State Medicaid Directors Driving Innovation: Continuous Quality Improvement February 25, 2013 The National Association of Medicaid Directors (NAMD) is engaging states in shared learning on how Medicaid directors can drive payment and delivery system innovations. As more states take on an active purchaser role in the health care market, Medicaid directors increasingly face pressure to move toward paying for value rather than volume. States struggle with the question of how to best maintain and improve the quality of health care services available to Medicaid members. States are not pursuing quality improvement in a vacuum; they are implementing multiple, concurrent initiatives with different goals. This dynamic presents a significant challenge. While Medicaid directors are poised to leverage their influence as state leaders to dramatically reform the provision of health care to millions of beneficiaries of public programs, they often lack the resources to effectuate and sustain these improvements. To aid in implementing these initiatives, NAMD supports networking and sharing of best practices among Medicaid directors on innovative delivery and payment reform models in their states. * This brief summarizes states experiences with quality improvement in the context of Medicaid innovation, including challenges, current approaches, and goals for the future. Barriers to Quality Improvement in Medicaid Currently, states face a number of barriers to implementing strategic quality initiatives to improve health care services for Medicaid members. These barriers can slow progress or make it more challenging to prove that interventions are working. States seek assistance from federal partners and others in addressing these concerns. Lack of appropriate measures It is difficult even to visualize a standardized set of measures that can be applied across the broad and complex Medicaid program. Current measurement systems are not designed for patients with multiple and complex chronic conditions or those served in non-traditional settings, such as home and community-based programs. Measures do not easily translate between fee-for-service, managed care, and long-term care provider environments. There are also essential, non-medical services, such as transportation and personal care, that Medicaid covers and that are not well accounted for in current quality measurement frameworks. For example, states proposing to integrate care for their dually eligible populations are running up against a lack of * NAMD conducts a range of technical assistance and dissemination efforts around delivery system and payment reforms. Project support is provided by The Commonwealth Fund. 444 North Capitol Street, Suite 524 Washington, DC 20001 Phone: 202.403.8620 www.medicaiddirectors.org
appropriate quality measures for these beneficiaries that often utilize higher than average services in a variety of settings. It is difficult for states to measure and track the quality of care provided to Medicaid members when there are no standardized measures available. Need for greater data analytics capacity States are in different places in their capacity to analyze data to compare plans and providers on quality and performance. On a national level, states collect, and report to the Centers for Medicare and Medicaid Services (CMS) Medicaid Statistical Information Statistics (MSIS) database information on eligible individuals, beneficiaries, utilization, and payment for services covered by State Medicaid programs. However, the MSIS does not include all relevant quality data, and states may report this same data to CMS in different ways. On a state level, data analytics capability varies across Medicaid programs. Some states are using out-of-date systems to pay claims, and in many places, providers have been slow to adopt information technology such as electronic health records (EHRs). Furthermore, states often lack the resources for outside analytic support or internal data infrastructure. In recognition of these challenges, states and the federal government have engaged in a project to reform MSIS. This new system Transformed MSIS or T-MSIS will be rolled out soon. But data must be utilized to be worthwhile, and states and HHS will need to work to develop strategies not just for data collection, but for analytics that improve the program and the care delivered to beneficiaries. Challenges in crafting a comprehensive quality framework to ensure sustained progress Providers are overwhelmed with requests from every payer to collect and report on different quality measures. Because Medicaid is usually the lowest payer, providers may feel less obligated to spend resources measuring and reporting on Medicaid-specific quality metrics. Even within the Medicaid program, there may be conflicting and duplicative reporting requirements tied to separate initiatives. A few states have been successful in streamlining their fragmented quality measurement efforts, and other states stand to learn a lot from their experiences. However, in many states where there has been turnover in leadership at the highest levels of state government, Medicaid directors have had difficulty setting and following a comprehensive vision for quality improvement. The bottom line is that large-scale and complex programs such as Medicaid cannot be transformed quickly. Sustained commitment that recognizes the diversity of possible approaches and the variation in local circumstances is essential. The following section looks at the key elements needed to drive continuous quality improvement in the program. Page 2 of 6
State Progress in Quality Improvement To address these barriers, state Medicaid programs are pursuing a variety of approaches to quality measurement and improvement. Identified here are the types of solutions used by states to overcome the above challenges. Strategic planning for innovation States are pursuing quality improvement efforts hand in hand with payment and delivery system reforms. Each new program innovation comes with new and often duplicative quality metrics. One option is to consolidate many quality monitoring efforts under one framework. An example of this is in Arkansas, where the state is launching an episode payment initiative for several conditions. Under this program, the state will produce performance reports for participating providers. Transparency in quality data is not enough, says Andy Allison, state Medicaid Director; quality improvement needs to be linked to financial incentives. Therefore, the quality reports will become the foundation for shared savings. Arkansas proposal is part of a larger, statewide cost containment and quality framework. Multi-payer collaborations Medicaid directors realize that they must leverage the power of the Medicaid program as one of the largest payers in a state. Together with Medicare, private insurance, and large, self-insured employers, Medicaid can hold providers and managed care organizations (MCOs) accountable for care improvement. To this end, more and more states are engaging in quality efforts across payers. For example, Missouri Medicaid has teamed up with Anthem on a multi-payer quality initiative in the state. Tennessee, South Carolina and Ohio have joined a group of private insurers and large employers to align contracting requirements and hold MCOs accountable for improving quality in their networks. South Carolina also established a partnership with Blue Cross Blue Shield to apply a common modifier to all claims to track birth outcomes. Measuring performance in different provider markets States are making strides in their efforts to redirect quality oversight and measurement efforts toward improving health system performance and value. Like other payers in the health care marketplace, state Medicaid agencies are aiming for quality and efficiency of services coupled with cost containment in the program overall. In the risk-bearing arena of managed care, Medicaid programs are exploring models that reward performance and care coordination and management. States also seek to apply relevant performance measures to providers in fee-for-service (FFS) environments. For example, effective January 2012, Connecticut transitioned its Medicaid medical services from managed care organizations to a single Administrative Services Organization (ASO), so the state is now directly monitoring quality. In its Page 3 of 6
contract with the ASO, Connecticut included a provision that permits the Medicaid agency to withhold 7.5% of each quarterly administrative payment contingent upon the ASO meeting established performance targets. In contrast, Arkansas Medicaid has a long history as a 100% FFS state and has been using HEDIS and CAHPS with its Primary Care Case Management (PCCM) program providers for many years. South Carolina has a mixed model of service delivery with both managed care and FFS populations. The state engaged a measure developer to develop non-hedis measures for its FFS population and then risk-adjusted the scores in order to accurately assess provider quality outcomes. States are also encouraging providers to reengineer their practices at the local and regional level to improve quality. California s most recent 1115 waiver includes a Delivery System Redesign Incentive Pool (DSRIP), whereby safety net hospitals in each county receive incentive payments as they meet milestones designed to transform their delivery systems and improve quality of care. California s proposal to integrate care for individuals dually eligible for Medicare and Medicaid also relies on local provider networks to drive care coordination and includes quality measures and shared savings tied to these providers. Oregon s new Coordinated Care Organizations are designed to bring quality improvement closer to the point of care by empowering individual providers and practices to transform the way they deliver services to best meet the health needs of Medicaid members. Maximizing data analytics capacity At the national level, there is an effort to redesign the MSIS system to be more useful in program analytics. According to the Affordable Care Act, starting in 2014, all states will be using T-MSIS database for reporting to CMS. The system will be updated more often and contain many more data elements than the current MSIS. An important priority will be ensuring that analytics are prioritized in the implementation process. Some Medicaid programs also are in the process of moving from paying hospital claims on a per diem basis to the diagnosis-related group (DRG) system, which allows the state to better track cost and acuity with outcomes. For example, California will have a DRG system up and running in the summer of 2013, while Texas has recently began to utilize a DRG systems to implement payment adjustments policies for certain hospital-acquired and preventable conditions. Meanwhile, Missouri is trying to enhance provider practices ability to monitor quality data by achieving meaningful use of EHRs. The Medicaid program has made progress in working with providers to adopt EHRs but there are some challenges. Where states might want to focus on health information exchange among state databases, plans and providers, other in the health IT arena are focused on building direct messaging capabilities among providers. Furthermore, many of the federal HIT efforts have not incorporated long-term care providers and others, further stunting Medicaid-relevant advances. Page 4 of 6
Other states have robust, state-level data analytics systems to monitor quality. For example, West Virginia has an all-payer claims database that allows the state to see a broad picture of individuals service utilization patterns. South Carolina also has a multipayer data warehouse that includes vital records as well as claims. The state codes the data by different variables, including geographic region, provider, race, and gender for easy viewing using dashboards. Some states have also tapped local academic centers as additional resources to add to limited state manpower. For example, Maryland Medicaid has an MOU with the Hilltop Institute at the University of Maryland, Baltimore County, which conducts analysis for the agency. The Future of Quality Improvement in Medicaid Given the above challenges, states are committed to moving forward with quality improvement in tandem with the other innovations in Medicaid program operations. Federal leaders at HHS and the national measurement community can help smooth the pathway forward for states in the following ways. Here are some of the supports that would accelerate state progress. Develop appropriate measures States agree they need appropriate quality measures, targeted to Medicaid populations, that states actually have the power to impact. CMS should enlist respected quality organizations, such as the National Committee for Quality Assurance (NCQA), to focus on developing measures to track the care provided to Medicaid patients in non-traditional settings, and other Medicaid-relevant circumstances. Standardize analytical tools States need the capacity to analyze state-level data to identify high-cost centers and target quality efforts at high utilizers and evaluate the quality of their Medicaid programs on a continuous basis. Ideally, each state would develop its own robust analytical infrastructure to allow rapid cycle quality improvement. State specific quality measures will be critical, particularly in allowing the Medicaid program to be accountable to local stakeholders. At the same time, states do not want to reinvent the wheel. States seek ways to work with CMS to enhance their data analytics capacity and to create and share quality measurement tools. CMS should support the sharing of practices for data collection and use to identify problems in quality and then identify potential evidence-based solutions to continuously improve their programs. Particularly as states begin to transition to T-MSIS, CMS should provide technical assistance and work with states to ensure the utility of this potentially rich data source. Increase support for Medicaid innovation Demonstrating improvement in the quality of care is a herculean challenge when viewed in the context of 56 different state and territorial Medicaid programs. States acknowledge this challenge and seek to engage with Page 5 of 6
CMS on technical assistance and guidance as well as increased resources through grants or demonstration projects. As states pursue payment and delivery system reforms and related quality improvement initiatives, CMS will see an increase in both the number of waiver and State Plan Amendment (SPA) applications as well as demand for technical assistance. This process could be significantly streamlined to accommodate both states new and ongoing initiatives. In addition, CMS should continue to support states in continuous quality improvement and system reform efforts. The recent release of the State Innovation Models (SIM) grants is a critical investment in state-based innovation. Medicaid will be a major participant and leader in these multi-payer reforms. The Center for Medicare and Medicaid Innovation s and CMS should work to collect lessons learned, and promote the sharing of best practices among SIM grantees, with all states, and between Medicare and Medicaid-based initiatives. Conclusion States believe it is essential to transform the Medicaid program to provide higher-quality care and improve the health outcomes for all members. States can learn from each other, from Medicare, and from the private sector, about what works to improve quality, and federal partners can help facilitate that learning. The examples here of challenges and successful models in the states are just the beginning. Medicaid directors will continue to drive innovation and quality improvement in the nation s public health programs. Page 6 of 6