Delivery of Care

How do you become an ACO? That is the question

From hospitals to insurers, from community health centers to the state’s Medicaid office, from the federal Centers for Medicare and Medicaid Services to the State Innovation Model, everyone is wrestling with what it means to be an accountable care entity

Graphic by Richard Asinof

The development of accountable care organizations or entities has become a driving force in the transformation of Rhode Island's health care delivery system, but how best to do that remains an iterative work in progress.

By Richard Asinof
Posted 1/4/16
The transformation of Rhode Island’s health care delivery system to an accountable care model with bundled payments for a continuum care is moving ahead rapidly, with the goal of improving outcomes and saving costs. But it is still a work in progress, and fast-tracking it, particularly as part of the state’s managed Medicaid program, may result in some speed bumps.
Who will become the arbiter of shared savings for the Medicaid managed program – the state, the insurer or the provider? Who will control the analytics measuring outcomes and benchmarks? How will accountable care organizations mesh with efforts to develop health equity zones? Will they converge, or will they be separate rivers? If there are shortfalls in the budget under the reinvention of Medicaid, how will that impact the effort to develop accountable care entities for the managed Medicaid population? How will the social and economic determinants of health be addressed and become part of the metrics for accountable care organizations?
The state’s decision to expand Medicaid coverage appears to have had measurable positive economic impact, particularly on the capabilities of community health centers to expand their services and facilities. For instance, Blackstone Valley Community Health Care plans to open its new satellite facility at 1145 Main St. in Pawtucket on Jan. 26, which will create an additional 12,000 square feet of exam space, doubling the existing capacity at its headquarters on East Street, to accommodate the increased demand.
What has not yet been calculated as an economic equation in the development of Rhode Island’s future strategic plan by the Brookings Institute is the economic value of expanding access to health care as a driver of productivity and sustainability.

PROVIDENCE – In a recent interview with ConvergenceRI, Dennis Keefe, the president and CEO of Care New England, offered up a humorous yet accurate assessment of the current state of confusion in the market regarding the plethora of different accountable care organizations and entities now being developed

“If you’ve seen one ACO, you’ve seen one ACO,” Keefe said, with a laugh, acknowledging in his answer the vast differences in business models now being developed, both here in Rhode Island and nationwide. [See link to ConvergenceRI story below.]

The concept of an accountable care organization, much as the concept of the patient-centered medical home, or PCMH, is not necessarily well understood except by those deeply enmeshed in the practice and reform of health care.

It is a lingo familiar to health policy wonks but not to many patients or, for that matter, members of the R.I. General Assembly.

But it is central to the confusing drama now being played out by the R.I. Executive Office of Health and Human Services in its role of changing the way that the state’s managed Medicaid program in Rhode Island operates in the future.

And, it is a critical component of how the state’s health care delivery system is moving to change its business model in the evolution from fee-for-service to bundled, global reimbursements over a continuum of care.

The unanswered questions are: who will share in the shared savings generated by these new entities? What kinds of analytics are required to manage population health under these new entities, and who will choose and control those analytics? To whom will these new accountable entities be held accountable? And, how do patients – and neighborhoods and communities – fit into the equation?

What is an ACO?
Once, all health care, much like making widgets in a factory, was paid for by what is known as the fee-for-service business model. You provide a service; you get paid. As long as there was a diagnostic code for the service, providers and hospitals got paid. The more services performed, the more you got reimbursed, regardless of health outcomes.

As part of health care reform, the federal payers – Medicare and Medicaid – as well as commercial health insurers, have begun to push back against paying for what they deemed unneeded and wasteful procedures, and they have been promoting a different model of bundled or global reimbursement, paying for a continuum of care, with the mantra of value not volume.

“The business model for hospitals and doctors [was]: whatever you did, whatever it is, there’s a code for it, and whatever the code is, there’s a fee for it,” explained Domenic Delmonico, executive director, of Integra Community Care Network, Care New England’s new ACO, in an interview with ConvergenceRI in May of 2015. [See link to ConvergenceRI story below.]

As the management saying goes, Delmonico continued: “You do what you’re paid to do.”

As a result, in the past, hospitals and doctors built their business models around doing more for patients, and not always doing what’s best for patients, according to Delmonico.

Now, under the newer bundled payment models, Delmonico explained, “You get a budget, you get a fixed amount of money to take care of a group of people, for a set amount of time. What that does is that it causes you to rethink: what’s best for the patient?”

On the fast track
On Jan. 1, the first four pilot accountable entity programs were scheduled to begin operation, run by two community health centers, Blackstone Valley Community Health Care, Providence Community Health Centers, and two hospital systems, Care New England, and Prospect Medical, the parent of CharterCARE.

On Jan. 6, a second round of applications are due for hospitals and providers who want to become pilot accountable entity programs. Successful entities will be chosen on Jan. 27, with the Round 2 pilot programs scheduled to begin.

In parallel with the two pilot programs, R.I. EOHHS is fast-tracking the full Accountable Entity certification standards, which won’t be posted until Feb. 12, with applications due on April 1, and final certification scheduled to be announced on June 24.

The fast-tracking is tied to the overarching goals to have 50 percent of all Medicaid payments made through alternative payment models such as accountable entities by 2018, and to have 25 percent of all Medicaid members enrolled in an accountable, integrated provider network by 2018, enshrined in law as part of the Reinventing Medicaid Act of 2015.

The effort’s promise is that the transformation of the Medicaid managed care system will reduce costs by improving coordination of care and by introducing harmonized quality metrics; however, the actual reduction in costs through accountable entities is still theoretical, a work in progress.

What is the state’s vision for what these new accountable entity programs will become?

“Entities that have multidisciplinary capacity, the ability to manage the full continuum of care for patients, and the analytic capacity to support real-time decision making,” said Michael Raia, communications spokesman for R.I. EOHHS, responding to questions from ConvergenceRI. “The goal is to provide coordinated, accountable care for Medicaid members.”

Much of the work to develop accountable care entities for the state’s managed Medicaid programs has been conducted under the radar screen, without very much scrutiny, in a kind of stealth conversation, as reported by ConvergenceRI in its Nov. 16, 2015, issue. [See link to ConvergenceRI story below.]

The question is: will the current cost-effective, high-quality outcome, managed Medicaid program delivered by federally qualified community health centers be disrupted, big time?

History, context and nuance
The managed Medicaid program in Rhode Island has been consistently rated as one of the top performing programs nationwide: both insurers that oversee the effort, Neighborhood Health Plan of Rhode Island, covering some 67 percent of Medicaid managed care population, and UnitedHealthcare of New England, covering the other 33 percent, have excelled in ratings measuring performance, quality and patient satisfaction.

The state’s RIte Care program for children and parents was ranked number-one in the nation in 2015 for its quality in the following categories, according to the Centers for Medicare and Medicaid Services:

• Timeliness of prenatal care

• Frequency of ongoing prenatal care

• Child and adolescent access to primary care

• Child and adolescent well visits

• Child and adolescent immunization status

As the old saying goes, if it isn’t broke, why fix it?

Confusion over blurred lines
Under the new accountable care entity structure, the current federally qualified community health centers may find themselves in a state of coordinated competition, organized by the R.I. EOHHS.

Under the rules current developed for the pilot programs, accountable entities cannot include other accountable entities as part of their program. Technically, the Providence Community Health Centers and Blackstone Valley Community Health Care cannot be a partner in each other’s accountable care entity.

That could create some confusion in the future, because the Rhode Island Health Center Association, the membership organization for community health centers, recently received a $300,000 grant from the Rhode Island Foundation with the goal of developing the state’s first Medicaid primary care-led partnership for accountable care. Charles Hewitt, formerly with the Rhode Island Quality Institute, has been hired to manage the project to assess the feasibility of setting up such a new accountable entity.

Would that mean that Blackstone Valley Community Health Care and the Providence Community Health Centers – and, for that matter, any other community health center such as Thundermist, that became part of an pilot accountable entity program under the second round – be excluded from the Health Center Association’s proposed accountable entity model? Stay tuned.

Another unknown factor will be what happens when the state goes out to bid to commercial health insurers for the managed Medicaid program later this year. Will Blue Cross & Blue Shield of Rhode Island or Tufts Health Plan become bidders? Will the current division of the market segments – one-third for UnitedHealthcare, two-thirds for Neighborhood Health Plan of Rhode Island – be altered? Once again, stay tuned.

At the heart of accountability is analytics
The new accountable entity requires the capability to measure and benchmark outcomes, in real time, over a continuum of care for patients, in order to manage population health. The secret sauce is the technology infrastructure backbone; without that, an ACO becomes just a pile of legal documents and nothing more.

“I’ve yet to see a pile of legal documents save money or improve quality,” as one health care analyst put it.

That is, in part, why many of the larger hospital systems have invested in installing new health IT systems, such as Epic, to give them the capability to manage population health analytics.

“I would say that whomever has the most of the best data, will win,” said Dr. James Fanale, chief clinical officer of Care New England’s hospital-wide ACO, known as the Integra Community Care Network, in an interview with ConvergenceRI. “What that means is that data is becoming a marketable commodity. And, people are trying to figure out, who’s going to have it, and who’s going to own it. Who’s going to control it?” [See link to ConvergenceRI story below.]

Trending now
Most major health insurers and hospitals in Rhode Island have pledged to have 80 percent of care reimbursed through bundled payments by 2019.

Instead of being reimbursed according to the number of patients seen or by the number of images and tests conducted, the new business model – driven in large part by shifts to a global payment model by Medicare and Medicaid – seeks to reward providers and hospitals through bundled payments across a continuum of care, focused on what the patient needs to be healthier.

The overarching goal is to deliver the right care at the right time and the right place, with quality gates in place so that the money doesn’t get paid until the “quality” of care can be shown.

In Rhode Island, there are a number of different commercial models of accountable care entities now in operation:

•   Coastal Medical has developed a pilot Shared Savings Medicare Advantage ACO, in partnership with the Centers for Medicare and Medicaid Services. It is one of more than 300 such pilot programs nationwide, and one of about one-quarter of which that has produced savings.

•   Care New England is in the midst of developing its own, hospital-wide ACO, known as Integra, under which it expects to be managing care for about 100,000 patients in the next year. It was also chosen to develop one of the first four pilot programs for Medicaid managed care. The hospital system also recently received a $520,000 grant from the Rhode Island Foundation to develop a Medicaid Accountable Care Organization to manage more effectively the physical and behavioral health of Medicaid patients.

•   There are now numerous shared shavings programs between hospital and insurers, including Blue Cross & Blue Shield of Rhode Island and UnitedHealthcare focused mostly on Medicare Advantage patients.

Creating and managing an ACO that can deliver savings requires a lot of hard work and investment, according to G. Alan Kurose, the president and CEO of Coastal Medical.

“We had to build a lot of infrastructure to [create] a primary care urgent visit system open 365 days a year. It takes some doing,” Kurose told ConvergenceRI in an interview in March of 2014.

“We [hired] 20 nurse care managers, and trained them, with 17 in practices, two that make rounds in hospitals and one that makes rounds in nursing facilities. We added four full-time pharmacists. We made investments and incurred costs. Happily, we were successful enough to cover those costs,” Kurose explained at that time.

It’s hard work, Kurose continued. “It’s hard because we had to deliver all those extra services to start to understand the total cost of care. We had to build an analytics platform to [manage] all of the claims. There was a great deal of work on quality; Coastal now has 72 quality measures.”


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