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Florida Medicaid To Launch Behavioral Health Housing Pilot

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.

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 information, such as diagnosis, functional level, comorbid conditions, and admission source, to place beneficiaries into clinically meaningful payment categories. In total, there are 216 different payment groups in the PDGM.

Under the current system in effect for 2019, to adjust for case-mix, the HH PPS uses a 153-category case-mix classification system to assign patients to a home health resource group (HHRG). The national, standardized 60-day episode rate includes the six home health disciplines (skilled nursing, home health aide, physical therapy, speech-language pathology, occupational therapy, and medical social services). The clinical severity level, functional severity level, and service utilization are computed from responses to selected data elements in the OASIS assessment instrument and are used to place the patient in a particular HHRG. Each HHRG has an associated case-mix weight which is used in calculating the payment for an episode. Therapy service use is measured by the number of therapy visits provided during the episode and can be categorized into nine visit level categories (or thresholds): 0 to 5; 6; 7 to 9; 10; 11 to 13; 14 to 15; 16 to 17; 18 to 19; and 20 or more visits. For episodes with four or fewer visits, Medicare pays national per-visit rates based on the discipline(s) providing the services. An episode consisting of four or fewer visits within a 60-day period receives what is referred to as a low-utilization payment adjustment.

The new PDGM case-mix system changes the current practice by eliminating the therapy caps, and shortening the episode length. The goal is to move Medicare toward a value-based system that focuses on beneficiaries’ unique care needs, remove the current incentive to over-provide therapy, while also reducing administrative burdens associated with the current model.

CMS estimates that the new case-mix system, coupled with other changes in the Home Health Quality Reporting Program, will save home health agencies approximately $60 million annually, beginning in 2020. The HH PPS rule for 2019 finalizes a proposal to streamline the Home Health Quality Reporting Program by removing seven quality measures, which home health provider organizations will no longer be required to report data on beginning in 2020. The final rule includes new provisions to support the use of remote vital sign monitoring systems and a new home infusion therapy benefit. Costs associated with remote vital sign monitoring systems will be considered allowable administrative costs.

PsychU reported on this topic in “Medicare Home Health Prospective Payment System Update Includes New Case-Mix Adjustment,” which published on August 15, 2018.

For more information, contact: Home Health Prospective Payment System, Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244; 202-690-6145; Fax: 202-260-1462; Email: HomehealthPolicy@cms.hhs.gov.

In 2019, per-employee health care costs are expected to increase 4.4% in 2019 after employers make health plan changes. In 2018, per-employee health care costs rose 3.6% and in 2017 they rose 2.6%. The rise in per-employee health care costs vary by size of the organization. In organizations with 10 to499 employees, costs rose 5.4% in 2018. For employers with more than 500 employees, costs rose 3.2%.

The average cost of health benefits per-employee was $12,666 in 2018. For organizations with 10 to499 employees, the average cost of benefits was $12,148 per employee. For organizations with more than 500 employees, the average cost of benefits was $13,018 per employee.

These findings were presented in “The Mercer National Survey of Employer-Sponsored Health Plans 2018” by the Mercer. In summer of 2018, Mercer conducted a survey using a national probability sample of large (500+ employees) and small employers (1-499 employees). In total, 2,049 employers completed the survey.

Additional findings are as follows:

  • The number of employers enrolled in high deductible consumer-directed health plans (CDHP) grew from 30% in 2017 to 33% in 2018.
  • Among small employers, 38% offer CDPHs compared to 68% of large employers in 2018. In 2017, 29% of small employers offered CDHPs and 64% of large employers offered CDHPs.
  • The average preferred provider organization (PPO) in-network deductible for small employers is $2,023 in 2018. The average deductible for large employers is $982. In 2017, the average deductible was $1,917 for small employers and $966 for large employers.

The findings of the Mercer National Survey of Employer-Sponsored Health Plans can be viewed online at Mercer.com. The full report on the Mercer survey, including a separate appendix of tables of responses broken out by employer size, region and industry, will be published in March 2019.

For more information, contact: Bruce Lee, Principal & U.S. Leader, Public Relations, Mercer, 1166 Avenue of the Americas, New York, New York 10036; 212-345-0553; Email: bruce.lee@mercer.com.

On November 16, 2018, the Arkansas Department of Human Services (DHS) announced that in March, 2019, it will launch the full-risk phase of its Medicaid Provider-led Arkansas Shared Savings Entity (PASSE) program for individuals with intellectual/developmental disabilities (I/DD) and behavioral health needs. This phase had been scheduled to launch on January 1, 2019 but has been delayed to March 1, 2019.

Phase 1 started in February 2018. The PASSEs started attributing members for care coordination services, totaling approximately 40,000 people, with 8,000 who have I/DD, and 32,000 who have serious mental illness (SMI). In the first phase, the PASSEs receive a per member per month (PMPM) payment for care coordination. The care coordinator employed by the PASSE is responsible for carrying out the total plan of care for each client assigned. During phase 1, the PASSE PMPM is $173.33 for case management and care coordination for each enrolled member. The care coordination services reflect many of the same principals as a specialty health home. Beneficiaries will continue to access Medicaid services on a fee-for-service basis through February 28, 2019.

In the next phase, the PASSEs will be responsible for member total cost of care. Each PASSE will receive a global PMPM payment and will accept full risk using the managed care organization model to manage medical services, counseling, and personal care services; and home- and community-based services. Enrolled Arkansas Medicaid service provider organizations are encouraged to sign contracts with one or more PASSEs to join the networks to receive in-network payment for PASSE member services. Each PASSE operates on a statewide basis and must have an adequate service delivery network of all provider types to ensure that beneficiaries have access to all Medicaid state plan and waiver services.

DHS delayed the phase 2 launch date based on feedback from stakeholders. The goal is to allow extra time for the PASSEs to prepare to take on the additional responsibilities. In the announcement, DHS said this allows PASSEs to test their systems to ensure that the billing systems are functioning seamlessly to allow timely payments to provider organizations. The additional time also allows PASSEs more time to train and enroll even more Medicaid service providers into the PASSE networks.

The phase 2 PMPM will consist of separate rates based on member assignment to a level of need tier determined during an independent assessment (IA). The PASSEs will initially serve people assigned to Tier II and Tier III. People assigned to Tier I will be able to voluntarily enroll later. The rates will be different for adults and children with behavioral health disorders, people with behavioral health disorders who are eligible for both Medicare & Medicaid, adults and children with I/DD, and dually diagnosed adults or children with I/DD and behavioral health disorders.

For individuals served by the DHS Division of Behavioral Health Services (DBHS), the three tiers are:

  • Tier I: Counseling Level Services —At this level, time-limited behavioral health services are provided by qualified licensed practitioners in an outpatient-based setting for the purpose of assessing and treating mental health and/or substance abuse conditions. Counseling services settings mean a behavioral health clinic/office, health care center, physician office, and/or school. Individuals in Tier I will be able to voluntarily enroll in a PASSE in July 2019.
  • Tier II: Rehabilitative Level Services—At this level of need, services are provided in a counseling services setting but the level of need based on the IA requires a broader array of services to address functional deficits. The PASSE Tier II rates for adults, children, and dual eligibles are still being developed.
  • Tier III: Intensive Level Services—Eligibility for this level of need will be identified by additional criteria and questions derived through the IA which could lead to placement in residential settings for more intensive delivery of services. The PASSE Tier III rates for adults, children, and dual eligibles are still being developed.

For individuals served by the DHS Division of Developmental Services, the three tiers are:

  • Tier I: Community Clinic Level of Care—At this level of need, the individual receives services in a center-based clinic such as a Disability Day Treatment Center or Child Health Management Services. Individuals in Tier I will be able to voluntarily enroll in a PASSE in July 2019.
  • Tier II: Institutional Level of Care—The individual meets the institutional level of care criteria but does not need care 24 hours a day and 7 days a week. The PASSE Tier II rates for adults and children and for those dually diagnosed with DD and behavioral health disorders are still being developed.
  • Tier III: Institutional Level of Care 24/7—The individual meets the institutional level of care and requires care 24 hours a day and 7 days a week. The PASSE Tier III rates for adults and children and for those dually diagnosed with DD and behavioral health disorders are still being developed.

Initially, five PASSE organizations were licensed in October 2017, but only four signed contracts. Each PASSE contains a governing body that includes: a representative of a developmentally disabled specialty provider organization, a behavioral health specialty provider organization, a hospital, a physician, and a pharmacist. The four PASSEs are:

  • Empower Healthcare Solutions members are Beacon Health Options, Inc.; Woodruff Health Group, LLC; Preferred Family Healthcare; The Arkansas Healthcare Alliance, LLC; Statera, LLC; and Independent Case Management Inc. Arkansas Community Health Network, LLC has signed a letter of intent to join Empower Healthcare Solutions, LLC as an equity member.
  • Arkansas Total Care members are Mercy Health; LifeShare Management Group, LLC; and Arkansas Health & Wellness Plan, Inc.
  • Forevercare, Inc. members are Gateway Health Plan; Community Service, Incorporated; Arkansas Pharmacists Association; Rehabilitation Network of Arkansas; Community Clinic; and Ouachita County Medical Center.
  • Summit Community Care members are Arkansas Provider Coalition, LLC and Amerigroup Partnership Plan, LLC.

In preparation for launching the PASSE model, DHS selected Optum Government Solutions for a contract to conduct independent assessments for beneficiaries eligible for PASSE and for children applying to preschool programs for children with developmental delay. The two-year Optum contract is valued at $25.5 million. Optum began conducting independent assessments in September 2017. After the assessment, members determined to need services in Tier II or Tier III were assigned to a PASSE based on an attribution methodology that matches an individual to the service provider organizations with whom they have the strongest relationship. On or after July 1, 2019, individuals with behavioral health or I/DD needs identified as Tier I will be allowed to enroll in a PASSE

On August 28, 2018, the Arkansas DHS presented information about the PASSEs in “Looking into the PASSE: Provider led Arkansas Shared Savings Entity” to the National Association of States United for Aging and Disabilities. The presentation is posted online at http://NASUAD.org.

PsychU reported on the PASSE model in “Arkansas Medicaid To Launch Provider-Led Shared Savings Entities For Members With Developmental Disabilities Or Mental Illness,” which published on October 23, 2017.

PsychU reported on the behavioral health tiers in “Arkansas Medicaid Launches New Three-Tier Outpatient Behavioral Health Benefits,” which published on September 4, 2018.

For more information, contact:

  • Marci Manley, Deputy Chief, Office of Communications & Community Engagement, Arkansas Department of Human Services, Post Office Box 1437, Slot S230, Little Rock, Arkansas 72203-1437; 501-682-7540; Email: marci.manley@dhs.arkansas.gov
  • Tami Harlan, Director, Division of Medical Services, Arkansas Department of Human Services, Donaghey Plaza South, Post Office Box 1437, Slot S401, Little Rock, Arkansas 72203-1437; 501-682-8330; Email: tami.harlan@dhs.arkansas.gov

Over the past couple of years accountable care organizations (ACOs) have become an increasingly important part of the evolution of health care delivery and financing. While the concept started with the Patient Protection and Affordable Care Act (PPACA) and Medicare, there are now more beneficiaries in commercial ACOs than in Medicare ACOs (more than 17.2 million in commercial ACOs versus 14.6 million in Medicare ACOs). And, in some states—Oregon, Massachusetts, and Colorado, among others—Medicaid ACOs are changing the landscape.

The question we’ve been contemplating is how do ACOs address the needs of complex consumers? I had a chance to learn more about this at the recent 2018 OPEN MINDS Executive Leadership Retreat, during the keynote address by William Lopez, M.D., CPE, Senior Medical Director for Behavioral Health at Cigna, “Key Issues Shaping The Market For Complex Consumers: A Health Plan Perspective On What Executives Need To Know To Succeed.”

He talked about Cigna’s version of ACOs, the Cigna Accountable Care (CAC) model, and specifically the latest pilot program which encourages behavioral health integration for the management of complex customers. Cigna originally launched its CAC program in 2008. Thus far, over 200 provider organizations have participated in some fashion, taking on financial risk and/or gainsharing related to total medical cost and quality. The behavioral integration pilot began in February 2018 after the Centers for Medicare & Medicaid Services (CMS) approved the new Collaborative Care Model (CoCM) codes the prior year. The purpose of the pilot is to demonstrate the value of the CoCM in a commercial book of business. The model has four key components that affect consumer care in general, and consumers with complex needs in particular.

Care coordination support – In order to assist provider organizations in transforming care to a population-based approach, Cigna funds at least one embedded care coordinator (ECC) in each CAC. The number of ECCs in each CAC depends on the size of the aligned population. Additionally, those organizations participating in the behavioral health integration pilot have an additional care coordinator to support the ECC. These care coordinators assist in managing care for consumers and connect them to outside programs in order to serve the whole person.

Clinical consultation – Cigna supports organizations participating in the CAC by acting as a clinical partner. Cigna provides organizations with clinical best practice resources, offers a learning collaborative, and a behavioral health toll-free hotline. The hotline is staffed by a masters-level behavioral health specialist who can assist with referrals, help providers to better evaluate the best clinical course, connect the consumer with Cigna’s coaching programs, and provide clinicians access to Cigna’s behavioral health medical directors for direct consultation.

Lopez, W. (2018). Key issues shaping the market for complex consumers: A health plan perspective on what executives need to know to succeed [PowerPoint slides]. Retrieved from OpenMinds.com.

Data sharing – As part of the CAC, provider organizations receive extensive reports from Cigna with the information needed to maintain a value-based arrangement. Organizations participating in the behavioral health integration pilot also receive a predictive report that identifies members with chronic conditions who may also have a co-occurring behavioral health disorder. This report can be used by the provider organization to reach out to the consumer and help get them needed services. It also allows them to identify individuals who may have higher than usual medical spend.

Gainsharing – The model supports a full spectrum of value-based payments from gainsharing to capitation. The risk arrangement is tailored to the provider organization’s current capabilities with the goal of slowly increasing risk acceptance over time. Cigna supports the provider organization in this process and will help them move between different risk arrangements as needed. Payments are tied to cost and quality. Cost is based on the total medical cost of the aligned population compared to the non-CAC population in the market. The program also tracks true reduction in care consumption such as a reduction in emergency department visits and improvements in quality of care, such as well-child screenings.

For executives of provider organizations, I think there is one major takeaway from Dr Lopez’s talk. Health plans like Cigna are tackling consumer needs mostly from the primary care side and behavioral health provider organizations are going to have to develop partnerships with these organizations in order to be successful.

Three states—Idaho, Nebraska, and Utah—passed ballot measures during the 2018 mid-term elections to expand Medicaid to individuals under age 65 with income up to 138% of the federal poverty level. Utah plan to implement the expansion on April 1, 2019 and Idaho plans to implement the expansion on January 1, 2020. Nebraska has not a set a date to implement the expansion. In order to implement the expansion, the states must submit and receive the proper approvals from the Centers for Medicare & Medicaid Services (CMS). In total the states estimate that over 330,000 individuals will be eligible under the expansion. None of the ballot measures include references to the implementation of work requirements or enhanced cost-sharing for the Medicaid expansion population.

Idaho voters passed An Initiative To Provide That The State Shall Amend Its State Plan To Expand Medicaid Eligibility To Certain Persons, which appeared as Proposition Two on the ballot. According to the state, the ballot now passes to the Governor and the legislature who can make changes to the language and who must decide how to fund the state’s share of the expansion. The ballot requires that the state submit a state plan amendment to CMS within 90 days to implement the expansion. The actual expansion will be implemented on January 1, 2020. An estimated 91,000 will become eligible under the expansion and the net cost to the state after savings and costs are accounted for will be $105.1 million for the ten-year period between 2020 and 2030.

Nebraska voters passed Medicaid Expansion on the ballot. The ballot requires the state to submit a state plan amendment for approval of the expansion by April 1, 2019 but did not set a go-live date. The ballot included a specific provision that states that “No greater or additional burdens or restrictions on eligibility, enrollment, benefits, or access to health care services shall be imposed on persons eligible for medical assistance pursuant to this section than on any other population eligible for medical assistance.” Next steps require the legislature to appropriate funds for the state portion of the program. The legislature plans to take up the issue in the session starting in January 2019. Over ten years, the state estimates that over 93,000 new individuals will enroll in Medicaid.

Utah voters passed Utah Decides Healthcare Act Of 2018, which appeared as Proposition Number 3 on the ballot. In addition to passing the Medicaid expansion, the ballot included an initiative to maintain as they existed on January 1, 2017, the eligibility levels, benefit costs, and patient costs for Medicaid and CHIP, and the payment rates for health care provider organizations under Medicaid and CHIP. To fund the Medicaid expansion and maintain January 1, 2017 levels, voters passed a ballot initiative to expand the current sales tax rate by 0.15%. The state Medicaid agency must develop a plan with the state legislature for the expansion and submit the appropriate approvals to CMS. The expansion must be implemented by April 1, 2019. Utah estimates that 150,000 individuals will be eligible under the expansion.

For more information, contact:

  • Niki Forbing-Orr, Public Information Officer, Idaho Department of Health and Welfare, Post Office Box 83720, Boise, Idaho 83720-0036; 208-334-0693; Email: Niki.Forbing-Orr@dhw.idaho.gov
  • Nebraska Department of Health and Human Services, 301 Centennial Mall South, Lincoln, Nebraska 68509; 402-471-3121; Email: DHHS.MedicaidExpansionQuestions@nebraska.gov
  • Tom Hudachko, Director of Communications, Utah Department of Health, Post Office Box 141010, Salt Lake City, Utah 84114-1010; 801-538-6232; Email: thudachko@utah.gov; or Kolbi Young, Public Relations and Marketing, Utah Department of Health, Post Office Box 141010, Salt Lake City, Utah 84114-1010; 801-538-6847; Email: kolbiyoung@utah.gov

On November 1, 2018, a federal court reinstated a deadline for the federal Department of Health and Human Services (HHS) to clear its Medicare recovery audit claims appeal backlog by 2022.The order requires HHS to achieve the following reductions from its own currently projected fiscal year (FY) 2018 backlog of 426,594 appeals: a 19% reduction by the end of FY 2019; a 49% reduction by the end of FY 2020; a 75% reduction by the end of FY 2021; and elimination of the backlog by the end of FY 2022. Starting December 3, 2018, HHS will also file quarterly status reports to document its progress.

In May 2014, the American Hospital Association and three regional hospitals filed a lawsuit to force HHS to clear the backlog. The plaintiffs sought an order of mandamus to compel the Secretary of HHS to comply with the statutory deadlines the Medicare Act imposes on the appeals process. By 2017, there were more than 650,000 pending appeals. In January 2017, the court directed HHS to clear the backlog by December 31, 2020. However, HHS protested that it lacked resources to meet that target. This new deadline supersedes that earlier order.

On March 23, 2018, Congress appropriated $182.3 million to HHS for the Office of Medicare Hearings and Appeals (OMHA), which will allow OMHA to hire about 80 more administrative law judges to increase its adjudication capacity to handle the claims backlog. HHS projects that OMHA’s adjudication capacity will increase over FY 2017 levels by 23% in FY 2018, 42% in FY 2019, 108% in FY 2020, and approximately 122% in FY 2021 and 2022.

Given that HHS was allocated new funding that would enable it to clear the backlog, the plaintiffs signaled that they were willing to accept the HHS estimate as a deadline. On October 23, 2018, the court held another hearing to address potential deadline-based remedies. In the ruling the court accepted the HHS estimate of when it could complete the work.

The American Hospital Association said in a statement that it is extremely pleased to see the court set a definitive timeline for the backlog to be cleared because the mandamus order will keep HHS accountable in reducing the backlog. However, if Congress cuts funding for OMHA in the future, HHS warned that it may not be able to continue to operate at the same estimated levels. The judge said that if funding is cut, HHS can return to the court and request changes to the timetable if needed.

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
  • 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

On November 8, 2018, the Medicaid and CHIP Payment and Access Commission (MACPAC) asked the federal Department of Health and Human Services (HHS) to pause disenrollment of 8,462 Arkansas Medicaid beneficiaries who failed to meet work and community engagement reporting requirements during the first reporting period. About 27% of Arkansas Medicaid beneficiaries are required to report work and community engagement; however, 91.6% failed to do so in September 2018. MACPAC said the low level of reporting is “a strong warning signal” that the current process may not be structured in a way that provides individuals an opportunity to succeed, with high stakes for those who fail

During the pause, MACPAC recommended that HHS and the Arkansas Department of Human Services (DHS) make program adjustments to promote beneficiary awareness, reporting, and compliance. In the letter, MACPAC also asked HHS to establish mechanisms for effective evaluation and monitoring and ensure adequate lead time for implementation before approving other states to begin enforcement of requirements that might lead to beneficiary disenrollment or lockout. In addition to Arkansas the Centers for Medicare & Medicaid Services (CMS) has approved similar community engagement waivers for three more states and is still considering waiver proposals submitted by 10 other states.

The Arkansas 1115 Medicaid waiver to impose work and community engagement requirements was approved on March 5, 2018 and implemented on June 1, 2018. In its review of the Arkansas early outcomes, MACPAC said the state was successful in using administrative data to identify beneficiaries exempt from or already in compliance with the work and community engagement requirements. About 73% of Arkansas Medicaid beneficiaries are not required to report because they are already in compliance or exempt. However, at the time it was implemented, CMS had not approved an evaluation design. MACPAC is concerned about whether the state and CMS will be able to interpret the early experience and evaluate progress toward evaluation goals. Additionally, the short implementation timeframe may have contributed to beneficiary reporting challenges, and to the absence of adequate measures and data to interpret the early results and guide adjustments. MACPAC highlighted the following three features of the Arkansas program design that may be preventing beneficiaries from reporting successfully:

  1. Reliance on online reporting: States are typically required to provide beneficiaries with multiple means of submission, but in Arkansas, the only way to report compliance is through an online portal. This approach may be challenging for beneficiaries with limited Internet access. The portal requires multiple steps to establish an account and then enter information. The Arkansas DHS has made reporting assistance available through county eligibility offices, the Arkansas Foundation for Medical Care call center, and about 250 registered reporters. However, DHS was not able to tell MACPAC how many beneficiaries used the assistance.
  2. Beneficiary awareness: Previous work by MACPAC indicates that efforts to change beneficiary behavior requires multiple avenues of communication and a sustained strategy that adapts to reflect lessons learned. However, in Arkansas, many educational resources for beneficiaries are available only online or through social media. MACPAC said this is a problem due to the low level of Internet access by the target population in Arkansas.
  3. Use of work supports: DHS makes automatic referrals to the Arkansas Department of Workforce Services for beneficiaries who need job search assistance or work supports. However, data are not being reported on the extent to which beneficiaries are accessing such services, what services they seek or are qualified for, which barriers exist for their use of these services, and whether the services are being delivered. MACPAC also noted that connections such as transportation are also important, and DHS posts information on its website, but neither DHS nor the Arkansas Foundation for Medical Care are directly connecting beneficiaries to organizations providing these resources. DHS is not collecting data to assess access to or unmet need for these or other resources that support work and community engagement.

MACPAC recommended that HHS require development and approval of robust evaluation and monitoring plans so that states implementing waivers can measure whether the waivers achieve their intended purposes and provide meaningful information. These data will help states adjust program operations, provide feedback on whether waiver objectives are being met, and become the basis of dialog between federal and state staff reviewing progress and success. MACPAC called on HHS to work with states to ensure that the time between waiver approval and implement is sufficiently long to educate beneficiaries about their new responsibilities and engage them. MACPAC believes the investment of time is critical for ensuring that states can assess whether requiring work and community engagement do improve beneficiary health.

PsychU reported on this topic in “More Than 7,000 People Fail To Meet Arkansas Medicaid Work Requirement,” which published on August 15, 2018.

For more information, contact:

  • 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: Kathryn.Ceja@macpac.gov
  • 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

On October 31, 2018, a group of people covered under a Blue Cross Blue Shield of Massachusetts (BCBSMA) employer-sponsored health plan sued the insurer alleging that it systematically denied member claims for residential mental health treatment. The complaint, Steve C, Kelly W. & Jane Doe, et al., v. Blue Cross Blue Shield Massachusetts, was filed as a class action. No hearing date has been set.

The plaintiffs allege that BCBSMA violated the terms of its insurance policies and self-funded medical benefit plans by denying claims for inpatient intermediate mental health residential treatment. They say that BCBSMA used a “restrictive interpretation” of what an intermediate treatment is, leading to the exclusion of medically necessary sub-acute residential treatment. Residential treatment is an intermediate level of inpatient mental health and substance use disorder treatment commonly provided to adolescents whose conditions do not present an imminent threat to themselves or others to the degree that acute inpatient hospitalization is required, but who still require medically necessary inpatient care in order to treat their illnesses.

The plaintiffs claim that BCBSMA’s interpretation of “intermediate treatment” violates contract terms, federal mental health parity laws, and the Employee Retirement Income Security Act. They further claim that about 100 BCBSMA members have had residential treatment claims improperly denied, and that thousands of others could face similar denials in the future.

BCBSMA’s polices for the plans covering the class members, state that BCBSMA covers “intermediate” inpatient treatment for mental health and addiction disorder, which the plans note may include, (but is not limited to) acute residential treatment.” However, BCBSMA has interpreted the policy as excluding any and all residential treatment other than what BCBSMA characterizes as “acute residential treatment.” The plaintiffs note that BCBSMA offers comparable intermediate level care coverage for medical/surgical treatment analogous to the sub-acute level of care offered in residential treatment facilities for mental health and substance use disorders. The plaintiffs’ say this limitation to the scope of residential services for behavioral health disorders represents an impermissible nonquantitative treatment limitation because it has no counterpart in the limitations to coverage BCBSMA imposes for intermediate inpatient treatment of medical/surgical conditions such as inpatient skilled nursing facility stays, rehabilitation hospitals, and hospice care.

For more information about the plaintiffs’ allegations, contact: Brian S. King, Attorney at Law, 336 South 300 East, Suite 200, Salt Lake City, Utah 84111; 801-532-1739; Fax: 801-532-1936; Email: brian@briansking.com; or Law Office of Jonathan M. Feigenbaum, 184 High Street, Suite 503, Boston, Massachusetts 02110; 617-357-9700; Fax: 617-227-2843; Email: jonathan@erisaattorneys.com; or Law Offices of Sean K. Collins, 184 High Street, Suite 503, Boston, Massachusetts 02110; 614-320-8485; Fax: 617-227-2843; Email: sean@neinsurancelaw.com.

For more information about the BCBSMA policies at issue, contact: Amy McHugh, Communications, BlueCross BlueShield of Massachusetts, 101 Huntington Avenue, #1300, Boston, Massachusetts 02199; 800-262-2583; Email: amy.mchugh@bcbsma.com.

On November 1, 2018, the Commonwealth of Virginia began accepting applications from Virginia adults newly eligible for health coverage under Medicaid expansion. Eligible adults will begin receiving services starting January 1, 2019. The new coverage is available to adults ages 19 through 64 who are not eligible for Medicare and who meet income requirements, which vary by family size. The Virginia Department of Medical Assistance Services (DMAS) estimates that close to 400,000 Virginia adults will be eligible for the Medicaid expansion.

The Medicaid expansion sets the annual income eligibility limit at 138% of the federal poverty level (FPL), which is higher than Virginia’s previous income eligibility limit. Under the earlier rules, a single adult with a disability qualified for Medicaid if annual income was no more than $9,700 (80% FPL). A two-adult, one-child household qualified if annual income was no more than $6,900 (33% FPL). Under the new eligibility rules, a single adult with an annual income at or below $16,754 may be eligible for coverage. An adult in a three-person family with a total household annual income at or below $28,677 may be eligible.

New adult enrollees not determined to be medically complex will be enrolled in an alternative benefit plan operated by the existing Medallion 4.0 Medicaid managed care plans: Aetna Better Health of Virginia; Anthem HealthKeepers Plus; Magellan Complete Care of Virginia; Optima Health; UnitedHealthcare Community Plan; and Virginia Premier. Those who are determined to be medically complex will be enrolled in Commonwealth Coordinated Care Plus (CCC Plus), which offers the same six health plan choices. Individuals who are excluded from enrollment in Medallion 4.0 or CCC Plus will be covered through the fee for service (FFS) delivery model. The excluded population includes incarcerated adults and adults identified as presumptively eligible. At any income level, from 0% to 138% FPL, enrollees will also have the option for premium assistance for the purchase of employer-sponsored health insurance coverage, if the state deems that option cost effective.

The Medicaid managed care plans will provide benefits nearly identical to those available to current members, with only minor adjustments to reflect additional federally required adult preventive services. The expansion population enrolled in Medicaid will be eligible for all mental health and addiction treatment benefits currently covered by Virginia Medicaid.

DMAS will soon submit an 1115 Medicaid demonstration waiver to impose community engagement requirements on non-disabled beneficiaries; and low, sliding-scale premiums; and other cost-sharing requirements for some program participants. The work requirements in the 1115 waiver application, called Creating Opportunities for Medicaid Participants to Achieve Self-Sufficiency (COMPASS), will require federal approval prior to taking effect. On October 15, 2018, DMAS and the Virginia Department of Social Services presented information to the Virginia House Appropriations Committee about the waiver components. The community engagement requirements are through the waiver’s Training, Education, Employment Opportunity Program (TEEOP). The goal is to promote work and community engagement. The Commonwealth intends to phase in a requirement that makes participation in TEEOP a condition of eligibility for all Medicaid enrollees between the ages of 19 and 64 with incomes up to 138% FPL who are not exempt.

Virginia’s current Medicaid demonstration waiver, which expires on December 31, 2019, includes the Governor’s Access Plan (GAP) program; the Addiction and Recovery Treatment Services (ARTS) demonstration; and Medicaid coverage authority to former foster care youth who have aged out of foster care in another state but now reside in Virginia. The ARTS/GAP waiver provides Medicaid benefits to adults with serious mental illness, expands the state’s substance use disorder services, and maintains authority for coverage of former foster care youth who aged out of foster care in another state. Because the Commonwealth is in the process of expanding Medicaid to non-disabled, non-pregnant adults with income up to 138% FPL, the GAP program will be phased out. The current GAP enrollees will be transitioned to the new adult Medicaid eligibility group. The waiver will continue to authorize addiction disorder services to enrollees and maintain authority for coverage of former foster care youth who aged out of foster care in another state. It will also create new housing and employment supports benefit for high-need populations.

PsychU reported on this topic in the following articles:

For more information, contact: Virginia Department of Medical Assistance Services, Attn: Director’s Office 600 East Broad Street, Richmond, Virginia 23219.

On November 8, 2018, the U.S. Department of Health and Human Services (HHS) announced a number of priorities to spur value-based transformation of the U.S. health care system, including the intent to launch new mandatory bundled payment models for Medicare. The intent is that bundled payment models will be mandatory, rather than voluntary. Currently, CMS operates the voluntary Medicare Bundled Payments for Care Improvement Advanced (BPCI Advanced) model for 32 clinical 90-day episodes, paid fee-for-service.

HHS Secretary Alex M. Azar II, made the announcement during his “Remarks on Primary Care and Value-Based Transformation.” He said that the Centers for Medicare & Medicaid Services (CMS) will revisit some of the episodic cardiac models that it canceled in November 2017. CMS is actively exploring new and improved episode-based models in other areas, including radiation oncology. As of November 26, 2018, no further details have been released.

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 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.

In the announcement, Mr. Azar named Adam Boehler, director of the Center for Medicare and Medicaid Innovation to oversee the HHS effort to implement value-based transformation. Mr. Boeher has identified four primary objectives for the model: empowering consumers, holding provider organizations accountable for navigating the health system, paying for outcomes, and preventing disease before it occurs or progresses.

The full text of Secretary Azar’s “Remarks on Primary Care and Value-Based Transformation” was published November 8, 2018, by HHS. A copy is available online at HHS.gov.

PsychU reported on the latest voluntary model in “New Medicare Bundled Payment Model Has 1,299 Participating Provider Organizations,” which published on November 19, 2018.

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.

For the year-to-date, nearly half of United Health Group (UHG) reimbursements are through value-based care (VBC) models. On October 16, 2018, at its third quarter 2018 investor conference, Dan Schumacher, president and chief operating officer of the UHG UnitedHealthcare (UHC) business, said the company had about $69 billion in value-based contracts for the first nine-months of 2018 that represent just under half of its total medical and surgical spend. By 2020, UHG seeks to have $75 billion in reimbursements through value-based care models.

Although the third quarter earnings call did not go into detail about UHC’s value-based arrangements, in April 2018,UHC released a report outlining its value-based care outcomes. In this report, “How Value-Based Care Is Improving Quality And Health,” UHC said it views VBC as emphasizing accountability for all involved by stressing collaboration rather than volume, outcomes rather than outputs; and by rewarding provider organizations for looking for missed care opportunities. As of February 2018, 15 million UHC members nationwide were receiving care from a physician in a VBC arrangement. About 110,000 network physicians and 1,100 hospitals are participating in a VBC arrangement with UHC. The primary vehicle is the accountable care organization (ACO) model; UHC has 1,000 ACO relationships.

In the third-quarter earnings call, Mr. Schumacher said UHC is focusing on migrating towards a population health orientation. He said, “half of our value-based spend is in the more progressive relationships that orient around population outcomes and that’s up from about 38%, 39% if we look just five years ago. And so we’ve got a lot of focus on deepening of partnerships. Some of our more progressive relationships are actually with our accountable care organization (ACO) partners and in those relationships we work to share data, share insights, drive better coordination, close gaps and care for people.” He said UHC has about 1,000 ACOs underway. Through the value-based arrangements, across the UHC Medicare, Medicaid and commercial sectors, he said “we’re able to drive less in-patient stays, lower readmission rates, more primary care, less ER and more preventive screening.”

UHG is a diversified health care company that offers a broad spectrum of products and services through two distinct platforms: UHC, which provides health care coverage and benefits services; and Optum, which provides information and technology-enabled health services. UHC serves about 50 million members.

The full text of “How Value-Based Care Is Improving Quality And Health” can be viewed online at UHC.com.

For more information, 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.

California is expanding a Medicaid program that allows low-income elderly and disabled people eligible for care in a nursing facility to stay in their own homes instead. Between July 1, 2018 and 2021, the Department of Health Care Services (DHCS) plans to expand the Home and Community-Based Alternatives (HCBA) waiver program from just under 4,000 slots to almost 9,000. Currently, nearly 3,500 people are currently enrolled in the HCBA program, and another 2,600 are on a waiting list. The program covers skilled nursing care, home health aides, personal care services, and case management to Medicaid beneficiaries in their homes or in a community setting.

The expansion is due to a waiver approved October 11, 2018. In a new approach, DHCS has contracted with nine regional HCBA Waiver agencies to serve as the organized health care delivery system providing the HCBA Waiver services. Previously DHCS ran the program. The regional agencies are:

  1. The Institute on Aging in San Francisco, San Mateo, San Bernardino, and Riverside counties
  2. Access TLC in Santa Barbara County, plus zip codes in Los Angeles and Orange counties
  3. Centers for Elders’ Independence in Alameda and Contra Costa counties
  4. Home Health Care Management in mostly northern California
  5. Libertana Home Health in central and some of southern California
  6. Partners in Care in Los Angeles County
  7. San Ysidro Health in San Diego County
  8. Sonoma County Human Services Department
  9. Ventura County Agency on Aging

To select the regional agencies, DHCS released a Solicitation for Application (SFA) on October 4, 2017. DHCS received 17 applications by the December 15, 2017 deadline. The contracts were awarded in February 2018. The contracts started July 1, 2018 and end December, 31, 2021 to align with the current term of the approved waiver.

The Waiver agencies are responsible for Waiver administration functions, which include identifying candidates for enrollment into the Waiver, LOC evaluations, Person-Centered Plan of Treatment (POT) review and approval, Waiver service authorization, utilization management, provider network development, quality assurance activities, billing the DHCS Fiscal Intermediary (FI), and provider claims adjudication and payments. The HCBA Waiver agencies receive two payments each month based on the number of participants enrolled in the Waiver in their services areas. Each month, Waiver agencies are paid $186.56 per enrolled participant for administrating the Waiver at the local level. The second HCBA Waiver administrator payment is for providing Comprehensive Care Management (CCM) to participants, based on the participants’ assessed levels of Care Management Acuity.

California Home & Community-Based Alternatives Waiver, CCM Payment Rates

Acuity Level Rate
1  $ 33.51
2 $ 175.37
3 $ 374.63
4 $ 562.01

For more information, contact: Rudy Acosta, Home & Community Based Services Section Chief, California Department of Health Care Services, 1501 Capitol Avenue, MS 4502, Post Office Box 997437, Sacramento, California 95899-7437; 916-440-7660; Email: Rudy.Acosta@dhcs.ca.gov.

Medicare beneficiaries in Hawaii, Alaska, and Oregon had access to the highest quality care at the lowest cost in 2016, according to a nationwide comparison of health care value by state. Nationally, standardized annual per-beneficiary costs in 2016 were $9,533. Nationwide, per-person costs ranged from $5,920 in Hawaii to $11,142 in Louisiana.

States With Lowest & Highest Mean Per-Person Medicare Costs (National Mean Is $9,533)

Five Lowest Cost States, Mean Cost (% Lower Than National Mean) Five Highest Cost States, Mean Cost (% Lower Than National Mean)
State Mean Cost % Below National Mean State Mean Cost % Above National Mean
Hawaii $5,920 -34% Louisiana $11,142 +25%
Alaska $6,457 -28% Florida $10,814 +21%
Oregon $7,107 -21% Texas $10,743 +20%
Montana $7,301 -18% Mississippi $10,530 +18%
Colorado $7,910 -12% Oklahoma $10,133 +13%

The rankings were developed The Commonwealth Fund and presented in “Health Care Quality-Spending Interactive.” The presentation is an interactive map that shows how health care spending per beneficiary compares to quality state-by-state. The spending estimates are based on 2016 data for Medicare fee-for-service beneficiaries and exclude Medicare Part D spending. The data source is the Medicare Geographic Variation Public Use File for data year 2016. The Commonwealth Fund did not describe the source for the quality scores. Medicare requires its Medicare Advantage plans and accountable care organizations to submit data for numerous quality measures.

A scatterplot based on the interactive map data shows an inverse relationship between quality and cost. States with overall higher quality scores had lower mean costs. States with lower quality scores had higher costs. In total, 21 states were grouped as high quality and low cost, and 20 were grouped as low quality and high cost.

States with Highest & Lowest Medicare Quality Scores

Five States With Highest Quality Ranking, % Above The National Average, Mean Annual Per-Person Cost Five States With Lowest Quality Ranking, % Below The National Average, Mean Annual Per-Person Cost
State % Above National Mean Mean Cost State % Below National Mean Mean Cost
Hawaii +47% $5,920 Mississippi -14% $10,530
Alaska +21% $6,457 Louisiana -13% $11,142
Colorado +20% $7,910 Kentucky -11% $9,605
Minnesota +18% $8,134 Oklahoma -10% $10,133
Utah +18% $8,384 Arkansas -8% $9,376

The Commonwealth Fund posted its Health Care Quality-Spending Interactive rankings at CommonwealthFund.org.

The Centers for Medicare & Medicaid Services Office of Enterprise Data and Analytics developed a State: Geographic Variation Dashboard. The interactive dashboard is posted at CMS.gov.

For more information, contact: Mary Mahon, Vice President, Public Information, The Commonwealth Fund, 1 East 75th Street, New York, New York 10021; 212-606-3853; Email: mm@cmwf.org.

The American Medical Association (AMA) has approved eight new Category I, and two revised Category III Current Procedural Terminology (CPT®) codes to report applied behavior analysis (ABA) services (termed “adaptive behavior assessment and treatment services”) to health insurance plans. These codes go live January 1, 2019.

The new codes are detailed in the “Adaptive Behavior Assessment and Treatment Code Conversion Table,” by the Virginia Association for Behavior Analysis. All new codes are per 15-minute increments. The new and revised codes include:

  • 0362T: Behavior identification supporting assessment – technician time.
  • 0373T: Adaptive behavior treatment with protocol modification – technician time.
  • 97151: Behavior identification assessment, administered by a physician or other qualified health care professional.
  • 97152: Behavior identification supporting assessment, administered by one technician.
  • 97153: Adaptive behavior treatment by protocol, administered by a technician.
  • 97154: Group (multiple patients) adaptive behavior treatment with protocol modification, administered by a technician.
  • 97155: Adaptive behavior treatment with protocol modification, administered by a physician or other qualified health care professional.
  • 97156: Family adaptive behavior treatment guidance, administered by a physician or other qualified health care professional.
  • 97157: Multiple-family group adaptive behavior treatment guidance, administered by a physician or other qualified health care professional.
  • 97158: Group (multiple patients) adaptive behavior treatment by protocol, administered by a physician or other qualified health care professional.

The full text of “Adaptive Behavior Assessment and Treatment Code Conversion Table” was published October 8, 2018 by the Virginia Association for Behavior Analysis. A copy is available online at VirginiaABA.org.

PsychU reported on this topic in “2018 Medicare Fee Schedule Expands The Telehealth & Remote Monitoring Code Sets,” which published on January 10, 2018.

For fiscal year 2019, the Iowa Department of Human Services (DHS) raised IA Health Link capitation rates by 7.5% for two of its Medicaid managed care organization (MCO) contractors, Amerigroup of Iowa and UnitedHealthcare Plan of the River Valley. The contracts were signed on August 24, 2018. The funding increase was based on an analysis of a new independent actuary. The goal is to ensure that the program is sustainable for the long term.

DHS said the new contract provides additional oversight by focusing performance measures on long-term services and supports (LTSS), health outcomes, and timeliness of claims reprocessing. The new contracts also address the state’s new mental health legislation that went into effect on July 1, 2018 and add new requirements to improve members’ experience. Members will be able to seek a second medical opinion outside their MCO network, and at no cost to the member.

Key details about the new provisions were reported in “IA Health Link: New Contract Summary.” The LTSS provisions focus on improving standards for community-based manager (CBCM) contacts. To support the requirement that members are to participate in the development of their care plans, the performance measures now require that 90% of surveyed members feel they have been a part of their service planning. The CBCMs will at minimum contact beneficiaries receiving home- and community-based waiver services (HCBS) at least monthly by telephone or in-person. Additionally, these members must be visited face-to-face in their residence or service location at least every three months. The new contract prohibits arbitrary reductions in staffing for those who require individualized, enhanced staffing.

The new mental health legislation, House File 2456, expands access to, and the scope of, locally-funded regional and state-funded community-based mental health services. The provisions of House File 2456 will create new and expanded community-based mental health crisis, and other intensive mental health services to be offered by regional mental health and disability service (MHDS) authorities. Additional and expanded services include access centers, assertive community treatment teams, comprehensive crisis services, and intensive residential service homes.

The new MCO contract prioritizes mental health services and supports the comprehensive reforms of House File 2456. Language related to members who have been ordered by a court to undergo mental health and substance use disorder (SUD) treatment is updated to ensure appropriate coverage. The MCOs are required to reimburse for all mental health and SUD services ordered for members through a court action for three days, regardless of medical necessity. Finally, the contract requires the MCOs to work collaboratively with the mental health and disability services (MHDS) regions in supporting intensive residential service homes and access centers.

The IA Health Link Program provides integrated Medicaid managed care coverage, including LTSS and behavioral health, to over 600,000 Medicaid members in the state, and more than 37,600 receive LTSS. The plans are operated by Amerigroup Iowa, Inc., and UnitedHealthcare Plan of the River Valley, Inc., and until November 2017, AmeriHealth Caritas operated a plan. However, in October 2017, Amerihealth Caritas announced plans to exit its IA Health Link contract for fiscal year 2018. DHS conducted a procurement, and on May 21, 2018, announced that it selected Iowa Total Care, Inc., a Centene subsidiary, for a Medicaid managed care contract for the IA Health Link program. The Centene contract goes live in July 2019.

The new contracts are posted online at DHS.Iowa.gov.

PsychU reported on the new mental health legislation in “New Iowa Law Expands Access To State Mental Health Services,” which published on May 4, 2018.

For more information, contact: Matt Highland, Public Information Officer, Iowa Department of Human Services, 1305 E Walnut Street, Hoover Building, 1st Floor,, Des Moines, Iowa 50319-0114; 515-281-4848; Email: mhighla@dhs.state.ia.us.

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 ending the state’s behavioral health carve-out, phase in tailored vertical health plans for certain populations, expand addiction treatment benefits, and address the social determinants of health. The waiver will go into effect on November 1, 2019, and the North Carolina Department of Health and Human Services (DHHS) anticipates launching the first phase of the waiver in mid-2019.

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.

During waiver negotiations, CMS and North Carolina agreed to finalize a first set of activities and continue to negotiate additional waiver and expenditure authority requests over the upcoming months. These open issues include:

  • Uncompensated Care Pool for Tribal Providers. North Carolina’s waiver application included a request for expenditure authority for an uncompensated care pool to address the high burden of uncompensated care borne by the Cherokee Indian Hospital Authority (CIHA). “Uncompensated care” refers to services provided to consumers who are unable to pay. Funds in uncompensated care pools go to provider organizations to help offset those losses.
  • North Carolina proposed to invest in building its Medicaid provider organization network through an Innovation Workforce Fund. The Fund would support loan repayment and recruitment bonuses for critical Medicaid provider organization and professional types targeted to fill identified gaps in the Medicaid network.
  • Behavioral Health Home Capacity-Building Funds. DHHS is working with CMS to gain approval for providing capacity-building funds to support the development of a strong health home care management model to meet the needs of people with I/DD or significant behavioral health needs.

North Carolina did not request authority to implement Carolina Cares, it requested a few specific authorities to implement certain features of the legislation that require CMS approval. Carolina Cares is a program that would require beneficiaries in the new adult group to pay monthly premiums and participate in community engagement activities as a condition of eligibility. Failure to pay the monthly premium or meet the community engagement requirement would result in disenrollment. After discussions between DHHS and CMS, they mutually agreed that discussions would be resumed once there is more certainty about program details.

The state’s request to implement a telemedicine program through two initiatives was also rejected. The first was a Telemedicine Innovation Fund to support PHPs addressing Medicaid quality strategy goals and unmet needs of the Medicaid population. The second was a Telemedicine Alliance to administer the Telemedicine Innovation Fund and provide a forum for sharing and disseminating best practices throughout the state. CMS gave DHHS information about other available resources to facilitate implementing a telemedicine program outside of the 1115 demonstration.

To launch the new managed care approach, on August 9, 2018, DHHS released a request for proposal (RFP 30-190029-DHB) seeking bids from organizations wishing to participate in Medicaid managed care as PHPs. The PHPs will provide Standard Benefit Plans, which are the new mandatory Medicaid managed care plans for the general population. DHHS intends to conduct a separate procurement for BH I/DD Tailored Plans. Proposals for Standard Plans were due on October 19, 2018, and awards announcements are anticipated by February 4, 2019. 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 an aggregate of approximately $12 billion annually.

For more information, contact: Jay Ludlam, Assistant Secretary for Medicaid Transformation, Division of Health Benefits, North Carolina Department of Health and Human Services, 2501 Mail Service Center, Raleigh, North Carolina 27699-2501; 919-527-7033; Email: Jay.Ludlam@dhhs.nc.gov.

Provider organization costs to provide services covered under the Medicare Diabetes Prevention Program (MDPP) may exceed the program’s reimbursements. Annual per beneficiary costs to deliver the program are estimated at $800. The average per beneficiary reimbursement is estimated at $139.

The MDPP is a lifestyle intervention for Medicare beneficiaries with pre-diabetes, which is defined as having an A1c level of 5.7 to 6.4, or a history of gestational diabetes. The MDPP is covered by Medicare Part B; it uses a pay-for-performance model to reward the provider organizations when the participating beneficiaries reach weight loss and attendance milestones. Beneficiaries enrolled in a Part C Medicare Advantage plan are also eligible for MDPP if their Medicare Advantage plan has contracted with an MDPP enrolled supplier.

The MDPP is based on the widely disseminated, yearlong National Diabetes Prevention Program (NDPP). The clinical intervention for the MDPP consists of a minimum of 16 intensive “core” sessions of a Centers for Disease Control and Prevention (CDC) approved curriculum (such as the NDPP) furnished over six months in a group-based, classroom-style setting that provides practical training in long-term dietary change, increased physical activity, and behavior change strategies for weight control. After the completing the core sessions, less intensive follow-up meetings furnished monthly help ensure that the participants maintain healthy behaviors. The total MDPP service period lasts for two years, consisting of one year of core and core maintenance sessions followed by up to one year of ongoing maintenance sessions. To maintain eligibility for ongoing maintenance sessions, the MDPP beneficiaries must obtain 5% weight loss.

The MDPP pay-for-performance reimbursement methodology gives beneficiary weight loss greater value than attendance because weight loss is a key indicator of reducing the risk of type 2 diabetes. Provider organizations will receive payment for beneficiaries who attend at least two out of three-monthly sessions within a core or ongoing maintenance interval, given other payment requirements are satisfied.

These findings were reported in “New Medicare Diabetes Prevention Coverage May Limit Beneficiary Access and Widen Health Disparities” by Natalie D. Ritchie, Ph.D.; and Robert M. Gritz, Ph.D. The researchers are affiliated with Denver Health and Hospital Authority, a safety net health care system that has provided the National Diabetes Prevention Program (NDPP) from 2013 through 2017. Denver Health and Hospital Authority initially offered six yearlong NDPP classes in March 2013. Thereafter, two to four new NDPP classes were launched approximately each quarter through September 2016, for a total of 45 NDPP classes completed by August 2017. Among 1,165 total participants, 213 were Medicare beneficiaries. The researchers analyzed the NDPP service cost and beneficiary performance. Based on the Medicare participants’ performance in NDPP, the researchers projected MDPP reimbursement.

The 213 Medicare beneficiaries who participated in the NDPP attended an average of 8.6 sessions. Their mean weight loss was 1.8%. Only 4.7% of beneficiaries achieved all pay-for-performance milestones associated with the maximum $470 payment in the MDPP.

Estimated Performance-Based Medicare Reimbursement For Medicare Beneficiaries Enrolled In The NDPP At Denver Health From 2013 To 2017

Performance Goal MDPP Performance-Based Reimbursement Rate Number Of Beneficiaries Who Achieved The Goal (%) Average Per-Beneficiary Payment
Months 1-6
Attended first session $25 213 (100%) $25
Attended 4 or more $50 125 (58.7%) $29.34
Attended 9 or more $90 81 (38.0%) $34.23
Months 7-9
Attended 2 or more sessions, with at least 5% weight loss achieved/maintained $60 21 (9.9%) $5.92
Attended 2 or more sessions, did not achieve at least 5% weight loss $15 34 (16.0%) $2.39
Months 10-12
Attended 2 or more sessions, with at least 5% weight loss achieved/maintained $60 14 (6.6%) $3.94
Attended 2 or more sessions, did not achieve at least 5% weight loss $15 17 (8.0%) $1.20
Achieved 5% or more weight loss $160 45 (21.1%) $33.80
Achieved 9% or more weight loss $25 23 (10.8%) $2.70
Achieved all performance goals in months 1-12 $470 10 (4.7%) $138.52

Cost to deliver the NDPP were estimated at $800 per participant in the 2014 through 2016 classes. The cost of delivering each yearlong NDPP class with the maximum 42 participants was estimated at $18,092. The average per-capita program delivery costs (adjusted to 2017 dollars) were as follows:

  • $431 for coaching staff; for the year this cost was $9,838.
  • $107 for program management personnel; for the year this cost was $2,354.
  • $17 for data collection and reporting staff to meet CDC requirements; for the year this cost was $382.
  • $5 for travel of staff to primary care clinics; for the year this cost was $108.
  • $25 for supplies and other direct program costs; for the year this cost was $560.
  • $12 for program development and startup costs; for the year this cost was $261.
  • $203 for indirect expenses (this was calculated as 34% of all direct costs using the institution’s federally negotiated indirect rate); for the year this cost was $4,589.

The researchers calculated that based on the NDPP data, the average MDPP per-beneficiary payment would be $661 lower than the average per-participant program delivery cost. On a per-class basis, assuming that the class enrolled 42 Medicare beneficiaries, the yearlong cost to deliver the MDPP would total $18,092, for an estimated per-beneficiary cost of $431. The estimated reimbursement would be $5,838, for an average per-beneficiary payment of $139, meaning that for a full class the MDPP provider organization would lose $292 per participant. The researchers noted that many MDPP suppliers are needed to reach all Medicare beneficiaries with pre-diabetes, and insufficient reimbursement may deter some suppliers from participating. The researchers concluded that higher payments are supported by strong return-on-investment findings and seem needed to reduce diabetes prevalence and related disparities.

The full text of “New Medicare Diabetes Prevention Coverage May Limit Beneficiary Access and Widen Health Disparities” was published in the November 2018 issue of Medical Care. An abstract is available online at Journals.LWW.com.

PsychU reported on this topic in “Medicare Expands Coverage To Include Performance-Based Diabetes Prevention Program,” which published on May 4, 2018.

For more information, contact: Natalie D. Ritchie, Ph.D., Clinical Psychologist, Denver Health and Hospital Authority, 777 Bannock Street, MC 6000, Denver, Colorado 80204; Email: Natalie.Ritchie@dhha.org.

On September 27, 2018, Aetna announced that it would sell its Medicare prescription drug business to Wellcare, to include both individual and group standalone Part D members, before the end of 2018. Financial terms were not disclosed. The sale is required by the Department of Justice Antitrust Division to permit completion of CVS Health’s proposed acquisition of Aetna, regulatory approvals, and other closing conditions. Other Aetna plans and products will not be affected by the sale.

The DOJ said the divestiture was needed because CVS, the nation’s largest retail pharmacy chain, and Aetna, the nation’s third-largest health-insurance company, are significant competitors in the sale of Medicare Part D prescription drug plans to individuals, together serving 6.8 million members nationwide. According to the DOJ complaint, the combination of CVS, which markets its Medicare Part D individual prescription drug plans under the “SilverScript” brand, and Aetna would cause anticompetitive effects, including increased prices, inferior customer service, and decreased innovation in sixteen Medicare Part D regions covering twenty-two states. The complaint alleges that the loss of competition between CVS and Aetna would result in lower-quality services and increased costs for consumers, the federal government, and ultimately, taxpayers.

WellCare provides managed care health plans primarily through Medicaid, Medicare Advantage, and Medicare Prescription Drug plans for more than 4.4 million members across the country. Under the terms of the proposed settlement, Aetna must divest its individual prescription drug plan business to WellCare and allow WellCare the opportunity to hire key employees who currently operate the business. Aetna must also assist WellCare in operating the business during the transition and in transferring the affected customers through a process regulated by the Centers for Medicare & Medicaid Services.

Aetna’s “Medicare Rx® Select” prescription services began at the start of 2018, and served 326,489 members in 27 states, and the District of Columbia, as of March 2018. Aetna will continue to administer and support the Medicare prescription plans throughout the 2019 benefit year, and all service, benefits, networks, formularies, and premiums will remain the same. Members are encouraged to call the number on their Aetna member ID card if they have questions or need additional information.

PsychU reported on this topic in “CVS Health To Buy Aetna For $77 Billion,” which published on January 18, 2018.

For more information, contact: Media Relations, Aetna, Inc., 151 Farmington Avenue, Hartford, Connecticut 6156; 860-273-0888; Email: mediarelations@aetna.com; or Maria Miles, Regional Communications Manager, WellCare Health Plans, Inc., Post Office Box 31370, Tampa, Florida 33631-3372; 813-290-6208; Email: WellCareMediaRelations@wellcare.com.

On September 7, 2018, the Alliance for Recovery-Centered Addiction Health Services (Alliance) announced the Addiction Recovery Medical Home (ARMH) model. The model is a long-term continuum of care that covers stabilization, active treatment, and community-based recovery management. The model is financed using an alternative payment model (APM) intended to deliver a long-term, comprehensive, and integrated pathway to treatment and recovery. The Alliance intends to pilot the ARMH model in at least two markets beginning in 2019.

The model provides a continuum of care that will be coordinated by a central team whose focus is a long-term process that is inclusive of the patient, family, peer support, community, social determinants, and other key environmental conditions to recovery capital development that promotes enhanced health and quality of life. Treatment and recovery support services will be delivered near the consumer’s natural living environment, circumstances permitting.

The model was described in “Addiction Recovery Medical Home – Alternative Payment Model: Incentivizing Recovery. Not Relapse” by The Alliance For Recovery-Centered Addiction Health Services. The proposed payment model incorporates aspects of fee-for-service, episodes-of-care, quality-adjustments, and shared savings. The goal is to promote improved integration of treatment and recovery resources with corresponding financial incentives. The three model stages use different payment modalities, as follows:

  1. Pre-recovery and stabilization: the stage lasts for up to one month. Reimbursement is fee-for-service for engagement and stabilization services, such as those provided in the emergency department or intensive care unit settings.
  2. Recovery initiation and active treatment: the stage lasts for up to 12 months. Reimbursement is a static bundled payment (structured as a prospective or retrospective bundle), quality achievement payments, and shared savings performance bonuses.
  3. Community-based recovery management: the stage lasts for 12 to 60 months. Reimbursement is a declining bundled payment (structured as a prospective or retrospective bundle), quality achievement payments, and shared savings performance bonuses. The provider organizations would receive a payment once every six months.

Reimbursement for the bundles will use capitated, episodic payments linked to population-based consumer severity criteria, adjusting payment for consumer with a higher-risk onset of addiction disorders and/ or co-complicating factors (co-morbidities and/or co-occurring mental health challenges). The ARMH model does not prescribe the duration of the episodes or dictate the treatment options available within each episode but does provide guidelines regarding the clinical settings for each episode and the process boundaries for care transitions, screenings, assessments, and other related matters.

The quality achievement payments will be an agreed upon percentage of the total payment tied, on a sliding scale, to provider organization performance on process and outcomes measures. Provider organizations will receive the base capitated payment based on population-based consumer severity for defined episodes of care, and those that meet the quality benchmarks will eligible for the full quality achievement payment. Those that have lower achievement levels could still earn a partial quality achievement payment.

Shared savings performance bonuses equal to a defined percentage of overall saving across the consumer’s entire continuum of care would be available to ARMH entities who obtain the full quality achievement payment. The pool of bonus funds would come from the expected shared savings attributable to increased coordination and treatment of consumers across all health care services: addiction, behavioral, and physical. For operational purposes, the payer must be an ARMH participating entity accountable for addiction treatment payment under ARMH and also the payer for behavioral and physical health services. For Medicaid programs in states in which behavioral/addiction and physical health funding streams are separated, ARMH entities can consider a risk-bearing entity who serves in a role like that of the payer with risk bearing entities who receives carve-out funds and merges physical health payment.

Alliance members Include: Anthem, AmeriHealth Caritas, American Hospital Association, Beacon Health Options, CaseSource, Facing Addiction with NCADD (The National Council on Alcoholism and Drug Dependence), FAVOR Greenville, Healthcare Financial Management Association, Intermountain Healthcare, Leavitt Partners, Remedy Partners, and Third Horizon Strategies. To develop the ARMH model, since August 2017, the Alliance has convened clinical, addiction, information technology, primary care, social, regulatory, and policy expertise logging hundreds of hours of work group meetings, ratifying principles and outputs. For the ARMH model pilot, the developers intend to compare outcomes to non-ARMH models of care, and to study correlations between specific model tenets and the corresponding outputs.

The full text of “Addiction Recovery Medical Home – Alternative Payment Model: Incentivizing Recovery. Not Relapse” was published in September 2018 by The Alliance For Recovery-Centered Addiction Health Services. A copy is available online IncentivizeRecovery.org.

For more information, contact:

  • Julie Sommer, Vice President of Marketing, Leavitt Partners, 299 South Main Street, Suite 2300, Salt Lake City, Utah 84111-2278; 801-538-5082; Email: Julie.sommer@leavittpartners.com; or Anne Marie Polak, Senior Director, Leavitt Partners, 299 South Main Street, Suite 2300, Salt Lake City, Utah 84111-2278; 202-774-1409; Email: annemarie.polak@leavittpartners.com
  • Heather Mills, Director of Corporate Marketing, Remedy Partners, 800 Connecticut Avenue, Norwalk, Connecticut 06854; 203-541-4646; Email: hmills@remedypartners.com
  • Greg Williams, Executive Vice President, Facing Addiction, Inc., 100 Mill Plain Road, Third Floor, Danbury, Connecticut 06811; 203-733-8326; Email: gwilliams@facingaddiction.org
  • Sarah Scholle, Dr.P.H., Vice President, Research & Analysis, National Committee for Quality Assurance, 1100 13th Street NW, 3rd Floor, Washington, District of Columbia 20005; 202-955-3500; Email: Scholle@ncqa.org

The New Mexico Health Insurance Exchange (NMHIX), branded as beWellnm, plans to transition to a state-based health insurance exchange in 2021; currently it relies on the federally facilitated marketplace for the individual marketplace while maintaining its status as a State-Based Exchange on the federal platform (SBE-FP). On September 21, 2018 the beWellnm Board of Directors, voted to transition to a fully state-based exchange (SBM) model. BeWellnm anticipates that the new individual exchange technology will be ready for launch in late 2020 for plans effective in January of 2021.

In preparation for the transition, beWellnm issued a request for proposals on October 5, 2018, to seek a project management office services for the transition. The project manager will provide implementation oversight, vendor task management, and risk management. Proposals were due by October 19, 2018. The contract awards are anticipated by November 16, 2018. BeWellnm intends to sign a 12-month initial contract, with the option to extend up to 36-months, to run from January 2019 through December 2021.

Previously beWellnm opted to use the federally facilitated marketplace for the individual marketplace because that was the lowest cost option at the time. A request for information (RFI) issued on June 25, 2018, noted that however, changes to the Centers for Medicare and Medicaid Services’ user fee structure—as promulgated in the annual Notice of Benefit and Payment Parameters— represent “a significant and unsustainable fiscal burden to New Mexico.” For 2019, CMS would require federally-supported state-based exchanges to pay a fee of about 3.0% of premiums, up from 1.5% in 2017 and 2.0% in 2018. In states that have a federally-run exchange or a partnership exchange the fee is slightly higher, at 3.5% of premiums.

Prior to 2017, state-based marketplaces using the federal enrollment platform were able to use the Healthcare.gov platform for free, while funding and operating the rest of their exchange functions themselves. In 2017, New Mexico paid CMS $2.9 million; the fee for 2018 is projected to be $5.9 million. For 2019, beWellnm anticipates that the fee to use HealthCare.gov could rise to $10.9 million. After considering responses to the RFI, at its September 21, 2018 meeting, the beWellnm board voted unanimously to transition to a fully state-run exchange in time for the 2021 plan year. The goal is to reduce user fees.

NMHIX/ beWellnm is a non-profit public corporation that runs the state’s small business insurance exchange (a SHOP exchange enrollment platform) but uses the federal enrollment platform at HealthCare.gov for individual enrollments. BeWellnm was created to help individuals and small businesses get access to affordable health insurance plans. BeWellnm helps consumers compare health insurance plans and choose the plan that works best for their health needs and budget. BeWellnm also helps individuals determine whether they are eligible for premium assistance and if so, at what level. Through beWellnm for Small Business, small businesses are able to purchase competitively priced health insurance plans and offer their employees the ability to choose from an array of plans. Certified agents and brokers, as well as Enrollment Counselors, are available throughout the state to help with signing up for health insurance.

For questions about the SBE and next steps, contact: Maureen Manring, Director of Communication & Outreach, BeWellnm, Office of Superintendent of Insurance, 7601 Jefferson Street NE, Suite 160, Albuquerque, New Mexico 87109; 833-862-3935; Email: MManring@nmhix.com.

For more information about the RFP, contact the procurement administrator, Jeffery Bustamante, Director of Policy & Compliance, New Mexico Health Insurance Exchange, 7601 Jefferson Street NE, Suite 160, Albuquerque, New Mexico 87109; 505-314-5200; Email: RFP@nmhix.com.

In the eight states operating Certified Community Behavioral Health Clinic (CCBHC) demonstration programs, the 67 CCBHC provider organizations are projected to serve more than 380,000 people during the first year, including nearly 270,000 Medicaid beneficiaries. The eight states selected for the two-year CCBHC demonstration are Minnesota, Missouri, Nevada, New Jersey, New York, Oklahoma, Oregon, and Pennsylvania; together these states have a population of 64 million. The 67 participating CCBHCs have 372 locations in 190 counties.

CCBHCs provide a comprehensive range of evidence-based behavioral health services directly or through referral to designated collaborating organizations (DCOs). The CCBHCs receive Medicaid payment through a daily or monthly Prospective Payment System (PPS) rate that is clinic-specific and reimburses the expected cost of demonstration services. The CCBHC clinics must provide access to person- and family-centered services for individuals with serious mental illness (SMI) or substance use disorders (SUD), including opioid disorders; children and adolescents with serious emotional disturbance (SED); and individuals with co-occurring disorders. All clinic users must be served, not just Medicaid beneficiaries, and the clinics cannot refuse services due to an individual’s place of residence or ability to pay, and they must accept payment on a sliding fee scale basis. During the demonstration, states receive enhanced Medicaid matching funds for the CCBH services provided to Medicaid beneficiaries.

These details about the start of the CCBHC demonstration were reported in “Certified Community Behavioral Health Clinics Demonstration Program Report to Congress, 2017” by the federal Substance Abuse and Mental Health Services Administration (SAMHSA). The report is SAMHSA’s first report to Congress about the CCBHC demonstration which began in mid-2017. The CCBHC demonstration was authorized by Section 223 of the Protecting Access to Medicare Act (PAMA) of 2014. The eight states conducting demonstration programs selected and certified provider organizations as CCBHCs based on their capacity to meet criteria specified by Section 223.

In this report SAMHSA focused on the statutory requirements of Section 223, its implementation, the planning grant that helped states prepare, and the selection of the states to participate in demonstration programs, including activities associated with launching the demonstration programs. The report noted that because states launched their CCBHCs in mid-2017, no outcome data was available, but more data will be included in future annual reports. The report further provides “State Snapshots” that show the specific impact CCBHCs are having in each of the eight participating states.

In their applications, states were asked to project the impact of their participation in the demonstration program by listing specific measures to show impact, providing baseline data on these measures, explaining the data collection and analysis plan, and projecting the impact from baseline to the completion of the demonstration program. They could select one or more of four goals: providing the most complete scope of services, improving availability and access to services overall, improving access to assisted outpatient treatment, or cost containment.
Selected CCBHC Goals By State

Goal  States
Goal 1: Complete Scope Minnesota, Missouri, New Jersey, Oklahoma, Oregon, Pennsylvania
Goal 2: Improve Access Minnesota, Missouri, Nevada, New Jersey, Oklahoma, Oregon, Pennsylvania
Goal 3: Improve Access to Assisted Outpatient Treatment  Missouri, Oklahoma
Goal 4: Contain Costs New York, Pennsylvania

The report noted that many of the demonstration states are planning to sustain certain aspects of the model beyond the two-year demonstration period. Doing so may require additional state funding and changes to a state’s Medicaid program because the EBPs and services implemented by CCBHCs will no longer be supported by Medicaid unless they are covered in the state Medicaid plan. SAMHSA said state behavioral health agencies are meeting with Medicaid officials to extend Medicaid payment for services beyond the demonstration period through waiver authority or amending the Medicaid state plan, seeking state legislative appropriation to continue state Medicaid matching funds for 2019, and collecting return-on-investment data, particularly on electronic patient registries, data collection, and service costs.

SAMHSA seeks to expand the CCBHC model to more states, and on May 10, 2018, issued a notice of funding availability totaling up to $95.9 million over the next two years to fund CCBHCs in the 24 states that participated in the fiscal year 2016 CCBHC Planning Grants. SAMHSA expects to fund up to 25 provider organization grantees with up to $2 million per year for up to two years. The actual award amount may vary, depending on the availability of funds. The eligible states include the eight selected for the CCBHC demonstration: Alaska, California, Colorado, Connecticut, Iowa, Illinois, Indiana, Kentucky, Massachusetts, Maryland, Michigan, Minnesota, Missouri, North Carolina, Nevada, New Jersey, New Mexico, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island, Texas, and Virginia. Applications were due by July 9, 2018. As of October 31, 2018, awards have not been posted.

PsychU reported on this topic in “75 Behavioral Health Provider Organizations In 8 States Prepare For CCBHC Demonstrations,” which published on February 24, 2017.

For more information, contact: Joy A. Mobley, Psy.D., Lieutenant Commander, USPHS, Public Health Analyst, SAMHSA’s Center for Mental Health Services (CMHS), Substance Abuse and Mental Health Services Administration, 5600 Fishers Lane, Rockville, Maryland 20857; 240-276-2823; Email: joy.mobley@samhsa.hhs.gov.

Strategies to identify and address behavioral health conditions in covered populations has become increasingly prevalent in health plans. A recent survey, published in Trends In Behavioral Health: A Reference Guide On The U.S. Behavioral Health Financing & Delivery System (The Guide), found that most health plans (over 93%) are using analytics to identify high-needs consumers who need behavioral health interventions.

Centripetal. (2017). Trends in behavioral health: A reference guide on the US behavioral health financing & delivery system. Rockville, MD: Otsuka America Pharmaceutical, Inc. Retrieved from PsychU.org.

The reasons behind these initiatives are straightforward. A small proportion of the population – around 5% – use 90% of health plan resources. And, the large proportion of these consumers have a mental health or addictive disorder.

Newly-emerging results from pilot programs to identify and treat behavioral health disorders are showing a link to lower overall cost of care. As an example, one payer used population health data coupled with predictive modeling tools to identify high cost utilizers of behavioral health, addiction, and medical services. Findings reveal that the highest cost cohorts were members with co-morbid conditions (e.g., mental health and addiction needs, depression and pain management, and behavioral health and developmental delays). The payer developed targeted interventions for each cohort. For example, for individuals with both behavioral health and developmental delays had higher costs if access to respite services were not available or marketed to caretakers. This led to the development of new programs that closed these treatment gaps.

Many health plans are developing new Population Health Management strategies focused on addressing the support needs of consumers with complex care conditions. These consumers represent just 5% of the population but use almost half of U.S. health care resources. To identify these consumers, health plans are increasingly using analytic capabilities for population segmentation. According to a recent national survey of over 4,000 health care professionals sponsored by Otsuka America Pharmaceutical, Inc. (OAPI) and conducted by OPEN MINDS, over 90% of health plans are using analytic tools to identify complex consumers – and 94% of health plans are using analytics to identify consumers with serious mental illnesses. The full results of this inaugural survey are contained in Trends In Behavioral Health: A Reference Guide On The U.S. Behavioral Health Financing & Delivery System (The Guide).

The survey and subsequent report captured input from national, state, and local health plans (payers).  Report findings indicate that payers have widely adopted the use of analytics for identification and early management of consumers in need of behavioral health interventions across both the public and private sector through developing:

  • Strategies focused on improving consumer access to care
  • Approaches for improving consumer engagement
  • Improved coordination of care for consumers with behavioral conditions
  • Tactics to ensure quality of behavioral health care

Behavioral health conditions greatly impact the health and wellness of the populations health plans manage. The overall adoption of analytics tools is indicative not only of the greater depth of understanding and acceptance by health plans of the need to use data, but also their recognition that actionable data is key to better serving the needs of complex consumers.

What does this mean for executives and the health care ecosystem as a whole? It means that analytics can help identify trends on a national scale down to the local level and provide the quantitative information necessary to guide decision making and planning. Analytics can also help to pinpoint areas for improvement and guidance on performance, thereby helping position organizations for success.

Through clinical, financial, and operations data, payer and provider organizations can utilize analytics to segment consumers and stratify risk to help understand the needs of the population so that services can be better planned and delivered. Once segmented, best practice interventions can be targeted to meet the needs of a specific population.

“This is a new era of health care, built on value and enhanced care coordination – and the use of data and analytics is key to improving financial and clinical outcomes,” says Monica E. Oss, CEO, OPEN MINDS.  “This report underscores just how much health plans are leveraging analytic tools to take segmentation to the next level, and more quickly and effectively get to those in need.”

A free copy of the full findings within this inaugural report is available on PsychU at https://www.PsychU.org/trends-behavioral-health-reference-guide-u-s-behavioral-health-financing-delivery-system.

About Centripetal

The Centripetal Behavioral Health Population Health Management Platform “mission” is to make positive contributions to the national health care conversation addressing the disproportionate effect behavioral health disorders have on the U.S. health care system, and mental health care trends that are shaping this reality.  The content delivered by the Centripetal platform is intended to provide critical insights about these trends for key healthcare stakeholders including commercial and government payers, integrated delivery networks, and medical and behavioral healthcare providers.

The Centripetal Behavioral Health Population Health Management Platform is supported by Otsuka America Pharmaceutical, Inc. and Lundbeck, LLC.  The Centripetal name and logo symbolizes a move toward the center which is evident in today’s healthcare landscape on multiple levels – at the system level by the increasing integration of medical and behavioral health care, at the group level by the increasing focus and attention to coordinated and collaborative care, and at the individual level by the increasing attention to meeting the healthcare needs and treatment of the whole person (i.e. patient-centered care).

The inaugural edition of Centripetal “Trends in Behavioral Health: A Reference Guide on the U.S. Behavioral Health Financing & Delivery System” provides information and insights into the multi-layered behavioral health system in the United States.  The guide includes an in-depth view of current statistics, prevailing issues, and emerging trends to inform the discussions, debates, and decision making of policy makers, payers, providers, advocates, and consumers.  Other highlights of what you can expect from the Centripetal Behavioral Health Population Health Management Platform include live virtual community learning events, podcasts, and continued research and publications.

On October 9, 2018, the Centers for Medicare & Medicaid Services (CMS) announced that 1,299 entities signed agreements to participate in the new Bundled Payments for Care Improvement – Advanced Model (BPCI Advanced), the new Medicare value-based bundled payment model. The model participants include 832 acute care hospitals and 715 individual physician group practices, for a total of 1,547 Medicare provider organizations and suppliers, located in 49 states plus the District of Columbia, and Puerto Rico. The participating entities will receive bundled payments for certain episodes of care as an alternative to FFS payments that reward only the volume of care delivered.

BPCI Advanced will initially include 32 bundled clinical episodes, and for the first time will include outpatient episodes. There are 29 inpatient clinical episodes and 3 outpatient episodes. The episodes fall into the following major disease states: spine, bone, and joint episodes; kidney, infectious diseases, neurology, cardiac episodes, gastrointestinal episodes, pulmonary episodes, and disorders of the liver.

Under the model, episodes will last 90 days and participants will be paid FFS. Individual episodes are reconciled to the target price and then netted with other episodes. After adjusting for quality measures, participants either receive or owe a payment to CMS. Participation in the model is completely voluntary and not limited to specific geographic regions. CMS selected seven quality measures for the BPCI Advanced Model. Two of them, All-cause Hospital Readmission Measure and Advance Care Plan, will be required for all clinical episodes. The other five quality measures will only apply to select clinical episodes. The measures were endorsed by the National Quality Forum (NQF) for use as quality measures. The measures are as follows:

  • All-cause Hospital Readmission Measure (NQF #1789)
  • Advanced Care Plan (NQF #0326)
  • Perioperative Care: Selection of Prophylactic Antibiotic: First- or Second-Generation Cephalosporin (NQF #0268)
  • Hospital-Level Risk-Standardized Complication Rate (RSCR) Following Elective Primary Total Hip Arthroplasty (THA) and/or Total Knee Arthroplasty (TKA) (NQF #1550)
  • Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate (RSMR) Following Coronary Artery Bypass Graft Surgery (NQF #2558)
  • Excess Days in Acute Care after Hospitalization for Acute Myocardial Infarction (NQF #2881)
  • Agency for Healthcare Research and Quality Patient Safety Indicators (PSI 90)

Participants selected to participate in BPCI Advanced beginning on October 1, 2018, committed to be held accountable for one or more clinical episodes and may not add or drop such clinical episodes until January 1, 2020. BPCI Advanced qualifies as an Advanced Alternative Payment Model (Advanced APM) under MACRA, so participating provider organizations can be exempted from the reporting requirements associated with the Merit-Based Incentive Payment System (MIPS). The BPCI Advanced Model builds on the BPCI Initiative, which ended on September 30, 2018. The BPCI Advanced Model was publicly announced in January 2018 and runs from October 1, 2018 through December 31, 2023. A second application period will open in 2020.

The BPCI initiative and the new BPCI Advanced Model differ, as follows:

  • BPCI Advanced offers bundled payments for additional clinical episodes beyond those that were included in BPCI. The three new outpatient clinical episodes are focused on percutaneous coronary intervention, cardiac defibrillator, and back and neck (except spinal fusion).
  • BPCI Advanced provides participants with preliminary target prices before the start of each model year to allow for more effective planning. The target prices are the amount CMS will pay for episodes of care under the model.
  • BPCI Advanced qualifies as an Advanced APM. Participating clinical professionals assume risk for consumer health care costs and also meet other requirements including meeting quality thresholds, potentially qualifying them for incentive payments and exempting them from the MIPS program.
  • Of the 32 bundled clinical episodes available, the top three clinical episodes selected by participants are: Major joint replacement of the lower extremity, congestive heart failure, and sepsis.

Provider organizations participate in the model as non-conveners or conveners. Non-conveners may initiate an episode and only bear risk for its organization; a non-convener is not responsible for the risk associated with other organizations participating in the episode. These organizations include physician group practices and acute care hospitals. Conveners bring together non-conveners, facilitate coordination between the entities, and bears and apportion the financial risk. Conveners may be entities that are either Medicare-enrolled or non-enrolled provider organizations and suppliers.

PsychU reported on this topic in “CMS Unveils New Voluntary Bundled Payments For Care Improvement Advanced Model,” which published on February 4, 2018.

For more information about the BPCI Advanced Model, send an email to: BPCIAdvanced@cms.hhs.gov. General information can be requested from: 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.

Medicare Advantage health plans overturned 75% of their denials during preauthorization and payment denial appeals during 2014 through 2016. This equals approximately 216,000 denials overturned each year (about 649,000 for all three years) of about 863,000 total denials for this time period.

A review by the Office of the Inspector General (OIG) for the U.S. Department of Health and Human Services found that Medicare Advantage plans overturned denials for two reasons. Either the appeals review may determine the original decision was incorrect, or the review may determine that the initial denial decision was correct based on information available at the time, but additional information changed the situation.

The OIG reported its findings in “Medicare Advantage Appeal Outcomes and Audit Findings Raise Concerns About Service and Payment Denials.” The OIG collected data on denials, appeals, and appeal outcomes at each level of the Medicare Advantage appeals process for 2014 to 2016. A primary goal was to determine the rates of appeals and overturns of denied services and payments by Medicare Advantage health plans. Additional findings include:

  • 70% of appeals were fully successful, 5% were partially successful, and 25% were not successful.
  • 82% of overturned denials occurred after the services were provided to the beneficiary and resulted in a payment to the provider organization.
  • The median rate of overturned denials was 77%. Across 320 Medicare Advantage health plans, the contract specific denial overturn rates ranged from 0% to 100%. Seven contracts overturned more than 98% of the denials.

The Centers for Medicare & Medicaid Services (CMS) audited 140 Medicare Advantage health plan contracts and issued citations in 2015. Additional details are as follows:

  • CMS cited 79 of the 140 audited Medicare Advantage health plan contracts (56%) for two types of violations related to inappropriately denying requests for preauthorization of services and/or payment. CMS found that some of these contracts made the wrong clinical decision based on the information submitted by the provider organization or beneficiary, and some did not conduct appropriate outreach to obtain all needed information before making clinical decisions.
  • CMS cited 63 of the 140 audited Medicare Advantage health plan contracts (45%) for sending denial letters that did not contain important required information. CMS found that some denial letters did not clearly explain why a request was denied, contained incorrect or incomplete information, did not use approved language, and/or were written in a manner not easily understandable to beneficiaries.
  • CMS suspended new enrollment for two Medicare Advantage health plans due to serious threats to the health and safety of their beneficiaries. One of these Medicare Advantage health plans had a history of noncompliance. These Medicare Advantage health plans represented 22 contracts and nearly 500,000 beneficiaries.
  • CMS issued $1.9 million in civil money penalties to nine Medicare Advantage health plans for violations related to processing requests for services and payment, appeals, and grievances.
  • The plan violations did not impact Medicare Advantage health plan star ratings until an average of two years later.

According to the OIG, high overturn rates of appealed denials and continued performance problems identified by CMS audits, raises concerns that some beneficiaries and provider organizations may not be receiving required services and payment from the Medicare Advantage health plans. The OIG recommended that CMS enhance its oversight of Medicare Advantage health plan contracts, address problems related to inappropriate denials and inadequate denial letters in Medicare Advantage, and provide beneficiaries with information about serious violations by Medicare Advantage health plans. CMS concurred with all three recommendations.

For more information, contact: Don White, Public Affairs Specialist, Office of Inspector General, U.S. Department of Health and Human Services, Federal Building, 90 7th Street, Suite 3-500, San Francisco, California 94103; 415-437-7982; Fax: 415-437-8060; Email: Donald.white@oig.hhs.gov.

Virginia Medicaid is developing an 1115 waiver to impose work requirements on non-disabled adults; and low, sliding-scale premiums and cost sharing for some program participants. The state expanded Medicaid to adults with income up to 138% of the federal poverty level in June 2018 and coverage for this population begins January 2019. The work requirements in the 1115 waiver, called The Creating Opportunities for Medicaid Participants to Achieve Self- Sufficiency (COMPASS), will require federal approval prior to taking effect.

Virginia’s proposed “Training, Education, Employment and Opportunity Program” work requirement applies to non-disabled adults (ages 19 to 64) who are enrolled in Medicaid. Exemptions will be granted for various populations, including pregnant and postpartum women, a parent caring for a dependent child, and medically frail and severely mentally ill enrollees. The state estimates that close to 400,000 individuals will be newly eligible under Medicaid expansion and that 120,000 of all Medicaid enrollees, including existing members and newly eligible adults, will not be exempt from work requirements. The state estimates that about 45% of non-exempt individuals already work 20 hours a week or attend school.

The requirement specifies that enrollees work, attend school, participate in job training programs, or engage in other forms of “community engagement.” Qualifying work and community engagement activities include:

  • Both unsubsidized and subsidized employment.
  • Job skills/job readiness training or job-search activities.
  • Participation in a state workforce program offered through Virginia Workforce Centers, One-Stops, or other approved Virginia state agency.
  • Participation in a tribal workforce program.
  • Participation in Virginia’s Agriculture and Foreign Labor, or other migrant workforce program.
  • Certain education endeavors.
  • Vocational education, training, and apprenticeships.
  • Community work experience programs, community service or public service (excluding political activities) that can reasonably improve work readiness.
  • Caregiving services for a non-dependent relative or other person with a chronic, disabling health condition.
  • Any additional qualifying work or community engagement activities the Commonwealth determines will support the health of enrollees and achieve the objectives of the program.

The work requirement will be phased-in for new enrollees. Three months after enrollment, enrollees will need to participate in community engagement activities at least 20 hours per month, which will gradually increase until enrollees must be participating in community engagement activities at least 80 hours per month once they’ve been enrolled in Medicaid for a year.

The waiver’s new “Health and Wellness” premiums and cost sharing apply to those with income between 100% and 138% of the poverty level. The premiums are to be $5 per month for those with income between 100% and 125% of the poverty level, and $10 per month for those with income between 126% and 138% of the poverty level. The premiums are accompanied by cost-sharing methods intended to promote healthy behaviors (such as not smoking), and appropriate use of emergency room services. Coverage will be suspended after a three month grace period for failure to pay premiums. Coverage can be reinstated at any time by making one premium payment, claiming an exemption, or reporting that family income dropped below 100% of the FPL. The state estimates that 42,000 individuals will be required to pay premiums.

The Creating Opportunities for Medicaid Participants to Achieve Self- Sufficiency (COMPASS) waiver is an extension and modification to the state’s Virginia Governor’s Access Plan (GAP) and Addiction and Recovery Treatment Services (ARTS) Delivery System Transformation waiver. The ARTS/GAP waiver provides Medicaid benefits to adults with serious mental illness, expands the state’s substance use disorder services, and maintains authority for coverage of former foster care youth who aged out of foster care in another state. The new waiver removes the program for adults with serious mental illness because they will now be covered under the expansion. The waiver will continue to authorize addiction disorder services to enrollees and maintain authority for coverage of former foster care youth who aged out of foster care in another state. It will also create new housing and employment supports benefit for high-need populations.

The full text of “The Virginia Governor’s Access Plan (GAP), Addiction, and Recovery Treatment Services (ARTS) and Former Foster Care Youth (FFCY) Delivery System Transformation: Section 1115 Annual Report 2017” was published September 18, 2018 by Virginia Department of Medical Assistance Services. A copy is available online at Medicaid.gov.

PsychU  reported on state work requirements in “Kentucky Granted Medicaid Waiver With Cost-Sharing & Work Requirements,” which published on February 2, 2018.

For more information, contact: Information Office, Virginia Department Of Medical Assistance Services, 600 East Broad Street, Richmond, Virginia 23219; 804-786-7933; Email: DMASInfo@dmas.virginia.gov.

An analysis of Medicaid home- and community-based services (HCBS) programs in five states (Arizona, Florida, Mississippi, Montana, and Oregon) found that the states and managed care organizations (MCOs) reported challenges recruiting and training direct care workers, due in part to low wages. The states also faced challenges due to the complexity of consumer care needs and state funding limitations.

Officials from all five states and three of the four MCOs interviewed as part of the analysis cited challenges recruiting and retaining HCBS direct care workers, particularly given the low wages these professionals typically receive. Officials from Montana and Oregon noted that direct care workers can typically earn more working at a fast food restaurant. Officials from Montana and Mississippi and officials from three of the MCOs said the workforce shortages are often worse in rural or remote areas, where travel across long distances is common. The officials said it can be hard to find a provider willing to drive a long distance each way to work for only a few hours.

Officials from four of the five selected states and all four MCOs described challenges serving beneficiaries with complex medical and behavioral health needs, including individuals who display aggressive or other challenging behaviors. The officials said complex medical conditions can be hard to accommodate in HCBS settings. Officials from Mississippi and one MCO mentioned difficulties finding appropriate placements for individuals requiring ventilator services. State and MCO officials also reported that complex conditions that affect beneficiaries’ behavior, such as co-occurring developmental disabilities and behavioral health conditions, dementia, and traumatic brain injury can also create challenges for providing HCBS, particularly when beneficiaries display aggressive or other challenging behaviors.

Officials from four selected states and officials from one of the MCOs in the fifth state said that limits on funding for HCBS programs were a challenge, particularly in the context of the growing number of individuals with long-term service and support (LTSS) needs.

  • In Mississippi, state officials were unable to enroll the maximum number in certain HCBS waivers, and that over the past three years, only a limited number of beneficiaries had been added to these programs.
  • Officials from an MCO in Arizona said that state budget constraints had led to past reductions in the amount of certain HCBS, such as respite care.
  • State officials in Oregon said that the increase in federal funding for implementing its 1915(k) Community First Choice state plan program failed to fully cover the increased cost of serving all eligible beneficiaries, which led to budget problems.
  • Florida officials said that the state has experienced rapid growth in the population with LTSS needs and that this growth, combined with medical advances that prolong life and reduce attrition from waiver programs, had contributed to a growing waiting list for HCBS.
  • Officials from one MCO said that the state’s limit on HCBS waiver spending per beneficiary was a challenge for beneficiaries with high needs because HCBS costs cannot exceed the cost of institutional care. If beneficiaries’ costs exceed 100% for more than a six-month period, the beneficiary can choose to move to an institutional setting, or to continue to receive more limited HCBS that do not exceed the cost of care in an institution. To choose the latter, the beneficiary and family/guardians are required to sign a form acknowledging the safety risks.

These findings were reported in “Medicaid HCBS: Selected States’ Program Structures and Challenges Providing Services” by the Government Accountability Office (GAO). The review encompassed 26 HCBS programs that provide long-term services and supports (LTSS) in Arizona, Florida, Mississippi, Montana, and Oregon. The analysis reported that the programs reflect state decisions on the population covered, whether to limit eligibility or enrollment, and use of managed care. Additionally, the analysis focused on state-level challenges related to providing HCBS, and actions states reported taking to respond to the challenges.

  • Populations: Four of the five states (Florida, Mississippi, Montana, and Oregon) had multiple HCBS programs (21 in total) that targeted specific populations. For example, Mississippi had separate HCBS programs for aged or physically disabled individuals and individuals with intellectual/developmental disabilities (I/DD). The fifth state, Arizona, had one program that targeted both the aged and disabled population and those with I/DD. The remaining four programs were not targeted to specific populations.
  • Eligibility: All five states had at least one HCBS program that limited eligibility to beneficiaries whose needs would otherwise require care in a nursing home or other institutional setting.
  • Enrollment: Four of the five states (Florida, Mississippi, Montana, and Oregon) limited enrollment in one or more of their HCBS programs; 19 of the 26 programs had enrollment caps, and 12 of these programs maintained a waiting list.
  • Managed care: Two of the five states (Arizona and Florida) used managed LTSS for one HCBS program.

The GAO reported state and MCO officials’ efforts to respond to the three key challenges to providing HCBS: workforce, consumer complexity, and funding. Their broad responses were as follows:

  • HCBS workforce: To make direct care worker salaries more competitive, officials from Mississippi, Montana, and two of the MCOs reported offering higher payment rates. Officials from Arizona and Montana and one MCO also mentioned that Medicaid’s participant-directed options—which allow beneficiaries to choose paid caregivers from among their family members, friends, and neighbors—had helped to address HCBS workforce shortages.
  • Consumer complexity: To respond to the challenge of serving HCBS beneficiaries with complex medical or behavioral health needs, the state officials and MCOs reported using the following strategies: supporting the development of locations in the community to serve individuals with specific complex needs, training provider organizations and direct care professionals, and increasing care coordination.
  • HCBS funding: State officials who said HCBS funding was a challenge said they responded to these challenges by, among other things, providing information to their legislatures on the projected need for HCBS to inform future funding decisions. The information included population growth, projected demand for Medicaid, the cost of providing HCBS, and cost avoidance achieved by keeping people out of nursing homes. They also leveraged other available resources, such as federal grants; these alternative funding sources include the Money Follows the Person grant program.

For more information, contact: Carolyn L. Yocom, U.S. Government Accountability Office, 441 G Street, NW, Room 7149, Washington, District of Columbia 20548; 202-512-7114; Email: yocomc@gao.gov; Chuck Young, Managing Director, Public Affairs, U.S. Government Accountability Office, 441 G Street, NW, Room 7149, Washington, District of Columbia 20548; 202-512-4800; Email: youngc1@gao.gov.

Medicaid spending rose to $592.2 billion in 2017, up 2.6% over the $582 billion in 2016. The $592.2 billion spent in 2017 includes $370.6 billion in federal expenditures and $221.6 billion in state expenditures. State Medicaid expenditures in 2017 were 4.2% higher than the $212.7 billion in 2016. Overall Medicaid expenditures are projected to increase at an average annual rate of 5.7%, and to reach $1,005.7 billion by 2026.

Enrollment rose by 2% (1.5 million people) from 72.3 million enrollees to 73.8 million, with 2017 per beneficiary annual expenditures of $7,648. Enrollment is projected to increase by an average of 1.3% per year over the next 10 years, and reach 82.3 million in 2026. Per beneficiary annual expenditures are projected to average $11,793 in 2026.

About 66% of the 2017 enrollment increase was among adults in the Medicaid expansion population (childless, non-disabled adults). Medicaid expenditures for expansion adults are projected to amount to $938 billion over the period 2017 through 2026. About $855 billion of these expenditures (about 91%) are projected to be financed by the federal government. By 2026, the expansion adult population is projected to grow to 13.3 million.

These findings were reported in “2017 Actuarial Report On The Financial Outlook For Medicaid,” by Christian J. Wolfe, FSA, MAAA; Kathryn E. Rennie, ASA; and Christopher J. Truffer, FSA, MAAA for the U.S. Department of Health & Human Services (Centers For Medicare & Medicaid Services’ (CMS’) Office of the Actuary). The researchers studied CMS’ MS-64 Financial Management Report (FMR) and the Medicaid Analytic eXtract (MAX). The goal was to analyze past Medicaid trends and create a 10-year projection of expenditures and enrollment under current law.

Key findings were as follows:

  • The share of the Gross Domestic Product (GDP) consumed by Medicaid is expected to increase. Over the decade, GDP is projected to increase by an average rate of 4.1%. Medicaid expenditures are projected to increase from 3.1% of GDP in 2016 to 3.7% of GDP in 2026.
  • Expenditures for Medicaid managed care (capitated payments) are projected to rise by an average of 7.8% per year, and costs are projected to rise from $272.8 billion in 2016 to $578 billion in 2026. The share of Medicaid expenditures for Medicaid managed care is projected to rise from 47% of the total projected $582 billion in Medicaid spending in 2016 to 57% of the total $1,005.7 billion projected Medicaid spending in 2026.
  • Costs for acute care services are projected to grow by 3.9% per year to $220.5 billion in 2026.
  • Costs for long-term care services are projected to grow by 3.2% and reach $158.7 billion in 2026.
  • Disproportionate share hospital (DSH) payments are projected to grow at an annual rate of 2.4%, with projected expenditures of $24.8 billion in 2026.

The researchers concluded that Medicaid’s share of state budgets would continue to expand absent other changes to the program, budget expenditures, or budget revenues, while its share of the federal budget would remain about the same, if trends continue as projected under current law.  They noted that their projections indicate that the use of Medicaid managed care over the next decade will become increasingly important; the growth rate for Medicaid managed care (capitated payments) is projected at 7.8% per year, compared to 5.7% per year cost growth for Medicaid overall for the next decade. Many states have covered expansion enrollees through managed care plans; and have continued to expand the use of managed care to cover aged enrollees and persons with disabilities, and to provide for long-term care services through managed care programs.

PsychU reported on this topic in “In 2016, 15% Of Medicaid Beneficiaries Were In The Expansion Population & Accounted For 12% Of Total Medicaid Spending,” which published on February 2, 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.

During 2017, Horizon Blue Cross Blue Shield of New Jersey (Horizon BCBSNJ) commercial members who received care from a physician participating in the organization’s value-based care initiative had better outcomes than other members. Those who received care from a physician in the value-based program had a 4% lower total cost of care trend, and they had 4% fewer hospital inpatient admissions. They also had a higher rate of screening for colorectal cancer (6% higher) and breast cancer (7% higher).

The commercial members with chronic health conditions who received care from a value-based physician also had better outcomes than members with chronic conditions not affiliated with a value-based physician. Members with diabetes had a 24% lower readmission rate, and an 11% improvement in diabetes management. Members with congestive heart failure had a 6% lower medical cost trend. Overall, members with chronic health conditions also had a 2% reduction in potentially avoidable emergency department visits year over year.

In the announcement on September 26, 2018, the insurer noted that its payments to value-based physicians have increased by 10%. In 2017, these value-based payments totaled $104 million and were in addition to what those clinical professionals were reimbursed on a fee-for-service basis. The announcement did not include the exact data for 2016 and 2017, only the percentage differences in the reported outcomes.

Non-profit Horizon BCBSNJ is an independent licensee of the Blue Cross and Blue Shield Association serving more than 3.8 million members. Horizon BCBSNJ provides a wide array of medical, dental, vision, and prescription insurance products and services. More than 70% of its in-network primary care doctors participated in one or more of Horizon BCBSNJ’s value-based care programs, which represents a 20% increase over the last two years. Thousands of specialists also participate in those programs. Horizon has several value-based care initiatives including the OMNIA Health Alliance, Accountable Care Organizations, Patient-Centered Medical Homes, and Episodes of Care.

For more information, contact: Thomas Vincz, Public Relations, Horizon Blue Cross Blue Shield of New Jersey, 3 Penn Plaza East, Newark, New Jersey 07105; 973-466-4614; Email: Thomas_Vincz@horizonblue.com.

On September 19, 2018, the federal Department of Health and Human Services (HHS) announced it awarded more than $1 billion in grants targeting opioid use disorder prevention and treatment. The awards support HHS’s Five-Point Opioid Strategy, which was launched last year. The grants were issued by the Substance Abuse and Mental Health Services Administration (SAMHSA), the Health Resources and Services Administration (HRSA), and the Centers for Disease Control and Prevention (CDC). The SAMSHA grants cover projects lasting up to two years.

SAMHSA awarded more than $930 million in State Opioid Response grants to support a comprehensive response to the opioid epidemic and expand access to treatment and recovery support services. These grants are intended to increase access to medication assisted treatment (MAT) for opioid use disorder and to reduce unmet treatment need. The grants fund prevention, treatment, and recovery activities for opioid use disorder.

States will receive the funding based on a formula, with a 15% set-aside for the ten states with the highest mortality rate related to drug overdose deaths. Other funding provided through this program, including $50 million for tribal communities, will be awarded separately. SAMHSA also awarded about $90 million to other programming for states and communities to expand access to MAT, increase distribution and use of overdose reversal drugs, and increase workforce development activities.

HRSA awarded over $396 million to HRSA-funded community health centers, academic institutions, and rural organizations to expand access to integrated addiction disorder and mental health services. The HRSA grants were for the following grant activities:

  • $352 million awarded to increase access to addiction disorder and mental health services through the Expanding Access to Quality Substance Use Disorder and Mental Health Services to 1,232 community health centers across the nation.
  • $18.5 million to support Behavioral Health Workforce Education and Training and Enhancing Behavioral Health Workforce awards.
  • $25.5 million to over 120 rural organizations to increase access to addiction prevention and treatment services serving rural populations across the country. This includes: $19 million awarded to 95 organizations under the Federal Office of Rural Health Policy’s Rural Communities Opioid Response Program-Planning, and nearly $6.5 million to 26 rural organizations to expand the reach of the Rural Health Opioid Program.

The CDC awarded $155.5 million to increase support for states and territories working to prevent opioid-related overdoses, deaths, and other outcomes. This funding will advance the understanding of the opioid overdose epidemic and scale-up prevention and response activities, including improving the timeliness and quality of surveillance data. The CDC also awarded $12 million in funds to support 11 Tribal Epidemiology Centers and 15 tribal entities to improve opioid overdose surveillance so that prevention strategies can be better targeted for tribal communities. CDC is also distributing an additional $27 million to nine non-governmental organizations, which will support states and territories with staffing, procurement, and training to enhance local public health capacity.

The individual SAMHSA grantees’ awards are listed online at SAMHSA.gov.

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 this question and answer session, William Wood and Deb Adler respond to unanswered questions from the PsychU webinar, “Tackling Behavioral Health Provider Shortages: Health Plan Strategies From Access To Engagement” which took place on November 7, 2018.

William Wood, MD, PhD, is the Former Managing Medical Director at Anthem and Deb Adler, MS, CPQH, is the former Senior Vice President of Network Strategy at Optum. Both speakers currently serve as Senior Associates at OPEN MINDS.

In the original webinar, Dr. Wood and Ms. Adler discussed key strategies that health plans use to tackle the shortage of clinical professionals and improve consumer engagement at the same time, including the use of technology. You can watch the full video recording of this webinar, or download the slide deck, here.

This summary was developed utilizing the full recorded presentation of this webinar. You can access the full sourcing, polling results, recording, or presentation slides here: https://www.psychu.org/tackling-behavioral-health-provider-shortages-health-plan-strategies-access-engagement/.

Health plans are challenged to assure timely access to behavioral health care. A misconception is that this problem only occurs in rural markets, but many urban areas are also feeling the pinch with all types of clinical professionals. On November 7, 2018, William Wood, MD, PhD and Deb Adler, MS, CPHQ, conducted a webinar to discuss the growing demand for and shrinking availability of behavioral health clinical professionals – both psychiatrists and allied providers such as social workers and psychologists.

Dr. William Wood is a psychiatric physician executive with 34 years of extensive senior leadership experience in public and private behavioral health care. Before joining OPEN MINDS as a Senior Associate, he served as Managing Medical Director for Medicare & Medicaid Anthem/Amerigroup. He has also had experience as a psychiatric executive in community mental health and psychiatric hospital environments. Dr. Wood received his Doctor of Medicine from Baylor College. He also earned a PhD in Biochemistry from the University of North Carolina at Chapel Hill School of Medicine.

Ms. Deb Adler has more than 20 years of experience in executive health care roles, serving in a variety of capacities including network executive, quality management executive and chief operating office. She is the former Senior Vice President of Network Strategy for Optum, where she was responsible for behavioral health network development, contracting, and strategy for over 185,000 clinical professionals and providers organizations. Currently she serves as a Senior Associate at OPEN MINDS. Ms. Adler received her Master’s Degree in Educational Psychology & Evaluation from Catholic University of America, and is a Certified Professional in Health Care Quality.

The presentation had the following educational objectives:

  1. Discuss where behavioral health access challenges are the greatest
  2. Investigate strategies to address behavioral health professional shortages to mitigate access challenges
  3. Explore potential best practices to improve behavioral health access and consumer engagement

The webinar began with a poll of the attendees, to learn what types of organizations were being represented within the attendee population. Results are presented in Figure 1.

Ms. Adler started the webinar with a discussion of monitoring and evaluating access and availability of behavioral health services. She reviewed the traditional methodology for measuring availability from the health plan perspective, including:

  1. Geographic Distance & Proximity: Using geoaccess reports to determine the distance from the consumer to the provider. In this methodology, the definition of distance evolves to reflect different areas (urban, rural and frontier).
  2. Timeliness Of Services: In particular, Ms. Adler spoke about timeliness in regards to outpatient services. For example, measuring the length of time between when a consumer first contacts a provider organization for their first appointment. Ms. Adler stated that typical industry standards are: 10 days from the consumer first requesting services to receiving service for a routine outpatient visit; 48 hours for urgent care; and 6 hours or immediately for emergencies.

Ms. Adler also mentioned other important measures of access, including: effectiveness (e.g. is the service evidence-based); convenience (e.g. can services be accessed at times that fit with the consumer’s work schedule); and whether or not care is consumer-centered. She then covered ways that payers can assess access to services, including: structural measures (e.g. what percent of a population is covered by insurance); utilization measures (e.g. penetration rate, which can range from 2%-4% for a commercially insured population, to 12-14% for a managed Medicaid population); and density (e.g. the ratio of providers to consumers for a given population or geographic region). Dr. Wood added to the discussion by stating that payers and providers are taking a more consumer-centered approach by answering new questions related to social determinants, like figuring out if consumers have access to transportation.

Moving on, Ms. Adler turned her focus to the current access and availability challenges in the behavioral health system. She began by presenting statistics from Centripetal’s Trends In Behavioral Health: A Reference Guide On The U.S. Behavioral Health Financing & Delivery System report, related to psychiatric bed supply and licensed psychiatrist shortages. Ms. Adler pointed out that the Treatment Advocacy Center recommends a standard of 40-60 available beds per 100,000 people, while findings from the Trends Report suggested that availability is closer to 30 beds per 100,000, with even less availability in rural and frontier areas. She mentioned that the supply of beds is even more challenging for Medicare and Medicaid consumers as opposed to consumers with commercial insurance, due to lower reimbursement rates within each payment system. Ms. Adler indicated that these current challenges with access to inpatient care may change over time as payers continue to look for alternatives for inpatient care.

Both Ms. Adler and Dr. Wood pointed out the national shortage of psychiatrists, which also varies by geographic region, with less availability within rural or frontier areas. They stated that a shortage of psychiatrists is likely to be a continual issue for some time, as demand continues to increase and supply continues to shrink. Speakers mentioned that dwindling rates of psychiatrists are due to an aging population of professionals heading toward retirement age, and fewer medical students choosing psychiatry as a specialty. Lastly, Ms. Adler mentioned that many private practitioners, including psychiatrists, have been moving towards “cash only” payment systems, which restricts access to those consumers who cannot afford to pay out of pocket for services.

At this point in the presentation, the audience participated in another poll, this time focused on the greatest challenges to access or availability within their current practice environment. Results are presented in Figure 2.

After the polling, Dr. Wood shared his professional experience during his time at Anthem. He stated that their largest issue was finding quick access to a psychiatrist for their commercial members. He mentioned that sometimes it was actually easier to find access for their Medicaid consumers, as many community mental health centers had psychiatrists on staff.

Ms. Adler moved on to a discussion of solutions to the challenges previously presented. The following potential solutions were explored:

  • Tackling The Psychiatric Bed Shortage: by encouraging partnerships and funding of new approaches; monitoring practices, collecting necessary data, and standardizing terminology; removing barriers to access
  • Changing Care Delivery: by utilizing advanced practice providers where appropriate and allowed within their prescriptive authority – including nurses with prescriptive authority, prescribing psychologists, physician assistants with psychiatric certifications, and board-certified psychiatric pharmacists; and offering virtual psychiatric services within state regulatory confines over HIPAA-secure technology to increase access to care
  • Delivering Collaborative Care: which is a person-centered model that rewards primary care providers and multi-disciplinary teams when they screen for anxiety or depression, allows access to psychiatrists in person or through a virtual consultation, and embeds a care manager in the team to coordinate care and update data as necessary
  • Exploring The Use Of Telehealth / Telepsychiatry: since around 15 million Americans are already receiving some medical care through telehealth, and it allows providers to increase productivity and eliminate travel time to increase convenience to the consumer
  • Addressing Reimbursement Issues: through increased rates, alternative models, other financial and non-financial perks, and equality between in-person and virtual visits

The audience was asked a third and final question to explore their organizations’ attempts to tackle access challenges. Results are presented in Figure 3.

Dr. Wood and Ms. Adler then discussed the critical link between access and engagement – the quicker the access, the better the engagement. They also mentioned that increased engagement may improve outcomes overall, including potentially lowering no-show rates, raising consumer satisfaction, and increasing medication adherence. Dr. Wood stressed the importance of an overall consumer-centered approach, including setting up a follow-up plan before individuals are discharged from a hospitalization, offering greater flexibility and availability of walk-in appointments, providing evening and weekend appointment times, and offering the consumer a choice of provider and location. He stressed that when consumers are given choices, they can be much more invested in health care outcomes.

The webinar concluded with a question and answer period in which the following questions were asked:

What are the best ways to work with primary care to support consumer engagement?

Ms. Adler cited the effectiveness of collaborative care models. Dr. Woods also pointed out the ability to do “warm handoffs” within collaborative care models – where the primary care professional introduces the consumer to the behavioral health professional as a part of the consumer’s care team – which can help with transition and engagement in care.

How can using clinical professionals to the top of their level of licensure help with workforce issues?

According to Dr. Wood, allowing professionals to practice at the top of their licensure increases access to necessary services. One potential issue often encountered is that psychiatrists are not traditionally or typically trained to work as a part of a larger interdisciplinary team. Dr. Wood stated that when behavioral health professionals work together as a team, each clinical professional is able to perform the tasks and duties that are most appropriate for their level of licensure. In turn, this can increase efficiency, and create more capacity to see consumers.

Are current reimbursement policies potential barriers to telehealth?

Ms. Adler expressed her opinion on the issue as a difficulty of awareness rather than reimbursement. She stated that many payers do pay the same rate for telehealth as face-to-face appointment time, however, consumers and providers may not be aware that telehealth is an equivalent option financially.

What role can peer specialists / peer providers play to help with these issues?

Dr. Woods stated his belief that peer specialists are an underused resource within the field, and that they could play a critical in role in consumer engagement and serve as a critical member of the provider team. Ms. Adler agreed, and stated her opinion that payers could ensure reimbursement for their services, which in turn would reflect the importance of these services and the peer specialists within the treatment team and behavioral health system.

Given the growing demand and shrinking availability of clinical professionals – both psychiatrists and allied health providers such as social workers and psychologists – health plans are challenged to assure timely access to care. A misconception is this is a challenge only in rural markets, but many urban markets are also feeling the pinch across all types of clinical professionals.

During this webinar, William Wood, MD, PhD, Former Managing Medical Director at Anthem and Deb Adler, MS, CPQH, Former Senior Vice President of Network Strategy at Optum, shares key strategies health plans use to tackle the shortage of clinical professionals and improve consumer engagement at the same time. Topics covered include how health plans overcome challenges to access and engagement with innovation and technology, and examples of access and engagement enhancements from a payer perspective.

Check out the follow up Q&A with the speakers:

On August 27, 2018, Medicare included 2,599 hospitals — or over half the total U.S. hospitals — in a list of those facing reimbursement penalties throughout fiscal year 2019 through Medicare’s Hospital Readmissions Reduction Program (HRRP). The penalties are imposed if the hospital’s 30-day readmission rate exceeds the hospital’s benchmark. The HRRP penalties do not apply to psychiatric hospitals.

For 2018, 47 hospitals received the maximum penalty, a 3% reimbursement reduction during fiscal year 2019. The average penalty cut reimbursements by 0.7%, which is about the same amount as last year. The reimbursement reductions are estimated at $566 million. The 47 hospitals that received the 3% reimbursement reduction include:

  1. Arizona Specialty Hospital, Chandler, AZ
  2. Arnot Ogden Medical Center, Elmira, NY
  3. Baylor Medical Center at Frisco, Frisco, TX
  4. Baylor Scott and White Surgical Hospital at Sherman, Sherman, TX
  5. Bertrand Chaffee Hospital, Springville, NY
  6. Canyon Vista Medical Center, Sierra Vista, AZ
  7. Centerpoint Medical Center, Independence, MO
  8. Charleston Surgical Hospital, Charleston, WV
  9. Chestatee Regional Hospital, Dahlonega, GA
  10. Christus Lake Area Hospital, Lake Charles, LA
  11. Crestwood Medical Center, Huntsville, AL
  12. Doctors Hospital at Deer Creek L L C, Leesville, LA
  13. El Paso Specialty Hospital, El Paso, TX
  14. Harlan ARH Hospital, Harlan, KY
  15. Hazard ARH Regional Medical Center, Hazard, KY
  16. Henry County Medical Center, Paris, TN
  17. Hilton Head Regional Medical Center, Hilton Head Island, SC
  18. Houston Physicians’ Hospital, Webster, TX
  19. Kentuckiana Medical Center LLC, Clarksville, IN
  20. Lafayette General Surgical Hospital, Lafayette, LA
  21. Lake Huron Medical Center, Port Huron, MI
  22. Lakeland Regional Medical Center, Lakeland, FL
  23. Lee’s Summit Medical Center, Lees Summit, MO
  24. Memorial Hermann Surgical Hospital Kingwood, Kingwood, TX
  25. Methodist McKinney Hospital, McKinney, TX
  26. Northwest Specialty Hospital, Post Falls, ID
  27. Northwestern Lake Forest Hospital, Lake Forest, IL
  28. Oklahoma Center For Orthopaedic & Multi-Sp, Oklahoma City, OK
  29. Oroville Hospital, Oroville, CA
  30. Physicians Centre, The, Bryan, TX
  31. Pine Creek Medical Center LLP, Dallas, TX
  32. Providence Medical Center, Kansas City, KS
  33. Reston Hospital Center, Reston, VA
  34. Southcoast Hospital Group, Inc., Fall River, MA
  35. St John Broken Arrow, Inc., Broken Arrow, OK
  36. St Lucie Medical Center, Port Saint Lucie, FL
  37. St Mary’s Medical Center, Blue Springs, MO
  38. Sugar Land Surgical Hospital LLP, Sugar Land, TX
  39. Surgical Specialty Center at Coordinated Health, Allentown, PA
  40. The Hospital at Westlake Medical Center, Austin, TX
  41. Tristar Greenview Regional Hospital, Bowling Green, KY
  42. Tug Valley ARH Regional Medical Center, South Williamson, KY
  43. Unity Point Health Trinity, Bettendorf, IA
  44. USMD Hospital at Fort Worth LP, Fort Worth, TX
  45. Webster General Hospital/ Swing Bed, Eupora, MS
  46. WellSpan Surgery and Rehabilitation Hospital, York, PA
  47. Wheeling Hospital, Wheeling, WV

The Centers for Medicare & Medicaid Services (CMS) evaluation method for 2018 includes a significant change. Prior evaluations judged each hospital against all others. The new method assigns hospitals to five peer groups containing facilities with similar proportions of low-income consumers. Medicare then compared each hospital’s readmission rates from July 2014 through June 2017 against the readmission rates of its peer group during those three years to determine if a penalty was warranted, and how much that penalty should be. An analysis by Kaiser Health News found that the new method reduced penalties against safety-net hospitals by an average of 25% compared to last year.

According to the Medicare Payment Advisory Commission (MedPAC) June 2018 report to Congress, the penalties from previous years successfully pressured hospitals to reduce readmissions, which has saved Medicare about $2 billion a year. The commission found that between 2010 and 2016 readmission rates fell by 3.6 percentage points for heart attacks, 3 percentage points for heart failure and 2.3 percentage points for pneumonia. At the same time, readmissions caused by conditions that do not factor into the penalties fell on average 1.4 percentage points, indicating hospitals were focusing on lowering unnecessary readmissions that could hurt them financially.

Hospitals that were exempt from the program include those with too few cases, veterans’ hospitals, children’s hospitals, critical access hospitals, and psychiatric hospitals. Hospitals in Maryland also were exempt because the state has a federal waiver related to how it distributes Medicare funding.

The full text of “Mandated Report: the Effects of the Hospital Readmissions Reduction Program” was published in June, 2018 by MEDPAC. A copy is available online at MEDPAC.gov.

The “Medicare Readmission Penalties By Hospital, Year 7” data was published September 26, 2018 by Kaiser Health News. The data is available at KHN.org.

Additional information about Medicare’s Hospital Readmissions Reduction Program can be found at the CMS website at CMS.gov.

For more information, contact: James Poyer, Division Director for Value Incentives and Quality Reporting, Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244; 202-690-6145; Fax: 202-260-1462; Email: james.poyer@cms.hhs.gov.

As of March 2018, approximately 15.75 million people were enrolled in individual, non-group health plans. This is approximately 4.8% of the total U.S. population. The 2018 enrollment is about 11.1% lower than the previous year as of March 2017.

The states with the highest enrollment in individual non-group plans were California, Florida, and Texas. In California, about 2.29 million people were enrolled, representing 5.8% of the state population, and 0.7% of the U.S. population. In Florida, about 1.98 million people were enrolled, representing 9.4% of the state population, and 0.6% of the U.S. population. In Texas, about 1.62 million people were enrolled, representing 5.7% of the state population, and 0.5% of the U.S. population.

The states with the lowest enrollments were Alaska, Delaware, and the District of Columbia. In Alaska 24,927 people were enrolled, representing 3.4% of the state population. In Delaware, 27,483 people were enrolled, representing 2.9% of the state population. In the District of Columbia 28,697 people were enrolled, representing 4.1% of the state population.

These statistics were reported In “A Brief Analysis of the Individual Health Insurance Market” by Mark Farrah Associates (MFA). The analysis is based on federal data on individual health insurance market enrollment with state-by-state comparisons. The data includes reports from the Centers for Medicare & Medicaid Services (CMS) combined with data from MFA’s Health Coverage Portal™. The goal was to determine trends of the individual health insurance market with comparisons by state.

Of the 15.75 million people enrolled in individual, non-group health plans, about 75% enrolled in a plan offered through a health insurance exchange (state or federally-run). The remaining 25% (about 4 million people) enrolled in off-exchange plans.

Centene, Kaiser, Guidewell Mutual Holding Group (the parent company of Blue Cross Blue Shield affiliates operating in Florida), and Anthem all reported more than 1.0 million individual medical covered lives in their individual plans as of first quarter 2018. Since March 2017, Centene, Kaiser Foundation Group, and Guidewell Mutual Holding Group (the parent company of Blue Cross Blue Shield affiliates operating in Florida) all showed enrollment increases in individual segment members. Anthem showed an almost 53% decrease after limiting its individual plan offerings (from about 2.2 million in March 2017 to about 1 million as of March 2018). As of August 2018, plans in the individual segment showed improved profitability over 2017 numbers (based on NAIC reports).

The full text of “A Brief Analysis of the Individual Health Insurance Market” was published August 6, 2018, by Mark Farrah Associates. A copy is available online at MarkFarrah.com.

PsychU reported on health plan enrollment in “Medicare Advantage SNP Plans & SNP Enrollment Rose From 2017 To 2018,” which published on September 17, 2018.

For more information, contact: Mark Farrah Associates, 16 Ridgewood Circle, Kennebunk, Maine 04043; 207-985-8484; Fax: 207-985-8484; Email: info@markfarrah.com.

On September 25, 2018, UnitedHealth Group acquired Genoa Healthcare, which operates on-site pharmacies at mental health centers, from Advent International. Financial terms of the deal have not been disclosed. Genoa’s operations will be incorporated into the UnitedHealth Group OptumRx pharmacy care service unit. As a business unit of OptumRx, no changes are planned to Genoa Healthcare’s current branding or existing contracts.

In a press statement, an Optum spokesperson said, “To help better support the pharmacy needs of patients with behavioral health and substance use disorders, OptumRx is combining with Genoa Healthcare. This will help ensure improved access, health outcomes and pharmacy, telepsychiatry, and medication management experiences for consumers across the country, including Medicare and Medicaid beneficiaries, while helping public and private sector payers reduce their health care costs.”

Genoa’s Chief Executive Officer Mark Peterson said, “Optum’s diverse relationships will help us continue to expand our reach and serve even more individuals with serious mental health, substance use, and other complex chronic conditions.” Genoa Healthcare has three service lines: on-site pharmacies, telepsychiatry, and medication management. The solutions can be purchased separately or bundled.

  • Full service pharmacy services are provided at 435 locations in the United These sites fill more than 15 million prescriptions per year for more than 650,000 consumers.
  • The telepsychiatry program is available in 35 states. The telepsychiatry network has more than 2,000 psychiatrists and advanced practice registered nurses who deliver behavioral health care services to over 125,000 people annually.
  • The pharmacy-based medication management solution is intended for high-risk health plan members living with complex health Through this program, Genoa Healthcare pharmacists conduct comprehensive medication management reviews, primarily by telephone.

For more information, contact:

  • Drew Krejci, Corporate Communications, Optum, 11000 Optum Circle, Eden Prairie, Minnesota 55344; 952-205- 6652; Email: krejci@optum.com
  • Shannon Beaudin Klein, Vice President, Marketing & Communications, Genoa Healthcare, 3140 Neil Armstrong Boulevard, Suite 110, Eagan, Minnesota 55121; 612-200-1766, ext. 39361; Fax: 651-688-3132; Email: sklein@genoahealthcare.com

With nearly 90% of the U.S. population insured through managed care, there is fierce competition among health plans to demonstrate their members receive the highest quality of care. Consumers hoping to maximize the value of their health care premiums search health care rankings, which are predicated on performance and quality measures. Quality measures focused on behavioral health are getting a lot of attention as many initiatives implemented by health plans have yielded inconsistent results which harm their overall quality ranking established by National Committee for Quality Assurance (NCQA) Health Plan Effectiveness Data and Information Set (HEDIS®). HEDIS® is comprised of over 80 measures, including thirteen measures specific to behavioral health.

Additional insight into experienced challenges in achieving optimal behavioral health performance is provided by a newly released report, Trends In Behavioral Health: A Reference Guide On The U.S. Behavioral Health Financing & Delivery System (The Guide). According to The Guide, health plans have continually yielded inconsistent performance results for certain behavioral health measures while others measures have shown consistent improvement. A few findings from The Guide related to HEDIS® that stand out include:

  • Two Measures Have Seen Significant Performance Declines: Follow-up care after hospitalization for mental illness (within 7 and 30 days post-discharge); and the initiation and engagement of alcohol and other drug dependence (AOD) treatment (most dramatically decreasing for Medicaid and commercial plans).

Centripetal. (2017). Trends in behavioral health: A reference guide on the US behavioral health financing & delivery system. Rockville, MD: Otsuka America Pharmaceutical, Inc. Retrieved from PsychU.org.

Centripetal. (2017). Trends in behavioral health: A reference guide on the US behavioral health financing & delivery system. Rockville, MD: Otsuka America Pharmaceutical, Inc. Retrieved from PsychU.org.

  • One Behavioral Health Measure Has Seen Significant Improvement: Followup care for children prescribed ADHD medication led to Medicaid and commercial health plan performance gains for children ages 6-12 years old.

Centripetal. (2017). Trends in behavioral health: A reference guide on the US behavioral health financing & delivery system. Rockville, MD: Otsuka America Pharmaceutical, Inc. Retrieved from PsychU.org.

The Guide’s findings highlight the steps health plans are taking across market segments to address care quality – and are the amalgamation of survey feedback from over 4,000 health care professionals. Some plans are building out robust care management services and financially rewarding providers through value-based reimbursement initiatives for achieving quality outcomes.

“This is a new era of health care built on value and enhanced care coordination. Consistent, relevant measurement standards are key to improving financial and clinical outcomes,” says Monica E. Oss, CEO, OPEN MINDS. “The report underscores just how important behavioral health quality measures are for the health plan but also most importantly to the member.”

Some plans are utilizing very different approaches specifically tailored to the consumers they serve. Options range from using technology and apps to engage consumers while others are developing stronger provider partnerships as a grassroots effort to open access to care to boost quality performance.

“Increased collaboration between payers and providers enables us to maintain our momentum on those quality measures that are showing signs of positive improvement while also enabling us to overcome obstacles for those measures that are lagging behind,” says Paul M. Duck, Former Vice President, Strategy and Development, Beacon Health Options. “Payer and provider partnerships will continue to strengthen as value-based reimbursement will reward providers for improving outcomes while payers will gain improved quality of care results for members.”

A free copy of the full findings within this inaugural report is available on PsychU here.

About Centripetal

The Centripetal Behavioral Health Population Health Management Platform “mission” is to make positive contributions to the national health care conversation addressing the disproportionate effect behavioral health disorders have on the U.S. health care system, and mental health care trends that are shaping this reality. The content delivered by the Centripetal platform is intended to provide critical insights about these trends for key healthcare stakeholders including commercial and government payers, integrated delivery networks, and medical and behavioral healthcare providers.

The Centripetal Behavioral Health Population Health Management Platform is supported by Otsuka America Pharmaceutical, Inc. and Lundbeck, LLC. The Centripetal name and logo symbolizes a move toward the center which is evident in today’s healthcare landscape on multiple levels – at the system level by the increasing integration of medical and behavioral health care, at the group level by the increasing focus and attention to coordinated and collaborative care, and at the individual level by the increasing attention to meeting the healthcare needs and treatment of the whole person (i.e. patient-centered care).

The inaugural edition of Centripetal Trends in Behavioral Health: A Reference Guide on the U.S. Behavioral Health Financing & Delivery System provides information and insights into the multi-layered behavioral health system in the United States. The guide includes an in-depth view of current statistics, prevailing issues, and emerging trends to inform the discussions, debates, and decision making of policy makers, payers, providers, advocates, and consumers. Other highlights of what you can expect from the Centripetal Behavioral Health Population Health Management Platform include live virtual community learning events, podcasts, and continued research and publications.

Starting January 1, 2019, Blue Cross and Blue Shield of Minnesota (Blue Cross) and Mayo Clinic will launch a new five- year provider network agreement in which the two organizations will establish a collaborative governance structure to ensure that advancements in medical technology and procedures have a path to market through health plan coverage options. The long-term strategic relationship is intended to focus on long-term pricing predictability. All Mayo locations across Minnesota will remain in the Blue Cross provider organization network through 2023.

The agreement will extend to covering advancements in organ transplants, radiation therapies, and genomics. The organizations are also establishing a collaborative guided-care approach for individuals who would benefit from complex care. The key goals are to collaborate on sustainable ways to use emerging and breakthrough technologies, and to help Blue Cross members with commercial or government coverage reduce avoidable costs caused by misdiagnoses or unnecessary treatment plans.

Garrett Black, senior vice president of health services and enterprise solutions at Blue Cross said, “Our new agreement was designed with the goal of launching a new kind of long-term strategic relationship that can bring long-term pricing predictability and stability to the market while fostering continued innovation in the way care is accessed, paid for and delivered.” Dennis Dahlen, chief financial officer at Mayo Clinic said, “This collaborative relationship provides opportunities to care for and manage patients in a more comprehensive manner with better outcomes through jointly developed innovative programs and care models.”

Blue Cross and Blue Shield of Minnesota is an independent licensee of the Blue Cross and Blue Shield Association. Mayo Clinic is a non-profit health care system.

For more information, contact:

  • Duska Anastasijevic, Public Affairs, Mayo Clinic, 200 First Street SW, Rochester, Minnesota 55905; 507-284- 5005; Email: newsbureau@mayo.edu
  • Blue Cross and Blue Shield of Minnesota, Post Office Box 64560, Paul, Minnesota 55164-0560; 651-662- 8000; Email: public.relations@bluecrossmn.com

Based on historical trends, 89.4% to 98.4% of adult non-disabled Medicaid beneficiaries ages 19 to 64 potentially meet proposed work requirements. Between 1.6% to 10.6% would potentially fail to meet the requirements.

Eleven states have submitted Medicaid waiver applications to implement work requirements. Across these states, from 3.9% to 29.2% of all Medicaid-eligible adults would be subject to (not exempt from) proposed work requirements. Among non-disabled adult beneficiaries, from 21.8% to 54.0% of the adult U.S. Medicaid population would be affected.

These findings were reported in “State-Level Population Estimates of Individuals Subject to and Not Meeting Proposed Medicaid Work Requirements” by David M. Silvestri, M.D., MBA; Margaret L. Holland, Ph.D., MPH, MS; and Joseph S. Ross, M.D., MHS. The researchers analyzed responses to the 2014 Survey on Income and Program Participation (SIPP) from non-institutionalized civilians. Data was reported for March 2013 responses. With this data source, the researchers estimated state-level proportions of Medicaid-eligible individuals subject to and not already meeting requirements that have been proposed by 11 states that have submitted waiver applications proposing work requirements: Arizona, Arkansas, Indiana, Kansas, Kentucky, Maine, Mississippi, New Hampshire, Ohio, Utah, and Wisconsin. The SIPP is a publicly available longitudinal, nationally representative U.S. Census Bureau household survey. It provides information on government assistance programs, income dynamics, labor involvement (including multiple jobs), and social context.

Additional findings include:

    • Among states with submitted waiver applications, from 3% to 5.4% of Medicaid-eligible adults were subject to, but did not meet, proposed work requirements.
    • The proportion of non-disabled adult beneficiaries potentially not exempt from the work requirements and who would potentially not meet the proposed work requirements was higher in Medicaid expansion states.

State Level Estimates Of Medicaid-Eligible Adults Subject To & Not Meeting Work Requirements, For States With Submitted Waivers

All Eligible For Medicaid Non-Disabled Adults Ages 19-64 Eligible For Medicaid
State Population Size Not Exempt From Work Requirements Subject To & Not Meeting Work Requirements Population Size Not Exempt From Work Requirements Subject To & Not Meeting Work Requirements
Arizona 1,862,609 14.6% 1.1% 1,004,924 27.0% 2.1%
Arkansas 941,937 11.8% 0.8% 504,051 22.0% 1.6%
Indiana 1,542,614 20.9% 1.7% 773,986 41.6% 3.4%
Kansas 363,366 4.3% 0.6% 54,784 28.8% 3.7%
Kentucky 1,161,787 27.9% 2.5% 686,087 47.3% 4.2%
Maine 298,363 29.2% 2.9% 161,833 53.8% 5.3%
Mississippi 560,640 3.9% 0.3% 100,231 21.8% 1.7%
New Hampshire 200,082 27.9% 5.4% 103,233 54.0% 10.6%
Ohio 2,722,039 12.8% 1.1% 1,481,865 23.5% 2.1%
Utah 339,739 11.0% 1.9% 86,073 43.3% 7.5%
Wisconsin 1,073,190 8.4% 0.9% 409,900 21.9% 2.4%

The researchers simulated the impact of work requirements in the 40 states that have not submitted a waiver to implement such requirements. State-specific analyses were performed for all Medicaid-eligible individuals, and specifically for non-disabled Medicaid-eligible adults. The analysis focused on identifying the share of beneficiaries who would potentially not be exempt from the work requirements and the subset who would potentially fail to meet them. They reported that across these states, the failure percentage range increased slightly to between 1.6% and 10.8% of beneficiaries who would be subject to the work requirements. Proportions were higher in states expanding Medicaid.

The researchers concluded that almost all Medicaid-eligible individuals may already meet proposed work requirements or exemptions prior to implementation. Because of this, policymakers should consider whether administrative costs and beneficiary burdens imposed by work requirements are justified.

The full text of “State-Level Population Estimates of Individuals Subject to and Not Meeting Proposed Medicaid Work Requirements” was published September 10, 2018 by JAMA Internal Medicine. An abstract is available online at JAMANetwork.com.

PsychU reported on this topic in “More Than 7,000 People Fail To Meet Arkansas Medicaid Work Requirement,” which published on August 15, 2018.

For more information, contact: Anne Doerr, Communications, Yale Cancer Center, Yale University, Post Office Box 208028, New Haven, Connecticut 06520-8028; 203-737-2629; Email: anne.doerr@yale.edu

Most health and human services organizations serving consumers with complex needs are providing care to individuals who are dually eligible for Medicare and Medicaid. However, the fact that these individuals are dual eligible isn’t always obvious—and often not addressed in strategy. In the decade ahead, deliberate strategies to serve this population will be critical.

Why? First, the dual eligible population is growing, slowly but steadily. In March 2017, there were 10.6 million dual eligible individuals. This is an increase of about 28% since 2009, when there were 8.3 million dual eligible individuals. Between 2009 and 2017, the dual eligible population increased at a rate of 1% to 4% each year. Over this time, dual eligibles have consistently represented about 18% of the Medicare population and have decreased slightly as a share of the Medicaid population—from 16% to 14%. This is likely a result of Medicaid expansion, which added a new population to Medicaid.

Second, the spending on the dual eligible population is increasing. We found that spending in 2017 will likely rise to $479 billion across Medicare and Medicaid (includes fee-for-service (FFS) and managed care spending)—approximately 14.5% of the total U.S. health care spend of $3.3 trillion. Medicare accounts for 60% of dual eligible spending and Medicaid accounts for 40% of spending in 2017.

It is important to note that between 2007 and 2017, dual eligible spending increased a total of 91%, at an average of 7% per year. During the same period, U.S. health care spending increased 45% at an average of 4% per year. And, dual eligible spending has increased as a percentage of both Medicare and Medicaid spending. In 2007, dual eligibles accounted for 35.4% of Medicare spending and 29.8% of Medicaid spending. In 2017, dual eligibles account for 40.9% of Medicare spending and 37% of Medicaid spending.

Third, the characteristics of the dual eligible population have remained largely the same—a population with disabilities characterized by complex physical and behavioral health disorders. For example, 12.6% of full benefit dual eligibles enrolled in Medicare FFS have schizophrenia or other psychotic disorders, compared to 1.8% of the Medicare-only population and 7.68% of the Medicaid population with a disability. But, the proportion of the U.S. population with complex support needs is on the increase—due to aging, multiple chronic health conditions, and the increasing prevalence of autism and dementia.

Figure 1 Mandros, A. (2018) Planning For The Changing Dual Eligible Market Opportunity. [PowerPoint Slides]. Retrieved from https://www.openminds.com.

Finally, more dual eligibles get their services via health plans. I wrote about this a couple of weeks ago in Is The Dual Eligible Market A Priority? Your Opportunity Depends On The State. We found that as of last year, an estimated 33% of all dual eligibles were enrolled in Medicare managed care, and 40% of full-benefit dual eligibles were enrolled in Medicaid managed care. This is an increase from 2011, when 22% of the dual eligible Medicare population was enrolled in some type of managed care, and 24% of dual eligibles were enrolled in Medicaid managed care.

This data underscores the need to better serve and deliver care to the dual eligible population. The federal government in partnership with states has tried to address care delivery and high costs through dual demonstrations that blend Medicaid and Medicare funding. However, the success of these demonstrations is mixed and they are plagued by low enrollment (see 3% Of Dual Eligibles Enrolled In Financial Alignment Demonstration As Of June 2016, and MyCare Ohio Duals Demo Average Claim Cost PMPM Drops 6.8%).

By contrast, Washington’s dual demonstration that uses health homes to coordinate care for dual eligibles has been successful, and New York has taken the approach of using health homes for the intellectual and developmental (I/DD) demonstration after its dual demonstration for the I/DD population failed to take off (see First Year Of Washington State Managed FFS Duals Demonstration Shows 6% In Medicare Savings and New York Medicaid To Launch Health Homes For People With Developmental Disabilities). And a pilot for coordinating care for dual eligibles in Medicare Advantage Dual Eligible Special Needs Plans is showing promising results (see A Tale Of Two Community-Based Program Models).

What does this mean for the strategy of specialty provider organizations? On one hand, the demand for services for populations with complex needs is on the rise. It’s a matter of population demographics and public health trends. That is the opportunity. But, how these service needs get met is the challenge. The more this consumer population is enrolled in health plans or ACOs, the more specialty provider organizations will face competition from alternative service delivery models.

What are these alternative models—what is high on my list as competition to traditional FFS service system models? First is backward integration by health plans and ACOs, that could assume care coordination and care management roles for the population or create staff model service centers for the population. Second are disruptive service models (often funded by private equity firms) like home-based primary care and consumer-centric specialty service systems. Third is “tech substitution” for some services—and the development of hybrid service system models.

Specialty provider organizations need a strategy that develops service solutions with a better value proposition than these emerging competitors.

Medicare beneficiaries with cognitive, neuropsychological, and functional impairment have higher than average mean Medicare total annual cost of care (TACC) for fee-for-service Medicare Part A and Part B services. The mean per person TACC for all beneficiaries was $9,117. Costs for those with depression were $2,740 higher. Costs for those with dementia were $2,922 higher. Costs for those with difficulty with three or more activities of daily living (ADLs) were $3,121 higher. ADLs include eating, bathing, getting dressed, toileting, transferring (from laying or sitting to standing), and continence (toileting). Costs for those with difficulties with three or instrumental ADLs (activities needed to live independently, such as shopping, financial management, meal preparation, or housekeeping) were $895 higher.

These findings were reported in “Association Between Patient Cognitive and Functional Status and Medicare Total Annual Cost of Care” by Kenton J. Johnston, Ph.D.; Hefei Wen, Ph.D.; Jason M. Hockenberry, Ph.D.; and Karen E. Joynt Maddox, M.D., M.P.H. The researchers used the Medicare Current Beneficiary Survey (MCBS) to examine health care consumer-reported neuropsychological and functional status; and the Area Health Resources File to obtain information on local area characteristics. The weighted sample included 213,904,324 patient-years, with 30,058 (unweighted) unique Medicare consumers; and 111,414 unique identifiable physicians. The goal was to determine whether factors not included in Medicare risk adjustment – including consumer neuropsychological status, consumer functional status, local area health resources, and local area economic conditions – are associated with Medicare TACC. The researchers defined Medicare TACC as the total annual reimbursed amount per patient for Medicare Part A and Part B services, in all categories.

Additional findings include:

  • The average mean overall TACC of all fee-for-service (FFS) Medicare beneficiaries was $9,117.
  • Those in the highest cost quintile were likely to be older (75 years or older) and female; and were more often either dually enrolled in Medicare and Medicaid, institutionalized, disabled, or have end-stage renal disease (ESRD).
  • Those living in a mental health shortage area or an area with a high unemployment rate were associated with mean $517 and $455 higher TACCs, respectively.

The researchers also sought to evaluate how accounting for consumer neuropsychological status, consumer functional status, local area health resources, and local area economic conditions affects clinical professionals working in outpatient safety-net settings. The researchers concluded that assessing outpatient clinicians for the TACC of treated Medicare consumers without considering other factors may inappropriately penalize safety-net clinical processionals who care for vulnerable consumers. They recommended that the Centers for Medicare & Medicaid Services (CMS) consider accounting for cognitive and functional status, and local area health care supply and economic conditions, in risk adjustment.

The full text of “Association Between Patient Cognitive and Functional Status and Medicare Total Annual Cost of Care” was published September 17, 2018, by JAMA Internal Medicine. A free abstract is available online at JAMANetwork.com

For more information, contact: Kenton J. Johnston, Ph.D., Assistant Professor, Department of Health Management & Policy, Center for Outcomes Research, College for Public Health & Social Justice, Saint Louis University, 3545 Lafayette Avenue, St. Louis, Missouri 63143; 314-977-3236; Email: kenton.johnston@slu.edu

On August 7, 2018, the Centers for Medicare & Medicaid Services (CMS) issued guidance that allows Medicare Advantage plans to use step therapy for Part B drugs, beginning January 1, 2019, as part of a patient-centered care coordination program. Step therapy may only be applied to new prescriptions or administrations of Part B drugs for enrollees who are not actively receiving the affected medication.

Step therapy is a type of prior authorization for drugs that begins treatment for a medical condition with the most preferred drug therapy and progresses to other therapies only if necessary because the consumer has failed to improve or has experienced side effects. Often the first drug also has the lowest cost among the treatment options.

Medications covered under Medicare Part B are infusions or injections (such as a long-acting injected antipsychotic) administered in a physician’s office or other outpatient setting. Some medications covered under Part B as a medical benefit are also covered by Medicare Part D prescription drug plans as a pharmacy benefit.

Under Part B, traditional Medicare generally pays the clinical professional a percentage (average sales price plus a 6% add-on) above the average sales price. Existing CMS guidance discouraged Medicare Advantage plans from using prior authorization for Part B drugs and prohibited step therapy, because Medicare Advantage plans must provide coverage in the same way that services are available through fee-for-service Medicare beneficiaries.

In the same guidance, CMS rescinded its September 17, 2012, memo “Prohibition on Imposing Mandatory Step Therapy for Access to Part B Drugs and Services.” In the new guidance, CMS acknowledged that the use of step therapy is a recognized utilization management tool. CMS said allowing step therapy practices for Part B drugs will help achieve the goal of lower drug prices while maintaining access to covered services and drugs for beneficiaries, and that Medicare Advantage plans may apply step therapy to control the utilization of services in a manner that does not create an undue access barrier for beneficiaries. CMS believes that appropriate consumer engagement and care coordination services support appropriate pathways to access to Part B drugs such as step therapy.

Medicare Advantage organizations will remain subject to regulations to comply with national and, in some cases, local coverage determinations. The guidance said that a Medicare Advantage plan may implement its own step therapy policies and procedures as part of utilization management where an applicable national and/or local coverage determination is silent on the matter. However, a Medicare Advantage plan remains subject to fee-for-service Medicare’s step therapy policies and procedures when they are specified in a national and/or local coverage determination. CMS will consider rulemaking related to step therapy that might be appropriate for 2020 and future years.

Medicare Advantage plans that also offer prescription drug (MAPD) coverage may use step therapy to require a Part D drug therapy prior to allowing a Part B drug therapy. These MAPD plans may also apply step therapy to require a Part B drug therapy prior to allowing a Part D drug therapy. However, the MAPD plans must ensure that these requirements are clearly outlined in the Part D prior authorization criteria for the affected Part D drugs.

Between August 17 and 21, 2018, Medicare Advantage plans were required to submit their Part B step therapy prior authorizations. The Part D drug must have a prior authorization edit submitted to CMS during this formulary update window. If the MAPD plan’s pharmacy and therapeutics committee had not developed and approved authorization criteria prior to the submission window, the MAPD plans could submit “placeholder” prior authorization criteria. The standard Part D utilization management criteria review processes will provide MAPD plans an opportunity to finalize the criteria for the affected Part D drugs. If an MAPD plan chooses to implement criteria during the 2019 plan year, the addition of prior authorization to a Part D drug can be requested as a negative change via the standard negative formulary change request timeframes.

Additionally, CMS said that Medicare Advantage plans opting to apply step therapy should encourage enrollees to participate in such a drug management care coordination program by offering rewards in exchange for enrollee participation. The rewards cannot be offered in the form of cash or monetary rebate but may be offered as gift cards or other items of value to all eligible enrollees. CMS said it will presume that the reward or incentive is reasonable and appropriate if it is equivalent to more than half the amount saved on average per participant by a more efficient use of health care resources, promotion of improved health, or prevention of injuries and illness.

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 June 2018, 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. The in-store clinic services will be provided by Partners in Primary Care, a wholly-owned subsidiary of Humana. Partners in Primary Care and Walgreens will also work together to provide in-store health navigation. Further, 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.

Since 2017, Partners in Primary Care has been operating four freestanding primary care clinics in Kansas City. All four primary care clinics serve individuals participating in Medicare plans. Partners in Primary Care provides services to address acute and immediate health issues and focuses on developing long-term relationships with people living with chronic conditions.

Humana has more than 65,000 Medicare Advantage and Medicare stand-alone Part D Prescription Drug plan members in the Kansas City area. Walgreens serves more than 75,000 Medicare beneficiaries in Kansas City through more than 50 pharmacies and other points of care. The announcement about the two co-located clinics noted that Walgreens and Humana will also look to extend certain services and resources across online and digital channels, to provide more 24/7 access.

For more information, contact:

  • Mark Mathis, Corporate Communications Director, Humana , 550 W Adams Street, Chicago, Illinois 60661; 312-441-5010; Email: mmathis@humana.com
  • Jenni Wong, Manager, Healthcare Communications, Walgreen Company, 108 Wilmot Road, Mail Stop 1845, Deerfield, Illinois 60015; 847-315-4443; Email: wong@walgreens.com

How do health plans, when looking at a steady stream of service model ideas, evaluate the many opportunities? How do they decide which model looks like a winner, and which one goes in the “thanks for coming” pile? That was the question I asked during a recent conversation with Michael Golinkoff, Ph.D., M.B.A., Senior Vice President, Innovation Advisor, AmeriHealth Caritas. Dr. Golinkoff didn’t mince words:

It begins by determining whether the program identifies a problem where we need a solution. What we are really looking for are provider organizations that have the capabilities to address those priority needs. But I’m not necessarily looking for a ready-made product that we can “plug and play.” I’m looking for a collaborator—an organization that has the right talent and infrastructure to partner with to build a model that works for everyone.

What health plan needs are top of mind for Dr. Golinkoff? First, the health plans are always looking to partner with programs that can address the support needs of Medicaid populations with complex chronic conditions—including opioid addiction, alcohol addiction, and social determinants of health (such as affordable healthy food, housing, utilities, vocational, educational issues, and parenting issues). Assessing the impact of these programs doesn’t always come down to solely analyzing outcomes data. For example, program effectiveness can be shown through demonstrated adherence to treatment within a substance abuse program, or predictive improvements for consumers with comorbid diabetes. Second, program improvement can help to assess value. For example, improvement of scores for external quality measures, like HEDIS and the Centers for Medicare and Medicaid Services (CMS) STARS program (e.g., improved follow-up and preventative care measures) can add value to a program. Finally, one unifying issue touched on both of these priorities: a need for better consumer engagement. Dr. Golinkoff explained:

Overall, we are looking for organizations that can engage people. Not just initial engagement, but an engagement that builds commitment over time. I want to see if organizations can capture someone’s attention, get them to interact, and do so over time. Our organization is focused on helping people with their day-to-day lives. That means we’re interested in organizations that understand the life of Medicaid recipients, and can help them not only to get health care services, but also connect them to the social supports they need.

Improving consumer engagement often means having the right management and clinical teams in place, the right operational infrastructure, and a willingness to be flexible and work in a partnership to find the best solutions for consumers. Additionally, Dr. Golinkoff also emphasized the necessity of data as part of this equation. He noted:

I recognize that a lot of organizations don’t have all the right data or outcomes. But what is more important is their potential. I want to know if they value data and have a plan for analysis when they do have data. I want to know if they have thoughts about how they plan to evaluate their program and how it relates back to my pain points, as well as their own goals. I’ll give a pass on not having the data if they are oriented toward extracting the data from our experience together and have a plan for how to do that in the future.

What advice does Dr. Golinkoff have for a manager of an organization with a great new program about how to present that to AmeriHealth? Focus the specific value of your program, be prepared to demonstrate how it will help to address AmeriHealth’s needs, and be open to new possibilities for partnership. Dr. Golinkoff described what he is looking for when he heads into a meeting with a potential provider organization partner:

The most important thing to remember is to use time wisely and cut to the chase. You have a limited time to meet with a health plan partner and present your solution. If the process goes well, and you come to meet me for an hour, don’t waste that time. It is amazing how often people come in and spend the first 30 minutes of the hour telling me about a problem I already know about. For example, don’t give me beautiful data showing how depression drives medical outcomes. I already know this. Spend most of the time telling me about your solution to the problem, and why it’s different than the other 30 solutions I’ve seen.

Ask about and listen for the pain points, talk about what makes you different, and engage in a discussion what a partnership will look like. When you talk about value-based reimbursement or shared savings, if you start without proof, it’s hard to talk about. I’m not going to put everything at risk for outcomes when we have no idea what we’re going to get. I’m looking for long-term relationships and credibility. The best deals are those fairly valued for everyone.

On August 28, 2018, the Illinois Department of Healthcare and Family Services (HFS) announced the selection of 18 quality performance measures for its new Medicaid integrated health home (IHH) program that will formally launch in January 2019. The first quarterly reports will take place in April 2019. A year-end assessment will determine a bonus level based-on performance outcomes, or corrective action plans as needed. IHHs will be able to qualify for one of three bonus levels: Bronze, Silver, or Gold.

The IHHs contract with Medicaid MCOs for MCO members, and the IHHs contract with HFS to serve Medicaid fee-for- service (FFS) members. For the MCO members, the Medicaid MCO will receive a higher capitation rate to account for payments to the IHHs. For the FFS members, the IHHs will be paid directly by the state. The IHH provider organizations will receive a per-member per-month (PMPM) payment from the MCO to coordinate MCO member care or will receive a payment from the state for FFS populations. The rates range from $48 to $240, varying across three age levels and three levels of member complexity. The IHHs are for Medicaid beneficiaries with chronic physical and behavioral health problems.

Eligible IHH provider types include primary care practices, clinical practices/clinical group practices, rural health clinics, physicians and physicians’ groups employed by hospitals, community mental health centers, home health agencies, community/behavioral health agencies, and federally qualified health centers. In addition to these providers or practice types, all other Medicaid enrolled provider/practice types that meet the IHH eligibility standards will be potentially eligible for the program. IHH provider organizations can be either a single practice with physical and behavioral health (including addiction treatment) capabilities housed under a single roof; or a lead practice, with one of the capabilities that establishes formal collaboration agreements with other provider organizations to provide the other capabilities. To participate, the IHH provider organizations will form agreements with collaborating provider organizations, such as a primary care provider and a behavioral health clinic. The state intends to approve provider organizations that meet the IHH criteria. After gaining the state approval, IHH provider organizations will then join Illinois Medicaid managed care organization (MCO) networks to provide health home services.

Then the IHH provider organization will apply for enrollment and specify which tier of members it can accept (tiers A, B, and C). The tiers and rates reflect underlying levels of physical and behavioral health needs, with further sub- segmentation based on age group.

  • Tier A is for members with both high physical health needs and high behavioral health needs.
  • Tier B is for members with low physical health needs, but high behavioral health needs.
  • Tier C is for members with low behavioral health needs, but high physical health needs.

The MCOs and/or state will passively assign members to the IHH provider organizations. An IHH must have at least 500 continuous members for six months to qualify for bonus payment.

According to “Integrated Health Homes Quality Indicators, Incentive Payments & Reporting” the IHHs will report eight quality measures that are not linked to incentive payments and 10 that are linked. To be eligible for outcomes-based payments, IHH must report on all 18 quality measures, and must meet a specific performance level for any single measure once all 18 measures are reported on.

The criteria and bonus levels are as follows:

  • Bronze criteria: Average 40th percentile, with no individual measure lower than 20th The bonus will be 10% of total amount of IHH’s care coordination per-member per-year (PMPY) payment
  • Silver criteria: Average 60th percentile, with no individual measure lower than 40th The bonus will be 25% of total amount of IHH’s care coordination PMPY payment
  • Gold criteria: Average 80th percentile, with no individual measure lower than 50th percentile. The bonus will be the Silver-level bonus and share of cost of care savings provider has achieved as determined via proxies for total cost of care

The eight measures for reporting only are as follows:

  1. Plan all-cause readmission rate
  2. Follow-up after hospitalization for mental illness
  3. Controlling high blood pressure
  4. Metabolic monitoring for children and adolescents on antipsychotics
  5. Prenatal and postpartum care
  6. Medication management for people with asthma
  7. Potentially preventable readmission for behavioral health
  8. Behavioral health related emergency department visits per 1,000

The 10 measures affecting outcomes-based payments are as follows:

  1. Initiation and engagement of alcohol and other drug dependence treatment
  2. Screening for clinical depression and follow-up plan
  3. Chronic condition hospital admission composite – PQI
  4. Adult body mass index assessment
  5. Follow-up after hospitalization
  6. Emergency department visits per 1,000
  7. Immunization combo 3 (This measure concerns the number of child members who by their second birthday have had four diphtheria, tetanus, and acellular pertussis (DTaP) vaccinations; three polio (IPV) vaccinations; one measles, mumps, and rubella (MMR) vaccination; three haemophilus influenza type B (HiB) vaccinations; three hepatitis B (HepB) vaccinations; one chicken pox (VZV) vaccination; four pneumococcal conjugate (PCV) vaccinations; one hepatitis A (HepA) vaccination; two or three rotavirus (RV) vaccinations; and two influenza vaccinations.)
  8. Breast cancer screening
  9. Diabetes management (hb1ac testing)
  10. Antidepressant medication management

PsychU reported on this topic in “Illinois Medicaid To Launch Integrated Health Home Program In October 2018,” which published on September 4, 2018.

For more information, contact: John K. Hoffman, Director of Communications, Illinois Department of Healthcare and Family Services, 401 South Clinton, Chicago, Illinois 60607; 312-793-4792; Email: John.K.Hoffman@illinois.gov.

The Wisconsin Medicaid program intends to make the first bonus payments in 2019 on its pay-for-performance initiative for Family Care managed physical, mental, and long-term services and supports (MLTSS) plans. The initiative launched in 2018. The state Department of Health Services (DHS) intends to require the Family Care and Family Care Partnership Medicaid managed care organizations (MCOs) to implement and complete a pay-for-performance initiative based on results of a member satisfaction survey to be administered during the third quarter of 2018. Over the next several years, DHS intends to add more pay-for-performance initiatives for the Family Care and Family Care Partnership plans.

Family Care is a capitated Medicaid managed care program for the delivery of all Medicaid long-term care services. Members enrolled in Family Care may be eligible at a Wisconsin Medicaid nursing home-certifiable level of care or at a non-nursing home level of care. One of these functional levels of care is required as a condition of eligibility.

Family Care Partnership is a capitated integrated Medicaid and Medicare managed care program that, in addition to the Family Care long-term care benefits, provides managed health care benefits, and all applicable Medicare Advantage Special Needs Plan and Medicare Part D prescription drug benefits. All members enrolled in Partnership have a Wisconsin Medicaid nursing home-certifiable level of care, which is required as a condition of eligibility. As a fully integrated program, all supports and services – whether Medicare or Medicaid benefits – are delivered through the Partnership model design identified in this contract.

According to the 2018 Wisconsin Family Care DHS-MCO Contract last updated in July 2018, all MCOs will have 0.5% of their calendar year 2018 capitation rate withheld to be returned based on the MCO’s performance on the member satisfaction survey. The aggregate value of this withhold is estimated at $10 million. The Family Care pay-for-performance initiative began on January 1, 2018. In the third quarter of 2018, DHS sent the member satisfaction survey to a sample of each MCO’s members. The pay-for-performance criteria will be based on four questions that are part of the survey. The questions assess the following:

  1. Member access to services
  2. Member participation in the care planning process
  3. Member satisfaction with care plan/team
  4. Member satisfaction with services

Benchmarks have been set for 2018. The MCO contract document did not mention the name of the entity that conducted the survey. DHS will notify the MCOs about the benchmarks before the survey is distributed. The evaluation will be complete in the 4th quarter of 2018.

The MCO will receive one fourth of the 0.5% withheld from the capitation rate for each survey question in which they meet the minimum performance standard set by the Department. MCOs that meet the minimum performance standards for all four questions will earn back all of the 0.5% withheld from the rate and will earn a 0.125% performance enhancement to their rate for each targeted performance benchmark they meet. Payments under this section will be made by December 31, 2019.

For more information, contact:

  • Wisconsin Department of Health Services, Post Office Box 7850, Madison, Wisconsin 53707-7850; 608-266- 1683; Email: DHSMedia@dhs.wisconsin.gov
  • Annette Cruz, Vice President of Public Policy & Advocacy, Leading Age Wisconsin, 204 South Hamilton Street, Madison, Wisconsin 53703; 608-255-7060; Fax: 608-255-7064; Email: info@LeadingAgeWI.org

Accountable care organizations (ACOs) saved Medicare nearly twice as much between 2013 and 2015 as the Centers for Medicare & Medicaid Services (CMS) has estimated. According to CMS estimates ACOs in the Medicare Program saved $954 million; however, this estimate is based on an administrative formula to determine whether ACOs will receive shared savings payments based on whether each individual ACO met financial savings targets. Actual total savings attributable to those ACOs total about $1.84 billion between 2013 and 2015.

These findings were reported in “Estimates of Savings by Medicare Shared Savings Program ACOs” by researchers with Dobson DaVanzo & Associates for the National Association of ACOs. The researchers analyzed Medicare fee-for-service (FFS) claims from 2011 through 2015. The researchers applied a difference-in-differences regression analysis on costs included in these claims, controlling eligibility, demographics, age group, and hierarchical condition category risk score. The goal was to determine actual Medicare savings generated by ACOs by estimating what spending would have been in the absence of ACOs. Additional findings include:

  • For performance year 2013, estimated per-member per-year (PMPY) savings were $109.84. When applied to the 3,288,745 attributed beneficiary years, this equals about $361.2 million in total gross savings.
  • For performance year 2014, estimated PMPY savings were $125.41. When applied to the 5,169,694 attributed beneficiary years, this equals about $648.3 million in total gross savings.
  • For performance year 2015, estimated PMPY savings were $117.72. When applied to the 7,057,089 attributed beneficiary years, this equals about $830.8 million in total gross savings.

For ACO performance years, 2013 through 2015, CMS estimated negative savings to the Medicare Trust Funds, with losses at -$78.3 million in 2013, -$49.7 million in 2014, and -$216.2 million in 2015. However, the researchers found positive savings to the Medicare Trust Funds for each of the three years, at $449.3 million, $307.1 million, and $185.3 million, respectively.

The full text of “Estimates of Savings by Medicare Shared Savings Program ACOs” was published August 30, 2018, by National Association of Accountable Care Organizations. An abstract is available online at NAACOS.com.

PsychU reported on this topic in “Medicare NextGen ACOs Generated $62 Million – About 1.1% – In Net Savings,” which published on September 24, 2018.

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- 640-1985; Email: dpittman@naacos.com.

What drives change in the health care system? I get a sense of the trends by stepping back and looking at the planned changes to Medicaid and Medicare. Why? Medicaid is 17% ($565.5 billion) of U.S. health care spending, and Medicare is 20% ($672.1 billion). If you look at the pending and proposed changes to Medicare, there are some shifts ahead to take note of in your strategy development.

Recast bundled rates—First up, the October 1 launch date for the new voluntary Bundled Payments for Care Improvement Advanced (BPCI Advanced) model. Under the new model, 90-day episodes for 32 different clinical events will be reconciled to a target price. Provider organizations will be paid fee-for-service (FFS) for all services, and after adjusting for quality measures, they will either receive a bonus or owe money back to CMS. The 32 clinical episodes include diseases states for everything from spine, bone, and joint episodes; to kidney, cardiac episodes, and disorders of the liver; to infectious diseases and neurology. The model will go live for the first cohort of participants next week and a second application period will open in 2020 (see CMS Unveils New Voluntary Bundled Payments For Care Improvement Advanced Model).

More virtual care—In July 2018, CMS released its proposed Medicare Physician Fee Schedule for 2019. As part of the new fee schedule, CMS proposes paying clinical professionals for virtual check-ins (defined as brief, non-face-to-face appointments via communications technology); paying for evaluation of patient-submitted photos; and expanding Medicare-covered telehealth services to include prolonged preventive services. This change could potentially expand the reach of virtual care to all 59 million Medicare beneficiaries.

Flat fees for office visits—Also in the proposed Medicare Physician Fee Schedule, there are plans to establish a flat fee- for-service (FFS) rate for physician office visits for new or recurring visits with Medicare beneficiaries (see MedicareProposes ‘Flat Fee’ Physician FFS Payment For Outpatient Visits). Public comments on the proposed rules were due by September 10, 2018; the rule could go into effect on January 1, 2019.

More consumer transparency—Then, there are the proposed changes to requirements for transparency in sharing health information with consumers. In March CMS announced the creation of the federal MyHealthEData initiative designed to give consumers access to their Medicare health data. This includes a relaunch of the Medicare Blue Button, version 2.0; and plans for overhauling the Medicare and Medicaid Electronic Health Record (EHR) incentive programs. Under this initiative, CMS will require Medicare provider organizations to update their EHR systems to the 2015 Edition certified EHR technology (CEHRT) beginning in 2019 (see Federal MyHealthEData Initiative To Allow Medicare Consumers Access To Personal Health Records and ‘Person-Centered’ Health Care Records Take Center Stage).

More risk sharing—Finally, there are the proposals to increase financial gain sharing/risk sharing arrangements between the Medicare program and private entities. Currently, the key models are the Medicare Advantage special needs plans, the bundled rate program in its new model launching next week, and accountable care organizations (ACOs) created in the PPACA. There are proposed changes ahead for ACOs, with CMS issuing a proposed rule that would change the way that Medicare ACOs participate in value-based payments. The current MSSP ACOs would have a much narrower window to participate without “downside” financial risk—the “basic” path would have two years of “upside-only” participation before three years of gradually increasing two-sided risk, qualifying as an advanced APM in the fifth year. This would move all ACOs to full financial risk arrangements much more quickly.

But there is also another risk-sharing proposal on the table. In April, CMS announced it is expanding population-based provider reimbursement models through the development of a direct provider organization contracting (DPC) model for Medicare fee-for-service, Medicare Advantage, and Medicaid beneficiaries. Like accountable care organizations (ACOs), under DPC physicians, non-physician professionals, and physician group practices would contract directly with CMS and be responsible for the cost of care and outcomes of a defined population (see CMS Expanding Population-Based Provider Reimbursement Models In Medicare & Medicaid). CMS released a request for information (RFI) and collected comments until May 25-and the program is currently under development. This could result in capitation-like payments for primary care.

For executives of health and human service organizations serving complex consumers, what do these pending changes to Medicare mean for strategy? The first of my key takeaways is the need to integrate technology into service delivery, through a robust tech platform and reconfigured organizational operational model, in order to maintain market share. “Consumer transparency” will become an “expected” characteristic of provider organizations. And, finally, and most importantly, specialty provider organizations serving complex consumers will need to find the opportunities to “fit” into the new post-acute bundled rate program, ACOs, and Medicare Advantage programs. These programs, which will likely be led by large health systems and health plans, will control referrals to specialty services for a growing proportion of the population. I think this will involve accepting risk for special populations, developing specialty “comprehensive care” offerings for these populations that include primary care elements, and managing crises and acute episodes of targeted populations. A tall and transformational order for many provider organizations. Lots of food for thought for strategy in 2019.

This week, a recent conference was wrapped with an executive session, “Reinventing Health & Human Service Organizations For A Value-Based World: Transformational Leadership Required!,” focused on the likely changes ahead for most health and human service organizations, and the leadership challenges in making that happen.

My thoughts about the competitive framework for the evolution that lies ahead has changed in recent months. Recent mergers, acquisitions, and partnership have “melted” the previously clear lines between traditional stakeholder roles. And when things melt, you never know what shape they will take. The shift in the value chain means that many organizations need to rethink their market position in some very fundamental ways.

Figure 1. Oss, M.E. (2018). The ‘Melting’ Value Chain [PowerPoint slides]. Retrieved from www.openminds.com.

What are the big value chain changes with a likely strategic impact of provider organizations serving complex consumers? There are few fundamental shifts that are the top of my list.

The “service delivery boundaries” of specialty care are disappearing—The boundaries of “specialties” started to disappear several years ago. But, the shift is becoming even more pronounced in mental health and addictions, autism and intellectual disabilities, mental health and diabetes, and child welfare and trauma-informed therapies. The services that used to be separate are now viewed as a “whole”, with service line integration following the “whole person” concept. William Lopez, M.D., CPE, Senior Medical Director, Behavioral Health of Cigna Behavioral Health, put a fine point on this when he said in our recent interview that care coordination for consumers with complex needs is more about the model, than a focus on specific specialty conditions.

The geographic boundaries of specialty care are becoming less relevant—Two market developments have made traditional geographic boundaries of specialty care delivery less relevant. First, there is the continued growth of national organizations providing specialty care. Second, there is the broader adoption (by consumers and by payers) of tech- enabled care delivery.

This past week, I had the chance to learn more about the work of many organizations expanding the geographic footprint of their services. For example, the Centerstone executive team discussed their path and plan for creating a national service delivery system. And I think there are many organizations that will follow this path.

The other market development in the disappearing geographic boundaries is the increasing health plan integration of virtual care delivery into their services systems. Anthony Hassan, Ed.D, LCSW, Chief Executive Officer & President, Cohen Veterans Network, in his presentation “Creating Public/Private Partnerships: Making Meta Leadership Work,” discussed the growing telehealth platform of the Cohen Veterans Network. And both of our featured speakers at this week’s Executive Leadership Retreat included robust discussions of their current and expanded future use of tech- enabled care, including Dr. Lopez in “Key Issues Shaping The Market For Complex Consumers: The Health Plan Perspective On What Executives Need To Know To Succeed;” and Debra Smyers, Plan Product President, Sunshine Health in “Next Generation Models For Health Plan Behavioral Health Services.”

The changing consumer interface—Technology has also changed the consumer relationship with the health care system. There are a growing group of virtual service delivery companies, like AbleTo, MDLive, MindDoula, MyStrength, Ginger.io, and Quartet Health that don’t just offer discrete tech-enabled services, they offer entire consumer service systems. In their planning, executives of traditional service provider organizations will need to consider how these new companies are reshaping consumer preference and consumer expectations. And there is certainly more work to do. In his presentation, “Creating An IT Strategy That Excites & Unites: Generating Support From The Board To The Front Lines With A Comprehensive Plan To Leverage IT As A Differentiator In The Marketplace”, Scott Green, Senior Vice President & General Manager, Behavioral Health, Netsmart, discussed how the consumer-facing functionality of EHRs (like consumer portals) are the least adopted technology functionality.

Health systems are embracing the entire value chain—There are 600+ health systems in the United States and they continue to get larger in both geographic service area and service scope. About 63% of accountable care organizations include a hospital. And, at yesterday’s 2018 OPEN MINDS Mergers, Acquisitions, & Affiliations Summit, Craig Albers, RN, MSN, MBA, President & Chief Operation Officer, Mercy Health St. Charles Hospital, spoke of both the recently completed of Mercy Health with Bon Secours and their new telepsychiatry partnership with Lighthouse. Just one of many examples of the expansion of size and scope of health systems.

Health plan backward integration continues at a rapid clip-Last, but not least, I consider the plans for backward integration by health plans as the greatest challenge to the market positioning of specialty provider organizations. United/Optum is acquiring primary care capacity. Aetna and CVS will soon be merged, adding 9,700 CVS Pharmacy locations and 1,100 MinuteClinic walk-in clinics to Aetna. Humana has purchased Kindred, the long-term care provider organization. In her presentation on Wednesday, Deb Smyers outlined an emerging plan by Centene to create co-owned behavioral health Independent Practice Association (IPA) as the preferred delivery system for behavioral health services.

Figure 2. Oss, M.E. (2018). The ‘Melting’ Value Chain [PowerPoint slides]. Retrieved from www.openminds.com.

When it comes to strategy and market positioning, there is no “cookbook” response to the changing health and human service market value chain. The impact of these changes will vary by geography, by consumer type, and by specialty. But, these are the forces that every executive team needs to consider in their strategy for long-term sustainability.

New York City has raised more than $400 million since 2014 through three types of public-private partnerships to fund social service initiatives. The City is using the partnerships to provide a dedicated platform to seek out, design and deepen alliances across sectors, test innovative solutions and bring what works to scale. The goal is to test and evaluate new approaches, support systems change, and use private capital to enhance public spending. The three types of partnerships are:

  • Partnerships that Develop and Test Innovative, Evidence-Based Models: Through this model, private or philanthropic funds provide risk capital to pilot new approaches, and to rigorously evaluate whether or not the approach works. The City anticipates that those approaches that are found effective can be scaled or replicated across the City, or exported to other urban centers.
  • Partnerships that Drive Systems Change: Through this model, the partnerships focus on larger systems transformation to institutionalize new methods of effective service delivery.
  • Partnerships that Enlist Private Capital to Complement, Enhance and Leverage Public Investment: Through this model, the partnerships seek relatively small amounts of private capital to complement, enhance, and leverage already significant public investment to achieve improved outcomes and fully realize the potential of these commitments.

The city’s public-private partnerships were outlined in “New York City Partnerships: Strategic Partnerships For A More Inclusive And Equitable City.” In 2014, the Mayor’s Office of Strategic Partnerships (OSP) was created to develop strategic partnerships that further the Administration’s desire to making New York a more equitable city. The OSP coordinates and oversees the priorities and strategies of the City-affiliated non-profit organizations, called Funds, with an eye on bringing greater collaboration, efficiency and alignment to the City’s public-private partnerships. OSP matches the needs of communities and service provider organizations with the varied resources of the City’s diverse private and philanthropic partners. The report presents a few of the city’s public-private partnerships by type.

Partnerships that Develop and Test Innovative, Evidence Based Models include Connections to Care in which 1,000 community based organization staff have been trained in evidence-based mental health interventions. Over five years, the trained individuals have provided 40,000 screenings and referrals to 9,000 New Yorkers.

Partnerships that Drive Systems Change include the following initiatives to test new methods of service delivery:

  • Computer Science For All – all 1.1 million NYC public school students will receive computer science education by 2025.
  • The Center for Youth Employment – 100,000 internships, mentorships and summer jobs per year for NYC’s youth.
  • Service Design Studio – provided 80 office hour sessions for more than 29 City agencies to feature human- centered design in their work.
  • Gun Violence Reduction- $20 million committed annually by the City to expand proven gun violence reduction programs to 17 precincts—based on the success of the Cure Violence public-private partnership.

Partnerships that Enlist Private Capital to Complement, Enhance, and Leverage Public Investment include the following initiatives:

  • Vision Care with Warby Parker – Over 40,000 Community School students received eye exams and free, stylish prescription glasses from Warby Parker with more than 150,000 students screened for vision issues.
  • Building Healthy Communities – Program to improve health and wellness in 12 historically underserved neighborhoods. Established first in the nation farms on public housing property, delivered 25,000 pounds of free fresh food, trained 150 local volunteer instructors trained to give free bilingual exercise classes, planned construction for 50 mini soccer fields, engaged over 150 community partners.
  • Get Alarmed NYC- 155,000 free photoelectric combination smoke/carbon monoxide alarms installed in homes of tens of thousands of City residents in at-risk communities.
  • NYCitizenship – 9,000 immigrants engaged through NYCitizenship, 1,600 screened for citizenship eligibility, 800 applications assisted resulting in 200 new citizens in year one of program.

The OSP supports public-private partnerships that cut across geography and discipline and to those that ensure that community voice and perspective are central to the design and delivery of interventions and solutions. Additionally, the OSP is able to act quickly to respond to urgent needs, in support of the Funds and agencies working in emergency situations.

For more information, contact: Gabrielle Fialkoff, Senior Advisor to the Mayor and Director of the Office of Strategic Partnerships, City Hall, New York, New York 10007; or Communications Department, New York Office of the Mayor, City Hall, New York, New York 10007; 212-788-2958; Email: pressoffice@cityhall.nyc.gov.

In 2017, about 2.5% of all Medicare beneficiaries surveyed and 4.4% of all privately insured consumers reported problems accessing a new PCP. About 10% of consumers surveyed were seeking a new primary care physician (PCP).

Within the group of Medicaid beneficiaries seeking a new PCP, about 27% reported problems finding a new PCP, with 14% reporting a “a big problem” and 13% reporting “a small problem.” Within the group of privately insured consumers seeking a new PCP, 40% reported problems, with 22% reporting “a big problem” and 18% reporting “a small problem.”

These findings were presented in “Mandated Report: Clinician Payment in Medicare,” by Kate Bloniarz, a senior analyst with the Medicare Payment Advisory Commission (MedPAC). For this report, MedPAC staff conducted an annual survey with a sample of Medicare beneficiaries and privately insured consumers. The goal was to determine whether health care consumers have issues when trying to see a physician.

Between 2006 and 2017, the share of Medicare beneficiaries reporting small or large problems accessing a new PCP has fluctuated between 20% in 2010 and 35% in 2011 and 2016. For privately insured consumers, the share reporting problems accessing a new PCP has gradually increased, from 25% in 2006 to 40% in 2017.

Additional findings included the following:

  • The number of clinical professionals billing Medicare has steadily increased since 2009, from about 790,000 in 2009 to about 950,000 in 2016.
  • The number of primary care physicians billing Medicare increased by about 2% per year from 2009 through 2016.
  • The number of other specialty physicians billing Medicare increased by about 1.5% per year from 2009 through 2016.
  • Direct Medicare billing by advance practice registered nurses and physician assistants averaged 10% per year from 2009 through 2016.

The analysts concluded that Medicare access is comparable to, or better than, access for the privately-insured. This is despite the finding that private insurance payment rates are considerably higher than Medicare’s payment rates, and that private insurance coverage has grown significantly faster in the past 10 years.

PsychU last reported on this topic in “CMS Expanding Population-Based Provider Reimbursement Models In Medicare & Medicaid,” which published on June 23, 2018.

For more information, contact: Medicare Payment Advisory Commission, 425 I Street NW, Suite 701, Washington, District of Columbia 20001; 202-220-3700.

About 24% of health care executives say that integrating care across the continuum was the top driver of health care mergers and acquisitions (M&A). Other key drivers of M&A include providing greater access to care, managing capital and finances, a response to insurance company consolidations, and to put advanced alternative payment models (APMs) in place.

These findings were discovered during the “C-Suite Survey: Drivers for Mergers & Acquisitions Among Healthcare Providers,” by Premier, Inc. The online survey was completed by 45 C-level executives in the health care field from April 24 through May 19, 2018. C-suite leaders responding included chief executive officers (CEOs), chief operating officers (COOs), chief medical officers (CMOs), chief financial officers (CFOs), chief information officers (CIOs), and chief technical and information officers (CTIOs). The goal was to determine the main reasons for health care mergers and acquisitions.

Of the C-suite respondents, 48% have completed a merger or acquisition in the past 24 months, and 77% plan to complete one between now and July 2020. Additional drivers of M&A activity reported by the survey respondents included the following:

  • 16% said “To provide greater access to care through retail clinics and outpatient centers” because this platform offers competitive leverage for serving health care consumers.
  • 13% said “To manage capital and financial pressures to help deliver high-quality care more cost-effectively by increasing shared services across non-similar facilities.”
  • 11% said “To respond to insurance company consolidations.”
  • 9% said “To put advanced APMs in place by managing cost and quality through clinically integrated networks.”

Premier, Inc. is a health care improvement company which offers supply chain services, and performance services. The company was incorporated in 2013 and is located in Charlotte, North Carolina.

The full text of “C-Suite Survey: Drivers for Mergers & Acquisitions Among Healthcare Providers” was published July 25, 2018 by Premier, Inc. A copy is available online at www.PremierInc.com.

For more information, contact: Public Relations, Premier Inc., 13034 Ballantyne Corporate Place, Charlotte, North Carolina 28277; 704-357-0022; Email: Public_Relations@premierinc.com.

In this presentation Jane Guo, PharmD, MBA, Managed Market Liaison on the Otsuka Pharmaceutical Development & Commercialization, Inc. Field Medical Affairs Team, provides an introduction to Medicare. Dr. Guo discusses:

    • The fundamentals of dual-eligible coverage
    • The composition of the dual-eligible population and their complex needs
    • The unique cost trends related to dual-eligible consumers
    • Dual-eligible financing and payment systems
    • Lessons learned from established dual demonstration projects

This is Part 5 in PsychU’s 5-part series on essentials of health care reimbursement, which covers the evolution of managed care, the building blocks of reimbursement, payer perspectives and
considerations, and reimbursement and value-based model creation to address the needs of individuals covered by Medicare, Medicaid, and those dually-eligible for Medicare and Medicaid.

Check out the rest of the series:

In this presentation Jane Guo, PharmD, MBA, Managed Market Liaison on the Otsuka Pharmaceutical Development & Commercialization, Inc. Field Medical Affairs Team, provides an introduction to Medicare. Dr. Guo discusses:

  • Current Medicare financing and benefit payments by service
  • Types of service and benefits covered by different Medicare plan options
  • Current trends in Medicare reimbursement
  • Changes to Medicare reimbursement due to the Medicare Access & CHIP Reauthorization Act of 2015, otherwise known as MACRA

This is Part 4 in PsychU’s 5-part series on essentials of health care reimbursement, which covers the evolution of managed care, the building blocks of reimbursement, payer perspectives and
considerations, and reimbursement and value-based model creation to address the needs of individuals covered by Medicare, Medicaid, and those dually-eligible for Medicare and Medicaid.

Check out the rest of the series:

In this presentation Jason Swartz, RPh, MBA, Managed Market Liaison on the Otsuka Pharmaceutical Development & Commercialization, Inc. Field Medical Affairs Team, provides an overview of Medicaid. Mr. Swartz discusses:

  • Medicaid and its increasing use of managed care
  • Payer-side Medicaid financing models
  • Provider-side Medicaid reimbursement
  • State examples of Medicaid financing models and reimbursement

This is Part 3 in PsychU’s 5-part series on essentials of health care reimbursement, which covers the evolution of managed care, the building blocks of reimbursement, payer perspectives and
considerations, and reimbursement and value-based model creation to address the needs of individuals covered by Medicare, Medicaid, and those dually-eligible for Medicare and Medicaid.

Check out the rest of the series:

In this presentation Jason Swartz, RPh, MBA, Managed Market Liaison on the Otsuka Pharmaceutical Development & Commercialization, Inc. Field Medical Affairs Team, provides an overview of payer perspectives and approaches to value-based reimbursement. Mr. Swartz discusses:

  • Potential considerations for payers as they conceptualize their product design, plan designs, and provider contracting
  • Different types of reimbursement models
  • Goals and challenges to each reimbursement model discussed

This is Part 2 in PsychU’s 5-part series on essentials of health care reimbursement, which covers the evolution of managed care, the building blocks of reimbursement, payer perspectives and
considerations, and reimbursement and value-based model creation to address the needs of individuals covered by Medicare, Medicaid, and those dually-eligible for Medicare and Medicaid.

Check out the rest of the series:

In this presentation Jane Guo, PharmD, MBA, Managed Market Liaison on the Otsuka Pharmaceutical Development & Commercialization, Inc. Field Medical Affairs Team, provides an introduction to health care reimbursement, including the evolution of health insurance, managed care, and value-based reimbursement. Dr. Guo discusses:

  • The historical context for health care insurance in the U.S.
  • The rise of managed care and its approaches to curtailing costs and addressing quality
  • Current trends in health care spending
  • The overarching market drivers of the shift toward value-based reimbursement in the U.S.

This is Part 1 in PsychU’s 5-part series on essentials of health care reimbursement, which covers the evolution of managed care, the building blocks of reimbursement, payer perspectives and considerations, and reimbursement and value-based model creation to address the needs of individuals covered by Medicare, Medicaid, and those dually-eligible for Medicare and Medicaid.

Check out the rest of the series:

On July 31, 2018, the Centers for Medicare & Medicaid Services (CMS) issued a final rule that increases skilled nursing payments by $820 million due to a 2.4% increase to the skilled nursing facility (SNF) market basket. There are three major provisions of the final rule: changes to the SNF prospective payment system (PPS) mix classification system used under the SNF Prospective Payment System (PPS), the SNF Value-Based Purchasing Program (VBP), and the SNF Quality Reporting Program (QRP). The increase in skilled nursing rates falls under changes in the SNF VBP.

The final rule updates and quality program changes for skilled nursing facilities (SNFs), including hospital readmissions for fee-for-service Medicare beneficiaries discharged from a Medicare-participating hospital, a critical access hospital, or a psychiatric hospital. Proposed rule updates go into effect on October 1, 2018 for the 2019 fiscal year. Changes in each area are summarized below.

SNF PPS Case-Mix Classification System Changes

The proposed rule replaces the existing case-mix classification methodology, the Resource Utilization Groups, Version IV (RUG–IV) model, with a revised case-mix methodology called the Patient-Driven Payment Model (PDPM), which focuses on a resident’s condition and care needs, rather than the amount of care provided, to determine reimbursement levels.

The improved SNF PPS case-mix classification system moves Medicare towards a more value-based, unified post-acute care payment system that emphasizes specific care needs of patients while also reducing administrative burden associated with the SNF PPS.

SNF Value-Based Purchasing Program Changes

Along with the $820 million increase in SNF payments, Medicare will withhold 2% of SNF prospective payment system (PPS) payments to fund SNF VBP incentive payments. Based on performance, each SNF will have a positive or negative adjustment to its PPS payment. The adjustment will be based on the SNF VBP score. The incentive payments for a positive adjustment will total from 50% to 70% of the amount withheld from the SNFs’ payments. The bottom 40% of SNFs will receive negative adjustments such that their rate will be lower than they would otherwise receive under the standard PPS. The hospital readmissions measure is intended to improve consumer outcomes by rewarding SNF provider organizations for taking steps to limit beneficiary readmission to a hospital. The baseline period affecting payment determination in FY 2019 is calendar year (CY) 2015 (January 1, 2015 through December 31, 2015). The performance period affecting payment determination in FY 2019 is CY 2017 (January 1, 2017 through December 31, 2017).

SNF QRP Changes

The SNF QRP is authorized by section 1888(e)(6) of the Social Security Act and applies to freestanding SNFs, SNFs affiliated with acute care facilities, and swing-bed rural hospitals except for critical access hospitals. Under the SNF QRP, SNFs that fail to submit the required quality data to CMS will be subject to a 2-percentage point reduction to the otherwise applicable annual market basket percentage update with respect to that fiscal year. The Final Rule adds an additional factor for evaluating measures for removal from the SNF QRP measure set, considering costs that are associated with a measure. These costs are again weighed against the benefit of the measure’s continued use in the program. The number of years of data used to display two claims-based SNF QRP measures, Discharge to the Community, and Medicare Spending per Beneficiary, are increased from one year to two years.

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 August 13, 2018, the Michigan Department of Health and Human Services (MDHHS) announced it was awarded a five-year federal grant valued at $2 million annually to launch projects to integrate primary and behavioral health care. The funding is through the Substance Abuse and Mental Health Services Administration (SAMHSA) Promoting Integration of Primary and Behavioral Health Care (PIPBHC) grant program. The MDHHS PIPBHC program will focus on three high- need counties – Barry, Saginaw, and Shiawassee. Community partners in each county are slated to launch the grant- funded program on or after November 1, 2018.

MDHHS collaborated with the Community Mental Health Association of Michigan and the Michigan Primary Care Association to select community partners in each county. The community partners will then partner with their respective local Community Mental Health Services Program (CMHSP) or Federally Qualified Health Center (FQHC) to strengthen behavioral health and primary care services.

  • Cherry Health, a Barry County FQHC, which will partner with the Barry County CMHSP.
  • Saginaw County CMHSP, which will partner with Great Lakes Bay Health Center, a FQHC
  • Shiawassee County CMHSP, which will partner with Great Lakes Bay Health Center.

SAMHSA released the grant application on March 17, 2017, with responses due by May 17, 2017. The selected applicants could receive funding of up to $2 million annually for the next five years to implement the Promoting Integration of Primary and Behavioral Health Care program. The goals of this program are as follows

  • Promote full integration and collaboration in clinical practice between primary and behavioral health care.
  • Support the improvement of integrated care models for primary care and behavioral health care to improve the overall wellness and physical health status of adults with a serious mental illness or children with a serious emotional disturbances.
  • Promote and offer integrated care services related to screening, diagnosis, prevention and treatment of mental and substance use disorders, and co-occurring physical health conditions and chronic diseases.

In August 2018, SAMHSA awarded funding to 11 states and Puerto Rico. In addition to Michigan, funding was awarded to: Connecticut, Delaware, Illinois, Indiana, Iowa, Louisiana, New Hampshire, New Mexico, Oklahoma, Puerto Rico, and Texas.

The MDHHS PIPBHC program is taking place independently of the state’s Section 298 Medicaid demonstration and pilot programs to test integrated health and mental health financing. In Michigan, Medicaid-funded specialty behavioral health services and supports are provided through 10 Prepaid Inpatient Health Plans, while Medicaid-funded physical health and mild-to-moderate health services are provided through 11 Medicaid health plans. The goal of the pilots is to test the integration of Medicaid-funded physical health and behavioral health services under a single contract with the Medicaid Health Plans. A demonstration is slated to take place in Kent County. On March 9, 2018, MDHHS announced three pilot sites for the Section 298 Initiative. Using a Request for Information (RFI) process to select the pilot sites, MDHHS selected Muskegon County Community Mental Health Center (dba HealthWest) and West Michigan Community Mental Health; Genesee Health System; and Saginaw County Community Mental Health Authority. In the pilot sites, the regional Medicaid health plans, rather than the PIHPs will cover Medicaid behavioral health services.

PsychU reported on the Medicaid Section 298 pilots in “Michigan Medicaid Delays Selection Of Cross-Region PIHP For Mental Health Integration Pilot Areas,” which published on June 13, 2018.

For more information, contact: Lynn Sutfin, Public Information Officer, Michigan Department of Health and Human Services, 333 S Grand Avenue, Post Office Box 30195, Lansing, Michigan 48909; 517-241-2112; Email: SutfinL1@michigan.gov.

On August 22, 2018, the Centers for Medicare & Medicaid Services (CMS) notified state Medicaid directors that it is phasing in adjustments to its methodology for calculating budget neutrality for Medicaid section 1115 demonstration projects, in order to strengthen fiscal accountability. CMS expects to phase in the new methodology for demonstration extension approvals beginning January 1, 2021.

The adjustments pose more rigorous tests to ensure that 1115 demonstration projects will be budget neutral. The adjustments are as follows:

  • Only savings from the most recent five years can “roll over” into an extension from prior approval Previously, CMS allowed demonstrations to continue to roll over savings, without a limit.
  • Beginning with the next demonstration extension approval period starting on or after January 1, 2021, “without waiver” (WOW) baselines are expected to be rebased to more accurately reflect recent state spending trends.
  • Beginning with the next extension of states’ demonstration projects, there is expected to be a transitional phase- down of the accrued savings which resulted from a continuation of the baseline trending from prior period(s). The transitional phase-down precedes rebasing.
  • The growth of upper payment limit (UPL) diversionary spending is limited.

CMS intends to implement the changes to strengthen fiscal accountability. The new approach was presented in “State Medicaid Director Letter: SMD # 18-009 RE: Budget Neutrality Policies For Section 1115(a) Medicaid Demonstration Projects.” Additional details about the four adjustments being implemented are as follows:

  • Limiting Savings Rollover –Under CMS’s previous budget neutrality approach, states were permitted to roll over savings from older demonstration approval periods rather than limiting roll-over savings to recent years. Under the current CMS approach to budget neutrality, states are permitted to roll over accumulated budget neutrality savings only from the most recently-approved five years. If expenditures from the most recent approval period are greater than or equal to that period’s budget neutrality limit, then no savings will roll over.
  • Rebasing WOW Baselines – Beginning with demonstration extension periods with effective dates on or after January 1, 2021, CMS expects to rebase the demonstration’s budget neutrality expenditure limits to better reflect the state’s most recent historical At each new extension thereafter, CMS expects to adjust WOW per member per month (PMPM) cost estimates to match recent actual PMPM costs experienced during the prior demonstration approval period. CMS also expects to apply its current policy of trending PMPM costs using the lower of the state historical trend or the President’s Budget to the rebased WOW baseline. CMS expects to rebase all demonstrations which are approved for an extension with an approval period beginning on or after January 1, 2021.
  • Transitional Phase-Down of Newly Accrued Savings – Until CMS has rebased all current demonstrations (i.e., before January 1, 2021), at each demonstration’s next approved extension, CMS expects to apply a transitional phase-down percentage to the demonstration’s annual savings based on when the state implemented the policy that produced the savings. CMS anticipates that savings phase-down would apply only during the extension approval period; however, CMS expects that the amount of phase-down would be determined based on the length of time since the state originally implemented the aspect of the demonstration that produced the savings. For the first five years post-implementation of the savings-producing policy, 100% of budget neutrality savings will accumulate and carry forward, but starting with the sixth year post-implementation of the savings producing policy, savings will be phased down by 10% per demonstration year, until savings are reduced to no less than 25% of the amount of savings realized based on the original baseline. CMS expects to apply this transitional phasedown to demonstration extensions taking effect on or before December 31, 2020. For extensions taking effect later than that date, or for demonstrations that have already had a transitional phase-down period, CMS expects to conduct a full rebasing. This phase-down of savings aligns with the overall goal of budget neutrality tests—to limit federal fiscal exposure resulting from the use of 1115(a) authority in Medicaid.
  • Limiting UPL Diversionary Spending – States with approved UPL diversionary spending have the choice of either rebasing UPL diversion estimates based on their current levels of fee-for-service utilization, or of carrying forward UPL without growth at each extension. The latter means the state would be limited to the capped annual amount in the final demonstration year of the previous demonstration approval period.

Additionally, CMS has developed a new monitoring tool to support a more streamlined and standardized approach to expenditure reporting for Medicaid demonstrations. CMS intends to require states to use the tool as a condition of demonstration approval and will soon provide states with a schedule of training dates outlining completion and submission of the tool. The tool is a standardized budget neutrality reporting form that consolidates financial data for each demonstration into a unified report. States will upload the tool into the Performance Metrics Database & Analytics system as they currently do for their other monitoring and evaluation reports.

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 Ohio Department of Medicaid (ODM) awarded CareSource and CareStar Inc. contracts to provide case management services for the Ohio Medicaid Home Care Waiver (OHCW) program and the Specialized Recovery Services (SRS) program. The contractors are responsible for the ongoing coordination of all Medicaid and non-Medicaid home- and community-based services that an individual receives. CareStar announced its contract on August 8, 2018. The contracts go live on October 1, 2018 and run through June 30, 2020. The maximum contract length, inclusive of renewals, cannot exceed four years. An annual value for the contracts was not released.

ODM released the request for proposals (RFP CSP900919) on February 28, 2018, with proposals due by April 11, 2018. Proposals were also received from Anthem Blue Cross and Blue Shield, Council on Aging of Southwestern Ohio, Council on Aging State Wide, KEPRO, and Optum. The previous contracts, awarded in 2015, were held by CareStar, CareSource, and Council on Aging. The new contracts have regional per-person rates for an initial contact, an assessment, and monthly case management for the OHCW program and the SRS program.

The case management services under the new contract will be for people served through the OHCW and the SRS programs. CareSource and CareStar will both serve in each of the state’s four regions. The role of the contractor is to provide case management services through the implementation and management of ODM-administered home- and community-based service (HCBS) programs and communicate directly with individuals at the local level. Case management services are administrative services, supports and activities that link, coordinate and monitor the services, supports and resources provided to an individual enrolled on the program. Case management services include, but are not limited to:

  • Evaluation and/or reevaluation of level of care via the ODM-approved assessment tool.
  • Assessment and/or reassessment of the need for program services via the ODM-approved assessment tool.
  • Development and/or review and updates to the Person-Centered Services Plan and determination of service costs.
  • Coordination of multiple services across multiple provider organizations and/or payers by acting as the accountable point of contact for the transdisciplinary care team.
  • The implementation and ongoing monitoring of the person-centered services plan, including ensuring individual health and welfare.
  • Addressing identified problems, gaps, and potential problems in service provision.
  • Responding to and addressing individual crisis situations and reportable incidents.

Additional responsibilities apply to the SRS program. These responsibilities include:

  • Verification that the individual resides in a HCBS setting.
  • Verification of the individual’s qualifying health or behavioral health diagnoses.
  • Evaluation of all other eligibility criteria.
  • Coordination of health services and facilitation of community transition for individuals who receive Medicaid- funded institutional services. Recovery management activities for individuals leaving institutions must be coordinated with, and must not duplicate, institutional and managed care plan discharge planning and other community transition programs.

As of February 2018, approximately 5,500 individuals were served by the OHCW and it is authorized to serve as many as 8,000 people in state fiscal year 2018. The waiver offers a wide range of services (including but not limited to nursing, personal care aide, home modifications and supplemental adaptive/assistive devices, etc.) to individuals to prevent or delay institutional placement or to improve an individual’s independence. Of those served, 1,200 were in the Cincinnati region, 1,700 were in the Columbus region, 1,300 were in the Cleveland region, and 1,300 were in the Marietta region. The highest concentration of individuals reside in urban areas. The OHCW serves individuals age 0 through 59 years who have been determined to have a nursing facility level of care (intermediate or skilled). Approximately 12% were under the age of 22 and 89% were between the ages of 22 and 59. Individuals have diverse conditions and a range of acuity levels. The OHCW is approved for operation through June 30, 2021.

The SRS program is for individuals with severe and persistent mental illness (SPMI) and diagnosed chronic conditions (DCC). Operational since August 1, 2016 as a 1915i Medicaid waiver, the program currently benefits individuals with SPMI who have income up to 300% of the federal benefit rate (currently $2,205). ODM is amending the waiver to include additional individuals who have been diagnosed with chronic conditions or who are active on the solid organ or soft tissues transplant waiting list. This includes individuals in need of transplants and former transplant recipients.

This program offers HCBS that are person-centered, recovery-oriented, and aimed at supporting individuals in the community. The SRS program modernizes and improves the delivery of mental health and DCC services to better meet the needs of those currently eligible, but also builds a foundation to ensure a robust continuum of supports and evidence- based options will be available in the future. SRS can be offered in community-based settings (e.g., the individual’s own home), as well as residential, employment, and day settings to help individuals live in the most integrated setting possible. All residential services must have home-like characteristics and may not be institutional in nature. For individuals receiving other Medicaid services, SRS provides strong links between systems to ensure a comprehensive and coordinated approach to services.

PsychU reported on this topic in “Ohio Rolls Out New Medicaid Electronic Visit Verification For Personal Care Programs,” which published on March 8, 2018.

For more information, contact:

  • Melissa Ayers, Spokeswoman, Ohio Department of Medicaid, Post Office Box 182709, Floor 5, Columbus, Ohio 43218; 800-364-3153; Fax: 614-466-6945; Email: Ayers@medicaid.ohio.gov
  • Fran Robinson, Manager Media Relations, CareSource, Post Office Box 8738, Dayton, Ohio 45401-8738; 937- 531-2374; Email: robinson@caresource.com
  • John Kemper, Vice President Administrative Services, CareStar , 5566 Cheviot Road, Cincinnati, Ohio 45247; 513-618-8300; Fax: 513-618-8319; Email: jkemper@carestar.com

The benefits of peer support service are widely known—the use of peer supports can result in reductions in hospital admissions, reduction of inpatient days, and increased use of outpatient services. Additionally, the model helps to improve consumer outcomes, including increased consumer empowerment, increased sense that treatment is responsive, and increased social support and social functioning. As a result, the use of peers and peer support programs can lend itself to success with value-based arrangements.

Last month, I had the chance to hear from two organizations that have value-based arrangements related to peer supports during the session, The Future Of Peer Support Services: Successful Models For A Value-Based Market, led by OPEN MINDS Senior Associate Ken Carr.

First to speak was Briana Gilmore, Senior Strategy Consultant at Community Access in New York City, a 400-employee organization that provides supportive housing, recovery supports, and advocacy services. What makes Community Access unique is its aim to have at least 51% of staff with “lived experience.” Community Access has a performance- based contract with the city of New York for their assisted competitive employment program; 20% of their contract payment is based on their success in supporting a number of individuals they work with in maintaining employment for three month, six month, and nine month intervals using the “find, get, keep” model. They are at risk for 20% of the contract payment if the peer employment specialists cannot support participants in obtaining and maintaining competitive employment.

Ms. Gilmore noted that the model is challenging for a couple of reasons. The first is that many people need support with logistics like completing school degrees or gaining skills on the computer. It can take time for people to be ready to find a job and not every participant is ready at the same pace, so it can be difficult to predict aggregated outcomes. Additionally, Ms. Gilmore noted that the supported employment model itself can be problematic, because the focus on competitive work in recovery services is sometimes not matched with a similar emphasis on well-being and other social determinants that help a person maintain employment.

Second on the agenda was Sue Ann Atkerson, LPC, MBA, the Chief Operating Officer at RI International. RI International is a multi-state (and multi-national) behavioral health organization headquartered in Arizona. RI International has about 1,000 employees, about 50% of which have lived experience. In Arizona, RI International uses peer recovery teams to provide group and one-on-one services to individuals transitioning from the Desert Vista Hospital and the Recovery Innovations Recovery Response Center Peoria. Funding for the program is in the form of monthly payments, plus quarterly performance-based incentives. The performance incentives are based on a variety of metrics, including: 95% of individuals receive services within 24 hours of referral; 90% receive a behavioral health medical professional (BHMP) appointment within seven days of discharge; and 90% are not readmitted to a hospital within 30 days.

What were my key takeaways from the speakers in this session?

Peer support has better outcomes—Peer support services do not just move the costs from higher-level employees to lower-level employees. The peer support model often has better outcomes for consumers than higher paid clinical professionals.

Peers can be deployed throughout the service system—Peers should not be regulated to certain jobs or roles. To run an organization that best serves consumers, there should be individuals with lived experience at all levels of the organization—including on the executive team and the board.

Push for shared savings opportunities—Peer support programs can result in big savings. Ms. Atkerson explained that some of these programs are huge cost savings in the millions of dollars, but provider organizations don’t see the benefits of these savings. RI International is looking to move to shared model based on quality and value.

Keep track of the numbers—Any value-based arrangement needs data for real-time management of performance, outcomes, and expenses. To help track this data and to view it in “real-time”, RI International created a series of dashboards that give a simple, visual snapshot of how the organization is performing. Ms. Atkerson noted that even if your organization isn’t ready to develop a dashboard system, you can begin to track data using simple charts and reports for one or two items.

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

  1. Workforce Shortages As A Strategy Issue
  2. Will Clinical Professional Compensation Drive Task Shifting?
  3. Does Peer Support Pay?
  4. The Innovation Conundrum
  5. Wake Forest Baptist Medical Center Finds Addiction-Focused Peer Support Program Reduces Readmissions
  6. Another Disruptor To Business As Usual – Peer Support
  7. Behavioral Health Evidence-Based Practices As Population Health Management Tools
  8. Task Shifting To Bend The Cost Curve

As a primary payer for behavioral health services, and the main payer serving the population with serious mental illness (SMI), state Medicaid programs are an important barometer for the behavioral health market. Medicaid accounted for 25% of the $186 billion spent on mental health (excluding addiction) in 2014. Consumers with SMI are disproportionately served by the public health system, with Medicaid serving a large portion (32%) of those consumers, including those dually-eligible for Medicare and Medicaid.

“The manner in which the system of care is organized and delivered is dramatically impacted with how Medicaid is financed within each state,” says William Wood, MD, Former National Medical Director, Medical Management, Behavioral Health, Government Business Division at Anthem. “As states continue to develop their own solutions to improve the cost and quality of care we expect to see a great deal of change in the future.”

Dr. Wood’s sentiments are echoed by findings in Trends In Behavioral Health: A Reference Guide On The U.S. Behavioral Health Financing & Delivery System, an inaugural survey of over 4,000 health care professionals, conducted by OPEN MINDS and sponsored by Otsuka America Pharmaceutical, Inc. The publication recently revealed some interesting findings about innovations taking place at the state level regarding behavioral health financing and service delivery systems.

Since each state’s Medicaid program is unique—with different benefits and coverage options, different populations eligible for benefits, and various financing and delivery systems—a review of the similarities and variation in state-level financing and delivery systems offers better insight into the initiatives shaping the behavioral health market. “The report findings clearly show greater integration in states’ financing models,” says Monica E. Oss, CEO, OPEN MINDS. “This tells us that there’s a need for national discussions on how coordination can better help consumers.”

Since 2011, state Medicaid programs have increasingly moved toward whole-health integrated financing models for behavioral health services. Between 2011 and 2017, the number of states with primary behavioral health carve-outs, either to governmental entities or private managed care entities, decreased from 21% to 18% respectively.

Conversely, during that period, the percentage of states with behavioral health financing integrated in private health plans increased from 25% to 40%.

Centripetal. (2017). Trends in behavioral health: A reference guide on the US behavioral health financing & delivery system. Rockville, MD: Otsuka America Pharmaceutical, Inc. Retrieved from PsychU.org.

Financing arrangements for services for consumers with SMI have also moved toward integrated managed care. In 2017, 28 states required consumers with SMI to enroll in a Medicaid managed care program; 18 states required these consumers to enroll in a Medicaid FFS plan; and in three states, the population was split between managed care and FFS.

States are also looking for better ways to coordinate benefits and services for consumers. In 2017, 41 states had at least one behavioral health care coordination initiative. In total, there were 33 states with patient-centered medical homes (PCMHs), 21 states with health homes, 12 states with dual eligible demonstration programs, 11 states with Medicaid accountable care organizations (ACOs), and eight states participating in the Certified Community Behavioral Health Clinic (CCBHC) demonstration.

Of course, health care coverage itself varies nationally, based on the characteristics of a state’s population. Factors such as unemployment rates, socioeconomic status, and other demographics play a role in defining state-level policies. In particular, the Patient Protection and Affordable Care Act of 2010 (PPACA) has affected how many Americans receive health insurance coverage through the federal essential health benefit, parity requirements, state-based health insurance marketplaces, and Medicaid expansion.

In general, states that have expanded Medicaid have a lower uninsured population and a higher percentage of their population enrolled in Medicaid. In 2015, among the 32 states that had expanded Medicaid, the average uninsured rate was 7%. The average uninsured rate was 11% in the 19 states that did not expanded Medicaid.

Medicaid coverage across the country ranges from a high of 25% of the population in New Mexico (a state that expanded Medicaid), to a low of 7% of the total population in Utah (a state that did not expand Medicaid). Across most states, the largest percentage of the population has commercial insurance coverage (employer-sponsored or other private insurance).

As state Medicaid programs continue to focus on increased care integration between behavioral and physical health, they will also require additional support from the provider community. Innovations in financing and care delivery through provider collaboration will to not only meet the complex needs of consumers with SMI, but those of the general population.

A free copy of the full findings within this inaugural report is available on PsychU here.

About Centripetal

The Centripetal Behavioral Health Population Health Management Platform “mission” is to make positive contributions to the national health care conversation addressing the disproportionate effect behavioral health disorders have on the U.S. health care system, and mental health care trends that are shaping this reality. The content delivered by the Centripetal platform is intended to provide critical insights about these trends for key healthcare stakeholders including commercial and government payers, integrated delivery networks, and medical and behavioral healthcare providers.

The Centripetal Behavioral Health Population Health Management Platform is supported by Otsuka America Pharmaceutical, Inc. and Lundbeck, LLC. The Centripetal name and logo symbolizes a move toward the center which is evident in today’s healthcare landscape on multiple levels – at the system level by the increasing integration of medical and behavioral health care, at the group level by the increasing focus and attention to coordinated and collaborative care, and at the individual level by the increasing attention to meeting the healthcare needs and treatment of the whole person (i.e. patient-centered care).

The inaugural edition of Centripetal Trends in Behavioral Health: A Reference Guide on the U.S. Behavioral Health Financing & Delivery System provides information and insights into the multi-layered behavioral health system in the United States. The guide includes an in-depth view of current statistics, prevailing issues, and emerging trends to inform the discussions, debates, and decision making of policy makers, payers, providers, advocates, and consumers. Other highlights of what you can expect from the Centripetal Behavioral Health Population Health Management Platform include live virtual community learning events, podcasts, and continued research and publications.

For executives of specialist organizations trying to stake out a place in an integrated market, understanding and packaging the “value” of unique expertise is key. Monica E. Oss spoke to the emerging opportunities for specialist organizations as falling in two categories—specialty care coordination and crisis management/diversion programs for consumers with special needs—in her keynote, Reinventing Your Organization: Key Management Best Practices For A Value-Based World. Success in either of these roles requires specialist organizations to be recognized by health plan managers as “uniquely qualified”—or a “center of excellence” (COE) for that specific consumer population. But that is not the traditional use of the term.

Figure 1 Mandros, A. (2018). What Does ‘Center Of Excellence’ Mean Now?. Retrieved from openminds.com

There is not a clear definition of COEs. Traditionally, a “center of excellence” has been defined as a research center focused on promoting best practices related to a certain health care condition or topic. Medicaid plans use COEs in either the traditional sense, or to designate organizations as providing high quality care. But health plans are taking a slightly different approach to the term COE. Generally, most health plan managers now define a COE as “a tertiary or quaternary health care provider organization that is identified as the most expert and cost efficient and produces the best outcomes”. What this means of course, varies in practice. Each health plan identifies what constitutes expert, cost efficient, and best outcomes for their programs. They also determine how a provider organization would qualify. For provider organizations, there are some clear benefits of COE recognition. Often it means enhanced rates, additional referrals, special status in the provider directory, or additional consultative help from the health plan.

What are some examples of the center of excellence concept in the current health care market? Walmart implemented their center of excellence program for employees in 1996, which pays a bundled rate to designated provider organizations for providing certain surgeries. For selecting these high quality organizations, employees have reduced out-of-pocket costs, and Walmart pays travel and expenses. At the local level, a Texas health plan made the news when it designated a center of excellence for providing children’s therapy services and in Arizona, one of the state’s health plans has designated centers of excellence for autism services.

OPEN MINDS Senior Associate Deb Adler weighed in:

Health plans are just beginning to “dip their toe” into the COE waters for behavioral health. Much of the pressure to expand COEs to the behavioral health and addiction space are tied to employer pressure. Employers have seen improvement in quality outcomes and significant health care cost savings for their employees and dependents in many of the early medical model COEs (e.g., transplant COEs). Employers see the COE model as an effective approach that could easily translate to behavioral health and substance use disorder and be used to drive new benefit designs and health care savings. Consensus around the member outcome measures is still evolving, albeit savings is typically measured in behavioral health care savings with total cost of care (inclusive of medical) a future goal of most plans.

I recently completed a market scan of the largest health insurers and their current COE initiatives. At this time, most of COE initiatives among the largest plans are focused on medical procedures related to complex physical health treatment such as bariatric surgery and transplants. Most health and human services related COEs are found at the local Medicaid plan level or are through behavioral health organizations (BHO). Both Optum and Beacon Health Options, two of the largest BHOs, offer programs focused on clinical excellence for behavioral health provider organizations

During 2016, the 18 organizations participating in the Medicare Next Generation accountable care organization (NextGen ACO) model generated net savings to Medicare of $62 million, representing a 1.1% reduction in the projected cost of care for the 477,197 aligned fee-for-service beneficiaries in 2016. Gross savings generated by the NextGen ACOs totaled about $100 million. As a group, the NextGen ACOs received shared savings payments of $38 million.

In total, 14 of the 18 NextGen ACOs generated per beneficiary per month (PBPM) savings, and 4 had increased PBPM costs. On average, the estimated cost reduction in Medicare spending was $18.20 PBPM. Across the ACOs, the PBPM changes ranged from a reduction of $79.4 PBPM to an increase of $38.8 PBPM. Over half (57%) of the model’s cost and utilization decline was generated by four of the 18 NextGen ACOs.

Compared to projected utilization for the 477,197 beneficiaries aligned to a NextGen ACO, their actual utilization of acute care hospital days and monthly non-hospital evaluation and management visits were lower. They had 1.7 fewer acute care hospital days per 1,000, representing a drop of 1.3%. They had 15.6 fewer visits per 1,000 for non-hospital evaluation and management visits per month, representing a drop of 1.5%. The number of annual wellness visits per 1,000 NextGen ACO beneficiaries rose by 20.4 visits, an increase of 11.9%. The savings were largely associated with reductions in hospital and skilled nursing facility (SNF) associated costs. Acute care hospital costs were 1.0% lower. SNF costs were 3.1% lower.

The NextGen ACO model launched in January 2016. The participating organizations have nearly complete financial risk sharing, at 80% to 100%, and they must accept risk of loss, unlike previous ACO models that limited risk exposure. The NextGen ACO model has no minimum savings or loss requirements; to balance the risk, the participating ACOs are able to implement features that give them a greater ability to manage their attributed beneficiaries. These features include prospective setting of financial benchmarks and prospective alignment of beneficiaries. The participating ACOs can also offer three optional benefit enhancements that waive certain Medicare requirements around SNF admissions, telehealth visits, and post-discharge home visits; and provisions for beneficiaries to voluntarily align with an NextGen ACO and to receive an incentive for an annual wellness visit from a NextGen ACO-affiliated provider organization.

These findings were reported to the Centers for Medicare & Medicaid Services (CMS) in “First Annual Report Next Generation Accountable Care Organization Model Evaluation” by researchers with NORC at the University of Chicago. The report presents initial and descriptive and analytic findings for the 18 NextGen ACOs that launched in 2016, were active for at least one quarter, and were financially responsible during the first program year. The researchers measured impact using Medicare claims a difference-in-differences evaluation design. The evaluation is organized around questions in four domains: model features and approaches, model impact, variations in impact and replicability of model effects; and implementation experience

Of the 18 NextGen ACOs, 15 had prior ACO experience, and 11 were integrated delivery systems, comprised of primary and specialty physicians and hospitals under a common ownership structure. Ten of the ACOs implemented the SNF three-day waiver in 2016. That waiver allowed the ACO to bill for costs of SNF admission for an attributed beneficiary who had not met the usual Medicare coverage requirement of a three-day hospital admission prior to SNF admission.

Most of the 2016 NextGen ACOs selected the 80% shared risk option and the traditional fee-for-service payment mechanism. Most of the ACOs had prior experience with risk sharing.

Next Generation Accountable Care Organizations, 2016

ACO Name Location Prior ACO Experience Risk Percentage & Payment Mechanism Attributed Beneficiaries Estimated Aggregate Impact (in millions) Estimated Change In Per Beneficiary Per Month Estimated Reduction In PBPM Relative To Expected PBPM
Accountable Care Coalition of Southeast Texas Inc. Houston, Texas Medicare Shared Savings Program (MSSP) 80%, fee-for- service (FFS) 13,391 -$0.5 million -$3.0 -0.3%
Baroma Accountable Care, LLC Miami, Florida MSSP 80%,

population- based payment (PBP)

27,449 -$1.3 million -$4.1 -0.3%
Beacon Health, LLC Brewer, Maine Pioneer 80%, FFS +

monthly infrastructure payment (MIP)

14,714 +$6.6

million

+$38.8 +4.3%
Bellin Health DBA Physician Partners, Ltd. Green Bay, Wisconsin Pioneer 80%, FFS 8,286 +$3.3

million

+$35.0 +4.5%
Cornerstone Health Enablement Strategic Solutions, LLC High Point, North Carolina MSSP 100%, FFS + MIP 13,281 -$4.6 million -$30.3 -3.4%
Deaconess Care Integration Evansville, Indiana MSSP 80%, FFS 31,442 -$15.3

million

-$42.4 -4.1%
Henry Ford Physician Accountable Care Organization Detroit, Michigan N/A 80%, FFS+ MIP 20,988 -$5.2 million -$22.1 -1.8%
MemorialCare Regional ACO, LLC Fountain Valley, California N/A 80%, FFS 19,453 -$12.6

million

-$57.4 -4.3%
Lifeprint (Optum) Accountable Care Organization, LLC Phoenix, Arizona N/A 100%, FFS 29,671 -$11.9

million

-$34.7 -3.6%
OSF HealthCare System Peoria, Illinois Pioneer 80%, FFS 36,668 +$1.0

million

+$2.3 +0.3%
Park Nicollet Health Services St. Louis Park, Minnesota Pioneer 80%, FFS 14,428 -$5.0 million -$30.3 -3.1%
Pioneer Valley Accountable Care, LLC Springfield, Massachusetts MSSP 80%, FFS + MIP 33,903 -$2.2 million -$5.6 -0.5%
Prospect ACO CA, LLC Los Angeles, California MSSP 80%, FFS + MIP 13,799 -$8.6 million -$55.1 -3.2%
Steward Integrated Care Network, Inc. Boston, Massachusetts Pioneer 80%, FFS 36,436 +$2.2

million

+$5.1 +0.4%
ThedaCare ACO LLC Appleton, Wisconsin Pioneer 80%, FFS 15,857 -$7.8 million -$43.2 -5.2%
Triad HealthCare Network, LLC Greensboro, North Carolina MSSP 100%, FFS 29,035 -$26.5

million

-$79.4 -8.4%
Trinity Health ACO Inc. Wilmington, Delaware MSSP 80%, FFS + MIP 52,882 -$9.7 million -$15.9 -1.6%
Iowa (UnityPoint) Health Accountable Care West Des Moines, Iowa Pioneer, MSSP 80%, FFS 65,487 -$1.8 million -$2.4 -0.3%

The NextGen ACO model is currently scheduled to run for a five-year period ending on December 31, 2020. In 2016, the NextGen ACOs had 477,197 beneficiaries aligned to one of the 31,070 NextGen ACO participating provider organizations. The NextGen ACOs had from 8,286 to 65,487 aligned beneficiaries; the average was 26,511 aligned beneficiaries per NextGen ACO. Two additional NextGen ACO cohorts began in 2017 and 2018.

PsychU reported on this topic in “17 Additional ACOs To Participate In The Medicare Next Generation ACO Program,” which published on March 16, 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 August 3, 2018, the North Carolina Department of Health and Human Service (DHHS) announced it had signed a $17 million contract with MAXIMUS to provide managed care enrollment broker services. The initial contract term runs through December 31, 2020 with up to three one-year renewal periods. The state had released the request for proposals (RFP 30-180090) on March 2, 2018, with proposals due by April 13, 2018. The state did not release the names of the unsuccessful bidders.

Under the state’s upcoming Medicaid managed care transition, which is expected to begin in 2019, MAXIMUS will provide choice counseling, enrollment assistance, and education to beneficiaries as they select from a variety of health plans. The actual contract value will depend on the number of beneficiaries eligible for managed care enrollment and whether DHHS engages any optional services under the contract.

As part of the enrollment broker function, MAXIMUS will help Medicaid beneficiaries select the managed care plan and primary care professional that is most appropriate to meet their needs and, to the extent possible, maintain existing physician-consumer relationships. Enrollment in managed care will be mandatory for 90% of the state’s Medicaid beneficiaries. MAXIMUS staff will be available to help members enroll over the phone via a call center, online through an interactive and user-friendly website, and face-to-face in some communities. MAXIMUS will establish an ongoing partnership with the state’s 100 county Departments of Social Services (DSS) and provide liaisons who will work closely with caseworkers and other county staff to provide managed care training, make beneficiary materials available locally, and conduct outreach services. County DSS offices will continue to process and determine eligibility. DHHS plans to improve the beneficiary experience by working with MAXIMUS to develop a tool that provides real-time eligibility determination and enrollment.

On August 9, 2018, DHHS released the Medicaid managed care procurement, RFP 30-190029-DHB, seeking bids from organizations wishing to participate in Medicaid managed care as prepaid health plans (PHPs) that will provide integrated physical health, behavioral health, and pharmacy services. DHHS intends to award four statewide contracts and up to 12 regional contracts. The PHPs selected via this RFP will provide Standard Benefit Plans, which are the new mandatory Medicaid managed care plans for the general population to launch in mid-2019. In the third year, DHHS plans to launch behavioral health and intellectual/developmental disability (BH/IDD) Tailored Plans that will provide specialty services for specific populations excluded from enrollment in a Standard Benefit Plan. The BH I/DD Tailored Plans will serve individuals with severe behavioral health disorders or IDD. DHHS intends to issue a separate procurement for BH I/DD Tailored Plans but has not yet announced the schedule for that procurement. Until the BH/IDD Tailored Plans launch, the population with behavioral health 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).

Based on 2016 historical enrollment data for nearly 2.1 million beneficiaries, DHHS estimates that about 73% of current Medicaid beneficiaries will be eligible to enroll in the Year 1 Medicaid managed care Standard Plans. In Year 3, another 6% will be eligible for a BH/IDD Tailored Plan for duals and non-duals, or a plan for children in foster care. In Year 5, the remaining 10% for enrollment will include non-dual eligible beneficiaries receiving long-term services and supports and full duals not eligible for a BH/IDD Tailored Plan.

For more information, contact:

  • Media Relations, North Carolina Department of Health and Human Services, 2001 Mail Service Center, Raleigh, North Carolina 27699-2001; 919-855-4840; Fax: 919-733-7447; Email: news@dhhs.nc.gov
  • Lisa Miles, Senior Vice President, Investor Relations & Corporate Communications, MAXIMUS, 1891 Metro Center Drive, Reston, Virginia 20190; 703-251-8637; Email: lisamiles@maximus.com

On July 19, 2018, L.A. Care Health Plan, a large publicly operated Medicaid health plan that serves Los Angeles County, California, launched a physician recruitment initiative called “Elevating the Safety Net.” L.A. Care Health Plan has committed up to $31 million to the initiative.

The initiative will initially be comprised of three grant programs — medical school scholarships; a program to help with physician salary subsidies, sign-on bonuses and/or relocation costs; and a program for physician loan repayments. The goal is to relieve financial burdens on physicians initially interested in working in practices and safety net facilities that serve the underserved, including L.A. Care members.

On July 19, in a ceremony to launch the initiative, L.A. Care honored eight students who will be the first to receive full medical school scholarships. Four of the students will attend the David Geffen School of Medicine at UCLA and four will attend Charles R. Drew University of Medicine and Science. All of the students have expressed a strong desire to work in underserved communities.

For the physician salary subsidies, in early September 2018, L.A. Care Health Plan will release a request for application for safety net provider organizations. The selected organizations will receive grants of up to $125,000 to use for salary subsidies, sign-on bonuses, and/or relocation costs. The proposal deadline is scheduled for mid-October.

L.A. Care Health Plan is a public entity and community-accountable health plan serving more than two million residents of Los Angeles County. Its programs include Medi-Cal, L.A. Care Covered™, L.A. Care Cal MediConnect Plan, and PASC- SEIU Homecare Workers Health Care Plan.

For more information, contact: Cynthia Carmona, Senior Director of Safety Net Initiatives, L.A. Care Health Plan, 1055 W 7th Street, 5th Floor, Los Angeles, California 90017; 213-694-1250, ext. 4907; Email: ccarmona@lacare.org.

Between April 2017 and April 2018, the number of Medicare Advantage special needs plans (SNPs) increased about 10%, from 583 to 641; SNP enrollment rose about 12%, from 2,357,000 to 2,633,000. This includes SNPs for those individuals with chronic or disabling conditions, those residing in an institution (or residing in the community but have a similar level of need), and dual-eligibles.

These statistics were reported by the Medicare Payment Advisory Commission (MedPAC) in its June 2018 Data Book “Health Care Spending and the Medicare Program.” Section nine of the report is focused on Medicare Advantage.

Researchers for MedPAC used the Medicare Current Beneficiary Survey (MCBS), and information from the Medicare Board of Trustees to compare beneficiary groups with different characteristics. The goal was to provide data on national health care and Medicare trends in regards to spending, provider settings, profit margins, the Medicare Advantage program and prescription drug coverage.

Additional statistics include:

  • In 2018, about 64.3% of SNPs were for dual eligibles; 20.6% were for those with chronic or disabling conditions, and 15.1% were for beneficiaries receiving institutional care.
  • In 2018, the majority of SNP members (about 83.9%) were dual eligibles; 13.3% were beneficiaries with chronic or disabling conditions, and 2.8% were institutional consumers.
  • Total enrollment in SNPs has increased from approximately 0.9 million in 2007 to about 2.6 million in 2018.

For more information, contact: Medicare Payment Advisory Commission, 425 I Street NW, Suite 701, Washington, District of Columbia 20001; 202-220-3700.

Bishop Rehabilitation and Nursing Center in Syracuse, New York and Service Employees International Union (SEIU) local 1199 recently agreed on a wage incentive program to pay staff bonuses when the facility meets quality of care measures. SEIU represents the facility’s direct care staff. On July 18, 2018, the two organizations ratified an agreement where the facility said it will provide lump-sum increases concurrent to meeting quality of care benchmarks, such as the reduction of pressure ulcers, falls with injury, re-hospitalizations, and other quality indicators.

In the collective bargaining agreement, SEIU 1199 and Bishop Rehabilitation agreed to create a quality assurance and performance improvement (QAPI) committee of certified nurse’s aide (CNAs). The committee is tasked with improving resident care. Bishop Rehabilitation also agreed to provide tuition reimbursement for employees seeking to further their nursing education. SEIU 1199, United Healthcare Workers East, represents 6,500 health care workers in Central New York and over 400,000 total members throughout the East Coast.

Bishop Rehabilitation and Nursing is a 440-bed skilled nursing and rehabilitation facility currently operated by Vestracare. The facility was formerly known as James Square Health and Rehab and owned by River Meadows LLC. The New York State Attorney General’s Office had been investigating the former owner over poor care, and staffing shortages. Vestracare purchased the facility in December 2017 for $45 million and renamed it Bishop Rehabilitation and Nursing. It provides short term sub-acute care as well as long term placement.

Vestracare operates four nursing facilities in New York State: Bishop Rehabilitation & Nursing in Syracuse; Chautauqua Nursing & Rehabilitation in Dunkirk; Golden Hill Nursing & Rehabilitation Center in Kingston; and Susquehanna Nursing & Rehabilitation Center in Johnson City. The Vestracare website says a fifth, Roscoe Nursing & Rehabilitation Center, is opening soon.

For more information, contact:

  • Bishop Rehabilitation and Nursing Center, 918 James Street, #2503, Syracuse, New York 13203; 315-766-2477; Email: info@bishopcare.com; or Edward Farbenblum, Chief Executive Officer, Vestracare, 230 Hilton Avenue, Hempstead, New York 11550; 516-350-5551; Fax: 888-959-9402; Email: info@vestracare.com.
  • Allison Krause, Media Contact, 1199 SEIU United Healthcare Workers East, 250 S Clinton Street, Suite 200, Syracuse, New York 13202; 315-679-6032; Email: krause@1199.org; Mindy Berman, Media Contact for 1199 SEIU New York State, 518-229-0486; Email: mindyb@1199.org.

On July 12, 2018, the Centers for Medicare & Medicaid Services (CMS) announced plans for the Medicare Advantage Qualifying Payment Arrangement Incentive (MAQI) Demonstration to waive Merit-Based Incentive Payment System (MIPS) requirements for clinical professionals who participate sufficiently in certain Medicare Advantage organizations that involve taking on risk. The MAQI Demonstration will allow participating clinical professionals to have the opportunity to be eligible for waivers that will exempt them from the MIPS reporting requirements and payment adjustment for a given year if they participate to a sufficient degree in Qualifying Payment Arrangements with Medicare Advantage organizations. Under the Demonstration, clinical professionals will not have to have a minimum amount of participation in an Advanced Alternative Payment Models (APMs) with Medicare fee-for-service (FFS) in order to be exempt from the MIPS reporting requirements and payment adjustment for a year.

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) provides clinical professionals with two tracks for payment under Fee-for-Service Medicare: MIPS, which requires clinicians to report quality data to CMS and have their payment adjusted accordingly; and Advanced Alternative Payment Models (Advanced APMs), which require clinicians to take on risk for their attributed beneficiary health care spending. Some Medicare Advantage plans are developing innovative arrangements that resemble Advanced APMs. However, without this demonstration, physicians are still subject to MIPS even if they participate extensively in Advanced APM-like arrangements under Medicare Advantage.

On August 6, 2018, CMS began accepting applications from individual clinical professionals interested in participating in the five-year MAQI Demonstration. Applications will be accepted through September 6, 2018. The first performance period for the Demonstration will be 2018.

The full proposal was included in the 2019 Physician Fee Schedule proposed rule. CMS proposed regulations to effectuate the waivers contemplated under the MAQI Demonstration. CMS said details of the MAQI Demonstration will remain under development until the 2019 Physician Fee Schedule proposed rule is finalized. The Demonstration will test whether:

  • There is an increase in clinical professional participation in payment arrangements with Medicare Advantage organizations that meet the criteria of Qualifying Payment Arrangements.
  • Participating in Qualifying Payment Arrangements and Advanced APMs to the degree required to be eligible for the Demonstration Waiver incentivizes clinical professionals to transform their care delivery (assessed by interviews with participating clinical professionals).
  • Whether there is a change in utilization patterns among clinical professionals in the Demonstration.
  • If there are changes in utilization, how those changes affect Medicare Advantage plan bids.

Under current law, eligible clinical professionals may participate in one of two paths of the Quality Payment Program (QPP): MIPS or Advanced APMs. MIPS adjusts Medicare payments based on combined performance on measures of quality, cost, improvement activities, and advancing care information. Clinical professionals participating in an advanced APM can earn an incentive payment for sufficient participation in certain payment arrangements with Fee-for-Service (FFS) and, starting in the 2019 performance period, with a combination of those Medicare FFS arrangements and similar arrangements with other payers such as Medicare Advantage commercial payers, and Medicaid managed care. To participate in the Advanced APM path of QPP for a given year and earn an incentive payment, eligible clinical professionals must be determined to be Qualifying APM Participants (QPs); in addition to earning an APM incentive payment, QPs are excluded from the MIPS reporting requirements and payment adjustment.

The MAQI Demonstration will permit consideration of participation in “Qualifying Payment Arrangements” with Medicare Advantage plans that meet the criteria to be Other Payer Advanced APMs a year before the All-Payer Combination Option is available. Clinical professionals who participate will not be required to be QPs or Partial QPs, or otherwise meet MIPS exclusion criteria. However, if clinical professionals participate in one or more Advanced APMs with Medicare FFS, that participation will also be counted towards the thresholds that qualify participants for the waiver under this Demonstration from the MIPS reporting requirements and payment adjustment.

Demonstration participants who do not meet the thresholds to receive waivers from MIPS reporting requirements and payment adjustments for a given year may still continue participation in the Demonstration and will be notified with enough time to complete MIPS reporting for the year. The Demonstration will not grant QP status to participating clinicians; participating clinical professionals would still have to meet the thresholds for participation under the Medicare Option or All-Payer Combination Option in order to become QPs and earn the incentive payment.

PsychU reported on this topic in “CMS Announces Process For Medicaid APMs To Be Certified Under Medicare QPP,” which published on May 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: press@cms.hhs.gov.

A federal bill signed on July 30, 2018, delays for one year the federal Medicaid penalties for states that fail to require an electronic visit verification (EVV) system for personal care services (PCS). The penalty, a lower Medicaid federal matching rate, had been scheduled to go into effect on January 1, 2019. The Centers for Medicare & Medicaid Services (CMS) will delay implementation until January 1, 2020.

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 home health care services (HHCS) that require an in-home visit by a provider organization. The system must be able to electronically verify the following:

  • The type of service performed
  • The individual receiving the service
  • The date of the service
  • The location of service delivery
  • The individual providing the service
  • The time the service begins and ends

This applies to PCS provided under six authorities of the Social Security Act or a waiver and applies to HHCS provided under 1905(a)(7) of the Social Security Act or a waiver.

  • Section 1905(a)(24) state plan personal care benefit
  • Section 1915(c) home and community-based services (HCBS) waivers
  • Section 1915(i) HCBS state plan option
  • Section 1915(j) self-directed personal attendant care services
  • Section 1915(k) Community First Choice state plan option
  • Section 1115 demonstration projects

The Cures Act called for states to require EVV use for all Medicaid-funded PCS by January 1, 2019 and HHCS by January 1, 2023. States are subject to incremental FMAP reductions up to 1% unless the state has both made a “good faith effort” to comply and has encountered “unavoidable delays.” CMS began accepting requests for good faith exemptions on July 1, 2018.

In May 16, 2018, CMS issued an EVV guidance memo and responded to frequently asked questions. The legislation delaying EVV penalties, H.R. 6042 of 2018, directed CMS to convene at least one public meeting in 2018 for the purpose of soliciting ongoing feedback from Medicaid stakeholders on the May EVV guidance. The stakeholders should include State Medicaid directors, beneficiaries, family caregivers, individuals and entities who provide personal care services or home health care services, Medicaid managed care organizations, electronic visit verification vendors, and other stakeholders. The legislation directed CMS to communicate with such stakeholders regularly and throughout the implementation process in a clear and transparent manner to monitor beneficiary protections.

PsychU reported on this topic in “Ohio Rolls Out New Medicaid Electronic Visit Verification For Personal Care Programs,” which published on March 8, 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 July 26, 2018, the Washington State Health Care Authority (HCA) announced the names of the regional Medicaid managed care organization (MCO) plans to launch in 2019 and 2020. The MCOs were selected via a competitive bidding process available to the five existing Apple Health MCOs. The plans will include both physical health and behavioral health. Under integrated managed care, services are coordinated through a single health plan; previously the state carved-out state plan mental health and addiction treatment from the Apple Health plans.

Five regions will move to integrated managed care in January 2019: Greater Columbia, King, North Sound, Pierce and Spokane regional service areas. The remaining areas will move to integrated managed care in January 2020: Great Rivers, Salish, and Thurston-Mason. HCA began the shift to integrated Medicaid managed care in April 2016 when the first region, Southwest Washington (Clark and Skamania counties), went live. In January 2018, the North Central region (Chelan, Douglas, and Grant counties) went live. To implement integrated Medicaid managed care in the rest of the state, on February 15, 2018, HCA released RFP 2567 for Pierce County and the rest of the state’s regional service areas (RSAs). Proposals were due by April 12, 2018.

On May 24, 2018, HCA announced the apparently successful bidders for each region, as follows:

  • Greater Columbia: Amerigroup, Community Health Plan of Washington, Coordinated Care, and Molina.
  • King: Amerigroup, Community Health Plan of Washington, Coordinated Care, Molina, and UnitedHealthcare.
  • North Sound: Amerigroup, Community Health Plan of Washington, Coordinated Care, Molina, and UnitedHealthcare.
  • Pierce: Amerigroup, Coordinated Care, Molina, and UnitedHealthcare.
  • Spokane: Amerigroup, Community Health Plan of Washington, and Molina.
  • For the Great Rivers, Salish, and Thurston-Mason regions that go live in January 2020, the apparently successful bidder’s list cited Amerigroup, Molina, and UnitedHealthcare as the MCOs.

In the two regions that are already live, HCA is adding a new county to each effective January 2019. In the Southwest Washington region, Klickitat County will be added, and a new MCO, Amerigroup, will be added to serve the entire region as well as the previously selected MCOs, Community Health Plan of Washington and Molina. In the North Central region, Okanagan County will be added; it will be served by the three MCOs previously selected for the region: Amerigroup, Community Health Plan of Washington, and Molina.

The selected MCOs for each region hold two contracts. One is for all Medicaid state plan services for Medicaid populations not excluded from Medicaid managed care. The other is for behavioral health wraparound services, which includes non-Medicaid services for Medicaid beneficiaries, such as services funded solely by the state legislature, with no federal matching funds. Through this second contract, the MCOs provide Medicaid behavioral health services only (BHSO) to a subgroup of Medicaid beneficiaries who are not eligible for managed care medical services. These populations are dual eligibles, children in foster care, people living in an institution for mental disease (IMD), and medically needy spenddown enrollees, pregnant women who are not citizens of the U.S., and individuals with other health coverage, but eligible for Medicaid BHSO.

Because the managed care plans integrate Medicaid behavioral health services, the state’s public behavioral health system has been redesigned so that each region will contract with a behavioral health administrative services organization (BH-ASO) to administer services provided without regard to insurance coverage and other services that operate more effectively when administered on a regional basis. The BH-ASO regions align with the regional integrated Medicaid managed care plan regions. Some of the services administered by the regional BH-ASO are Medicaid reimbursable when provided to Medicaid beneficiaries. The BH-ASO services include the following:

  • A 24/7 regional crisis hotline
  • Mental health crisis services, including dispatch of a mobile crisis outreach team staffed by mental health professionals and/or Designated Crisis Responders (DCRs) and certified peer counselor
  • Administration of the Involuntary Treatment Act (ITA), including reimbursing the county for court costs associated with ITA; availability of DCRs to conduct assessments and emergency detentions; and availability of DCRs to file petitions for detentions and provide testimony for ITA services
  • Operation of a behavioral health Ombudsman

In the Southwest and North Central regions, HCA selected Beacon Health Options as the BH-ASO following a competitive procurement process. To select a BH-ASO for the remaining seven regions HCA offered each current regional behavioral health organization the first right of refusal to function as BH-ASO. The Pierce County regional behavioral health organization declined, so on March 22, 2018, HCA released RFP 2669 to select a BH-ASO for Pierce County. This procurement was also to select a BH-ASO for the other regions if the regional behavioral health organization declines or is unable to meet the contractual obligations.

On June 13, 2018, HCA announced that Beacon Health Options was the apparently successful bidder. The contract will be in negotiation through September 1, 2018 and is slated to go live in Pierce County on January 1, 2019. HCA has not announced further details about which other regions might be included in the contract.

PsychU reported on this topic in “Washington Medicaid Moving To Integrated Care,” which published on April 11, 2018.

PsychU reported on this topic in “Washington State To Move Medicaid Addiction Treatment To Managed Care & Carve-In Mental Health Services,” which published on September 4, 2015.

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.

This week, I’ve heard a lot of conversations about value-based reimbursement (VBR) that have ranged from, “We don’t have the ability to track, let alone report, these types of performance measures”, to “we’re as ready as we are ever going to be.” But the big question is what should executive teams be doing now to ensure that their organization is positioned and prepared for VBR, even if they don’t have risk-based contracts yet. OPEN MINDS advisory board member Ken Carr answered that question at a recent institute in his seminar, “How To Prepare For & Succeed With Value-Based Reimbursement.” Mr. Carr shared three steps to keep the momentum moving forward in preparation for value-based payment.

First, he suggested that provider organization executive teams need to ensure that their strategic plan includes initiatives that will move the enterprise toward value-based reimbursement readiness. If you’re doing scenario-based planning, this is likely already part of your planned scenarios for the future. In particular, this means focusing on three aspects of readiness:

  1. Strengthening relationships with payers and health plans—Build trust with payers by delivering results in fee-for- service (FFS) contracts and pilot projects is an important way to develop working relationships that will be needed later to tackle larger opportunities together.
  2. Improve revenue cycle effectiveness—With one foot still in FFS and the other stepping toward VBR, revenue cycle management is Organizations need to show they can do FFS well before adding value-dependent payments to the equation.
  3. Implement the state-of-the art technology needed to create a data-driven culture—Gathering relevant data, analyzing that data, and adapting services based on the data to achieve outcome goals is essential to sustainability with VBR.

Second, Mr. Carr recommended that executive teams need to focus on assessing the talents and culture of their team. All staff must understand and embrace their role in delivering quality services with the most efficient use of resources. Talent, or the lack of talent, is what sets one organization apart from another. It is a key ingredient of organizational brand management and competitiveness and comes down to two essential components:

  1. Insure you have the right staff, and that your staff have the right skills—The skills necessary under a value-based reimbursement business model are different from a FFS model. Focus on customer service, engagement and activation, motivation to achieve outcomes, and tech skills to understand and use data are all important skill sets to master.
  2. Attract the best talent—Inbound marketing (based on online marketing reputation) will assist in the process of attracting, engaging, converting, and tracking a talent pool of potential staff.

And finally, Mr. Carr outlined the need for strategy execution, which puts the strategic alignment decisions and talent together to actually move the organization to readiness. Executing your plan to move VBR forward has three key components:

  1. Educate all staff on the role of value-based reimbursement—It is essential for staff to understand the relationship between customer service and financial results; and how their role within the organization helps to create value for consumers, payers, and the organization. It also ensures ongoing focus on the move to VBR and prevents staff from straying away to other perceived priorities.
  2. Ground all project planning “in reality”—A plan without implementation details is a plan that will A strong plan should identify what resources will be needed, where those resources will be obtained, and how they will be managed.
  3. Construct dashboards around the project plan—Continuous monitoring of key metrics will enable the organization to monitor whether it is achieving the key readiness initiatives on anticipated timeline. Variations identified in the dashboards will provide opportunity to adapt activities before losing momentum.

Mr. Carr summed up the challenge of moving to value-based reimbursement care, saying, “Moving to a place of readiness for value-based purchasing is a complex process that involves multiple changes in the organization—culture, staffing, workflows, and processes. Taking time to integrate the plan into strategy, assess and onboard the right talent, and stay focused on execution will be necessary to move the organization to readiness.”

For more on the recent developments in value-based reimbursement, check out our coverage:

  1. Pennsylvania Medicaid Moving To Value-Based Reimbursement For Behavioral Health
  2. 46% Of Health Care Leaders Expect Value-Based Reimbursement To Increase Profitability
  3. Massachusetts Medicaid Proposes Changes To One Care Duals Demo Program

Successful consumer engagement is a strong predictor of retention and ongoing participation in treatment. Engaged consumers take action to become better informed and more proactively involved in decisions and behaviors that affect their health, insurance coverage, and health care. Medicaid health plans are industry leaders in adopting an array of consumer engagement strategies according to findings from a new report, Trends In Behavioral Health: A Reference Guide On The U.S. Behavioral Health Financing & Delivery System (The Guide). The overall industry average across all health plans is low, with no more than 21% adopting any one consumer engagement innovation. The report is the result of a survey featuring feedback from over 4,000 health care professionals, conducted by OPEN MINDS and sponsored by Otsuka America Pharmaceutical, Inc. and Lundbeck, LLC.

Despite lackluster overall adoption rates, health plans have invested in a wide range of strategies to increase the engagement of consumers with behavioral health disorders. The consumer engagement strategies surveyed included the use of online tools, recovery management tools, mobile apps, and shared decision-making initiatives.

“Consumer engagement is a rapidly evolving area in the behavioral health space due to the latest technology advancements,” says Princess Little, Marketing Product Manager, at Cigna Corporation. “I believe we are seeing quite a bit of experimentation to understand the right mix of technology in order meet the unique needs of the health plan’s consumers.”

Centripetal. (2017). Trends in behavioral health: A reference guide on the US behavioral health financing & delivery system. Rockville, MD: Otsuka America Pharmaceutical, Inc. Retrieved from PsychU.org.

According to The Guide, Medicaid health plans have moved beyond experimentation and moved into full-fledged adoption of consumer engagement strategies. Medicaid plans have the greatest overall current users of innovative engagement strategies – with more than 60% of plans reporting the use of online engagement tools, shared decision