Short­changed providers wary of states'de­sire to con­tract with net­works for care to poor

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At least 11 states are adding ini­tia­tives re­sem­bling ac­count­able care or­ga­ni­za­tions to their Med­i­caid pro­grams. And many providers who shied away from the Medi­care ACO mod­els are in­ter­ested in the state ver­sions, many of which lack sanc­tions for providers who fall short of qual­ity and cost bench­marks.

State Med­i­caid ACOS cover a broad range of ap­proaches that re­flect the di­ver­gent pri- vate-sec­tor ar­range­ments and pay­ment sys­tems also re­ferred to as ACOS. The Med­i­caid ver­sions in­clude some that state of­fi­cials call ACOS but lack key com­po­nents of the fed­eral ACO mod­els, as well as oth­ers that don’t use the term but con­tain many core ACO fea­tures, such as ty­ing provider pay­ments to pa­tient out­comes.

That may be be­cause the la­bel comes with both hype and a bur­den, said Xiaoyi Huang, as­sis­tant vice pres­i­dent for pol­icy at the National As­so­ci­a­tion of Pub­lic Hos­pi­tals and Health Sys­tems. “Any­one can call some­thing an ACO and not ac­tu­ally be it, or on the flip side no one wants to call it an ACO and they will call it their own thing,” she said. “You just have to fig­ure out if that fits into this ac­count­able care model.”

Nei­ther fed­eral nor state health­care of­fi­cials know the ex­act num­ber of states ex­per­i­ment­ing with Aco-type pro­grams, but key lead­ers from both lev­els of govern­ment are closely fol­low­ing the is­sue. An­other gauge of state in­ter­est is that 13 states have sub­mit­ted Med­i­caid amend­ments to the CMS to im­ple­ment the new med­i­cal home model, which in­clude aspects of ACOS. Four such amend­ments have re­ceived ap­proval so far, fed­eral of­fi­cials said.

State in­ter­est in adding the con­cept to con­trol spend­ing growth in their in­creas­ingly costly Med­i­caid pro­grams has surged within the past cou­ple of years, ac­cord­ing to health pol­icy ex­perts.

“States are try­ing to fig­ure out what it means for them and what it means for their

ex­ist­ing sys­tems and where they want their sys­tems to go,” said Kath­leen Nolan, di­rec­tor of state pol­icy and pro­grams at the National As­so­ci­a­tion of Med­i­caid Di­rec­tors.

Part of the in­creased in­ter­est may stem from the national at­ten­tion the fed­eral Medi­care ACO pro­grams have re­ceived. Fed­eral health of­fi­cials, while not specif­i­cally urg­ing ACOS, have con­sis­tently pushed states to in­sti­tute more provider ac­count­abil­ity and move their jointly fed­eral- and state-funded Med­i­caid pro­grams away from the fee-forser­vice model, those of­fi­cials said.

“We’re ac­tively en­gaged with states and have been for quite a while to get states in­ter­ested in it, and many states are by them­selves in­ter­ested in it,” said Cindy Mann, deputy ad­min­is­tra­tor at the CMS and di­rec­tor of the Cen­ter for Med­i­caid and CHIP Ser­vices. “We’re work­ing on broader guid­ance about how those con­cepts fit into the Med­i­caid pro­gram.”

Many evolv­ing de­liv­ery and pay­ment mod­els at­tempt to make providers ac­count­able for their pa­tients’ health sta­tus, but few do so as ex­plic­itly as ACOS. Med­i­cal homes, for ex­am­ple, of­fer up­front pay­ments to physi­cians to pro­vide additional ser­vices, such as co­or­di­nat­ing care with other providers. But such preACO ini­tia­tives usu­ally lack mech­a­nisms to tie providers’ pay to their pa­tients’ on­go­ing clin­i­cal out­comes—one of the hall­marks of the fed­eral ACO model.

Ap­proaches vary

One Med­i­caid pro­gram that is build­ing an Aco-like struc­ture off a long­stand­ing med­i­cal home model is in North Carolina. The state Leg­is­la­ture re­cently added Aco-like fea­tures to the Med­i­caid Com­mu­nity Care of North Carolina pro­gram, which dates from the 1990s and as­signs a sin­gle pri­mary-care provider to co­or­di­nate each ben­e­fi­ciary’s care. The state will add shared sav­ings and risk ad­just­ment to the pro­gram, un­der the new state laws, ac­cord­ing to national health pol­icy ex­perts fol­low­ing the plans.

Other states are mod­i­fy­ing their Med­i­caid man­aged-care pro­grams into Aco-type pi­lots. For ex­am­ple, in Jan­uary, Hen­nepin County, Min­nesota, launched a two-year ex­pan­sion of its man­aged-care pro­gram that will pro­vide ex­tra provider pay­ments for up to 10,000 Med­i­caid ben­e­fi­cia­ries. The ex­tra fund­ing will al­low longer ex­am­i­na­tions of pa­tients and in­creased co­or­di­na­tion of care, in­clud­ing men­tal health and sub­stance­abuse treat­ment.

How­ever, the county rather than providers will be sub­ject to re­duced pay­ments for fail­ing to im­prove clin­i­cal out­comes. “The county is at risk al­ready for many of the ser­vices that these pa­tients may need; some are al­ready re­ferred to four dif­fer­ent county case work­ers from dif­fer­ent agen­cies,” said Larry Kryza­niak, chief fi­nan­cial of­fi­cer at the Hen­nepin County Med­i­cal Cen­ter, Min­neapo­lis, which is par­tic­i­pat­ing in the pro­gram.

In an­other ini­tia­tive viewed as an ACO­like model, a Colorado Med­i­caid pro­gram launched in mid-2011 gives providers reg­u­lar bonus pay­ments for of­fer­ing ex­tra care to pa­tients. That pro­gram also plans to add bonus pay­ments to providers whose pa­tients’ out­comes im­prove, and providers in­volved hope it will evolve into a global pay­ment sys­tem that pays them a fixed sum for all the care a pa­tient re­ceives in­stead of fee-for-ser­vice pay­ments.

The Den­ver Health Med­i­cal Plan, within which about 70% of the ben­e­fi­cia­ries are Med­i­caid en­rollees, be­gan par­tic­i­pat­ing in Colorado’s Aco-like ini­tia­tive—called the Ac­count­able Care Col­lab­o­ra­tive—this month be­cause it funded more com­pre­hen­sive care than the plan’s more than 100 pri­mary-care physi­cians are tra­di­tion­ally paid to pro­vide, said Leann Dono­van, ex­ec­u­tive di­rec­tor of the plan. “It’s also an op­por­tu­nity for us to col­lab­o­rate with other providers and the state on best prac­tice ini­tia­tives for this pop­u­la­tion,” she said.

Sim­i­lar to other Med­i­caid ACO pro­grams, the Colorado ini­tia­tive does not pe­nal­ize providers for poor pa­tient out­comes. In­stead, the re­gional en­ti­ties that ad­min­is­ter the pro­gram can face such cuts un­der the man­aged­care pro­gram.

Sev­eral states have not yet im­ple­mented their Aco-like Med­i­caid changes but are ex­pected to com­plete their plans soon.

One of the most ag­gres­sive is part of a broader over­haul un­der dis­cus­sion by the gov­er­nor and leg­isla­tive lead­ers in Mas­sachusetts. The Mas­sachusetts Med­i­caid’s pay-for­per­for­mance pro­grams al­ready tie up to 2% of provider pay­ments to pa­tient-out­come mea­sures, and the com­ing changes—which could be im­ple­mented by this sum­mer—are ex­pected to re­quire global pay­ments that in­crease providers fi­nan­cial risk if their Med­i­caid pa­tients’ health does not im­prove.

Utah Gov.gary Her­bert,ar­riv­ing to de­liver his bud­get plan last month,rec­om­mended spend­ing $670,000 to ad­min­is­ter Med­i­caid ACOS.


New Jersey Gov. Chris Christie, who wants to save $300 mil­lion in Med­i­caid spend­ing with a pend­ing waiver that in­cludes the use of ACOS to man­age costs, called Med­i­caid “the def­i­ni­tion of an out-of­con­trol pro­gram” in his bud­get ad­dress last year.

The Den­ver Emer­gency Cen­ter for Chil­dren is a part of Den­ver Health Med­i­cal Plan, which be­gan par­tic­i­pat­ing this month in a Med­i­caid pro­gram that in­cor­po­rates ACO com­po­nents.

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