Illinois Governor s Office of Health Innovation and Transformation

1 Illinois Governor s Office of Health Innovation and Transformation Medicaid Managed Care Conference October 21, 2014 Michael Gelder, Senior Health Policy Advisor to Governor Pat Quinn Executive Director, Governor s Office of Health Innovation and Transformation

2 Why Transformation is Needed Globally, the U.S. rates poorly on overall health system performance Ranked 37 th out of 190 countries by the World Health Organization Infant mortality (39th), life expectancy (36th) Illinois faces similar challenges: Fragmented Care Last among states (50th) for % of lowcare nursing home residents (26%) Dysfunctional Payment Systems Stakeholder Dissatisfaction Unnecessary Costs System rewards providers for volume of services delivered, not the value of care provided Source: World Health Organization. (2000). The World Health Report 2000 Health Systems: Improving Performance

3 Transforming Health Care for Illinois 26 2014 Overall State Health System Ranking (out of 51) Indicator Rank Access 24 Prevention & Treatment Avoidable Hospital Use & Costs Healthy Lives Equity 23 39 27 18 Estimated Impact of Improvement: (if Illinois improved to the level of the best-performing state) 1,159,562 480,281 80,386 more adults would be insured fewer adults would go without needed health care because of cost fewer emergency department visits would occur among people with Medicare Source: D.C. Radley, D. McCarthy, J.A. Lippa, S.L. Hayes, and C. Schoen, Results from a Scorecard on State Health System Performance, 2014, The Commonwealth Fund, April 2014.

4 Alliance for Health Innovation Plan Goal is to identify strategies to improve health and transforming how health care is delivered for IL residents, including those served by: Medicaid Medicare Commercial insurance Large employers (self insured) Those remaining without insurance Vision Statement Better health and lower costs will be achieved when people live in healthy, safe communities with appropriate resources, including access to high quality health care delivery systems where provider teams help patients achieve physical, mental and emotional well being.

5 Alliance for Health Illinois received $2 million planning grant from the Center for Medicare & Medicaid Innovation (CMMI) in Spring 2013 With executive leadership from the Governor s Office, more than 90 stakeholders have allied to help Illinois achieve the Triple Aim Payers Public Health Professionals Health Care & Human Service Providers Insurers Triple Aim Community Development Advocates Illinois State Agencies Improve the health status of the population Improve the health care delivery system Reduce costs

6 The Plan s Key Innovations Triple Aim 1. Improve the health status of people and their communities 2. Improve the efficiency and effectiveness of clinical care 3. Reduce costs to make health care more affordable Objectives (Primary Drivers) 1 2 3 4 5 Create comprehensive, integrated delivery systems, along with payment reforms to support them. Ensure additional supports and services for people with specific needs. Enhance public health efforts focusing on environmental and social factors that negatively affect large segments of the population. Ensure an adequate workforce that has the appropriate education, training and compensation to staff integrated delivery systems and enhance public health. Expand the state's leadership role in promoting continuous improvement in public health and health care systems.

7 Medicaid 1115 Demonstration Waiver A recommendation of the Innovation Plan Assists in achieving comprehensive, multi-payer payment reform Leverages Medicaid federal funding to implement initiatives within the Plan Implementation planning requires broad stakeholder engagement GOHIT plans to secure funding through the 1115 Waiver process in order to jumpstart innovations to infuse into Illinois Medicaid.

Medicaid Transformation 2.7 million enrolled in Illinois Medicaid before the ACA o Means-tested program, based on income o Includes asset tests for some groups (e.g., disabled) But since 1965, Medicaid clients also had to fit into a category, no matter how poor they were: o Children under 19 ( AllKids ) o Their parent or caretaker ( FamilyCare ) o Pregnant women o Persons with disabilities o Seniors aged 65 and older (many also qualify for Medicare) 8

Newly Eligible Clients Under ACA Now includes one new group previously excluded: adults 19-64 years of age without dependent children ACA Adults They also have to qualify based on income o Income under 138% of Federal Poverty Level (FPL) o $15,856 for a single person or $21,404 for a couple Huge take-up rate so far: 300,000+ of 342,000 expected already have submitted applications! We don t know medical history or pent-up demand 9

10 Why Medicaid Redesign Is Needed Clients must search for providers willing to accept Medicaid, with little help in navigating a fragmented system Providers operate in silos, with few incentives to coordinate services or create multidisciplinary teams The client s medical, behavioral health and social needs are not considered holistically Fee-for-service payments reward for volume of services rather than value

11 Illinois State Mandate 2011 Medicaid reform law (P.A. 96-1501) mandates 50% of clients to be enrolled in care coordination by 1/1/15 Even without state mandate, we believe that care coordination is needed to achieve the Triple Aim We use care coordination and managed care interchangeably - it s about managing care Care coordination requires the redesign of the Medicaid Program

12 Our Unique Structure: 4 Types of Managed Care Entities Illinois Medicaid is testing different models for 5 different Medicaid populations Seniors and Persons with Disabilities (SPD) Medicaid only Seniors and Persons with Disabilities (SPD-duals) -- Medicare/Medicaid Children with complex medical needs Children/family & caregivers Newly eligible ACA Adults There are 4 different models, generally called Managed Care Entities Managed Care Organizations (MCO) Managed Care Community Networks (MCCN) Care Coordination Entities (CCE) Accountable Care Entities (ACE)

13 What Is Changing With Managed Care? Managed care entities organize networks of providers Networks include primary care, specialists, hospitals, behavioral healthcare Clients select a managed care entity, then stay within network Patient-centered health homes coordinate care of clients with complex needs Multidisciplinary teams focus on clients holistic needs Care coordinators help navigate the system, arrange care transitions and follow-up care Electronic health records make care coordination possible with sharing of clinical information Payments reward for quality and health outcomes ( value-based purchasing ); transition from fee-for-service to full risk There is renewed focus on social determinants of health, prevention and wellness

Quality Performance Review for Integrated Care Program Quality measures are key component of contracts o 50 quality metrics are measured, including pay-for-performance measures (quality has not been measured for Medicaid fee-forservice providers) o Pay-for-Performance withholds: a percentage of capitation payments is withheld each month and MCOs must earn money back by meeting 14 metrics tied directly to incentive payments covering quality issues o Minimum performance related to quality metrics: after first year, if performance on any pay-for-performance quality metric drops more than 1% below baseline, plan loses the ability to earn any pay-for-performance money, no matter how well they perform on all other metrics -- strong incentive to focus on all areas of quality 14

15 Why Medicaid Redesign Is Needed Clients must search for providers willing to accept Medicaid, with little help in navigating a fragmented system Providers operate in silos, with few incentives to coordinate services or create multidisciplinary teams The client s medical, behavioral health and social needs are not considered holistically Fee-for-service payments reward for volume of services rather than value

16 Illinois State Mandate 2011 Medicaid reform law (P.A. 96-1501) mandates 50% of clients to be enrolled in care coordination by 1/1/15 Even without state mandate, we believe that care coordination is needed to achieve the Triple Aim We use care coordination and managed care interchangeably - it s about managing care Care coordination requires the redesign of the Medicaid Program

17 Our Unique Structure: 4 Types of Managed Care Entities Illinois Medicaid is testing different models for 5 different Medicaid populations Seniors and Persons with Disabilities (SPD) Medicaid only Seniors and Persons with Disabilities (SPD-duals) -- Medicare/Medicaid Children with complex medical needs Children/family & caregivers Newly eligible ACA Adults There are 4 different models, generally called Managed Care Entities Managed Care Organizations (MCO) Managed Care Community Networks (MCCN) Care Coordination Entities (CCE) Accountable Care Entities (ACE)

18 What Is Changing With Managed Care? Managed care entities organize networks of providers Networks include primary care, specialists, hospitals, behavioral healthcare Clients select a managed care entity, then stay within network Patient-centered health homes coordinate care of clients with complex needs Multidisciplinary teams focus on clients holistic needs Care coordinators help navigate the system, arrange care transitions and follow-up care Electronic health records make care coordination possible with sharing of clinical information Payments reward for quality and health outcomes ( value-based purchasing ); transition from fee-for-service to full risk There is renewed focus on social determinants of health, prevention and wellness

Quality Performance Review for Integrated Care Program Quality measures are key component of contracts o 50 quality metrics are measured, including pay-for-performance measures (quality has not been measured for Medicaid fee-forservice providers) o Pay-for-Performance withholds: a percentage of capitation payments is withheld each month and MCOs must earn money back by meeting 14 metrics tied directly to incentive payments covering quality issues o Minimum performance related to quality metrics: after first year, if performance on any pay-for-performance quality metric drops more than 1% below baseline, plan loses the ability to earn any pay-for-performance money, no matter how well they perform on all other metrics -- strong incentive to focus on all areas of quality 19

20 Health Innovation and Transformation Alliance for Health Innovation Plan Create Comprehensive Integrated Delivery Systems Ensure Supports and Services for People with Specific Needs Enhance Public Health Efforts Ensure the Workforce has Appropriate Education, Training, and Compensation Expand the State s Leadership Role in Promoting Continuous Improvement Path to Transformation 1115 Waiver Transform the Health Care Delivery System LTSS Infrastructure, Choice and Coordination Build Capacity for Population Health Management 21st Century Health Care Workforce Innovation and Transformation Resource Center Implementation Work Groups Integrated Delivery System Reform Services and Supports Public Health Integration Workforce Data and Technology

21 Implementation Work Groups Vision Statement Providing an open and participatory process for policy makers and stakeholders to advise the state on how best to implement Alliance for Health and Section 1115 Waiver innovations to improve health, improve health care delivery, and lower costs. Work groups will address issues of stakeholder concern fairly and deliberately, and leverage the work of existing advisory groups.

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23 Implementation Work Group Process The Implementation Work Groups will adhere to the following high level process as they work toward a common goal, the development of a Strategic Implementation Plan Initiate Work Groups begin meeting Subcommittees defined Roles and responsibilities finalized Critical paths defined Collaborate Work Groups execute their critical tasks Participants work together toward a shared goal Work Groups develop and finalize their recommendations Consolidate GOHIT gathers and synthesizes input from all Work Groups Strategic Implementation Plan This plan represents the culmination of all Work Group planning activities, and will include actionable steps for implementing all strategic recommendations.

24 GOHIT Resources Questions? Email: GOV.gohit@illinois.gov Workgroup meeting materials are posted here: http://www2.illinois.gov/gov/healthcarereform/pages/gohit.aspx Governor s Office Health Reform www.healthcarereform.illinois.gov 1115 Waiver http://www2.illinois.gov/gov/healthcarereform/pages/1115waiver.as px