Last week, our In Focus section provided a recap of the second annual HMA Conference, The Future of Medicaid is Here: Implications for Payers, Providers, and States, held Monday, September 11, and Tuesday, September 12, in Chicago, Illinois. More than 300 leading executives from health plans, providers, state and federal government, community-based organizations, and others in the health care field gathered to address the challenges and opportunities for organizations serving Medicaid and other vulnerable populations given the priorities of the new Administration and Congress.
“The Future of Medicaid is Here: Implications for Payers, Providers and States”
Diane Rowland, Executive Vice President of the Kaiser Family Foundation, set the stage with an overview of Medicaid’s role in the Affordable Care Act (ACA) debate and what the next steps are for Medicaid going forward. Medicaid’s importance to the American public, as well as its role in supporting Medicare, the long term care system, and the health care safety net were discussed before looking at the key upcoming issues that those in the Medicaid world will address: (1) the future of the Medicaid expansion; (2) Medicaid waivers and other administrative actions at the federal level; (3) Medicaid’s role in public health and the opioid crisis; (4) the growth of the aging population and demand for long term care; and (5) potential restructuring of Medicaid’s programmatic design and financing. While Congress may have little appetite to address much beyond CHIP reauthorization and market stabilization, the desire to reduce federal spending over time, cap entitlement programs, and generate savings could present real concerns to the Medicaid program. A key question that will shape the future of Medicaid is whether Congress will enact nationwide changes, or whether the future of Medicaid will be shaped by state-level actions.
Keynote Q&A Session
“The Future of State Innovation in Medicaid”
Next up, HMA convened three current or former state Medicaid directors, as well as Matt Salo, the Executive Director of the National Association of Medicaid Directors (NAMD), to discuss the environment around state innovation in Medicaid. California’s Mari Cantwell, State Medicaid Director & Chief Deputy Director, Health Care Programs, California Department of Health Care Services; Kansas’ Michael Randol, Director, Division of Health Care Finance, Kansas Department of Health and Environment; and Texas’ Gary Jessee, Former Deputy Executive Commissioner, Medical and Social Services, Texas Health and Human Services, each provided an overview on their respective state’s innovation activities and their views on innovation going forward, while Matt Salo brought insights from NAMD members, before fielding questions from HMA Managing Principal Kathleen Nolan and from the audience.
Innovation around social determinants of health and a real focus on the member were major topics, presenting both significant opportunities and significant challenges, particularly around financing and aligning across state and federal programs. Cost-containment will be another issue in innovation, and Medicaid programs will need to communicate effectively around what it really means to contain costs going forward when innovation can appear to be increasing spending. The role of state partners – particularly MCOs – will be key to successful innovation in Medicaid, while organizations and vendors will need to be thoughtful in their approach to working with states. Finally, flexibility was a key word used across the discussion on innovation in Medicaid. In light of what looks to be a new era of federal flexibility, states are going to be the leaders and Medicaid is the mechanism for states to act on health care. States will have to be creative and thoughtful in weighing options and setting a course for innovation.
Health Plan Keynote Q&A Session
“Managed Care and the Brave New World of Medicaid Innovation”
“Cutting $800 million from the Medicaid budget is not our idea of reform,” said Pam Morris, chief executive of CareSource (Dayton, Ohio) in commenting on failed Congressional efforts to repeal and replace the Affordable Care Act. She did note that a shift to block grants could force remaining fee-for-service states to move to Medicaid managed care. Morris also praised the concept of a Medicaid buy-in option.
Janet Grant, Regional Vice President, Great Plains Region, Aetna Medicaid, said that a Medicaid funding model using per capita caps could work; although, she noted, there would be winners and losers among the states. Grant said she was looking to state Governors in the Medicaid reform debate, hoping they will help drive federal policy.
Mario Molina, Director and former Chief Executive, Molina Healthcare, described managed care as the only large-scale solution that has successfully reduced costs. Molina also said that the biggest challenge concerned new provider risk-sharing arrangements is the providers themselves, noting that many are unable or unwilling to take on risk. He said the best approach to provider risk sharing is capitation.
Judith Candice Davis, Divisional Vice President, Clinical Operations for Government Programs at Blue Cross Blue Shield of Illinois, said that Federally Qualified Health Centers are some of the most trusted Medicaid providers in the Illinois market and can be slowly migrated into risk-sharing arrangements. She also said the health plans can address social determinants of health by focusing on health workers best equipped to help members in certain settings. For example, social workers in many cases have higher engagement with members than primary care physicians, while EMT workers can have even higher levels of engagement in certain situations.
Matt Salo, Executive Director of NAMD, said that the battle over repeal and replace of the Affordable Care Act “is not over by a long shot.” While the window of opportunity for Republicans is narrowing, there is still nearly three weeks to pass some form of repeal and replacement legislation with 51 votes under reconciliation in the Senate, according to parliamentary rules. “We have three weeks to see if this zombie comes back from the grave….After that it goes away,” Salo said. He described the House and Senate versions of repeal and replace as “bad public policy.” Despite attempts by NAMD to educate lawmakers on the complexities of Medicaid, Salo said it was clear from the proposed legislation that “they didn’t listen.” While there are a lot of things that can be improved, Salo said, the type of changes envisioned in the repeal and replace proposals “are not the kind of changes we need in Medicaid.” Salo said reforms should focus on the “four P’s:” payers, plans, providers, and patients. Payers need to think differently in serving markets like Medicaid, Medicare and commercial insurance; plans need to recognize that what worked before might not work today, and that serving children is different from serving the frail elderly; and providers need to realize they’re going to be held accountable.
“Medicaid Waivers – A Future of Innovation, A Danger of Disruption”
Judy Mohr Peterson, Medicaid Director, Hawaii State Department of Human Services, kicked off the discussion on Medicaid waivers with the concept of “kuleana,” a shared responsibility, and how it relates to the health and wellbeing of Medicaid members. This responsibility influences Hawaii’s approach to its Section 1115 waiver, built on community conversation. The next generation of waivers will focus on the delivery system and financial alignment, integrated at the community level. Waiver innovations will be rethinking the roles of primary care and prevention, focusing on social needs as true drivers of innovation, and will involve more than Medicaid.
Chris Priest, Medicaid Director, Michigan Dept. of Health and Human Services, took the stage next to discuss the era of flexibility under the new federal administration. While waivers have always been the way to implement change in Medicaid, a new conversation is needed on how much can be changed and how fast. States will need to move both deliberately and cautiously, as well as be wary of “innovation fatigue” after years of ACA implementation. Furthermore, in the new era of flexibility, waivers should not be expected to bring in significant new funding, but rather provide an opportunity to optimize and innovate, particularly around social determinants of health.
Finally, Karen Brach, President, Meridian Health Plan of Illinois, provided the MCO perspective, stressing that managed care can and will continue to be a partner to states in innovation. MCOs can bring invaluable experience with successes and failures in other states and markets. MCOs can be a partner in the waiver conversation to minimize member disruption, increase provider awareness and preparedness, support provider engagement, and encourage stakeholder involvement. On the running theme of flexibility, Brach noted that this applies to contracting and program requirements as well: inflexibility can be a barrier to successful innovation.
“Value-Based Payments and the Future of Payer-Provider Collaboration”
Susan Fleischman, Vice President of Medicaid, CHIP, and Charitable Care at Kaiser Permanente; Rachel Quinn, Director of the Office of Value Based Purchasing at the Washington State Health Care Authority; and Paco Trilla, Medical Director of the Neighborhood Health Plan of Rhode Island shared strategies on how their organizations are working towards successful value-based payment (VBP) goals across payers, providers, and plans, and the importance of data. The Washington State Health Care Authority has set a goal to reach 90 percent VBP by 2021 through payment reform initiatives that focus on elements, including withholding premiums for managed care organizations, risk sharing, and rewarding improvement. Fleischman stressed the importance of electronic health records to connect everyone and improve outcomes. Kaiser uses an integrated model that aligns the health plans, hospitals, and physician groups to drive coordination of care across all settings. In Rhode Island, Medicaid Accountable Entities are used to improve quality. In 2016, the entities saved $11.6 million and improved quality for patients. Trilla stated, “data improves lives.”
“Opportunities and Challenges for Community-based Organizations”
Barbara Ferrer, Director of Public Health at Los Angeles County Health Agency, and June Simmons, President and CEO at the Partners in Care Foundation, shared their experiences on how community-based organizations can leverage resources and build partnerships to address social determinants of health through non-clinical interventions. Social and economic factors heavily influence health outcomes, especially within the Medicaid population. The speakers emphasized the importance of best practices, evidence-based models, innovative payment structures, and technology to address health outcomes linked to social determinants of health. The speakers provided case studies on addressing both children’s asthma and high hospital readmission rates for home and community-based services utilizers through interventions provided by community-based organizations. Identifying champions and new partners, including managed care organizations and housing authorities, can create new funding streams and support pilots that demonstrate results. Non-clinical interventions are powerful and many times inexpensive, especially when supporting wellness in the home and community.
“Medicaid Managed Care and the Future of Long-Term Services and Supports”
Melanie Bella, national consultant; Patti Killingsworth, Assistant Commissioner for TennCare; and Michael Monson, Corporate Vice President of Long-Term Care and Dual Eligibles at Centene Corp., addressed the use of managed care for Long-Term Services and Supports (MLTSS) populations, including individuals who are dually eligible for Medicare and Medicaid. Bella noted that implementation of the federal duals Financial Alignment Initiative had some initial bumps, but today it covers 400,000 members and is delivering positive outcomes. She said one of the biggest challenges is getting eligible individuals enrolled. Monson pointed out that there are no effective metrics today to measure the quality of MLTSS plans. He pointed to an initiative by the National MLTSS Health Plan Association to identify measures in five domains: quality of life, transition to most integrated setting, integration risk factors, person-centered planning and coordination, and satisfaction. Killingsworth said that MLTSS has the potential to improve outcomes, reduce costs, and increase access to home and community-based services. She stressed services and supports that enable people to stay connected and integrated in their local communities, not just at home and out of a nursing home. She added that investment is needed because the healthcare system is largely unequipped to serve the LTSS population.
“Behavioral Health Integration: A Care Management Imperative”
Patrick Gordon, Associate Vice President of Rocky Mountain Health Plan, a UnitedHealthcare plan; Tamara Hamlish, Executive Director of ECHO-Chicago and Project Manager of HepCCATT; Virna Little, Senior Vice President of Psychosocial Services and Community Affairs at the Institute for Family Health; and Joe Parks, Medical Director of the National Council for Behavioral Health talked about the importance of integrating behavioral health in this breakout session. The cost of taking care of patients with mental health conditions is significantly higher. To lower costs and improve lives by successfully integrating behavioral health, there needs to be shared accountability, shared plans of care, and competent providers. Speakers stressed sharing the risk by increasing dependency and vulnerability. Education and cross-training are extremely important to developing workforce competency. Additionally, plans must increase behavioral provider rates to cover the actual cost of care in order for integration to work. The speakers spoke of specific models and processes to integrate care, as well as the benefits of doing so.
“Investor Views on the Future of Publicly Sponsored Healthcare”
David Caluori, Principal at General Atlantic; Josh Raskin, a Wall Street Analyst; Todd Rudsenske, Managing Director at Cain Brothers & Company LLC; David Schuppan, Private Equity Investor; and Tim Sheehan, Managing Director at Beecken Petty O’Keefe, discussed investment opportunities in the Medicaid market and trends they are tracking since the election. Investors are looking for opportunities that create value, demonstrate results, and offer savings. Medicaid managed care is an area that is data driven and has demonstrated savings, including a competitive advantage over government-provided services. Additionally, given the amount of spending that exists outside of managed care, there remains significant room for growth in the industry. Another area of opportunity is behavioral health care, with undiagnosed and untreated behavioral health causing a tremendous strain on the economy over the past decade. New models that bring coordinated care into the community can reduce the overall costs on society, making this an opportunity for investors. For the dual eligible population, there are several areas of opportunity for investors, including home health, adult day, home-delivered meals, and home and community-based services that replicate services offered in an institutional setting, offer choice for Medicaid beneficiaries, and replace one-on-one care. Alternatively, highly fragmented areas and services with high variability between states can make investors cautious. There was additional discussion on the overall inflation in valuation of health care deals, particularly as investors in other sectors begin to look to the health sector for new value opportunities. Overall, the speakers emphasized the importance of opportunities of growth within a five to ten-year cycle and high-quality services that benefit the individual and the community.
Keynote Address and Q&A Session
“The Pros and Cons of Shared Responsibility in Medicaid”
In one of the conference’s most spirited conference sessions, former Indiana Medicaid Director Joe Moser discussed the state’s hybrid HIP 2.0 Medicaid expansion, which includes premium contributions equal to 2 percent of income and health savings accounts. The program also includes penalties for not making premiums payments. Anyone at or below poverty loses enhanced benefits like vision and dental; those above poverty up to 138 percent experience a six-month lock-out period. Moser noted that the program was a way of bringing coverage to thousands of expansion members in Indiana, a state that politically was not prepared to launch a more standard expansion under the Affordable Care Act. Moser noted that after two years, 65 percent of people are making their contributions and receiving enhanced benefits. He attributes the success of the program in part to reimbursing providers at Medicare rates, which helps ensure a robust network. He also noted that the dental benefit has been extremely popular. Indiana is now in the process of seeking additional changes, including a work requirement.
Kristen Metzger, President of Indiana Medicaid for Anthem Blue Cross and Blue Shield, said that members in HIP 2.0 are much more engaged than traditional Medicaid members, calling for information about benefits at least five times more than in other states. “They ask a lot of questions, but we’re okay with that,” she said. Member satisfaction is also higher, along with HEDIS quality measurement scores, Metzger noted. About 70 percent of HIP 2.0 expansion members enrolled with Anthem make their premium payments.
Toby Douglas, Senior Vice president, Medicaid Solutions, Centene Corporation, said that Indiana Medicaid members appreciate the enhanced benefits, especially dental coverage. He agreed that member engagement is much higher than other Medicaid populations and ER use is lower. Douglas said that HIP 2.0 allows for a partnership between the state and health plan, allowing plans to innovate, for example, by offering certain incentives and rewards for work, housing, and childcare.
Christopher Perrone, Director, Improving Access, California Health Care Foundation, expressed skepticism over many of the features of HIP 2.0, citing studies showing that premium contributions act as a barrier to obtaining and maintaining coverage, and that cost-sharing reduces utilization of needed services. As for work requirement, Perrone said, voluntary programs have proven to be just as effective as mandates that penalize members by holding back coverage.
Provider Keynote Q&A Session
“Trends in Provider Innovation and Delivery System Reform”
Allen Dobson, MD, Chief Executive of Community Care of North Carolina; Allison McGuire, Executive Director, Montefiore Hudson Valley Collaborative; and Paco Trilla, MD, Medical Director, Neighborhood Health Plan of Rhode Island discussed the development of clinically and financially integrated delivery systems like Accountable Care Organizations to further improve quality, cost and member experience of care. Trilla pointed to success in Rhode Island’s Accountable Care Entity program, noting that per member per month costs for 89,000 members enrolled in five ACEs in 2016-17 declined 3 percent, compared to a 4 percent increase among 47,000 non-ACE members. McGuire pointed to the challenges of delivery system redesign, noting that system redesign takes time and that state regulations must align with program goals and allow organizations to innovate. Dobson pointed to four initiatives to take advantage of opportunities to improve outcomes and care management: (1) integration of community pharmacists; (2) behavioral health integration; (3) stressing “impactability” of data, i.e., making sure data can be used to drive decisions; and (4) organizing the delivery system.