Delivery of Care

Who will be accountable for accountable entities?

The roll out of accountable entities as part of the reinvention of Medicaid continues on the fast track in Rhode Island

Image courtesy of CharterCARE website

The newest accountable entity approved by the R.I. Medicaid office and Neighborhood Health Plan of Rhode Island is the CharterCARE Provider Group RI LLC, a physicians group that will provide managed care to some 3,300 Medicaid members in Rhode Island.

By Richard Asinof
Posted 8/22/16
The latest approval of an accountable entity by Neighborhood Health Plan of Rhode Island, to contract with the CharterCARE Provider Group RI to manage care for some 3,300 Medicaid members, has called attention to the ongoing strategy to transform a majority of Medicaid services in Rhode Island to accountable care.
Does the entry of CharterCARE/Prospect, a for-profit health system, into the managed Medicaid market, set up a competition with community health centers for share of the Medicaid population? How will the pot of shared savings be distributed among the numerous accountable entities within Medicaid? How do Neighborhood Health Stations in Central Falls and Scituate redefine the population health equation?
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PROVIDENCE – Here in Rhode Island, much of the focus of health care reform has been on transformation of the health care delivery system from the fee for service business model to one of bundled payments for a continuum of care, featuring what’s known as accountable entities or accountable care organizations, to promote population health.

Accountable entities are a cornerstone of the effort to reinvent Medicaid in the state. The Reinventing Medicaid Act of 2015 mandates that 50 percent of all Medicaid payments must be made through alternative payment models such as accountable entities by 2018, and that 25 percent of all Medicaid members must be enrolled in accountable integrated provider networks by 2018. [See link to ConvergenceRI story below.]

The premise and promise is that the transformation of the Medicaid managed care system will reduce costs by improving coordination of care by introducing harmonized quality metrics.

Exactly what comprises an accountable care organization or an accountable entity, and which designs will work best, is still a work in progress.

“If you’ve seen one ACO, you’ve seen one ACO,” said Dennis Keefe, the president and CEO of Care New England, in interview with ConvergenceRI in November of 2015, offering up a humorous yet accurate assessment of the current state of confusion in the marketplace regarding the plethora of different accountable care organizations and entities now being developed.

What’s the definition of an accountable entity, according the R.I. Executive Office of Health and Human Services?

“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, then the communications spokesman for R.I. EOHHS, now the communications director for Gov. Gina Raimondo, responding to questions from ConvergenceRI earlier this year. “The goal is to provide coordinated, accountable care for Medicaid members.”

However, the actual reduction in medical costs through accountable entities is still theoretical, a pilot program. That has not prevented the R.I. Medicaid office from moving in fast-track fashion to create new accountable entities to serve the managed Medicaid population, mandated under the new law.

To date, there are now some 100,000 lives covered by newly formed accountable entities in the state’s managed Medicaid programs, Elizabeth Roberts, secretary of the R.I. Executive Office of Health and Human Services, recently told ConvergenceRI.

But, exactly how the health insurers and the R.I. Medicaid office will divvy up the pot of shared savings among competing entities remains unclear.

Who will emerge as winners and losers will depend, in large part, on the sophistication of the health IT system health management analytics employed by the new accountable entities to manage population health. When the music stops sometime in early 2017, there is certain to be a scramble.

[How the departure of Anya Rader Wallack, the director of the R.I. Medicaid office, at the end of September will change the equation remains an unknown factor.]

Diving into the murky waters and weeds
A recent news brief, rewritten from a news release, published by the Providence Business News on Aug. 17 as part of its daily online newsletters, said: “Neighborhood Health Plan of Rhode Island has partnered with CharterCARE Provider Group RI LLC to launch an accountable entity to improve care and reduce costs for Medicaid participants.”

The story continued: “Neighborhood, which announced the accountable entity partnership on [Aug. 16], said it is expected to improve the delivery of health care services to approximately 3,300 Rhode Islanders [emphasis added] enrolled in Neighborhood’s Medicaid managed care plans served by CPGRI providers.”

It then quoted a statement in the news release by the president and CEO of Neighborhood Health Plan, Peter Marino: “Accountable entities are a key part of Neighborhood’s long-term strategy to help improve our health care system and encourage overall quality while delivering care at a price taxpayers can afford.”

He continued: “CPGRI and its provider partners have great experience serving people with low-income and health disparities, so we think there is a lot of potential in deepening our relationship.”

The rewritten news release made the new accountable entity sound like a big step forward, without any critical reporting or questioning of the content.

Such as: How did an accountable entity with only 3,300 Rhode Islanders get the stamp of approval from Neighborhood Health Plan and the R.I. Medicaid office, when the initial threshold was set at 5,000 Medicaid members?

Sophie O’Connell, the Deputy Communications Director at the R.I. Executive Office of Health and Human Services, provided a quick response.

“Here’s a good way to think about this: the state has contracts with the health plans, and the health plans are responsible for contracting with accountable entities,” O’Connell explained.

She continued: “In this case, CharterCARE/Prospect is the accountable entity. As an [accountable entity], they contract with both Neighborhood Health Plan of Rhode Island and UnitedHealthcare. Based on snapshot figures, across both health plans, the CharterCare/Prospect [accountable entity] has a total of just over 8,000 attributed members.”

Further, O’Connell quoted the requirements in the application published in October of 2015 for the “Accountable Entity Coordinated Care Pilot Program,” which said: “The goal for the Pilot Program is for each participating Pilot Program accountable entity to be assigned at least 5,000 members and up to 25,000 Medicaid members. However, the minimum of 5,000 members is a guideline, and smaller programs will be allowed to apply.”

History, background and context
There are, of course, many follow-up questions to pursue, such as: How many other accountable entities had been approved that had less than 5,000 members?

And: How much is the total pool for shared savings to be divvied up by accountable entities? How much of those shared savings are slated to go directly into the state’s general revenue fund?

And, further: What happens if there are shortfalls in the budget under the reinvention of Medicaid? How will that impact the effort to develop accountable entities for the managed Medicaid population?

The recent designation of the CharterCARE Provider Group to become an accountable entity by Neighborhood Health Plan of Rhode Island needs to be put in a much broader context and history to understand the for-profit health system’s desire to manage a share of the Medicaid population.

In February of 2015, CharterCARE Health Partners, the for-profit health system that includes Our Lady of Fatima Hospital and Roger Williams Medical Center, approached Gov. Gina Raimondo with a proposal to create a Medicaid coordinated care pilot as part of the reinvention of Medicaid effort, according to Steve O’Dell, senior vice president at Prospect Medical, the parent company of CharterCARE Health Partners, in an interview with ConvergenceRI in 2015.

The offer went something like this: CharterCARE/Prospect would manage a percentage of the Medicaid population [said to be about 90,000 of the roughly 240,000 Medicaid managed care members], for 95 percent of the current cost, with the state keeping the 5 percent savings. [If CharterCARE/Prospect further bent the cost curve, they would capture any additional saving.]

A version of CharterCARE/Prospect’s proposed coordinated care pilot did make it into Reinventing Medicaid Act of 2015.

Following the money
With profit margins shrinking at health systems and hospitals, the rationale behind the move by CharterCARE/Prospect to capture a share of the managed Medicaid population is straightforward and apparent: that’s where the money is.

In turn, their competitors in the market are most likely to be community health centers, which are very good at what they do, providing integrated, coordinated health care at lower costs and achieving better outcomes, serving the Medicaid managed care population.

In the patient-centered world of bundled payments across a continuum of managed care, community health centers deliver. And, they are prospering under the expansion of Medicaid.

The managed Medicaid program in Rhode Island has been consistently rated as one of the top performing programs nationwide: both insurers that currently 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.

Will the system of accountable entities developed through the state Medicaid program create a competition between community health centers and health systems over market share of the managed Medicaid population? Stay tuned.

Shared risk
One competitive advantage that CharterCARE/Prospect may bring to the table is in its shared risk model, which O’Dell told ConvergenceRI that Prospect Medical had been operating for more than 20 years in other markets around the country.

O’Dell also said that Prospect had more than 8,900 physicians under contract, coordinating data from more than 200 different EHR systems. “The thought process, that physicians and hospitals all need to be on one system to communicate, that’s simply not true,” he said.

Healthy appetite
Prospect Medical Holdings is also expanding its footprint in Connecticut, where regulators approved on July 15 the purchase of the nonprofit Greater Waterbury Health Network, which includes Waterbury Hospital, for $43.3 million.

Prospect, which currently owns and operates some 18 hospitals as well as 140 clinics and outpatient centers in five states, is also in the process of acquiring a two-hospital system in Manchester and Rockville, Conn.

“The difficulties face by hospitals in delivering quality health care services in a changing and increasingly challenging fiscal landscape have become, appropriately, a subject of national concern and debate,” the Connecticut attorney general’s office said in its decision approving the sale.


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