Alabama Medicaid Preparing the State for Reform through Regional Care Organizations January 23, 2015
Restarting the Conversation 2
Agenda Alabama s Healthcare Landscape I. RCO Rationale II. DSRIP Design III.Sources of Non-Federal Share Funding IV.Sustainability 3
Alabama s Healthcare Landscape: Access and Quality Data Alabama tends to have more chronic conditions and more hospital admissions than people in other states Quality Data: Condition (Kaiser Measure) Alabama Claims 1 National Rank 2 Heart (Heart Disease Deaths per 100,000) $1,303,975,099 47 Mental Health (Percent of Adults with Poor Mental Health) $1,263,451,448 49 Diabetes (Percent of Adults with Diabetes) $607,061,914 46 Chronic Obstructive Pulmonary Disease (COPD) $385,714,212 n/a Severe Mental Illness $361,767,183 n/a BMI (Percent of Adults who are Overweight or Obese) (Overweight or Obese Children) $240,973,641 Asthma $179,592,038 n/a Cancer (Cancer Deaths per 100,000) $126,103,620 43 Maternity (Teen Birth Rate) (Number of Infant Deaths) (Number of Preterm Births) (Number of Low Birth Weight) Access Data Alabama 3 National 3 n/a 44 42 37 36 32 31 Hospital Admissions per 1,000 Population 135 110 Hospital Emergency Room Visits per 1,000 Population 488 424 Hospital Outpatient Visits per 1,000 Population 1,424 2,040 [1] Source: Alabama Claims 2013 [2] Source: Kaiser Family Foundation State Health Facts Data (2009 2012) [3]: Source: Kaiser Family Foundation State Health Facts Data (2012) 4
Alabama s Healthcare Landscape: Current Medicaid Programs Alabama has undertaken efforts to address fragmentation in the Medicaid delivery system through various programs o Current programs have limited scopes, populations and geographic reaches o FFS does not incentivize beneficiaries/providers to improve outcomes Current Programs Objectives Gap Maternity Care Program Created to address Alabama s o High infant mortality rate o High drop-in delivery rate Care coordination to support improved safety and quality outcomes Patient 1 st Program Primary care case management program and medical home Patient Care Network of Alabama (Patient Care Networks of Alabama) Health Home services to patients who meet one of the following criteria: o Two or more chronic conditions o One chronic condition (risk of another) o One serious mental illness Only targets pregnant women Does not provide comprehensive management of care Operates in less than one third of the State s counties 5
Alabama s Healthcare Landscape: Where We Are Need for Transformation: Poor Health Outcomes Fragmented System of Care and Overutilization of Hospitals and Emergency Rooms Potential Solutions: Expand Patient Care Networks of Alabama Statewide Challenge: Does not alter the fundamental financial drivers for overutilization Use of Commercial Managed Care Challenges: No experience with managed care in Alabama provider community Alabama s dependence on provider based funding makes imposition of unpopular delivery model difficult Provider-Based Capitated Delivery System Advantages: Providers are at the table not on the table Allows Statewide patient management and changes the financial incentives for hospital utilization Has the greatest potential for maintaining provider support and the current funding structure Challenges: These changes likely improve health outcomes long-term but do not immediately address initial health problems in Alabama Specifically targeted initiatives to address problems such as heart disease, diabetes, comorbidities, etc. are insufficiently funded by the current Medicaid funding system and require additional targeted funding 6
RCO Rationale: Provider-Led Managed Care RCOs are designed to help deliver the Agency s transformation goals Provider-led Organizations RCOs are designed to give providers financial incentives to work together to improve people s health and reduce costs Clinicians included in governance structure Beneficiary engagement through required RCO Citizens Advisory Committees Accountability through at-risk capitation payments Accountability through quality reporting Close relationships with provider community Investment in local delivery systems Regionally-based Organizations RCOs are designed to use local leaders and providers to achieve statewide goals Use the strengths of the current Patient Care Networks of Alabama and Maternity Care Program in the RCO program design Provide local and broad representation of providers and beneficiaries Target local needs 7
RCO Rationale: Stakeholder Engagement to Date RCOs grew out of the work of the Alabama Medicaid Advisory Commission o Included key legislators and leaders of State agencies, insurance companies, consumer groups, medical providers and professional associations Quality Assurance Committee (QAC) The group represents hospitals and providers from across the State It developed RCO quality measures It has met regularly since October 2013 Stakeholder Engagement/Meetings Six town hall meetings on the RCO program between February 2014 and May 2014 Regular meetings with sister agencies, including Department of Mental Health, Department of Human Resources and Department of Rehabilitation Services National Governors Association (NGA) helped get input from stakeholders in December 2014 Public Comment Period/Engagement Public comments and discussions with key provider associations and advocacy groups regarding the 1115 Demonstration Proposal and dozens of Alabama administrative rules governing the RCO program Two public hearings on 1115 Demonstration Proposal 8
RCO Rationale: Ongoing Stakeholder Engagement Stakeholder input will continue throughout 2015 and the development of the RCO program Open Communication Email inbox Alabama Medicaid Agency website postings Town hall meetings General Webinars/Educatio n Overviews of rules and other pertinent information Provider education Quality Improvement Quality Assurance Committee meetings Working group for DSRIP and other topics Probationary RCO Working Sessions Technical assistance sessions with the Agency Learning collaboratives 9
RCO Rationale: Organizations with Probationary Certification The Agency has certified 11 organizations as probationary organizations These organizations must complete a thorough readiness assessment process to receive final certification from the Agency REGION A Alabama Community Care - Region A - Sentara - Huntsville Hospital System Alabama Healthcare Advantage North - McKesson/Med3000 - WellDyne Rx - Individual Investors My Care Alabama - Healthcare Business Solutions, LLC (Wholly-owned by BCBS) - North Alabama RCO Holding Co, LLC REGION C Alabama Community Care - Region C - Sentara - Huntsville Hospital System - DCH Health System - Whatley Health Services - Mental Health Retardation Board of Bibb, Pickens and Tuscaloosa Counties - Greater Alabama Health Network Alabama Healthcare Advantage West - McKesson/Med3000 - WellDyne Rx - Individual Investors REGION B Alabama Care Plan - UAB Health Systems - St Vincents Health System - Triton Health Systems Alabama Healthcare Advantage East - McKesson/Med3000 - WellDyne Rx - Ball Health Services - Anniston EMS - Individual Investors REGION D Care Network of Alabama - East Alabama Health Care Authority - East Alabama Medical Center - Triton Health Systems - Health Care Authority for Baptist Health - Houston County Health Care Authority - Univ of Ala Board of Trustees for UAB Alabama Healthcare Advantage - McKesson/Med3000 - WellDyne Rx - Jackson Hospital - Individual Investors REGION E Alabama Healthcare Advantage South - McKesson/Med3000, WellDyne Rx, Individual Investors Gulf Coast Regional Care Organization - USA HealthCare Management LLC, AltaPoint Health Care Systems 10
RCO Rationale: Quality Assurance Measures The Agency will measure RCOs against performance on 42 metrics, selected by the QAC o Nearly all metrics reflect national standards including metrics from the: Healthcare Effectiveness Data Information Set Physician Quality Reporting System CMS Medicaid Adult and Child Core Measures CMS Health Home Measures o Ten measures will be used for a quality-performance bonus withhold program CMS Quality Domain Quality Measure Count Patient and Family Engagement 5 Patient Safety 8 Care Coordination 22 Population/Public Health 16 Efficient Use of Healthcare Resources 7 Clinical Process/Effectiveness 28 Note: Some measures fall into multiple domains 11
RCO Rationale: DSRIP The Agency needs a new tool to encourage providers to make measurable improvements in health-care delivery The Agency needs to create care delivery structures and incentives to increase the number of physicians willing to take Medicaid patients Better access should lead to better care Federal investment in a DSRIP program would give RCOs big incentives to work with providers and other groups to carry out Agency-approved projects to improve health care 12
Sample Outcomes DSRIP Targeted Areas RCO Program Objectives DSRIP Design: RCO Program Objectives and DSRIP Targeted Areas The DSRIP targeted areas and their associated sample outcomes are designed to support Alabama s RCO program objectives Care Coordination: Improve care coordination and reduce fragmentation in the State s delivery system Outcomes: Create aligned incentives to improve beneficiary clinical outcomes Access: Improve access to health care providers Cost: Reduce the rate of growth of Medicaid expenditures Improved Prevention and Management of Chronic Disease Improved Access to and Care Coordination of Mental Health Services Improved Birth Outcomes Improved Financial Stability percent reduction in unnecessary emergency department visits for targeted conditions >85% screening for mental health / substance abuse in primary care percent reduction low fetal birth weight births percent reduction in the Medicaid expenditure growth rate percent reduction in preventable admissions and readmissions in targeted conditions Individualized care plans developed for >85% of at-risk patients percent reduction in preventable readmissions in mental health 13
DSRIP Design: Identification of DSRIP Projects The Agency reviewed DSRIP projects in other states, focusing on New York to identify potential projects best suited to achieving improvements in Alabama s DSRIP targeted areas Projects were reviewed against criteria to determine a preliminary DSRIP project menu for Alabama DSRIP Project Requirements A project should: 1. Address Alabama s: Primary cost drivers (identified through 2013 claims experience analysis) Poor ranking against peers in chronic conditions and access/utilization (captured from Kaiser Family Foundation State Health Facts) 2. Align with the 42 RCO Quality Assurance Measures 3. Contribute to achievement of the RCO Program Objectives Based on these criteria, the Agency identified 10 project categories for reaching improved outcomes in Alabama 14
DSRIP Design: Preliminary DSRIP Projects The Agency will provide requirements for each DSRIP project and will define process and outcome milestones for each project To encourage innovation, RCOs will propose specific evidence-based strategies to meet the milestones, subject to approval of the Agency The Agency will consult with key stakeholders (e.g., Department of Mental Health, Department of Public Health, Alabama Hospital Association) DSRIP Targeted Area Chronic Disease Mental Health Birth Outcomes Preliminary DSRIP Projects Evidence-based Strategies for Disease Management (focus on heart disease, diabetes and co-morbidities) Emergency Department (ED) Care Triage for At-Risk Populations with Chronic Conditions Care Transitions Intervention Model to Reduce 30-day Readmissions for Chronic Health Conditions Integration of Primary Care and Behavioral Health Services Community Crisis Stabilization ED Care Triage for At-Risk Populations with Mental Health Conditions Care Transitions Intervention Model to Reduce 30-day Readmissions for Mental Health Conditions Innovative Models of Prenatal Care (e.g., types of home visitation models such as Family Nurse Partnerships) Care/Referral Community Network Strategies to Reduce Low Birth Weight Deliveries Project Components Core requirements in all projects (as appropriate): Health Homes Post-acute care management Care transition management 15
RCO Savings Capabilities: Budget Neutrality RCO savings through coordinated care are assumed to result from the waiver process and all of its components Savings assumptions are based on results seen in other states and reviews of Alabama Medicaid data Savings assumptions will be re-visited by the Agency s actuary and actuary s clinician when the capitation rate is developed 16
Sustainability: Budget Neutrality To achieve budget neutrality, unsustainable hospital, inpatient and emergency department use and associated expenditures will be replaced by more appropriate ambulatory care and better management of chronic disease, mental health and maternity care Better and lower-cost health outcomes should make Medicaid more sustainable Individualized care planning and care coordination will decrease avoidable admissions Overall Cost of Care (PMPM) for Chronic Disease Decreases RCOs will have incentives to provide the right care at right time in the right setting and at the right cost Preventive Outpatient Visits Increase
Sustainability: Vision for Sustainable Transformation Better access to preventive care and better care coordination should improve health outcomes for beneficiaries and lower costs Capitation will give the state more certainty in budgeting within a contract period RCOs will be a catalyst for clinical transformation that extends beyond Medicaid The RCO model can be adopted and used by the State and commercial carriers as a care delivery model for other populations Costs will go down for RCOs at a rate that allows for a sustainable margin Efforts Extend to all of Alabama Medicaid Beneficiaries Alabama Residents 18
RCO Rationale: Vision for Transformation Program Aims Primary Drivers Secondary Drivers Sample Outcomes Improve Care Coordination and Reduce Fragmentation Create Aligned Incentives to Improve Beneficiary Clinical Outcomes Develop a regional based provider sponsored managed care solution called RCOs Expand Health Home and Medical Home program elements to improve management of chronic diseases Grow State s health information exchange (HIE) system to improve care coordination and communication between providers Implement DSRIP Engage providers and beneficiaries Create quality measure reporting system Create nonprofit RCOs with Health Home responsibilities Develop a staged and facilitative process to support RCO development Require RCOs to meet rigorous Federal and State managed care requirements Aggressively monitor RCOs for readiness, compliance and performance Require providers to participate in the State s HIE in order to be in RCO provider networks Require RCOs to include all elements of current Health Home/Medical Home Involve provider and beneficiary stakeholders in governance and beneficiary advocacy Develop quality reporting withhold program At least one RCO developed and maintained in each region *Reduce rates in: Infant mortality Premature births Low birth weight babies Preventable admissions and readmissions for diabetes, heart disease, co-morbid conditions and mental health Unnecessary emergency department visits for diabetes, heart disease, co-morbid conditions and mental health *Improve access to/care coordination for mental health services: >85% screening for MH/SA by primary care 85% individualized care plans developed for at risk patients Reduce avoidable readmissions > 85% percent connection of all RCO primary medical providers and hospitals with electronic health records (EHRs) to state HIE by September 2018 Majority of providers improve in quality performance measures involved in the quality withhold measures over 3 years time *Clinical outcomes improve in heart disease, diabetes, co-morbid conditions, mental health and birth outcomes Improve Access to Health Care Providers Develop access and care coordination RCO contract requirements Require RCOs to meet network adequacy requirements Increase primary care and prevention visits while decreasing avoidable admissions and ER usage Primary medical provider (PMPs) available within 50 miles for each beneficiary Reduce the Rate of Growth of Medicaid Expenditures Align payment incentives to foster cost reduction and improvement in care coordination/outcomes Hold RCOs at risk for total cost of care Implement All Patient Refined Diagnosis Related Groups (APR-DRG) methodology at the State and RCO level *Reduce Medicaid growth rate APR-DRG hospital payment implemented * Designated clinical improvement areas for DSRIP; specific improvement targets are still under consideration 19