PART Three

PROVIDENCE – It may lack the calculated drama of “The Masked Singer” or “The Bachelor,” but the next big data reveal around health care cost trends – and, in particular, the numbers around Medicaid costs, broken down by per member per month comparisons for accountable entities, will occur on Tuesday morning, March 29, at the meeting of the R.I. Cost Trends Steering Committee.

At that time, the R.I. Office of the Health Insurance Commissioner will share publicly the latest data analysis for the cost trends growth conducted by Bailit Health consultants, for 2020 [and perhaps for 2019, too].

The data reveal will provide the third leg of the stool in how health care delivery in Rhode Island has been divided into a world of haves and have nots, with the most vulnerable, frailest, and economically insecure – including neighborhoods and communities of color – have gotten the shaft, while the wealthy continue to travel in the luxury class of health care.

[Editor’s Note: In PART One, ConvergenceRI detailed the severe damage done by the failure to increase Medicaid reimbursement rates. In PART Two, ConvergenceRI showed how the use of algorithms by Optum by the two dominant Managed Care Organizations in Rhode Island allegedly embedded racism into the decision-making about who received health care. And, here in PART Three, ConvergenceRI, provides the context and narrative around how hospital-centric health systems may have been able to game the system of value-based performance metrics.]

Nuance and narrative
It is no secret that all health care is personal, all health care is complex, all health care is expensive, and that the health care delivery system operates not so much as a system of care but as a market of wealth extraction.

It is also no secret that the major driver of increased health care cost trends in Rhode Island is the ever-escalating cost of prescription drugs, a situation that has Martha Wofford, the president and CEO of Blue Cross and Blue Shield of Rhode Island, the state’s largest health insurance firm, sounding like a consumer advocate.

“Pharmacy now makes up a third of all health care costs,” Wofford said in a recent interview with ConvergenceRI. “I was actually alarmed when the team shared this data point with me – that for Blue Cross [and Blue Shield of RI], “1 percent of our pharmacy claims equals 50 percent of our pharmacy spend,” and the culprit behind the rising pharmacy costs is Big Pharma. [See link below to ConvergenceRI story, “The more we do what Big Pharma wants, the higher the costs are going to be.”]

And, it should not have been a surprise to anyone to learn what the coronavirus pandemic has demonstrated about health outcomes in the U.S. – impoverished communities and neighborhoods of color bore the brunt of the health and economic consequences.

What are accountable entities?
The system of accountable entities was created in 2016, under the Reinvention of Medicaid law enacted in 2015, the first major initiative of former Gov. Gina Raimondo’s first term. The idea was to conduct social engineering around the health care costs for Medicaid by transitioning Medicaid members to a value-based performance risk sharing system.

The majority of accountable entities were created by existing community health centers and by hospital-based creations. As ConvergenceRI had reported, “The players in the accountable entity sweepstakes were determined in part by the number of people served – those providers that served roughly 9,000 patient lives a year. [The one part of the Medicaid system lacking an accountable entity is the long-term services and supports program.]

The current R.I. EOHHS certified participants in the Medicaid accountable entity program are:

• Providence Community Health Centers

• Blackstone Valley Community Health Care

• Integrated Healthcare Partners, an amalgam of seven community health centers. [Thundermist Health Center, which had been a member of that group, has now chosen to withdraw and to go it along.]

• Integra Community Health Care [Care New England hospital network]

• Prospect Health Services Rhode Island [CharterCARE hospital network]

• Coastal Medical [now part of Lifespan hospital network]

What the numbers will reveal – and not reveal
Depending upon whether the costs for 2019 are shared, the issue is that the results for 2020 may be skewed by the low utilization rate as a result of the COVID pandemic.

Translated, most of the accountable entities may end up showing “losses” in 2020 compared to the numbers for 2019.

Last year, at the last minute, OHIC decided against sharing publicly the cost growth analysis figures for 2018 and 2019, only providing a range, saying that the highest cost increase between 2018 and 2019 was 14 percent.

As ConvergenceRI reported in the story, “What do the cost data on health care really tell us,” the decision not to make all the data public caused a stir. [See link below to ConvergenceRI story.]

The analysis by the R.I. Health Care Cost Trends Steering Committee, conducted by Bailit Health, was, for the first time, promising to make public the data analysis results from the Medicaid accountable entities for 2019, comparing each of the providers’ performances by cost.

But, when the big reveal occurred at the end of April, only a composite score was given, in terms of cost performance.

The problem, it seems, was that the initial data compilation conducted by one of the managed care organization [insurance health plans] was not accurate.

ConvergenceRI asked Cory King, the chief of staff at the R.I. Office of the Health Insurance Commissioner, about potential problems with the data.

In response, King wrote: “First, the data that OHIC collects from the insurers is distinct from any data that the Medicaid program may be collecting or using for the AE [accountable entity] program.”

King recommended speaking with the R.I. Medicaid office about the AE data, because: “I am not close enough to that program to speak to it. Theoretically, the data should be well aligned. The AE contracts adjust the claims data [for example, truncation of high-cost outliers] that our data collection did not make. These adjustments are pretty much standard practice in the industry, and they serve to mitigate certain risks confronted by the provider due to costs outside of their control.”

As King explained it, the desire is to align methodologies: “We want to align methodologies going forward so that data published through the cost trends project is aligned with the standards of performance under the contracts.”

As it turned out, there were some problems identified with the data initially reported by one of the insurers. [Although King did not identify the insurer that had produced the questionable data, three different sources confirmed to ConvergenceRI that it was Neighborhood Health Plan of Rhode Island.]

King continued: “Second, we identified problems in the data reported to OHIC by one of the insurers. This really proved the value of doing data validation at the provider level, as the providers were able to call into question certain values in the reporting based on knowledge of their own data. To the credit of this insurer, they very quickly corrected these errors and resubmitted their data. We believe the data we have is accurate.”

That is an excellent positive reframe by King, but without specific data results for each of the providers to measure costs, the story remains somewhat incomplete, in ConvergenceRI’s opinion.

When asked by ConvergenceRI to at least provide the highest and lowest costs achieved in 2019 by Medicaid accountable entities, as well as the median, King answered: “For the AEs in our dataset, the annual medical trend [risk adjusted] from 2018 to 2019 ranged from 0.2 percent to 14 percent. The median was 3.05 percent.”

Translated, there is big gap between cost increases that range from 0.2 percent to 14 percent for 2019, a magnitude of difference of some 700 percent.

The other difficult question, not explored by the data results, is how any potential shared savings awards would be calculated. Should it be by the percent of decrease in costs year over year? Say, in a hypothetical example, the accountable entity with a 14 percent increase in costs in 2019, the highest level, had actually decreased their costs by more than 20 percent, compared with 2018 costs. Should they receive a greater percentage of shared savings?

In comparison, in another hypothetical example, should the accountable entity with the lowest cost increase in 2019, at 0.2 percent, be penalized when it comes to shared savings because their room for improvement in cost reductions, given their efficient operations, is much, much more limited?

Another question, which will remain unresolved until the data for all the performances by accountable entities is revealed, is this: Do the accountable entities associated with hospital systems have a higher cost of doing business because of testing and facilities fees?

Coming full circle
With the decision by R.I. Attorney General Peter Neonha to reject the merger application by Care New England and Lifespan, the performance by the hospital-based accountable entities becomes less controversial in the overall scheme of things.

Further, community health centers are the backbone providers of primary care in Rhode Island. During the last year, the providers and community health worker teams at community health centers have been at the front lines in attempting to halt the spread of the deadly virus, at the neighborhood level.

The questions remain: What are the political consequences, if any, for the Governor and for the leadership of the R.I. General Assembly for their failure to increase Medicaid rates of reimbursement? Will R.I. EOHHS establish any conditions about how future MCOs will deploy software management algorithms through Optum as a way to limit alleged embedded racism in the way that services are provided? And, how will hospital-based accountable entities and accountable care organizations be held accountable for higher priced per-member-per-month performance analytics? How will their potential shared savings be reduced?