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    A Closer Look at State Innovation Model Testing Winning States: Payment and Delivery System Reform Analysis

    HHS recently announced the first round of State Innovation Model (SIM) Testing Awards to six states: Arkansas, Maine, Massachusetts, Minnesota, Oregon, and Vermont. These grants, worth between $30 – $45 million for 3 to 4 years will support states’ work on multi-payer payment and delivery system reform. This chart looks at how selected states are planning to reform their payment methods and delivery system approaches based on states’ proposals that you can find in our document library.

    As states begin to actually do this work, we hope you will share and discuss more details and work products on State Refor(u)m. Do you know of state activity or analyses that we should add to this compilation? Eager to update a fact we've included? Your feedback is central to our ongoing, real-time analytical process, so tell us in a comment below, or email the author with your suggestion. He can be reached at


    Project Narrative XXXXX
    Award Amount$42,000,000$33,068,334$44,011,924$45,231,841$45,000,000$45,009,480
    Model Overview
    Shift from encounter-based services to care coordination. Using a multi-payer approach, the model integrates two complementary strategies statewide: 1) episode-based payment for acute medical episodes, acute procedures, and select chronic conditions managed by specialists, it also this applies to care for populations with supportive care needs, 2) population based care via the medical home and health home.
    Formation of multi-payer Accountable Care Organizations (ACOs) that commit to value and performance based payment reform and public reporting of common quality benchmarks. Builds on the model of MaineCare (Medicaid) accountable communities.  Emphasis on enhanced primary care; alignments between primary care and public health, behavioral health, and long-term care; new workforce models; and alignment of measures, data and analytics across providers.


    Accelerate the migration to a statewide multi-payer model where providers assume responsibility for quality and cost. The model encourages provider organizations to embed in larger organizations such as Accountable Care Organizations (ACOs) and for primary care practices to transform into patient-centered medical home (PCMH). A payment framework will be developed with a set of incentives based on quality metrics for payments to support practice transformation. An operational structure will provide practices with data to support care coordination and accountability.
    A comprehensive, statewide, initiative to close current gaps in health information technology; exchange health information; and build quality improvement infrastructure, and workforce capacity needed to provide team-based, coordinated, patient-centered care. Will expand the current Medicaid Accountable Care Organizations (ACOs) to improve health and lower costs for people with complex health needs. It will move the majority of health care in state to shared savings/shared risk payment programs. Will also expand existing models, such as its Health Care Home program, that target the unique needs of populations and ensure care is integrated and coordinated.
    Test Medicaid Coordinated Care Organizations (CCOs) under the recently approved Medicaid 1115 Waiver Demonstration and will expand this model to the Oregon Public Employees Benefits Board (PEBB) and other qualified private plans. Will utilize global budgets for CCOs and integrate behavioral health. Oregon will also use key levers to achieve savings including: Patient Centered Primary Care Homes (PCPCH), physical and mental health integration, improved care management experienced by beneficiaries in CCOs, administrative efficiencies in CCOs, and flexible benefits. SIM funds will create the Oregon Transformation Center to work with stakeholders to promote successful implementation.
    Expand the Medicare model for Shared Savings ACOs to Medicaid and commercial payers, test bundled payments for episodic care that involves integration of payment and services across multiple providers, and test a pay-for-performance model aimed at improving quality, performance, and efficiency of individual providers. The state’s initiative aims to: align Blueprint for Health advanced primary care practices with specialty care providers; implement and evaluate value-based payment methodologies, coordinate delivery and financing for enhanced care management for the dually-eligible; and accelerate the establishment of the state’s learning health system. 

    Payment Methods

    The specific payment strategies states and organizations will use in paying providers.

    PCMH receives: Care coordination fees on a PMPM basis.  Shared savings payment based on performance.

    Health Homes (institutions on the ACS Waiver) receive: Care coordination payment not contingent on performance. The state plans to move toward a Performance based PMPM. Case-management payment not based on performance.

    Both PCMH and Health Homes receive: Episode-based payment with retrospective risk sharing for selected medical episodes and behavioral health conditions.

    Primary care based, multi-stakeholder, multi-payer ACO with shared risk. The model phases in alternative payment methods into the ACO along the continuum from shared savings, to partial capitation, to full global capitation

    Multi-payer ACO and PCMH Model supported by a shared savings/risk payment framework with quality incentives and an aligned multi-payer operational structure.

    Massachusetts Medicaid’s Duals Demonstration Integrated Care Organizations are encouraged to use alternative payment methodologies including shared savings/shared risk arrangements.

    Shared Savings in the Virtual ACO Health Care Delivery System (HCDS) based on the difference between annual expected and actual realized total cost of care if savings are achieved, contingent on meeting quality and patient experience outcomes.

    The Integrated ACO HCDS builds toward a two-way risk-sharing model that distributes the difference between the annual expected and actual realized total cost of care, contingent on meeting quality and patient experience outcomes.

    Alternative payment methodologies via the Coordinated Care Model (CCM), including:

    • Pay-for-performance (P4P) incentive payments built on a fee-for-service (FFS) base.
    • Shared savings payments built on a FFS base.
    • Bundled or episode payments for all services connected to an episode of care.
    • Primary care base payments to support activities that FFS does not reimburse.

    Expands the Medicare shared savings ACO model to include Medicaid and commercial payers across the state’s ACO systems; employs bundled payments for two programs.

    Medicare will use P4P programs for all providers, Medicaid will work to expand P4P programs to all participating providers, and commercial providers are expected to participate in varying scope.

    The state currently provides services to dual-eligibles in a managed care model and hopes to expand this model to include Medicare dollars for this population.

    Participants in Payment Innovation

    The patients, providers, and health plans that will be affected when the model is implemented.

    Patients Covered: Medicaid and Medicare, Medicare/Medicaid dual eligible individuals, CHIP, those covered by participating private plans.

    Providers Included: Medical Home and Health Home providers.

    Health Plans: Medicaid, Arkansas BlueCross BlueShield, potentially Medicare.

    Patients Covered: Medicaid, Medicare, those covered by participating private plans.

    Providers Included: Health Home and Patient Centered Medical Home providers and providers in MHMC.

    Health Plans: Medicaid, State Employees, Bath Ironworks, Maine University System. Maine has also partnered with the Maine Health Management Coalition (MHMC), a multi-stakeholder purchaser-led collaborative representing employers, providers, payers, and consumers.

    Patients Covered: Medicaid and Medicare, Medicare/Medicaid dual eligible individuals, state employees, those covered by participating private plans.

    Providers Included: All primary care providers. Massachusetts has established a goal of having all PCPs functioning as medical homes by 2015. PCPs are defined broadly to include group practices, hospital based PCPs, and community/health mental health centers that provide primary care services.

    Health Plans: Medicaid, Medicare, state employees, Blue Cross Blue Shield of Massachusetts, Tufts Health Plan.

    Patients Covered: Medicaid, CHIP, MinnesotaCare, Medicare, those covered by participating private plans.

    Providers Included: Current ACOs, provider organizations selected through a competitive RFP will participate as ACOs, Hennepin Health, current Health Care Homes and those seeking to become certified.

    Health Plans: Medicaid, Medicare, Medica, Blue Plus (Blue Cross Blue Shield of Minnesota), HealthPartners, UCare, PrimeWest, South Country Health Alliance, Itasca Medical Care.

    Patients Covered: Medicaid (will also allow CCOs to serve as integrated Medicare and Medicaid plans for dually eligible individuals), state employees, and those purchasing qualified health plans on Oregon’s health insurance exchange.

    Providers Included: Oregon’s CCO’s and those practices that have achieved PCPCH status.

    Health Plans: Medicaid, state employees, qualified private health plans on state exchange. See appendix C of the innovation plan for a list of payers.

    Patients Covered: Medicare, Medicaid, those covered by participating private plans.

    Providers Included:  Fletcher Allen and Dartmouth‐Hitchcock ACO, Community Hospitals, FQHCs, statewide networks and independent physicians.

    Health Plans: Medicaid, Medicare, and participating commercial plans.

    Potential for Savings

    State cost savings estimates to be achieved through model implementation.

    Estimated at $1.1 billion over the 3-year Model Testing period and $8.9 billion through 2020.

    Estimated at $472 million for Medicaid, $554 million for commercial payers, and $248 million for Medicare over 3 years.

    Massachusetts’s innovation plan does not include an estimate on cost savings.

    Projected $111.1 million savings over a three-year period. $90.3 million in Medicaid savings, $13.3 million in savings to private payers, and $7.5 million in Medicare savings.

    Estimated reduction of per capita Medicaid spending by 1 percentage point by July 2013 and 2 percentage points by July 2014. For state employees and dual-eligibles, an estimated reduction of 2 percentage points in its cost trend for selected populations.Vermont’s innovation plan does not include an estimate on cost savings.

    Patient Centered Medical Home (PCMH) Requirements

    Milestones practices must achieve to be recognized as PCMH (or equivalent) by the state.
    Practices participating in the Comprehensive Primary Care Initiative (CPCI) are not required to attain formal PCMH recognition, though recognition by NCQA or other programs is viewed favorably. There are also additional state criteria. The model will underwrite the costs of primary care practice transformation and reward providers for effective population health management. Health home functions match the CMS definition.

    The model builds on the Multi-Payer Patient Centered Medical Home pilot. To become a PCMH practices must meet ten core expectations. By meeting these expectations practices can move to Accountable Communities that include shared savings and risk and are tied to quality improvement.

    The Massachusetts Medicaid Patient-Centered Medical Home Initiative (PCMHI) developed twelve core competencies that practices must possess in order to be recognized as PCMH.To be recognized as a Health Care Home practices must meet state developed certification standards and expectations. For specific information on eligibility requirements please view Minnesota’s certification rule.

    There are three tiers for PCPCH (1 – 3 with 3 being the highest). The tiers are based on measures related to six core attributes: access to care, accountability, comprehensive whole person quality care, continuity, coordination and integration, and person and family centered care. See appendixes C & D of the Final Report of by the PCPCH standards advisory committee for specific measures related to the attributes. OHA collects information at the clinic level to recognize clinics.

    Vermont, under the Multi-Payer Advanced Primary Care Practice (MAPCP) demonstration project and the Blueprint for Health recognizes practices as PCMH as designated by NCQA standards. Medicare, Medicaid and commercial payers provide per member per month payments to these practices.

    Shared Community Resources

    Community services used by each PCMH in primary care delivery but not located in any one practice.   

    The state has developed a Health Care Workforce Strategic plan. Goals include developing community reinforcement mechanisms such as community health workers, direct care workers, and faith-based initiatives.

    The PCMH model makes use of Community Care Teams (CCTs) to manage high risk/high cost patients and link them to shared community resources. New workforce models include: community paramedicine pilots, training workers for Maine CDC implementation of the National Diabetes Prevention Program, and; training to all PCMH/health home practices.

    The model invests in an electronic referral system that facilitates clinical-community linkages for evidence-based self-management programs for chronic disease and for community-based health and wellness programs, delivered by community partners. The model will also enhance practices’ access to pediatric psychiatrists for behavioral health consultation.The model expands and builds on both public and private ACOs (i.e. Hennepin Health). Multi-payer Health Care Homes, Community Health Teams and Service Coordination Teams are already in place working on care coordination and integration across the state. Testing funds will also support the integration of new providers such as community paramedics, and advanced dental therapists.Innovator Agents (IAs) will help CCOs break down the bureaucratic barriers between the CCO and the state and serve as a conduit for data and, sharing best practices.  The model increases the workforce of non-traditional health care workers such as: community health workers, peer wellness specialists, patient navigators, and interpreters to support CCOs in implementing the model.The MAPCP demonstration shares costs with the Blueprint’s Community Health Teams (CHTs), which connect patients with social and community supports. MAPCP also provides funding for the state’s Support Services at Home (SASH) program.  The Blueprint has established a team of practice facilitators to support primary care practices and to aid participating practices and CHTs in data-guided improvement activities.

    Performance Metrics

    Metrics that the state will use or develop to measure the impact of its payment and quality initiatives.

    Use of AHRQ indicators, CMS-CHIPRA pediatric quality indicators and CMS adult quality measures to track progress. The model will integrate emerging national metrics on health care value as they become recognized.The Maine Health Management Coalition will identify the measures for PCPs and behavioral health providers. Maine will also coordinate data collection efforts with CMMI evaluation contractors.The Statewide Quality Advisory Committee will build upon existing measure sets such as the CHIPRA Core Measures for adults and children, CMS ACO measures, and quality measures used by private buyers. The model also calls for patient experience surveys and collection of practice-level data on patient experience to calculate practice-level HEDIS quality measures.The Statewide Quality Reporting and Measurement System is currently in development to monitor and report performance for hospitals and clinics engaged in ACOs. The model supports development of unique quality, cost, and care coordination measures for ACOs, as well as the development of mechanisms to collect and report on these measures.They will develop a core set of 16 quality metrics for the first two years. Other metrics will be decided. These measures will be derived from: data collected by the Oregon Health Authority (OHA) and CCOs: CMS Medicaid Adult Core Measures, CHIPRA Core Measures, SAMHSA National Outcome Measures, and collection of race and ethnicity data at enrollment.Within the Multi-payer claims system there are 16 utilization measures, 26 expenditure measures and 112 HEDIS quality measures.  Within the Central Clinic Registry there are 107 measures for self-management and 296 measures for health status. The above measures must be adjusted to allow participants to indicate their activity in one or more of the interventions.
    Data Sources
    What types of data the state is using and where it is coming from.
    The Medicaid and Arkansas BlueCross BlueShield multi-payer provider portal. An All-Payer Claims Database Plus is being developed by the Arkansas Center for Health Improvement and the Office of Health Information Technology is developing The State Health Alliance for Records Exchange.  The Advanced Health Information Network provides desktop online access to patient eligibility information and electronic claims submission. Medicaid’s statewide analytics engine calculates per-episode costs and generates provider reports.HealthInfoNet, the state HIE, will provide: Emergency Department (ED) notifications to community care teams, capture of Health Homes clinical outcomes from EHRs for reporting and analysis, development of a behavioral health EHR incentive program, and development of the Personal Health Record.  The Maine Model also requires participating providers to commit to a common set of measures and a common claims data source (All Payer Claims Database).Massachusetts will leverage SIM funds to strengthen data infrastructure including the All Payer Claims Database (APCD), which will provide cross-payer claims-based reports to practice. Quality and utilization data from the Medicaid Management Information System (MMIS) to facilitate its use in alternative payments. SIM funds will finance technical resources to behavioral health and long-term services and supports (LTSS) providers to participate in the Health Information Exchange (HIE). The HIE will also enable the transmission of measures of clinical quality captured by EHRs as providers attain Stage 2 of Meaningful Use.Statewide Quality Measurement and Reporting System, enrollment, utilization and complexity indicators from the Medicaid Health Care Delivery System Demonstration. The model will further develop HIE and EHRs in the context of the 2015 Interoperable Electronic Health Records Mandate.Encounter and utilization data from the All-Payer All-Claims database, Oregon Behavioral Risk Factor Surveillance System. Oregon will develop and implement a statewide health information exchange.

    The multi-payer claims database (VHCURES) collects eligibility and claims data, the Central Clinical Registry (DocSite) collects clinical information from the patient record for use at both the patient and population level, and a statewide health information exchange (VHIE) with the capacity to produce care summaries and continuity of care documents as well as other reports. The model will expand HIT adoption and HIE connectivity.  Patient experience surveys will be expanded to measure the impact of specific delivery and payment methods on the patient experience.

    Provisions for Links to Specialty Care

    How the state will integrate specialty care into its primary care models; most have focused on patients with complex needs.

    Health homes will be accountable for the full experience of individuals with special needs including the frail elderly, those with DD, severe and persistent mental illness, and other high needs behavioral health clients. Providers will be responsible for health outcomes, streamlining care planning, and ensuring each person has a single integrated plan across all types of care.

    Behavioral health and other specialty services will be integrated into the patient-centered medical home model. This includes the use of CCTs to manage high risk/high cost patients and link them to community-based services.

    The PCMH and ACO model calls for the integration of public health initiatives, behavioral health, and LTSS with the primary care system. SIM funds will enhance the capability of the Executive Office of Elder Affairs (ELD) case management system so that it can process clinical assessment data. Providers will be able to upload date to the systems site, allowing the patient, caregivers, and case managers access.The Accountable Care and Health Care Home models will expand to ensure that the care for those with special needs and complex conditions is integrated and coordinated within the larger health care system. The next RFP for provider organizations to become ACOs will focus on those that include behavioral health, and services and supports for complex patients.CCO’s are responsible for the integration and coordination of physical, mental, behavioral, and dental health care. CCO’s are also responsible for coordinating with outside services such as LTSS and I/DD. CCO’s are required to ensure that members have access to high-quality care beyond just PCPCHs to other clinical and health professionals, including specialists.

    The Blueprint for Health and Act 79 called for the integration of mental health with medical services and all health reform initiatives.  The expanded use of patient experience surveys will be aimed at high needs individuals receiving specialty services.

    Key Infrastructure and Policies in Place

    Legislation and initiatives already in place in the state that will assist in implementation of the model.

    All-Payer Claims Database Plus and Advanced Health Information Network, The state is developing its health information exchange (SHARE) and expanding its HIT capacity through the US Commerce Department Broadband Technology Operations Project. The Health Care Payment Improvement Initiative.

    All-payer claims database, HealthInfoNet – Maine’s designated HIE, Maine Regional Extension Center. Currently HealthInfoNet’s database includes records for approximately 80% of Maine’s population and it is expected that all Maine hospitals will be engaged with the HIE by 2014. HealthInfoNet will also plan an incentive program for EHR adoption similar to the meaningful use program.

    Massachusetts 1115 Demonstration for its Medicaid program, comprehensive health care reform legislation – Chapter 224 of the Acts of 2012, All-Payer Claims Database, Medicaid’s MMIS, Medicaid’s Patient Centered Medical Home Initiative (PCMHI), Medicaid’s Primary Care Payment Reform (PCPR) Initiative, Group Insurance Commission representing state and some municipal employees, Blue Cross Blue Shield of Massachusetts’s Alternative Quality Contract, and the Health Information Exchange.State Law 62J.495 setting the 2015 mandate for interoperable electronic health records, Minnesota 1115 Waiver, Health Care Delivery Systems Demonstration, Statewide Quality Measurement and Reporting System, Executive Order Establishing a Vision for Health Care Reform, and Hennepin Health demonstration.Oregon Health Policy Board’s CCO implementation proposal and “Action Plan for Health.” Enabling legislation: senate bills approving CCOs, and approving the Health Insurance Exchange; house bills, one directing the OHPB to create an implementation plan for CCOs, one creating the Oregon Health Authority, and one creating the All-Payers All-Claims database. See Appendix A of the Oregon Health Care Innovation Plan for more information.Act 79 strengthening the mental health care system, adopted rule change expanding the Blueprint for Health from a pilot to a statewide program, Multi-payer claims database VHCURES, Central Clinical Registry, Health Information Exchange, 1115 Waiver, Global Commitment 1115 Waiver, Health Care Reform Legislation, and Act 48 creating Green Mountain Care.

    Alignment with Federal Initiatives

    Other related federal initiatives that the state will align with SIM.
    Comprehensive Primary Care InitiativeMaine MAPCP Demonstration, MaineCare Health Homes Initiative, Bangor Beacon CommunityCore components of multi-payer model align with the Medicare Shared Savings Program and Pioneer ACO Program, Duals Demonstration, Delivery System Transformation Initiative, Pediatric Asthma Bundled Payment Pilot, IMPACT, CHIPRA Quality Demonstration Grant, Money Follows the Person Demonstration Grant.Minnesota MAPCP Demonstration, dual-eligibles demonstration, Health Care Delivery Systems Demonstration, Southeastern Minnesota Beacon CommunityCPCI initiative, dual-eligibles demonstration,  Health Care Innovation Awards, Oregon Partnership for Patients, ACA section 2703 Health Home SPA. See Appendix F of the Oregon Health Care Innovation Plan for more information.Blueprint for Health & Advanced Primary Care Practice Demonstration (MAPCP), dual-eligibles demonstration, Bundled Payments for Care Improvement Initiative, Advanced Payment ACO Model



    Chart Produced by: Larry Hinkle, Anne Gauthier, Jade Christie-Maples and Robert Gottfried, National Academy for State Health Policy 





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    what is MS up to with health insurance refom act

    What is MS up with the health reform act?

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