PROVIDENCE – Ever since the Nov. 28, 2016, news conference held at the State House to announce the latest version of Reinventing Medicaid 2.0, ConvergenceRI had been waiting for the shoe to drop that Tufts Health Plan had been named as the third health insurer “managed care organization” to join UnitedHealthcare and Neighborhood Health Plan of Rhode Island in divvying up the managed Medicaid population.

As ConvergenceRI reported in its Dec. 5 newsletter: “If, as Lenny Bruce once said, the only justice in the halls of justice is in the halls, then, as a corollary axiom, the only news at a State House news conference occurs on the street outside the State House.

“Which is where ConvergenceRI encountered a senior executive from Tufts Health Plan who had also attended the news conference, and who was, like ConvergenceRI, walking back to his parked car.

“The insurance executive shared with ConvergenceRI that Tufts had responded to a state RFP issued earlier this year, to capture its fair share of the state’s managed Medicaid program.

“Further, the insurance executive said that Tufts was waiting to hear about the state’s decision, with some anticipation of good news.

“It is anyone’s guess whose ox was going to be gored if Tufts gained entry to the managed Medicaid market, depending on the state’s pending decision to the RFP.

“Further, it also means that the way that shared savings under accountable entities are going to be divvied up may become a bit more complicated.

“Perhaps it speaks to the reasons why the existing accountable entities infrastructure, thrown together in a whirlwind of activity in 2015 and 2016, may be undergoing changes to comply with the apparent new standards imposed by CMS as a condition of more than $100 million into the program.

“Under the new agreement with CMS, by July 1, 2018, each MCO must have at least two effective contracts, serving 10 percent of covered lives under Medicaid, with certified accountable entities, as defined by the “roadmap,” in an R.I. EOHHS-approved alternative payment model. If not, the state will be liable for a 15 percent penalty. [That initial deadline appears to have been pushed back.]

“What does not seem to be accounted for [pun intended] are the extra administrative costs in time and personnel required to deal with another MCO in the Rhode Island managed care marketplace. Are the accountable entities supposed to absorb those costs by themselves? How would that drive up the cost of care?

As the world turns
Six months later, in a news release on April 20, the R.I. Executive Office of Health and Human Services officially announced that Tufts Health Plan had been invited to join the Reinvention of Medicaid 2.0 party.

As the headline to the news release proclaimed: “Three Health Plans Sign 5-year Contract with Rhode Island’s Medicaid Program. Tufts Health Plan Joins Neighborhood Health Plan of Rhode Island and UnitedHealthcare Community Plan To Serve Rhode Island’s 250,000 Medicaid Members.”

Of course, the world has turned a few hundred times since the Nov. 28, 2016, news conference.

• Elizabeth Roberts, the former secretary of R.I. EOHHS, is gone; her former top deputy, Jennifer Wood, has been demoted, in the wake of the continuing fallout of the botched roll out of the $364 million Unified Health Infrastructure Project. Anya Rader Wallack, in turn, has been named interim secretary at R.I. EOHHS.

• The savings in Medicaid costs projected as part of the UHIP disaster, not surprisingly, have vanished. As Patrick Anderson of The Providence Journal reported last week, spending on Medicaid is projected to be $30 million higher than analysts forecast last fall, including $5.5 million in state dollars.

• Gov. Gina Raimondo has received a black eye or two in her public image because of the way that her team handled the UHIP mess. Another potential black eye may be looming with the revelation that the U.S. Attorney’s office has begun an investigation into the UHIP mess, beginning with a broad sweeping request for documents dating back to 2011. While Raimondo has maintained that the target is Deloitte, it is anyone’s guess what the document search will turn up.

At risk may be Raimondo’s vaunted plan to “reinvent” Medicaid, if the project savings don’t add up and the costs keep increasing.

Less than zero?
Adding Tufts Health Plan as the third managed care organization, or MCO in Rhode Island, is pretty much a zero sum game. They do not bring additional patients with them, but rather will have to attract other patients now being served by the other two insurers, Neighborhood Health Plan and UnitedHealthcare.

In response to ConvergenceRI’s question about how the percentages would change, and would the other insurers lose market share of the managed Medicaid population, Diana Beaton, a spokeswoman for R.I. EOHHS replied:

“Members will now have a choice of three plans instead of two. New members can select whatever plan is best for them. We anticipate having Open Enrollment beginning this summer. At that time, current members have the option to switch MCOs, [with] one additional choice being Tufts Health Plan. So, yes, percentages may change.”

Translated, the addition of Tufts into the mix will necessarily result in the siphoning off of patients from the other two insurers, diluting the number of “attributed lives” that care providers have under the other existing contracts, making it harder to achieve shared savings.

What is the total cost of care?
Exactly how the accountable entities under the Reinvention of Medicaid 2.0 will compete for sharing savings remains one of a number of unanswered questions moving forward.

At risk is not just the way that shared savings are calculated, but the manner in which the savings projected under the Reinvention of Medicaid 2.0 will be calculated.

ConvergenceRI asked R.I. EOHHS how the addition of another insurer would the change the metrics around shared savings.

Beaton responded, with a kind of non-answer answer: “The state’s risk and gain-sharing arrangement with the MCOs will extend to Tufts Health Plan for the members covered in their health plan.”

Further, ConvegenceRI asked: What is the status of shared savings for existing accountable entities? Can you share any numbers?

Beaton responded: “Rhode Island’s pilot accountable entities began in 2016. At this time, we don’t have the complete data or analysis yet on shared savings.”

Digging deeper
To achieve shared savings, not just for the managed care organization and for the state, but for the provider such as a community health center actually providing the care, the equation depends on knowing how what’s known as the “Total Cost of Care” will be defined, the target for costs that establishes a baseline.

If a provider’s cost comes in below the baseline, then a savings pool is generated, and if the provider performs well on quality measures, than the provider can share in the savings.

Complicating the “accounting” is the fact that the Center for Medicare and Medicaid Services is not requiring Rhode Island to submit its Total Cost of Care guideline and method until Oct. 1, but providers are currently being asked to apply for certification as an accountable entity without knowing how the Total Cost of Care will be defined.

Translated, it is like be asked to jump off a diving board without knowing if there is any water in the swimming pool.

Off the top
Another unknown in how shared savings will be calculated for accountable entities participating in the managed Medicaid delivery of care is whether or not the calculation will be done as a factor of how much the cost has been reduced compared to the previous year’s performance, or whether shared savings will be calculated on the average cost performance for all the providers.

Translated, if you are the lowest-cost provider, say at $300 per member per month, it may be more difficult to reduce your costs another $5 per member per month, compared to a high-cost provider with a $400 per member per month, reducing its cost by $15 to $385 per member per month.

Which provider should be rewarded from the shared savings pool? The provider with the highest cost reduction, when compared with the previous year’s performance? Or the lowest cost provider? Good questions.

Another calculation that is not transparent – but is directly related to whether or not the state can show savings as a result of the reinvention of Medicaid – is how much money that gets taken off the top by a managed care organization as part of the shared savings pool.

If under the Medicaid contract, the state forces the insurer serving as a managed care organization to cut its capitation rates, the likelihood is that the money lost will be made up in how the shared savings pool gets implemented.

Translated, if the state forces a reduction in capitation rates of $1 million, does the insurer than add the stipulation that the shared saving pool for the provider begins at $1 million plus $1 dollar?

More transparency, please.