State of Minnesota. Multi-payer Advanced Primary Care Practice Demonstration Application

Transcription

1 State of Minnesota Multi-payer Advanced Primary Care Practice Demonstration Application Minnesota Department of Health Minnesota Department of Human Services August 17, 2010

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3 Table of Contents A. Background on the State Reform Initiative... 1 B. Problem Statement... 6 C. Description of the State Reform Initiative... 9 D. Operating Structure E. Evidence Supporting Expectation of Budget Neutrality F. Evaluation Plan G. Commitment to Cooperate in Evaluation H. Limitation on Participation in Other Medicare Demonstrations APPENDIX A APPENDIX B APPENDIX C APPENDIX D APPENDIX E APPENDIX F

4 A. Background on the State Reform Initiative 1. Authority and Historical Background on the State Initiative Minnesota s state initiative is conducted under the specific statutory authority of the Minnesota Department of Health (MDH) and the Minnesota Department of Human Services (DHS). This authority stems from a law passed by the Minnesota Legislature and signed by Governor Tim Pawlenty in May 2008 that, among other components, established health care homes in the state of Minnesota. The law includes components focused on: Population health Market transparency and enhanced information Care redesign and payment reform These components, along with supporting activities in consumer engagement, e-health, administrative simplification and others, work together to create a comprehensive approach to health reform that aims to fulfill goals based on the Institute for Healthcare Improvement s Triple Aim : to simultaneously improve the health of the population, the patient/consumer experience and the affordability of health care. The health care homes initiative is a cornerstone of the 2008 law. While the term medical home is more common, Minnesota s Legislature specifically chose to name this transformation of primary care health care homes as a way to acknowledge a move away from a purely medical model of health care, with a focus on linking primary care with preventive and community services. Minnesota s initiative showcases a redesign of both care delivery and payment through the following components: Statewide system of provider certification, with practice transformation supported by a statewide learning collaborative. Multi-payer payment system, with reimbursement stratified by patient complexity. Emphasis on evaluation and outcomes measurement, with an expectation of budget neutrality and provider recertification based on outcomes. Focus on patient- and family-centered care, with consumers involved in both certification site visits and quality improvement efforts. The groundwork for Minnesota s health care homes initiative and the entire 2008 health reform law began in 2007, with the efforts of both a a governor-appointed task force and a legislative commission. Governor Pawlenty s Health Care Transformation Task Force and the Legislative Commission on Health Care Access both published reports in early 2008 that included recommendations to: Improve population health Better coordinate care for those with chronic and complex health conditions Make advances in coverage - 1 -

5 Improve transparency Lower administrative cost Better involve the patient and individual Reform how we pay for health care These recommendations led to the development of legislation in the 2008 session that ultimately became the health reform law. The bill went through numerous legislative committee hearings before it was passed and signed into law. The bill also built on prior legislation, including medical home legislation that was first passed by the Minnesota Legislature in 2007 and applied only to very complex fee-for-service public program enrollees. The 2008 health reform law was the outgrowth of years of work in Minnesota by policymakers and health care organizations, which meant that Minnesota started its reform efforts from a strong base. For example, Minnesota has one of the lowest uninsurance rates in the nation, with a historically strong employer base (this remains the case, although the recent economic recession has had an adverse impact on uninsurance rates in the state). At the same time, Minnesota consistently ranks as one of the healthiest states in the nation. Minnesota also has a long history of collaboration in the health care delivery system. The state has a unique health plan market that is largely non-profit, as well as a high concentration of large, integrated multi-specialty group medical practices and active large purchasers. Evidence of Minnesota s collaborative culture comes from non-profit organizations such as the Institute for Clinical Systems Improvement (ICSI) and Minnesota Community Measurement (MNCM). ICSI was established in 1993 by HealthPartners, Mayo Clinic and Park Nicollet Health Services; in 2002 it moved to sponsorship by all health plans in the state and its membership increased to include organizations with 80 percent of the physicians in the state. Its purpose is to help improve patient care in Minnesota through collaboration and innovations in evidence-based medicine. The Minnesota Council of Health Plans launched the Minnesota Community Measurement Project in 2002, after health plans saw an opportunity to complement ICSI s efforts by working together to create public performance reports at the medical group level and now at the individual clinic level. Both organizations continue to work closely with the state as it implements the components of the 2008 health reform law. The 2008 health reform law also created a body that reviews the progress of implementation. This 16-member Health Care Reform Review Council meets quarterly to discuss and review the implementation of specific parts of the law, including the health care home, quality measurement and provider peer grouping provisions. 2. Participation of Private Insurers Private health plans in Minnesota (including Blue Cross Blue Shield/Blue Plus of Minnesota, HealthPartners, Medica, Metropolitan Health Plan, PreferredOne, Sanford Health Plan and UCare) have been active partners in the development and implementation of health care homes (HCH), serving on steering committees and work groups at a number of levels to create the multi-payer system of provider certification, payment and evaluation. Minnesota s insurers have - 2 -

6 a strong history of commitment to innovative and collaborative payment reform efforts, such as the ICSI-led Depression Improvement Across Minnesota, Offering a New Direction (DIAMOND) depression care management program 1. The 2008 HCH law requires that, in addition to Medicaid and state public programs, consistent care coordination payment be made to certified health care homes for all fully insured products, as well as the state employee group insurance program (SEGIP). According to the most recent data available from MDH s Health Economics Program 2, these private insurance populations touched by the state law total 28.4 percent of Minnesotans. The remainder of the privately insured population in the state (40.6 percent of Minnesotans) is composed of self-insured groups that are regulated by federal ERISA law and thus not included in the scope of the state legislation. There is significant interest in participating in the HCH initiative among these purchasers of health care, and state government staff are working with employers to provide education and develop strategies to encourage the integration of HCH payments into insurance products 3. As illustrated in FIGURE 1 below, with a relatively modest assumption that 15 percent of the self-insured market will participate by the end of the MAPCP demonstration period, the majority of private insurers are expected to make payments along with Medicaid and (if this proposal is accepted) Medicare. FIGURE 1: Minnesota Statewide Insurance Coverage - Projected Participation in the HCH Initiative Uninsured, 7.2% MCHA (High Risk Pool), 0.5% Self-Insured: Remainder, 32.8% Medicare Advantage, 6.3% Medicare FFS, 7.7% Self-Insured: Estimated Voluntary Participation, 5.8% SEGIP (State Employees), 2.0% Fully Insured, 26.8% Minnesota Health Care Programs (incl. Medicaid), 10.8% Source: Adapted from MDH Health Economics Program, Medicare enrollment data and SEGIP enrollment data Similarly, DHS, MDH and the Minnesota Department of Commerce will be working with Medicare Advantage (MA) plans to identify barriers and explore incentives to encourage the adoption of HCH payments

7 Precise revenue numbers by private payer are challenging to collect. In 2008 patient revenues at Minnesota s primary care clinics totaled approximately $672,960,407, according to MDH s Health Economics Program. Some $378,931,358, or 56.3 percent, came from commercial/private insurers. In the same year Minnesota s multi-specialty clinics had patient revenues of $5,564,036,896. About $3,547,898,968, or 63.8 percent, of those revenues came from commercial/private insurers. (It is important to note that the multi-specialty clinics include both primary care and specialty care; the above revenues are for all of those services, not just for primary care.) 3. Participation by Medicaid Along with MDH, DHS (Minnesota s Medicaid agency) has led the statewide development of the HCH initiative and is also responsible for implementing it across the Minnesota Health Care Programs (MHCP), including Medical Assistance (Medicaid). DHS will continue to lead stakeholder efforts to evaluate and refine the tiered payment methodology (described below in section C7) and partner in outcomes evaluation. As illustrated in FIGURE 1 above, the MHCP enrollees constitute roughly 11 percent of Minnesota s population. Discounted by the expected rate of clinic certification over time, the state expects a total of 446,102 MHCP enrollees to participate in the HCH initiative during the three years of the MAPCP demonstration (CY ). About 70,180 of these enrollees, or 20 percent of the Medicaid total 4, are expected to be dually-eligible for both Medicare and Medicaid, and 375,922 are eligible for MHCP only. Precise Medicaid revenue figures for primary care sites are challenging to collect. According to MDH s Health Economics Program, Minnesota public program revenue at primary care clinics totaled approximately $105,145,445, or 15.6 percent of the total revenue for those clinics. In the same year, multi-specialty clinics had $324,438,731 in revenue from Minnesota public programs about 5.8 percent of their total revenue. (As stated above, it is important to note that the multispecialty clinics include both primary care and specialty care; the above revenues are for all of those services, not just for primary care.) 4. Support by Primary Care Physicians Primary care physicians have been extremely supportive of Minnesota s HCH initiative. For example, primary care physicians and members of their associations have participated on HCH work groups that developed certification standards, outcomes measures, the payment methodology and educational resources. In 2009 MDH contracted with a consortium of primary care associations the American Academy of Pediatrics, Minnesota Chapter, Minnesota Academy of Family Physicians (MAFP), MAFP Foundation, the American College of Physicians, Minnesota Chapter and Stratis Health (the Minnesota Medicare QIO) on an assessment of clinic and consumer readiness for HCH implementation in Minnesota. MDH has also contracted with the American Academy of Pediatrics, Minnesota Chapter, and MAFP on 4 -

8 projects to build 5 statewide capacity for HCHs. This project has included mini-grants, workshops, conferences and other educational tools. FIGURE 2 illustrates the geographic spread of the HCH initiative across Minnesota by noting all of the areas that have participated in these training and education components to learn more about and prepare for the certification process. FIGURE 2: Map of Providers Involved in HCH Trainings, Surveys and Mini-Grants Participants in Minnesota health care home (HCH) training, surveys and mini-grants by zip code of participant (when available), March 2009 to June 2010 Source: Primary Care Coalition, including MN Academy of Family Practice, MN Chapter of the American Academy of Pediatrics and the MN Chapter of the American College of Physicians Individual provider participation in HCHs is voluntary. Providers who choose to be certified as a HCH must meet a set of rigorous standards to be certified and then must continue to meet specified outcomes in order to be recertified. Interest among providers in becoming HCHs appears to be high. In the statewide capacity assessment mentioned above, the state surveyed 707 primary care clinics (internal medicine, family practice and pediatrics) across Minnesota to gather input, and 373 clinics completed the survey. The majority of these clinics (272, or 73 percent), self-reported that they had already implemented some HCH components in their practices. Of the 12 percent of respondents who indicated they did not have some of the components of HCHs already implemented in their clinic, 72 percent reported they had considered implementing HCH concepts. (Additional letters of support from primary care physicians are available in APPENDIX A.)

9 B. Problem Statement The same key health care problems that APC/medical home efforts across the country are intended to address lack of coordination of care for co-morbid chronic conditions, uneven quality of care and poor value - are prevalent in care delivery for Minnesota s Medicare population. For MAPCP-eligible Minnesotans and the delivery system that serves them, these systemic challenges are exacerbated by two key factors: the disproportionate burden of chronic conditions in Medicare-eligible populations and the coming demographic age wave. Nature of the Problem Similar to other parts of the country, Minnesota is struggling with rising rates of obesity, heart disease, diabetes and tobacco-related illness. As a result, the state s health care costs have skyrocketed over the past several years. This, combined with the recent economic challenges facing our state and nation, has resulted in an erosion of employer-based coverage and an increase in demand for and expense to government programs. Medicare expenditures nationwide nearly doubled from $222 billion in 2000 to $432 billion in Likewise in Minnesota, health care spending has more than doubled, from about $16 billion in 1998 to about $35 billion in The Minnesota Department of Health (MDH) estimates that, if left unchecked, health care costs could double again in the next 10 years 7. Payers and policymakers agree that current rates of growth are unsustainable. Despite spending $35 billion per year on health care, the quality of care that Minnesotans receive is uneven. Variation in optimal care is significant from provider to provider, and major health disparities exist not only between public program enrollees and commercial patients, but also between racial and ethnic groups. An often-cited reason for the higher levels of spending is our reimbursement system that rewards more care, increased capacity and high-margin treatments and has little focus on value. Likewise, providers point to a fragmented system that has resulted in a lack of support for improvement, care management and coordination functions. Extent and Magnitude of the Problem The prevalence of chronic disease, combined with system fragmentation and Minnesota s demographic age wave will exacerbate the health care cost crisis in the state. These problems tend to manifest themselves disproportionately in the populations eligible for Medicare, namely people 65 and older and people with disabilities. For example: 6 Centers for Medicare and Medicaid Services Annual Report of the Board of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds. Table IIIA

10 The vast majority of spending growth in Medicare is associated with patients under medical management for multiple chronic conditions 8. Data show that people with five or more chronic conditions see an average of almost 14 different physicians and fill 50 prescriptions in a year 9. More than two-thirds of health care costs are for treating chronic illnesses; among older Americans, almost 95 percent of health care expenditures are for chronic diseases 10. The age groups that will grow the fastest during the next decade are those with the highest average health care costs and burden of chronic disease 11. Between 2005 and 2030, Minnesota s population aged 65+ will more than double from 620,000 to 1,300,000. During the same time period, the population 85+ will nearly double, rising to 163, Medicare spending is projected to increase from 3.5 percent of U.S. gross domestic product (GDP) in 2009 to 5.5 percent in Given the health and long-term care resource use of the Medicare population, a comprehensive strategy to address these problems must include this population to be effective. Despite consistently ranking near the top of cross-state health comparisons, recent data suggest that Minnesota s status as a leader in health is in jeopardy. In overall rankings the state has fallen from first in 2006 to sixth in Although Minnesota ranks first in outcomes; its ranking in the determinants of health has fallen to seventh. Determinants such as healthy behaviors, socioeconomic conditions and the environment are crucial to outcomes even more so than health care services. Unacceptable racial and ethnic health disparities persist, with communities of color experiencing poorer health outcomes than whites 15. The trajectory of Minnesota s health ranking suggests that the state is at risk of experiencing further deterioration of population health. Other data corroborate the concern. For example: 62 percent of adults are overweight or obese 16. In 2008, 17.5 percent of Minnesota adults were current cigarette smokers K.E. Thorpe and D.H. Howard, The Rise in Spending Among Medicare Beneficiaries: The Role of Chronic Disease Prevalence and Changes in Treatment Intensity, Health Affairs 25 (2006): w378-w G. Anderson. Chronic Conditions: Making the Case for Ongoing Care, Johns Hopkins University, November Hoffman C, Rice D, Sung HY. Persons with chronic conditions: their prevalence and costs. JAMA 1996;276(18): Minnesota State Demographic Center, Social Security and Medicare Board of Trustees. A Summary of the 2010 Annual Reports (2010) 14 The American Public Health Association, Partnership for Prevention, & United Health Foundation. (2009). America s Health Rankings MN Eliminating Health Disparities Initiative Report to the Legislature: January Based on Body Mass Index (BMI), defined as weight in kilograms divided by height in meters squared. BMI > 25 = Overweight, BMI > 30 = Obese. 2007,Behavioral Risk Factor Surveillance System, in Minnesota, Minnesota Department of Health Fact Sheet, June 2009 Heart Disease in Minnesota - 7 -

11 Approximately 5.9 percent of adults in Minnesota have diabetes, and one-third are unaware that they have the disease 18. More than 20 percent of all deaths in Minnesota are due to heart disease, making it the second-leading cause of death in the state behind cancer 19. Lack of care coordination and continuity across the health care delivery system in Minnesota is a challenge to health outcomes, patient experience and affordability. Examples of fragmentation include: The inability to contact and consult with primary care providers outside of normal office hours. The inability to obtain a timely appointment for office visits. Deficiencies in the discharge planning process, leading to significant readmission rates for the conditions most-often linked to Medicare hospitalizations in Minnesota 20. Barriers to communication and to follow-up after referrals to specialists. Lack of clinic coordination with community-based resources that would facilitate adherence to recommended regimes for patients with chronic conditions. Limits on the amount of time providers can spend with patients and a focus on volume of patients seen rather than quality of care provided to patients. An observed gap between patient and provider perception of the current use of MAPCP components. For example, in the HCH Capacity Assessment mentioned in section A4, primary care providers surveyed consistently answered more positively than patients surveyed about the availability of same day appointments, 24/7 clinic or triage access, the inclusion of patients in decision-making about their own care and the use of individual care plans and identified care coordinators. How the State Initiative Addresses the Problems As a central component of Minnesota s comprehensive health reform efforts, the health care home (HCH) initiative addresses the above problems by equipping primary care practices to provide comprehensive, coordinated, person-centered care. The HCH initiative itself directly addresses the stated problems by linking the specific components of the certification standards to reductions in undesirable health care utilization. For example, the components of improved post-discharge planning, end-of-life care, transition planning and the use of individualized care plans are expected to reduce hospitalizations. Expanded clinic access and improved relationships are expected to reduce emergency department (ED) utilization. Effective communication, person-centered care and shared decision- 17 Behavioral Risk Factor Surveillance System, in Minnesota, Minnesota Department of Health Fact Sheet, June 2009 Heart Disease in Minnesota 18 Vital Statistics, , Minnesota Center for Health Statistics, Minnesota Department of Health. Minnesota Department of Health Fact Sheet, June 2009 Heart Disease in Minnesota 19 Vital Statistics, , Minnesota Center for Health Statistics, Minnesota Department of Health. 20 Stratis Health. Profile of Medicare in Minnesota. (2004)

12 making are expected to improve health disparities. The HCH model also creates the appropriate incentives for providers to engage the most complex Medicare beneficiaries, while providing an operational clinic framework that improves quality and value for the entire population served. As a whole, the package of health reforms passed in 2008 provides a policy framework to improve the health of the population, the patient/consumer experience and the affordability of health care. In addition to the HCH initiative, the law also includes a significant investment in a statewide health improvement program, a statewide quality reporting system, a provider peer grouping system and the creation of baskets of care (episodes of care). Taken individually, these components are designed to improve population health, cost and quality transparency and care delivery. Together, the components are the building blocks for meaningful reform that will deliver improved health and higher-value health care. Medicare s participation in Minnesota s HCH efforts will increase payer critical mass. Even in Minnesota s fairly consolidated market, no payer has influence over even a majority of the dollars. While Medicare is only 16 percent of spending (less than in some other states), the other payers have similar minority segments; private insurance is divided among the different plans, including state employees. The state seeks a critical mass for implementation of HCHs in order to achieve true market transformation in cost and quality. Medicare s participation in Minnesota would be extremely desirable, especially in rural Minnesota, where clinics may have a high population of Medicare patients and may not consider certification without Medicare involvement. These clinics may face barriers to transformation, but Medicare s participation can create a new incentive for clinics to transform. C. Description of the State Reform Initiative 1. Structure and Overall Design of the State Initiative Minnesota s health care homes (HCH) initiative is a statewide transformation of primary care. The design principles for HCHs in Minnesota focus broadly on the continuum of health and incorporate expectations for engagement of the patient, family and community. The aim is to improve the health and quality of life of Minnesotans and to connect the health care delivery system with the community and the broader goals of improving population health. To accomplish this transformation, the state, in collaboration with private partners, has developed: A common statewide process of provider certification A multi-payer payment methodology A system of outcomes measurement Minnesota s goals for the HCH program are to create market-wide alignment through the statewide certification system and to reform the payment system through multi-payer participation to achieve the - 9 -

13 critical mass needed for true transformation of care delivery ultimately bending the cost curve while improving quality and patient experience. Minnesota s initiative is not a pilot dependent on the short-term voluntary commitment of a few payers and practices, but is the foundation for the statewide, sustainable transformation of Minnesota s health care delivery system. A number of features of Minnesota s health care home initiative are unique: Stakeholder-developed certification standards and criteria. o Minnesota stakeholders opted to develop state-specific certification criteria, which differ from the NCQA criteria primarily in their focus on patient- and family-centered care, required linkages to community resources, practice-based improvement through learning collaborative participation and less reliance on strict health IT requirements. Practice support through a learning collaborative. o Certified HCHs must participate in a state-sponsored learning collaborative, where multi-disciplinary teams work on quality improvement to support transformation. This model is seen as central to the success of the HCH initiative. Multi-payer payment methodology that reflects patient complexity. o The HCH payment methodology varies payment based on common patient complexity tiers. Patient complexity is assessed by clinicians and monitored by payers and reimbursement rate structures reflect the actual expected amounts of time and work for each tier. Multi-payer participation will create the critical mass of reimbursement needed to transform the delivery system for all patients. Patient- and family-centered care focus. o Principles of patient- and family-centered care are infused throughout the initiative. Patients serve on clinic quality teams and are included in site visits for certification, and the initiative is guided by a HCH Consumer/Family Council. As one patient participant in a large urban clinic team stated: This is one of the most important things I can do in my life right now. Participating in this quality committee in my community gives me the ability to give back to my children. Each week I meet with my friends at the local coffee house in order to get input on the things we re improving at the clinic. This is my opportunity to make a real difference. 2. Participating Primary Care Practices All of the certified HCHs treating Medicare beneficiaries are expected to participate in the MAPCP demonstration. Minnesota s common statewide certification system makes it possible for providers across the state to become certified as a HCH, regardless of whether they are in urban or rural areas or are single practitioners or large, integrated medical systems. Minnesota is just beginning the statewide rollout of HCH certification. Providers will continue to be certified throughout the MAPCP demonstration period; certification projections are contained in section E. Recertification as a HCH is

14 based on outcomes (including quality, cost, and affordability), shifting participation requirements over time from processes to results. To become certified as a HCH in Minnesota, providers must meet rigorous standards and criteria. The broad standards include: Access and communication Participant registry and tracking participant care activity Care coordination Care plan Performance reporting and quality improvement To develop the HCH standards and criteria, Minnesota used a robust community engagement and input process that culminated in formal administrative rulemaking. The Minnesota Department of Health (MDH) and Minnesota Department of Human Services (DHS) sponsored numerous work groups, public meetings and public comment periods to allow extensive opportunities for stakeholder input as the standards were developed throughout Stakeholders included representatives from Minnesota health plan companies, health care providers and associations, physician organizations, individual physicians, governmental agencies, patient advocates, patients and family members. National experts from the Center for Studying System Change 21, the National Committee for Quality Assurance 22 and the Center for Medical Home Improvement 23 also participated in communitywide dialogues and provided input on the Minnesota standards and criteria. The administrative rule laying out Minnesota s certification process contains detailed requirements that implement the five broad standards. Each standard has a set of requirements to address whether the applicant is seeking certification: (a) for the first time, (b) after one year of experience as a HCH or (c) after two or more years of experience. As the applicant moves along the experience continuum, these requirements focus more heavily on performance outcomes rather than the initial infrastructure. Finally, the rule contains procedural requirements, including provisions for a variance, revocation or voluntary certification surrender and an appeals process when MDH declines to certify or recertify. One of the key components of Minnesota s model is that HCHs develop proactive approaches through care plans and offer more continuity of care through increased care coordination 21 The Center for Studying Health System Change (HSC) is a nonpartisan policy research organization located in Washington, D.C. HSC designs and conducts studies focused on the U.S. health care system to inform the thinking and decisions of policy makers in government and private industry. 22 The NCQA is a private, 501(c)(3) not-for-profit organization dedicated to improving health care quality. It was founded in NCQA has helped to build consensus around important health care quality issues by working with large employers, policymakers, doctors, patients and health plans to decide what s important, how to measure it and how to promote improvement. The NCQA is a leading authority on medical home criteria. 23 The CMHI is an organization founded in 1993 by Dr. W. Carl Cooley, medical director and Ms. Jeanne W. McAllister, B.S.N., M.S., M.H.A., director. The mission of the Center for Medical Home Improvement (CMHI) is to promote high quality primary care in the medical home and secure health policy changes critical to the future of primary care

15 between providers and community resources. To accomplish this increased care coordination, certified HCHs are required to have a dedicated care coordinator. Thise care coordinator serves as a liaison between the providers and the patient and family, as well as between the HCH and community resources. The goal of this coordination is to reduce system fragmentation and, as a result, improve patient health, enhance the experiences of patients and families and reduce unnecessary or duplicative care that can lead to increased health care costs. Interest in the certification process is high, and the state expects practices to seek certification throughout the demonstration period. To date, Minnesota has certified 11 clinics as HCHs. These clinics are in several regions of the state, include both urban and rural clinics and range from single-physician clinics to clinics in large systems. Nearly 50 additional clinics from around the state, representing more than 400 clinicians, are in the process of applying for certification as a HCH. A grid listing a number of provider organizations that have formally stated their intent to become certified during the demonstration period is attached as APPENDIX B. In addition, about 500 people have attended certification training sessions at regional workshops around the state, and more than 30 individual clinics and health systems have received a variety of mini-grants to help them move toward certification. 3. Identification and Recruitment of Participating Beneficiaries HCHs are required to establish a process to systematically screen patients to identify those who could benefit from care coordination services based on the patient s medical and non-medical complexity. This process is the foundation for patient participation and activation and defines the patient s complexity level for services and billing. It triggers communication with the organization about the patient s status as a HCH participant and the necessary level of care coordination services. Clinicians in certified HCHs are encouraged to talk to patients who may benefit from the expanded care coordination that is a hallmark of the HCH. Through this process of shared decision-making, patients and clinicians decide together whether participating in the HCH is the right choice. One of the central tenets of HCHs in Minnesota is a focus on patient- and family-centered care. The goal of HCHs is that patients and families work in partnership as part of the care team. To ensure that consumer and patient needs remain at the forefront of the initiative, the state has convened a Consumer/Family Council that meets regularly and advises stakeholders on each major component of the initiative. It is important to note that the HCH is not a gatekeeping model; patients are not locked into a primary care practice and are able to seek specialty care when needed. The certification standards require certified HCHs to provide objective information about optimal treatment and care options available through various providers, rather than basing a referral solely on an organizational relationship. There must be no evidence of gatekeeping or negative consequences to the patients for selection of referral resources

16 To aid in expanding public awareness about HCHs, MDH is contracting with a local public relations agency to develop meaningful consumer-oriented messages to educate consumers about HCHs. A HCH Resource and Education Committee has also been meeting for the past year to create educational resources for both providers and consumers. Through a contract with the American Academy of Pediatrics, Minnesota Chapter, the group has developed a template brochure for clinicians to use with their patients of all ages to begin the discussion about HCHs. 4. Attribution of Participating Beneficiaries to Participating Practices As described above and in section C7 below, clinic teams identify eligible patients and are responsible for establishing the expected partnership and describing the patient s role in the advanced primary care practice team. Providers bill for care coordination services on a standard claim form, which links patients to providers and serves as a de facto marker of exposure to the HCH intervention for evaluation purposes. Thus, the HCH payment methodology does not rely on the prospective attribution of beneficiaries to participating practices. Safeguards are in place to ensure that double-billing does not occur and that each beneficiary is only associated with one MAPCP practice at a time. There is an administrative standard for cases where more than one provider attempts to bill for the same patient during the same time period, in which case the provider would be instructed to follow up directly with the patient to reestablish/confirm the HCH participant relationship. This is the administrative standard for all payers, and CMS role in attribution will be restricted to claims adjudication using these processes through its contracted claims administrator. This system preserves flexibility of patients to choose and change their HCH as desired. Beneficiary choice is consistent with the program design of open access to participating providers and the absence of required referrals from primary care in order to receive covered services. The voluntary nature of Minnesota s program is a real strength, as it ensures that providers will only bill for patients with whom they have established a partnership and who are active participants in the APCP model of care. This arrangement increases the likelihood of achieving the desired outcomes compared with the passive attribution of beneficiaries to practices which they may or not consider the primary hub of their care. 5. Community-based Practice Support Linkages between primary care practices and broader community resources serving Medicare beneficiaries are central to the goals of the MAPCP demonstration in Minnesota. While Minnesota is not directly creating community-based teams as part of the payment structure, such linkages are a required component of the certification process and will be encouraged at the macro-level in a number of ways. One of the unique features of Minnesota s certification standards is the requirement that certified HCHs establish partnerships to link to community-based organizations and public health

17 resources, such as disability and aging services, social services, transportation services, schoolbased services and home health care services.the goal of these linkages is to facilitate the availability of appropriate resources for patients and families. Through the certification process the state ensures that HCHs implement these community standards. Community practice support will be fostered at the macro-system level in a number of ways. Clinics of all sizes and in all areas of Minnesota are seeking certification as HCHs. Because of the varied nature of these clinics, the HCH standards have been designed with differences in clinic population, culture, location and access in mind. Minnesota has both large rural and urban areas, so connections to community resources have been designed with a variety of options. As part of the demonstration, the state would develop specific training materials focused on connections to community-based resources for certified HCHs. Through the state-required learning collaborative, HCHs can share strategies and implementation ideas on effective ways to connect with community-based organizations. Recently, as clinics have begun participating in certification site visits, the state has observed evidence of clinics building new successful relationships with communities. This focus on population health, rather than only health care delivery, is critical to the achievement of the state s health reform goals. Examples include: One large urban clinic has established a work group with 24 community associations representing all ages and diverse organizations. Together, this collaborative work group has established an action plan and has begun to develop linkages between the health care system and the community. Another organization just completed a survey asking patients what community resources were important and necessary for them. The organization then held a follow-up day-long community meeting with representatives from diverse groups and all ages to develop new transparent community-based strategies. One clinician reported that in the past he would make referrals for patients to community resources with little understanding of what services were actually provided. Today this clinic is meeting face-to-face with those partners to discuss mutual expectations. Risk identification is a crucial first step to link individuals to appropriate resources to maintain their health status. Research shows that excessive utilization of Medicare services can be caused by an unstable health status, functional deficits, cognitive deficits and unsupported living arrangements among older adults. In these instances, many older adults may not receive any community-based supportive services until their condition has deteriorated or they experience a medical crisis. It is important to target coordination to Medicare beneficiaries who are at high risk and to have team members work collaboratively to have the most significant impact. With its focus on care coordination and requirement of a dedicated care coordinator, Minnesota s HCHs are well-positioned to accomplish these goals. Access to community services linked to health care enables older adults to stabilize their health status and mitigate risk factors for unnecessary health care use. The HCH payment methodology risk tier tool (described below in section C7) is utilized to identify those adults with risk factors

18 In addition to the risk tier tool, tools such as the Minnesota Board on Aging s Live Well at Home Initiative may be added to further screen older adults. This DHS Administration on Aging grantfunded initiative has developed and tested the Live Well at Home Rapid Screen. The Screen identifies older adults at risk in the areas of limited functionality, falls, memory loss, lack of family/social support, stressed caregiver and thinking of moving. These risks are shown to be predictive of nursing home placement and spend-down to Medicaid eligibility. Adding risk factor areas that are predictive of increased health care utilization such as multiple medications, multiple chronic conditions, poor nutrition and cognitive impairment moves toward a comprehensive list to guide medical home care coordination efforts. HCHs are required to address these types of risk factors in care coordination and care planning activities. Care coordination includes a plan for communication between the care team and the patient and family to enhance shared understanding about such elements as referrals for specialty care; test results; admissions to facilities; timely post-discharge planning; communication with the pharmacy; and links to external care plans. Other key success factors identified by Randall Brown 24 and Robert Berenson 25 and built into the HCH clinical approach include special attention to transitions in care setting and postdischarge monitoring, to go along with regular assessment, education, care planning, monitoring and coaching. Community partners can be the eyes and ears for the HCH team with higher frequency of contact than clinic visits provide. While much has been developed to encourage HCH practices to work with community resources, the HCH initiative has also actively reached out to community-based service providers so that they may pull HCH into collaborative relationships. Hundreds of local community-based providers have participated in events sponsored by the Minnesota Board on Aging, the Association of Minnesota Counties and others. A variety of community services are available that, in conjunction with health care services, are proven to mitigate the risk factors identified above, promote community living and reduce unnecessary hospitalizations and other health care utilization. A non-exhaustive listing is included in TABLE 1 below: TABLE 1: Examples of Available Community Services for MN Medicare Beneficiaries Risk Factor Community Services Memory Loss - Minnesota Family Memory Care (a translation of the New York University Caregiver Intervention) offered in 12 locations across the state. Falls - Matter of Balance Program: evidence-based group behavior modification program that reduces fear of falling, increases activity 24 Brown, R. The Promise of Care Coordination: Models that Decrease Hospitalizations and Improve Outcomes for Medicare Beneficiaries with Chronic Illnessess. Mathematica Policy Research (commissioned by the National Coalition on Care Coordination), March Berenson, R, Howell J. Structuring, Financing, and Paying for Effective Chronic Care Coordination. Report Commissioned by the National Coalition on Care Coordination. July

19 Multiple Medications (4+) Multiple Chronic Conditions levels and reduces fall risk in older adults - Group education sessions followed up by one-on-one sessions with pharmacist to review medications (Metropolitan Area Agency on Aging project). In-home medication set-up and reminders through home care - Stanford University s Chronic Disease Self-Management Program: evidence-based group behavior modification program that is proven to consistently result in greater energy/reduced fatigue, more exercise, fewer social role limitations, better psychological wellbeing, enhanced partnerships with physicians, improved health status, greater self-efficacy and reduced healthcare expenditures Poor Nutrition - Senior Nutrition Program: home delivered meals (hot or frozen) and congregate dining options (600 community sites) including those that are culturally appropriate - Grocery shopping assistance Limited Functionality - Homemaker, chore Lack of Family/Social Support Stressed Family Caregiver Community Alternatives to Institutional Placement - Transportation (including assisted transportation) - In-Home technology: telehealth, home monitoring - Home health care, personal assistance - Assistance to caregivers in gaining access to supportive services - Caregiver training and education, including caregiver consultation/screening, support groups - Consumer-directed services that provide temporary relief from caregiving stress (e.g. home modifications, home monitoring devices and respite) - Face-to-face long term care consultations are provided to frail elderly, medically fragile and disabled persons by social service and public health agencies in all Minnesota counties. These consultation services help individuals and their families make decisions about long-term care needs and can support them to stay in their homes through alternative services to skilled nursing facility placement. - If financially eligible, frail elderly, medically fragile and disabled persons receive individually-designed packages of community-based services that are coordinated at the community level. Through a single contact with the MinnesotaHelp Network, which provides resources for seniors, veterans and Minnesotans with disabilities, care coordinators within primary care practices can gain access to a set of critical community supports for their patients. This network provides HCHs with quick access to an array of both informal and formal services listed above and a live person with whom they can consult and refer patients who are in need of tools and in depth counseling. Assistance is available online, via toll-free telephone and face-to-face at one of the roughly 300 outreach sites across Minnesota or directly in clinics and other access sites. Community resource availability varies significantly by geography in Minnesota, especially in some rural areas, but thousands of organizations exist throughout the state, including parish nurses, volunteer transportation projects, public health agencies, local long-term care providers,

20 adult foster care and housing with services. Certified HCHs will be able to develop local arrangements for referral of seniors served in their practices, especially for common needs such as home-delivered meals or chore help. When there are complex situations where specialized knowledge of resources for problem solving and coordination of services are needed, Minnesota HCHs will have access to experts ready and able to support coordination with community resources. 6. Integration with Health Promotion/Disease Prevention Minnesota has a strong infrastructure to link primary care to evidence-based prevention efforts. Through these linked efforts, the state can help improve the health and quality of life for Minnesotans by reducing the burden of chronic disease. The HCH standards require strong community connections and also require clinics to implement ongoing preventive care for patients based on evidence based guidelines and document when those standards are not implemented. Care coordinators are required to work with patients to ensure that health prevention strategies are implemented as one of their core functions. HCHs will be integrated with public health-focused prevention efforts as well as prospective risk screening efforts to promote health and avoid undesirable health care utilization. Minnesota has long had a strong network of local public health agencies that help focus on health promotion and disease prevention at the community level. As part of the state s 2008 health reform law, Minnesota further advanced its statewide focus on chronic disease prevention through the Statewide Health Improvement Program (SHIP). Through this program, the state supports local efforts of counties and tribal governments to address tobacco use and obesity through policy, systems and environmental change strategies. SHIP is an investment upstream to increase healthy behaviors and prevent the leading causes of illness and death: tobacco and obesity. Communities must implement interventions in each of four settings: schools, worksites, communities and health care. This focus on health care is particularly key to HCHs. For example, SHIP grantees across the state are working with the Institute for Clinical Systems Improvement (ICSI) to implement evidence-based guidelines for obesity and primary prevention of chronic disease. Other grantees are working with health care providers to refer patients to community resources related to obesity and tobacco use cessation. Minnesota has a free statewide tobacco cessation line that offers phone and web-based counseling to tobacco users, as well as no-cost nicotine patches and gum for patients who have no insurance coverage for this pharmacotherapy. Certified HCHs will also establish relationships with local community-based health prevention and disease promotion resources and access information about local resources as appropriate to the services needed. These efforts will be bolstered by the risk screening activities described in section C5 to improve coordination and maximize the integration of these programs into the HCH. Minnesota has a strong infrastructure to link primary care to evidence-based prevention efforts. Through these linked efforts, the state can help improve the health and quality of life for

21 Minnesotans by reducing the burden of chronic disease. At the same time, the state can work to contain health care costs that continue to rise unsustainably. 7. Payment Provisions and Methods Minnesota s HCH initiative includes a multi-payer payment methodology that reimburses certified practices for care coordination. The methodology is unique in its stratification based on provider-determined patient complexity, its inclusion of supplemental (lifestyle and psychosocial) complexity factors that extend beyond medical conditions and a rate structure that rationally values the expected amount of time and work required to coordinate care for patients in each complexity tier. As specified in state law 26, the payment methodology is a per-person, complexity-stratified payment that represents the sum of the previously non-billable work of care coordination performed by the HCH clinical team. The payment is in addition to other billable services. The methodology was designed with extensive stakeholder input and represents a statewide administrative standard for HCH reimbursement. A central feature of the payment methodology is a system of patient complexity tiers. Informed by claims data modeling performed by the University of Minnesota School of Public Health using the Johns Hopkins Adjusted Clinical Groups (ACG) Case-Mix System 27, stakeholders created five tiers of patient complexity that represent the amount of time and effort required to coordinate care in the primary care setting. HCHs place all participants in a complexity tier using a common clinic-based screening process 28 that draws on all patient information in the provider records, avoiding the need to rely on historical diagnosis coding patterns available to payers (which tend to underrepresent complexity) as the sole basis for patient assessment. The tiers are based on the count of provider-identified condition groups (such as cardiovascular and endocrine ) that are considered major by virtue of being chronic, severe and requiring a care team for optimal management. Although providers are responsible for assigning patient tier level for billing, the estimated tier distribution across a population can be modeled using customized ACG programming on claims data. Based on analysis of a 2008 Medicare fee-for-service claims dataset in support of this application 29, the estimated distribution of the complexity tiers across MAPCP-eligible beneficiaries in Minnesota is displayed in FIGURE A paper version of the tool is attached as APPENDIX C. 29 Tier modeling was conducted on a 2008 Chronic Condition Warehouse (CCW, 100% sample) dataset available to MDH under an existing data use agreement

22 FIGURE 3: Minnesota Fee-for-Service Medicare: Estimated Distribution of Beneficiary Member Months by Patient Complexity Tier 8% 13% Tier 0 (No Major Condition Groups) Tier 1 (1-3 Major Condition Groups) 16% 55% Tier 2 (4-6 Major Condition Groups) Tier 3 (7-9 Major Condition Groups) Tier 4 (10+ Major Condition Groups) 8% Source: U of MN analysis of Medicare fee-for-service claims data. The complexity tiers are linked to a defined set of procedure codes and modifiers, an administrative standard for monthly billing using a CMS-1500 professional claim transaction and common clinic process and documentation requirements 30. Minnesota payers are collaborating to develop monitoring and audit structures to ensure the accuracy and integrity of complexity tier assignment and provider coding patterns and there are common clinic documentation standards in the event that a practice is required to verify their level of billing. Medicare s administrative participation in MAPCP reimbursement would involve tracking certified providers, claims adjudication (via Noridian Administrative Services) using the assigned procedure codes and modifiers, as well as (if desired) sharing claims data with DHS for the purposes of monitoring provider coding patterns and feeding actionable Medicare data back to MAPCP practices 31. The only administrative costs to CMS are directly related to reimbursing certified practices; these are the same internal administrative costs shared by all participating payers. From this common foundation of complexity tiers and administrative uniformity, DHS developed a Medicaid fee-for-service rate methodology that reimburses certified practices for all patients in Tiers 1-4 (all patients with one or more major chronic condition) at PMPM rates ranging from $10.14 to $ Rates increase by 15 percent if the patient (or caregiver of a dependent patient) has a supplemental complexity factor: either a non-english primary language or a severe and persistent mental illness diagnosis (rates increase by 30 percent if both 30 A complete description of the multi-payer payment methodology can be found at: 31 These functions are described in further detail in section D

23 factors apply) 32. This rate structure was recently approved by CMS as a state plan service for Minnesota Medicaid under an assumption of budget neutrality 33. TABLE 2: Medicaid Fee-for-Service Care Coordination Rate Structure Patient Complexity Tier PMPM Rate 0 (No Major Chronic Conditions) N/A 1 (1-3 Major Condition Groups) $ (4-6 Major Condition Groups) $ (7-9 Major Condition Groups) $ (10 or More Major Condition Groups) $ Although the HCH model will benefit the entire patient panel, the rate structure initially focuses higher payment on more complex participants that Minnesota stakeholders believe are most likely to produce a short-term return on investment. The calculation of these rates is based on a literature and expert opinion-informed valuation of the anticipated average level of service delivered for each complexity level in a given month 34. This level of rigor in paying for the actual work performed sets Minnesota s payment model apart from those that pay an arbitrary PMPM payment that does not reflect the complexity of a panel or the clinic resources required to meet its needs. Minnesota proposes adopting this Medicaid rate structure for Medicare beneficiaries in the MAPCP demonstration. Given the estimated distribution of Minnesota fee-for-service Medicare beneficiaries across the complexity tiers and the estimated prevalence of the supplemental complexity factors, the statewide average care coordination payment for MAPCP participants is expected to be $ The budget neutrality evidence in section E that follows details the offsetting savings that are expected to result from this investment in care coordination. 32 The HCH legislation specifically requires the inclusion of lifestyle/psychosocial factors in patient complexity for HCH payment, and MN is very interested in expanding the use of these factors beyond the starting point of these two widely-accepted and easily-verifiable factors aveas=1&rendition=primary&allowinterrupt=1&ddocname=dhs16_ A complete description of the Medicaid fee-for-service rate structure can be found at: veas=1&rendition=primary&allowinterrupt=1&ddocname=dhs16_

24 D. Operating Structure 1. Key Personnel and Organizational/Governing Structure Minnesota s statewide implementation of health care homes (HCHs) is collaboratively organized in state government between the Minnesota Department of Health (MDH) and the Department of Human Services (DHS). The two commissioners of these agencies lead the partnership. Program implementation is led at MDH by the assistant commissioner in charge of the Community and Family Health Promotion Bureau and at DHS by the medical director of Minnesota Health Care Programs. The HCH Program Manager coordinates project activities between the two agencies and community participants. The MDH project implementation staff includes a senior planner for certification; a senior planner for measurement and the learning collaborative; registered nurses for certification site visits; and administrative support staff. DHS project implementation staff includes a manager for care delivery reform; a research and evaluation coordinator; an information technology technical liaison; and a policy specialist. Other MDH and DHS staff assist with program implementation as needed. See FIGURE 4 below for the MDH/DHS organizational chart. FIGURE 4: Minnesota State Health Care Homes Organization Structure Source: Minnesota Departments of Health and Human Services

25 As part of the governance of Minnesota s HCH program, the state has convened a number of work groups, advisory groups and steering committees. More detail about these entities can be found in section D3 below. 2. Medicare Participation in Multi-payer Data Systems While the evaluation of the demonstration s effectiveness will not depend on Medicare participation in a multi-payer data system (as described in section F), Minnesota can offer a number of value-added services to CMS if provided access to Medicare fee-for-service claims data for participating beneficiaries. These services, performed by DHS, would mirror the program monitoring and provider data feedback functions in place for the Medicaid population. Provider assessment of patient complexity (via procedure code modifiers submitted on claims) could be monitored and compared to the estimated distribution of complexity tiers across the population. This information would be used to target follow-up audits to ensure payment integrity. Medicare data could be fed into existing web tools that allow providers to track actionable utilization information (such as ED and pharmacy utilization and hospital admissions) on patients they are treating. This data feedback is instrumental in equipping providers to better coordinate care and achieve the desired demonstration outcomes. To achieve these functions, DHS staff would require access to claims data for potentially eligible Medicare fee-for-service beneficiaries, for the most recent 12-month period available and on a mutually agreeable periodic basis going forward. As described above, the data would be used to monitor program payments and to equip primary care providers with near real-time data to better manage patients. Because these identical functions are being developed and carried out for the Medicaid population, DHS can offer these tools and functions for Medicare beneficiaries at a relatively low cost to CMS. Should CMS be interested in such a data-sharing arrangement, DHS estimates at total of 1.0 FTE for the IT development and analysis needed for these functions during the demonstration period the cost of which is considered in the budget neutrality section that follows. Only project team members at DHS and MDH and contracted technical staff will have access to identifiable information and the data will be housed on secure servers. The state will comply with all applicable federal and state regulations governing privacy and data security. Minnesota is also a willing and active partner in the Milbank-funded Multi-State Collaborative described in APPENDIX D, and welcomes future opportunities to work with CMS and the Collaborative states in the development of common measurement, data sharing and informatics platforms. This opportunity represents a unique chance to build a learning health care system together, and Minnesota embraces it fully

26 3. Use of Consultants and Vendors The state has emphasized public-private collaboration and transparency with patients and families, the health care community and other organizations. In order to ensure broad stakeholder input in the development of Minnesota s HCHs, the state has convened a wide array of stakeholder work groups and committees. Many of these groups offer recommendations to the state staff involved in the implementation of HCHs and thus may also be considered part of the governing structure outlined in section D1 above. The state has also contracted with a number of vendors to capitalize on their specific areas of expertise. Work has already been completed on some of these contracts; in others, work will continue through the demonstration. Building Capacity These vendors include a consortium of primary care providers including the Minnesota Chapter of the American Academy of Pediatrics Foundation in partnership with the Minnesota Academy of Family Physicians (MAFP), the MAFP Foundation, the American College of Physicians- Minnesota Chapter and Stratis Health. This consortium worked to develop an initial capacity assessment of the readiness of Minnesota clinics and consumers for HCHs. Ongoing Work Under a separate contract, the Minnesota Chapter of the American Academy of Pediatrics Foundation, in partnership with MAFP, develops conferences, training, webinars and educational materials to build capacity for HCH transformation in the state. The academies also facilitate the HCH Resource and Education Committee 3, made up of stakeholders, which continues to create outreach materials and educational resources for providers. Learning Collaborative The first step in the development process was an evaluation of collaborative learning methods that incorporate quality improvement approaches that could be implemented statewide for initial and ongoing clinician certification as a HCH provider. Wilder Research and national experts were awarded a contract to perform this evaluation 35. Ongoing Work Implementation of the learning collaborative is expected in fall 2010, after a contract is awarded for that work. This collaborative will be held in regional locations across the state. It provides an opportunity for clinic teams and patients to learn from each other and share ideas and resources through both face-to-face and virtual sessions. A community- 35 Wilder Research. Integrating Best Practices into Collaborative Learning Methods for Health Care Home Providers, September

27 based leadership committee participates in setting the direction of the learning collaborative and a HCH curriculum is planned with both an adult and pediatric track. Outcomes Measure Development Following a request for proposals, MDH contracted with the Institute for Clinical Systems Improvement (ICSI) 4 to make recommended HCH performance outcomes that MDH could use to evaluate applicants for HCH certification. ICSI assembled a large work group to perform this task. Ongoing Work The HCH Outcomes Measurement Advisory Work Group meets regularly to recommend outcomes for measuring HCH improvement in the areas of patient health, patient experience and cost-effectiveness. Data for outcome evaluation will be collected through a contract with Minnesota Community Measurement (MNCM) as well as from payer claims data. The advisory work group will closely monitor the measurement and evaluation of HCHs. The group will meet for two years to follow the progress from implementation to evaluation for both recertification and outcomes measurement. More information on the evaluation of HCHs is described in section F. Payment Methodology Development MDH and DHS drew on the expertise of a steering committee and three work groups composed of a variety of nominated stakeholders, including representation for all major payers in Minnesota and from across the health care system 36. Ongoing Work The University of Minnesota School of Public Health s Division of Health Policy and Management (led by David Knutson, MS) is under DHS contract to develop the multi-payer HCH payment methodology and to evaluate the HCH initiative. The university serves as a crucial technical expert on claims analysis, risk adjustment strategies and the grounding of the MAPCP in the current literature and research environment. MAPCP Advisory Work Group Ongoing Work As part of this demonstration, the state will actively engage organizations that represent Medicare beneficiaries. The state has already begun this effort by establishing a MAPCP work group that met three times in development of this proposal. This work group included representatives of key senior, clinical and community organizations. The state anticipates that this work group will continue in an advisory capacity throughout the demonstration

28 Consumer Participation and Awareness Ongoing Work The Consumer/Family Council, made up of patients and family members, advises the state on HCH implementation and provides patient representation for broader work groups. There are four Medicare beneficiaries on this council. To broaden consumer understanding of HCHs in Minnesota, the state is contracting with a local public relations agency to develop meaningful consumer-oriented messages and a public awareness campaign to educate consumers about HCHs. E. Evidence Supporting Expectation of Budget Neutrality 1. Projected APCP Payments The projected payment amounts to certified health care home (HCH) practices depend on a number of factors, including the number of certified practices in the state and the overall patient complexity (and thus the average PMPM reimbursement 37 ) of distinct insured populations. Each demonstration year assumes a continued ramp-up of certified practices, so payment is not assumed for each patient for the entire year. A consistent Medicaid rate structure for each of the complexity tiers is assumed across all populations, although actual reimbursement amounts will be contractually negotiated independently for private insurance. Similarly, since the complexity tier distribution for the private insurance population is not immediately available to the state, it is assumed that the private insurance tier distribution is the same as the Medicaid and State Programs managed care population 38. Based on statewide insurance data, claims analysis and the current status of the provider certification process, payment projections over the three-year demonstration period are contained in TABLE 3 below. 37 For example, state public programs in Minnesota contain a mix of fee-for-service (FFS) and managed care enrollees. The FFS population, which contains a disproportionate number of people with disabilities who fall into higher complexity tiers, produces an average payment of $15.63 PMPM. The managed care population, which contains more children and families, produces an average payment of $7.87 PMPM. Combined, the adjusted average for state public programs is $10.24 PMPM. 38 Although the overall complexity of the privately insured population is likely to be somewhat lower than Medicaid managed care, from a cost perspective this is likely to be offset somewhat by the higher reimbursement rates seen in commercial insurance

29 TABLE 3: Health Care Home (HCH) Payment Projections* Medicare FFS (MAPCP) Medicaid and State Programs (Non-Dual) Private Insurance** Year 1 (CY 2011) Year 2 (CY 2012) Year 3 (CY 2013) Certified Clinics % of MN Primary Care Supply Certified Participating Patients Payments at $14.43 PMPM Average*** Participating Patients Payments at $10.24 PMPM Average Participating Patients Payments Assuming $7.87 PMPM Average % 105,580 $ 14,364, ,727 $ 15,957, ,693 $ 27,506, % 165,911 $ 24,811, ,676 $ 28,681, ,628 $ 57,062, % 226,243 $ 35,258, ,922 $ 41,573, ,038 $ 81,089,430 TOTAL: % 226,243 $ 74,434, ,922 $ 86,212, ,038 $ 165,658,847 * "Participating Patients" includes all individuals served by the HCH: those with PMPM payment in Tiers 1-4 as well as those in Tier 0 receiving panel management services. ** Private insurance includes all fully-insured products, the state employee group insurance program (SEGIP), and an assumed voluntary participation of 15% of the self-insured market beginning in Year 2. *** Average PMPM payments vary across insured populations due to the differing patient complexity of populations. Given the relatively high burden of chronic disease in the Medicare population, the average payment is somewhat higher than other populations even though the rate structure by complexity tier is identical. By the end of the demonstration period over 226,243 Medicare beneficiaries are projected to be treated by certified HCHs -- significantly more than the expected 150,000 beneficiaries per state articulated in the solicitation. Although the number of participants will ramp up over the three year period, the assumption of budget neutrality extends to all of these beneficiaries and the state sees no benefit to capping participation as long as payment is restricted to certified practices that have achieved transformation. As stated in section D, the Minnesota Department of Human Services (DHS) is willing to work with CMS to receive Medicare data to conduct provider coding surveillance and provide actionable data feedback to providers. If CMS is interested in these value-added services in support of the demonstration, an estimated 1.0 FTE is requested in addition to the projected payments to certified HCHs at a funded rate of $91,000 per year (including salary and benefits). The costs of this additional position are more than offset by the projected savings described below

30 2. Projected Impact of State Initiative on Medicare Expenditures The University of Minnesota School of Public Health s Division of Health Policy and Management assisted the state in the analysis of Medicare claims data and the development of the budget neutrality argument that follows. Historical Utilization Patterns and Opportunities for Improvement Historical utilization patterns for Medicare beneficiaries in Minnesota show that even with Minnesota s comparatively low overall Medicare per capita cost, there is much room to improve in reducing avoidable costs such as admissions, emergency department (ED) visits and duplicative services due to lack of coordination. The state compared national Medicare costs with Minnesota s Medicare costs using the data provided by CMS and found no major differences in utilization for the key service cost categories in which cost impacts are expected. The state has also explored Minnesota s avoidable admissions and readmissions rate, as well as the avoidable use of the emergency department and has found significant opportunities for savings statewide. In addition, the literature review that provided much of the evidence for the cost impact assumptions (described below) included studies that showed cost savings for Medicare beneficiaries in diverse regions, including those with both relatively high and low overall Medicare expenditures. Medicare populations are notable for their prevalence of major chronic illness, even for the under-65 beneficiaries and for the prevalence of multiple chronic conditions. The personcentered approach of the HCH initiative fits the comprehensive needs of many Medicare beneficiaries. In other words, while disease-specific interventions will be provided by HCHs, the impacts will cut across conditions. This analysis assumes that the intensity of care coordination, systematic care processes and attention to establishing trusting primary care relationships and continuity with patients will produce improved outcomes at reduced cost. The state makes the assumption that certified HCH practices in total have a proportion of Medicare beneficiaries that is consistent with the proportion of these beneficiaries across Minnesota as a whole. In addition, the analysis assumes that the HCHs Medicare patient population will have a similar risk distribution to Minnesota as a whole. The analysis recognizes that the proportion of costs incurred by Medicare beneficiaries far exceeds their proportion in numbers. Medicare beneficiaries have a higher than average prevalence of the major chronic illnesses that are associated with avoidable utilization and related costs. Most of the well-studied ambulatory care-sensitive conditions are highly prevalent in the over-65 population. Literature Review In a comprehensive literature review guided by stakeholders, the university examined the interventions of APC models and the associated resource use benefits in terms of cost effectiveness or cost savings, as well as improved health care quality outcomes

31 Medical home(s), patient-centered medical care, patient-centered health care, case management, care coordination and chronic disease were the terms used for identifying relevant literature from PubMed and Medline. Articles in English were selected. More than 120 articles were thus identified. Articles were selected for review only if the abstracts/articles described a clinical trial, secondary data analysis from claims records or happened to describe or compare medical home demonstration projects or projects implementing the core concepts of medical homes. The intervention and outcomes, in terms of health care quality, resource use and cost-benefit or cost savings, were identified and mapped. The interventions were identified as continuity of care, care coordination/transitions management, disease management, availability of dedicated care staff, primary care provider access and triage and end-of-life care. Outcomes were charted in terms of impact on utilization (effect on emergency room utilization, prevention of hospital admissions or readmissions), use of specialists, overuse of services, impact on hospital lengths of hospital stays and overall cost. Detailed information on the literature reviewed is available in APPENDIX E. Predicted Changes in Utilization Patterns The following section describes predicted changes in Medicare beneficiaries utilization patterns while receiving care from a Minnesota health care home. Predicted changes are presented by category of covered service. To view detailed calculations of changes in utilization, see APPENDIX F. Regardless of how the savings assumptions were built up from findings for subpopulations (e.g. with beneficiaries with ambulatory care-sensitive conditions), the cost impacts have been reported on a total beneficiary population per capita basis by service category. The state estimates that participation in the MAPCP demonstration will produce average savings of $27 PMPM: more than off-setting the average investment of $14.43 PMPM 39 to certified practices. TABLE 4: Summary of Budget Neutrality Calculations by Service Category Service Category Cost Impact PMPM Inpatient Acute Care Hospital Services (IP) - $29 Emergency Department Utilization (ED) - $1 Skilled Nursing Facility Services (SNF) - $1 Outpatient Primary Care and Specialty Services (OP) + $4 SUM: - $27 PMPM 39 Reminder: the average MAPCP payment of $14.43 is calculated by distributing the PMPM payment for Tiers 1-4 across the estimated tier distribution of the MAPCP population and estimating the prevalence of the two supplemental factors as described in section C7 (including those in Tier 0 that are served by the HCH but are not complex enough to garner monthly payment)

32 According to the Minnesota Medicare cost data made available by CMS to support this application, the average total medical expenditure for Parts A and B is $575 PMPM. To achieve budget neutrality, HCH participation must achieve savings equal to or greater than 3 percent of current Medicare spending for physician and inpatient services. Although the average MAPCP payment of $14.43 is higher than the $10 PMPM expectation set in the solicitation, the state believes that its Medicaid rate structure adequately reflects the clinic work required to coordinate care based on beneficiaries chronic disease burden and individual needs. The complexityadjusted payment structure sets Minnesota s program apart from similar efforts, targets coordination resources at the beneficiaries with the greatest potential to achieve savings and provides appropriate incentives for clinics to engage in managing complex patients. Even with the rather conservative utilization impacts assumed, the state expects to achieve budget neutrality at this payment level. The predicted changes are based on a number of assumptions. The analysis assumes that most beneficiaries, whether with single or multiple conditions, will experience a broad scope of impacts. In addition to scope, it is assumed that the scale will be comprehensive at the population level, meaning that anyone with need for HCH services will receive them at near the state-of-theart level for advanced primary care. The analysis also assumes that the intensity of the intervention will be on the high end of the intervention spectrum, falling somewhere between the artificially produced intensity under randomized controlled trial (RCT) protocols often associated with funded clinical trials; e.g., excluding subjects with co-morbidity and the lower intensity one may expect from pilot programs with intrinsic limitations due to the fact that the intervention is usually a temporary carve-out program often characterized by slow ramp-up and low adherence to the program s design. Finally, the analysis assumes that HCHs will produce the predicted impact early in the three-year demonstration, given that HCHs are only certified after they have achieved transformation and are ready to coordinate care as highly-functioning advanced primary care practices. The state recognizes that the literature is most well established for beneficiaries with major chronic illnesses and complex co-morbidity and, more specifically, those that are considered to be impactable through advanced primary care. Some studies, however, are of broad-based interventions that are targeted at nearly all Medicare patients. As in all populations, a relatively small proportion of beneficiaries account for most of the cost to Medicare. The state wishes to be able to account for the larger cost savings associated with the highest risk subpopulation while at the same time account for the savings shown for populations without these identified major conditions and co-morbidities. The initial focus is on the utilization/cost impacts that are most studied and with the greatest impact, namely costs associated with hospital-related services, such as admissions, readmissions and ED use. The HCH patient complexity tiers provide a natural structure to accomplish this. The analysis then expands to other services and the entire beneficiary population. The following describes the logical analysis the state applied in translating the findings from the literature and local sources for the MAPCP demonstration giving consideration to the design features of Minnesota s HCH program and Minnesota s health care delivery context

33 Inpatient Acute-Care Hospital Services (IP) Integrating the results of the literature review with the baseline data provided by CMS produced an IP savings projection of $29 PMPM. This is calculated as a PMPM change for the entire eligible population. Computational details are provided in APPENDIX F. The steps for this computation included: Deriving an ACG case mix profile for eligible beneficiaries using Minnesota fee-forservice Medicare claims data available to MDH Using the ACG model results to stratify the population and target impactable strata Deriving expected cost change from the peer-reviewed literature Applying these findings to the population baseline data for Minnesota provided by CMS The state s approach focused on IP services to concentrate on changes that are sufficiently documented 40 and account for most of the cost reduction shown for APC initiatives 41. The analysis used the Minnesota HCH tier model to identify beneficiaries with the highest prospects for improvements in IP care patterns. The analysis linked the improvement estimates in Brown (2009) with only the beneficiaries expected to exhibit high impactability 42. These were individuals with multiple co-morbidities and ambulatory care sensitive (ACS) conditions. Cost reductions projected for this impactable subset were dispersed over the entire eligible population to derive overall PMPM cost reduction estimates. IP utilization changes are expected to be produced by certified HCHs use of patient-specific care plans, improved coordination with specialists, medication reconciliation, discharge and care site transition planning to avoid readmissions, and improved end-of-life planning and coordination. Emergency Department Utilization (ED) Projected ED-related cost reductions total $1 PMPM. This was calculated as a PMPM change for the entire eligible population. Computational details are provided in APPENDIX F. Changes in ED use and cost patterns have been widely reported in the literature describing 40 Huang, ES. Will Patient-Centered Medical Home Improve Efficiency and Reduce Costs of Care? A Measurement and Research Agenda. PCMH Evaluators Collaborative Efficiency Workgroup, Annual Research Meeting, Academy Health. 29 Jun 2010, Boston, MA. 41 Billings, J; Mijanovich, T. Improving the management of care for high-cost Medicaid patients. Health Affairs 26(6) 2007: Brown, R. The Promise of Care Coordination: Models that Decrease Hospitalizations and Improve Outcomes for Medicare Beneficiaries with Chronic Illnessess. Mathematica Policy Research (commissioned by the National Coalition on Care Coordination), March Lewis, GH. Impactability models: Identifying the subgroup of high-risk patients most amenable to hospitalavoidance programs. The Milbank Quarterly 88(2) 2010: Wolff, JL; Starfield, B; Anderson, G. Prevalence, expenditures, and complications of multiple chronic conditions in the elderly. Arch. Internal Med. 162: 2002:

34 medical home initiatives, care coordination and advanced clinical practices. Estimations of ED use reductions range from 15 percent to 50 percent, depending on the study 43. The state explored projections of cost changes based on a 29 percent reduction. This seemed to represent an intermediate expectation, with more studies reporting reductions in this range than near either extreme. Computation of the projected PMPM savings was less sophisticated than the IP determination. Visit reductions were converted to PMPM changes. Because of the relatively low PMPM cost reported for these services, even dramatic improvements are unlikely to deflect overall cost very much for the whole eligible population. This reinforces the observation that most cost savings will be found within inpatient interventions and outcomes. ED utilization changes are expected to be produced by HCHs expanded clinic access (including 24/7 telephone coverage with access to patient information), improved triage and the use of patient-specific care plans. Skilled Nursing Facility Services (SNF) An estimated PMPM cost reduction for SNF services was projected at $1 PMPM. Documentation of impacts from medical home, care coordination or advanced primary care initiatives on SNF use patterns are relatively sparse. The analysis applied a 37 percent decrease in SNF days as a test level, derived from Leff (2009). Computation details are provided in APPENDIX F. Despite a reduction in projected PMPM cost ($34 compared to $53) for the user group, the overall PMPM reduction across the population was very low because of the low number of users for SNF services compared to the entire eligible population. SNF utilization changes are expected to be produced by certified HCHs use of patientspecific care plans, improved coordination with specialists, medication reconciliation, discharge planning to avoid readmissions, and improved end-of-life planning and coordination. Outpatient Primary and Specialty Care Services (OP) A projected PMPM cost increase of $4 PMPM was estimated for outpatient primary care and specialty services. Some of the reviewed studies noted an increase in primary and 43 Reid, RJ; Fishman, PA; Yu, O; Ross, TR; Tufano, JT; Soman, MP; Larson, EB. Patient-Centered Medical Home Demonstration: A Prospective, Quasi-Experimental, Before and After Evaluation. American Journal of Managed Care. 15(9): 2009: e71-e87. Leff, B; Reider, L; Frick, K; Scharfstein, D.O; Boyd, C.M; Frey, K; Karm, L; Boult, C. Guided Care and the Cost of Complex Healthcare: A Preliminary Report. American Journal of Managed Care. 15(8) Gill James et al. The Effect of Continuity of Care on Emergency Department Use. Arch Fam Med. 2000;9: McBurney, PG; Simpson, KN; Darden, PM. Potential cost savings of decreased emergency department visits through increased continuity in a pediatric medical home. Ambulatory Pediatrics May-Jun;4(3):

35 specialty care costs 44. Accordingly, a cost increase of $5 PMPM for evaluation and management (E&M) service users was used to project PMPM changes for the MAPCPeligible population. Computational details are provided in APPENDIX F. Other Service Categories A number of other service categories were examined, including: Imaging Laboratory tests Therapy services Ambulance/transportation services Home health services Durable medical equipment (DME) Hospice care Until more and better evidence is available, the state cannot make cost change projections for these service areas. Leff (2009) does note changes for DME use, tests and home health services, but it is not clear how general these findings are, or if the basis for the observed use patterns is applicable to Minnesota. Consequently these service areas were considered costneutral, and not included in the state s budget impact determinations. In general, the university s review of the literature supports the observation that cost estimations are best concentrated with IP reduction estimates. Other service categories may hold significant potential for cost reductions attributed to this program. However, only enhancing the current knowledge base can provide the measurement basis for making those determinations. 3. Related Medicaid Waiver Requests The state plan amendment detailing Minnesota s Medicaid fee-for-service participation in the HCH initiative was approved in July , with a similar expectation of budget neutrality in Medicaid. This state plan language was the template for analogous contract requirements for state public program enrollees enrolled in managed care plans operating under a broad managed care waiver. Incorporating the tiered rate structure for HCH payments into the Medicaid entitlement in Minnesota provides a solid administrative foundation for the multi-payer payment 44 Reid, RJ; Coleman, K; Johnson, EA; Fishman, PA; Hsu, C; Soman, MP; Trescott, CE; Erikson, M; Larson, EB. The Group Health Medical Home At Year Two: Cost Savings, Higher Patient Satisfaction, And Less Burnout For Providers. Health Affairs, 29, no. 5 (2010): Leff, B; Reider, L; Frick, K; Scharfstein, D.O; Boyd, C.M; Frey, K; Karm, L; Boult, C. Guided Care and the Cost of Complex Healthcare: A Preliminary Report. American Journal of Managed Care. 15(8) aveas=1&rendition=primary&allowinterrupt=1&ddocname=dhs16_

36 methodology. Minnesota is also encouraged by the degree of congruency between its existing Medicaid state plan language and the payment requirements laid out in Section 2703 of the Patient Protection and Affordable Care Act (PPACA) 46. F. Evaluation Plan Description of State Evaluation Plan As part of the 2008 statutory requirements, Minnesota will be evaluating and monitoring the impact of the health care home (HCH) initiative for all populations, including Medicare beneficiaries. Robust evaluation was a cornerstone of the law creating HCHs across the state. Statutory language, in fact, requires that HCHs meet specific outcomes measures for the purposes of annual recertification. The language states that for continued certification under this section, HCHs must meet process, outcome and quality standards as developed and specified by the commissioners. The commissioners shall collect data from HCHs necessary for monitoring compliance with certification standards and for evaluating the impact of HCHs on health care quality, cost and outcomes 47. Statutory language goes on to direct the commissioners to provide to the Legislature comprehensive evaluations of the HCH model three and five years after implementation. The report must include: 1. The number of state health care program enrollees in HCHs and the number and characteristics of enrollees with complex or chronic conditions, identified by income, race, ethnicity and language. 2. The number and geographic distribution of HCH providers. 3. The performance and quality of care of HCHs. 4. Measures of preventive care. 5. HCH payment arrangements and costs related to implementation and payment of care coordination fees. 6. The estimated impact of HCHs on health disparities. 7. The estimated savings from implementation of the HCH model for the fee-for-service, managed care and county-based purchasing sectors 48. In addition to the legislative requirements, the Minnesota Department of Health (MDH) and the Minnesota Department of Human Services (DHS) have established a partnership research study Minnesota Office of the Revisor. [Internet] St. Paul (MN): 2009 Minnesota Statues 256B.0751 Health Care Homes Minnesota Office of the Revisor. [Internet] St. Paul (MN): 2009 Minnesota Statues.256B.0752 Health Care Home Reporting Requirements. -

37 with investigators at the HealthPartners Research Foundation and Minnesota Community Measurement (MNCM) through the Agency for Healthcare Research and Quality (AHRQ) to study the transformation of primary care clinics certified as HCHs. Details of this additional evaluation are below. Legislative Evaluation Design and Methods Minnesota has a very important asset in evaluating the effects of HCH: Minnesota Community Measurement (MNCM) - a well-established statewide performance measurement and public reporting entity sponsored by Minnesota s non-profit health plans. MNCM has operated as an independent 501(c)3 since 2002, reporting selected quality measures on a medical group basis. MNCM s community role was expanded as part of the 2008 health reform law when the Minnesota Legislature mandated that all clinics participate in direct data submission. Beginning in 2011, this system will also be surveying patients using the CG-CAHPS questionnaire to capture quality measures on the patient experience of care. The state will combine the descriptive data identified above (#1, #2, #5) that is collected by MDH from HCH clinics with quality and patient experience data from MNCM to enable two comparisons: Changes over time in clinics certified as HCHs. Comparison between HCH clinics and those eligible but not yet certified on a crosssectional yearly basis. Over the past year, the MDH-sponsored Outcomes Measurement Work Group (comprised of a number of community stakeholders including representatives from the provider community, health plans and government) has been developing recommendations for measurement for this evaluation. The purpose of this work group (and its technical committee counterpart) is to recommend outcomes for measuring HCH improvement in the areas of patient health, patient experience and cost-effectiveness for the total patient population. Whenever possible, HCH evaluation will also coordinate with other health care reform measurement efforts for market transparency and quality reporting. This work group will closely monitor the measurement and evaluation of HCHs. The group will meet for two years to follow the progress from implementation to evaluation for both recertification and outcomes measurement. The work group has selected the following initial measures for HCH evaluation: 1. Clinical quality: a. Optimal asthma care (well controlled, no increased risk of exacerbations and a written asthma action/management plan in the medical record); and b. Optimal vascular care (LDL cholesterol = <100 mg/dl, blood pressure <130/80, daily aspirin use as appropriate and documented tobacco free). 2. Access and patient experience of care from CG-CAHPS surveys, including additional questions about shared decision-making developed by the Minnesota Shared Decision

38 Making Collaborative in conjunction with National Committee for Quality Assurance (NCQA) and AHRQ. 3. Cost-effectiveness from DHS claims data on: a. Rates of hospitalizations, emergency room visits and avoidable readmissions; and b. Risk-adjusted total annual cost of care for patients attributable to individual clinics. In addition, through its collaboration with MNCM, the State will also be developing a functional status measure over the course of the next two years for use by health care homes. DHS will be evaluating the effectiveness of the HCH initiative through claims analysis and is leading a cross-payer work group that will encourage an aligned evaluation initiative outside of Medicaid. Data will be used both to feed actionable information back to HCH practices and to evaluate the overall HCH initiative on cost and quality dimensions. AHRQ Grant Evaluation Design and Methods In addition to the statutorily-required evaluation, MDH and DHS have established a partnership research study with investigators at the HealthPartners Research Foundation and MNCM funded by a $600,000 grant from AHRQ to study the transformation of primary care clinics certified as HCHs. As part of this study, additional data will be collected from HCHs to establish comparison groups that are more and less effective in implementing systematic care coordination and improving quality performance. The study will then collect information on the organizational factors that distinguish these groups and the process used to achieve higher levels of performance. Finally, the study will compare these groups in terms of operating costs and total cost of care. These data, measured and analyzed in a scientifically sound way, will be available to the state agencies responsible for HCH sponsorship on an aggregate basis to add understanding of the process and outcomes of HCH transformation. This AHRQ-funded evaluation will address the following questions: 1. Do clinics certified as HCHs have better quality, patient experience and costs than clinics not so certified? 2. Do clinics certified as HCHs demonstrate improvement over time in their measures of quality, patient experience and costs? 3. What organizational factors and change processes distinguish HCHs that achieve the highest levels of performance from those that do not? Additional Efforts Since the announcement of the MAPCP demonstration, Vermont, New Hampshire, Maine, Rhode Island, Massachusetts, Pennsylvania, Minnesota and Colorado have worked to together to

39 initiate a framework for a true multi-state learning health system with common metrics, shared learning and rapid cycle data-guided improvement of their respective MAPCP models. These states plan to use common measures and comparative effectiveness to guide their delivery system reforms, providing the best opportunity to evolve models that are clinically and financially effective for a successful CMS demonstration. While MAPCP has been the impetus to organize, policy leaders in each of these states realize the overarching opportunity offered by a structured and systematic approach to comparative assessment and shared learning. As part of the 2008 health reform law, Minnesota is also establishing a provider peer grouping (PPG) system that will compare providers based on overall value (risk-adjusted quality and cost). The system will initially rely on existing quality measures and eventually incorporate other measures currently being developed. PPG will incorporate de-identified health care claims data on cost and resource utilization and the state has the ability to stratify results for Medicare beneficiaries. The scheduled PPG public release is January 2011 for a value measure of total care and March 2011 for a value measure of six identified specific health conditions. It is also important to note that the state s efforts around public health improvement will also be evaluated. The Statewide Health Improvement Program (SHIP) evaluation is divided into two main parts: surveillance and evaluation of systems change. MDH has responsibility for SHIP surveillance activities, focusing on broad trends in systems and environmental change, health behaviors and health care costs. SHIP surveillance brings together multiple sources of data. Systems change data come from the local public health reporting system; data on individual health behaviors and risk factors of obesity and tobacco use come from the Behavioral Risk Factor Surveillance System and the Minnesota Student Survey; and cost data come from utilization of health care services. Grantees are required to submit interim and annual evaluation reports on their progress. These documents are designed to evaluate the implementation of systems changes from start to finish, as well as the individual health behavior changes and health outcomes that result from implementation of SHIP interventions. This ensures that SHIP communities that have chosen to implement the preventive care and chronic care prevention guidelines in health care settings (that are also certified HCHs) will be evaluated as well. How Evaluation Results will be Used Data are submitted by certified HCHs annually for recertification based on the authority of the HCH rule. The rule states that at the end of year two and all subsequent years (unless the applicant obtains a variance for superior outcomes) HCHs must achieve continued progress on standards towards the benchmarks established by the commissioner for improving the quality of services based on patient health outcomes, patient experience outcomes and outcomes related to cost-effectiveness in its primary care services patient population. The commissioner must use benchmarks announced annually to determine whether an applicant has demonstrated that it has achieved the benchmarks in its primary care services patient population. The benchmarks must be based on one or more of the following factors: 1. An improvement over time as reflected by a comparison of data measuring quality submitted by the HCH in the current year to data submitted in prior years

40 2. A comparison of data measuring quality submitted by the HCH to data submitted by other HCHs. 3. Standards established by state or federal law. 4. Best practices recommended by a scientifically based outcomes development organization. 5. Measures established by a national accrediting body or professional association. 6. Additional measures that improve the quality or enhance the use of data currently being collected. Organization/Individuals Conducting the Evaluation MDH and DHS will conduct a competitive process to select a vendor to complete the HCH evaluation. Types of Data and Data Sources / Expected Timeline for Completion Data will be collected through direct data submission to MNCM or, in the case of CG-CAHPS, through a clinic-selected vendor. DHS claims data will be used to evaluate cost effectiveness for the Medicaid and state public programs population. Data will be stratified based on complexity tiers and payer type. This allows for MDH (which administers the certification) to work with certified HCHs to interpret the data as comparisons are made to benchmarks. The department will have other opportunities for comparisons on cost and quality through the state s PPG initiative, in which certified HCHs will be flagged. Outcome measure collection will be phased in over the next two years, with legislative reports evaluating the statewide program s effectiveness due in August 2011 and August G. Commitment to Cooperate in Evaluation The state and participating providers and payers commit fully to participating in CMS formal evaluation of the demonstration. Minnesota looks forward to collaborating with CMS to implement an evaluation approach that clearly measures the value of the MAPCP model in the most administratively efficient manner possible. Further, is committed, as part of its application to CMS, to participate in the Multi-State Shared Learning Collaborative, as is described in APPENDIX D. With support from the Milbank Memorial Fund, eight states have worked together to establish the basis for data sharing and common metrics, comparative assessment, shared learning and technical assistance that will support rapid cycle transformation and refinement of our MAPCP models. These states MAPCP models are based on similar principles, yet they employ different strategies and tactics, presenting an ideal opportunity to identify the most effective strategies across different settings. Inclusion of all states in this existing

41 collaborative presents a compelling opportunity for CMS to have a successful demonstration and to establish a broad geographic footprint of advanced primary care. H. Limitation on Participation in Other Medicare Demonstrations There are currently three regions of Minnesota linked to active demonstrations: Park Nicollet Health Services is a participant in the Physician Group Practice (PGP) Demonstration in the Twin Cities (Minneapolis and St. Paul) metro area. A number of counties in southwestern Minnesota are impacted by the South Dakota e- Health Collaborative s Electronic Health Records (EHR) Demonstration. A number of counties in southeastern Minnesota are impacted by Gunderson Lutheran s participation in a Medicare Health Quality (646) demonstration. Minnesota s health care home initiative is statewide by design and the blanket omission of these large segments of the state would severely inhibit our ability to achieve the stated goals of the MAPCP demonstration. Instead, Minnesota proposes to work closely with CMS and demonstration sites to ensure that the roll-out of MAPCP contains strong safeguards against double-payment and does not compromise existing evaluation efforts. For example, in the future iteration of the PGP demonstration currently being discussed by Park Nicollet and CMS, PMPM MAPCP payments are expected to be deliberately incorporated into cost structures for gainsharing/accountable care organization (ACO) arrangements. Similarly, Minnesota is interested in partnering with CMS and the Milbank states to develop innovative evaluation methodologies that fit our rapidly evolving post-reform health system. Such flexibility regarding potential future demonstrations is also crucial for Minnesota s ongoing health reform goals. The MAPCP demonstration is an important opportunity for Minnesotans who will benefit from more coordinated and patient-centered primary care. Nevertheless, many expect that future CMS demonstrations will involve payment and delivery reforms that are more expansive across the health care system impacting incentives for primary care practices as well as other providers and payers. If Minnesota is precluded from leveraging the opportunities these future demonstrations will offer because of our participation in the MAPCP, we will be left with smaller, short-term gains at the cost of much more significant, valuable and long-term transformation. As stated in the letter Minnesota submitted by the Milbank Collaborative to Secretary Sebelius 49 and expressed often by other states, this flexibility around the traditional demonstration structure (with appropriate safeguards) is crucial to ensure that our mutual reform goals are met and that complementary reform efforts do not present either/or choices for entire states or regions. 49 Letter sent to Secretary Sebelius and Ms. Jody Blatt on July 20,

42 APPENDIX A: Letters of Support 39

43 40

44 41

45 42

46 43

47 44

48 45

49 46

50 47

51 48

52 49

53 50

54 51

55 APPENDIX B: Provider Groups Intending to Seek Certification % Central - Isanti Allina Medical Clinic - Cambridge Medical Center Metro - WashingtonHealthEast Cottage Grove Clinic Central - Pine Region Allina Medical Clinic - Hinckley Clinic Name # Unique Patients Percent Medicare Central - Pine Allina Medical Clinic - Pine City Metro - Hennepin HCMC East Lake Street Clinic Central - SherburneAllina Medical Clinic - Elk River Metro - Hennepin HCMC Hennepin Care - South Clinic Central - Wright Allina Medical Clinic - 3 clinics: Annandale, Buffalo, Cokato Metro - Hennepin HCMC Positive Care Center Central - Wright Allina Medical Clinic - St. Michael Metro - Hennepin HCMC Family Medicine Center Central Chicago Allina Medical Clinic - North Branch Metro - Hennepin HCMC Brooklyn Center Region Clinic Name # Unique Patients Central Kanabec Allina Medical Clinic - Mora Metro - Hennepin HCMC Dow ntow n Medicine Clinic Metro - Anoka Allina Medical Clinic - Coon Rapids Metro - Hennepin HCMC Dow ntow n Pediatric Clinic Metro - Anoka Allina Medical Clinic - Ramsey Metro - Carver Allina Medical Clinic Crossroads - Chaska Metro - Stearns Lakeview Medical Clinic Metro - Dakota Allina Medical Clinics - 4 clinics: Eagan, Farmington, 2 - Central - Todd Lakew ood Health - Brow erville Hastings Metro - Hennepin Allina Medical Clinics - 9 clinics: Abbot, Champlin, Central - Todd Lakew ood Health - Eagle Bend Clinic Metro - Ramsey Edina, Isles, Maple Grove, Nicollet, Uptow n, West Campus, Allina Medical Woodlake Clinics - 6 clinics: Shoreview, St. Paul, Central - Morrison Lakew ood Health - Motley United, West St. Paul, Woodbury Metro - Scott Allina Medical Clinic Crossroads Dean Lakes - NW - Cass Lakew ood Health - Pillager Shakopee Metro - Scott Allina Medical Clinic - Shakopee Central - Todd Lakew ood Health - Staples Metro - Scott Allina Medical Clinic Crossroads - Prior Lake Metro - WashingtonAllina Medical Clinic - Cottage Grove SE - Blue Earth Mankato Clinic, Ltd Metro - WashingtonAllina Medical Clinic - Forest Lake SE - Rice Allina Medical Clinic - Faribault SE - Steele Mayo - Ow atonna Clinic - MHS SE - Rice Allina Medical Clinic - Northfield SE - Mow er Mayo Austin Medical Center SW - Brow n Allina Medical Clinic - New Ulm Medical Center Clinic SE - Olmsted Mayo Employee and Community Health: 132,000 paneled patients SW - Meeker Allina Medical Clinic - Litchfield SW - Sibley Allina Medical Clinic - Winthrop Area Clinic SE - Cottonw ood Sandford Windom Medical Clinic 2, Allina Total: 415, SE - Cottonw ood Sandford Mountain Lake Medical Clinic 2,400 37% 8 Metro - WashingtonBluestone Physician Services Metro - Hennepin People's Center Medical Clinic Metro - Sherburne CentraCare Clinic - Becker Metro - Stearns St. Cloud Medical Group P.A. 175, Metro - Sherburne CentraCare Big Lake Clinic Metro - Hennepin North Clinic - Robbinsdale 1267 Central - Todd CentraCare Clinic - Long Prairie Metro - Hennepin North Clinic - Robbinsdale

56 Metro - Stearns CentraCare Clinic - 5 clinics: Heartland, Melrose, Mid MN Family, River Campus, St. Joseph, St. Cloud Metro - Stearns CentraCare Clinic Women & Children Metro - Hennepin NorthPoint Health & Wellness Center Metro - Hennepin Park Nicollet Clinic - Pediatric Specialty Metro - Hennepin Children's Clinic - Minneapolis Metro - Hennepin Park Nicollet Clinic - St. Louis Park - Family Medicine Dept. Metro - Ramsey Children's Clinic - St. Paul Metro - Hennepin Park Nicollet Clinic - St. Louis Park - Internal Medicine Dept. Metro - Hennepin Park Nicollet Clinic - St. Louis Park - Pediatrics Dept Metro - Stearns Christopher J Wenner MD, PA Metro - Hennepin UMP Smiley's Clinic Metro - Hennepin Community-University Health Care Center Metro - Ramsey UMP Phalen Village Clinic Metro - Hennepin UMP Broadw ay Family Medicine Metro - Hennepin Courage Center Physicians' Clinic Metro - Ramsey UMP Bethesda Clinic Metro - Hennepin UMP Primary Care Center Center - Clay Essentia Health Innovis Health Moorhead Metro - Hennepin UMP Mill City Clinic Central - Crow WingEssentia Health St. Joseph's Medical Center - 3 clinics: Brainerd Medical Clinic, Cross Lake, Pequot Lakes Metro - Hennepin UMP Women's Health Center Central - Morrison Essentia Health St. Joseph's Medical Center - Pierz NW - Hubbard Essentia Health Innovis Health Park Rapids Clinic Central - Wadena Essentia Health Innovis Health Menahga NW - Mahnomen Essentia Health St. Mary's Innovis Health Mahnomen Clinic NE - St. Louis Essentia Health SMDC Medical Center NW - Norman Essentia Health Bridges Medical Center NE - St. Louis Essentia Health Duluth Clinic - Pediatrics Dept 1276 NW - Polk Essentia Health First Care Medical Services - Fosston 1280 NE - Itasca Essentia Health Duluth Clinics - 7 clinics: Aurora, NW - Polk Essentia Health First Care Medical Services - Erskine Babbitt, Chisholm, Deer River, Hermantow n, Hibbing, Virginia NW - Becker Essentia Health St. Mary's Innovis Health - Detroit NW - Red Lake Essentia Health First Care Medical Services - Oklee Lakes Women's Clinic NW - Becker Essentia Health St. Mary's Innovis Health Frazee NW -Polk Essentia Health Innovis Health Fosston NW - Becker NW - Cass Essentia Health St. Mary's Innovis Health Lake Park Clinic Essentia Health - 5 clinics: St. Joseph's Hackensack, St. Joseph's Pillager, St. Joseph's Pine River, Duluth Clinic Remer, Innovis Walker, SW - Big Stone Essentia Health Graceville Health Center Essentia Health Total: 300, Metro - Anoka Fairview - 5 clinics: Andover, Blaine, Columbia Metro - Hennepin HealthPartners West Clinic Heights, Fridley, Lino Lakes Metro - Carver Fairview Jonathan Clinic Metro - Hennepin HealthPartners Bloomington Clinic Metro - Chisago Fairview - 6 clinics: Chisago Lakes, Family Medicine, Internal Medicine, Pediatric, North Branch, Rush City Metro - Ramsey HealthPartners Health Center for Women

57 Metro - Dakota Fairview - 7 clinics: Cedar Ridge Clinic, Eagan, Metro - Ramsey HealthPartners Arden Hills Clinic Farmington, Lakeville, Ridges, RidgeValley, Rosemount Metro - Hennepin Fairview Clinics - 14 clinics: Maple Grove, Bass Lake, Metro - Ramsey HealthPartners Maplew ood Clinic Brooklyn Park, Children's, Crosstow n, EdenCenter, El Centro, Hiaw atha, Northeast, Oxboro, Pond Center, Rogers, Uptow n NE - St. Louis Fairview Mesaba Clinics - Hibbing Metro - Ramsey HealthPartners St. Paul Clinic NE - St. Louis Fairview Mesaba Clinics - Mountain Iron Metro - Ramsey HealthPartners Como Clinic SE - Goodhue Fairview Red Wing Medical Center Metro - Ramsey HealthPartners White Bear Lake Clinic SE - Goodhue Fairview Zumbrota Clinic Metro - Ramsey HealthPartners Specialty Center - Adult & Seniors Health Wisconsin Fairview Ellsw orth Metro - WashingtonHealthPartners Woodbury Clinic Fairview Total: 373, Metro - Anoka HealthPartners North Suburban Family Physicians - Lino Lakes Metro - Dakota Family Healthservices MN - Inver Grove Heights Metro - Ramsey HealthPartners North Suburban Family Physicians - Roseville Metro - Dakota Family Healthservices MN - White Bear Lake Metro - Anoka HealthPartners RiverWay Clinics - Andover Metro - Ramsey Family Healthservices MN - 10 clinics: East Metro, Maplew ood, North St. Paul, Shoreview, 3 - St. Paul, Vadnais Heights, West St. Paul Metro - Anoka HealthPartners RiverWay Clinics - Anoka Metro - Ramsey Family Healthservices MN -East Metro Family Practice and MinnHealth Metro - Sherburne HealthPartners RiverWay Clinics - Elk River Metro - WashingtonFamily Healthservices MN - Woodbury Metro - Ramsey HealthPartners Center for International Health/Midw ay Clinic Family Healthservices total: HealthPartners Total: 326, Metro - Dakota HealthPartners Apple Valley Clinic Metro - Anoka HealthPartners Coon Rapids Clinic Metro - Carver Valley Family Practice Metro - Dakota HealthPartners Inver Grove Heights Clinic Metro - Hennepin HealthPartners Brooklyn Center Clinic Metro - Hennepin HealthPartners Riverside Clinic

58 APPENDIX C: Payment Methodology Complexity Tier Assignment Tool. 55

59 56

60 57