arrangements. Spectrum is a behavioral health provider in Western, New York that has 14 locations in five counties. They are a member of Health Home Partners of WNY, which manages integrated care services for consumers with chronic conditions under a per member per month reimbursement structure, and the Value Network, IPA: Independent Practice Association, which is designed to enhance the bargaining power of the local behavioral health care system. Spectrum is also participating in value-based arrangements through the state of New York’s Delivery System Reform Incentive Payment (DSRIP) program, including the Millenium Collaborative Care System and the Finger Lakes Performing Provider System. For more information about Spectrum, see 3 Steps To Competing On Performance .

Figure 1. Threnhauser, S. Your Organization Is Ready For VBR When. [Powerpoint Slide] Retrieved from www.openminds.com

The basic question many institute attendees were asking was, once you “go live” with VBR, then what? You may think you have a handle on all your competencies but like any strategy, what you have on paper going into a plan is seldom exactly what it looks like in practice. Mr. Dauman identified six key areas that provider organization executives need to master for VBR success—partnerships, leadership buy-in, technology and data mastery, fiscal management, clinical development, cultural buy-in.

Partnerships—Success in a VBR arrangement relies on developing and maintaining partnerships with payers, health plans, and other provider organizations alike. Put simply, effective whole-person care management relies on it. But just having a collaboration isn’t enough. Executive teams need to know what value you need from those relationships. Mr. Dauman noted:

Every person who works in your organization will be part of building these partnerships. They need to know how critical this is, so they know how best to react. Look for local community resources, and get your people involved in the community to make those partnerships for your organization. Depending on the type of talent you need, and depending on where you are located, bringing in the people you need to run and administer the programs can be hard. Especially when you have multiple organizations looking for and competing for that talent. Consider what makes your organization more attractive than others. Also look to shared services/shared management structures to address the high cost of upper level talent.

Leadership Buy-In—Provider organization executive teams (and boards of directors) need to align strategy and commitment at the highest levels of the organization with operational execution. Executive leadership skillsets that are critical include financial management, human resources, technology, data management, and the ability to prioritize and act on growth opportunities. Mr. Dauman noted:

Do you have a board and administrative understanding of the change? You will go through a lot of change, and everyone needs to understand the risk involved. You will need the ability and resources to expand into this and that will take top level commitment.

Technology & Data Mastery—Mastering VBR means mastering all the tools, skills, expertise and infrastructure needed to practice it. This means making the investments in tech infrastructure, data analytics, and population health management. The goals? You need the ability to integrate data from many sources, meaningfully analyze data through business intelligence capacity, and inform your staff from front-line, to clinicians, to management. Mr. Dauman summarized-“Interoperability is a big word, but we haven’t gotten there yet.”

Fiscal Management—The reinvention of the chief financial officer position is a fundamental shift for VBR because the traditional ways of “doing the finances” must change. The new skillsets of importance include more focus on cost accounting and cost management, understanding population-based payment mechanisms, unit costing, KPI development, reporting, and analysis. Mr. Dauman explained:

This is a whole new world. This is not just about revenue and expenses. It’s a whole process of understanding cost, how the data is provided, how the services are provided. I need to develop what each service is costing me within a particular framework. The big word is cost accounting and understanding how you are going to price your services. You need to invest in the financial talent that can generate cost accounting analysis, design rolling budgets and forecasts, price your various service lines and determine units costs, costs per episode of care, costs to serve different populations, diagnosis groups, age/demographic groups, and ultimately capitated cost models.

Clinical Development—When aligning staff and culture with the demands of a VBR-oriented practice, clinical staff decisionmaking and performance is front-and-center to overall organizational performance. Clinical staff will need ongoing access to best practices and decision support tools, non-traditional service models, and performance management platforms. The new dimension for clinical leaders is incorporating the services (and service data) of collaborating organizations into care coordination models. Mr. Dauman noted:

You must get this team to think outside the box. What skills do they have and what skills do they still need? You will need to look at training to make this happen. You will need to involve the people at the ground level to find out what they need. You will need measurable outcomes for everything you are doing. Train, educate, and hire for what the consumer and payers need tomorrow, not the position you have open today.

Cultural Buy-In—Culture touches everything in an organization, and when it comes to VBR, mastering the necessary culture means embracing education, adaptability, change management, and accountability at all levels of the organization. This shift is, once again, promoted at the highest levels of the organization. VBR, already reliant on the use of metrics, will demand an investment in staff performance reviews that use Key Performance Indicators (KPI). Mr. Dauman noted:

We are always working on the next big thing, and you must be able to make that shift to adapt a culture of change. We invested a lot in ongoing staff training and education to make that happen. Do all your managers know what they are responsible for monitoring and to achieve. Do they know where their own staff is in terms of productivity and performance against VBR metrics. To include all these things in your culture will make you more versatile and attractive to payer systems.

The move to value-based reimbursement has been central to strategy for more and more health and human service organizations. This shift requires new organizational infrastructure—and new approaches to management and leadership.

In 2018 about 28% of American adults (ages 19 to 64) with employer-sponsored health coverage and 42% of those with individual coverage were underinsured in terms of the amount of their plan out-of-pocket costs compared to their household income. Since 2010, the greatest growth in the underinsured rate has occurred among Americans in employer-based health plans; in 2010 about 17% were underinsured compared to 28% in 2018. However, those who would purchase plans on their own through the individual market or the marketplaces were the most likely overall to be underinsured. In 2010 about 27% were underinsured, compared to 42% in 2018.

People who are underinsured are defined as:

  • Those whose out-of-pocket medical costs, excluding premiums, over the prior 12 months are equal to 10% or more of household income.
  • Those with income under 200% of the federal poverty level ($24,120 for an individual or $49,200 for a family of four) whose out-of-pocket medical costs, excluding premiums, over the prior 12 months are equal to 5% or more of household income.
  • Those whose deductible constitutes 5% percent or more of household income.

These findings were reported in “Health Insurance Coverage Eight Years After the Affordable Care Act (ACA); Fewer Uninsured Americans and Shorter Coverage Gaps, But More Underinsured” by Sara R. Collins, Herman K. Bhupal, and Michelle M. Doty. The researchers presented facts from the Commonwealth Fund’s 2018 Biennial Health Insurance Survey. The telephone survey included a nationally representative sample of 4,225 adults ages 19 to 64 between June 27, 2018 and November 11, 2018. The goal was to summarize updates in the American health insurance population.

Additional findings include:

  1. The overall percentage of adults (45%) who are inadequately insured is about the same as in 2010, however there are shifts in the details surrounding the inadequate insurance.
  2. Compared to 2010, the duration of coverage gaps people experience has shortened significantly: the percentage experiencing a coverage gap of one year or more was 31% in 2016, compared to 39% in 2012.
  3. The 2018 adult uninsured rate was 12.4%, and statistically unchanged since the 2016 survey.
  4. The percentage of adults in 2018 who did not have long-term insurance coverage for more than two years was 54%, compared to 63% in 2010.
  5. People who are underinsured or spend any time uninsured report cost-related problems getting care and difficulty paying medical bills at higher rates than those with continuous, adequate coverage.

The researchers concluded that since 2010 when the PPACA became law, working-age adults are much more likely to have health insurance. However, the improvement in uninsured rates has stalled. More people are covered by health plans that fail to adequately protect them from high health care costs, and the erosion in cost protection has several possible sources, as follows:

  • Although the PPACA’s reforms—the essential health benefits package, cost sharing reductions for lower-income families, and out-of-pocket cost limits— have provided many consumers with greater protection against health care costs, the protections have primarily benefited consumers with incomes at or below 250% of the federal poverty level (FPL). Consumers earning more are not eligible for cost-sharing reductions on plans purchased through the Health Insurance Marketplace. Further, the PPACA reforms do not apply to plans purchased through an insurance broker.
  • The bans against insurers excluding people from coverage because of a preexisting condition and rating based on health status have meant that individuals with greater health needs, and thus higher costs, are now able to get health insurance in the individual market. Because they have health insurance, the population has higher costs because they are seeking care.
  • While plans in the employer market historically have provided greater cost protection than plans in the individual market, businesses have tried to hold down premium growth by asking workers to shoulder an increasing share of health costs, particularly in the form of higher deductibles.
  • Growth in Americans’ incomes has not increased at the same rate as the growth in health care costs.

The full text of “Health Insurance Coverage Eight Years After the ACA; Fewer Uninsured Americans and Shorter Coverage Gaps, But More Underinsured” was published February 7, 2019, by the Commonwealth Fund. An abstract with access to the full text is available online at www.commonwealthfund.org.

For more information, contact: Bethanne Fox, Vice President, Outreach and Strategy, Commonwealth Fund, 1 East 75th Street, New York, New York 10021; 212-606-3853; Email: bf@cmwf.org.

On January 29, 2019, the U.S. Department of Veterans Affairs issued a request for proposals (RFP 36C25919R0065) seeking a contractor to provide assisted living residences with psychiatric step-down services for veterans in Aurora, Colorado. Proposals were due by February 12, 2019. The contract is slated to begin on March 1, 2019, for an initial term that expires on February 29, 2020. The initial term is followed by four one-year renewal options that end on February 28, 2024. The RFP stated no estimated contract value; it is a firm, fixed-price, indefinite delivery, indefinite-quantity contract. The RFP is a rebid of an existing service.

The assisted living residence will be for veterans discharging from the inpatient psychiatric mental health care unit (IPU) of the Rocky Mountain Regional Veterans Affairs Medical Center (RMRVAMC). The residence must be licensed by the Colorado Department of Public Health and Environment (CDPHE), and located within 60 miles of RMRVAMC. It will provide room, board, and the following required services for 400 bed-days per year:

  • Transportation so that veterans housed at the facility are able to attend scheduled appointments at RMRVAMC.
  • A physical environment designed to support mental health residential treatment services.
  • A secured (locked) medication room/area and medication administration by technicians who are Colorado Qualified Medication Administration Persons (QMAP) or Registered Nurses (RN).
  • Board-certified or board-eligible physician(s)/psychiatrist(s) to provide services necessary to residents with psychiatric step-down services.
  • Structured daily activities that focus on mental health and or addiction recovery needs.
  • Telephonic coordination of care and clinical updates on a weekly and as-needed (when clinical care concerns arise) basis with the RMRVAMC step-down clinician.
  • Regular supervision of veterans on a 24-hour basis. This includes monitoring the residents’ needs to ensure that they receive the services and care necessary to protect their health, safety, and well-being.
  • Contracted staff will provide verbal prompting to encourage veterans to complete activities of daily living that include getting out of bed in the morning, daily hygiene, attending groups, and appropriate social skills.

For more information, contact: Claudia Coria, Procurement Officer for 36C25919R0065, Federal Contract / Grant Awards and Opportunities, U.S. Department of Veterans Affairs, 4100 East Mississippi Avenue, Suite 900, Glendale, Colorado 80246; 303-202-8239; Email: claudia.coria@va.gov.

The prevalence of employer-sponsored health insurance did not change significantly after the Medicaid expansion provisions of the Patient Protection and Affordable Care Act (PPACA) of 2010 went into effect. A comparison of employer offers of insurance coverage, employee acceptance rates, and the amount employees paid for out-of-pocket premiums found little change that could be attributed to Medicaid expansion. There may have been an inverse relationship between expanded Medicaid eligibility and the share of employees who were eligible for employer-sponsored insurance.

These findings were reported in “The Impact Of Medicaid Expansion On Employer Provision Of Health Insurance” by Jean M. Abraham, Anne B. Royalty, and Coleman Drake. The researchers analyzed data from the 2010–2015 Medical Expenditure Panel Survey-Insurance Component for approximately 141,900 private sector employers that inluded all data for workforce characteristics. The goal was to detect change in four employer-sponsored insurance outcomes: offers of health insurance, eligibility, take-up, and the out-of-pocket premium paid by employees for single coverage. The researchers compared differences in the four outcomes between Medicaid expansion states and non-expansion states. The researchers merged information from the U.S. Bureau of Labor Statistics’ Local Area Unemployment Statistics file, and information about state minimum wage laws. They also controlled for a possible association between the employer shared responsibility requirement (ESRR) that applied to companies with 100 or more employees. Under the ESRR, companies were required to offer health insurance to full-time employees working at least 30 hours per week.

The researchers compared employer characteristics for 2010 to 2013, and for 2014 to 2015. Key findings were as follows:

  • The percentage of establishments (the physical locations of an employer, as opposed to the firm, which is the entirety of the employer’s operations) offering insurance declined from 49.13% to 44.19% between the two periods.
  • The percentage of workers eligible for insurance decreased from 80.57% to 79.53%.
  • The percentage of eligible workers who accepted the employer insurance decreased from 74.94% to 73.83%.
  • The share of establishment workforces that are low wage declined from 33.55% to 30.56%. Low wage is defined as the percentage of workers earning under $11.50 per hour.
  • Annual out-of-pocket premiums remained essentially the same after adjusting for inflation; they averaged $1,026.31 from 2010 to 2015 in 2015 dollars. However, establishments with higher percentages of low-wage workers have higher out-of-pocket premiums.

The researchers found no support for the hypothesis that expansion and non-expansion states exhibited significant differences in any of the four outcomes of interest. They concluded that the PPACA did not produce the large-scale changes in employer-sponsored insurance that some policymakers predicted. They noted that the PPACA provisions had incentives that encouraged employers to offer insurance and encouraged employees to accept, which may have countered the incentives to stop offering insurance and allow employees to seek Medicaid expansion eligibility or purchase Marketplace policies. The researchers also said that employers may have continued to offer insurance due to the legal challenges that created uncertainty about whether PPACA would remain law.

The full text of “The Impact Of Medicaid Expansion On Employer Provision Of Health Insurance” was published December 15, 2018, by International Journal of Health Economics and Management. An abstract is available online at link.springer.com.

For more information, contact: Jean Abraham, Ph.D., Wegmiller Professor and Master of Healthcare Administration Program Director, Division of Health Policy and Management, University of Minnesota, 420 Delaware Street SE, MMC 729, Minneapolis, Minnesota 55455; Email: abrah042@umn.edu.

I often get asked two questions. The first is do states still have Medicaid behavioral health carve-outs? The second (and related question) is how are integrated plans working for consumers with behavioral health problems?

The short answer:

  • Nine states have Medicaid behavioral health carve-outs to care management organizations (CMOs). Four of those are to private CMOs and five to public entities. This is a change from 15 primary carve-outs in 2011.
  • 29% of the 74.7 million Medicaid beneficiaries are in Medicaid behavioral health carve-outs to CMOs. 7% of these individuals are in private CMOs organizations and 93% are in public entities.
  • Four states have vertical carve-out plans, which integrate physical and behavioral health services for individuals with SMI. These plans represent less than 1% of the Medicaid population.

With this see change in policy, the question is whether the physical and behavioral health care delivery for the 64% of Medicaid consumers in integrated financing models is actually “integrated” from a clinical perspective. We don’t know the answer to that question entirely.

The move to integration leads to the second question: Do integrated financing models work? There is a lot of research on the benefits of physical and behavioral health integration at the clinical level, there isn’t a lot of research on behavioral health and physical health financial integration. The Medicaid and CHIP Access Payment Commission (MACPAC) attributes this gap in research to a lack of quality measures and proven quality strategies. Other research has focused on strategies that can help make integration successful and the challenges to integrating financing.

What does this mean for executives of provider organizations? For your Medicaid book of business, it’s a matter of keeping an eye on the “big picture” changes. Will the nine states that have primary behavioral health carve-outs continue – and if so, with what lead organizations? If not, what does integration of behavioral health into Medicaid health plans mean for rates/revenue, referrals, and contracting? Will Medicaid health plans in your geographic area increase or decrease their use of behavioral health secondary carve-out plans, health homes and medical homes, other forms of value-based reimbursement for serving consumers with chronic conditions and complex needs? Its important to keep your market intelligence in these areas up-to-date.

Where are we seeing the most action? I’ll be watching Michigan, which is currently piloting a variety of different behavioral health integration models in response to stakeholder advocacy (see Michigan Medicaid Delays Selection Of Cross-Region PIHP For Mental Health Integration Pilot Areas). Even though North Carolina has already committed to ending their carve-out, I’ll be watching their implementation process and particularly the development of the vertical carve-out plans for serious mental illness and intellectual/developmental disabilities. Finally, I’ll be keeping an eye on California as they gear up to renew their 1115 demonstration waiver in 2020. In the last waiver renewal, the Centers for Medicare and Medicaid Services put fairly stringent requirements on the county mental health plans as a condition of their continued operation (see California’s Mental Health Carve-Out Preserved For Five Years, But With New Performance Transparency Requirements).

A couple of weeks ago, OPEN MINDS released the results of the 2019 Performance Management Executive Survey which found that 69% of organizations are participating in alternative payment arrangements and 58% of these organizations are recognizing revenue from these arrangements (see VBR @ Scale—Changes Required). What this means is that executives team of specialty provider organizations are going to have to make changes across their organization to make these new models work.

One of the most important changes organizations have to make is adjusting their revenue cycle management model. This was the topic of a recent session, Revenue Cycle Management: A New Model For A New Market, featuring OPEN MINDS Senior Associate David E. Wawrzynek and Vanessa R. Lane, MBA, Vice President, Revenue Cycle Management/ Data Analytics, Grafton Integrated Health Network.

Figure 1. Mandros, A. Adapting Revenue Cycle Management For A VBR-Driven World. [Graphic Illustration] Retrieved from www.openminds.com

Revenue cycle management is the administrative and clinical functions related to capturing client service revenue. It begins when a consumer schedules an appointment and continues through point-of-service registration, charge capture and coding, claims submission, remittance processing, payer follow-up, and analysis. Crucial to revenue cycle management is clearly articulated workflows, sufficient staffing, integrated technology, and regular oversight.

Mr. Wawrzynek summed up perfectly the changes organizations need to make to succeed with revenue cycle management in a value-based world, noting:

The revenue cycle management process is not going to change, the tools and info and detail to manage revenue cycle management are going to change. So when I talk with people, the key is to have the basics done and nailed now, because when you bring in another variable, like outcomes, then it is going to be difficult to be successful.

What exactly are some of those key changes?

Easily configurable billing and EHR systems – EHR and billing systems should be easily configurable to accommodate value-based contracting specifics. For example, a value-based contract may require outcomes data that is not currently collected in the EHR. A billing system may also need to collect additional discreet variables to identify individual projects or contracts at the payer level and the client level. Ms. Lane did caution that it is important to manage the changes and updates being done to your system in order to control the complex variables that go into billing. Don’t let your vendor make a change to the system without completely understanding what they are doing and how it will effect your systems.

Adding the ability to suspend claims – Mr. Wawrzynek explained that many billing systems can suspend claims from being sent for payments if they do not meet certain regulatory compliance standards. Organizations may need to enhance their systems to suspend claims based upon contract specific requirements. Ms. Lane also added that it is crucial to have a compliance system in place that regularly audits your billing processes. By catching wrongly billed claims earlier, not only can organizations prevent claw backs later in the year, they can build trust with payers by voluntarily offering refunds for incorrectly billed services.

Directly access data stored in billing and EHR systems – A major part of managing revenue cycle management in a value-based contracts is actively managing performance data. Therefore, provider organizations should begin developing data warehouses and data models that can be used to manage performance. Ms. Lane explained that Grafton regularly pulls data and looks at their performance. In cases where their performance isn’t what they expected or they are in danger of missing the targets in their contract, they will speak with the payer. She also said that payers like to see that they are proactively reviewing their contracts and are willing to problem-solve. It goes a long way in managing their relationships.

Finally, Ms. Lane explained that managers need to take a more holistic approach to the traditional revenue cycle management process. While having the correct systems in place is crucial, managers should be actively using market intelligence and monitoring the data payers are putting out. Additionally, different revenue cycle staff members should attend meetings and conferences to network with payers. People with different specialties, often have different perspectives and may find a new way to solve a problem for a payer.

Finally, it is important to communicate across different revenue cycle management teams and the organization as a whole. Ms. Lane explained that the head of your revenue cycle management team should take their position broadly and sit in on business development meetings and strategy meetings. Value-based reimbursement requires organizations to sell their services, not just fill out contracting forms. Revenue cycle management should understand the different processes and components that are expected. Across the revenue cycle management team, its important to communicate new enhanced rates, changes in procedures due to a new contract, etc. As contracts become more complicated and individualized, team need to be in constant communication to ensure they are billing at or above the negotiated rate and meeting the specified requirements.

Figure 2. . Mandros, A. Adapting Revenue Cycle Management For A VBR-Driven World. [Graphic Illustration] Retrieved from www.openminds.com

As specialty provider organizations look to re-tool their revenue management cycle process for value-based reimbursement, they should stop focusing on whether they are billing and start focusing on relationship management at every level – the C-suite, clinical, and contracting.

Among low-income households that lack access to employer plans, the rate of missed rent or mortgage payments was 25% lower among households that qualified for subsidized health insurance marketplace plans compared to households that did not qualify for subsidies. Those who received subsidies had reduced exposure to out-of-pocket (OOP) medical expenditure risk. For example, at the 90th percentile of the spending distribution, their OOP medical spending declined by $1,054 per eligible household.

These findings were reported in “The Effect Of Health Insurance On Home Payment Delinquency: Evidence From ACA Marketplace Subsidies” by Emily A. Gallagher, Radhakrishnan Gopalan, and Michal Grinstein-Weiss. The researchers analyzed administrative tax data and survey responses to quantify the effect of subsidized health insurance on rent and mortgage delinquency. The administrative data set was comprised of households that used a free online tax preparation software in 2014, 2015, or 2016 to prepare their tax returns; each later participated in a survey about their finances at the end of the tax-filing process. The tax return data provided each household’s adjusted gross income (AGI), which the researchers used to approximate the household’s eligibility for Marketplace subsidies. The linked survey provided information on the household’s health insurance status, home delinquency, and recent medical expenditures. The researchers noted that this data was able to capture rent delinquency, which is not generally reported to credit bureaus in the same way that mortgage delinquency is. In total, in the pooled 2014 to 2016 sample, the researchers had 15,967 observations from households in non-Medicaid expansion states and 24,531 observations from households in expansion states. The researchers further considered a subset of households that reported not having the types of insurance that would typically disqualify them from receiving Marketplace subsidies. They called this subset the “intent-to-treat” (ITT) subsample; it included 6,443 observations from non-expansion states and 10,390 observations from expansion states.

The researchers found a significant increase in reported health insurance coverage from households at 100% of the federal poverty level from non-expansion states. Across the full sample,the number of households that reported having any form of health insurance coverage increased by 6%. The share of all households that reported having non-group private insurance coverage, specifically, increased by 35%. In the “ITT” subsample (which excludes households that have employer plans and other affordable sources of insurance), the share reporting non-group private insurance rose by 46%. The researchers said they found no increase in the probability of coverage at 100% FPL among households in states that expanded Medicaid. They said this confirmed that the increase in coverage was due to the Marketplace subsidies.

With regard to home delinquency rates, in the full sample, about 19% reported hardship missing rent or mortgage payments.The researchers found that being above the poverty line in a non-expansion state was associated with a 9% to 33% decline in this rate of home payment delinquency among the full sample of households.

The researchers estimated that gaining access to Marketplace subsidies was associated with about a 25% decline in the home delinquency rate among households that lacked access to alternative insurance plans. For such “ITT” households in non-expansion states, the researchers found a large reduction in the upper bounds of OOP medical spending at the Marketplace subsidy threshold.

The researchers estimated that the subsidy policy may have indirect financial benefits beyond health costs. Social benefits may accrue because those receiving subsidies have fewer delinquent home payments, and fewer delinquent home payments results in fewer evictions and foreclosures – which carry large social costs. Under a range of plausible values for the social cost of eviction, the researchers estimated the social benefits from fewer delinquencies would range from $441 to $683 per subsidy-eligible person.

The full text of “The effect of health insurance on home payment delinquency: Evidence from ACA Marketplace subsidies” was published in the April 2019 issue of Journal of Public Economics. An abstract is available online at www.sciencedirect.com.

For more information, contact: Emily A. Gallagher, Ph.D., Assistant Professor, Leeds School of Business, University of Colorado Boulder, 995 Regent Drive, Office 427, Boulder, Colorado 80309; Email: emily.a.gallagher@colorado.edu.

Greeting from the sunny shores of Clearwater Beach, Florida. The goal was to facilitate a dialogue between health plan executives and managers of specialty provider organizations—and it was quite a dialogue. The session, facilitated by OPEN MINDS Senior Associate Deborah Adler, featured the perspectives of executives of four different health plans—Charles Gross, Ph.D., Vice President, Behavioral Health, Anthem, Inc.; Beth Rath, PMP, Vice President Network Operations, New Directions; Kelly J. Champ, Vice President, Network Strategy & Innovation, Optum; and Matt Miller, Senior Vice President, Public Sector, Magellan Healthcare. What struck me at the end of the day was that, although the health plans are operating in different markets and managing a variety of different populations, there are some emerging similarities across all plans.

First, most of the health plans are now working within the same reimbursement continuum—currently operating some pay-for-performance programs, with upside risk-based arrangements. Health plans are also starting pilot programs and value-based reimbursement (VBR) arrangements that include downside risk, with the goal of shifting a greater percentage of reimbursement to that model over time. Many of the health plans were focused on a shift to bundled payments and case rates encompassing multiple conditions, including addiction treatment, major depression, schizophrenia, and applied behavioral analysis for autism.

Second, many of the health plans are starting to use similar performance metrics, with a greater attention to medical measures, total cost of care, and funding integrated care (including social determinants of health). The health plan executives acknowledged that this presents a challenge for specialty provider organizations. Physical health and behavioral health are funded separately, making it difficult for specialty provider organizations to get a clear picture of the total cost of care. The question posed—how do specialty provider organizations get data to show that a behavioral health services result in total cost of care savings? There are two paths. One, specialty provider organizations can form their own partnerships with health systems and primary care practices. This could include accountable care organizations (ACOs), collaborative care models with health systems, or specialty medical homes. Through these collaborations, organizations will have access to a more comprehensive data set and be better positioned to get the data needed to show the value of a whole person care model. Two, focus on diversion, prevention, and readmissions. If specialty provider organizations can show that programs are preventing hospitalizations, emergency room visits, or even incarcerations, they can demonstrate global savings to health plans.

Finally, health plans have been operating a wide array of VBR arrangements—and they are seeing more results. During the session, the faculty shared results from integrated bundled payment pilot programs, which have resulted in reductions in average length-of-stay (LOS), inpatient admissions, hospital readmission rates, and emergency room visits; improvements in follow-up after hospitalizations; and reductions in overall cost of care.

My key takeaway from the day for provider organization executives is that while the pace of change towards value-based care may be glacial, there is some consistency emerging—and this is the place to start. As executives prepare for the shift to value-based care, the goal should be to explore collaborative care models that focus on whole person health, improve outcomes, and reduce costs across the continuum. Having your own cost and performance data is the key.

On January 14, 2019, the Ventura County Behavioral Health Department issued a request for proposal (RFP) seeking a contractor to operate a program that will address first episode psychosis among people between ages 16 and 25. Proposals are due by February 22, 2019. The initial anticipated contract period will run from May 7, 2019 through June 30, 2020, with the potential for one additional one-year extension. The first-term contract value is capped at $1 million, to include a startup budget and an operational budget for Early Detection & Intervention for the Prevention of Psychosis (EDIPP) services and outreach and engagement.

The current contract, awarded in 2016, is held by Telecare. With the current contract, Telecare serves the population for psychosis risk/prodrome individuals aged 16 to 25. The service model is a Coordinated Specialty Care (CSC) model as well as a certified PIER program. The 2016 contract was valued at $1.4 million.

The county’s preferred model focuses on an early detection and intervention approach with attention to the pre-psychotic (prodromal) phase of a developing psychotic illness. The services are specifically for people within the age group who have experienced psychotic symptoms for less than one year with or without treatment.

The desired evidenced-based practice model program should include early identification of those individuals with prodromal and active symptoms, as well as state-of-the-art treatment that can continue, perhaps in a less intense form, for as long as the person remains vulnerable. The county aims to provide these services with a minimum of six key staff roles that include a: team leader, recovery coach, supported employment and education specialist, pharmacotherapist/prescriber, outreach and referral specialist, and peer support specialist.

For more information, contact:

  • Peter Owen, Contracts Officer, Ventura County Behavioral Health Department, 1911 Williams Drive, Suite 200, Oxnard, California 93036; 805-981-5410; Email: peter.owen@ventura.org
  • Sheila Murphy, Public Information Officer, Ventura County Behavioral Health Department, 1911 Williams Drive, Suite 200, Oxnard, California 93036; 805-677-5274; Email: sheila.murphy@ventura.org.

At the first day of a recent institute, attendees spent the day focused on all things metrics—performance-based compensation, prepping for value-based reimbursement (VBR), key performance indicators, performance optimization, and much more.

Monica E. Oss opened the day with the results of the 2019 OPEN MINDS Performance Management Executive Survey. On reviewing the results, I was reminded of the Bill Gates adage, “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don’t let yourself be lulled into inaction.” The changes in specialty provider organizations’ involvement with VBR remains glacial—moving, but slowly.

Of the many survey results, one finding that struck me is the proportion of provider organization revenue now coming from VBR arrangements. Nearly 60% reported some revenue from VBR arrangements. Of those, 16% have 20% or more of their revenue through those contracts. For those organizations, the need to manage their organization’s performance—and population health—will be increasingly important for their sustainability. Looking ahead, I think we’ll see this revenue “gap” increase. A limited number of provider organizations will end up with most of the VBR contracts and most of the revenue.

Figure 1. Oss, M. VBR @ Scale—Changes Required [PowerPoint Slides] Retrieved from www.openminds.com

Working on the ground in the implementation of VBR arrangements between health plans and specialist organizations, I see impediments to a smooth process on both sides. We’ve written a lot about the challenges for provider organization management teams, particularly around getting contemporary performance data to manage these contracts. And, there is also the issue in making the shift in clinical culture to use decision support tools and manage population health (see Moving Out Of Your Comfort Zone: The VBR Technology Continuum).

There are also some problems on the health plan side of the equation that need to be addressed to make VBR a working reality for serving consumers with complex needs. First, there is the issue of consensus on performance measures. Currently, the most-used measures are follow-up after hospitalization and readmissions. But there is not broad consensus about performance measures across health plans. However flawed, it would be great if health plans could have an intra-organizational compact on the measure set.

Figure 2. Oss, M. VBR @ Scale—Changes Required [PowerPoint Slides] Retrieved from www.openminds.com

The second issue has to do with health plan’s own structure and priorities. In many health plans, it is difficult to determine who “speaks” for the health plan on non-typical contracting. The provider organization management teams I’m working with are investing significant amounts of time developing relationships with health plan managers—often with little financial result.

A few examples? Recently, after a year of negotiation (and many meetings) on a case rate, the health plan managers turned over and now the provider management team was told they need to start the process all over again. In a second example, which is fairly typical, a provider organization I work with took on a small VBR pilot (too small to make money) with the understanding that if the VBR pilot has positive results they would be able to expand the money-losing pilot in order to make a reasonable margin. Now they can’t get the health plan to review the results and expand the scope and are facing terminating a successful program because of the continuing red ink.

In a recent discussion about the challenges of proposing value-based contracts to health plans, my colleague had this observation: “To negotiate a value-based arrangement with a health plan you really need to have their contracting lead, their clinical lead, and a financial lead in the same room. Otherwise it’s almost impossible to make sure the clinical and financial goals come through in the contract terms.”

I think to best serve consumers with chronic conditions and complex support needs, the health plan manager and provider organization management teams need to work together. Provider organizations executive teams need to get their performance management “house in order” and realize that there will be a degree of financial risk attached with any alternate payment model. Health plans managers need to get internal agreement and then communicate with the provider community about what they are looking for and where—and the process for contracting. Perhaps creating requests for proposal for specific markets would bring clarity.

Moving the reimbursement system for the 17.9% of the U.S. GDP that is for health care certainly can’t be done overnight. I think that, if well done, VBR types of models will serve consumers well and can stabilize the service delivery system. But there are number of issues to be addressed between where the system is now and where it needs to be to move from “volume to value”.

The full results of the 2019 OPEN MINDS Performance Management Executive Survey are available online at OPENMINDS.com.

On February 4, 2019, the North Carolina Department of Health and Human Services (DHHS) announced it had selected one regional and four statewide prepaid health plan (PHP) contractors to provide integrated physical health, behavioral health, and pharmacy services through Standard Plans for the general Medicaid population. Managed care is a new approach for North Carolina Medicaid, which currently uses a fee-for-service primary care case management structure. Statewide PHP contracts were awarded to AmeriHealth Caritas North Carolina, Inc.; Blue Cross and Blue Shield of North Carolina; UnitedHealthcare of North Carolina, Inc.; and WellCare of North Carolina, Inc. A regional Provider-Led Entity PHP contract for Regions 3 and 5 was awarded to Carolina Complete Health, Inc.

The state released the request for proposals (RFP 30-190029-DHB) on August 9, 2018, with proposals due by October 12, 2018. Bids were received from eight offerors. The unsuccessful bidders were Aetna, My Health by Health Providers (a regional provider-led entity), and Optima Health. The contracts will be implemented in mid-2019, and run through June 30, 2022, followed by up to two optional one-year extensions. At full implementation, the state will pay the PHPs $6 billion annually in aggregate for up to five years.

The state estimates that the Standard Plan PHPs will enroll 1.6 million Medicaid beneficiaries during a two-phase enrollment. The first phase will launch in November 2019 for beneficiaries in the following 27 counties: Alamance, Alleghany, Ashe, Caswell, Chatham, Davidson, Davie, Durham, Forsyth, Franklin, Granville, Guilford, Johnston, Nash, Orange, Person, Randolph, Rockingham, Stokes, Surry, Vance, Wake, Warren, Watauga, Wilkes, Wilson, and Yadkin. Standard Plans will launch in the remaining counties in February 2020.

Starting in June 2019, Medicaid beneficiaries who will transition to Medicaid managed care will receive more information on the PHPs in their area, including how to find out which plans include their physician, and a phone number to get help to understand their choices. Those who live in the 27 counties launching in November 2019 will select a plan starting in July 2019. Beneficiaries in all other counties will select a plan starting in October 2019.

Beneficiaries with intellectual/developmental disability (I/DD) and severe mental health or addiction disorders are excluded from enrollment in the Standard Plan PHPs. For this population, DHHS intends to issue a separate procurement for BH I/DD Tailored Plans but has not announced a schedule. Until the Tailored Plans launch, the population with severe mental health or addiction disorders or I/DD will remain in fee-for-service Medicaid for their physical health benefits and will receive their behavioral health benefits from the regional local management entity-behavioral health organizations (LME-MCOs).

Additionally, for a period not to exceed five years from Contract Year 1, DHHS will temporarily exclude the following populations:

  • Beneficiaries who reside in a nursing facility and have so resided, or are likely to reside, for a period of 90 days or longer and are not being served through CAP/DA.
  • Beneficiaries who are enrolled in both Medicare and North Carolina Medicaid and for whom North Carolina Medicaid coverage is not limited to the coverage of Medicare premiums and cost sharing, excluding individuals served through CAP/DA.

Exempt Populations: Members of federally recognized tribes, including the Eastern Band of Cherokee Indians. Exempt populations will not be mandatorily enrolled in Standard Plan but they will have the option to enroll.

Temporarily Exempt Populations: Beneficiaries who meet the eligibility criteria for Behavioral Health and I/DD Tailored Plans are also exempt from mandatory enrollment in Standard Plan PHPs (so they have the option); once Tailored Plans go live in 2021 they will be mandatorily enrolled in a PHP (Standard Plan or Tailored Plan)

The following population are excluded:

  • Qualified aliens subject to the five-year bar for means-tested public assistance who qualify for emergency services
  • Medically needy North Carolina Medicaid beneficiaries
  • Presumptively eligible beneficiaries, during the period of presumptive eligibility
  • Beneficiaries participating in the NC Health Insurance Premium Payment (HIPP) program
  • Beneficiaries enrolled under the Medicaid Family planning program
  • Beneficiaries who are inmates of prisons
  • Beneficiaries being served through the Community Alternatives Program for Children (CAP/C)
  • Beneficiaries being served through the Community Alternatives Program for Disabled Adults (CAP/DA)
  • Program of All-Inclusive Care for the Elderly (PACE) participants

On October 19, 2018, the federal Centers for Medicare & Medicaid Services (CMS) approved North Carolina’s 1115 Medicaid waiver demonstration to implement integrated managed care, phase in tailored vertical health plans for individuals with I/DD and those with serious mental illness, expand addiction treatment benefits, and address the social determinants of health. In addition to being at-risk for for physical health, behavioral health, and pharmacy services, the Standard Plan PHPs will provide an Advanced Medical Home program that will preserve broad access to primary care services for Medicaid enrollees while strengthening the role of primary care in local care management, care coordination, and quality improvement. The Standard Plan PHPs will also invest in areas that impact health outside of health care services, known as “Opportunities for Health,” in the domains of housing, food, transportation, employment, and interpersonal safety, to build on work already being done in communities.

The waiver allows the following changes to be made to the state Medicaid program:

  • Integrated managed care – The state will implement managed care plans for the general population called prepaid inpatient health plans (PHPs). The PHPs will integrate behavioral health, physical health, and pharmacy services.
  • Tailored vertical health plans for certain populations – The state will phase-in managed care plans, called Tailored Plans, for individuals with serious mental illness (SMI), serious emotional disturbance, severe substance use disorder, I/DD, or a traumatic brain injury the year after the PHPs are implemented. Tailored Plans will provide a specific, more intensive set of behavioral health benefits and specialized health homes to ensure strong care management. The state will also develop a specialized plan to be offered by a PHP for children in foster care, meeting a set of care management and medication management requirements specific for this population.
  • Expand addiction treatment – DHHS and the Medicaid PHPs will cover inpatient and residential addiction treatment provided in institutions of mental disease (IMD), which are defined as psychiatric facilities with more than 16 beds. This benefit will be for beneficiaries ages 21 to 64.
  • Address the social determinants of health – The state will implement Healthy Opportunities Pilots in two to four regions selected through a competitive procurement process. The Medicaid managed care plans will work within the selected regions to provide services addressing “social determinants of health,” with a focus on housing, food, transportation, employment, and interpersonal safety services. North Carolina is the first state to receive federal Medicaid approval to comprehensively pilot these innovations. The pilot region procurement will seek proposals from Lead Pilot Entities (LPEs) for serving target populations, and delivery of evidence-based interventions for health and cost outcomes. The pilot provider organizations delivering health and social services will coordinate non-medical care to address health determinants that potentially adversely affect health. The state will develop a pathway to value-based payments for the pilot provider organizations, Medicaid PHPs, and LPEs by incentivizing delivery of high-quality enhanced case management and other services by increasingly linking payments for services to demonstration outcomes and the gathering of data and experience necessary for complex risk-based models.

PsychU reported on this topic in the following article: “CMS Approves North Carolina’s 1115 Medicaid Managed Care Waiver, Ending The Behavioral Health Carve-Out,” which published on December 3, 2018.

For more information, contact: Media Office, North Carolina Department of Health and Human Services, 101 Blair Drive, Adams Building, 2001 Mail Service Center, Raleigh, North Carolina 27699-2001; 919-855-4840; Email: news@dhhs.nc.gov.

By the end of 2018, the uninsured rate rose to 13.7%, an increase of 2.8% since 2016. This represents a net increase of about seven million adults total without health insurance as of 2018. Prior to the 2014 implementation of the Patient Protection and Affordable Care Act (PPACA), 18% of U.S. citizens were uninsured, and while the percentage of women uninsured in 2018 was less than men, women showed a 3.9% increase since 2016, compared to a 1.6% increase for men.

These findings were presented in “U.S. Uninsured Rate Rises to Four-Year High,” by Dan Witters for the Gallup National Health and Well-Being Index (Gallup). Data for the report was collected as part of the Gallup National Health and Well-Being Index, based on Americans’ answers to the question, “Do you have health insurance coverage?” The researchers randomly surveyed approximately 28,000 adults per quarter in 2018 (a total of 115,929 adults) who lived in all 50 U.S. states and the District of Columbia. The goal was to determine the current rate, and trend, of those uninsured in the U.S.

Additional findings include:

  • While the uninsured rate increased in all age groups since 2016, those aged 18 to 34 years had the largest increase (4.8%), compared to those age 35 to 64 (a 2.7% increase), and those aged 65 and older (a 1.4% increase).
  • The increase in uninsured since 2016 was largest in households making between $24,000 and $48,000 per year (3.0%); followed by those making under $24,000 (a 2.8% increase); and those making between $90,000 and $120,000 per year (a 2.7% increase).
  • Those who live in the eastern U.S. states saw a 0.4% decrease in uninsured rates since 2016 (from 7.5% to 7.1%). In comparison, those who lived in the south saw a 3.8% increase; those who lived in the west saw a 3.6% increase, and those who lived in the Midwest saw a 3.2% increase in uninsured rates.

The full text of “U.S. Uninsured Rate Rises to Four-Year High” was published January 23, 2019 by Gallup. An abstract is available online at news.gallup.com.

PsychU reported on this topic in “12.2% Of U.S. Adults Are Uninsured, Up 1.3 Percentage Points From Record Low In 2016,” which published on February 21, 2018.

For more information, contact: Dan Witters, Research Director, Gallup National Health and Well-Being Index, Gallup, 1001 Gallup Drive, Omaha, Nebraska 68102; 402-951-2003; Fax: 888-500-8282; Email: Dan_witters@gallup.com.

On December 12, 2018, the New York Department of Health (DOH) issued a quality measure set for its Medicaid Health and Recovery Plans (HARP). The HARPs are specialized Medicaid managed care organization (MCO) plans that integrate physical health, behavioral health, and Medicaid waiver home- and community-based services (HCBS) for beneficiaries diagnosed with serious mental illness (SMI). The quality measure sets includes 38 measures, which will be reported by provider organizations to MCOs in 2019. The measures will be used to support value-based purchasing contracts between provider organizations and Medicaid managed care plans.

The quality measure sets are updated annually. For 2019, DOH added one measure to the 2018 measure set (Asthma Medication Ratio) and removed five measures related to diabetes care.

New York HARP 2019 Quality Measurement Set, Category 1 Measures

Measure Measure Steward Classification, Pay-For-Performance (P4P) or Pay-For-Reporting (P4R)
Adherence to Antipsychotic Medications for Individuals with Schizophrenia Centers for Medicare & Medicaid Services (CMS) P4P
Asthma Medication Ratio National Committee for Quality Assurance (NCQA) P4P
Breast Cancer Screening NCQA P4P
Cervical Cancer Screening NCQA P4P
Chlamydia Screening in Women NCQA P4P
Colorectal Cancer Screening NCQA P4P
Comprehensive Diabetes Care: Hemoglobin A1c (HbA1c) Poor Control (>9.0%) NCQA P4P
Comprehensive Diabetes Care: Medical Attention for Nephropathy NCQA P4P
Comprehensive Diabetes Screening: All Three Tests (HbA1c, dilated eye exam, and medical attention for nephropathy) NCQA P4P
Continuity of Care from Inpatient Detox to Lower Level of Care NYS P4P
Continuity of Care from Inpatient Rehabilitation for Alcohol and Other Drug Abuse or Dependence Treatment to Lower Level of Care NYS P4P
Controlling High Blood Pressure NCQA P4P
Diabetes Screening for People with Schizophrenia or Bipolar Disorder Who Are Using Antipsychotic Medications NCQA P4P
Follow–Up After Emergency Department Visit for Alcohol and Other Drug Dependence NCQA P4P
Follow–Up After Emergency Department Visit for Mental Illness NCQA P4P
Follow–Up After Hospitalization for Mental Illness NCQA P4P
Initiation of Pharmacotherapy upon New Episode of Opioid Dependence NYS P4P
Maintaining/Improving Employment or Higher Education Status NYS P4R
Maintenance of Stable or Improved Housing Status NYS P4R
Medication Management for People with Asthma NCQA P4P
No or Reduced Criminal Justice Involvement NYS P4R
Percentage of Members Enrolled in a Health Home NYS P4R
Potentially Preventable Mental Health Related Readmission Rate 30 Days NYS P4P
Preventive Care and Screening: Body Mass Index (BMI) Screening and Follow–Up Plan CMS P4R
Preventive Care and Screening: Influenza Immunization American Medical Association Physician Consortium for Performance Improvement (AMA PCPI) P4R
Preventive Care and Screening: Tobacco Use: Screening and Cessation Intervention AMA PCPI P4R
Statin Therapy for Patients with Cardiovascular Disease NCQA P4R
Statin Therapy for Patients with Diabetes NCQA P4R
Use of Pharmacotherapy for Alcohol Abuse or Dependence NYS P4R
Use of Spirometry Testing in the Assessment and Diagnosis of COPD NCQA P4R

There are no changes to the Category 2 HARP measure set for 2019. All Category 2 measures are classified as P4R in measurement year 2019.

New York HARP 2019 Quality Measurement Set, Category 2 Measures

Measure Measure Steward
Adherence to Mood Stabilizers for Individuals with Bipolar I Disorder CMS
Asthma Action Plan American Academy of Allergy, Asthma & Immunology (AAAAI)
Asthma: Assessment of Asthma Control – Ambulatory Care Setting AAAAI
Asthma: Spirometry Evaluation AAAAI
Continuing Engagement in Treatment (CET) Alcohol and Other Drug Dependence NYS
Initiation of Pharmacotherapy upon New Episode of Alcohol Abuse or Dependence NYS
Mental Health Engagement in Care 30 Days NYS
Percentage of HARP Enrolled Members Who Received Personalized Recovery Oriented Services (PROS) or Home and Community Based Services (HCBS) NYS
Use of Opioid Dependence Pharmacotherapy NYS

To reimburse the MCOs for participating in the VBP, the state implemented a stimulus adjustment in the 2018 MCO rate setting process to increase the managed care capitation premium for those MCOs that have captured more provider-payment dollars in VBP arrangements at higher levels. The adjustment lasts for two years.

The state described the arrangements in “A Path Toward Value Based Payment: Annual Update November 2017: Year 3, New York State Roadmap For Medicaid Payment Reform,” which was released in November 2017. From 2018 on, based on the prior year’s VBP contracts, MCOs that fall behind the goals for VBP contracting as outlined in the Roadmap will receive a penalty. Additional details are as follows:

  • For 2018, MCOs were subject to a penalty if they had less than 10% dollars of total MCO expenditure captured in Level 1 or above VBP contracts as of April 1, 2018. The penalty was 0.5% on the marginal difference between 10% of Medicaid managed care expenditure and their total expenditure on Level 1 or above VBP contracts.
  • For 2019, fully capitated and non-fully capitated MCOs are both subject to penalties if as of April 1, 2019, their contracts fail to have at least 50% of the total MCO expenditures captured in a Level 1 or higher arrangement. The penalty is 1% on the marginal difference between 50% Medicaid managed care expenditure and the MCO’s total expenditure on Level 1 or above VBP contracts. Both types of MCOs are subject to penalties based on the share of expenditures captured in a Level 2 or higher arrangement. Fully capitated MCOs must have 15% in Level 2 or higher contracts; non-fully capitated MCOs must have at least 5%. Failure to meet the Level 2 target results in a penalty of 1.0% on the marginal difference between the contracting target and the total expenditure on Level 2 or above VBP contracts. If both penalties are incurred, then only the larger penalty will be applied.
  • As of April 1 2020, fully capitated and non-fully capitated MCOs are both subject to penalties, if their contracts fail to have at least 80% of the total MCO expenditures captured in a Level 1 or higher arrangement. The penalty for fully capitated MCOs is 1% on the marginal difference between 80% Medicaid managed care expenditure and the MCO’s total expenditure on Level 1 or above VBP contracts; for non-fully capitated MCOs, the penalty is 1.5%. Fully capitated MCOs must have 35% in Level 2 or higher contracts; non-fully capitated MCOs must have at least 15%. Failure to meet the Level 2 target results in a penalty of 1.0% (or 1.5% for the non-fully capitated MCOs) on the marginal difference between the contracting target and the total expenditure on Level 2 or above VBP contracts. For the fully capitated MCOs, if both penalties are incurred, both will be applied. For the non-fully capitated MCOs, only the larger penalty will be applied.

HARPs are a Medicaid Special Needs Plan (SNP) operated by New York’s Medicaid MCOs. The HARPs have a specialized staff with behavioral health expertise, and the plan provides all covered services available through Medicaid managed care, in addition to an enhanced benefit package that includes BH HCBS for eligible enrollees. HARP eligibility criteria has been determined by the state. Beneficiaries eligible for HARP cannot be dual enrolled (receiving both Medicare and Medicaid) or participating in a program with the New York State Office for People With Development Disabilities (OPWDD).

The state launched the first VBP pilot in the Fall of 2016. The long-term goal is that by April 2020, 80% to 90% of MCO payments to provider organizations will  be made using VBP methodologies. The VBP pilot lasted for two years to help create momentum in the transition from fee-for-service to a VBP environment and to provide data about the design of VBP. The pilot included six provider organizations and eight MCOs working together on 12 distinct contracts. The contracts pilot three types of VBP arrangements: HARP subpopulations, Integrated Primary Care (IPC), and Total Care for the General Population (TCGP). The HARP pilots included MCO Healthfirst PHSP, Inc. and provider organizations Maimonides Medical Center and Mount Sinai Health Partners. The pilot organizations helped evaluate the validity, feasibility, and reliability of quality measures for their respective arrangements, and they shared feedback on core aspects and best practices of the VBP process for statewide implementation. The 2018 performance results, in terms of penalties and bonuses, were not reported. The Measurement Year (MY) 2019 HARP Quality Measure Set was created in collaboration with the Behavioral Health/ HARP Clinical Advisory Group (CAG), as well as the New York State Value Based Payment (VBP) Workgroup. For measure year 2019, the quality measures in place for 2018 were reviewed by the VBP Measure Support Task Force.

The VBP Measure Support Task Force sorted the measures into three categories:

  • Category 1 measures are approved measures that are deemed to be clinically relevant, reliable, valid, and feasible. VBP contractors report Category 1 measures to the managed care organizations (MCOs). These measures are intended to be used to determine the amount of shared savings for which VBP contractors are eligible. VBP contracts must include at least one Category 1 pay-for-performance measure.
  • Category 2 are measures that are clinically relevant, valid, and reliable, but where the feasibility could be problematic. These measures were investigated during a 2017 and 2018 pilot program. These measures will be further investigated in the VBP Pilots. The state requires that VBP Pilots select and report a minimum of one Category 2 measure per VBP arrangement for measurement year 2019 (or have a state and plan approved alternative). VBP Pilot participants will be expected to share meaningful feedback on the feasibility of Category 2 measures when the CAGs reconvene. The state will discuss measure testing approaches, data collection, and reporting requirements with VBP Pilots as a part of the Measure Support Task Force.
  • Category 3 measures are those that were identified as unfeasible at this time, or as presenting additional concerns including accuracy or reliability when applied to the attributed member population for an arrangement. As a result, Category 3 are not included in the measure set.

PsychU reported on the HARPs in “New York Medicaid Releases RFQ For Adult Behavioral Health Benefit Plans Outside New York City,” which published on July 30, 2015.

For more information, contact: Delivery System Reform Incentive Payment (DSRIP) Program, New York State Department of Health, Empire State Plaza, Corning Tower, Albany, New York 12237; Email: dsrip@health.ny.gov.

Your organization has prepared. You’ve done your homework and built partnerships with health plans. You have the contract. The real question is, once you have the contract, then what? That was the topic of the session, Mapping Performance To Manage Value: The Clinical Data You Need To Manage The Risk Of Value-Based Reimbursement, featuring Luke Crabtree, J.D., MBA, Chief Executive Officer, Project Transition; Jason Turi, MPH, RN, Vice President of Population Health, Centerstone; and moderated by OPEN MINDS Senior Associate Joseph P. Naughton-Travers, EdM.

This question assumes that your executive team has done the obvious—made sure that the organization has “the basics” for value-based reimbursement (VBR) operations. Those basic competencies include the right technology-driven capabilities, the financial management skills, the clinical models, and more. For more on VBR competencies, see Four Ps For Leading A VBR Evolution (Or Any Change).

But once you “go live” with VBR, then what? Being ready and being successful are two separate issues. Mr. Crabtree and Mr. Turi shared their insights on VBR success and what is required to make those partnerships work. Their keys for success include:

Agree on what “value” means—Every payer and health plan are going to have a different definition of the “value” they are looking for from your services. Those value measures will have different priorities. Be sure you understand the many perspectives on value, perspectives that will vary by different executives in the same organization. And once you have that understanding, do another review to make sure that those “value priorities” are in sync with your VBR contract so your team spends their time on the right priorities. I am reminded of the Peter Drucker adage, “There is nothing so useless as doing efficiently that which should not be done at all.”

Define each performance measure—Defining a big concept like “value” is important, but that doesn’t outline a path for achieving that value. Value is all about quantifying performance and being able to show “how much” value is being produced, using measures that are important to the payer or health plan. If it’s not measurable, it really doesn’t count. Mr. Crabtree noted the use of data dictionaries and nationally recognized normed measurements.

Establish and maintain performance improvement initiatives—Once defined, your team needs to focus on metrics-based performance management. And, it is not enough to have a good dashboard. It’s all about using that data for on-going performance improvement.

Realize there is no “one” perfect software solution—What technology should your organization invest in, and which vendors are the best fit to partner with? For success with VBR, it is likely that your organization will need to have several software platforms—for EHRs, dashboards, care coordination, population health management, consumer engagement, clinical outcome measures, and more. The important part is understanding the functionality needs of your team.

Integrate “all” of your data—Beyond technology-facilitated functionality, in VBR arrangements your executive team needs a performance management tool that combines data from all sources to get the “big picture” of your organization’s performance (see Thinking About Partnering With A Tech Start-Up? and Preparing For The Very Glacial VBR Rollout In Some Markets). This is one of the most fundamental strategic issues for specialty provider organizations that want to participate in pay-for-performance initiatives. Health information exchange is an essential capability (see Are You Strategically Interoperable? and HIE 3.0?).

Engage consumers—Making consumers a partner in managing their wellness is critical to success in VBR arrangements. The data is clear: engaged consumers are activated consumers are healthier consumers (see Getting, & Keeping, Consumers Engaged With Technology).

Acknowledge that the transition is hard—It is unfortunate but there will be a long period of time for most organizations where there are both FFS and VBR contracts. This creates challenges in organizational structure, in performance management, and in hiring. And, it means that staff can easily be confused about priorities and often asked to perform extra work with two systems in place. Communicate this and engage your team in how best to optimize overlapping workflows (see The Future Has Arrived For VBR).

About 70% of Medicare Advantage members surveyed report having one or more chronic conditions, however 44% of respondents said their health care plan does not communicate with them about their chronic condition. Just 10% report that their health plan offers reminders about chronic conditions, but these reminders are often general reminders not tailored to their needs. Chronic conditions reported include:

  • Hypertension (65% of respondents)
  • Hyperlipidemia (37%)
  • Diabetes (22%)
  • Obesity (22%)
  • Asthma (11%)
  • Depression (11%)

These findings were based an analysis of the HealthMine Medicare Survey. During June and July 2018, the survey queried 781 Medicare Advantage-insured consumers, aged 65 and above. The goal was to give health plan sponsors insight into member attitudes and desires about health plan communication and help in informing and planning members’ health.

Members want communication from their health plan on several topics. These include:
Health Plan Communications By Topic

Topic Members Who Want Communication On This Topic Members Who Receive Communication On This topic
Chronic condition 28% 15%
Fees/coverage after service 43% 37%
How to lower health costs 47% 11%
Information from digital health tools 12% 12%
Recommended health screenings 53% 48%

About 86% of respondents believe that their health care provider knows best how to help manage their health care, while only 3% believe their health plan best provides health care. Additional findings include:

  • About 53% said they do not receive any follow up from their health plan after a health care provider visit. About 31% report follow-up regarding coverage, benefit, and bills only; while 16% report follow-up regarding quality of care.
  • About 48% report that their preferred communication method is by telephone; 31% prefer digital communication via email, text, web portal, or a mobile app; and 21% prefer communication via the U.S. mail.
  • About 47% are connected to their plan through a portal.
  • Approximately 52% say that their health care plan portal answers most or some of their questions. About 14% say the portal rarely answers their questions, and 33% said the portal never answers their questions.
  • About 31% report that they are informed when health care providers drop out of their health care network.
  • About 77% use digital health tools. These primarily include blood sugar monitors, physical health trackers, electronic health or electronic medical records, medication trackers, heart rate monitors, food or nutrition trackers, and sleep monitors.
  • About 57% of members know if their plan offers telemedicine; about 31% believe telemedicine is not offered.
  • About 79% do not have easy access to their electronic medical records.

The researchers concluded that getting correct information to health plan members in a timely manner is critical to the success of health care management. Follow-up can be important in better managing both physical health for the members, and cost-related factors for health plans.

Health Mine reported the top-line findings in “60 Percent of Medicare Advantage Beneficiaries Say Plan Does Not Incentivize Action to Improve Health”, which published January 6, 2019, as a press release at www.PRNewswire.com.

For more information, contact: Bryce Williams, President and Chief Executive Officer, HealthMine, Inc., 2911 Turtle Creek Boulevard, Suite 1010, Dallas, Texas 75219; 469-730-5320; Email: ITSupportTeam@healthmine.com.

On January 18, 2019, the Alaska Department of Health and Social Services (DHSS) issued a request for proposals (RFP) to increase access to medication-assisted treatment (MAT) for adults and adolescents (ages 16-18) with opioid use disorder (OUD) and those who are at risk of OUD. The programs will focus on six geographic areas. The DHSS Division of Behavioral Health seeks to award a minimum of one program focusing on serving youth and a minimum of one program focusing on adults. The grantees will provide access within one to two days to all of the FDA approved medications for OUD treatment. The selected contractors will link provider organizations to Project Echo Opioid and other educational opportunities.

Proposals will be accepted from non-profit and government entities. Proposals are due by February 20, 2019.

This RFP is for a 1.25-year period, beginning April 1, 2019 through June 30, 2020. Successful applicants will be awarded funding for an initial term consisting of the remainder of fiscal year 2019 (April 1, 2019-June 30, 2019). Funding in the subsequent year of the 1.25 year duration is based on factors including the following: history of the applicant’s compliance with grant requirements, to include records of program performance, on-site program reviews, and prior year audits; priorities in applicable state health and social services plans; requirements of applicable state and federal statutes; and municipal ordinances or regulations applicable to the grant program. If funding permits and DHSS believes need exists, DHSS may consider projects for continued funding in subsequent program years.

Funding is through Alaska’s State Opioid Response Medication Assisted Treatment grant. Funds available for this program are anticipated to total up to $800,000 federal funding per fiscal year for fiscal years 2019 and 2020. Total estimated funding for the 1.25-year contract term is $1.6 million. Each bidder’s budget must include matching funds equal to 25% of the proposed DHSS funds.

The six geographic areas targeted to receive an award are Municipality of Anchorage, Fairbanks North Star Borough (part of the Interior region, Kenai Peninsula Borough (part of the Gulf Coast region), Matanuska-Susitna Borough (also known as the Mat-Su Valley), Southeast Region, and Southwest Region.

Grants will be awarded to eligible applicants to offer comprehensive addiction treatment services to Medicaid beneficiaries, people with commercial insurance, or to the uninsured on a self-pay or sliding scale basis. In order to build capacity to provide Office-Based Opioid Treatment (OBOT), the grantees will utilize an adaptation of Vermont’s “Hub and Spoke” service delivery model. The adapted model will emphasize stabilizing individuals in one setting and referring them out to “spokes” for less intensive services when appropriate. In general, the “hub” is responsible for providing comprehensive assessments and treatment protocols; initiating MAT and providing care during the initial stabilization period; coordinating referral and transition to ongoing care at the “spoke” site; providing specialty addictions consultation and support to ongoing care; and providing ongoing coordination for clinically complex individuals.

For this model, the grantee must have the following:

  • A care coordinator to ensure that there is coordination between the behavioral health agency and the prescriber, that the individual is seamlessly linked to the “spokes,” which may be a long-term prescriber, and recovery support services such as housing, peer support, employment, etc.; and that the individual is transitioning between levels of care as needed (moving into the “hub” for more intensive services if needed at any point).
  • A physician, physician assistant, or advanced nurse practitioner that agrees to provide MAT services to the provider organization, either through a contract or collaboratively within their own practice. The prescriber can provide services to shared individuals in treatment either at their primary care setting or on site at the behavioral health provider organization.
  • A peer support service for the individuals served, or the grantee must provide access to peer support activities within the community for the individuals served.
  • Evidence-based individual and group treatment.
  • Support for individuals in treatment, as needed, including housing vouchers and transportation vouchers to access treatment and support for the medication costs.

The “spoke” is the ongoing care system comprised of a prescriber and collaborating health and addictions professionals who monitor adherence to treatment; coordinate access to recovery supports; and provide counseling contingency management and case management services. The spokes can be outpatient substance use disorder treatment provider organizations, primary care provider organizations, federally qualified health centers, community behavioral health centers, or independent psychiatrists.

The RFP provisions encompass many of the goals of the Alaska “Statewide Opioid Action Plan 2018-2022,” which was released on November 26, 2018. This document noted that during 2017, Alaska experienced, 108 opioid-related deaths, of which 93% were due to opioid overdose. During 2010 through 2017, there were 623 identified opioid overdose deaths. The opioid overdose death rate increased by 77%, from 7.7 per 100,000 persons in 2010 to 13.6 in 2017. The rates of opioid-related inpatient hospitalizations were 28.5 per 100,000 persons in 2016 and 26.0 per 100,000 persons in 2017, with total inpatient hospitalization charges exceeding $23 million. On February 14, 2017, the Alaska Office of the Governor issued a disaster declaration for the opioid epidemic. The five-year action plan, compiled by the Office of Substance Misuse and Addiction Prevention (OSMAP), was developed with input from multiple agencies and community partners.

For more information about Alaska’s approach to the opioid crisis, contact: Clinton Bennett, Media Relations Manager, Alaska Department of Health and Social Services, 3601 C Street, Suite 902, Anchorage, Alaska 99503; 907-269-4996; Email: clinton.bennett@alaska.gov.

For more information about the RFP, contact: Alyssa Hobbs, Grants Administrator, Alaska Department of Health and Social Services, Post Office Box 240249, Anchorage, Alaska 99503; 907-465-1187; Fax: 907-465-3419; Email: alyssa.hobbs@alaska.gov.

The Missouri Department of Health and Senior Services (DHSS) is updating how it determines the nursing facility level of care (LOC) needed by older adults and adults with disabilities to qualify for Medicaid-funded long-term care, including Medicaid home and community-based services (HCBS). The state has not updated its HCBS eligibility requirements since 1982.

After a series of stakeholder meetings to inform HCBS stakeholders of national best practices in LOC and obtain input on ways to address the problems with the current LOC system, DHSS drafted a new LOC algorithm. On December 26, 2018, DHSS informed HCBS provider organizations about the release of the draft LOC algorithm, and asked them to submit feedback by March 31, 2019. The state intends to utilize the feedback to finalize the updated LOC algorithm during 2019.

The draft LOC algorithm scores the applicant’s level of impairment on the following factors:

  • Activities of Daily Living (ADLs), such as bathing, mobility, transfers, dressing, grooming, toileting, and eating
  • Instrumental Activities of Daily Living (IADLs), such as managing medications, meal preparation, and self-care
  • Behavior
  • Cognition
  • Safety- impacting health, such as fall risk during bathing and transfers, or wandering/exit-seeking
  • Treatments, such as suctioning, wound care, and ostomy care
  • Rehabilitation needs, such as physician-ordered therapies

In a November 27, 2018 presentation, “Missouri’s LOC Transformation; Final Stakeholder Meeting,” about the process to develop the new LOC system, DHSS said it believes the system needs improvement because it is based on decades old outdated medical standards, and thereby allows for those who may not really need the help to be eligible and leaves those most in need without a way to access care.

DHSS has three goals for the new LOC model:

  • Ensure access to care for those most in need of HCBS providing the services in the least restrictive community setting for as long as safely possible.
  • Use state resources on those most in need of HCBS compared to more costly facility placement.
  • Ensure that individuals able to live in the community are not inappropriately placed in a more restrictive setting.

In the November stakeholder meeting, DHSS said it intends to phase in the new approach. In Phase 1 during 2019 and 2020, DHSS will finalize and test the LOC algorithm. In Phase 2, DHSS will focus on predictive budgeting in the model and budget process. In Phase 3, DHSS will implement modifications, transition plans, regulation changes, and will submit waiver amendments.

Missouri’s current LOC requires individuals seeking long-term care to meet a 24-point eligibility requirement. Prior to 2017, people who scored more than 21 points on the DHSS LOC needs-based scoring system were eligible for HCBS. Beginning July 1, 2017, the state increased the LOC threshold to 24 points to reduce the number of participants and reduce costs. However, according to an audit released in December 2018 by the Missouri State Auditor, 74% of the 5,497 beneficiaries whose eligibility was reassessed between July 2017 and May 2018 received higher eligibility scores that met the new LOC threshold. The auditor questioned whether some participants were improperly scored to maintain their eligibility under the higher threshold. The previous year, 41% of those reassessed received higher eligibility scores. The auditor also noted that the LOC score does not effectively capture some aspects affecting participants’ needs limiting its usefulness as an eligibility threshold and management tool. Additionally, the units of authorized services differ regionally for participants with similar LOC scores.

A web tutorial to accompany the Draft LOC Algorithm is posted online at health.mo.gov.

For more information, contact: Division of Senior and Disability Services, Bureau of Long Term Services and Supports, Missouri Department of Health and Senior Services, 912 Wildwood, Post Office Box 570, Jefferson City, Missouri 65102; 573-526-8557; Email: LTSS@health.mo.gov.

Across the United States, Medicaid fee-for-service programs in 49 states and the District of Columbia provide coverage and reimbursement for some type of live video telemental health service. Only Massachusetts Medicaid does not presently reimburse for any mental health services delivered via telehealth technologies.

In 39 states and the District of Columbia, telehealth parity laws are on the books that require payers to cover telemental health services in some respect similar to the same way that in-person services are covered. However, the laws differ greatly. In some of the states, the laws apply to all payers including Medicaid; but in other states, only to commercial payers. Parity laws further vary in that some specify the types of services that can be provided via telehealth, and others call for equal reimbursement for telehealth services. For example, in some states, the parity laws simply state that telehealth services must medically necessary in order to qualify for coverage. In other states, the provisions state that payers should not exclude services provided via telehealth.

These findings are presented in the “Telemental Health Laws” survey report application, prepared by attorneys with national law firm Epstein Becker Green (EBG). EBG researched, analyzed, and compiled state-specific content relating to the regulatory requirements for professional mental/behavioral health professionals and stakeholders seeking to provide telehealth-focused services. The 2018 data is an update to EBG’s original 50-State Survey of Telemental/Telebehavioral Health (“2016 Survey”) and an appendix issued in 2017.

The report summary provided the following examples of increasing state support for telehealth:

  • In terms of professional licensing, all states require physicians to hold a valid license to practice medicine that has been issued by the state’s medical or osteopathic board. Several states (e.g., Indiana, Louisiana, Maine, Minnesota, Nevada, New Mexico, Ohio, and Oregon) continue to issue to qualified out-of-state physicians “special telemedicine licenses,” which generally provide these physicians with a way to practice across state lines without having to go through the required process to obtain a full professional license.
  • Several states are using telehealth to address the opioid crisis. In 2017, Indiana passed legislation that expanded the list of controlled medications that can be prescribed via telehealth platforms, including some that can be used to treat opioid dependence disorders. Michigan and Missouri permit the prescribing of controlled substances via telehealth as long as physicians adhere to the standards of care applicable to their profession relative to the act of prescribing controlled substances. Arizona expanded its existing parity law in January 2019 to include coverage of addiction disorder treatment services provided through telehealth.
  • Most state Medicaid programs no longer limit telehealth reimbursement to services for beneficiaries in rural geographic areas; although restrictions remain on where Medicaid beneficiaries can be located to receive telehealth services. Thirteen states explicitly allow for a Medicaid recipient’s home to serve as an originating site under certain circumstances. Kentucky adopted legislation that goes into effect on July 1, 2019, that will allow for telehealth visits to take place in a consumer’s home and will require commercial health plans to reimburse psychologists, therapists, and other non-physician clinical professionals for telehealth visits.
  • Many states have expanded their lists of clinical professionals eligible for telehealth reimbursement to extend beyond physicians. Virginia expanded its policies to allow 13 different types of clinical professionals to be reimbursed for telehealth services.

The report authors concluded that overall interest in, and acceptance of, telehealth services in the U.S. continues to increase. The key drivers for expanded telehealth are bipartisan support, greater advocacy from Medicare and Medicaid, and the opioid epidemic.

The survey findings are only available as a free app for mobile devices. The app format provides the following data points for each state:

  • Licensure requirements for clinical professionals providing telemental health services
  • Criteria for establishing professional-patient relationships via telehealth technologies
  • Accepted modalities for the delivery of telemental health services (e.g., telephone, video) in order to meet standards of care
  • Coverage and reimbursement issues
  • State requirements for remote prescribing and controlled substances

EBG’s primary focus is health care and life sciences; employment, labor, and workforce management; and litigation and business disputes. The firm published the “2018 Telemental Health Laws” app in December 2018. An overview and links to app download sites are available online at www.EBGLaw.com.

PsychU reported on mental health telemedicine in “Medicare Rural Telemedicine Mental Health Visits Increased 45% Annually Between 2004 & 2014,” which published on June 6, 2017.

For more information, contact: Piper Hall, Director of Marketing Communications, Epstein Becker Green, 1227 25th Street NW, Suite 700, Washington, District of Columbia 20037; 202-861-1872; Fax: 202-296-2882; Email: plhall@ebglaw.com.

On January 18, 2019, the Centers for Medicare & Medicaid Services (CMS) approved Arizona’s Medicaid waiver amendment to implement work and community engagement reporting requirements. The Arizona Health Care Cost Containment System (AHCCCS) Works program requirements may begin no sooner than January 1, 2020. The amendment requires that certain individuals, ages 19 through 49, engage in qualifying community engagement activities for at least 80 hours per month, and report monthly that they are meeting the work and community engagement requirements. There will be various exemptions from the requirement, including but not limited to: pregnant women; beneficiaries who are medically frail; and beneficiaries who are in active treatment with respect to a substance use disorder.

Beneficiaries can comply with the work and community engagement requirements by participating in several activities, including employment (including self-employment); or in employment readiness activities, which include less than full-time education, job or life skills training, and health education classes; job search activities; or community service. Beneficiaries who successfully complete and report compliance on a monthly basis will have no disruption in coverage. Arizona will provide a three-month grace period for individuals to meet the community engagement requirements once determined otherwise eligible.

If a beneficiary does not fully comply with the community engagement requirements, including failure to report compliance for any month after the three-month grace period, the state will suspend the beneficiary’s eligibility for two months. Beneficiaries with suspended eligibility will have their eligibility reactivated immediately after the end of the two-month suspension if they continue to meet all other eligibility criteria. Beneficiaries in suspension status may have their eligibility reinstated earlier if it is determined that a beneficiary qualifies for another category of Medicaid eligibility that is not subject to the community engagement requirements or is currently exempt from the requirements.

The waiver amendment also allows the state to change its approach to retroactive eligibility. Previously Arizona had a waiver of retroactive eligibility through December 31, 2013, to provide health care services through a prepaid, capitated managed care delivery model that provided acute and long-term care. Under the newly approved waiver amendment, Arizona will test whether waiving retroactive coverage for certain groups of Medicaid beneficiaries encourages them to obtain and maintain health coverage, even when healthy, or to obtain health coverage as soon as possible after becoming eligible (e.g., if eligibility depends on a finding of disability or a certain diagnosis). The new amendment begins no sooner than April 1, 2019. The state will evaluate whether the new policy increases continuity of care by reducing gaps in coverage that can occur when beneficiaries churn on and off Medicaid or sign up for Medicaid only when sick, and facilitates receipt of preventive services when beneficiaries are healthy.

In the waiver approval letter, CMS noted that it would not approve Arizona’s request to implement a five-year maximum lifetime limit for beneficiaries subject to but who fail to comply with, the community engagement requirements. Instead, Arizona will impose the two-month eligibility suspension when beneficiaries fail to comply with community engagement reporting requirements. CMS did not approve Arizona’s request for demonstration expenditure authority at the medical assistance matching rate for the costs associated with the design, development, installation, operation, and administration of systems necessary to implement AHCCCS Works community engagement programs and activities.

Arizona is now the eighth state with approval to operate a community engagement program to incentivize certain adults to participate in activities like job training, community service, and employment. The others are, Arkansas, Indiana, Kansas, Kentucky, Michigan, New Hampshire, and Wisconsin

PsychU reported on this topic in “Arizona Submits Request To Add Work Requirements To Medicaid Program,” which published on January 24, 2018.

For more information, contact: Heidi Capriotti, Public Information Officer, Arizona Health Care Cost Containment System, 801 E Jefferson Street, Phoenix, Arizona 85034; Email: Heidi.Capriotti@azahcccs.gov

On January 15, 2019, Kaiser Permanente announced a $5.2 million investment in a 41-unit affordable housing complex in East Oakland, California. The purchase is through the Housing for Health Fund, and is part of Kaiser’s initiatives intended to improve health outcomes by creating stable housing for vulnerable populations. The Housing for Health Fund is a new joint-equity fund between Enterprise Community Partners and the Kaiser Permanente business that serves the Bay Area. The housing complex is located near Kaiser Permanente’s national headquarters.

The Housing for Health Fund partners have a development partnership with the East Bay Asian Local Development Corporation (EBALDC). The building is in a district scheduled for renovation, which would render the units unaffordable for existing residents. The total purchase price for the 41-unit building was $8.7 million. By purchasing the building, EBALDC can upgrade the building appropriately and keep it affordable. EBALDC will also provide residents with the opportunity to get supportive social services.

The East Oakland purchase is the first investment of Kaiser Permanente’s $200 million “Thriving Communities Fund.” First announced in May 2018, the fund is one of the largest private-sector initiatives with a concentration on homelessness. Additional efforts for the fund will include a $100 million national loan fund established to create and preserve multi-family rental homes for low-income residents in the communities that Kaiser Permanente serves in Northern and Southern California, Washington State, Oregon, Hawaii, Colorado, Georgia, Maryland, Virginia, and the District of Columbia. The $100 million loan fund is comprised of $50 million from Kaiser Permanente and $50 million from Enterprise Community Partners. Kaiser Permanente also announced an effort to end homelessness for more than 500 Oakland-area residents who are over age 50 and who live with at least one chronic health condition.

Non-profit Kaiser Permanente provides health care services for more than 12.2 million members in eight states and the District of Columbia. Additional community health initiatives by the company include several healthy eating, active living, health education, and policy direction efforts for health improvement.

Enterprise Community Partners specializes in well-designed affordable housing. The company has invested $36 billion in the effort and has created nearly 529,000 homes.

EBALDC is a non-profit community development organization, concentrating in Oakland and the East Bay area of the San Francisco Bay Area. The organization develops and manages high-quality affordable apartments and homes, and commercial spaces, for local small businesses and community organizations. EBALDC fosters increased economic opportunities for low-income families and individuals.

PsychU reported on this topic in “Kaiser Permanente To Invest $200 Million Into Community-Based Efforts To Tackle National Homeless Crisis,” which published on June 21, 2018.

For more information, contact: Sara Vinson, National Media Relations, Kaiser Permanente, One Kaiser Plaza, Oakland, California 94612; 510-271-5953; Email: National-Media-Relations@kp.org

On January 8, 2019, the Massachusetts Attorney General awarded $3 million in grant funding for the Social Determinants Partnership initiative to support innovative health care partnerships. The Social Determinants Partnership initiative focuses on the impact that identified social factors play in relation to health equity, including nutrition, safe housing, violence prevention, and substance use. Awards were issued in varying amounts up to $250,000. The initiative runs through December 31, 2021. No program extensions will be available.

A total of 13 partnerships were funded under the Social Determinants Partnership grant, with efforts covering localities, regions, and the entire state. Partnerships are in Boston, Everett/Revere, Franklin County, Hampden County, Lowell, Lynn, New Bedford, the “Western Massachusetts” area, and Worcester County. No information was available regarding the exact amounts awarded to each partnership.

  1. Boston: Ecumenical Social Action Committee (ESAC) will partner with the Uphams’ Corner Health Committee Inc. and Johns Hopkins School of Nursing for the Program of All Inclusive Care for the Elderly (PACE). This program is administered by MassHealth and Medicare to provide a range of in-home care and services to the elderly (such as assessing and modifying their homes to reduce the risk of falls).
  2. Boston: Community Care Cooperative will partner with the Boston Public Health Commission, Boston Housing Authority, and MLPB (formerly the Medical-Legal Partnership of Boston) to improve maternal and child health by stabilizing housing for approximately 50 housing-insecure pregnant and postpartum women.
  3. Boston: Children’s Services of Roxbury will partner with Boston Public Schools; Beats, Rhymes & Life; Boston Afterschool & Beyond; and the Massachusetts Department of Mental Health to increase access to behavioral health services for young people who have experienced trauma. The program will use music therapy to engage at-risk adolescents who are reluctant to participate in traditional behavioral health services.
  4. Boston: Health Care Without Walls will partner with Brigham and Women’s Hospital to reduce health disparities and health care costs for homeless pregnant and postpartum women and their babies. The program will provide intensive care management and nurturing trusting relationships by a field team that builds longstanding personal relationships for outpatients.
  5. Everett/Revere: Cambridge Health Alliance will partner with the Greater Boston Food Bank, Good Measures LLC, Tufts Health Plan, and Institute for Community Health. The partnership will operate a free monthly mobile food market in Revere, and organize regular health fairs to provide health screenings, vaccinations, information on social services, assistance in social service enrollment, and evaluating the impact of improving access to healthy produce on health and well-being.
  6. Franklin County: Community Action Pioneer Valley will partner with Community Health Center of Franklin County and the Center for Human Development. This partnership will offer mental health support to improve the health of high-risk adolescents and young adults in Franklin County and the North Quabbin region, and help them participate fully in work, family and community life.
  7. Hampden County: Baystate Health Care Alliance/BeHealthy Partnership ACO will partner with Community Legal Aid. This grant launches the BeHealthy Medical-Legal Partnership, which aims to improve the health and well-being of low-income residents of Hampden County by adding legal assistance and advocacy to the range of services offered by health care teams at five community health centers in Springfield: Caring Health Center, Baystate Brightwood Health Center, Baystate Mason Square Neighborhood Health Center, Baystate High Street Health Center Pediatrics and Baystate High Street Health Center Adult Medicine.
  8. Lowell: UTEC Inc. will partner with Lowell Community Health Center. This partnership will address behavioral health needs in young adults in order to reduce recidivism, increase employability, and promote educational attainment.
  9. Greater Lynn: YMCA of Metro North will partner with Lynn Community Health Center. This partnership will support individuals recovering from drug and alcohol addiction and their families using wellness practices combined with a 12-step model that will enhance recovery outcomes for participants.
  10. Massachusetts Statewide: Massachusetts Housing and Shelter Alliance in partnership with the Community Healthlink Inc., Duffy Health Center, and Mercy Healthcare for the Homeless Program to create the “Health Care for Housing” (HCH) initiative. The partnership will address chronic homelessness and the impact it has on the health care system. The grant will help community health workers engage with long-term homeless individuals who frequently use emergency health care and behavioral services to help them move toward permanent supportive housing and change how they use health care services. One community health worker (CHW) will be stationed at each of the three health centers to provide personalized care to a targeted group of chronically homeless individuals with complex health needs. The CHWs will help these individuals navigate the medical system, and more importantly, secure stable permanent housing coupled with ongoing support services. The HCH is a continuation of MHSA’s work to develop solutions to end chronic homelessness.
  11. New Bedford: Health Law Advocates will partner with Boston Medical Center Health System Inc. This partnership will support a new site in New Bedford for Health Law Advocates’ Mental Health Advocacy Program, which provides free legal assistance for low-income children that need access to mental health care.
  12. Western Massachusetts: Collaborative for Educational Services’ Healthy Hampshire initiative will partner with the Hilltown Community Health Center, Hilltown Community Development Corporation, and the Pioneer Valley Planning Commission. This partnership will address identified inequities in the food system in the Hilltown region by designing and implementing a distribution system that connects underserved community members to healthy, affordable produce. It will also promote walk-friendly communities by working with six Hilltowns to develop walking maps and community design changes that promote pedestrian safety, accessibility, and connectivity.
  13. Worcester County: LUK Crisis Center Inc. will partner with UMass Memorial Health Alliance-Clinton Hospital. This partnership will support families as they cope with addiction through family-centered approaches that address prevention, intervention, treatment, and recovery from substance use and opioid addiction.

For more information, contact: Office of Massachusetts Attorney General Maura Healey, 1 Ashburton Place, 20th Floor, Boston, Massachusetts 02108; 617-727-2200

For the past year, in almost every meeting that I’ve attended that focused on provider reimbursement from health plans, the number one concern is the definition of “value.” The question—if we are going to reimburse some organizations more than others for a particular service based on the “value” of that service, who defines “value” and how is it measured?

As a reminder, the “value equation” is quite simple—”performance” for the “cost.” But while cost is easy to determine, defining “performance” is a continuing challenge in the health and human service field.

Where are we now? The big payers—Medicare, Medicaid, and employers—predominantly rely on either National Committee on Quality Health Assurance (NCQA) Healthcare Effectiveness Data Information Set (HEDIS) measures, or their own set of measures (like CMS STARS) to assess the quality of health plans and accountable care organizations (ACO). The health plans and ACOs—over 90%—are focused on improving those “big picture” payer metrics.

But one key question is whether those measures really work for consumers with complex conditions in general, and for behavioral health in particular. And even on the limited number of NCQA HEDIS and CMS STARS measures that might apply to this consumer population, the performance isn’t great. It’s a work in progress. According to the latest Centripetal reference guide, health plan performance on the behavioral health measures has been mixed, with some measures showing performance gains, and others showing performance declines (see Trends in Behavioral Health: A Reference Guide On The U.S. Behavioral Health Financing & Delivery System).

This issue—and how it affects the emerging value-based contracts between specialty provider organizations and health plans—was the topic of the session, What Do We Mean By “Value”? A Discussion Session On Defining, Measuring & Reporting Value. The session, facilitated by OPEN MINDS Senior Associate Joseph P. Naughton-Travers, brought together three health plan executives who are making this happen—Angie Costello, Assistant Vice President, Value-Based Payment Products, Beacon Health Options; Matt Miller, Senior Vice President, Public Sector, Magellan Healthcare; and Zoe Webb, Network and Contract Director, Cigna Behavioral Health-Northeast Region.

The panel discussed that at this point, there are few alternatives to the focus on HEDIS and CMS STARS measures. And their overall message was that in negotiations with health plans, it up to the executives of specialty provider organizations to “prove” how they can deliver “value” as currently defined. The panel offered four pieces of advice on this process.

Understand your impact on HEDIS measures—One of the primary and most important data sets that provider organization executives need to keep in mind are HEDIS measures (see ‘Rapid Access’ Might Just Be Your Next Health Plan Conversation and Solve The Problem, Gain A Partner.) Ms. Webb explained that provider organizations come with data and Cigna compares that with the HEDIS measures to designate who has have met those benchmarks.

Know what you are good at—Once a provider organization’s executive team understands the perspective of a potential health plan customer, the next step is for that team to know what they are good at today, and how incremental improvements can be made from a partnership built on the data (see Digital Transformations Demand Digital Dexterity). The panel was adamant that before a value-based discussion can happen, there needs to be a discussion about data and complete buy-in at all levels of the organization. Mr. Miller explained, “Two things jump out. The whole organization needs to be ready for change. And second, you need to understand what data you are being measured by. That needs to be transparent.” Ms. Webb also noted that this is incremental and starts with a partnerships, and building those partnerships has to happen on the data. Before there is even a value-based discussion, there has to be a discussion about the data.

Start the conversation with a value story—The data, both provider organization data and health plan data, is key to developing a contract. But a key is to put organizational performance in context and create a narrative of how the provider organization services can improve specific performance metrics and “value” to consumers. Ms. Webb explained that Cigna looks at member satisfaction outcomes as one of the primary measurements, and if providers want to begin to track what they think are the metrics for proving better quality of life, and what that means, that is a big positive. This will vary depending on the population and what their challenges are.

Ms. Costello added, “As a payer, we are focusing on VBPs with providers where membership attributions are high. Those relationships will yield great opportunities for us to recognize value to our members. Know your membership and how you can demonstrate your value to their total care.”

Be prepared operationally—As the field shifts away from fee-for-service (FFS) operations, provider organizations do need new operational processes for the wholeprocess of delivering and managing services within a value-based model. Mr. Miller explained:

We can write the contract that you need, but there must be someone who can administer it, for both the payer and provider. If we can’t play the claim, it won’t do any good. Most of the value-based reimbursement we’re participating in today is at the grass roots level and in partnership with the provider. It must be, “can we do this?”

Ms. Costello added, “No matter how solid your clinical expertise and performance, strong administrative and billing support at the payer/provider level is essential to a positive VBP relationship.”

The panel’s final takeaway for the day—approach this process with patience. This kind of transformation and contracting isn’t the kind of thing that will happen quickly, but will involve a lot of relationship building, time, and hurdles along the way. Mr. Miller noted, “It’s not going to be this monumental thing that happens tomorrow. It is happening, and we know it’s happening. It’s nothing to be frightened of. It’s something to be excited about.”

Ms. Costello added, “Establishing the right outcomes and payment model takes time. It’s a collaborative effort between the payer and provider. Be patient, as we build those VBPs together. We all are striving for the same primary outcome…better care for our members.”

On December 28, 2018, the U.S. Department of Veterans Affairs (VA) awarded three regional contracts to Optum Public Sector Solutions (also known as OptumServe) for the new Community Care Network (CCN). The CCN will allow veterans who are unable to receive care at the local VA medical center to receive care from high-performing licensed civilian health care professionals and provider organizations. The VA awarded Optum contracts with an aggregate value of $55 billion for Regions 1, 2, and 3. The contract has an initial base term of one year followed by seven individual option years.

The contract award for Region 4 is expected by early April 2019. Contract awards for Regions 5 and 6 are expected by end of calendar year 2019. Under these contracts, the CCN regional administrators will develop regional networks of high-performing licensed civilian health care professionals and provider organizations who will work together with VA health care professionals to deliver medical, dental, and pharmacy services to veterans who are unable to receive care at local VA medical centers. Mental health and addiction treatment services are included. In all four CCN Regions, the contractor will initiate care at two sites in each region within 180 days and at all sites within each region in 12 months, from the date of the contract award.

The three regional contracts awarded to Optum cover VA medical centers in the Eastern and Central regions of the United States, as follows:

  • Region 1 covers Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, Vermont, Virginia, Washington, D.C., and West Virginia.
  • Region 2 covers Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin.
  • Region 3 covers Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, Oklahoma, Puerto Rico, South Carolina, Tennessee, and the U.S. Virgin Islands.

The CCN replaces the existing Patient Centered Community Care (PC3) and the Veterans Choice Program (VCP). In the announcement, the VA said the CCN will be the standard contract vehicle allowing VA to purchase care for veterans from community health care provider organizations using industry-standard approaches and guidelines in support of the VA MISSION Act of 2018 to administer services and manage the network to its full potential. The VA will provide care coordination for the CCN.

The PC3 and the VCP community care networks will transition out over a designated period of time to allow for the CCN implementation to occur region-by-region in a phased approach. The goal is to avoid disruptions for veterans served by the two programs. Until CCN is fully implemented in all regions, TriWest Healthcare Alliance, which currently administers the VCP, has expanded its network to support veteran and provider organization care coordination.

The VA MISSION Act of 2018 was signed on June 6, 2018. The provisions are intended to streamline the VA’s community care programs so that the VA would have a single method for veterans to receive care from community-based provider organizations if their local VA medical center is not able to provide a timely appointment or the medical center is located outside a reasonable transit time from the veteran’s home. The VA had initially issued the CCN request for proposals (VA79116R0086) on December 28, 2016. The VA said it would award regional contracts to up to four organizations.

PsychU reported on this topic in “Veterans Administration To Launch Community Care Network In 2018,” which published on September 1, 2017.

For more information, contact:

  • Patricia (Patty) Horoho, Chief Executive Officer, Optum Public Sector Solutions Inc., 800 King Farm Boulevard, Suite 500, Rockville, Maryland 20850; or News Room, Optum, 11000 Optum Circle, Eden Prairie, Minnesota 55344; 888-445-8745; Email: newsroom@optum.com
  • Community Care Network, U.S. Department of Veterans Affairs, 810 Vermont Avenue NW, Washington, District of Columbia 20420; Email: https://iris.custhelp.com/app/ask; or Public Relations, U.S. Department of Veterans Affairs, 810 Vermont Avenue NW, Washington, District of Columbia 20420; 202-461-7600; Email: va.media.relations@va.gov

On January 9, 2019, the Alabama Medicaid Agency issued a request for proposals (RFP 2019-ACHN-01) to manage regional care coordination services for the new Alabama Coordinated Health Network (ACHN). The state is establishing the ACHN in 2019 to streamline its current care coordination programs into a single program for each of seven regions that will be managed by single, region specific Primary Care Case Management Entities (PCCM-E) throughout the state. In addition to managing care coordination, the PCCM-E will coordinate transportation needs for assigned recipients, as needed. Delivery of medical services is not part of the ACHN; Medicaid will pay provider organizations directly. Proposals are due by February 25, 2019. Bidders can submit proposals on one or all seven regions in the state, but must submit a separate proposal for each individual region. The aggregate value of the first-year contracts is about $40.9 million; the maximum contract values for the seven regions range from $5.5 million to $6.6 million. If approved by the federal government, the networks are expected to be implemented on October 1, 2019.

Currently, care coordination services are now provided by 12 maternity programs, six health home programs, and by Alabama Department of Public Health staff in 67 counties. The goal is to increase beneficiary access to care coordination. The ACHN will combine the following four programs: Family Planning Care Coordination services, Patient 1st State Plan Amendment (SPA) Care Coordination services, Health Home (SPA) functions, and Maternity Care (1915(b) Waiver) functions.

The ACHN will serve full-benefit, non-institutionalized children, pregnant women, and aged/blind/disabled beneficiaries in the Patient 1st population, maternity care population, and Plan First (family planning) population. Excluded populations include: people dually eligible for Medicare and Medicaid, those in an institutional setting (including prison or jail), those enrolled in the state’s home- and community-based services waiver, children in custody of the Department of Youth Services, and people using hospice services.

The state has established a budget for each region based on the number of eligible individuals living in the region and the volume of care coordination services currently provided. The budget includes financial considerations for those regions that are more rural. Reimbursement for the PCCM-Es will be a combination of the following: a per member per month payment for quality improvement activities; payment for specific care coordination services delivered based on the complexity/level of activity provided during a month for the recipients; and additional incentive payments based on achieving quality metrics. ACHN payments to physicians will be tiered and based on services, not participation. The Patient 1st panel system will end, meaning that primary care consumers can visit any Medicaid Primary Care Physician.

The PCCM-Es will have clinical and administrative incentive metrics focused on ambulatory care items under control of the PCCM-E and primary care physicians. The RFP noted that the PCCM-E must not exceed caseload limits, as follows:

  • Staff providing services in the General Care Coordination Program must not have a caseload of more than 50 eligible individuals per one full time equivalent.
  • Community Health Workers must not have a caseload of more than 100 eligible individuals per one full time equivalent.
  • Maternity Care Coordinators must not have a caseload of more than 365 eligible individuals per caseload per one full time equivalent.
  • Family Planning Care Coordinators must not have a caseload of more than 250 eligible individuals per one full time equivalent.

The Alabama Medicaid Agency will provide the PCCM-Es with a targeted list of eligible individuals for assignment into care coordination screening and assessment, as well as monitoring medical review. The assignment list will be based on the Milliman Advanced Risk Adjusters (MARA) risk assessment tool, emergency room claims, and total cost. The Alabama Medicaid Agency will review updated data each month and can assign all eligible individuals that meet any one criterion. If the care coordination program is exceeding its targets and fiscal limitations, the Alabama Medicaid Agency intends to limit assignments to only eligible individuals who meet multiple criteria. The currently planned criteria are as follows:

  • Total MARA risk score of 5 or greater
  • Inpatient MARA risk score of 2.5 or greater
  • Emergency Department (ED) MARA risk score of 0.4 or greater
  • Medication MARA risk score of 1 or greater
  • Risk score increase in the past 6 months of 2 points and 25%
  • ED visits of 6 or more in the past year and at least one in the past two months
  • Total cost greater than $20,000 for previous year

The RFP noted that about 6.9% of potential eligible Medicaid beneficiaries meet these criteria. The state does not anticipate that each eligible individual will be appropriate for care coordination. Each month’s assignment list will include eligible individuals who have not previously met the criteria and eligible individuals who have not been assigned in more than six months.

For more information about RFP 2019-ACHN-01, contact: Varonica Wagner, Alabama Medicaid Agency, Lurleen B. Wallace Building, 501 Dexter Avenue, Post Office Box 5624 , Montgomery , Alabama 36103-5624; Email: achnrfp@medicaid.alabama.gov

For more information about the Alabama Medicaid transformation, contact: Melanie Cleveland, Communications Director, Alabama Medicaid Agency, 501 Dexter Avenue, Montgomery, Alabama 36104; 334-353-9363; Email: Melanie.cleveland@medicaid.alabama.gov

By 2021, the California Department of Health Care Services (DHCS) will move Medicaid pharmacy purchasing from managed care to state-administered fee-for-service (FFS). The shift is due to an executive order issued on January 7, 2019, by California’s new Governor, Gavin Newsom. The goals are to give the state greater leverage in negotiating with pharmaceutical companies, standardize the Medi-Cal pharmacy benefit statewide, improve pharmacy services, and to maintain quality and outcomes.

Under the order, by July 12, 2019, DHCS, the state Health and Human Services Agency, and the California Pharmaceutical Collaborative will review all state purchasing initiatives, and will consider additional options to maximize the state’s bargaining power, including the state Medicaid program, Medi-Cal. This review will account for and supplement the DHCS transition of pharmacy services to a FFS benefit. The review may include recommendations to change state law or current processes for procuring and reimbursing for pharmacy services.

Drugs for most of California’s 11.9 million Medicaid and CHIP enrollees are covered by managed care plans operated by private insurers. The managed care plans are at risk for physical health pharmacy. Mental health and addiction treatment drugs are excluded from the health plan capitation rates. They are covered as fee-for-service (FFS) and managed by the state. For the approximately two million FFS beneficiaries, all pharmacy is covered as FFS.

By March 15, 2019, the Department of General Services, in consultation with the California Pharmaceutical Collaborative, will develop a list of prescription drugs that could be prioritized for bulk purchasing initiatives or reexamined for potential renegotiation with the manufacturer. In developing the list, DGS will consider the 25 highest-cost prescription drugs, which currently account for half of the state’s prescription drug spending. The prioritization shall be based on criteria such as the price of the drug, and the extent to which the drug is subject to competition, such as a sole-source drug without a generic or alternative option. The report to be submitted in March will include a list of prescription drugs recommended for future bulk purchasing initiatives, and the rationale for excluding any of the 25 highest-cost drugs.

By May 17, 2019, DGS will create a framework, based on the prioritized list, for enabling private purchasers to benefit from state bulk pharmaceutical purchasing. The framework should include the opportunity for private purchasers—small businesses, health plans, and the self-insured—to opt in to a state purchasing program. DGS and the California Pharmaceutical Collaborative should recommend legislative changes to make prescription drugs more affordable.

The order noted that since 2012, state spending on prescription drugs has increased by 20% per year. The California Department of Insurance (CDI) and the California Department of Managed Health Care (DMHC) recently reported on prescription spending in 2017 by commercial health plans. The nine health plans that reported to CDI had paid $1.2 billion for prescription drugs. The 25 health plans that reported to DMHC paid nearly $8.7 billion

For more information, contact:

  • California Office of Governor Gavin Newsom, c/o State Capitol, Suite 1173, Sacramento, California 95814; 916-445-2841; Fax: 916-558-3160
  • Office of Communications, California Department of Health Care Services, Post Office Box 997413, Mail Stop 0000, Sacramento, California 95899-7413; 916-440-7660; Email: DHCSPress@dhcs.ca.gov

On December 21, 2018, the National Health Law Program and the Southern Poverty Law Center and Jonesboro-based Legal Aid of Arkansas filed a brief that said that nearly 17,000 Arkansas Medicaid beneficiaries subject to work requirements lost Medicaid coverage. The premise of the brief is that the work requirement functions as a “simple benefits cut,” which is not permitted under federal Medicaid rules.

In June 2018, the Arkansas Department of Human Services (DHS) implemented a Medicaid 1115 waiver, Arkansas Works, that included work and community-engagement requirements for non-exempt enrollees. The Arkansas Works Medicaid program is a private option program. The state uses Medicaid funds to purchase private health insurance for those who are eligible for expanded Medicaid. Most of the more than 234,000 enrollees receive the coverage through private plans, with the Medicaid program paying the premium. From June to October 2018, the requirement was implemented for enrollees ages 30 to 49; and in January 2019, went into effect for enrollees ages 19 to 29. Beneficiaries who are not exempt from reporting for the work and community engagement requirement must report at least 80 hours of work, volunteering, or other approved activities each month to maintain their coverage. There is no “documentation” in the traditional sense – enrollees report their income, volunteer hours, etc. through the online site or by phone and attest to the accuracy of that each month. During the random quality assurance process, a beneficiary may be asked to verify what he or she reported by providing documentation at that later time. Enrollees who are not exempt from reporting must report each month. If an enrollee does not report or meet the requirement for any three months in a calendar year, then their coverage ends for the remainder of that calendar year. There is not a consecutive requirement. The state has filed monthly reports on beneficiary reporting status. DHS reported that in August coverage was ended for 4,353 beneficiaries who failed to submit the community engagement data, in September, another 4,109 lost coverage; in October another 3,815 lost coverage, and in November 4,685 lost coverage.

The brief was filed as part of the complaint, Gresham v. Azar, which was filed in the U.S. District Court for the District of Columbia in August 2018. The complaint alleges that the Centers for Medicare & Medicaid Services (CMS) focused on goals other than providing health coverage when approving the waiver, including improving health outcomes and moving enrollees out of poverty. The original complaint also argues that U.S. Health and Human Services failed to adequately consider the effect the requirement would have on the Medicaid program’s goal of providing health coverage for low-income people.

In November 2018, the plaintiffs filed an amended complaint, and a motion for summary judgment. The plaintiff’s motion for summary judgment states that the administration did not approve the “Arkansas Works Amendment” to promote the objectives of Medicaid, “but to fundamentally transform the Medicaid program through agency action.” CMS issued a “State Medicaid Director Letter announcing a new policy establishing requirements for states that wish to condition medical assistance on compliance with work requirements, with minimal evidence for how work requirements will further Medicaid’s purpose.” In their response to the motion for summary judgment, the state federal government said the CMS acted within its authority to approve the Arkansas Works 1115 Medicaid waiver in March 2018 to allow adding the work requirement. The lawsuit will be decided by U.S. District Judge James Boasberg, who blocked a similar requirement from taking effect in Kentucky in June 2018. Nine Arkansas Works enrollees are named as plaintiffs.

The Arkansas work requirement applies to enrollees in the expanded part of the state’s Medicaid program, known as “Arkansas Works.” The Arkansas Works Medicaid program is a private option program. The state uses Medicaid funds to purchase private health insurance for those who are eligible for expanded Medicaid. Most of the more than 234,000 enrollees receive the coverage through private plans, with the Medicaid program paying the premium. To meet the work requirement, enrollees who don’t qualify for a reporting exemption must spend 80 hours a month on work, volunteering or other approved activities; and report what they did through a state website or over the phone. Enrollees who fail to meet the requirement for three months during a year have their Arkansas Works coverage end, and they cannot re-enroll for the rest of the year.

The plaintiffs in Gresham v. Azar allege the following:

  • Work requirements dictated under Arkansas Works result in residents unnecessarily losing health care coverage.
  • By disallowing re-enrollment for Medicaid after being dropped from the program for work requirements, the state prevents these citizens from having the necessary health care to keep themselves healthy to continue to work.
  • Arkansas Works permits Arkansas to eliminate the three months of retroactive coverage required under the Medicaid Act and provide only one month of coverage prior to the month of application. This prevents the enrollee to have coverage during any gap between when they were disenrolled, up to the month prior to when they re-enroll.
  • Some enrollees are unable to work due to psychological, physical, or medical restrictions; and therefore, cannot meet work requirements under Arkansas Works.
  • Arkansas Works restricts enrollees to only online submission of work requirement and exemption documentation, and that many enrollees may not know how to use computers, may not have access to computers or the internet, and have difficulty working with the online portal.

The plaintiffs ask the following of the court:

  • Declare that the January 2018 HHS letter, from the U.S. Department of Health and Human Services to State Medicaid Directors, allowing implementation of work requirements violates the Administrative Procedure Act, the Social Security Act, and the United States Constitution.
  • Declare that approval of Arkansas Works Amendment violates the Administrative Procedure Act, the Social Security Act, and the United States Constitution.
  • Forbid the State of Arkansas from implementing the Arkansas Works Amendment.
  • Require the state to pay for the plaintiffs’ attorney fees.

PsychU reported on this topic in “MACPAC Asks HHS To Pause Arkansas Medicaid Work Requirement Disenrollments,” which published on December 24, 2018.

For more information about the state’s policies, contact: Marci Manley, Deputy Chief of Communications, Arkansas Department of Human Services, State of Arkansas, Post Office Box 1437, S201, Little Rock, Arkansas 72042; 501-683-5286; Email: Marci.Manley@dhs.arkansas.gov.

For more information about the complaint, contact:

  • Kevin De Liban, Attorney and Economic Justice Practice Group Leader, Legal Aid of Arkansas – West Memphis, 310 Mid-Continent Plaza, Suite 420, West Memphis, Arkansas 72301; 870-732-6370, ext. 2206; Email: kdeliban@arlegalaid.org; or Trevor Hawkins, Staff Attorney, Legal Aid of Arkansas, 714 S Main Street, Jonesboro, Arkansas 72401; 870-972-9224, ext. 6313; Email: thawkins@arlegalaid.org.
  • Jeremy Leaming, Media Contact, National Health Law Program, 1444 I Street NW, Suite 1105, Washington, District of Columbia 20005; 202-289-7661; Email: leaming@healthlaw.org.

In the Medicare physician fee schedule for 2019, the Centers for Medicare & Medicaid Services (CMS) modified its proposals to flatten payments for evaluation and management (E&M) visits. CMS had initially proposed single blended payment rates for both new and established visits for office/outpatient E&M levels 2 through 5. After reviewing comments on the proposed rule, CMS opted to maintain a separate level of payment for the most complex patient care, or level 5 visits. CMS will delay implementing the E&M coding reforms until 2021.

Under the proposed rule, reimbursement for a new visit ranged from $44 for a simple standard check-up, to $135 for any level of intensity beyond a standard new visit check-up. Proposed reimbursement for a recurring visit for an established consumer ranged from $24 for a simple standard check-up, to $93 for any other level of intensity.

The rates established by the final rule were highlighted in a graphic “Medicare Changes To Evaluation & Management Payment Amounts.” Reimbursement for a new visit will be $130 for visits at levels 2, 3, and 4. For a new visit at level 5, reimbursement will be $211. Reimbursement for an established visit will be $90 for visits at levels 2, 3, and 4. For an established visit at level 5, reimbursement will be $148. Both new and established visit rates will be augmented by specialized and extended add on codes.

Revised Medicare E&M Payment Amounts, Final Rule Physician Fee Schedule For 2019

Visit Type New Levels 2 To 4 New Level 5 Established Levels 2 To 4 Established Level 5
Base $130 $211 $90 $148
Primary or Or Specialized Add-On $143 n/a $103 n/a
Extended Add-On $197 for 38 minutes n/a $157 for 34 minutes n/a
Both Add-Ons $210 n/a $170 n/a
Prolonged n/a $344 for 90 minutes n/a $281 for 70 minutes

PsychU reported on this topic in “Medicare Proposes ‘Flat Fee’ Physician FFS Payment For Outpatient Visits,” which published on September 4, 2018.

For more information, contact: Office of Communications, Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244; 202-690-6145; Fax: 202-260-1462; Email: OSAMedicaidinfo@cms.hhs.gov.

Most state Medicaid programs assign preferred status to all medication-assisted treatment (MAT) medicines for opioid use, for reimbursement purposes. If a medication does not have preferred status, the prescriber usually must obtain permission from the member’s pharmacy benefit plan before the product can be reimbursed.

These findings were presented in “Medicaid Coverage Of Medication-Assisted Treatment For Alcohol And Opioid Use Disorders And Of Medication For The Reversal Of Opioid Overdose,” by the Substance Abuse and Mental Health Services Administration (SAMHSA).  The research team retrieved the most recent pharmacy and behavioral health documents from state Medicaid agency websites during the second and third quarters of 2018 for the 50 states, District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Searches were conducted for information related to Medicaid pharmaceutical coverage of and benefit design for MAT, including selected Medicaid managed care plans, if available. The goal was to present summary information on Medicaid coverage and financing of medications to treat alcohol and opioid use disorders.

Additional findings regarding MAT include:

  • All states reimburse for some form of medications for MAT.
  • State Medicaid programs routinely use pharmacy benefit management requirements, such as prior authorization, to contain expenditures and encourage the proper use of medications, including for the treatment of alcohol and opioid disorders.
  • As part of the authorization process, several states require evidence that the consumer was being referred or was concurrently receiving psychosocial treatment with their medications.
  • Step therapy is another drug utilization management strategy that requires consumers to try a first-line medication, such as a generic medication, before they can receive a second-line treatment, such as a brand name medication.
  • Quantity or dosing limits often are used by Medicaid programs to avoid potential abuse or misuse of a medication, promoting safe and appropriate medication use.

The full text of “Medicaid Coverage Of Medication-Assisted Treatment For Alcohol And Opioid Use Disorders And Of Medication For The Reversal Of Opioid Overdose” was published November 14, 2018 by SAMHSA. A copy is available online at Store.SAMHSA.gov.

For more information, contact: Chris Garrett, M.A., Senior Media Advisor, Office of Communicaitons, Substance Abuse and Mental Health Services Administration, 5600 Fishers Lane, Rockville, Maryland 20857; Fax: 240-276-2135; Email: media@samhsa.hhs.gov.

On December 19, 2018, Optum announced that the federal Department of Veterans Affairs (VA) selected OptumServe to provide 12-month telephone lifestyle coaching (TLC) services in a pilot with the Veterans Health Administration (VHA) National Center for Health Promotion and Disease Prevention. The services are for eligible veterans receiving care from the VA at 20 medical centers in Minnesota, Missouri, and Nebraska and their corresponding community-based outpatient clinics. The contract is structured as an indefinite delivery, indefinite quantity (IDIQ) contract with an initial 12-month contract term followed by four 12-month renewal options.

The request for proposals (RFP 36C24518R0176) was released on June 25, 2018, with proposals due by July 17, 2018. The VA did not report the number of proposals received or the names of unsuccessful bidders. The contract was awarded in September 2018. No minimum or maximum contract value has been announced.

The coaching is focused on helping veterans maintain a healthy diet, increase their physical activity, manage their weight and stress, stop smoking, and limit alcohol use. A qualified lifestyle coach will provide scheduled calls to veterans enrolled in the program. Participants will also be able to call the coaching lines outside of scheduled appointments. Veterans will be referred to the program via the VA “Patient Aligned Care Team” (PACT)/primary care, or extended PACT staff, who will enter a Computerized Patient Record System (CPRS) consultation request which shall be accessed by the contractor whose staff shall then call the veteran. The calls will take place at regular intervals, with greater frequency at the start of the service.

The VHA National Center for Health Promotion and Disease Prevention (NCP), in partnership with the VHA Office of Rural Health, is focused on decreasing risky health behaviors as an important strategy to reduce the large burden of chronic disease within the veteran population seen in the VHA health care system and improve overall health and well-being. The VA piloted the TLC service at 24 selected VA medical centers from 2011 through 2013. The pilot services were provided by Free & Clear under a contract awarded on June 29, 2011, valued at $4.5 million. The pilot offered veterans six different TLC programs: dietary change, physical activity, weight management, smoking cessation, stress management, and unhealthy alcohol use. Veterans could participate simultaneously in as many of the six as they desired. Each program offered 10 coaching sessions over a six-month period.

The pilot implementation and outcomes were analyzed in “Implementation Evaluation Of The Telephone Lifestyle Coaching (TLC) Program: Organizational Factors Associated With Successful Implementation” by Laura J. Damschroder, Caitlin M. Reardon, Nina Sperber, Claire H. Robinson, Jacqueline J. Fickel, and Eugene Z. Oddone. More than 9,000 veterans were referred to the TLC program operated by Free & Clear. Of those referred, 5,321 (57%) completed at least one coaching session and self-reported their lifestyle behaviors six months after enrollment. Among these veterans, 40% quit smoking and 25% lost more than 5% of their baseline weight. The goal of the study was to identify facility-based contextual factors that influenced implementation of the TLC program to inform future scale-up and implementation. The NCP determined that the services were effective for health behavior change across a variety of behaviors, including dietary change, physical activity, weight management, smoking cessation, stress management, and unhealthy alcohol use.

OptumServe provides health services and expertise to federal agencies. OptumServe partners with the Departments of Defense, Health and Human Services, Veterans Affairs and other organizations. OptumServe is part of Optum, an information and technology-enabled health services business, which is part of UnitedHealth Group.

The full text of “Implementation Evaluation Of The Telephone Lifestyle Coaching (TLC) Program: Organizational Factors Associated With Successful Implementation” was published in the June 2017 issue of Translational Behavioral Medicine. An abstract is available online at Academic.OUP.com.

For more information about the contract, contact: Aaron Albright, Director, External Communications, Optum, Inc., 11000 Optum Circle, Eden Prairie, Minnesota 55344; Email: aaron.albright@optum.com; or Public Relations, U.S. Department of Veterans Affairs, 810 Vermont Avenue NW, Washington, District of Columbia 20420; 202-461-7600; Email: va.media.relations@va.gov.

For more information about the study findings, contact: Laura J. Damschroder, Corresponding Author, VA Center for Clinical Management Research, VA Ann Arbor Healthcare System (152), 2800 Plymouth Road, Building 16, Ann Arbor, Michigan 48105; Email: Laura.Damschroeder@va.gov.

“When elephants fight, it’s the grass that suffers.”

OPEN MINDS just completed their recent analysis of the largest Medicaid insurers. The findings brought to mind the proverb; “when elephants fight, it’s the grass that suffers.” Why? The top-five Medicaid insurers are increasing their market share and are likely to continue to increase that market share. And on top of that, we are seeing non-traditional mergers and acquisitions, which are likely to have a profound effect on how health care is delivered.

First, who are the top-five largest Medicaid insurers? Centene, UnitedHealthcare, Anthem, WellCare, and Molina Healthcare (in that order). These insurers serve approximately 25.8 million individuals and represent 47% of the population enrolled in Medicaid managed care. In between 2017 and 2018, these insurers saw a 4.2% increase in their market share. Centene had the largest increase in enrollment at 24% due to the acquisition of Fidelis Care, which had over 1.2 million members.

What sort of other activity have we seen over the past year among the five largest plans?

  1. Centene To Acquire Community Medical Group To Expand Its Provider Assets
  2. Centene To Acquire MHM Services, Expanding Correctional Health Care Reach
  3. OptumRx Acquires Genoa Healthcare
  4. Optum To Acquire DaVita Medical Group For $4.9 Billion
  5. Aetna To Sell Medicare Prescription Drug Business To Wellcare

What does this mean for provider organization strategy? I think it goes back to the second half of the proverb—”the grass will suffer.” Specialty provider organizations both big and small are going to see increasing challenges to their market. Narrow networks, value-based reimbursement, acquisition of service capacity, and ACO partnerships are just a few of the continuing developments that are changing the role of specialists. As health plans get larger, individual provider organizations will have less bargaining power.

But there is no “magic bullet” strategy. The key is understand in each geographic market what health plans have the most market share—and what the specific pain points and opportunities are with each of those health plans (see ‘Rapid Access’ Might Just Be Your Next Health Plan Conversation and Fitting Specialty Care Into ACOs). For most specialist provider organizations, I see two different strategic directions—broad positioning embracing “whole person care” management within the delivery system or becoming a provider of very specific urgent and acute services (see What Does It Take To Outlast The Disruptors?).

On December 11, 2019, the San Luis Obispo (SLO) County, California Board of Supervisors awarded a three-year contract valued at $6.7 million annually to Wellpath to provide jail medical and mental health services. Previously, the services were provided by county staff. The initial three-year contract term begins on February 1, 2019, the County will have the option to renew for two additional years.

Wellpath will be responsible for medical, dental, and behavioral health services, including a Jail Based Competency Treatment Program, intake health screenings, intoxication and withdrawal management. The jail has an average daily population of nearly 600. During the first contract year, Wellpath will also work to gain accreditation for the jail by the National Commission on Correctional Health Care (NCCHC). The sheriff’s Chief Medical Officer will be responsible for the management and oversight of the contractor. Wellpath is a new company formed by a merger between California Forensic Medical Group (CFMG) and Correct Care Solutions (CCS). CMFG has contracts at 349 jail facilities, where it provides health care services to more than 130,000 people.

The County released the request for proposals (RFP 1475) on March 2, 2018. Proposals were due by May 25, 2018. The County received three bids, but is not releasing the names of the unsuccessful bidders. The selection criteria for the RFP responses focused on understanding the scope of work (15 points), expertise in performing similar work (20 points), staff qualifications (20 points), demonstrated ability to meet state and federal requirements and NCCHC accreditation standards (20 points), demonstrated technical ability (5 points), and cost (10 points). In total 100 points were available for the RFP response, and another 100 points for the phase two optional interviews. The interview selection criteria focused on the oral interview (40 points), best and final offer (40 points), and site visit (20 points).

The County’s Board of Supervisors decided to outsource jail health services after a critical look at the risks, benefits, and costs of different inmate health care delivery systems. The ability to improve health care services quickly and to expand upon the experience of a seasoned company were the driving forces in the decision to outsource.

The SLO County Jail, like the rest of the country, has been struggling to care for a medically fragile inmate population. Between 2009 and 2016, there were 10 in-custody deaths, placing SLO County Jail in the middle of California Counties for the number of deaths per County population (according to the DOJ). Some families have filed lawsuits as a result of the inmate deaths; in one high-profile case, the deceased man’s family received a $5 million settlement.

For more information, contact:

  • Tony Cipolla, Public Information Officer, Sheriff’s Office, San Luis Obispo County, 1585 Kansas Avenue, San Luis Obispo, California 93405; 805-781-4547; Email: tcipolla@co.slo.ca.us; or Wade Horton, Director, Administrative Office, San Luis Obispo County, 1055 Monterey Street, San Luis Obispo, California 93408; 805-781-5000; Email: pwd@co.slo.ca.us; or Andrea Madrigal-Ramsey, Buyer – Central Services Purchasing, San Luis Obispo County, 1087 Santa Rosa Street, Room D 430, San Luis Obispo, California 93408; 805-781-5200; Email: amramsey@co.slo.ca.us.
  • Jorge Dominicis, Chief Executive Officer, Wellpath, 1283 Murfreesboro Road, Suite 500, Nashville, Tennessee 37217; 800-592-2974; Website: https://wellpathcare.com/; or Corporate Communications, Wellpath, 1283 Murfreesboro Road, Suite 500, Nashville, Tennessee 37217; 800-592-2974; Email: corpcomm@wellpath.us.

On December 19, 2018, the Centers for Medicare & Medicaid Services (CMS) issued guidance to state Medicaid directors that listed ten options that states could use to better serve individuals who are dually eligible for Medicare and Medicaid. The guidance emphasized that states can leverage managed care, via existing dual eligible special needs plans (D-SNPs) and Programs of All-Inclusive Care for the Elderly (PACE), to integrate Medicare and Medicaid services. None of the opportunities requires complex demonstrations or Medicare waivers. A number of the opportunities are newly available to states through Medicare rulemaking or other CMS burden-reduction efforts.

The guidance was offered in “State Medicaid Director Letter #18-012 RE: Ten Opportunities to Better Serve Individuals Dually Eligible for Medicaid and Medicare,” by CMS. The letter highlights ten recommendation for states to better serve these dual eligibles. The opportunities focus on Medicare-Medicaid integrated care, giving states better access to Medicare data, and improving beneficiary experiences and reducing administrative burden.

The ten opportunities are as follows:

  1. State contracting with D-SNPs through Medicare Improvements for Patients and Providers Act (MIPPA) of 2008 contracts can be used to support and shape local integrated care approaches.
  2. Default enrollment into a D-SNP in which dually eligible individuals receive all of their Medicaid and Medicare services through the same organization. CMS established new Medicare regulations on default enrollment in April 2018 through the Final Parts C & D Rule for 2019. Default enrollment makes the D-SNP the automatic first enrollment option, although beneficiaries can opt out to return to fee-for-service Medicaid, to PACE, or to another Medicare Advantage plan.
  3. Passive enrollment to preserve continuity of integrated care in instances where integrated care coverage would otherwise be disrupted. CMS established new Medicare regulations on passive enrollment in April 2018 through the Final Parts C & D Rule for 2019. The change authorizes CMS to enroll full-benefit dual eligibles from an integrated D-SNP that is no longer available to another comparable D-SNP in stances where integrated care coverage would otherwise be disrupted. Passively enrolled beneficiaries would be able to decline the enrollment, return to fee-for-service Medicare or to another Medicare Advantage plan.
  4. Integrating care through the Programs of All-Inclusive Care for the Elderly (PACE): both not-for-profit and for-profit organizations can participate. Previously PACE could only be offered by non-profit provider organizations.
  5. Reducing the administrative burden in accessing Medicare data for use in care coordination: states may now execute “data request attestations” (DRAs) through a streamlined process, which replaces the previous (and more time consuming) Data Use Agreement (DUA) process.
  6. Program integrity opportunities using Medicare data. When CMS originally began sharing Medicare claims and assessment data for duals, states were limited in using the data only for care coordination. States can now use the data for program integrity purposes such as investigating improper provider organization billing and coding.
  7. MMA file timing (named after the Medicare Prescription Drug, Improvement and Modernization Act of 2003): More frequent submission achieves state efficiencies, improves beneficiary experiences, and reduces burden for providers. States submit the MMA files to CMS to identify both full and partial benefit duals. CMS uses the MMA files for a variety of functions, including auto-enrolling full-benefit duals into Medicare prescription drug plans, and deeming full-and partial-benefit duals automatically eligible for the Medicare Part D Low Income Subsidy. States can submit MMA files daily.
  8. State buy-in file data exchange: States, the Social Security Administration (SSA), and CMS share data to facilitate buy-in processes for Medicare Parts A and B. greater frequency of buy-in data exchange between the states and CMS supports more timely access to coverage and reduces burdens for states, beneficiaries, and providers. Under the state buy-in program, states can enter into Medicare Part A and B buy-in agreements to make it easier to enroll Medicaid recipients in Medicare and pay premiums on their behalf.
  9. Improving Medicare Part A buy-in by permitting a state to directly enroll eligible individuals in Part A at any time of the year, without late enrollment penalties assessed to a beneficiary’s premium liability.
  10. Opportunities to simplify eligibility and enrollment using the authority described in section 1902(r)(2)(A) of the Social Security Act to better align the Part D Low-Income Subsidy and Medicare Savings Programs (MSPs) income and/or asset criteria.

PsychU reported on this topic in “CMS Considering More Care Coordination Reporting For Dual Eligible Demonstrations,” which published on March 16, 2016.

For more information, contact: Office of Communications, Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244; 202-690-6145; Fax: 202-260-1462; Email: press@cms.hhs.gov.

CalOptima, the county-operated Medicaid health plan for Orange County, California, is preparing to launch the state’s Medicaid health homes program (HHP) on July 1, 2019. In preparation, CalOptima released a request for proposals (RFP 19-021) on December 20, 2018, seeking a contractor to provide housing services, accompaniment of HHP members to key medical appointments, and family support and caregiver assessment services. Proposals are due by January 28, 2019. CalOptima anticipates awarding a one-year firm, fixed-price contract with three additional one-year renewal options.

The HHP housing services provider will work with CalOptima, health networks, and other provider organizations to ensure access to delivery of housing support services, which includes housing navigation services (not only referrals to housing), individual housing transition services, individual housing, tenancy sustaining services, and engagement services for homeless or hard to reach members. The housing services vendor must have one or more HHP staff designated as “Housing Navigators” to be part of the HHP care team. The housing services are not limited to HHP participants experiencing chronic homelessness; they can be provided to any HHP-enrolled member at-risk of becoming homeless.

The accompaniment services provider will have staff to accompany HHP members to clinical appointments, as requested. HHP members will be expected to arrange their own transportation or request CalOptima to provide non-medical transportation to the appointment.

The family support and assessment services provider will coach the HHP member’s family or support persons on how to motivate the member’s self-management. The provider organization will assess/ evaluate the family/support person’s strengths and needs for services, and then link them to community resources, peer supports or support groups to assist them in their own and the HHP enrollees care needs.

The state’s Medicaid (Medi-Cal) HHPs in the participating counties serve beneficiaries with chronic physical conditions and substance use disorders (SUD), and members with serious mental illness/serious emotional disturbance (SMI). HHP key focus areas include wrapping increased coordination around existing care, strengthening community linkages, strengthening team-based care, and the use of care coordinators embedded in the community. The California Department of Health Care Services (DHCS) rolled out the implementation in three phases. The first phase launched in San Francisco on July 1, 2018. The second phase launched in Riverside and San Bernardino on January 1, 2019.  Orange County is currently scheduled to implement in Phase 3 starting July 1, 2019 for members with chronic physical conditions and SUD, and January 1, 2020 for members with SMI. Members with both SMI and chronic conditions may enroll on a referral basis beginning July 1, 2019. DHCS is targeting the top 3 to 5% highest risk/utilizing Medi-Cal members with specific multiple chronic physical conditions, SUD or SMI whose outcomes may improve through HHP interventions.

CalOptima is a public agency serving approximately 775,000 members as of July 1, 2018. The organization is a County Organized Health System and is the only Medi-Cal managed care plan for Orange County. The majority of CalOptima members have only Medi-Cal. Approximately 11% have both Medicare and Medi-Cal. Nearly 15,000 of these “Medi-Medi’s” are enrolled in CalOptima’s Cal MediConnect plan, OneCare Connect (OCC), which provides members with Medicare and Medi-Cal benefits in a single plan. CalOptima will be the HHP lead administrative entity. The CalOptima membership that expected to be eligible for HHP targeted engagement may be approximately about 23,350 to 38,750 individuals based on the above DHCS target; however, as a voluntary opt-in program it is not known how many members may consent to participate. While most HHP covered services are already part of CalOptima’s Medi-Cal managed care delivery model, CalOptima anticipates that a higher level of care coordination services, in addition to some new services, will be required to help members with higher levels of acuity.

The HHP services are expected to be provided primarily by an entity which is designated a Community-Based Care Management Entity (CB-CME) under a contract with CalOptima as the lead provider entity. This CB-CME may be CalOptima, a health network (HN) or other type entity meeting applicable requirements pursuant to CalOptima’s HHP delivery model, subject to DHCS and CalOptima Board approval. CalOptima members must elect to participate in HHP.

For additional information about CalOptima and the RFP process, see the CalOptima website at CalOptima.org.

PsychU reported on this topic in “California Medicaid Health Homes To Launch On-Time In San Francisco, Riverside & San Bernardino Counties,” which published on May 23, 2018.

For more information, contact: Ryan Prest, Purchasing Manager, CalOptima, 505 City parkway West, Orange, California 92868; 714-347-3235; Email: rprest@caloptima.org.

From December 10 to 14, 2018, the approximately 4,000 Kaiser Permanente behavioral health professionals represented by the National Union of Healthcare Workers (NUHW) held a strike at Kaiser facilities across California to protest staffing ratios. They say Kaiser’s ratio of one professional to 3,000 Kaiser members is inadequate to ensure that members making new and follow-up appointments, receive appointments within state timeliness standards. Kaiser Permanente is in contract negotiations with the NUHW for behavioral health professionals employed by Kaiser Permanente’s Northern and Southern California affiliates. The previous contract expired in September 2018.

The California Department of Managed Health Care (DMHC), which oversees health maintenance organizations (HMOs) such as Kaiser, requires that urgent appointments when prior authorization is not required must be scheduled within 48 hours of request. Non-urgent mental health appointments with a non-physician (psychologists, therapists, social workers, psychiatric nurses and addiction medicine specialists) must be scheduled within 10 business days of the member request.

The behavioral health professionals believe that the ratio of one professional to 3,000 members is inadequate because it is the same ratio that existed in the DMHC’s February 2015 Kaiser follow-up survey report, which found that 22% of Northern California members and 9% of Southern California members experienced excessive appointment delays. When NUHW settled the last contract in late 2015, Kaiser had committed to working with the NUHW to improve access and had agreed to contractual language in Northern California that was aimed at increasing staffing. However, due to turnover and growing membership, the ratio has remained unchanged. A NUHW spokesperson said some Kaiser members wait one to two months for follow-up behavioral health appointments.

The NUHW spokesperson said the behavioral health professionals have proposed that Kaiser require that for every new initial appointment with a patient, a therapist be able to schedule six return appointments. They believe this would reduce the wait for return appointments and set a mechanism for improving staffing. They also proposed that Southern California Kaiser commit to moving away from its model of outsourcing mental health care and bring the service in-house, just like Kaiser medical services. In press releases, NUHW said its contract proposals are intended to help Kaiser meet the DMHC appointment timeliness standards.

In a public statement released on December 9, 2018, Kaiser provided the following information about the dispute:

  • NUHW wants to reduce the amount of time clinical professionals spend seeing members to below the average of 75% of time, a performance standard NUHW agreed to in 2015. Kaiser believes doing so would mean fewer appointments for members.
  • NUHW has asked Kaiser Permanente to stop working with non-Kaiser community therapists that serve as extenders to ensure access to care for members.
  • Kaiser seeks no takeaways in its contract proposal and is offering wage increases.
  • Since 2015, Kaiser has hired more than 500 new behavioral health professionals in California, which increased its behavioral health staff by 30%,

In 2011, NUHW members reported Kaiser to the DMHC in 2011 for failing to meet the appointment timeliness standards. In 2013, the DMHC levied a $4 million fine on Kaiser for violating the California’s Mental Health Parity Act and state standards for timely access to care. In February 2015, the DMHC released a follow-up survey, which found that 22% of Northern California members and 9% of Southern California members experienced excessive appointment delays. In June 2017, the DMHC released results from a full survey of the Kaiser Health Plan, which found that Kaiser had not fully resolved member access issues for its mental health services. In July 2017, the DMHC and Kaiser announced a settlement agreement in which Kaiser agreed to a three-year program of outside monitoring of its mental health services by a state-approved firm with the authority to impose up to $1 million in additional fines against Kaiser if it fails to remedy access issues.

PsychU reported on this topic in “Kaiser Permanente In California Recruiting 350+ Mental Health Therapists By End Of Year,” which published on October 8, 2015.

For more information about the NUHW position, contact: Matthew Artz, Communications, National Union of Healthcare Workers, 5801 Christie Avenue, Suite 525, Emeryville, California 94608; 510-435-8035; Fax: 510-834-2019; Email: martz@nuhw.org.

For more information about Kaiser Permanente’s position, contact: Jessie R. Mangaliman, National Media Relations, Kaiser Permanente, 1950 Franklin Street, Oakland, California 94612; 510-301-5414; Email: National-Media-Relations@kp.org.

In our current market, the reality is that Medicaid matters to health and human service organization strategy. Why? Right now, 17% of Americans get their primary health insurance through Medicaid, and Medicaid accounts for 17% of total health care spending (see U.S. National Health Spending Grew At A Rate Of 3.9% In 2017).

The real challenge in developing a successful strategy when looking at overall Medicaid statistics is the variability that occurs state by state. A recent analysis found 75% of the Medicaid population was enrolled in managed care for their health services. That total number hides the distribution—with two states having the largest proportion of their Medicaid population in managed care at 100%. And nine states with no Medicaid managed care. Like real estate, in health care, location really does matter.

Figure 1. Mandros, A. (2019). Which state had the greatest change in medicaid managed care? What is coming in 2019? Retrieved from OPENMINDS.com.

 

In their analysis, they found that the state with greatest change from 2017 to 2018 in Medicaid managed care enrollment is Missouri—with an increase in enrollment of 23 percentage points. Other states with major changes in enrollment include Louisiana, Nebraska, Illinois, and Virginia.

But state Medicaid programs are a work in progress, and we can expect big changes in the year ahead. For example, in January 2019, individuals in Florida who need managed long-term services and supports can enroll in comprehensive health plans. In March 2019, Arkansas will begin to pay the Provider-led Arkansas Shared Savings Entities (PASSEs) a global payment to deliver health care services to individuals with serious mental illness (SMI) and intellectual/developmental disabilities (I/DD) (see Arkansas Medicaid To Launch Full-Risk Phase Of Medicaid Shared Savings Program In March 2019). Additionally, New York plans to move individuals with I/DD to managed care on a voluntary basis beginning in April 2019 and on a mandatory basis beginning in 2021. Alaska plans to implement a pilot, voluntary managed care program in the Anchorage and Mat-Su Valley region beginning in August 2019 (see Alaska Medicaid Selects Providence Family Medicine Center For Coordinated Care Demonstration Project). And perhaps the biggest change, North Carolina will begin enrolling the non-SMI and I/DD population into managed care beginning in November 2019.

If your organization provides services in one of the states that are on the “changes ahead” list, it’s time to sharpen up your strategy. The report includes enrollment in managed care, primary care case management, and fee-for-service enrollment by state and a look at the changes in each state over time. Also, don’t miss these recent updates on state Medicaid programs from the PsychU team:

  1. Oregon Announces Next Medicaid Coordinated Care Organization Contracts Will Establish Service Areas Based On Counties
  2. Virginia Implements Medicaid Expansion On November 1
  3. CMS Approves North Carolina’s 1115 Medicaid Managed Care Waiver, Ending The Behavioral Health Carve-Out
  4. Pennsylvania Medicaid Launches Southeast Region Enrollment In Community HealthChoices, Mandatory Managed Long-Term Services & Supports
  5. Illinois Medicaid Launches Redesigned Mandatory Managed Care Program Statewide
  6. Voters In Idaho, Nebraska & Utah Passed Ballot Measures To Expand Medicaid

As executive teams of specialty provider organizations look ahead to 2019, it appears that the shift to performance-based reimbursement will continue. The most recent change has been the new CMS rules that will move accountable care organizations (ACO) to full-risk reimbursement contracts. This is going to generate new and different relationships between health plans and provider organizations, as I discussed in Health System/Insurer Combos Gain Steam-& More To Come With ACO Changes. As a result, value-based reimbursement (VBR) strategy is a key sustainability issue for provider organizations in 2019.

If that is the case, the strategic question for executive teams is: How do you seize the opportunities and avoid market challenges in this landscape? OPEN MINDS Senior Associate Deb Adler’s overarching advice for provider organization executive teams struggling with this question is focused on enhancing their skills with building relationships (and new programming) for health plans.

What is involved in that relationship building? Ms. Adler outlined four key items:

  1. Develop a brief (one or two slide) value story that describes how your organization’s programs are differentiated in terms of quality and costs, and how you contribute to health care cost savings for the payer
  2. Know the payer’s pain points and needs, as well as important performance metrics
  3. Know thyself and plan a formal negotiation strategy that identifies your “walk-away” position on pricing and service model elements
  4. Develop the relationship, at the highest level possible, and sustain that relationship intentionally

Develop a brief value story—When contact is made, and executives of a provider organization have gotten “in the door” for their initial meeting, the conversation needs to get to the point promptly. What value is your organization bringing to the table, and what are the strengths that differentiate you from the competition. Ms. Adler noted:

Provider organizations should have a short, one or two-slide value story presentation that illustrates what they bring to the health plan that is a cost and quality differentiator. Ideally it would include measurable results for the measures that the plan cares about—measures like ambulatory follow-up, readmission rates, health care cost savings, reduced emergency room visits, etc.

Know the payer’s pain points—It’s a mistake to walk in and attempt to describe the problem when the payer knows exactly what their problems already are. The key is for the provider organization’s executive team is to understand the problem from the health plans perspective and how they will measure success. Ms. Adler explained:

There is a high probability that the payer’s pain points largely center around three key areas: access to psychiatry services, addiction costs, and autism service access and costs. While I wouldn’t assume that any individual health plan has all three or even any of these pain points, the best approach is to ask. Get to know the health plan’s specific problems and devise a proposal that makes the health plan management team successful in terms of the quality or cost issues they have identified. Presenting a proposal that ultimately solves the health plan’s current challenge is the key—with a focus on the service, the cost, and measures of performance.

Know thyself and plan—When developing a relationship, and hopefully a contract, a provider organization’s executive team need to know when to compromise and when to hold firm. Walking that fine line is the focus of your negotiations, and requires an understanding of the market, the competition, and your organization’s capabilities and cost structure. Ms. Adler explained.

Provider organizations need to have a formal negotiation strategy-knowing what they want and how to negotiate towards that end. You need to understand your internal unit costs and key performance indicators (KPI) and your ability to manage risks and alternative reimbursement models. You should spend time preparing (and role playing if possible) all key contract terms (both language and reimbursement), thinking through various payer reactions and how you will respond. You need a clear idea of what things you will bend on, as well as those that would result in walking away.

Develop the relationship—Finally, Ms. Adler stressed the importance of pull-through on the new relationship. After the contract is in place, the executive team must be involved in maintaining and continuing to build the relationship to ensure that the partnership remains mutually beneficial. She noted:

Like any relationship, you need to find ways to develop and sustain it. I always recommend reaching as high into the payer organization as possible to develop those relationships—and the more relationships, the better. Then implement formal touchpoints (e.g., monthly or quarter scorecard reviews) or informal touchpoints (watch for conferences where the health plan leader is attending, and you can interact), where you can share industry updates that you think will be valuable to the health plan.

In summary, Ms. Adler explained that connecting with health plans on these (and other) topics comes down to persistence more times than not. Provider organizations need to find the right contact in network management, or whoever is leading their local plan and continue to reach out.

The U.S. Department of Labor (DOL) says that pay for home health aides can vary weekly, if the pay still meets or exceeds minimum hourly wage. However, any overtime pay must be calculated accordingly.

The DOL issued this opinion on December 21, 2018 in response to a home health company’s question on whether a compensation plan complies with the Fair Labor Standards Act (FLSA). The FLSA requires that covered, nonexempt employees receive at least the federal minimum wage (currently $7.25 per hour) for all hours worked. The question came following a 2015 DOL mandate that in-home care workers are eligible for overtime and minimum wage protections.

According to FLSA, if the employee’s total wages for the workweek divided by compensable hours equal or exceed the applicable minimum wage, the employee has been paid in compliance with FLSA. The FLSA also requires that covered, nonexempt employees receive overtime compensation of at least one and one-half times their regular rate of pay for time worked in excess of 40 hours per workweek. The plan in question calculates weekly pay by multiplying an employee’s time with clients by pay rate. For the organization, this rate is typically $10.00 per hour with a client and includes travel time. That number is then divided by total hours worked, which also includes time with clients and any travel between client locations. If any employee works over 40 hours of total paid ours and travel time during a workweek, they are paid time and a half for all time over 40 hours at a rate of $10.00 (or $15.00 per hour for time above 40 hours in one workweek).

Based on the information provided by the provider, DOL determined that the provider follows FLSA for minimum wage requirements. However, if the provider always assumes a regular rate of pay of $10 per hour when calculating overtime for all employees, including those who are compensated at a rate higher than $10 per hour, the provider may not comply with overtime requirements. However, the plan is in total compliance for all employees who make $10.00 per hour.

For more information, contact: Wage and Hour Division, U.S. Department of Labor, 200 Constitution Ave NW, S-1032, Washington, District of Columbia 20210; 866-487-9243.

Members of Medicare Advantage plus prescription drug (MA-PD) plans were 37% less likely to fill opioid prescriptions than beneficiaries enrolled in a stand-alone Part D plan (PDP). Opioid prescription rates were 25% lower for MA-PD members. About half of the difference in opioid fill rates was because MA-PD members filled fewer prescriptions from prescribers who wrote a very large number of opioid prescriptions.

These findings were reported in “The Effects of Medicare Advantage on Opioid Use” by Laurence C. Baker, Kate Bundorf, and Daniel Kessler in a working paper for the National Bureau for Economic Research. The researchers analyzed a sample of Medicare Part D claims in 2014 to compare the rate of opioid prescriptions for beneficiaries enrolled in MA-PD plans versus PDPs. The analysis included 1,126,373 prescribers. The goal was to evaluate insurer strategies on inappropriate opioid use. The two forms of Medicare Part D—MA-PD and PDPs—provide plan administrators with different incentives and abilities to control inappropriate use of prescription opioids. The researchers noted that MA-PD plans have an incentive to account for how prescription drug use affects the overall cost of care, and that MA-PD plans can choose their physician networks and can choose how to manage care. The PDPs have no incentive or ability to manage the physicians who prescribe covered drugs.

The analysis included a cohort of a 20% random sample of Medicare beneficiaries in 2014. The cohort included beneficiaries age 66 or older who aged into Medicare eligibility, and who were enrolled in some PDP or MA-PD plan in 2013, and a single PDP or MA-PD plan for all of 2014 but were not enrolled in a private fee-for-service plan. For each beneficiary, the researchers obtained all outpatient prescription drug claims for 201, determined if a claim was for an opioid, and then calculated the number of days’ supply of opioids.

The analysis focused on the following four points for each beneficiary:

  • Any prescription for an opioid
  • Any prescription for an opioid from a high prescriber, defined as the top 1% of prescribers in terms of number of opioid prescriptions written
  • Any prescription for > 7 days’ supply of an opioid, conditional on any opioid
  • Any prescription for > 7 days’ supply of an opioid from a high prescriber, conditional on any opioid from a high prescriber.

The researchers presented the findings for all non-rural Medicare beneficiaries, and for beneficiaries from Metropolitan Statistical Areas (MSAs) with a population of 100,000 to 400,000. For beneficiaries from MSAs in this population range, it also presents means by county floor status (in MSAs with above versus below 250,000 population). Counties with more than 250,000 population are considered urban. In the analysis, the researchers accounted for the overall county opioid prescription rate, the availability of primary care physicians, and the percentages of county residents who were disabled, obese, diabetic, or on Medicaid. They determined that the urban floor counties did not differ significantly in ways that suggested that Medicare beneficiaries would be likely to have an opioid prescription.

About 43.9% of beneficiaries in counties above the urban floor were enrolled in a MA-PD, compared to 30.2% of beneficiaries in counties below the urban floor. Beneficiaries in urban flor counties were much less likely to be prescribed an opioid. In 2014, 30.8% of beneficiaries in counties just above the floor had at least one opioid prescription in 2014, versus 31.9% in those just below. Each prescriber wrote an average number of 14.759 opioid prescriptions. The top 1% prescribers wrote 217 opioid prescriptions each for the 20% sample of Medicare beneficiaries. The top high prescribers accounted for 26.9% of all opioid prescriptions written for Medicare beneficiaries in 2014. The top 50% wrote just one.

The researchers concluded that MA-PD enrollment reduced opioid prescription rates by 0.08 percentage points per person, which translated to a 25% reduction compared to PDP opioid prescription rates. The likelihood that a MA-PD member would fill an opioid prescription was 37% lower, representing an 11.6 percentage point difference from the average likelihood of 31.3 percentage points. More than half of the 11.6 percentage point reduction was because fewer MA-PD members received an opioid prescription from a high prescriber (defined as the top 1% of opioid prescribers). MA-PD enrollment had no statistically significant effect on the number of days’ supply of opioids received, either from any prescriber or a high prescriber. The researchers said their research indicates that enrollment in a MA-PD reduced only inappropriate opioid use, rather than representing a broader effort to restrict access to treatment. They were not able to determine if the reduction in opioid prescriptions from the 1% highest prescribers was because these prescribers were excluded from the MA-PD networks, some other aspect of benefit design that encouraged beneficiaries to avoid high prescribers, or other changes in treatment that reduced the need for opioids.

The full text of “The Effects of Medicare Advantage on Opioid Use” was published in December 2018 by the National Bureau for Economic Research. An abstract is available online at www.NBER.org.

PsychU reported on this topic in “Proportion Of Medicare Advantage & Commercial Populations Using Prescription Opioids Unchanged,” which published on September 24, 2018.

For more information, contact:

  • Laurence C. Baker, Ph.D., Professor of Health Research and Policy, Department of Health Research & Policy, Stanford University, HRP Redwood Building, Room T110, Stanford, California 94305-5405; 650-723-4098; Fax: 650-725-6951; Email: laurence.baker@stanford.edu.
  • Daniel P. Kessler, Ph.D., Professor of Political Economy and Senior Fellow, Hoover Institution, Stanford University, 434 Galvez Mall, Stanford, California 94305; 650-723-0596; Fax: 650-725-6951; Email: fkessler@stanford.edu.
  • Kate Bundorf, Ph.D., Associate Professor, Health Research & Policy, Stanford University, HRP Redwood Building, Room T108, Stanford, California 94305; 650-725-0067; Fax: 650-725-6951; Email: bundorf@stanford.edu.

Final 2019 enrollment in Patient Protection and Affordable Care Act (PPACA) health plans through the HealthCare.gov website was 8.4 million consumers; falling 4% compared to 2018 enrollment. Final enrollment for the 2018 plan was about 8.7 million consumers. No information is available for those 11 states that offered state-run insurance marketplaces.

A total of 10.7 million Americans applied for coverage through the website, signifying a 78.5% acceptance rate. Of the 8.4 million consumers enrolled for 2019, about 25% (4.4 million) enrolled in a new PPACA plan and 75% (6.3 million) renewed their 2018 coverage.

Of the 39 states using the HealthCare.gov platform, Florida (1,783,304) and Texas (1,087,240) had the highest number of cumulative plan selections. Alaska (17,805) and Hawaii (20,193) had the fewest. States that use the HealthCare.gov platform include:

  1. Alaska
  2. Alabama
  3. Arkansas
  4. Arizona
  5. Delaware
  6. Florida
  7. Georgia
  8. Hawaii
  9. Iowa
  10. Illinois
  11. Indiana
  12. Kansas
  13. Kentucky
  14. Louisiana
  15. Maine
  16. Michigan
  17. Missouri
  18. Mississippi
  19. Montana
  20. North Carolina
  21. North Dakota
  22. Nebraska
  23. New Hampshire
  24. New Jersey
  25. New Mexico
  26. Nevada
  27. Ohio
  28. Oklahoma
  29. Oregon
  30. Pennsylvania
  31. South Carolina
  32. South Dakota
  33. Tennessee
  34. Texas
  35. Utah
  36. Virginia
  37. Wisconsin
  38. West Virginia
  39. Wyoming

PsychU reported on this topic in “Spending & Enrollment Growth Slow After Initial National Health Care Coverage Expansions,” which published on February 21, 2018.

For more information, contact: Office of Communications, Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244; 202-690-6145; Fax: 202-260-1462; Email: press@cms.hhs.gov.

On November 20, 2018, the Centers for Medicare & Medicaid Services (CMS) re-approved Kentucky’s 1115 demonstration, Kentucky HEALTH, which includes work or community engagement requirements and cost sharing. The waiver was initially approved in January 2018 but was challenged in court. The district court subsequently vacated the demonstration approval directed CMS to review the waiver a second time. The new waiver goes into effect on April 1, 2019 and is approved through September 30, 2023.

Under the Kentucky HEALTH waiver, some Medicaid expansion adults between 19 to 64 and low-income parent/caretaker relatives will have to complete 80 hours per month of community engagement requirements, such as employment or education, to remain enrolled in Medicaid. These populations may be required to pay premiums of $1.00 to $15.00 per month, based on household income. Individuals with income over 100% of the federal poverty level may be dis-enrolled if premiums are unpaid. Generally, exemptions will be available to the medically frail, pregnant women, children, former foster care youth, and survivors of domestic violence. Individuals who meet the requirements of Supplemental Nutrition Assistance Program (SNAP), Temporary Assistance for Needy Families (TANF), are enrolled in the state’s Medicaid employer premium assistance program, or are employed at least 120 hours per calendar month are already meeting requirements and will not need to report their activities. Individuals who fail to meet the requirements will have one month to avoid suspension by meeting hour requirements for the current month and either making up the hours deficit not completed; or taking a re-entry course. Beginning April 1, 2019, the state plans to begin phasing in the community engagement requirements regionally.

In addition to the community engagement/work requirements, the new waiver changes Kentucky Medicaid benefits in four other areas – the benefit package, elimination of retroactive health coverage for some populations, cost sharing requirements, and member accounts.

  1. Benefit package changes: Some Kentucky HEALTH enrollees in the Medicaid expansion (“new adult”) population will have a new benefit package, called the Alternative Benefit Plan. They will still have access to primary and specialty services and prescription medications, but their vision and dental benefits will be available through a separate rewards account.  They may still have access to transportation for emergencies, but may not have non-emergency medical transportation. Other populations enrolled in Kentucky HEALTH, including pregnant women, children, former foster youth, medically frail individuals, and low-income parents/caretakers will have the same benefit package they have now, called the State Plan. This plan will cover the same vision and dental services they get now, and will also cover transportation to their medical appointments.
  2. Changes to retroactive coverage and effective dates: Some Kentucky HEALTH enrollees will not have retroactive health coverage when they enter the program. Pregnant women and former foster youth may still be eligible for coverage dating back up to three months before they applied. Other enrollees may have their coverage start on the date they applied or up to 60 days after they were approved, depending on their cost sharing requirement.
  3. New cost sharing requirements and penalties for premium non-payment: Some Kentucky HEALTH enrollees will be required to pay premiums that are at least $1.00 per month, but do not exceed 4% of household income. Premium amounts will be based on household income and length of enrollment in Kentucky HEALTH. Managed care organizations (MCOs) will collect the premiums. Exemptions will be given to pregnant women and children. Former foster care youth, survivors of domestic violence, and beneficiaries who are medically frail will have the option to pay a premium for access to a rewards account. Penalties for not paying premiums vary based on income level. In general, individuals with income over 100% of the federal poverty level (FPL) may be dis-enrolled for six months if they do not pay a required premium. Individuals with income less than 100% of the FPL will remain enrolled but may have co-payments for their medical services, and may have their My Rewards Account reduced and suspended. Enrollees with a premium requirement who want to get out of the penalty period early will need to pay two missed premium payments, one forward premium payment (a total of three months’ premium), and complete a re-entry course.
  4. Two new member accounts—Deductible Account and My Rewards Account: All adult Kentucky HEALTH enrollees will have a “Deductible Account.” The Deductible Account will help enrollees track their health care spending and show the cost of health care services. Adults will be assigned a Deductible Account of $1,000, and the account will be managed by their health plan. The account will be used to cover the first $1,000 of non-preventative services each enrollee receives. Individuals will receive a statement detailing the amount in their deductible account each month. The account does not affect services received, or the ability to access services. Individuals with money left in their Deductible Account may have up to 50% of the pro-rated balance transferred to their My Rewards account. The My Rewards Account provides incentives for enrollees to improve their health and works like a Health Spending Account. Individuals can earn My Rewards dollars by completing healthy behaviors, exceeding community engagement requirements, and appropriate health care utilization. The account funds can be used for dental, vision, and other benefits not covered by the enrollee’s health plan.

Some current Medicaid rules and expectations will still apply to Kentucky HEALTH enrollees, but they may have a new impact on enrollees. For example, current enrollees are expected to report any changes in circumstance within 30 days. This expectation will continue in Kentucky HEALTH. It is important that people do report changes as soon as possible so they can make sure the program requirements like cost sharing and community engagement requirements are applied correctly.  Individuals who fail to report an increase in income that makes them ineligible for Medicaid could also be subject to up to six months without their medical benefits. Individuals who are disenrolled for failure to report an income change would need to re-apply for coverage and complete a re-entry course.

Current Medicaid enrollees are also expected to complete and return any redetermination information requests. With Kentucky HEALTH enrollees, failure to complete the redetermination process could result in up to six months without coverage. Individuals who are disenrolled for failure to complete redetermination would need to re-apply for coverage and complete a re-entry course.

PsychU reported on the Kentucky HEALTH waiver in “Kentucky Granted Medicaid Waiver With Cost-Sharing & Work Requirements” which published on February 2, 2018.

For more information, contact: Kristi Putnam, Deputy Secretary, Kentucky Cabinet for Health and Family Services, 275 East Main Street, Frankfort, Kentucky 40621; 502-229-8310; Email: Kristi.Putnam@ky.gov; or Tracy Williams, Program Manager, Kentucky HEALTH, Kentucky Cabinet for Health and Family Services, 275 East Main Street, Frankfort, Kentucky 40621; 502-229-4078; Email: Tracy.williams@ky.gov.

On November 21, 2018, the Mississippi Division of Medicaid (DOM) awarded contracts for administering the Children’s Health Insurance Program (CHIP) to incumbent UnitedHealthcare Community Plan and new bidder Molina Healthcare. Incumbent Magnolia Health Plan (Centene) also submitted a request for qualifications but was not selected. The contracts are statewide. The initial term begins on July 1, 2019 and runs through January 31, 2022; and may have up to two one-year extensions.

Mississippi considers it CHIP and Medicaid program to be separate and procures health plans for each program separately. Currently UnitedHealthcare Community Plan, Molina Healthcare, and Magnolia Health Plan are contracted to serve the Medicaid population.

In FY 2018 there was an average of 47,380 children enrolled in the state’s CHIP program. The CHIP program covers children with family income up to 209% of the federal poverty level who do not otherwise qualify for Medicaid. In FY 2018, Mississippi spent approximately $134 million on the CHIP program.

The state released the request for proposals (RFP 20180608) on September 14, 2018, with proposals due by October 5, 2018. The state received a letter of intent from three bidders by the June 29, 2018 deadline: the third bidder was Magnolia Health.

PsychU reported on the Mississippi Medicaid program in “Mississippi Medicaid Awards Managed Care Contracts To Molina Healthcare & Incumbents Magnolia Health & UnitedHealthcare,” which published on November 3, 2017.

PsychU reported on the Mississippi Medicaid program and a proposal to change eligibility requirements in “Mississippi Medicaid Submits Waiver To Impose Work Requirements On Caretaker Adults,” which published on June 13, 2018.

For more information, contact:

  • Division of Medicaid, Office of Procurement, Mississippi Office of the Governor, Sillers Building, 550 High Street, Suite 1000, Jackson, Mississippi 39201-1399; 601-359-6189; Email: procurement@medicaid.ms.gov
  •  Liz Calzadilla-Fiallo, Media Contact, UnitedHealthcare of Mississippi, 795 Woodlands Parkway, #301, Ridgeland, Mississippi 39157; 954-378-0537; Email: elizabeth.calzadilla-fiallo@uhc.com
  •  Justine dela Rosa, Public Relations, Molina Healthcare of Mississippi, 200 Oceangate, Suite 100, Long Beach, California 90802​​; 562-528-5090; Email: Justine.DelaRosa1@MolinaHealthcare.com

The Centers for Medicare & Medicaid Services (CMS) published new rules for Medicare accountable care organizations (ACOs) that will be effective for the performance year starting July 1, 2019, and later. Under the new “Pathways to Success” rules, ACOs will be able to participate in the program without downside risk for only two years. Physician-led ACOs considered “low revenue” ACOs and some rural ACOs will be permitted to remain in a model without downside risk for three years. Previously, ACOs could remain in an upside-only model for six years.

CMS published the final rules for the “Pathways to Success” updates to Medicare ACO operations on December 21, 2018. The rules are effective as of February 14, 2019, though most of the provisions go live for the performance year starting July 1, 2019, and later. The provisions of “Medicare Shared Savings Program Notice of Final Rulemaking (CMS-1701-F2), “Accountable Care Organizations-Pathways to Success” also address quality of care, beneficiary engagement, and program integrity. As ACOs transition to accept greater levels of risk, they will be eligible for higher shared savings rates. And, for performance years starting July 1, 2019, and after, ACOs that terminate their participation will be accountable for prorated shared losses.

The new rules also include some important changes to service delivery. ACOs taking on risk will be able to offer expanded telehealth services, including providing telehealth services at the beneficiary’s residence. This provision goes into effect for performance year 2020. And, ACOs in two-sided risk agreements will be able to offer new incentive payments to beneficiaries who take steps to achieve good health. Payments can be offered to beneficiaries who obtain primary care services and necessary follow-up care. To encourage beneficiary engagement, ACOs will be required to provide their attributed beneficiaries with a written explanation in person or via email or patient portal of what it means to be in an ACO.

CMS will establish performance benchmarks for each ACO during all agreement periods by incorporating factors from regional Medicare spending. The goal is to provide a more accurate point of comparison for evaluating ACO performance. Agreements would last for at least five years, rather than the current three-year agreement length.

As of January 2018, 561 ACOs were participating in the program and serving over 10.5 million Medicare fee-for-service (FFS) beneficiaries. About 82% of ACOs are operating under a one-sided, shared savings-only model (Track 1), under which eligible ACOs receive a share of any savings under their benchmark but are not required to pay back a share of spending over the benchmark. The final rule noted that ACO participation in Track 2, a shared risk model introduced in 2012, has been low and declining since 2016 when Track 3 was introduced. Track 3 is the highest risk track; participation remains modest. The CMS Innovation Center launched the Track 1+ Model to facilitate ACOs’ transition to performance-based risk. The Track 1+ model began on January 1, 2018 with 55 participating ACOs. It is based on the Track 1 model but tests a payment design that incorporates more limited downside risk, as compared to Track 2 and Track 3. The goal of Track 1+ is to encourage Track 1 ACOs to progress more rapidly to accepting performance-based risk.

Among ACOs that first entered Track 1 in 2012 or 2013, 82 would be required to renew their participation agreements to enter a third agreement period beginning in 2019, but after six years in Track 1, they must transition to share risk. CMS said these ACOs face transitioning from a one-sided model to a two-sided model with significant levels of risk that some are not prepared to accept. Another 114 ACOs that have renewed for a second agreement period under a one-sided model, including 59 ACOs that started in 2014 and 55 ACOs that started in 2015, will face a similar transition to a two-sided model with significant levels of risk in 2020 and 2021, respectively.

In connection with the Medicare Shared Savings Program redesign, CMS will offer an application cycle for a special one-time new ACO agreement period start date of July 1, 2019. About 90% of eligible ACOs with participation agreements that expired on December 31, 2018 elected to extend their agreements for six months, so they have the option to renew their agreement under the new policies and continue to participate in the program uninterrupted. The Notice of Intent to Apply is available January 2, 2019 through January 18, 2019, at www.CMS.gov.

PsychU reported on the proposed ACO changes in “Behavioral Health Organizations Urge CMS To Help ACOs Better Address Behavioral Disorders,” which published on December 3, 2018.

For more information, contact: Elizabeth November, Final Rule Contact Point, Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244; 410-786-8084; Email: aco@cms.hhs.gov.

Starting in 2020, states with federal waivers to run their own state health insurance marketplaces will be able to offer subsidies to qualifying consumers who enroll in short-term, limited duration insurance (STLDI) plans and association health plans (AHP), as well as to those who enroll in traditional marketplace plans that cover the full range of essential health benefits. STLDI plans and AHP do not cover the full range of essential health benefits, such as mental health services and prenatal care.

The expanded use of subsidies was among the provisions of rules for “State Relief and Empowerment Waivers” issued on October 24, 2018, by the Centers for Medicare & Medicaid Services (CMS). States can request State Relief and Empowerment Waivers (also called Section 1332 waivers) from the Patient Protection and Affordable Care Act (PPACA) provisions to pursue innovative strategies for providing their residents with access to higher value, more affordable health coverage. These waivers could potentially be used to allow states to build on additional opportunities for more flexible and affordable coverage that the Administration opened through expanded options for STLDI and AHP.

On November 29, 2018, CMS released four waiver concepts that illustrate how states could implement new flexibility provided in the recently released guidance on section 1332 innovation waivers. The four concepts are: account-based subsidies, state-specific premium assistance, adjusted plan options, and risk stabilization strategies. Nothing in the new guidance or waiver concepts changes requirements for health insurance issuers to provide protections for people with pre-existing conditions. States must also ensure that the waiver plan complies with the four statutory requirements relating to comprehensiveness, affordability, coverage, and federal deficit neutrality. Additional details about the four waiver concepts are as follows:

  1. Account-based subsidies: Under this concept, a state can direct public subsidies into a defined-contribution, consumer-directed account that an individual uses to pay for health insurance premiums or other health care expenses. The account could be funded with pass-through funding made available by waiving the Premium Tax Credit (PTC) under section 36B of the Internal Revenue Code (IRC) or the small business health care tax credit. The account could also allow individuals to aggregate funding from additional sources, including individual and employer contributions. CMS believes this approach could give individuals more choices in terms of deductibles and premium cost and give them greater incentive to take responsibility for managing their health care spending.
  2. State-specific premium assistance: Under this concept, states can create a new, state-administered subsidy program with a structure intended to provide more affordable health insurance options to a wider range of individuals, attract more young/healthy consumers into the market, or to address structural issues that create disincentives to obtaining insurance coverage. States may receive federal pass-through funding by waiving the PTC under section 36B of the IRC to help fund the state subsidy program.
  3. Adjusted plan options: Under this concept, states could provide financial assistance for different types of health insurance plans, including non-Qualified Health Plans, such as catastrophic plans, STDLI, or AHPs. States could use this concept in conjunction with the account-based subsidy waiver concept to provide subsidies in the form of contributions to accounts, allowing individuals to use the funds to purchase coverage and use any remaining funds in the account to offset out-of-pocket health care expenses.
  4. Risk stabilization strategies: Under this concept, states would have more flexibility to implement reinsurance programs or high-risk pools. For example, states could implement a state-operated reinsurance program or high-risk pool by waiving the single risk pool requirement. CMS noted that reinsurance programs have lowered premiums for consumers, improved market stability, and increased consumer choice. States currently use a variety of models to operate state-based reinsurance programs, including: a claims cost-based model, a conditions-based model, and a hybrid conditions and claims cost-based model. If the state shows an expected reduction in federal spending on PTC, the state can receive federal pass-through funding to help fund the state’s high-risk pool/reinsurance program.

The potential impact of the State Relief and Empowerment Waivers was included in a December 3, 2018 report “Reforming America’s Healthcare System Through Choice & Competition” released by the federal Department of Health and Human Services (HHS). The report highlights steps HHS has taken to improve health care markets by addressing government rules and programs that limit choice and competition and produce higher prices for the American people. The report also identifies four areas where federal and state rules inhibit adequate choice and competition and offers recommendations for improving public policy in each of these four areas:

  1. Health Care Workforce and Labor Markets: HHS believes that reduced competition among clinical professionals leads to higher prices for health care services, reduces choice, and negatively impacts overall health care quality and the efficient allocation of resources. HHS believes that government policies have suppressed competition by reducing the available supply of health care professionals and restricting the range of services that they can offer. HHS recommended that states adopt policies to broaden health care professionals’ scope of practice and support telehealth service delivery to encourage innovation and allow health care professionals to meet consumer needs more easily. HHS also recommends that funding for graduate medical education be streamlined to allocate federal funding to address physician supply shortages.
  2. Health Care Professional Markets: HHS believes that state policies restrict entry into health care professional markets and can stifle innovative and more cost-effective ways to provide care while limiting choice and competition. These policies have resulted in higher health care prices and fewer incentives for health care professionals to improve quality. HHS recommended that states repeal or scale back their Certificate of Need laws and encourage the development of value-based payment models that offer flexibility and risk-based incentives for health care provider organizations, especially without unduly burdening small or rural practices.
  3. Health Care Insurance Markets: HHS believes that government mandates often reduce choice and competition in insurance markets and increase overall premiums. In the individual and small group markets, many consumers face limited coverage options that cover services they do not want or need and that drive up premiums, while others have been completely priced out of the market. Regulations that limit coverage choices should be changed so that states have more flexibility to develop policies that account for diverse consumer preferences. HHS recommended scaling back government mandates, eliminating barriers to competition, and allowing consumers maximum opportunity to purchase health insurance that meets their needs.
  4. Consumer-Driven Health Care: HHS believes that reliance on third-party payment insulates consumers from the true price of health care and offers them little incentive to search for low-cost, high-quality care. HHS further believes that when federal and state health policies give consumers more control over their health care dollars, consumers can use that power to demand greater value. HHS recommended promoting and expanding Health Saving Accounts (HSAs) and Health Reimbursement Accounts (HRAs), implementing reference pricing where appropriate, and developing price and quality transparency initiatives to help consumers make well-informed decisions.

However, the actual impact of the State Relief and Empowerment Waivers will likely be influenced by the recent partial summary order in Texas v. United States that found the entire PPACA to be unconstitutional because the Tax Cuts and Jobs Act signed in December 2017 eliminated the tax penalty for being uninsured. The health insurance marketplaces, the subsidies, and the State Relief and Empowerment Waivers were created by the PPACA. The ruling was issued on December 14, 2018.

PsychU reported on this topic in “DOL Finalizes Rules For August Launch Of Association Health Plans For Small Businesses & Self-Employed,” which published on July 25, 2018.

PsychU also reported on this topic in “Changes Proposed For PPACA Via HHS Rule Change On CSR Payments & New Presidential Executive Order,” which published on December 4, 2017.

PsychU reported on the allegations of Texas v. United States in the following articles:

For more information, contact: Press Office, U.S. Department of Health and Human Services, 200 Independence Avenue SW, Washington, District of Columbia 20201; 202-690-6343; Email: media@hhs.gov.

During its first full year, the Ohio Medicaid MyCare demonstration project for people dually eligible for Medicare and Medicaid reduced inpatient utilization by 21%. The probability of inpatient admissions for ambulatory care sensitive conditions dropped by 14.3%. The probability of an inpatient admission for a chronic, but ambulatory care sensitive condition dropped by 13.2%. Skilled nursing facility (SNF) admissions were 15.3% lower. The probability of SNF stays longer than 90 days was also lower. However, the demonstration also resulted in a 10.3% increase in preventable emergency room visits.

These findings were reported in “Financial Alignment Initiative MyCare Ohio: First Evaluation Report” by the National Academy of State Health Policy and RTI International for the Centers for Medicare & Medicaid Services (CMS). CMS contracted with RTI International to monitor and evaluate the implementation of the MyCare Ohio capitated model demonstration, which began on May 1, 2014. The evaluation includes findings through December 2016 and quantitative results through December 2015, and looked at the demonstrations effect on beneficiary experience, quality, utilization, and cost.

MyCare Ohio is a capitated model demonstration in which five competitively selected Medicare-Medicaid Plans (MMPs), called MyCare Ohio plans, are paid a blended, capitated rate to provide Medicare and Medicaid integrated primary, acute care, behavioral health, and long-term services and supports (LTSS) to enrollees age 18 and older who live in one of the 29 demonstration counties. The five health plans are Aetna, Buckeye, CareSource, Molina, and United. Of the 100,000 Medicare-Medicaid dual enrollees eligible for MyCare Ohio, approximately 69,000 had enrolled in the capitated model demonstration as of December 2016. Approximately 43% of eligible MyCare beneficiaries had an diagnosis of serious and persistent mental illness (SPMI).

Results for the LTSS and severe and persistent mental illness (SPMI) populations, when compared with similar beneficiaries in the comparison group, varied somewhat from the results for all eligibles.

Summary Of MyCare Demonstration Impact Estimates For Demonstration Period (May 1, 2014, To December 31, 2015), For All, LTSS, & SPMI Beneficiaries (adapted from Table 22)

All LTSS SPMI
Inpatient admissions  Lower Lower  Lower
Probability of ambulatory care-sensitive condition (ACSC) admissions, overall  Lower Not Statistically Significant (NS) Lower
Probability of ACSC admissions, chronic Lower Higher Lower
All-cause 30-day readmissions  NS  Lower  NS
Emergency room (ER) visits  NS  NS  NS
Preventable ER visits Higher Higher Higher
Probability of monthly follow-up after mental health discharges NS  NS NS
Skilled nursing facility (SNF) admissions Lower Higher  Lower
Probability of any long-stay nursing facility (NF) use Lower N/A  N/A
Physician evaluation and management (E&M) visits  Lower NS  Lower

The demonstration reduced monthly inpatient admissions by 0.0112 admissions per beneficiary per month, which corresponds to 0.1343 fewer inpatient admissions per eligible beneficiary per year. The demonstration decreased physician evaluation and management (E&M) visits by 0.0728 visits per month; it decreased SNF admissions by 0.0022 visits per month. The likelihood of long-stay SNF use (101 days or longer) decreased by 1.59 percentage points. There was no statistically significant demonstration effect on emergency room visits.

Using a difference-in-differences (DID) approach to evaluate the impact of the demonstration on Medicare costs, RTI found that the predicted capitated rate of $1,498 when compared to actual fee-for-service (FFS) expenditures ($1,577) showed the potential for gross Medicare savings compared to the non-enrolled beneficiary population, but did not find “statistically significant Medicare savings or losses during the first 32 months of the Ohio demonstration.” Demonstration enrollees had lower expenditures in base year two ($1,280 for enrollees vs. $1,797 for non-enrollees).

The savings calculation was based on capitation rates paid by CMS to MyCare Ohio plans for enrollees, and the fee-for-service expenditures and Medicare Advantage capitation rates for eligible beneficiaries who did not enroll in the demonstration. The estimates do not take into account actual payments for services incurred by enrollees and paid by the MyCare Ohio plans. The researchers did not calculate Medicaid savings due to lack of data. They intend to rerun the analyses to calculate Medicaid savings when more data is available.

PsychU reported on this topic in “MyCare Ohio Duals Demo Average Claim Cost PMPM Drops 6.8%,” which published on June 9, 2017.

For more information, contact: Office of Communications, Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244; 202-690-6145; Fax: 202-260-1462; Email: press@cms.hhs.gov; or Melissa Ayers, Director of Communications, The Ohio Department of Medicaid, 50 W Town Street, #400, Columbus, Ohio 43215; 800-324-8680; Email: Melissa.Ayers@medicaid.ohio.gov.

From 2013 through 2016, net savings generated by Medicare accountable care organizations (ACOs) totaled more than $660 million, representing about 0.026% of the more than $2.5 trillion in Medicare spending over the four-year period. Over the four years, gross savings generated by Medicare ACOs totaled $2.7 billion, about 1% of the $2.5 trillion in Medicare spending. The net savings accounts for about $2.1 billion in bonuses paid to ACOs that met their spending and quality targets.

These estimates were calculated using a difference-in-difference approach, rather than the benchmark-based approach used by the Centers for Medicare & Medicaid Services (CMS) in its most recent analysis of the ACO program. CMS calculated that ACOs have saved Medicare $1.6 billion, but resulted in a net loss of $384 million to the Medicare Trust Fund after shared savings were paid to ACOs.

The estimates were reported in “2016 Updates: MSSP Savings Estimates Program Financial Performance 2013-2016” by the National Association of Accountable Care Organizations (NAACOs). The report was written by researchers with Dobson|DaVanzo: Allen Dobson, Ph.D.; Sarmistha Pal, Ph.D.; Alex Hartzman, M.P.A., M.P.H.; Luis Arzaluz, M.S.; Kimberly Rhodes, M.A.; and Joan E. DaVanzo, Ph.D., M.S.W. For their analysis, the researchers compared spending by ACO provider organizations to spending of similar provider organizations not participating in the ACO program. The goal was to estimate Medicare spending in the absence of the ACO program. In its analysis, CMS judges ACO financial performance relative to the annual ACO benchmarks set as the pre-determined spending target. NAACOs believes that the CMS approach underestimates the savings generated by the ACO program.

Gross Savings in the Medicare Shared Savings Program for 2013 To 2016 Dobson | DaVanzo Analysis Compared to CMS Benchmark Approach (in millions)

Performance Year Difference-In-Difference Analysis CMS Benchmark Analysis
2013 $372.9 $233.6
2014 $637.2 $291.5
2015 $786.8 $429.3
2016 $858.8 $651.9
Total $2,655.7 $1,606.3

The full text of “2016 Updates: MSSP Savings Estimates Program Financial Performance 2013-2016” was published in December 2018 by NAACOs. A copy is available online at NAACOs.com.

PsychU reported on the most recent CMS estimates in “ACOs Shared Savings Raised Federal Costs By $384 Million Between 2013 & 2016,” which published on May 9, 2018.

PsychU reported on another aspect of this issue in “In Medicare Shared Savings Program, ACO Tenure Linked To Greater Spending Reductions,” which published on November 30, 2017.

For more information, contact: David Pittman, Health Policy and Communications Advisor, National Association of Accountable Care Organizations, 601 13th Street NW, Suite 900 South, Washington, District of Columbia 20005; 202-640-2689; Email: dpittman@naacos.com.

Looking back at 2018, one of the developments that most caught my attention was the number of “mega-collaborations” between health systems and health plans. These collaborations are changing how care is delivered, and coupled with the just released Medicare ACO risk rules, will have more importance in the year ahead. And, this shift brings great opportunity and great peril for specialty provider organizations serving consumers with complex needs. These collaborations have taken many forms.

There is the merger and acquisition model of provider organizations:

This past year, Humana acquired Kindred; and more— Humana & The Consortium To Buy Curo Health Services For About $1.4 Billion and Humana Partners With Walgreens To Provide ‘Senior-Focused’ Primary Care In Missouri.

Centene announced it had signed a definitive agreement to acquire Community Medical Holdings Corporation (see Centene To Acquire Community Medical Group To Expand Its Provider Assets). Anthem announced it had entered into an agreement to acquire Aspire Health. UnitedHealth and its subsidiary Optum were active in the acquisition space. And, dominating the health care news was the completion of the $69 billion acquisition of the health insurer Aetna by CVS.

And, there were other types of experiments in collaboration. There are also initiatives that target specific consumer groups—Care1st Health Plan Arizona Signs Value-Based Agreement With Equality Health To Offer An Expanded Network & Culturally Competent Services and Aetna & Betty Ford Partner With Kenton County, Kentucky On Jail Reentry Program.

And, I expect the number and depth of these types of health system/health plan collaborations will speed up with the recent CMS announcement changing the rules regarding Medicare Shared Savings ACO financial risk. Essentially, the new rules limit the amount of time an ACO can operate under a shared savings model from six years to three years. Additionally ACOs will be able to offer telehealth services and beneficiary incentives for healthy behaviors. (We’ll have more in-depth coverage of the new rules in an upcoming article.)

For specialty provider organizations, this raises great opportunities and presents some tremendous market threats, depending on what consumers the organization serves and what geographic markets the organization is located in. The health system/health plan collaborations represent “uber integration.” Integration of services—both vertical and horizontal—combined with fiscal integration. For most specialty organizations, I think the emerging available market positioning falls into two areas – “whole person” care coordination and/or providing admission diversion/readmission prevention for high-need chronic and complex populations.

Figure 1. Oss, M. Health System/Insurer Combos Gain Steam—& More To Come With ACO Changes [PowerPoint Slides] Retrieved from www.openminds.com

As we move into the new year, the executive teams of specialist organizations need to be aware of the big moves by the big players in their market—and have plans for where to “fit” in the value chain as it morphs. (The situation brings to mind my oft-used adage, “you can’t help but notice when elephants roll over.”) It’s all about strategy and anticipating the strategic scenarios that can rapidly change competitive advantage and sustainability. In my last piece for 2018, I want to wrap with some thought-provoking pieces on organizational strategy for the new year:

  1. Are Health Plans Your New Competition?
  2. Fitting Specialty Care Into ACOs
  3. Preparing For The Very Glacial VBR Rollout In Some Markets

On November 30, 2018, the federal Centers for Medicare & Medicaid Services (CMS) approved an amendment to the Florida Medicaid Managed Medical Assistance Waiver program that adds community behavioral health provider organizations as a participating provider group to the low-income pool (LIP). This change goes into effect for state fiscal year (SFY) 2018/19. Community behavioral health providers are organizations participating in the substance use disorder and mental health safety net system (Central Receiving Systems) administered by the Florida Department of Children and Families (DCF). Eligible provider organizations must be enrolled as a Medicaid provider. A Central Receiving System consists of a designated central receiving facility and other service provider organizations that serve as a single point or a coordinated system of entry for individuals needing evaluation or stabilization or crisis services.

The LIP consists of local funds contributed by counties, municipalities, and local health care taxing districts plus a federal match. The fund is used to reimburse safety net provider organizations for the costs of uncompensated charity care for uninsured low-income individuals who have income up to 200% of the federal poverty level. An annual total of $1.5 billion in LIP funds is available for each waiver demonstration year. Uncompensated care (UC) includes charity care for the uninsured but does not include UC for insured individuals, “bad debt,” or Medicaid and CHIP shortfall. Before CMS approved the new waiver amendment, LIP payments were reserved for UC provided by hospitals, federally qualified health centers, medical school physician practices, and rural health centers. Community behavioral health provider organizations were excluded.

A spokesperson for the Florida Agency for Health Care Administration (AHCA) said that for state fiscal year 2018-19, the LIP payments will provide an additional $7.5 million to cover uncompensated charity care costs for community behavioral health organizations designated as DCF Central Receiving Systems. This is additional funding that has not been previously available to this provider group. To receive LIP funds, eligible community behavioral health provider organizations must also show that they have uncompensated charity care costs. Additionally, LIP payments to provider organizations are contingent upon the non-federal share being provided through intergovernmental transfers.

AHCA submitted the “Managed Medical Assistance Waiver Amendment Request -Low Income Pool & Retroactive Eligibility” on April 27, 2018. The amendment also makes the following changes:

  • Regional Perinatal Intensive Care Centers added as an eligible hospital ownership subgroup for LIP funds effective for SFY 2017/18. The RPICC work to improve the outcome of pregnancy and the quality of life from birth. These centers provide obstetrical services to women who have a high-risk pregnancy. The centers also provide care for newborns with special health needs, such as critical illnesses or low birth weight.
  • Establish the Pre-Paid Dental Health Program (PDHP) to provide Florida Medicaid State Plan dental services to recipients through pre-paid ambulatory health plans effective December 1, 2018.
  • Eliminate the three-month Medicaid retroactive eligibility period for non-pregnant recipients aged 21 years and older (adults). This goes into effect on February 1, 2019, and will remain in effect until June 30, 2019, unless it is extended by the state legislature. Eligibility will continue to begin the first day of the month in which a non-pregnant adult applies for Florida Medicaid.

AHCA data indicates that that during SFY 2015/16 about 39,000 adults, less than 1% of all Florida Medicaid recipients, were made retroactively eligible at a cost of $98 million. The goal of eliminating retroactive eligibility is to improve fiscal predictability for the Medicaid program.

For more information, contact:

  • Mallory McManus, Communications Director, Florida Agency for Health Care Administration, 2727 Mahan Drive, Tallahassee, Florida 32308; 850-412-3623; Email: AHCACommunications@ahca.myflorida.com
  • Ron Fowler, Director of, Communications, Florida Council for Community Mental Health, 316 East Park Avenue, Tallahassee, Florida 32301; 850-224-6048; Email: ron@fccmh.org

During 2017, national health spending in the United States increased by 3.9%. In 2016, the increase was about 3%. Between 2016 and 2017, national health spending rose from $3.36 trillion (or about $10,402 per person) in 2016 to $3.49 trillion (or about $10,739 per person) in 2017. Health care spending accounted for 17.9% of gross domestic product (GDP) in 2017, which was similar to 2016 when health care spending accounted for 18.0% of GDP. Growth in overall health care spending slowed for the second consecutive year, following elevated rates of growth in 2014 (5.2%) and 2015 (5.8%). These years were affected by expanded Medicaid and private health insurance coverage, and increased spending for prescription drugs – particularly for drugs used to treat hepatitis C.

Growth in national health spending decreased among all payers—private health insurance, Medicare, Medicaid, out-of-pocket spending, and federal government sponsor spending. Private health insurance saw the greatest decrease in health spending at 2.0 percentage points. This is a result of lower growth in medical benefits and a decline in fees and taxes resulting from the Consolidated Appropriations Act 2016, which suspended collection of the health insurance provider fee in 2017. Medicare saw the smallest decrease in health spending growth at 0.1 percentage points.

Changes In Growth Of National Health Spending By Payer, 2016-2017

Category % growth in 2016 % growth in 2017 Change in Growth Total 2017 Spending & % Of Total
Private Health Insurance 6.2% 4.2% – 2.0 $1.2 trillion (34%)
Medicare 4.3% 4.2% – 0.1 $705.9 billion (20%)
Medicaid 4.2% 2.9% – 1.3 $581.9 billion (17%)
Out-Of-Pocket Spending 4.4% 2.6% – 1.8 $365.5 billion (10%)
Federal Government Sponsor Spending 4.9% 3.2% – 1.6 $982.4 billion (19%)

These findings were reported in “National Health Expenditures 2017,” by the Office of the Actuary at the Centers for Medicare & Medicaid Services (CMS). Researchers analyzed information from several sources, including (but not limited to) Medicare Trustees Reports, the Medicaid & Children’s Health Insurance Program (CHIP) Expenditure Tracking System, The U.S. Census Bureau, the Bureau of Labor Statistics, the Bureau of Economic Analysis, and a number of other surveys and statistical sources. The goal was to determine information regarding 2017 health care spending.

Overall national health spending for growth slowed in 2017 for the three largest goods and service categories. Hospital care growth decreased by 1 percentage point due to lower growth in the use and intensity of hospital services. Physician and clinical services decreased by 1.4 percentage points due to lower use and intensity of physician and clinical services. Retail prescription drugs decreased by 1.9 percentage points due to slower growth in the number of prescriptions dispensed, a continued shift to lower-cost generic drugs, slower growth in the volume of some high-cost drugs, declines in generic drug prices, and lower price increases for existing brand-name drugs.

Changes In National Health Spending Growth By Goods & Service Category

Category % growth in 2016 % growth in 2017 Change in Growth Total 2017 Spending
Hospital Care 5.6% 4.6% – 1.0 $1.1 trillion
Physician & Clinical Services 5.6% 4.2% – 1.4 $694.3 billion
Retail Prescription Drugs 2.3% 0.4% – 1.9 $333.4 billion

Data tables for “National Health Expenditures 2017” were published on November 27, 2017 by CMS, and are available at www.CMS.gov

The full text of “National Health Care Spending In 2017: Growth Slows To Post–Great Recession Rates; Share Of GDP Stabilizes” was published in the December 2018 issue of Health Affairs. An abstract is available online at www.healthaffairs.org.

PsychU reported on this topic in the following articles:

For more information, contact: Office of Communications, Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244; 202-690-6145; Fax: 202-260-1462; Email: press@cms.hhs.gov.

On December 6, 2018, The John A. Hartford Foundation with co-funding from the Gary and Mary West Foundation awarded the developers of the “Hospital at Home” model a $2 million, two-year grant to expand the use of the model at 10 existing sites. The Hospital at Home model which provides hospital-level acute care services at home was developed by The Icahn School of Medicine at Mount Sinai and Johns Hopkins University. Additionally, funds from the grant will be used to develop new payment strategies with Medicare and commercial payers.

Hospital at Home is an evidence-based program that provides high-quality, hospital-level medical care in the home for adults who require hospital admission for certain diseases, such as community-acquired pneumonia, congestive heart failure, chronic obstructive pulmonary disease, and cellulitis. Services provided through the Hospital at Home program include diagnostic tests, diagnostic studies, and treatment therapies from the clinical team which includes physicians and nurses. Any diagnostic studies and therapeutics that cannot be provided at home, such as computerized tomography, magnetic resonance imaging, or endoscopy, are available via brief visits to the acute care hospital.

Hospital at Home programs have been launched at Presbyterian Health Services in Albuquerque, New Mexico; Mount Sinai in New York; Partners and Atrius Health in Boston, Massachusetts; and the Marshfield Clinic in Wisconsin. It is also in practice at Veterans Affairs Medical Centers in Boise, Idaho; Honolulu, Hawaii; New Orleans, Louisiana; Philadelphia, Pennsylvania; and two Oregon sites in Bend and Portland. Researchers participating in the program stated that an aggregate number of participants is not available across the sites. They also noted that the number of individuals participating in the Hospital at Home program was small.

The payment model for Hospital at Home program varies by payer and by site. Initially, in 2014, the Icahn School of Medicine at Mount Sinai, New York was awarded a Centers for Medicare & Medicaid Services (CMS) Innovation Center challenge grant for $9.6 million to test Hospital at Home to inform a possible 30-day bundled payment model for fee-for-service Medicare. Funding for the program expired in 2017; however, the Icahn School of Medicine at Mount Sinai applied for a new Medicare payment model for Hospital at Home with the Physician-Focused Payment Model Technical Advisory Committee within the federal Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation (ASPE). Private payers currently support the model, but details on the reimbursement model are not available. The Veterans Affairs Medical Centers support the model through their unique reimbursement model.

The program evaluation, “Association of a Bundled Hospital-at-Home and 30-Day Postacute Transitional Care Program With Clinical Outcomes and Patient Experiences” was published in August 2018. The researchers Alex D. Federman, M.D., MPH; Tacara Soones, M.D., MPH; Linda V. DeCherrie, M.D; and colleagues compared outcomes for 295 people who received Hospital at Home services between 2014 and 2017, and for 212 with similar conditions who received traditional hospital care. The researchers found that those who received Hospital at Home care had shorter length of stay; lower rates of 30-day hospital readmission, emergency department visits, and skilled nursing facility admissions; and better ratings of care. There were no differences in the rates of adverse events.

The full text of “Association of a Bundled Hospital-at-Home and 30-Day Postacute Transitional Care Program With Clinical Outcomes and Patient Experiences” was published in August 2018 by JAMA Internal Medicine. An abstract is available online at jamanetwork.com

PsychU reported on this topic in “Hospital-At-Home Program Had Better Outcomes Than In-Hospital Care For Post-Acute Episodes,” which published on July 25, 2018.

For more information, contact:

  • Bruce A. Leff, M.D., Professor of Medicine, Division of Geriatric Medicine, Johns Hopkins University School of Medicine, 5505 Hopkins Bayview Circle, Baltimore, Maryland 21244; 410-550-2654; Fax: 410-550-8701; Email: bleff@jhmi.edu
  • Marie Persaud, Administration, Mount Sinai Health System, 1468 Madison Avenue, Annenberg Building Floor 10, New York, New York 10029; 212-241-1446; Email: dookumarie.persaud@mssm.edu
  • Clare Churchouse, MFA, Communications Assistant, The John A. Hartford Foundation, 55 East 59th Street, 16th Floor, New York, New York 10022-1713; 212-832-7788; Email: clare.churchouse@johnahartford.org

The issue of “non-medical” factors on health care outcomes and health care spending continues to get attention. The reasons are obvious—social determinants of health (SDH) like nutrition, transportation, housing, and more have a big impact on health (see Social Risk & The ‘Value’ Of Health Care, Paying For Social Services ‘Value’ Requires Measuring Cost Impact, and Tending To The Social Determinants Of Health – Or Not).

So it is not surprising that 80% of health plan executives believe addressing SDH are important—42% are integrating SDH programs into their population health efforts, and 34% are using census and socioeconomic data to augment their clinical data (see The Possible Dark Side Of Social Determinants Of Health). For example, the Humana Foundation, the philanthropic arm of Humana Inc., announced it is dedicating $7 million to address social determinants of health-funding that aligns with the organization’s stated goal of improving the health of the communities it serves by 20% by 2020.

But how do executives of provider organizations propose (and get paid for) solutions for health plans that address the SDH of their members. Our team has come up with a model for demonstrating the “ROI” of integrated health/social programs. For provider organization executive teams, this is where a specialized and focused approach to health plan/ACO marketing comes in, based on six key steps:

  1. Assess your organization’s ability to deliver social support programs
  2. Review health plan/ACO enrollment in the geographic service area to identify target customers
  3. Develop a concept statement about your social support services
  4. Meet with health plan/ACO managers to start the dialogue
  5. Refine your concept statement based on the conversation with health plan/ACO managers
  6. Continue the dialog until you get to the demonstration pilot stage

But I gained a few tips for making integrated health/social programs from a newly-released report from the Blue Cross Blue Shield of Massachusetts Foundation: Massachusetts has an accountable care organization (ACO) program combines shared savings and capitated payment arrangements with incentives to address the SDH using partnerships with community-based organizations—or community partners (CPs) as they are referred to.

The steps that Massachusetts community-based provider organizations are taking are steps that would work with provider organizations anywhere as they look for an expanded relationship with health plans. The approach of those organizations includes:

CPs are hiring health care staff and adopting health care organization language—There has been a lot of talk about health care integration, and in preparation for SDH, CPs are putting the relevant professionals on staff and adopting “medical” language to help build the requisite culture before the shift occurs, and to streamline the communications between social service organizations and health care.

CPs are shifting metrics—Not all metrics are created equal, and they can’t simply be swapped for one another and expect to deliver the same information. CPs have recognized this and are changing to new metrics that are better at showing how SDH affect things like readmission rates and emergency department utilization. CPs are also starting to reconsider their value proposition in ways that show value to health care financing and utilization.

CPs are expressing enthusiasm for research and data—CPs are committed to building an evidence base, including participating in academic research and randomized control trials to show the effectiveness of their work. This was often in response to the priority that MassHealth ACOs place on demonstrating service efficacy.

CPs are presenting menus of service options—Instead of focusing on one service line, CPs are developing different service options that ACOs could purchase on behalf of their consumers, and as a step toward eventually providing a customized program of supports.

CPs are considering creating HUBs—In the Massachusetts context, a HUB is a lead agency or prime contractor, functioning as the contractors with health plans and subcontracting the service delivery to other provider organizations.

Expect to see more research, pilot programs, and controversy on the integration of social supports into health care delivery system. The issues are myriad—access, equity, privacy, and more. But the financial effects are large enough that adventuresome executives of both health plans and provider organizations will likely wade into these waters.

For more on our recent coverage of those issues, check out these resources from the PsychU Resource Library:

  1. Tending To The Social Determinants Of Health – Or Not
  2. Helping Consumers With Food Insecurity: What Services Are Available?
  3. A Question Of Permanent Supportive Housing
  4. The Social Service Factor In The Health Care Value Equation
  5. Medicare Advantage Plans Approved To Offer Expanded Non-Medical Supplemental Benefits

Employers offering Cigna plans with integrated coverage for medical, behavioral, and pharmacy benefits saved an average of $193 per member per year. Cigna attributed the savings to greater member engagement with managing their health.

These results were announced as part of the findings from Cigna’s third annual Value of Integration Study. Cigna conducts the Value of Integration Study annually to assess and evaluate opportunities to optimize health plan benefit designs. Cigna’s 2018 Value of Integration Study examined approximately 4.9 million of its customer medical claims for group benefit plans from January 2016 to December 2017. Approximately half of the population had comprehensive medical, behavioral, and pharmacy benefits administered by Cigna, while the other half had only medical benefits with basic behavioral benefits administered by Cigna. Basic behavioral benefits are a carve-in fee-for-service (FFS) option that allows employers to choose between inpatient care management only (this is called the FFS Low Option). Customers were matched between the two groups on key attributes, including demographics, health condition, access to health improvement services, plan design and geographies. Cigna engaged KPMG LLP to review Cigna’s analysis of medical cost savings benefits from integration; KPMG reviewed the approach and methods used to conduct the study of medical cost savings benefits and found them to be sound.

The analysis compared outcomes during 2017 for Cigna members with only medical coverage to outcomes for those with integrated coverage (medical, behavioral, and pharmacy). For this analysis a “consumer with a health improvement opportunity” was defined as a member identified via claims for medical, pharmacy, or behavioral health claims or by self-report as eligible for chronic condition coaching programs (for diabetes, congestive heart failure, chronic obstructive pulmonary disease), lifestyle or wellness coaching (hypertension, smoking, healthy eating), or case management (complex oncology, transplants). Cigna defines engagement as completion of two health maintenance activities and one health improvement activity. Examples of the activities associated with health improvement include Goal complete – phone, online or onsite, Gaps in Care –credited closure, Pre/Post admission counseling, Case Management, Treatment Decision Support, and Healthy Pregnancies Healthy Babies.

Key findings were as follows:

  • A greater share of Cigna members with integrated benefits engage in health coaching, complex case management, and specialty drug management compared to Cigna members with only medical coverage.
  • About 22% more Cigna members enrolled in an integrated plan (medical, behavioral, and pharmacy benefits) participated in health coaching and case management.
  • Members with integrated benefits completed 15% more health improvement activities.
  • Members with integrated benefits had 10% lower out-of-network claims.
  • Among Cigna members with integrated benefits who were identified with a specific health improvement need, employers saved $645 per member per year for covered members with a known health improvement opportunity.
  • Employers saved $9,792 per member per year for an engaged member with a specialty condition.
  • Employers saved $5,900 per member per year for an engaged member with diabetes.

Jon Maesner, PharmD, chief pharmacy officer at Cigna, said “When people are actively engaged in their health and well-being, we see improvement across all metrics. Offering a fully-connected pharmacy benefit allows us to maximize every opportunity available to engage the people we serve, and we’re encouraged by the consistent value shown by connecting medical, behavioral and pharmacy benefits.”

For more information (and a copy of the top-line findings), contact: Ellie Polack, Media Contact, Cigna, 900 Cottage Grove Road, Bloomfield, Connecticut 06002; 860-902-4906; Email: elinor.polack@cigna.com.

The New Hampshire Department of Health and Human Services (DHHS) has proposed changing the public mental health system to deliver mental health services via a regional hub-and-spoke model with enhanced central accountability and oversight. DHHS proposed starting the work in the 2020-21 biennium. Total investment is projected at $23.95 million. The funding would be used to raise Medicaid rates; establish a centralized mental health portal; increase education, prevention, and early intervention efforts; and develop the mental health workforce. The funding would also be used to increase supported housing and transitional services for those leaving or at risk of requiring inpatient treatment; and expanding mobile crisis services and peer support programs.

DHHS released the plan on November 20, 2018, in its proposed 10-year mental health plan. Comments were accepted through December 10, 2018. The final plan will be submitted to the legislature in 2019. The proposed funding of $23.9 million would be used for three primary areas: $13.4 million to build infrastructure, $500,000 to increase DHHS oversight capacity, and $9.95 million to expand the service continuum.

A $13.4 million investment would be needed to build resources and infrastructure. The funds would be used as follows:

  • $10 million to raise Medicaid rates to the national average.
  • $1.5 million for DHHS to operate or to contract with an administrator to operate the proposed Mental Health Portal. The portal would provide a phone number for central mental health access point for consumers, facilitate psychiatrist consultations for primary care professionals, coordinate a public awareness and stigma reduction campaign, and monitor transactional and population-level accountability for the entire continuum of care. The portal would also provide a data platform for monitoring available resources in real time (bed tracking, emergency department wait times, mobile crisis units and other services.
  • $400,000 for community education to improve local community recognition and response to signs of mental distress.
  • $1 million for prevention and early intervention, with $800,000 to expand early serious mental illness interventions and $200,000 to support the Infant Mental Health Plan.
  • $500,000 for workforce development to provide training and support for both mental health and non-mental health professionals who encounter people in emotional distress. The state would provide $300,000 to provide training and technical assistance for front-line workers for Crisis Intervention Team for law enforcement, Mental Health First Aid for emergency room staff, and Youth Mental Health First Aid for teachers. The state would provide $200,000 for suicide prevention training.

A $600,000 investment would be needed to implement system strategies to improve quality improvement, monitoring, and DHHS capacity. The funds would be used as follows:

  • $100,000 for a new full-time position within DHHS to oversee implementation, quality, and monitoring of new system expansion efforts.
  • $500,000 to strengthen DHHS staff capacity by creating five new positions: a housing specialist, a liaison with the Department of Corrections, an infant and early childhood mental health specialist, a liaison with the Department of Education, and a Division of Behavioral Health Access Coordinator to work in partnership with the mental health portal and the Division of Public Health to launch and oversee a public health campaign.

A $9.95 million investment would be needed to implement practice strategies to improve community-based capacity. The funds would be used as follows:

  • $4.2 million for outpatient services, with $3 million for supported housing, supervised housing for transition age youth, and transitional housing for adults, with $1 million to expand the Housing Bridge Subsidy program and eliminate its wait list, and with $200,000 to expand the FAST Forward program to support children and families.
  • $2 million for step-up and step-down options to include community based transitional services for people at risk of an inpatient psychiatric admission; these services include crisis residential programs for children and adults, as well as expanded therapeutic day programs and partial hospitalization programs.
  • $3 million (and possibly more) for more crisis services and inpatient services, to include $1.5 million to create an additional crisis response team or center and $1.5 million to enhance current crisis services to include integrated mental health and co-occurring treatment response for adults and children. Further, more targeted inpatient beds are needed; DHHS intends to build budget projections for the additional beds and plans to explore options with private hospitals to consider reopening inpatient psychiatric beds in local communities.
  • $750,000 to integrate peer and natural supports; a priority is having peer navigators in emergency departments. Expanding the availability of peers in a variety of practice settings and engaging youth ambassadors is also recommended

Wait times for inpatient psychiatric care for individuals in mental health crisis are a key problem that the plan seeks to address. The number of state residents in crisis who were boarded in hospital emergency departments while waiting for admission to inpatient psychiatric treatment at a Designated Receiving Facility (DRF) has tripled since 2014. On several days during the past year, more than 70 people were waiting for admission to a DRF. Though emergency room wait times can vary, they can last up to three weeks. While waiting for admission to a DRF, the individual under civil commitment is forced to remain at the hospital emergency department but is not provided with care needed to address the individual’s mental health crisis. On November 10, 2018, the American Civil Liberties Union, New Hampshire (ACLU-NH) filed a class action complaint against the state over the state’s lack of inpatient psychiatric beds to provide timely treatment to people in mental health crisis. The plaintiffs in “John Doe v. State Of New Hampshire” had been subject to psychiatric boarding in an emergency department. On October 31, 2018, about 46 adults and 4 children were being involuntarily boarded. They accuse DHHS, Southern New Hampshire Medical Center, and the New Hampshire Circuit Court, District Division of involuntarily detaining them without due process, appointed counsel, or opportunity to contest their detention. Currently the state provides due process only after the individual is formally admitted to a DRF. The plaintiffs asked the court to require the state to provide due process protections to individuals involuntarily detained in emergency rooms.

The 10-year mental health plan noted that the problem of psychiatric boarding is a symptom of system stress. Over the past decades, New Hampshire has reduced beds at the New Hampshire Hospital and community hospitals have reduced or eliminated mental health units. The state has not increased the array of community supports. As a result, in some areas inpatient beds are occupied by individuals who could be treated in less restrictive environments, but due to lack of community-based service capacity they must remain hospitalized and the bed occupied.

PsychU reported on the state’s plans in “New Hampshire To Expand Mental Health Services For Residents,” which published on September 5, 2017.

For more information about the DHHS 10-year mental health plan, contact: Public Information Office, New Hampshire Department of Health and Human Services, 129 Pleasant Street, Concord, New Hampshire 03301; 603-271-9389; Fax: 603-271-4827; Email: PIO@dhhs.nh.gov.

For more information about the allegations and status of John Doe v. New Hampshire, contact: Ariana Schechter, Communications Director, American Civil Liberties Union of New Hampshire, 18 Low Avenue, Concord, New Hampshire 03301; Email: ariana@aclu-nh.org; or Jeanne Hruska, Political Director, American Civil Liberties Union of New Hampshire, 18 Low Avenue, Concord, New Hampshire 03301; Email: jeanne@aclu-nh.org.

The Washington State managed fee-for-service (MFFS) Medicaid health home duals financial alignment initiative saved Medicare 9.7%, or $103.4 million, from 2014 through 2016, compared to what would have spent without the demonstration. During the first demonstration year in 2014, Medicare savings totaled $35.4 million. During the second year, from January to December 2015, Medicare savings before adjustment for outliers totaled $30.4 million. For the third demonstration year, from January to December 2016, Medicare savings before adjustment is estimated at $37.7 million.

In the demonstration project, health homes act as the central point to integrate primary and acute care, behavioral health, and long-term care services for the riskiest beneficiaries. The program was implemented in 14 counties in July 2013, 23 additional counties were added in October 2013, and the remaining 2 counties (King and Snohomish) joined in April 2017. During the demonstration period under review, the state paid the health homes for delivery of services on a per-beneficiary, per-month basis, using three payment tiers. The payments included a one-time $252.93 fee for initial outreach and engagement, a $172.61 payment for intensive-care coordination and a $67.50 payment for each month that low-level care coordination was provided. The organizations selected to operate the health homes were Community Choice (a provider organization consortium); Northwest Regional Council (an Area Agency on Aging); Optum (a Mental Health Regional Support Network); and Southeast Washington Aging and Long Term Care (an Area Agency on Aging). Two managed care plans were also selected to be health homes, Community Health Plan of Washington and United Health Care Community Plan.

The findings were reported in “Report for Washington Health Home Managed Fee-for-Service: Final Demonstration Year 2 and Preliminary Demonstration Year 3 Medicare Savings Estimates: Medicare-Medicaid Financial Alignment Initiative” by Actuarial Research Corporation (ATC) and RTI International for the Centers for Medicare & Medicaid Services (CMS) Center for Medicare & Medicaid Innovation (CMMI).For Medicare, this preliminary report covers the 24-month period from January 1, 2015 through December 31, 2016. This 24-month period covers Medicare data only for demonstration period 2 for the Washington demonstration (January 1, 2015 through December 31, 2015) and demonstration period 3 (January 1, 2016 through December 31, 2016). It provides final Medicare savings estimates for demonstration period 2 and preliminary estimates for demonstration period 3.

The report has no analysis of Medicaid savings or outcomes. The report covers Medicare only because sufficient Medicaid data for 2015 and 2016 was not available. The authors intend to issue a savings report after each demonstration period and future reports will include Medicaid data for demonstration periods 1, 2, and 3 when available.

To calculate savings, the researchers compared trend of per member per month Medicare expenditures for each cohort in the demonstration group with the trend of per member per month expenditures of those in a comparison group. For Medicare, the per member per month amounts are calculated by dividing total Medicare Parts A and B expenditures by the number of member months of eligibility. Medicare-paid amounts do not include the amounts for deductibles, coinsurance, or balance billing. For hospital claims, the paid amount is reduced for Medicare Disproportionate Share (DSH) payments and Indirect Medical Education (IME) payments, because these payments are not directly related to the cost of care provided to individual beneficiaries.

The mean per member per month Medicare expenditures during demonstration year 2 decreased an average of $167.84 for the demonstration group. The target cost was $1,783.70, and the demonstration group cost was $1,615.86. The demonstration group baseline was $1,649.33, which dropped to $1,615.86 during the year. The comparison group baseline was $1,624.10, which increased to $1,754.60.

Washington State MFFS Demonstration Year 2, Medicare Per Member Per Month Costs By Type Of Service

Service Type Intervention Comparison Target Savings
Baseline $1,649.33 $1,624.10 N/A N/A
Durable Medical Equipment $73.68 $89.91 $90.62 $16.94
Home Health $65.74 $105.33 $104.99 $39.25
Hospice $20.60 $45.93 $45.92 $25.32
Inpatient $622.64 $648.16 $660.17 $37.52
Outpatient $385.01 $354.22 $359.89 -$25.12
Professional $298.39 $373.34 $380.64 $82.25
Skilled Nursing Facility $149.79 $137.73 $141.47 -$8.32
Total $1,615.86 $1,754.60 $1,783.70 $167.84

The mean per member per month Medicare expenditures during demonstration year 3 decreased an average of $178.07 for the demonstration group. The target cost was $1,749.99, and the demonstration group cost was $1,571.92. The demonstration group baseline was $1,649.33, which dropped to $1,571.92 during the year. The comparison group baseline was $1,624.10, which decreased to $1,703.93 from the demonstration year 2 total of $1,754.60.

Washington State MFFS Demonstration Year 3, Medicare Per Member Per Month Costs By Type Of Service

Service Type Intervention Comparison Target Savings
Baseline $1,649.33 $1,624.10 N/A N/A
Durable Medical Equipment $60.64 $74.63 $76.15 $15.51
Home Health $64.61 $102.01 $103.01 $38.41
Hospice $18.86 $56.97 $56.86 $38.00
Inpatient $605.54 $633.57 $652.03 $46.48
Outpatient $391.07 $354.24 $363.76 -$27.31
Professional $293.15 $354.80 $365.45 $72.31
Skilled Nursing Facility $138.06 $127.71 $132.73 -$5.33
Total $1,571.92 $1,703.93 $1,749.99 $178.07

In November 2018, the state issued a monthly update on the current status of the demonstration in “Washington State’s Fee-For-Service Dual Eligible Demonstration Monthly Report.” As of October 2018, there were 33,906 dual beneficiaries eligible for the duals demonstration, and 58% (19,593 beneficiaries) were actively enrolled with a health home lead entity. The remaining 21% chose not to participate. There are now nine lead entities: Community Choice, Community Health Plan of Washington, Northwest Regional Council, Optum Health, Southeast Washington Aging and Long Term Care, United Health Care Community Plan, Molina, Full Life, and Coordinated Care. Each lead entity has a different geographic coverage area. Full Life became a health home lead entity beginning in April 2017 in King County. Coordinated Care became a lead entity beginning in January 2018.

PsychU reported on this topic in “First Year Of Washington State Managed FFS Duals Demonstration Shows 6% In Medicare Savings,” which published on March 16, 2016.

PsychU reported on this topic in “Washington State To End Medicaid Health Home Program,” which published on January 13, 2016.

For more information, contact: Communications Office, Washington State Health Care Authority, Post Office Box 45502, Olympia, Washington 98504-5502; 360-725-1057; Email: communications@hca.wa.gov; or Office of Communications, Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244; 202-690-6145; Fax: 202-260-1462; Email: press@cms.hhs.gov.

Humana’s value-based contracts (VBC) are supporting physicians in improving member health and reducing medical costs. During 2017, condition-specific screening rates and cancer screening rates were higher among Humana Medicare Advantage members attributed to physicians participating in Humana VBC compared to those whose physicians received fee-for-service (FFS) reimbursement. Medical costs were 15.6% lower among Humana members whose physicians participated in VBC compared to costs for beneficiaries enrolled in original Medicare.

Members with diabetes whose physicians participated in Humana VBC had more condition-specific screenings and better adherence to medications compared to members with physicians who received Humana FFS reimbursement. Key improvements were as follows:

  • About 2% more had controlled blood glucose levels, 2% more had controlled renal disease, and 3% more had nephropathy screenings/tests.
  • About 9% more got regular eye examinations.
  • Across all members whose physicians participated in VBC, 11% more received colorectal cancer screenings, and 10% more had breast cancer screenings.
  • Receipt of screenings and medication adherence were higher among members whose physicians participated in VBC, with 4% more receiving an assessment of their body-mass index, and 8% more with controlled blood pressure.
  • Medication adherence rates were also higher, with 3% higher adherence to statin medications, hypertension medications, and diabetes medications.

Across Humana Medicare Advantage members, medical costs were 1% lower for those whose physicians participated in VBC compared to members whose physicians received Humana FFS reimbursement. A contributing factor to the difference in medical costs was associated with a difference in utilization of emergency room care and hospitalization. Outcomes for Humana Medicare Advantage members affiliated with VBC physicians in 2017 (compared to Humana FFS physicians) were as follows:

  • 7% fewer emergency room visits per thousand
  • 5% fewer hospital admissions per thousand

Humana reported these findings in “The Intersection Of Health + Care, Value-based Care Report.” It is Humana’s fifth year for reporting on the outcomes of its value-based care agreements. The section that discussed cost outcomes, “2017 Key insights,” was written by Kathryn Lueken, M.D., M.M.M. corporate medical director, Medical Market Clinical Integration. The data about outcomes and cost were from a study of approximately 1.5 million Humana Medicare Advantage members affiliated with physicians in value-based agreements compared to 146,000 Humana Medicare Advantage members affiliated with physicians under standard Medicare Advantage FFS reimbursement, and compared to original FFS Medicare.

In 2017, Humana had a total of 3.3 million Medicare Advantage members in individual and group plans. About 67% of Humana Medicare Advantage individual members are affiliated with primary care physicians participating Humana VBC, representing 1.9 million of the 2.9 million Humana Medicare Advantage individual members.

About 70% of physician practices participating in the Humana value-based program in 2017 earned shared savings. About 16.8% of every dollar Humana spent on member care in 2017 went to primary care physician (PCP) practices in value-based agreements (percent taken of total Medicare Advantage-covered claims expense). Non-value-based PCP practices contracted with Humana received 6.9% of total payments Humana distributed in 2017. The national average is 6%.

Results also showed that members affiliated with physicians in Humana Medicare Advantage VBC had more favorable outcomes in all Healthcare Effectiveness Data and Information Set (HEDIS) Star measures compared to members affiliated woth physicians who received Humana FFS reimbursement. HEDIS is a measurement tool developed by the National Committee for Quality Assurance (NCQA) to assess health plans’ performance on various dimensions of care and service. Members with diabetes who were affiliated with value-based physicians had more condition-specific screenings and better adherence to medications, demonstrating tighter control of blood glucose and blood pressure levels. Cancer screening rates were also higher for members affiliated with value-based physicians.

A section by Fernando Valverde, M.D. regional president, Medicare South Florida described Humana’s value-based continuum. There are two primary categories of payment models: FFS plus a quality bonus and value-based care. The share of members receiving care through each is as follows:

  • 8% of the members receive care via FFS arrangements
  • 25% receive care via FFS plus bonus for meeting quality of care targets.
  • 35% of members are in a shared savings plus bonus arrangement, which consists of FFS plus bonus plus potential for limited shared savings (upside only) in Medicare Parts A, B and D.
  • 6% of members are in a limited value arrangement, which consists of FFS plus bonus plus care coordination payment plus higher portion of shared savings in Medicare Parts A, B and D
  • 6% are in full value arrangements, which consist of FFS plus 100% responsible for Medicare Part B expenses and sharing of Part A (may have shared savings or complete responsibility for Part D)
  • 20% are in global value arrangements, which consist of full responsibility for Medicare Parts A, B and D through monthly capitated payments

Humana offers bundled payment agreements in select clinical specialties—Total Joint Replacement and Maternity. In 2018, there were 62 bundled payment agreements, up from 28 in 2017, and 12 in 2016.

The full text of “The Intersection Of Health + Care, Value-based Care Report” was published in November 2018, by Humana. A copy is available online at ValueBasedCare.Humana.com.

For more information, contact: Alex Kepnes, Corporate Media Relations, Humana, 500 W Main Street, Louisville, Kentucky 40202; 502-580-2990; Email: akepnes@humana.com.

On January 1, 2019, the new Pennsylvania Medicaid managed long-term services and supports (LTSS) program, Community HealthChoices (CHC) will go live for beneficiaries in the Southeast region of the state. The CHC managed care organizations (MCOs)—AmeriHealth Caritas, Keystone First CHC (AmeriHealth Southeast), Pennsylvania Health and Wellness (Centene), and UPMC for You—will coordinate physical health and MLTSS for beneficiaries age 21 and older. This is the second region to launch the CHC program; the first was in January 2018 in the Southwest region of the state.

Under the full-risk capitated contracts, which are valued at about $5 billion annually, the CHC-MCOs coordinate physical health and MLTSS for more than 420,000 adults age 21 or older who are dually eligible for Medicare and Medicaid, and/or adults with disabilities who need MLTSS. The CHC population represents about 15% of Pennsylvania’s total 2.7 million Medicaid beneficiaries.

The state is launching CHC statewide in three phases. The phase one launch took place in January 2018 in the Southwest region of the state, and about 80,000 beneficiaries enrolled. In phase two, CHC will launch in the Southeast region of the state, about 141,000 beneficiaries are eligible to enroll. The phase three launch in January 2020 will include all other regions of the state.

For the Medicaid-only members, the CHC-MCOs will manage physical and MLTSS; the members will continue to receive behavioral health services through the Behavioral HealthChoices MCOs. For the dual eligible members, the CHC-MCOs coordinate Medicare benefits and Medicaid LTSS. With CHC, individuals previously enrolled in the Aging waiver and individuals residing in a nursing facility become eligible for behavioral health services through the Behavioral HealthChoices program. Previously, these two populations received behavioral health through the fee-for-service system. There is a 60-day continuity of care period for all newly eligible members when CHC starts in each zone. Prior to the end of this continuity of care period, the behavioral health provider organization must either seek enrollment into the BH-MCO network, enter into an out-of-network agreement with the BH-MCO, or assist with transitioning the member to a BH-MCO network provider organization.

To ensure coordination of care, each BH-MCO and CHC-MCO will have a point-contact for coordination activities. The behavioral health provider organization is responsible for obtaining releases of information to allow the CHC-MCO, their service coordinators, or provider organizations to participate in coordination activities and treatment team meetings regarding their behavioral health care. Behavioral health provider organizations enrolled with the BH-MCOs may also be invited to participate in service planning meetings set up by the CHC-MCO service coordinators.

For more information, contact: Colin Day, Press Secretary, Pennsylvania Department of Human Services, Post Office Box 2675, Harrisburg, Pennsylvania 17105-2675; 717-425-7606; Email: dcolin@pa.gov.

On November 14, 2018, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule to ease and streamline the managed care regulatory framework for Medicaid and the Children’s Health Insurance Plan (CHIP). The proposed rule modifies the 2016 managed care final rule. The key proposed revisions focus on promoting flexibility, strengthening accountability, and maintaining and enhancing program integrity. The major changes in the proposal give states flexibility to set rate ranges and set network standards based on quantitative measures that account for telehealth. Comments on the proposed rule will be accepted through January 14, 2019.

Under the provisions to promote flexibility:

  • States will be able to develop and certify a rate range under specific conditions and limitations, including that the rate range be actuarially sound.
  • States will have more flexibility to set meaningful network adequacy standards using quantitative standards, such as “wait time for an appointment” that can account for telehealth and other new service delivery models. This approach can replace the current “time and distance” standards.
  • States will have a three-year transition period to meet requirements related to pass-through payments.
  • A current requirement that managed care plans must enter into a coordination of benefits agreement directly, will be eased. Instead contracts with managed care plans would be required to specify the methodology by which the state would ensure that the managed care plans receive all appropriate crossover claims for which they are responsible.
  • Administrative requirements will be updated to remove outdated and overly prescriptive provisions that govern how plans communicate with beneficiaries to better align with standards used across federal programs and enable the use of modern means of electronic communication when appropriate.

To strengthen accountability, CMS will issue guidance to help states move more quickly through the federal rate review process and to allow for submission of less documentation in certain circumstances while providing appropriate oversight to ensure patient protections and fiscal integrity. CMS will maintain the requirement for states to develop a Quality Rating System (QRS) for health plans to facilitate beneficiary choice and promote transparency. However, states will have greater ability to tailor an alternative QRS to their unique program while requiring a minimum set of mandatory measures to align with the Medicaid and CHIP Scorecard.

The provisions related to program integrity maintain the current regulatory framework for program and fiscal integrity, including provisions related to the actuarial soundness of rate setting, provider organization screening and enrollment standards, and medical loss ratio (MLR) standards. States will be prohibited from retroactively adding or modifying risk-sharing mechanisms and ensuring that differences in reimbursement rates are not linked to enhanced federal match.

Additionally, CMS is also asking states for data that could support revising the current 15-day limit on stays in an institution for mental disease (IMD) for Medicaid managed care beneficiaries. In this proposed rule, CMS did not propose any changes to the IMD policy but did note that states have expressed concerns with the administrative challenges created by the current limit. CMS will continue to support state waivers to the IMD exclusion for Medicaid managed care members diagnosed with addiction disorder; to date, CMS has approved a total of 15 such waivers, and is exploring further options to remove barriers to treatment in an IMD setting.

CMS said the proposed rule supports its efforts to streamline the Medicaid and CHIP managed care regulatory framework and reflects a broader strategy to relieve regulatory burdens; support state flexibility and local leadership; and promote transparency, flexibility, and innovation in the delivery of care.

PsychU reported on this topic in “The Final Medicaid Managed Care Rules = Lots Of State Discretion,” which published on June 6, 2016.

PsychU also reported on the final rule in “Medicaid Finalizes Managed Care Rules, Including Qualified End To IMD Exclusion,” which published on May 20, 2016.

For more information, contact: Office of Communications, Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244; 202-690-6145; Fax: 202-260-1462; Email: press@cms.hhs.gov.

The Alaska Department of Health and Social Services (DHSS) launched its Medicaid coordinated care demonstration project on September 1, 2018 via a contract with Providence Family Medicine Center (PFMC) that runs from July 1, 2018 through June 30, 2021. The value of this contract was not disclosed. PFMC will be demonstrating a patient-centered medical home (PCMH) model in the Anchorage area. The state is currently working with PFMC on implementation and oversight activities.

Through this program, PFMC will provide current Medicaid beneficiaries the services of a physician-led interdisciplinary care team (IDCT), which includes primary care-based management for integrated medical and behavioral health services, case management, care coordination, social work, health education, and transitional and follow-up care. The state will pay a partial capitation rate for the additional IDCT services. The program is voluntary for beneficiaries, who may opt-out of receiving the additional services at any time.

This demonstration project is one of the 16 initiatives DHSS developed to implement Alaska Senate Bill 74 of 2016 (SB 74). The bill’s provisions directed DHSS to enact comprehensive reform of Alaska’s Medicaid program. The purpose of these demonstration projects is to assess the efficacy of various health care delivery models with respect to cost, access, and quality of care.

For the Medicaid Coordinated Care Demonstration, DHSS intended to consider proposals for three health care models: managed care organization (MCO), prepaid inpatient health plans, and prepaid ambulatory health plans; care management entities; and provider organization-based reform. The request for proposals (RFP 170007291) was released on December 30, 2016, with proposals due by April 17, 2017. The state received three proposals for the provider-organization-based reform model and one proposal for the managed care model.

On June 1, 2018, DHSS selected Providence Family Medicine Center for the provider-organization-based reform contract. The unsuccessful bidders were PeaceHealth Ketchikan Medical Center and Pinnacle Integrated Medicine. On June 1, 2018, DHSS announced that the intended contractor for the MCO model is United Healthcare Insurance Company, which submitted the only bid. United will demonstrate a Medicaid managed care model in the Anchorage and Mat-Su Valley regions of the state. However, the contract requires approval by the Centers for Medicare & Medicaid Services (CMS); the contract award is anticipated by April 2019. In November 2018, DHSS presented the status of the initiative, and noted that it is also in negotiations with a care management entity for a bundled payment demonstration project. However, because the negotiations are in process, the entity was not identified.

In its proposal, PFMC proposed a payment model which continues current fee-for-service (FFS) payments for physician services and adds a capitated $5.00 per member per month care coordination fee component to support PCMH services which are currently non-reimbursable in the current FFS environment. PFMC and the State agreed upon a payment of $6.25 per member per month (PMPM) in Year 1, $6.40 in Year 2, and $6.55 in Year 3.

The care coordination fee would include the following services at an expanded level: behavioral health, social work, pharmacy, home visits and nurse case management. PFMC is currently providing these services to Medicaid enrollees who seek care at its clinic, and this new source of funding will allow PFMC to expand and enhance these services for additional Medicaid enrollees who currently do not have a primary care provider organization in the community. The interdisciplinary PCMH model will be evaluated for the following outcomes:

  • Lower expenditures for the PFMC Medicaid population resulting in cost neutrality with a per member per month payment system.
  • Less upstream service utilization, in terms of emergency department visits, inpatient admission, and readmissions within 30 days.
  • Improvements in the quality of clinical care and consumer health.

PFMC’s transformation from a traditional Family Practice to a PCMH was funded by Providence Health & Services Alaska. In May 2017, PFMC received Level 3 recertification (initial certification was in 2011) as a PCMH from the National Committee for Quality Assurance (NCQA). PFMC is an integrated (primary care and behavioral health) clinic providing consumer-centered support and services for all consumers (pre-natal through end-of-life) and across all health care venues –  inpatient, outpatient, long-term care, and in-home care, including homeless shelters and assisted living homes.

Additional information about the United Healthcare project was noted in the “Alaska DHSS Annual Medicaid Reform Report, Fiscal Year 2018” released to the legislature. DHSS is currently developing the draft managed care contract which will be implemented using 1915(a) federal statutory authority, and submitted to CMS for final approval. DHSS is working with Milliman Inc. to help develop and certify the MCO capitation rate. The rates are expected to be finalized by the end of December 2018. The contract will be finalized once CMS approves the contract and the capitation rates have been certified. The anticipated go-live date is April 1, 2019. At baseline United Healthcare will provide the same scope of services as the current Alaska Medicaid program unless specifically carved out within the contract. Pharmacy, behavioral health services, waiver services, and long-term care will not be included. United Healthcare will also offer care coordination, case management, wellness programs, a 24-hour nurse hotline, and other services that are currently not provided as regular benefits in the Alaska Medicaid program. Enrollment in the managed care plan will be voluntary for beneficiaries and provider organizations.

PsychU last reported on the provisions of Alaska Senate Bill 74 of 2016 in “Alaska Considers Privatizing Psychiatric Institute,” which published on July 20, 2016.

For more information, contact:

  • Jolene Withers, Program Manager, Alaska Department of Health and Social Services, 4501 Business Park Boulevard, Building L, Anchorage, Alaska 99503; Email: Jolene.withers@alaska.gov.
  • Mike Canfield, Senior Manager, External Communications, Providence Health & Services Alaska, 3760 Piper Street, Suite 2021, Anchorage, Alaska 99508; 907-212-5809; Fax: 907-980-6353; Email: Mikal.Canfield@providence.org.

On November 28, 2018, CVS Health announced that it completed its $69 billion acquisition of the health insurer Aetna. However, final legal approvals are still pending, and may not be issued for several months. The judge overseeing the acquisition is still reviewing antitrust concerns, and a hearing is scheduled for December 18, 2018. At this point, the judge cannot block the acquisition, but can question whether the federal Department of Justice (DOJ) should have conducted a broader antitrust review of the deal. On December 4, 2018, the judge told representatives of CVS, Aetna and the DOJ that at the December 18 hearing they must show why the two companies should be allowed to continue integrating while the judge makes a final determination on the antitrust issue.

The DOJ required Aetna to divest its stand-alone Medicare Part D plans to quell antitrust concerns, and approved Aetna’s plan to sell the plans to WellCare Health. That sale closed on November 30, 2018. WellCare will assume control of Aetna’s 2.2 million-member business, but Aetna will provide administrative services for the Part D business and take on financial risk associated with the unit through 2019.

After final legal approval for the acquisition is granted, CVS Health intends to integrate the health resources of CVS Health with Aetna’s provider organization network to help remove barriers to high quality care and to build lasting relationships with consumers. A key goal is making it easier for consumers to access information, resources, and services.

CVS Health President and Chief Executive Officer Larry J. Merlo said, “By delivering the combined capabilities of our two leading organizations, we will transform the consumer health experience and build healthier communities through a new innovative health care model that is local, easier to use, less expensive and puts consumers at the center of their care. As the front door to quality health care, our combined company will have a community focus, engaging consumers with the care they need when and where they need it, will simplify a complicated system and will help people achieve better health at a lower cost. We are also leading change in health care by challenging the status quo with new technologies, business models and partnerships. In doing so, we will continue to deliver on our purpose of helping people on their path to better health.” Mr. Merlo said CVS Health intends to integrate Aetna’s medical information and analytics with CVS Health’s pharmacy data. He said the goal is to “develop new ways to engage consumers in their total health and wellness through personal contacts and deeper collaboration with their primary care physicians.”

New products and services developed by the combined company will be broadly available to the health care marketplace, regardless of a consumer’s insurer, pharmacy benefit manager (PBM), or pharmacy of choice. Additionally, current CVS Health offerings, including retail pharmacy services, specialty pharmacy and long-term care, walk-in clinical services and PBM services, will continue to be fully accessible to other health plans. Aetna members will also continue to have a broad network of pharmacies, including community-based independent pharmacies, available to fill their prescriptions; they will not be limited to using CVS pharmacies. In the announcement, CVS Health mentioned the following as the first phase of new programs and services for the combined company:

  • Enhanced health services in the community will include a range of services focused on self-management for consumers with chronic conditions, expansion of services at MinuteClinic, nutritional and behavioral counseling and benefit navigation support, as well as assistance with durable medical equipment, digital health apps and connected devices.
  • CVS Health will build on its Project Health screening events at CVS Pharmacy and Aetna’s commitment to building healthier communities to offer new preventive health screenings in communities that are identified as high-risk for certain health challenges. These community-based programs will aim to improve consumers’ health outcomes through expanded preventive health screenings and support in the diagnosis, treatment and management of chronic diseases that can be effectively treated with prescription drugs and enhanced care management, including high cholesterol, high blood pressure and diabetes.
  • CVS Health will work with local community partners to provide consumers who are diagnosed for the first time with the follow up they need.
  • To support these communities and newly diagnosed consumers, MinuteClinic will also be introducing newly expanded chronic care management services.

CVS Health is also developing new medical cost reduction programs to improve medication adherence and avoid hospital readmissions and unnecessary emergency room visits. This will include timelier and more comprehensive medication reviews as well as expanded services and hours at select MinuteClinic locations to reduce inappropriate emergency room use.

PsychU reported on the acquisition in the following articles:

For more information, contact: Carolyn Castel, Vice President, Corporate Communications, CVS Caremark Corporation, One CVS Drive, Woonsocket, Rhode Island 02895; 401-770-5717; Email: Carolyn.Castel@CVSHealth.com; or Media Relations, Aetna, Inc., 151 Farmington Avenue, Hartford, Connecticut 06156; 860-273-0888; Email: mediarelations@aetna.com.

On December 4, 2018, the American Hospital Association (AHA) and the Association of American Medical Colleges (AAMC) filed a lawsuit against the U.S. Department of Health and Human Services (HHS) over the new Medicare site-neutral final rule on outpatient hospital clinic payments. The final rule on the Medicare prospective payment system (OPPS) was released on November 2, 2018 and goes into effect on January 1, 2019. The Centers for Medicare & Medicaid Services (CMS) intends to pay the same rate for a clinic visit in any setting. Currently Medicare pays more for a visit in the hospital outpatient setting than in the physician office setting. Over two years, the rule reduces payments to hospital outpatient clinics located off the hospital campus.

The AHA and AAMC have three hospitals as co-plaintiffs: Olympic Medical Center in Port Angeles, Washington; Mercy Health in Muskegon, Michigan; and York Hospital in York, Maine. The lawsuit, American Hospital Association et al., v. Azar, was filed in the U.S. District Court for the District of Columbia. The plaintiffs believe that the site-neutral policy violates Congressional intent to protect hospital outpatient departments. They allege that the rule is based on faulty analysis, and that the cuts will adversely affect consumers in rural and vulnerable communities.

CMS released the Final Rule, “Medicare Program: Changes To Hospital Outpatient Prospective Payment And Ambulatory Surgical Center (ASC) Payment Systems And Quality Reporting Programs” on November 2, 2018; it published in the Federal Register on November 21, 2018. Comments were accepted through December 3, 2018. CMS proposed the site-neutral payments for clinic visits as a way to increase the sustainability of the Medicare program.

The final rule also updates the requirements for the Hospital Outpatient Quality Reporting (OQR) Program and the ASC Quality Reporting (ASCQR) Program. CMS updated the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) Survey measure under the Hospital Inpatient Quality Reporting (IQR) Program by removing the Communication about Pain questions; and retaining two measures that were proposed for removal, the Catheter-Associated Urinary Tract Infection (CAUTI) Outcome Measure and Central Line-Associated Bloodstream Infection (CLABSI) Outcome Measure, in the PPS-Exempt Cancer Hospital Quality Reporting (PCHQR) Program beginning with the fiscal year 2021 program year.

For more information, contact:

  • Gabriella Valentine, Communications Coordinator, American Hospital Association, 800 10th Street, N.W., Two CityCenter, Suite 400, Washington, District of Columbia 20001-4956; 202-626-2264; Email: gdvalentine@aha.org.
  • Office of Communications, Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244; 202-690-6145; Fax: 202-260-1462; Email: press@cms.hhs.gov.

Solving a problem is the best path to a long-term partnership with a health plan. That was the advice of Michael Golinkoff, Ph.D., M.B.A., Senior Vice President, Innovation Advisor, AmeriHealth Caritas, in our September interview with him, Solve The Problem, Gain A Partner.

A couple months later, in his keynote address, Building Successful Partnerships With Health Plans: An Insider’s Guide To Payer Relationships, Dr. Golinkoff took his advice one step further talking about what enables executives of provider organizations to move to the “next level” in collaborations with health plans. His perspective is that there are three key enablers of developing these new relationships and participating more fully in the emerging value-based market—new reimbursement models, expanded technology platform, and focused use of analytics.

New reimbursement models—Having the ability to participate in a new financial relationship with health plans is key. This means both the ability to accept reimbursement other than the more traditional fee-for-service method  and to link that reimbursement to performance and outcomes. To build successful partnerships, provider organization executives need to rethink their approach to engagement with health plans and tailor their approach to focus on the information that health plans want. This means understanding health plan needs and providing solutions with demonstrated outcomes. Provider organizations that can show outcomes will be the ones that receive the most favorable payment arrangements. Dr. Golinkoff noted that provider organizations should stop seeing outcomes as secondary and start seeing them as their primary variable in reimbursement.

Expanded technology platform—In order to make these new reimbursement models work, provider organization executives need to create models for the rapid evaluation and adoption of new technologies. These models should focus on technology that increases the value of care through cost reductions or performance improvement. And, executives need to think beyond the EHR, to more personal technology such as telehealth, remote monitoring, wearable devices, machine learning, and online communities. Not only may these technologies extend the workforce, but they have the potential to offer new access points for consumers.

For more from PsychU, see Are You Strategically Interoperable?.

Focused use of analytics—In the end, being able to navigate changes in reimbursement, technology, and service lines depends on having the right data. Dr. Golinkoff made the point that with advancements in big data and analytics, not only is it possible to manage the system but also it will soon be possible to better individualize services at the consumer level. The key is building a metrics-informed system management platform.

For more from PsychU, see Building Your Foundation & Your Castle, and Tech Management As Executive Competency.

Finally, for new approaches to value-focused collaborations to work, there is the issue of legislation and regulation. Dr. Golinkoff spoke to the lag between where the field is going and the laws that support it, especially when it comes to issues around reimbursement for virtual health care, privacy and security of consumer data, and the use of outcomes-based reimbursement and treatment models. This lag—which is both national and state-specific—will mean that innovation will move at different pace in different markets. But, it will move.

To get a sense of where the market is at in the evolution to new relationships between provider organizations and health plans, check out:

  1. Medicare Beneficiaries Have Highest Quality & Lowest Cost In Hawaii, Alaska & Oregon
  2. CMS Awards 7 Agreements For Performance Measure Development For Medicare’s Quality Payment Program
  3. New Medicare Bundled Payment Model Has 1,299 Participating Provider Organizations
  4. Horizon Blue Cross Blue Shield Of New Jersey Reports 4% Lower Cost For Commercial Members In Value-Based Arrangement

The American Psychiatric Association (APA) and APA Foundation Center for Workplace Mental Health recommend employers take a more active role in improving access to behavioral health care. They recommend improving access by ensuring network adequacy, mental health parity compliance, collaborative care, and telepsychiatry in employer-sponsored health plans. The recommendations include:

  1. Network adequacy of health plans: Health plans and behavioral health organizations should ensure network adequacy: increase in-network providers for all mental health and substance use services, provide updated and accurate provider directories, understand and improve network participation to enhance access to in-network treatment, provide incentive payments to fully network-participating providers who meet quality metrics.
  2. Benefit parity: Employers and employer coalitions should improve mental health parity compliance: ask plans about differences in frequency of in-network and out-of-network care for mental health and substance use care; denial of care rates for mental health and substance use disorder; an explanation of disparities, corrective action, and action timelines; and organizational legal department familiarity with parity laws.
  3. Measurement-based care: Employers and employer coalitions should advance measurement-based care: request health plan action plans that require provider organizations to use standardized measurement-based tools for decision-making, and that requires aggregate-level outcomes data for employees being treated for mental health and substance use conditions; and assure that health plans are screening enrollees for depression, anxiety, psychosis, bipolar disorder, suicide, substance use and that the plans track and report on treatment outcomes. Health plans and behavioral health organizations (BHOs) should provide incentive payments and minimize administrative requirements to primary care, mental health, and substance use provider organizations who participate in network and in quality improvement programs that require the use of standardized measurement tools at regular intervals.
  4. Integration with primary care: Health plans and BHOs should expand the collaborative care model: pay for the evidence-based collaborative care model (CoCM); ensure that primary care practices implement the CoCM with appropriate methodology; provide health care professionals a link to APA’s collaborative care training module, and provide technical assistance and training on the module; and provide employers with data on the use of CoCM Current Procedural Terminology (CPT) codes. Employers and employer coalitions should request a plan for ongoing technical assistance and training regarding the CoCM and CPT codes from health plans.
  5. Expansion of virtual care: Health plans and BHOs should offer a link to the APA’s telepsychiatry toolkit to their in-network primary care and mental health providers for best-practice use; and identify and notify employers of barriers to expanding care through telepsychiatry, and methods to overcome these barriers. Employers and employer coalitions should educate providers and plan enrollees about telepsychiatry, and ensure training for in-network providers regarding telepsychiatry delivery; and require health plans to reimburse telehealth care at the same rate as in-person health care.

These recommendations were reported in “Recommendations for Improving Access to Mental Health and Substance Use Care.” The APA partnered with the APA Foundation’s Center for Workplace Mental Health and consulted with psychiatrists, large employers, health plans, business groups on health and other mental health professionals. The goal was to develop these recommendations to assist employees in locating and accessing timely and effective mental health and substance use treatment.

The full text of “Recommendations for Improving Access to Mental Health and Substance Use Care” was published in August 2018 by the Center for Workplace Mental Health and the American Psychiatric Association. An abstract is available online at workplacementalhealth.org.

For more information, contact: Darcy Gruttadaro, JD, Director, Center for Workplace Mental Health, American Psychiatric Association Foundation, 800 Maine Avenue SW, Suite 900, Washington, District of Columbia 20024; 202-559-3888; Email: dgruttadaro@psych.org.

On November 26, 2018, Beacon Health Options launched Beacon Care Services, a new business entity that will provide outpatient mental health services. The first Beacon Care Services practice is located at the Walmart store in Carrollton, Texas. In the coming months, the practice plans to accept health coverage programs so people can take advantage of their health plan’s mental and behavioral health benefits. This would include Medicare, Medicaid, and private health plans. Appointments can be set online or with a phone call; walk-ins are also accepted.

Beacon Care Services is led by Russell C. Petrella, Ph.D., who is also president and chief executive officer of Beacon Health Options. Dr. Petrella said “We chose a retail setting for the first practice because it offers the convenience of a local neighborhood location that is close by and easy to get to, and our evening hours accommodate our patients’ schedules. Our online appointment scheduling system makes it easy for people to plan their visits ahead of time to fit into their busy lifestyles.” Dr. Petrella said, “Our hope is to help close this gap by providing more trained clinicians in neighborhoods throughout the country, starting in 2018 with Texas.” In addition to this location, Beacon is evaluating other locations that will help further expand access to behavioral health services.

Beacon Care Services offers brief and short-term therapy, or long-term treatment for the following: counseling for adults; diagnostic screening and assessment; individual and couples therapy; wellness, recovery, and resilience education; and grief counseling. It does not provide individual counseling or medication management for children and adolescents under 18 except in relationship to family issues/family counseling at a parent’s request.

In addition to Dr. Petrella, the Beacon Care Services leadership team includes Sherry Dubester, M.D., as chief medical officer; Chris Carson, M.D. as medical director; and Kristen Tripp, LMHC as director of clinical services.  Beacon Health Options entities have been providing behavioral health management services in Texas for 26 years and currently serve 750,000 Medicaid enrollees (STAR), Children’s Health Insurance Program (CHIP) recipients, and Marketplace Exchange members.

For more information, contact: Amy Sheyer, Assistant Vice President, External Relations, Beacon Health Options, 200 State Street, Boston, Massachusetts 02109; 888-204-5581; Fax: 781-994-7600; Email: amy.sheyer@beaconhealthoptions.com.

On November 29, 2018, the Maryland Department of Health (MDH) released a request for proposals (RFP MDH/OPASS 20-18319) seeking an administrative services organization (ASO) for the state’s public behavioral health system. Proposals are due by January 22, 2019. The resulting contract has a five-year base period, followed by a one-year option period. The current ASO contract was awarded to ValueOptions, now Beacon Health Options, in October 2014; the five-year contract is valued at approximately $77 million.

The ASO will manage behavioral health services for individuals with Medicaid eligibility as well as certain uninsured and grant-funded individuals. Additionally, the ASO will manage the provider network and service utilization for the Applied Behavioral Analyst (ABA) program for children and youth with autism. The ASO functions in the contract include provider management and maintenance; participant relations; registration, authorization and utilization management; participant and provider assistance and communication; quality management and evaluation; eligibility; claims processing; and special projects/new initiatives.

The current ASO contract does not include the ABA program. All other ASO functions are the same as those sought in the RFP.

Under the new ASO contract, in the second contract year MDH will impose five outcome-based standards. If the ASO fails to meet one or more of the standards (on an annualized basis) the contractor will pay MDH fixed, agreed, and liquidated damages equal to 0.10% of the invoice amounts for the previous contract year. In this way, the total credit amount is capped at 0.5% of the invoice amounts for the contract year. The five outcome-based standards include:

  1. Follow-up Appointment After Behavioral Health Hospitalization, including inpatient psychiatric hospitals and addiction treatment at an institution of mental disease (IMD). This measure will be performed with the ASO’s mental health and addiction treatment data and reported quarterly. Two items will be measured: follow-up appointment kept after hospitalization within 7 and 30 days. However, the addiction treatment residential shall be reported separately. The goal is to decrease the length of time between hospital discharge and the first outpatient appointment.
  2. Mental Health Readmission Rate. This measure will be performed with the ASO’s mental health data and reported quarterly. This will include all Maryland inpatient providers. The goal is to reduce mental health readmission rates.
  3. Engagement of Individuals Newly Diagnosed with Substance Use Disorders or Mental Health Disorders. This measure will be performed with the ASO’s behavioral health data and reported quarterly. This measure will be performed for individuals with a new diagnosis of: schizophrenia (first episode psychosis); major depressive disorder; opioid use disorder; or alcohol use disorder. The goal is to positively impact engagement with addiction and mental health services for those individuals newly diagnosed with an addiction or mental health disorder.
  4. Consumers Newly Diagnosed with Schizophrenia and Antipsychotic Medication Adherence. This quality measure will report on the consumers that have a new diagnosis of schizophrenia and who are prescribed antipsychotic medication(s). The goal is to positively influence medication adherence. For the purposes of this performance measure, “newly” is defined as no claim with a diagnosis of schizophrenia for at least the previous six months.
  5. Adherence of Antidepressant Medication Use for Consumers Diagnosed with Major Depression from Inpatient Hospitalization. This quality measure will report on consumers diagnosed with major depression, and their adherence to prescribed antidepressant medication(s). The goal is to positively influence medication adherence.

The contract will also include performance measures related to the ASO system performance. These measures affect the timeliness of call center responses, turnaround of inpatient authorization requests, non-Medicaid application processing, grievances and appeals, and claims processing. The measures also address ASO staffing levels. If the ASO fails to meet the system performance benchmarks, the ASO will pay liquidated damages at a fixed percentage of invoices.

MDH set three minimum qualifications that the bidders must document have been met within the past seven years.

  1. Accreditation under National Committee for Quality Assurance (NCQA) or URAC (formerly Utilization Review Accreditation Commission) as a managed behavioral health care organization.
  2. Neither the bidder or its subcontractors are enrolled as Maryland Medicaid provider organizations.
  3. Three years of experience as an ASO managing an array of services for individuals who have moderate to severe behavioral health needs that are financed with Medicaid (state and federal funds) and state-only-generated funds, or similar braided funding. The bidder must provide evidence that it has managed a system that serves at least 100,000 Medicaid covered lives for a single publicly funded behavioral health system.

During fiscal year 2018, Maryland Medicaid served about 1.4 million people. About 200,000 people receive specialty mental health services annually through the public behavioral health system, 96% are participants in the Medicaid system. In addition, 100,000 state residents receive publicly funded addiction treatment services and of those, 96% are Medicaid beneficiaries. About one-third of people served through the public behavioral health system have dual diagnoses. The services provided through the public behavioral health system include those covered by Medicaid as well as others offered by federal, state, and other grants that support the continuum of care.

Currently, about 85% of all Maryland Medicaid participants receive somatic health services through a managed care organization (MCO), which is responsible for providing somatic care through a risk-based, capitated payment system. Currently nine MCOs participate in the HealthChoice program. The remaining 15% receive somatic care services through the fee-for-service (FFS) system. The FFS population includes those newly eligible and waiting to pick an MCO, those in a spend-down category, those over age 65, those dually eligible for Medicare and Medicaid, those living in an institution, those participating in the Employed Individuals with Disabilities program, or the Rare and Expensive Case Management (REM) program, or the Model Waiver.

Mental health care has historically been carved out of the HealthChoice MCO contracts. In 2015, MDH carved addiction treatment out from the MCO responsibilities, and moved it to the public behavioral health system to be jointly administered with mental health services. Under this model the HealthChoice MCOs are still responsible for behavioral health services which can be obtained from a Medicaid participant’s primary care provider. Medicaid participants needing specialty behavioral health services, both those in managed care and in FFS, receive services through the specialty behavioral health provider organizations. The public behavioral health system ASO pays claims for Medicaid mental health and addiction treatment services and pays claims for authorized state-only and some grant-funded services for Medicaid beneficiaries and for eligible uninsured individuals.

For more information, contact:

  • Maryland Department of Health, 201 West Preston Street, Room 416A, Baltimore, Maryland 21201; 410-767-5117; Email: mdh.solicitationquestions@maryland.gov.
  • Brittany Fowler, Deputy Director of Communications, Maryland Department of Health, 201 W Preston Street, Baltimore, Maryland 21201-2399; 410-767-1368; Email: brittany.fowler@maryland.gov.

On November 28, 2018, the Oregon Health Authority (OHA) said that in its next procurement for Medicaid Coordinated Care Organizations, the service areas will be based on counties. Currently the 15 CCOs operate in service areas defined in 2012 through the request for applications (RFA) process. Of those, nine CCOs have boundaries that follow ZIP codes, not county lines.

OHA intends to release the CCO RFA in January 2019. Contract awards are anticipated in June 2019. The new contracts will go live in January 2020. The contracts will run through 2024. The stated benefit of CCO service areas based on county line boundaries is the alignment with behavioral health and public health infrastructure, school districts, and the justice system. The state will not have a predetermined limit on the number of CCOs that can serve each county. Currently, the CCOs must contract with the public behavioral health system in each county.

On October 12, 2018, OHA released “CCO 2.0 Recommendations of the Oregon Health Policy Board” to solicit public comment on its plans for the next CCO contracts. The report focuses on four key areas: improving the behavioral health system, increasing value and pay for performance, focusing on social determinants of health and health equity, and maintaining sustainable cost growth. On November 21, 2018, the Oregon Health Policy Board submitted its final report to the governor.

To improve the behavioral health system and address barriers to access to and integration of care, the CCOs will be fully accountable for the behavioral health benefit, including developing a person-centered mental health and addiction disorder (behavioral health) system. The CCOs will work with partners from across their communities to remove barriers between behavioral, physical, and dental health. OHA will use metrics to reward behavioral health and oral health integration. OHA will implement policies that expand programs that integrate primary care into behavioral health settings. The CCOs will be required to support electronic health record adoption and access to electronic health information exchange.

To increase value and pay for performance, over the next five years the CCOs will make a significant move away from fee-for-service payments toward paying provider organizations based on value. OHA will increasingly incentivize provider organizations and health systems for delivering consumer-centered and high-quality care. All CCOs will significantly increase the development of value-based payments (VBPs) to improve health outcomes specifically in the areas of hospital care, maternity care, behavioral health, oral health, and children’s health care. By 2024, 70% or more of CCO payments should be through VBP arrangements. Each CCO will be required to meet annual VBP growth targets.

To focus on social determinants of health and health equity, the CCOs will increase their investments in strategies to address social determinants of health and health equity, working deliberately with partners to prevent health inequities and eliminate systemic barriers to better health outcomes for all Oregonians. For this effort, the partners include: members, non-profit organizations, hospitals, schools, and local public health departments. The CCOs will align goals at the state and local level to improve health outcomes and advance health equity, while OHA will develop measurement and evaluation strategies to increase understanding of spending in this area and track outcomes. OHA will adopt policies to encourage CCOs to increase strategic spending on social determinants of health, by increasing CCO financial support of non-clinical and public health provider organizations. Community health assessments will be aligned with community health improvement plans to increase impact. The CCOs will increase the integration and use of traditional health workers.

To maintain sustainable cost growth and ensure financial transparency, the CCO 2.0 policies are designed to intensify the state’s focus on addressing major cost drivers. OHA will also identify areas where CCOs can increase efficiency, improve value, and decrease administrative costs.

On November 19, 2018, OHA also held public input sessions on member enrollment and rate setting for CCO 2.0. OHA seeks to develop a process for how members will enroll in CCOs when there is a change in CCO availability, and to develop an auto-assignment process for members who do not select a CCO in areas with multiple CCOs. OHA shared multiple proposals for this process. The agency also sought public comment on how to set the capitation rates (amount paid to CCOs per member per month) used to build global budgets, and draft rate methodology adjustments to the current rate development process. Decisions on member enrollment and rate setting will be announced with the release of the RFA in January.

OHA sought public comment on how to best define service areas for current and potential new applicants. Public comment supported establishing service areas based on county boundaries. The OHA announcement noted that CCO applicants will be allowed to seek exceptions to county-wide coverage. Those applicants will need to demonstrate how their proposed service area would do a better job of achieving the transformation priorities of CCO 2.0, the benefit to members and the community, how it addresses consumer travel and referral patterns, and that the proposal is not designed to minimize financial risk and does not create adverse selection.

For more information, contact: Allyson Hagen, Oregon Health Authority, 500 Summer Street NE, E-20, Salem, Oregon 97301-1097; 503-947-2340; Fax: 503-947-5461; Email: Allyson.Hagen@state.or.us.

The Delaware Department of Health and Social Services (DHSS), Division of Substance Abuse and Mental Health (DSAMH) are exploring adding core service requirements for comprehensive behavioral health clinics serving Medicaid beneficiaries. The goal is to create a non-fragmented approach to care, which could allow individuals to remain with their “provider of choice” even when their level-of-care needs dictate a change in services. Currently, the state does not operate traditional community mental health centers that provide safety net services. Instead, it contracts with private provider organizations that do not have responsibility for safety net services, unless the contracts are specifically amended.

The Delaware Medicaid program offers specialized home-and community-based services (HCBS) for people with severe and persistent mental illness (SPMI) and significant addiction disorder through the Promoting Optimal Mental Health for Individuals through Supports and Empowerment (PROMISE) 1115 waiver program. PROMISE, which launched in 2015, offers an array of HCBS that are person-centered and recovery oriented. PROMISE serves any adult age 18 and older in Delaware who has behavioral health needs (mental health and/or addiction) and moderate or severe functional impairments who meets need-based eligibility criteria. The individual may also be found to continue to need at least one service or support in order to live and/or work independently. Medicaid and private insurance are charged for any individuals with insurance coverage. PROMISE is stand-alone program under Delaware’s Medicaid program for anyone with Medicaid coverage.

As a first step toward determining the feasibility of requirements for comprehensive behavioral health clinics, DSAMH issued request for information (RFI HSS-PF-001) on November 28, 2018. Responses are due by December 12, 2018. Specifically, DSAMH is considering whether behavioral health provider organizations should offer a core set of services, and whether any subsequent request for proposal (RFP) should ask vendors to offer a set of value-added services in addition to the core set. In the RFI, DSAMH clarified that it anticipates that offering value-added services would not be required, but that the vendors who offered them would receive additional consideration during the RFP response review.

The RFI listed the following proposed core services that comprehensive behavioral health clinics would provide to consumers eligible for PROMISE services:

  • Assertive Community Treatment (ACT)
  • Intensive Care Management (ICM)
  • Community Psychiatric Supportive Treatment (CPST)
  • Peer Supports
  • Psychosocial Rehabilitation (PSR)
  • Supervised Apartment Program (SAP). This is a statewide program for persons who are working toward the goal of living independently and who need some additional daytime, evening, overnight, and weekend supervision. The apartment leases, on-site services, and operations are paid for and managed by the ACT/ICM provider organization.

The comprehensive behavioral health clinics would also provide the following proposed core services that will not require PROMISE eligibility. These services would be offered to any consumers with mental illness, addiction disorder, or both are as follows:

  • Outpatient Individual and Group Therapy
  • Outpatient Psychiatry
  • Peer Support
  • Intensive Outpatient Therapy

DSAMH proposed that comprehensive behavioral health clinics would provide the following value-added services for PROMISE-eligible consumers:

  • Benefits Counseling
  • Community Transition Services
  • Financial Coaching
  • Individual Employment Support Services
  • Instrumental Activities of Daily Living/ Chore
  • Nursing
  • Personal Care
  • Respite

The proposed value-added services that will not require PROMISE eligibility, to be offered to any consumers with mental illness, addiction disorder, or both are as follows:

  • Medication Assisted Treatment (MAT)
  • Partial Hospitalization

PsychU reported on the state’s behavioral health system in “Delaware Behavioral Health Consortium Proposes Plan To Improve Addiction & Mental Health Services,” which published on July 13, 2018.

For more information, contact: Jill Fredel, Communications Director, Delaware Department of Health and Social Services, 1901 N Du Pont Highway, Main Building, New Castle, Delaware 19720; 302-255-9047; Email: jill.fredel@state.de.us.

The adoption of new technology is an evolving process that is never quite finished—as the market changes, so do technology needs. The shift to more reimbursement based on performance or value is no exception. What technology and data analytics an organization needs are dependent on where they are on the spectrum of value-based care. As value-based reimbursement (VBR) models require more assumption of downside financial risk, there is a need for more sophisticated functionality and informatics.

The VBR-driven spectrum of technology needs was the focus of the discussion in the session, Technology Solutions For Value Based Care: How To Make The Best Decisions Relative To Your Market & Business Positioning. In the session, Laurie Nelson, Group Product Manager for Analytics, Relias; Kevin McDonnell, Senior Director, Enterprise Account Management-Population Health and Healthcare Analytics, Relias; and Michael Garrett, Chief Executive Officer, Horizons Mental Health Center, discussed how the use of technology evolves with an organization and how organizations can prepare for the inevitable shift to value-based reimbursement.

Figure 1. Nelson, L. Technology Solutions For Value Based Care: How To Make The Best Decisions Relative To Your Market & Business Positioning [PowerPoint Slides] Retrieved from www.openminds.com

Mr. Garrett from Horizons Mental Health Center provided a great illustration about how the market, and reimbursement, shapes an organization’s technology strategy. His organization, a Kansas-based behavioral health provider organization that serves over 6,000 consumers and their families a year, has made several investments in new technology as the Medicaid system in Kansas has evolved.

As the state began shifting to managed care in 2007, technology for improving managed care efficiencies was key. Horizons shifted away from transcribing dictation and paper records and added an electronic health record system.

Then, in 2015, when the state began planning for a health home program, Horizons had to think about care coordination and population health management. They needed technology to facilitate the care coordination process, and to maximize outcomes, their team needed analytics to identify at-risk consumers and the best interventions for those consumers. Both activities require sharing data with payers and other provider organizations. To make sharing and analyzing data possible, they began working with Relias to develop a population health management platform and enhance their data analytics capabilities.

Figure 2. Nelson, L. Technology Solutions For Value Based Care: How To Make The Best Decisions Relative To Your Market & Business Positioning [PowerPoint Slides] Retrieved from www.openminds.com

As they moved through this evolution, Mr. Garrett explained that their organization’s overall strategy for technology purchases focused on three questions:

  1. Does the technology create operation efficiencies for both consumers and the organization itself?
  2. Does the technology help to promote financial efficiencies and automation, or help to produce more accurate reporting?
  3. Does the technology aid in clinical practices by helping to track outcomes and processes or aiding in documentation processes to meet payer standards?

Regardless of where an organization’s reimbursement is on the VBR continuum, these three questions are great guides to technology planning and technology purchases. But it demands a willingness to change at the speed of the market. Or, as Ms. Nelson explained, with the health care system changing along with the shifting spectrum of value-based care, provider organizations will need to “move out of their comfort zone” when it comes to the use of new technology and analytics

For more on what it takes to master the transition to value-based care, check out these resources in the PsychU Resource Library:

  1. Tech Capabilities In An Era Of Integration & Value
  2. What Will Mental Health Treatment Look Like In The Years Ahead?
  3. Preparing For The Very Glacial VBR Rollout In Some Markets
  4. HIE 3.0?

The past couple of years have seen broad changes in Medicaid health plan reimbursement of inpatient behavioral health services (see The End Of IMD Exclusion? and CMS Issues New Guidance On Medicaid Managed Care Coverage Of Short-Term IMD Stays). Most recently, on November 13, the Centers for Medicare & Medicaid Services (CMS) released new guidance to states that will allow federal financial participation for short-term psychiatric care in institutions for mental disease (IMDs) for Medicaid enrollees with serious mental illness or serious emotional disturbance. This comes on the heels of the 2015 guidance that allows stays in IMDs for addiction disorder.

As a refresher, IMDs refer to residential or inpatient facilities with more than 16 beds where individuals are primarily receiving care for a “mental disease”. The exclusion rule does not allow for Medicaid federal financial participation reimbursement for services in an IMD for individuals between the ages of 21 to 64. The original intent of IMD exclusion was to limit the amount of care provided in institutions and serve more individuals in the community. Under the new rules, essentially the inpatient behavioral health facilitates that were prohibited from Medicaid reimbursement in the past are now eligible for reimbursement.

From a strategy perspective, it is important to note that these changes are not national. Rather, states have the option to add provisions that will allow reimbursement for use of these previously-excluded institutions for treatment of mental health conditions and/or addictive disorders. Under the guidance, states will need to submit a 1115 demonstration waiver (or an amendment to a current waiver) to provide services in an IMD for psychiatric care. All new 1115 waivers and amendments to existing waivers require at least one 30-day public comment period, not to mention time for the state to write the waiver and the CMS review period. As a result, it will likely be at least a couple of months before we see any waivers approved or operationalized.

What can we expect to see in states that pay for IMDs? It’s still a little early to draw conclusive results from states that have a waiver for services in an IMD. However, preliminary state data from the Virginia demonstration, which allows care in IMDs in addition to making changes to their addiction treatment system as a whole, had some interesting results. All substance use-related emergency room visits (ER) decreased by 31% and opioid-related visits, specifically decreased by 39%. Additionally, there was a large increase in the number of participating intensive outpatient and residential addiction treatment provider organizations.

It is likely that the expansion of coverage of IMDs will increase adoption of value-based forms of reimbursement. The majority of Medicaid lives are now managed by health plans, and those plans will likely use performance-based reimbursement models like incentivized care coordination contracts or case rates to allow rapid access to services—while controlling utilization and cost.

Approximately 75% of clinical episodes had lower costs in the Medicare Bundled Payments for Care Improvement (BPCI) initiative for Models 2, 3, and 4. CMS released the outcomes for the fifth year of the Medicare BPCI on October 9, 2018. Under the BPCI initiative, Medicare payments declined for most clinical episodes and over half of the relative payment reductions were statistically significant. The declines were primarily due to relative reductions in the use of post-acute care. Medicare payments declined for three-quarters of the clinical episode combinations evaluated, with little change in quality of care.

The BPCI initiative rewards participants financially for reducing Medicare payments for an episode of care relative to a target price. The participants’ agreements with CMS specified their model choice, and their choices among 48 clinical episodes and other episode characteristics. Participants could enter the risk-bearing phase of the initiative during a two-year period through September 2015 and could enter additional clinical episodes into the risk-bearing phase through December 2015. At any time, the participants could stop participating in a given clinical episode or terminate their participation entirely. Model 1 began earlier than Models 2, 3, and 4 and was evaluated separately.

The BPCI outcomes were presented in “CMS Bundled Payments for Care Improvement Initiative Models 2 to 4: Year 5 Evaluation & Monitoring Annual Report,” by The Lewin Group and partners for CMS. Data for the report was obtained through analyses of Medicare claims and enrollment data, post-acute care (PAC) provider organization and consumer assessments, awardee-submitted data, beneficiary surveys, participant interviews, and participant site visits. The evaluation includes all analyses conducted during the five-year evaluation contract and describes the experience under BPCI for over three years of the initiative, from the fourth quarter (Q4) of 2013 through Q4 2016. The goal was to update previous outcomes reports to include the new analysis; it is the first report to include results of episodes initiated by physician group practices (PGPs). Over the first 13 quarters of the BPCI, there were more than 796,000 episodes initiated across Models 2, 3, and 4; most (87%) were Model 2 episodes.

Model 2: Retrospective acute care hospital stay plus post-acute care—The 48 bundles of care include inpatient services, physicians’ services, care by the post-acute provider organization, and related readmissions within 30 days. In total, 221 awardees that represented 423 hospital episode initiators (EIs) and 272 PGP EIs joined the risk-bearing phase of Model 2. During the first 13 quarters of the BPCI initiative, 20% of all Model 2 hospital EIs and 26% of all Model 2 PGP EIs withdrew completely from the initiative. The average Model 2 EI participated in eight clinical episodes, and the most commonly selected clinical episode was major joint replacement of the lower extremity (MJRLE). Approximately 27% of BPCI hospital episodes and 25% of BPCI PGP episodes initiated through Q4 2016 were for a beneficiary who was aligned with a Medicare accountable care organization (ACO). The outcomes were as follows:

  • There was a relative decline in total Medicare payments during the inpatient stay plus 90 days post discharge for 24 of the 32 Model 2 hospital clinical episodes for which there was a sufficient sample size during the first 13 quarters of the BPCI initiative. Twelve of the 24 declines were statistically significant.
  • Skilled nursing facility (SNF) payments declined for nearly all the clinical episodes. Smaller shares of patients were discharged to institutional post-acute care (PAC) settings, and there were fewer SNF days for SNF users. These declines led to reduced Medicare payments.
  • Home health agency (HHA) payments increased, which was expected because smaller shares of PAC users were discharged to institutional PAC.
  • In general, quality of care as measured through Medicare claims did not change under BPCI.
  • Beneficiary resource intensity did not change for most clinical episodes from the baseline to the intervention period relative to a comparison group.

Model 3: Retrospective post-acute care only—The 48 bundles of care include post-acute care services provided within 30 days of discharge from the inpatient stay; ending either 30, 60, or 90 days after initiation of the episode. In total, 135 awardees that represented 873 SNF EIs, 144 PGP EIs, 116 HHA EIs, 9 inpatient rehabilitation facility (IRF) EIs, and one long-term care hospital (LTCH) EI participated in the risk-bearing phase in Model 3 of BPCI. The participants represented 5% of all SNFs and 1% of all HHAs. During the first 13 quarters of the initiative, 27% of all Model 3 SNF EIs and 30% of all Model 3 HHA EIs withdrew from BPCI. The impact analysis was conducted on 11 SNF and 3 HHA clinical episodes. The study sample included 493 SNFs and 71 HHA EIs that initiated 28,121 and 9,306 episodes of care, respectively, during their tenure in the BPCI initiative. The Model 3 outcomes were as follows:

  • Seven of the 11 SNF clinical episodes and one of the three HHA clinical episodes that were examined had statistically significant declines in Medicare allowed payments among BPCI participants relative to the comparison group.
  • The total allowed payment amount (Medicare program payments plus coinsurance and/or copayments) included in the bundle declined from baseline to intervention for BPCI HHAs episodes relative to the comparison group in two of the three clinical episodes, and the decline was statistically significant for one clinical episode.
  • There were no statistically significant relative changes in SNF or HHA payments during the 90-day post-discharge period in any of the three clinical episodes.
  • BPCI-participating SNF and HHA EIs were larger and more likely to be for-profit and members of a chain than non-participating providers. They also had higher standardized Part A payments prior to joining BPCI for the clinical episodes they selected.

Model 4: Prospective acute care hospital stays only—The 48 bundles of care include inpatient services, physician services, and related readmissions within 30 days. Participation in Model 4 was low. There were no statistically significant changes in total payments and there were few statistically significant changes in utilization, quality of care, or patient satisfaction among the two clinical episodes analyzed through September 2015.

PsychU reported on a new BPCI model in “New Medicare Bundled Payment Model Has 1,299 Participating Provider Organizations,” which published on November 19, 2018.

For more information, contact: Office of Communications, Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244; 202-690-6145; Fax: 202-260-1462; Email: press@cms.hhs.gov.

The footprint of accountable care organizations (ACO) continues to change. At the start of 2018, there are approximately 1,000 ACOs covering 32.7 million consumers—approximately 11% of the U.S. insured population (294.6 million)—under 1,477 different contracts.

The coverage varies by payer. According to Leavitt Partners, about half of the 32.7 million consumers are enrolled in commercial ACOs—roughly 11% of the 186 million people enrolled in commercial insurance. As of 2018, there are eleven states with Medicaid ACO models enrolling 3.8 million individuals and representing 6.2% of total enrollment in 2018. Finally there were 612 Medicare ACOs with more than 10.5 million beneficiaries enrolled in them, representing 17.5% of the Medicare population.

One issue for specialty provider organizations with ACOs is their “ownership.” Leavitt Partners estimates that about 65%+ ACOs are physician group-led and 25%+ are hospital group-led (see ACOs & Hospitals – The Changing Landscape). But there is wide variation in who is participating in ACOs. The Centers for Medicare & Medicaid Services estimates that about 30% of Medicare ACOs are composed of physicians-only; 58% include physicians, hospitals, and other facilities; and 12% include federally qualified health centers (FQHCs) and rural health centers. Who is leading and participating in ACOs has an impact on performance—according to a new study in The New England Journal of Medicine, physician-led ACOs saved Medicare $256.4 million in 2015, while hospital-led ACOs cost money. For specialty provider organizations, these physicians and hospitals are the gatekeepers and will determine if specialty provider organizations have a seat at the table.

That is why I was interested to see last month that a coalition of behavioral health advocacy organizations recommended that CMS should ensure that Medicare ensure that ACOs have the capacity to address beneficiary mental health problems, addiction disorder, and suicide risk. The advocacy organization noted that Medicare ACOs have reported poor performance on the sole behavioral health beneficiary-reported performance measure, Depression Remission at 12 Months. They believe that the post-screening follow-up problems indicated by poor ACO performance on the depression readmission measure indicates that ACOs may have widespread gaps in post-screening follow-up and that these issues are likely to extend to follow-up for addiction treatment or services for those at risk of suicide.

The advocacy group made recommendations focused on three items that specialty provider organizations should recognize—behavioral health capacity, data collection, and outcomes-based payments:

  1. Promote Behavioral Health Capacity in All ACOs—CMS should work with ACOs to ensure that each has the capacity to meaningfully address mental health and substance use in their population.
  2. Explore Ways to Enhance Data Collection for Patient-Reported Outcomes (PROs) in Mental Health and Substance Use— The majority of performance challenges in the Depression Remission at Twelve Months measure may be attributable to loss to follow-up – the ACO was not able to screen a second time to determine if remission was achieved.
  3. Offer Additional Outcomes-Based Payments in Behavioral Health—Additional investment in mental health and substance use services, supports, and infrastructure may help build new capacities and catalyze further innovation in ACOs.

Whether this focus on poor performance in behavioral health will result in new policies or regulations is unclear—but what these recommendations do highlight is a growing need to better integrate behavioral health services into the ACO model. And with more ACOs moving to higher levels of financial risk and reward, they will need to focus on behavioral health performance (see 17 Additional ACOs To Participate In The Medicare Next Generation ACO Program). And whether ACOs decide to build increased behavioral health capacity themselves, or seek out existing specialty provider organizations, this is a moment of opportunity to specialty provider organizations.

If you are looking to contract with ACOs, now is the time to build relationships with the ACOs in your community and identify how your organization can help improve their behavioral health performance through demonstrated program outcomes (see How To Build Successful ACO Health Plan Partnerships). For more, check out these resources from the PsychU Resource Library:

  1. Building The ‘Next Generation’ Behavioral & Social Service ACO
  2. New ACO Developments, Same Challenges
  3. 62% Of ACOs Launched In 2012 Implemented Behavioral Health Initiatives
  4. 61% Of ACO Contracts Only Include Upside Financial Risk

Medicare will launch updates to the value-based payment model for home health services, effective January 1, 2020. The changes include the new mandatory case-mix adjustment methodology payment system called the Patient Driven Groupings Model (PDGM). Additionally starting January 1, 2020, the length of home health episodes of care will be reduced to 30 days, down from the current 60 days. The PGDM eliminates the use of “therapy thresholds” in determining payment for the 30-day episode. The goal is to place home health periods of care into meaningful payment categories more consistent with how home health clinical professionals use beneficiary characteristics to differentiate consumers and identify needed services.

These changes to Medicare home health services and reimbursement are required by the Bipartisan Budget Act of 2018 (BB Act). On November 13, 2018, the Centers for Medicare & Medicaid Services (CMS) issued the final rules for the 2019 home health prospective payment system (HH PPS) update. The BB Act specifically mandated that Medicare stop using the number of therapy visits provided—therapy thresholds—to determine home health payment. The HH PPS for 2019 goes into effect for episodes ending on or after January 1, 2019. For calendar year 2019, CMS intends to raise home health reimbursement rates by 2.2%.

The mandatory PDGM going into effect on January 1, 2020, applies to all Medicare home health provider organizations. CMS says it is intended to remove current incentives to over-provide therapy services. The PDGM relies more heavily on clinical characteristics and other beneficiary in