Featured Health Business Daily Story, Feb. 7, 2013 - AISHealth

Utah Implements ACO Model in Most Populous Medicaid Counties

Reprinted from ACO BUSINESS NEWS, a hard-hitting monthly newsletter on the latest industry actions to design and create ACOs, for hospitals, physicians, health plans and their advisers.

Utah — the second state after Colorado to implement accountable care organizations in its Medicaid population — is using a combination of physician incentives and client engagement techniques in an effort to bring that state’s Medicaid budget under control via its brand-new ACOs.

The state’s Medicaid program has enlisted four managed care organizations — Select Access (part of SelectHealth, the managed care subsidiary of Intermountain Healthcare), Molina Healthcare of Utah, Health Choice of Utah, and Healthy U (part of University of Utah Health Care) — to serve as ACOs. The state has given them fairly broad latitude to reward their providers and engage their Medicaid clients. The program rolled out on Jan. 1.

The goals of the ACO program are to maintain and improve quality of care while getting costs under control — specifically, Medicaid cost growth cannot exceed the growth rate of the Utah general fund, which pays for most state expenditures. Annual Utah Medicaid growth rates have exceeded the state’s annual revenue growth rate every year for the last two decades, according to the state.

Beyond that intent of restricting growth in Medicaid to growth in the state’s overall budget, the program doesn’t have financial aims, says state Medicaid director Michael Hales. If the program meets quality outcomes and hits those financial targets, the state will be satisfied, regardless of whether it bends the cost curve significantly, he tells ABN.

Program Starts With Populous Areas

The ACOs cover four counties — Salt Lake, Davis, Utah and Weber — with 70% of the state’s Medicaid population. The remaining counties in the state are rural, which makes it difficult to implement managed care, Hales says. Medicaid clients in those counties have the option of enrolling in an ACO, but are not required to do so, and in total, the ACOs cover about 180,000 of the state’s total Medicaid population of about 245,000, he says.

Expanding the program is possible, Hales says — the state may consider adding additional ACOs, or may consider adding additional counties. “We do think there are some more counties where we might be able to do this, but we want to make sure it’s going to work first,” he says. The state also would like to integrate long-term care, mental health and dental services into the program, he says.

In addition, Utah is looking at how it could integrate the ACO program into its Children’s Health Insurance Program (CHIP), he says. The state’s CHIP contract ends in December, but it’s likely the state will take advantage of a one-year renewal clause while it waits to get results on the Medicaid ACO program, and begin considering changes in CHIP in 2014.

Utah has had “varying versions of managed care” in place in Medicaid for almost two decades, Hales tells ABN. The ACO contract in place as of Jan. 1 replaces existing managed care contracts, and “goes back to a full-risk capitation methodology,” he says. “Going forward, we’re providing incentives in the contracts for the ACOs to deliver care that’s less expensive.”

The ACO contracts provide monthly risk-adjusted capitated payments based on enrollment. The ACOs themselves can decide how to reimburse their providers, and the contract allows them to share savings with those providers as well as penalize them financially if goals aren’t met, Hales says.

Medicaid clients choose from at least two ACOs at their time of enrollment, and are encouraged to stay in-network for care. In addition, each Medicaid client in the ACO service area must have a primary care medical home that’s responsible for coordinating care. About 80% to 85% of Medicaid clients make their own decisions on ACOs and medical homes, while the remaining 15% to 20% are auto-enrolled, he says.

Utah’s Medicaid program has been collecting HEDIS data for about 15 years, and therefore has a good window into quality at its Medicaid ACOs, most of which have been long-time Medicaid managed care organizations, Hales says. Quality generally is good: the state’s Medicaid plans are on par with Utah’s commercial plans, he says. Over the next several months, the state Medicaid agency plans to develop new quality measures for the Medicaid program, with input from the ACOs, he adds.

Utah Experiments With Incentive Payments

Utah had hoped to win approval to require higher client cost-sharing for more expensive Medicaid services, such as emergency room visits, but CMS turned down the request, Hales says.

Nonetheless, the Medicaid waiver approved by CMS last year allows the ACOs to pay clients incentives intended to direct them to more appropriate, cost-effective care, Hales says. “If we identify you as a frequent flyer at the emergency department and we want you to get services at a community health clinic or at a physician office, we will give you an incentive — possibly a gift certificate to a local store,” he says.

However, it’s not clear whether the monetary value of those incentives will be enough to actually change Medicaid beneficiary behavior, he says. “The physicians can’t be held accountable” if their clients seek out more expensive services, Hales says, but “we think client incentives may give them better tools to help them engage clients.”

Utah’s Medicaid agency hasn’t dictated limits for those incentives; instead, it asked the ACOs to submit them for approval, Hales says. They won’t be direct cash payments, but they might be “cash equivalents” such as membership at a gym or a cell phone plan, he says.

Utah Medicaid ACO SelectAccess covers about 75,000 Utah Medicaid beneficiaries over the four ACO counties, says SelectAccess Medicaid program director Russ Elbel. The organization has a leg up because many of its clinics already have implemented the medical home model and invested in care managers, Elbel tells ABN, and Select Access intends to implement an integrated care management system across the organization that will allow the care managers to collaborate with each other.

At the very least, this new system will prevent duplication of case management efforts at different sites across the network, Elbel says. The organization also has disease management programs in place for asthma, diabetes and chronic obstructive pulmonary disease.

To improve care management, the ACO is working with provider groups to identify gaps in care and close them, Elbel says. SelectHealth has made financial incentives available to clinics that make strides in closing care gaps — for example, a clinic might receive a set dollar amount for improving collection of all diabetes care measures, he says.

Physicians Share in Gains, Losses

SelectAccess is paying its physicians via a fee-for-service model right now, but will consider moving to some other payment methodology eventually, Elbel says. Even with the current fee-for-service methodology, the physicians share in profits and losses on an annual basis, he says, although he declines to give more details on the payment system.

On the client side, SelectAccess is focusing first on high risk pregnancies, Elbel says. There, clients will be eligible to receive a small gift card — about $10 — for becoming engaged in a high risk pregnancy program or an offering designed to help them following the birth, he says. That initiative currently is in testing to see how well it works, he says.

SelectAccess also is looking at using an emergency room “redirection” program — if a Medicaid client comes into the emergency room for a non-emergent reason, the emergency room staff would “redirect” that client to the medical home, Elbel says. In total, SelectAccess employs 50 care managers.

The goal is to meet the ACO triple aim by looking at clinical protocols to identify the highest quality, most cost-effective care and deliver that care, he says. “If you reduce variation in care, you will deliver less costly care.”

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