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State Innovations in Value-Based Care: ACOs and Beyond

Rachael Matulis, Senior Program OfficerNational Academy of Medicine Value Incentives & Systems Innovation CollaborativeMay 18, 2017

© 2017 Center for Health Care Strategies

About the Center for Health Care Strategies

Non-profit policy center dedicated to improving the health of low-income Americans

CHCS Projects Focused on Advancing Delivery System and Payment Reforms

• Medicaid Accountable Care Organization (ACO) Learning Collaborative

• State Innovation Model• Innovation Accelerator

Program (IAP) for Value-Based Payment (VBP)

• Delivery System Reform Incentive Payment (DSRIP) VBP Roadmaps

Alternative Payment Model (APM) Framework

Leve

l of f

inan

cial r

isk

Degree of care, provider integration, and accountability

Category 1:

Category 2:

Category 3:

Category 4: Goal is to shift U.S. health care system toward payment models in Categories 3 and 4. In 2016, ≈18% of Medicaid payments fell in these categories.

Fee-for-service payments not link to quality/value

(e.g., traditional FFS, DRGs)

Alternative payment models built on fee-for-service payment

(e.g., shared savings/risk)

Fee-for-service payments linked to quality/value

(e.g., pay-for-performance)

Population-based payment

(e.g. global payments)

4Source: Health Care Payment Learning & Action Network (LAN) APM Framework, available at: https://hcp-lan.org/workproducts/apm-whitepaper.pdf

What is the Current ACO Market?

Rapid expansion across payers

Over 25 million covered lives

Widespread penetration

Over 800 ACOs in the United States

Commercial: 17.2 million Medicare: 8.3 million Medicaid: 2.9 million

ACO service areas in all 50 states and the District of Columbia

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Source: Health Affairs: Accountable Care Organizations in 2016: Private And Public-Sector Growth And Dispersion. http://healthaffairs.org/blog/2016/04/21/accountable-care-organizations-in-2016-private-and-public-sector-growth-and-dispersion/ .

Medicaid ACO models vary greatly, but we generally see three models:

What Does an ACO Look Like in Medicaid?

Regional/Community Partnership-driven

Regional/community organizations form care teams with providers and receive payments

MCO-driven

MCOs retain financial risk but implement new payment model and partnerships with providers

Provider-driven

Provider establishes collaborative networks and assumes accountability for cost of care

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Current Medicaid ACO Landscape

WY

WI

WV

WA

VA

VT

UT

TX

TN

SD

SC

RIPA

OR

OK

OH

ND

NC

NY

NM

NJ

NH

NVNE

MT

MO

MS

MNMI MA

MD

ME

LA

KYKS

IAINIL

ID

GA

FL

DC

DE

CT

COCA

ARAZAL

States pursuing Medicaid ACO programs

States with active Medicaid ACO programs

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In 2013, MN launched its Medicaid ACO program, Integrated Health Partnerships (IHPs)

Key IHP program features include: » Provider-led with two tracks: (1) larger systems providing inpatient and

outpatient care; and (2) smaller systems not integrated with a hospital

» Shared savings payment arrangement, with upside/downside risk for larger systems and upside only for smaller systems

» 21 IHPs oversee care for 465,000 enrollees, approximately 45% of MN Medicaid population

Accomplishments:» Estimated savings of $156 million compared to trended targets, over

first three years; IHPs received 85%+ of dollars at risk for quality

State Example: Minnesota

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In 2012, OR launched Coordinated Care Organizations (CCOs), a type of Medicaid ACO

Key CCO program features include: » Payer-led organizations with governing boards that include Medicaid

members, providers, and local government

» Global budgets with a fixed rate of growth to cover physical, oral, behavioral health; flexibility to spend funds on “health-related” services

» 16 CCOs provide care for nearly 1 million enrollees, approximately 90% of OR’s Medicaid population

Accomplishments:» Estimated 23% decrease in emergency department visits; cost growth

below national average; 15 of 16 CCOs earned 100% of quality bonuses

State Example: Oregon

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Future of Medicaid ACOs

Version 2.0Version 1.0Fee-for-service payment models (shared savings or P4P) Capitated or global payments

Physical health only Behavioral health, LTSS, dental, pharmacy, social services

Medicaid only Multi-payer

Many quality measures Fewer, more aligned quality measures

Payment tied to quality reporting / performance on process measures

Payment tied to quality outcomes and care coordination metrics

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Other Innovative State Approaches to Advance VBP

Medicaid ACOs are just one of many types of delivery system and payment reforms being implemented or planned by states

State Example: Tennessee’s Health Care Innovation Initiative

Primary Care Transformation

Episodes of Care

Long-Term Services and Supports

Patient Centered Medical Homes

Tennessee Health Link for Individuals with Serious Mental Illness

20 retrospective episodes of care in place

75 episodes of care designed by 2020

Quality and value-adjusted payments for nursing facilities and home and community-based services

12 Source: Adapted from https://tn.gov/assets/entities/hcfa/attachments/IntroductionEpisodes.pdf

In general, lack of evidence on payment reform initiatives in Medicaid » Only 17 of 355 payment reform evaluations identified through Duke’s

“Payment Reform Evidence Hub” focused on Medicaid

However, early evidence indicates that a variety of state VBP initiatives have been successful» Reported improvements in quality and cost performance in both

Colorado and Oregon’s Medicaid ACO models (McConnell et al, JAMA Internal Medicine, 2017)

» 7 percent relative reduction in Oregon’s CCO expenditures compared to Washington state, primarily attributable to reductions in inpatient use (McConnell et al, Health Affairs, 2017)

» Tennessee reported aggregate savings of $6.2 million in 2015 for three episodes of care (perinatal, acute asthma exacerbation, and total joint replacement)

What Does the Evidence Tell Us?

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State interest in VBP continues to grow, with focus on…

• Implementation of VBP through managed care contracting

• Integrating long-term services and supports, behavioral health, and social determinants into VBP

• Alignment with MACRA

Visit CHCS.org to…

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Learn about cutting-edge efforts to improve care for Medicaid’s highest-need, highest-cost beneficiaries

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McConnell, K. John, Stephanie Renfro, Benjamin KS Chan, Thomas HA Meath, Aaron Mendelson, Deborah Cohen, Jeanette Waxmonsky, Dennis McCarty, Neal Wallace, and Richard C. Lindrooth. "Early Performance in Medicaid Accountable Care Organizations: A Comparison of Oregon and Colorado." JAMA Internal Medicine 177, no. 4 (2017): 538-545.

McConnell, K. John, Stephanie Renfro, Richard C. Lindrooth, Deborah J. Cohen, Oregon's Medicaid Reform And Transition To Global Budgets Were Associated With Reductions In Expenditures Health Affairs 36, no.3 (2017):451-459. doi: 10.1377/hlthaff.2016.1298.

M. McClellan, R. Richards, and Mark Japinga. “Evidence on Payment Reform: Where Are The Gaps?” Health Affairs Blog (April 25, 2017). Available at: http://healthaffairs.org/blog/2017/04/25/evidence-on-payment-reform-where-are-the-gaps/

Oregon Health Authority. Oregon’s Health System Transformation: 2015 Mid-Year Report. January 20, 2016. Available at: https://www.oregon.gov/oha/Metrics/Documents/2015%20Mid-Year%20Report%20-%20Jan%202016.pdf

Resources

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