ecg management consultants, inc. the shift from volume to value: emerging reimbursement and...
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ECG Management Consultants, Inc.
The Shift From Volume to Value: Emerging Reimbursement and Alignment Models
August 22, 2014
Ms. Purvi B. Bhatt, Senior Manager
Mr. Sean T. Hartzell, Senior Manager
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Agenda
I. Market Trends
II. Alignment Models
III. Innovative Payment Models
IV. Case Studies
V. Key Takeaways
Appendix A – Alignment Model Examples
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I. Market Trends
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I. Market TrendsKey Issues
• Evidenced by significant federal, state, and commercial payor initiatives, strategic direction, and financial urgency (governmental).
• Health systems focused on eliminating waste.
• Strong physician partnerships critical to driving change and protecting market share.
• Systems focused on efficiencies must restructure contracts to be rewarded for improved value.
The burning platform is here.
• Providers largely dependent on a productivity-based system and cannot simply “flip a switch.”
• As utilization is taken out of the system (through focused medical/chronic disease/population management initiatives), hospital and specialist financial performance at risk if contracts not restructured.
The pacing of the movement to value-based care is critical.
• Critical (no matter what provider type) to focus on efficiencies, measurement, and quality.
• Essential to execute strategy that closely aligns organization with preferred care partners.
Not all organizations can or should strive for the end-state model (in its totality).
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I. Market TrendsEnd-State Model
Independent Providers
Hospital
Outcomes• Provider Organization• Management/Governance • Clinical Protocols• Disease Management• Wellness• Integrated EHR • Performance Measurement• Reporting • Disease Registry• Joint Payor Contracting• Employee Health Plan
(EHP)• Funds Flow Design • Aligned Incentives
Independent Providers
Employed Physicians
Hospital
CIN • Home Health• SNF• Pharmacy• Other
Fragmented Delivery System
• Home Health• SNF• Pharmacy• Other
The end-state model is a clinically integrated network (CIN) of providers who follow common clinical protocols, have aligned measures and incentives based on improved value, and obtain joint payor contracts.
Employed Physicians
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I. Market TrendsA Time for New Alliances
In Central and Southern Georgia, 23 hospitals form a not-for-profit LLC called Stratus Healthcare.
This new network is a partnership allowing the member hospitals to collaborate while remaining independent.
georgia23 Hospitals Form Care Alliance
Three Philadelphia-area health systems form an alliance to work collaboratively to improve care and meet demands of health reform. The initial focus is to jointly manage the healthcare benefit plans of the systems' employees and their families.
.
PhiladelphiaThree Leading Health Systems Form New Initiative
This new alliance will bring together more than 30 facilities, including 6 of the 10 that make up Indiana's Suburban Health Organization.
“Healthcare reform has required healthcare systems to think differently than in the past,”– Vincent Caponi, CEO.
IndianapolisThree Health Systems Create Accountable Care Consortium
“The goals of population health management may be encouraging rampant consolidation across the healthcare industry, but some systems are pushing back
and seeing whether they can achieve the same results with looser arrangements.”
– Modern Healthcare, July 2013
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I. Market TrendsThe Spectrum of Integration
• Traditional medical staff/hospital relationship.
• Physicians are “customers” of the hospital.
• Competition over outpatient services and revenue streams.
• FFS mechanisms predominate.
• Organizational models created to achieve physician/hospital integration (e.g., joint ventures [JVs], employment).
• Physician-only models may include entering into managed care risk (e.g., independent practice association [IPA]).
• Focus is on creating structures that align strategic and financial goals – typically of one aspect of the healthcare delivery system (e.g., a service line, an outpatient service, physician recruitment, payor type).
• Systems and processes in place to measure quality and cost across a continuum (e.g., hospital, physicians, pharmacy, outpatient services).
• Selective participation of physicians who are willing to comply with set protocols and outcome measures.
• Pursuit of new models of clinical care delivery to enhance the management of chronic disease and coordination of care overall.
• All characteristics of clinical integration with a greater degree of financial integration and interdependence.
• Ability to approach the market and payors with an integrated system (i.e., hospitals, physicians, and other providers of care).
• Culture is totally focused on the success of the system versus individual components (e.g., hospital versus physician group).
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Independent/Competitive
SegmentedIntegration
ClinicalIntegration
Provider Network/ACO
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II. Alignment Models
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II. Alignment ModelsHow Physicians Are Organizing
Single-Specialty
Group
Multispecialty Group
Professional Services
Agreement (PSA)
• Loose; little interrelationship.
• Difficult to realize economies of scale.
• More integrated relationship.
• Possible hospital financial support.
Equity JV
Hospital Employment
• Shared services, lower cost.
• Little negotiating power.
• More risk sharing.
• Rewards for improved performance.
Physicians are choosing to organize themselves in response to changing payor dynamics.
Service Line Management
Ultimately, group dynamics will play into the preferred relationship/tactic.
Management Services
Organization(MSO)
IPA/PHO1
1 PHO = Physician Hospital Organization.
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II. Alignment ModelsAlignment Approaches and Their Characteristics
AlignmentApproach
Ability to Maintain Financial
Autonomy/ Independence
Ability to Leverage
Infrastructure Development
Costs
Ability to Facilitate Clinical
Collaboration
Ability to Manage Care
Across Continuum
Ability to Pursue Joint Contracting With Payors
Single-Specialty Group High Low Medium/High Low High
Multispecialty Group High Low Medium/High Medium High
MSO High Medium Low Low Low
PHO Medium/High Medium/High High Medium/High Medium
IPA Medium/High Medium/High High Medium/High Medium
Service Line Management
Medium/High Low High Medium/High Medium
Equity JV Medium Low Low Low Medium
PSA Medium Medium High Medium Medium/High
Hospital Employment Low High High High High
There are a variety of approaches for pursuing alignment, yet the requirements for infrastructure and capabilities related to population management will vary.
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II. Alignment ModelsRange of Provider/Payor Collaborations
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Range of Payor and Provider Collaborative Models
Traditional Contractual Relationship
JV Clinical Programs
InfrastructureResearch
JVFinancial IntegrationClinical Integration
ACO
Incentive Arrangement
Providers are contemplating a range of payor collaborative models, a thoughtful network strategy, and models for building appropriate insurance
capabilities.
Merged Organization
Degree of Clinical/Financial Integration
Level of Commitment
Complexity and Financial Investment
Single Organization/Ownership
Potential Upside
Major ConsiderationsNetwork Strategy
Need for Premium Access Need for Insurance Capabilities
RiskContract
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A provider organization’s strategy must consider how it fits into the full continuum of care and its vision for future care delivery.
II. Alignment ModelsNetwork Participation Tiers
Network formation typically includes participation tiers, allowing organizations to choose the most appropriate level of their commitment and exclusivity related to clinical integration efforts.
Level of Commitment and Exclusivity
Typical Network Tiers
Network Core
• Ownership (if necessary).
• Governance.
• Risk sharing.
• Surplus sharing.
Network Participants
• No governance or decision-making participation.
• FFS with shared savings.
• For example, home health agency.
Network Contractors
• No governance or decision-making participation.
• FFS only.
• For example, radiology group.
Network Affiliates
• Participation in decision making.
• Potential risk sharing.
• For example, aligned independent medical group.
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II. Alignment ModelsAlignment of Payment Models With Network Goals
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The funds flow is an important tool for creating alignment among the participating providers with both the immediate and longer-term goals of the network.
Characteristic First Generation Second Generation Ultimate Goal
Emphasis • Gain experience.• Develop capabilities.• Generate modest financial/
cost improvement.
• Leverage experience.• Expand capabilities.• Participate in associated
savings.
• Market/promote experience.• Capitalize on capabilities.• Engage in population health
management.
Scope EHP only. • EHP.• Medicare Advantage (MA)
and/or commercial plans.• Medicaid HMO contracts.
• EHP.• MA and/or commercial plans.• Self-funded employer plans.• Medicaid HMO contracts.
Level of Risk Moderate upside opportunity. Shared savings. Shared risk.
Business Requirements/Capabilities
Evolving. More advanced. Advanced.
Possible Transition Over Time
Level of Risk
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III. Innovative Payment Models
III. Innovative Payment ModelsClinically Integrated Models
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• Providers share responsibility for cost or utilization and have a significant positive gain for achieving targets.
• Members or owners share financial risk directly or through membership in another organization.
• Members may not account for more than 30% of physicians in local market.
• Patient-centered care focused on common understanding of desired outcomes.
• Broad network of providers.
• Integrated IT and efficient information exchange.
• Compliance with utilization review and performance standards.
• System-wide efficiencies across providers.
• Centralized ownership.
• Care is provided in accordance with quality targets.
• The quality of care is reviewed and monitored.
• There are provisions for adequate peer review if quality targets are not achieved.
• Payments are based on historical activity to avoid referral incentives.
• This model involves separate, independent, and unilateral contracting decisions.
• Offers and counteroffers between individual providers and payors are conveyed by PHO messenger.
• Objective information is communicated to providers regarding proposed contract terms.
Financial IntegrationP4P“Messenger” Model
Third-Party Messenger
Physician/Hospital Alignment
Merger/Acquisition
Coordinated Care
Clinical Integration
LessIntegrated
MoreIntegrated
Range of Clinical Integration
Potential Models of IntegrationIndependent Contracting Decisions
“United Front”
Risk Sharing
III. Innovative Payment ModelsRange of Value-Based Payment Models
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1 Medical homes that receive extra dollars for patient management.
Clinical and Financial Integration
Complexity/Broader Capabilities Required
Source: Healthcare Financial Management Association, “Accountable Care: The Journey Begins,” August 2010.
FFS
MedicalHome1
BundledPayment
Payment forEpisodes of Care
Total Cost of Care/
Shared Savings
Global Payment With Performance Risk
and P4P
Global PaymentWith Financial RiskP4P
Risk Continuum Associated With Various Reimbursement Structures
As more risk is introduced into payment methodologies, providers are moving toward greater integration and scale to efficiently develop capabilities for value-based
models.
Greater Risk/Potential Upside
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Payor initiatives are putting downward
pressure on provider
reimbursement.
Those providers positioned for a
value-based system will emerge as market leaders.
III. Innovative Payment ModelsContracting Vehicles
The economic reality of reform has caused enormous changes in the insurance industry; plans are differentiating themselves through the creation of innovative products.
P4PDisease Manage-
ment
Managed Medicaid
Narrow Networks
Dual Eligibles
Health Exchanges
MA
Patient-Centered Medical Home
(PCMH)
Commercial
EHPs
Shared Savings
Shared/ Full Risk
Bundled Payments
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III. Innovative Payment ModelsRange of Potential Risk Arrangements
• Ideally, as a provider network matures, it will adopt payment models with increasingly more risk.
• With the increased risk should come the opportunity to earn a greater percentage of shared savings, because the network/entity will be more accountable for cost and quality.
• As organizations become more adept at managing risk and enhance their clinical integration through care process redesign and better health IT, they can transition from risk-free or one-sided risk models to two-sided risk models in which organizations suffer a loss if they spend more than their projected global medical spending amount.
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Gain Sharing/One-Sided/ Asymmetric Model
“Two Sided”/ Symmetric/Shared-
Risk Model
Global Risk/Partial Capitation Model
Global payment arrangements (total cost of care models) range from shared savings (e.g., gain sharing, “one sided” track) within an FFS environment to shared-risk and ultimately to global-risk (e.g., capitation) arrangements with quality bonuses.
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III. Innovative Payment ModelsCritical Success Factors in Full-Risk Contracting
Overall, there are major clinical, financial, operational, and strategic requirements that will drive successful population health
management.
• Meeting of financial strength requirements to accept risk.
• Legal structure in place to receive and distribute payments.
• Broad base of clinical and administrative leadership.
• Clear lines of authority and accountability among related entities.
• Alignment of compensation/funds flow programs.
• Adequate incentives for population.
• Alignment of incentives.
• Sufficient primary care size for population management.
• Clinical consideration for specialty management and/or involvement for patients with chronic conditions.
• Hospital partnership.
• Support of the transformation of the care process to a team approach.
• Use of physician extenders.
• Group visits, e-visits, or other forms of patient encounters.
• Communication tools to facilitate integration of practice teams.
• Patient satisfaction monitoring.
• Patient attribution method in place.
Governance and ManagementProvider Composition/Practice
Source: Adapted from the AMGA Accountable Care Organization Readiness Assessment, 2010.
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III. Innovative Payment ModelsCritical Success Factors in Full-Risk Contracting (continued)
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• Chronic care management processes.
• PCMH practices.
• Predictive analytical tools to identify high-risk patients.
• Case managers assigned to high-risk patients.
• Systems in place to manage transitions of patient care settings.
• Medication reconciliation.
• Behavioral health programs integrated into care management plans.
• Home health and other extended care programs integrated into care management plans.
• Patient communication established as standard practice.
• Patient follow-up and reminder systems.
• Follow-up visits and referrals scheduled at time of initial encounter.
• Systems to manage population costs.
• System-wide measures and performance tracking of quality and efficiency.
• Episode-based resource-use metrics linked to quality metrics.
• Public reporting on outcomes/costs.
• Common EHR across providers.
• Practice guidelines/clinical protocols embedded in EHR.
• Appropriate alerts for clinical decision support.
• Processes to improve coding.
• Registries for chronic disease patients.
• E-prescribing used by PCPs.
• Formularies for generics.
• Electronic patient communication.
Care Management/Coordination Accountability/Reporting
Source: Adapted from the AMGA Accountable Care Organization Readiness Assessment, 2010.
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IV. Case Studies
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IV. Case StudiesExample #1 – Nonurban Hospital With Local Providers
• 250-bed hospital, 40 miles outside of major metropolitan city.
• Inpatient market share in the core market is high.• Payor market is consolidated, and the local Blue Cross
plan is dominant.• The medical community is predominantly composed of
small, independent, single-specialty physician practices.• A significant proportion of the primary care base, while
generally loyal to the hospital, is economically aligned with a regional network of primary care practices.
• The hospital is preferred by affiliated physicians and patients.
• Multiple clinical affiliations augment local expertise.• Quality, excellence, and continuous improvement are
areas of ongoing emphasis for the organization.• Costs and utilization are lower compared to other area
hospitals.• Limited experience with pilots for care management of
specific patient populations.
Background
• Most of the covered lives cared for by the hospital and the medical community are “owned” by the regional primary care network.
• Market share of covered lives will be a key measure of indispensability in the future, replacing today’s emphasis on market share of beds, discharges, and/or specialists.
• Local PCPs have growing expertise to support the management of care for specific populations.
• Most nearby competitors have achieved greater economic alignment with physicians and have a larger base of employed PCPs.
• Hospital-centric mind-set means health system model is underdeveloped.
• Despite pilot initiatives around care coordination, the care model remains fragmented, with generally uncoordinated care transitions.
• Success in new care delivery models and under new payments models will require more than improved performance on traditional metrics.
• Financial capacity to fund growth is limited.
Considerations for the Future
IV. Case StudiesExample #1 – Nonurban Hospital With Local Providers (continued)
The key to being relevant in the future is to strengthen existing relationships and establish new ones that add value, capture new markets, and accelerate the development of new competencies and capabilities.
Build the competencies required to be successful as healthcare reform drives delivery and payment system changes.
Enhance financial strength and market position to continue to operate as an independent hospital/health system.
Develop a system of community care that is no longer hospital-centric, reaches out proactively, and engages all providers and the patient.
Shift focus from managing episodes of hospital-based care to managing the health of a population, thereby requiring clinical integration.
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Secure an economically aligned referral base in order to be indispensable in the primary market.
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IV. Case StudiesExample #1 – Nonurban Hospital With Local Providers (continued)
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The previous investments and commitment by the physicians and the hospital in cultivating a strong partnership, implementing technology, and engaging in continuous improvement provide a strong foundation for the medical community to build upon.
• Strong physician/hospital relationships and shared decision making.
• Platform for exchanging electronic health data.
• PHO.
Culture that supports physicians in delivering the best care.
Infrastructure that encourages and facilitates collaboration.
Population health management tools and delivery of targeted, cost-effective care.
• Continuous quality improvement initiatives.
• Pilots with EHP.
• Bundled payment initiatives.
Financial incentives for high-quality, low-cost care to a large patient cohort.
• Economic alignment between PCPs and specialists.
• Improved geographic access to primary care.
• Health system model with stronger linkages across system of care.
• Evidence-based protocols and care guidelines.
• Coordinated care transitions using decision support tools and reporting capabilities.
• Cost discipline maintenance.
• Capitalizing on existing expertise.
Transforming Care Delivery System
IV. Case StudiesExample #2 – Nonurban CIN
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Improve Outcomes
Gain Efficiencies
Deliver Value to the Populations the CIN Serves
Vision
Guiding Principles
Support Local Autonomy and Independence
Collaborate With Independent
Providers Who Choose to Work
Together
Provide Options for Degree of Involvement
Engage Physicians
Focus on Innovating to
Create Value for Purchasers and
Patients
More than a dozen inpatient facilities and over 1,000 employed physicians formed a CIN focused on improving the quality and efficiency of care being delivered. The CIN members will collaborate and innovate
to:
• Integrated IT.– Health information exchange.– Population health/utilization data warehousing. – Disease registries.
• Utilization, medical management, and care design. – Utilization review. – Standard protocol development and compliance. – PCMH.– Standardized care transitions.– Care management and infrastructure.
• Contracting.– Collective negotiations. – Risk-based contracting/shared risk. – Network formation and contract execution.– Funds flow design and planning.
• Managed care administration– Risk management support.– Data analytics and reporting. – Surplus and deficit accounting and distribution.
IV. Case StudiesExample #2 – Nonurban CIN (continued)
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Two main functional areas have been identified to provide benefit to members of the CIN: (1) payor contracting and (2) shared services.
• Vendor contracts and pricing.– Supply chain.– Insurance. – Consulting.
• Provider credentialing.• Best practices and education.
– Evidence-based practice guidelines.– Quality improvement. – Staff “in-services.” – Industry trends. – Regulatory compliance.
• Medical delivery support.– Telemedicine. – Physician staffing/rotations. – Medical transport.
• Centralized corporate/other functions.– Human resources (HR)/benefits. – Revenue cycle.– IT. – Pharmacy.
Payor Contracting Shared Services
IV. Case StudiesExample #2 – Nonurban CIN (continued)
• The CIN will begin with consistent measurements and the development/refinement of programs for major chronic conditions, using the EHP as a starting point.
• The CIN will evaluate payor contracting opportunities to expand population management capabilities to additional patient populations.
• As a first step in this process, it will evaluate MA.
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The ultimate goal is to evolve the CIN through the management of a series of phased-in populations.
• EHP.
• MA.
• Commercial contracts.
• New Medicare or Medicaid programs.
• State health exchange.
• Direct-to-employer contracting.
• CIN.
First Generation
Second Generation
Ultimate Goal
A single EHP network will be developed by year-end 2014 aimed at improving the health of employees through clinical integration and reducing the total cost of care.
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V. Key Takeaways
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Organizations can leverage the new care model and position themselves in the competitive healthcare market as a high-quality, high-value provider.
V. Key TakeawaysSo What Does It All Mean?
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Patient Engagement and Communication
CoordinatedCare
Comprehensive Care
New demands from patients and payors are forcing care delivery changes in hospitals and physician practices.
Pra
ctic
e R
esp
onse
s
Access
New
Dem
and
s fo
r C
are
• Schedules with same-day open access and/or extended hours.
• New delivery model (PCMH).
• New patient encounter types (e-visits, e-mail).
• Stratification of patient panel at start of visit to off-load physician schedule.
• Dedicated care managers or disease management PCMHs.
• Coordination with dentists, pharmacists, and nutritionists for preventive care.
• Provision of services at schools, employers, etc.
• Evidence-based practices.
• PCP collaboration with specialists to set expectations for referral coordination.
• Standards for information sharing (e.g., patient discharge notes, medication reconciliation).
• Organization-wide standard protocols for patient follow-up.
• Patient portals, chat rooms, e-visits.
• Group visits.
• Education champions in each practice.
• Online scheduling.
• In-office resource centers.
• Telephone calls for patient follow-up.
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Presenter Biographies
Ms. Purvi B. Bhatt, Senior Manager, ECG Management Consultants, Inc.• Ms. Bhatt works with providers and health systems as they transition from volume- to value-based
delivery systems, analyzing quality and financial data; facilitating stakeholder discussions regarding a culture of collaboration, creativity, and accountability; and developing ACO/delivery-based strategies.
• She has master’s degrees in business administration and health services administration from the University of Houston and a bachelor of arts degree in psychology from the University of Texas at Austin.
• Ms. Bhatt can be reached at 703-522-8450 or [email protected].
Mr. Sean T. Hartzell, Senior Manager, ECG Management Consultants, Inc.• Mr. Hartzell is the co-leader of the firm’s transaction advisory service line, which focuses on
developing and disseminating the firm’s thought leadership in the areas of transaction planning, facilitation, and implementation, and he has published thought leadership pieces and spoken nationally on these topics.
• He received a master of business administration degree from the Darden Graduate School of Business at the University of Virginia and a bachelor of science degree in operations research and industrial engineering from Cornell University.
• Mr. Hartzell can be reached at 703-522-8450 or [email protected].
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Appendix AAlignment Model Examples
Appendix AAlignment Model Examples1
A-1
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CollaboratorsLocation/
Date Details Outcomes
Horizon BCBS, PCPs, and New Jersey Academy of Family Physicians
New Jersey, 2011
• Pilot PCMH program included eight practices and 24,000 Horizon members.
• Horizon paid practices a care coordination fee ($2 to $3 per member per month [PMPM]) to support practice transformation and for the provision of additional services under the PCMH model, in addition to existing FFS reimbursement.
• Practices are also eligible for additional payments for meeting quality and utilization outcomes.
• An expanded version of the program is now implemented in 48 practices serving 154,000 Horizon members.
• 8% higher rate in improved diabetes control (HbA1c).
• 6% higher rate in breast cancer screening.
• 6% higher rate in cervical cancer screening.
• 10% lower cost of care (PMPM).
• 26% lower rate in emergency room (ER) visits.
• 25% lower rate in hospital readmissions.
• 21% lower rate in hospital inpatient admissions.
• 5% higher rate in the use of generic prescriptions.
California Public Employees’ Retirement System (CalPERS) and Multiple High-Quality Hospitals
California, 2008
• CalPERS limited what it would pay for hip and knee replacements to $30,000.
• Found several hospitals willing to stick to threshold amount.
• Some CalPERS members have 100% coverage, including travel costs, when electing to receive these procedures at participating facilities.
• CalPERS has since applied thresholds to colonoscopies, cataract surgeries, and arthroscopies.
• Members required to pay for charges above threshold when using outpatient hospitals instead of ASCs.
• In 2008, hip and knee replacement cost CalPERS $55 million, and hospital bills ranged from $15,000 to $110,000 with no discernible difference in quality.
• In 2011, the average price per surgery dropped nearly 28% to $23,113.
1 Source: Oregon’s Office for Health Policy and Research, Alternative Payment Methodologies.
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Appendix AAlignment Model Examples1 (continued)
A-2
1 Source: Oregon’s Office for Health Policy and Research, Alternative Payment Methodologies.2 Source: Deloitte report on Texas Medicaid reform.
CollaboratorsLocation/
Date Details Outcomes
BCBS Illinois and Advocate Health Care
Illinois, 2011
• Began shared savings program for fully and self-insured commercial PPOs in Chicago area.
• Performance and cost standards were implemented for physicians, who would be penalized for failure to meet them.
• In the first 6 months of 2011, hospital admissions per member decreased 10.6% compared with 2010.
• ER visits fell 5.4%.
Texas Medicaid, MCOs, and Network Physicians and Hospitals2
Texas, 2012 • Medicaid managed care contracts in Texas require MCOs to conduct gain-sharing programs in which network physicians and hospitals share a portion of an MCO’s savings resulting from reduced utilization and inappropriate admissions.
• Contracts also include a Quality Challenge Award whereby 4% of an MCO’s capitation is withheld based on eight quality measures.
• If an MCO does not achieve performance levels, future monthly capitation payments will be adjusted by an appropriate portion of the 4% at-risk amount. Unearned funds are redirected to the Quality Challenge Award.
• Potential savings related to readmissions is $120 million in the first year.
• The state found that most preventable admissions were related to mental health conditions.
• The program underwent substantial changes in 2014 to emphasize incremental improvement, rather than quality challenge and at-risk measures.
• This is part of Texas’ broader effort to shift from FFS to managed care for Medicaid populations.
New York Medicaid Program and Health Plans Contracting With Medicaid
New York, 2002
• New York Medicaid offering quality-based bonuses and performance-based auto-assignment incentives to health plans.
• Using HEDIS and CAHPS measures to develop quality and patient satisfaction benchmarks.
• Created quality incentive score based on a scale of 150 points.
• During first 4 years of program, New York paid nearly $71.5 million in bonuses.
• The state saw an increase in enrollment plans that it deems as high quality.
• A study by The Commonwealth Fund reported that appropriate postpartum care rose from 49% to 68%.
Appendix AAlignment Model Examples1 (continued)
A-3
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CollaboratorsLocation/
Date Details Outcomes
Oregon Health Plan (Medicaid) and Healthcare Providers – Care Coordination Organizations (CCOs)
Oregon, 2012
• Initiative calls for the formation of a cross-functional network of all healthcare providers working together to provide medical services to persons covered under the Oregon Health Plan.
• As of September 2013, 16 CCOs are in operation.
• CCOs participate in quality pool funding, which is a pool totaling 2% of the aggregate CCO payments. The payments are made completely outside of the capitation rates.
• Oregon plans to increase the incentive percentage on an annual basis and has a waiver in place that allows the supplemental pool to grow to 5%.
• Oregon publishes Quarterly Progress Reports, showing the performance of the CCOs on 33 designated measures. Of these measures, 17 are linked to incentive payments, and the remaining measures are data the CCOs are required to submit to the state to be reported publicly.
• Oregon believes one of the most successful aspects of its program is the state’s strong relationships with the CCOs. One of the reasons for these strong relationships is that Oregon designates a single point of contact who is made available to the CCOs to address all questions regarding quality measures and the reporting and analyzing of their results.
• Utilization and spending data in 2013 compared to 2011:
– ER visits down 9%.
– ER spending down 18%.
– Hospitalization for congestive heart failure down 29%.
– Hospitalization for obstructive pulmonary disease down 28%.
– Hospitalization for adult asthma down 14%.
– Primary care outpatient visits up 18%.
– Adoption of EHRs up 29%.
1 Source: Oregon’s Office for Health Policy and Research, Alternative Payment Methodologies.