Medicaid Conference Takes Stock on Value-Based Payment

Release Date: 07.15.2016
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Jim Tallon

The revolutionary and evolutionary redesign of New York’s Medicaid program has entered a new phase, with greater focus on payment reform. Whereas the program’s fee-for-service system has historically rewarded providers for the quantity of service provided, payment reform is today pushing toward value-based payment, the theme of the 2016 edition of United Hospital’s Fund’s annual Medicaid conference.

In introducing the program—held on July 14 at the New York Academy of Medicine—Jim Tallon, UHF president, noted that value-based payment was selected as a theme in part because Jason Helgerson, New York State Medicaid Director, had touched on its importance in his keynote presentation from UHF’s 2015 Medicaid conference. It was clearly important to focus not just on the implementation of the new payment model, but also on its effect on beneficiaries, health plans, and health care providers.

Jason Helgerson: State of the Medicaid Program Past, Present, and Future

Mr. Helgerson began his keynote with a review of the Medicaid program’s transformation to date, from the initial commitment in 2011 focused on preventing avoidable hospital use, to the securing of a $7 billion 1115 waiver to fund the transformative Delivery System Reform Incentive Payment (DSRIP) program in 2014, to the current drive toward value-based payment, designed to encourage providers to deliver greater value to communities and to tailor the health care system to patients’ needs. While the number of beneficiaries in the program over this period has grown from four million to six million, the program has seen spending per recipient drop initially and now stabilize, indicating sustainability in program spending.


Jason Helgerson

Focusing on the DSRIP program’s achievements to date, Mr. Helgerson reported that the participating Performing Provider Systems have advanced from the planning phase to the implementation of projects, and all appear to be on a path to success. The participants have qualified for 99.4 percent of all available funds to date, or $1.2 billion.

He also shared examples of what Performing Provider Systems are already doing to both improve how the health delivery system operates and fundamentally change the lives of individuals. Among the 11 examples he cited are the recruitment of health care professionals to underserved rural communities (North Country Initiative), the reduction in opioid-related emergency department utilization among a targeted cohort (Ellenville), an analysis of Medicaid claims data to refer frequent emergency department users to primary care providers (Catholic Health System), and the creation of a new community health worker training program to address a range of needs (Staten Island).

He then talked about opportunities to improve care through value-based payment, noting the lessons that are being learned from the Performing Provider Systems that are doing especially well in reducing the 35 percent of costs associated with potentially avoidable complications from respiratory diseases, which can be sharply reduced through better care coordination among providers across organizational boundaries.

Mr. Helgerson concluded his keynote with his vision for a transformed system of the future, in which not only are health care services truly coordinated, but outcomes that society cares about move beyond traditional health care metrics; such outcomes might include housing, kindergarten readiness, and even community happiness. Public systems could also build relationships across sectors, so that the health care system could interact effectively with criminal justice, employment, schools, and more—in an ecosystem designed to achieve the most important outcomes. (Audio and slides are available.)

Panel 1: Engaging and Protecting Medicaid Members


(From left) Harvey Rosenthal, Chad Shearer, Rebecca Novick, and Christina Jenkins, MD

Moderated by Chad Shearer, director of UHF’s Medicaid Institute, the day’s first panel featured a discussion on emerging efforts in Medicaid beneficiary engagement and considerations for consumer empowerment. The panelists included Christina Jenkins, MD, President and Chief Executive Officer of OneCity Health, the DSRIP Performing Provider System led by NYC Health+ Hospitals; Rebecca Novick, Director of the Health Law Unit of the Legal Aid Society; and Harvey Rosenthal, Executive Director of the New York Association of Psychiatric Rehabilitation Services.

The discussion included an examination of consumer confusion. Ms. Novick asserted that Medicaid beneficiaries don’t know who all the players in their health care sphere are. “With questions, are they supposed to call the care manager, or someone they talk to in the doctor’s office?” She added that notifications about health care changes can be confusing and stressful for many people. Mr. Rosenthal added that beneficiaries aren’t aware of or don’t understand the concept of health homes, including the fact that, through health homes, beneficiaries can get additional help with care coordination. Dr. Jenkins noted that patients need clarity in understanding the roles played by different providers and the changes in how health care is provided, and explanations need to be shared in ways that patients understand and that are meaningful to them. The panelists all agreed that reform outcomes will fail if the messaging is about the health care system and not the patients.

In considering what patients want and need, Mr. Rosenthal noted that the starting point is often in a crisis. “You need to start where the person is,” he said. Ms. Novick concurred with examples of the things patients fight for at different times: “They fight to get access to services, to get on or stay on Medicaid, to deal with crises around housing and other benefits; they come from so many different places and need help putting the pieces together.” Dr. Jenkins added that Medicaid beneficiaries “need help understanding what we are trying to do together, and frontline staff are critical to building this sense of purpose.”

The panelists also focused on sensitivities around the electronic medical record—the balance between the clinical need for patient information, including information about social determinants of health, versus patients’ concerns about privacy. Dr. Jenkins noted, “Data sharing is unfortunately very onerous, and quick indicators at a high level are difficult to get.” Mr. Rosenthal affirmed that, for patients, especially those with behavioral health concerns, there is enormous sensitivity around electronic medical records. Ms. Novick emphasized the importance of giving patients clear answers and details about what information is being shared, what is not, the confidentiality of the information shared, where it is going, and who has access to it. “It’s important to explain why this information is useful and to reassure people that details about their lives are not out there for everyone.”

Panel 2: Implementing the Medicaid Value-Based Payment Roadmap


(From left) Andrea Cohen, Caroline D. Greene, Carl Lund, and James Sinkoff

Moderated by Andrea Cohen, UHF’s Senior Vice President for Program, the second panel offered a look at early activities by plans and providers to develop value-based payment arrangements. The panelists included Caroline D. Greene, Chief Administrative and Financial Officer, Maimonides Central Services Organization; Carl Lund, Vice President for Hospital Contracting and Value-Based Arrangements, EmblemHealth; and James Sinkoff, Executive Vice President, Business and Informational Services and Chief Financial Officer, HRHCare. Before engaging in discussion, each of the panelists talked briefly about their organizational role in value-based payment agreements—Ms. Greene, on her role in the DSRIP Performing Provider System led by Maimonides, Mr. Lund, from the perspective of a not-for-profit health care insurer, and Mr. Sinkoff, from his finance perspective leading a network of more than 30 health centers in the Hudson Valley.

The discussion initially focused on exploring which core strategies might be appropriate as first steps in the drive toward value. Ms. Greene noted that the theme that really matters most is care coordination. Mr. Lund, offering the payer perspective, said that size matters; it’s important to have a population with a critical mass. Mr. Sinkoff offered a third perspective: “Don’t worry so much about strategy from the outset; start by endeavoring to learn and by capturing data. Broader learning at the beginning will naturally lead to evolving strategies and hypotheses.”

Switching to questions related to the cost of care—i.e., the role of unit prices, the importance of price information, how pricing works when providers need to refer out—the panelists drew contrasts with the old model, in which price transparency was largely non-existent. Mr. Lund noted that, as providers take on more risk, more pricing information will need to be shared, and contracting conversations will focus more on pricing. Mr. SInkoff added that when providers are a part of arrangements involving total cost of care, negotiations will also need to focus on delegated roles and responsibilities related to total care management.

Closing with a look at the role of a more empowered and engaged patient, Ms. Greene emphasized that it’s the patient who will decide what is valuable and that frontline staff will play a greater role in working with patients to gain a collaborative understanding of where value is and what is valuable. Mr. Lund agreed that it would be a mistake to let the patient take the back seat, but creativity will be needed to help Medicaid beneficiaries get the information they need to make decisions. Mr. Sinkoff added that, when measuring the patient experience, it will be important to measure the right things, such as, following a visit to an urgent care center, asking patients the simple question, “Would you come back?” (Slides from all three panelists are available.)

Chris Koller: Parting Thoughts: The Future of Value-Based Payment in Medicaid


Christopher F. Koller

The conference culminated with a synthesizing keynote by Christopher F. Koller, president of the Milbank Memorial Fund and former health insurance commissioner for Rhode Island, who provided key takeaways on the future of value-based payment for New York.
He noted that health care costs continue to rise, and that attention needs to be paid to underlying inflation. Nevertheless, New York is operating from a position of strength related to other states—in terms of finances, science, performance on health care disparities—in part, because of the State’s commitment through public policy. Even so, there are still lessons to learn from other states.

He then focused on five key points:

  1. Patient protection: New York’s consumer protection community is among the strongest in the country, with independent consumer affairs organizations and statewide coalitions. And while New York also has a strong history of Medicaid managed care, the question remains, How does the role of the provider change under value-based payment?
  2. Changing roles of health plans and providers: While providers will have some different responsibilities, there are bigger changes ahead for health plans. The rates that they negotiate have been a key piece of proprietary information that they don’t want to give up. Pay close attention to discussions around rate negotiations. Mediciad and Medicare rates are of course public, so they are known. But who gets to know the prices for value-based payment, and where is the money being transferred? Transparency is very important, and public rate setting is crucial.
  3. Real or fad: The current drive is to lock in value-based payment arrangements, but how do we know it’s not just the latest fad or trend? Moreover, what are the consequences of failure if cost-saving and quality-improvement goals aren’t met? In addition, there’s a sense of urgency related to capping the growth of the cost of care, but how strongly can we adhere to those caps?
  4. Social determinants of health: Plans and provider groups are both very interested in making a difference, but it’s unclear what interventions will matter, especially in an evidence-based way. Can risk-bearing entities figure out how to pay for such interventions?
  5. Medicaid’s role in the reform agenda: Can Medicaid alone accomplish health care reform? After all, providers see patients other than Meidcaid beneficiarires. Medicaid will need to collaborate with others, especially primary care providers, to effect system transformation. Primary care will unquestionably be a powerful arena for payer alignment.

Mr. Koller also noted that many of the challenges fall outside the health care sphere, with community violence being a particularly pertinent problem. Value-based payment has the potential to change the discussion to social capital, social determinants, even happiness. Such are the challenges that might be addressed by paying differently for outcomes.

All slide presentations and the audio of Mr. Helgerson's keynote are available.