Delivery System Redesign

Given the often overwhelming prevalence of social needs facing Medicaid populations, including housing, transportation, and nutrition, aligning social services and supports with health care delivery is critical. Many states recognize the connection between social determinants of health and health care utilization and outcomes, and are building the infrastructure to support social service delivery through accountable care organization (ACO) programs. This brief highlights the initial efforts of seven states — Colorado, Maine, Minnesota, New York, Oregon, Vermont, and Washington — that participated in CHCS’ Medicaid ACO Learning Collaborative, and outlines key themes and considerations from these early adopters to help additional states support collaboration between ACO and social service providers.

The primary goal of the ACA is to increase access to health care by expanding health insurance coverage, but another major thrust of the law is support for innovation in health care delivery and payment aimed at improving patient care and population health and reducing health care costs. The ACA-established Center for Medicare and Medicaid Innovation (Innovation Center) within the Centers for Medicare and Medicaid Services (CMS) is testing an array of alternative payment and service delivery models through numerous demonstration and pilot programs designed to lower costs for Medicare, Medicaid, and the Children’s Health Insurance Program while maintaining or improving the quality of care for beneficiaries. This fact sheet provides an overview of one of these programs – the State Innovation Models (SIM) initiative.

With the support of The Commonwealth Fund, the National Association of Medicaid Directors (NAMD) brought together staff from states over a period of one year to focus on data analytics, practice transformation, and multi-payer alignment. While states were organized into different workgroups to address these issues, reform proved to be a wide-ranging topic. As these workgroups discussed their respective state’s work to drive innovation at the point-of-care for their beneficiaries, cross-cutting and coherent themes emerged. This brief reflects the discussions across the workgroups and all-state calls, and draws from state submissions to NAMD’s State Medicaid Operations Survey: Third Annual Survey of Medicaid Directors.

States purchase health care benefits for more than a third of all Americans — nearly one quarter of all Americans receive coverage through Medicaid and about 14 percent of working Americans are state or local government employees. Because managed care plans oversee health care services for most Medicaid beneficiaries, public employees, and those getting coverage through the marketplaces, health plans are key channels through which state purchasers can accelerate the shift away from fee-for-service reimbursement toward value-based purchasing (VBP). CHCS developed this toolkit – a brief on  Strategic Considerations for State Purchasers, an Implementation Guide for State Purchasers, and Planning Template for Value-Based Purchasing – to help state purchasers design and implement effective VBP strategies within managed care.

Seventeen states currently are implementing accountable care strategies in Medicaid or state employee health programs. State activity runs the gamut from financing accountable care models to developing state standards that certify public and private accountable care organizations, to aligning accountable care principles with the creation of new community-based organizations or Medicaid managed care organization contracts. This article describes the range of strategies taken by states to drive value-based payment mechanisms aligned with accountable care principles. It also shows the power states have to influence financing of these models in Medicaid, state employee health programs, and commercial insurers’ plans, thus creating new opportunities for furthering provider participation.

Delivery System Reform Incentive Payment (DSRIP) initiatives are part of broader Section 1115 Waiver programs and provide states with significant funding that can be used to support hospitals and other providers in changing how they provide care to Medicaid beneficiaries.  While they originally were more narrowly focused on funding for safety net hospitals and often grew out of negotiations between states and HHS over the appropriate way to finance hospital care, they increasingly are being used to promote a far more sweeping set of payment and delivery system reforms. This brief examines similarities and difference across key elements of DSRIP waivers in six states – California, Texas, Kansas, New Jersey, Massachusetts, and New York.
 

Federal and state policymakers are faced with the challenge of integrating services to address both the physical and behavioral health needs of the population. This brief summarizes key lessons and opportunities for federal and state alignment that surfaced during a meeting supported by The Commonwealth Fund of high-level federal and state leaders. Several case studies are featured including Arizona, Missouri and Tennessee. Opportunities discussed spanned payment models, information and data sharing approaches, as well as operational strategies for achieving integration.
 

The combination of fee-for-service payments and the US health care system’s standing commitment to treating existing illness discourages spending on the behavioral, social, and environmental (that is, the nonmedical) conditions that contribute most to long-term health. Pay-for-success, alternatively known as social impact bonds (SIBs), offers a possible solution. The pay-for-success model relies on an investor that is willing to fund a nonmedical intervention up front while bearing the risk that the intervention may fail to prevent disease in the future. Should the intervention succeed, however, the investor is repaid in full by a predetermined payer, such as a public health agency, and receives an additional return on its investment as a reward for taking on the risk. These efforts, supported by key policy reforms such as public agency data sharing and coordinated care, promise to increase the number of evidence-based nonmedical service providers and seed a new market that values health, not just health care.
 

Oregon has taken significant steps to transform its health care and early education systems. Recognizing that good health is a key component of ensuring children enter school ready to succeed, Oregon is now aligning the two systems with the ultimate goal of improving kindergarten readiness. This report describes Oregon’s approach to aligning its two innovative system transformations and highlights key strategies – including joint staffing, blended funding, and shared expectations – to elucidate lessons for policy makers seeking to bridge health care and early education.
 

The new National Scorecard on Payment Reform shows commercial health plans have dramatically shifted how they pay physicians and hospitals, with 40 percent of their payments now designed to encourage health care providers to deliver higher-quality and, in some cases, more affordable care. It also shows a 29 percentage point increase over 2013, when just 11 percent of payments were value-oriented. However, 60 percent of payments remain largely in traditional fee-for-service. While the Scorecard findings are not wholly representative of all health plans nationally, they offer a baseline against which to measure progress toward value-oriented payment in the commercial sector.