MEDICAL ECONOMICS
Driving quality Medicaid moves toward quality-based payments
BY AMY LYNN SORREL Private payers aren’t the only ones eyeing quality-based payment reform to control costs while improv- ing patients’ health. Now that Texas Medicaid has moved into managed care almost completely, the state is intent on similar strategies. The Texas Health and Human Services Commission (HHSC)
recently won a $3 million federal grant to design innovative delivery and payment systems. It hopes to win as much as $50 million to later test the models under the Centers for Medicare & Medicaid Services (CMS) State Innovation Models initia- tive. From accountable care organizations (ACOs) and medi- cal homes to health information technology and bundled payments, the state is looking to physicians, health plans, and others to figure out what it takes to successfully im- plement such models for Medicaid patients across the multiple payers and providers that manage them. The experiments are backed by several pieces of legislation Texas passed over the past two sessions that direct HHSC to develop a system that ties Medicaid pay- ments to quality-based outcomes to bring down costs. (See “Med- icaid Roadblocks,” October 2013 Texas Medicine, pages 14–21.) The agency says Medicaid expenditures doubled over the past 10 years under a largely fee-for-service structure. The state spent roughly $30 billion a year on Med- icaid over the 2012–13 biennium. Texas Medical Association leaders say this latest reform ini- tiative is another sign the state is intent on holding managed care organizations and physicians accountable for quality and cost improvements by factoring those elements into payments. For it to work, however, the state has to strike the right bal- ance, cautions Mary Dale Peterson, MD. She is a member of TMA’s Select Committee on Medicaid, CHIP, and the Uninsured and chairs the state’s Medicaid Quality-Based Payment Advi- sory Committee charged with studying and recommending a set of metrics that will be used in the near future to measure
quality of care in Medicaid. She also is president and chief executive officer of Driscoll Children’s Health Plan in Corpus Christi.
“Quality-based purchasing is certainly being ramped up.
“We’re talking about a lot of money being spent without a lot of control.”
We are seeing it from the health plan side, and [the state] is expecting [plans] to pass that along on the provider side, as well,” she said. “There are definitely things that can be done to improve care and save money. But everybody is looking for some magic bullet — an ACO or a medical home — that will fix costs, and it’s not out there.” State officials acknowledge such hurdles. Nevertheless, the move is necessary, Texas Medic- aid/CHIP Director Kay Ghahre- mani told a roomful of physi- cians, providers, and payers at an August meeting on the initiative.
“We’re talking about a lot of mon- ey being spent without a lot of control,” she said. Managed care has slowly but steadily helped rein in costs and utilization, “but we know more can be done to drive quality.”
Focusing on quality Given the diversity of Texas’ Med- icaid population, geography, and health care settings, the state is looking at ways to do that, while
at the same time searching out common approaches that work across the board, HHSC’s Mark Chassay, MD, told Texas Medi- cine. He oversees the agency’s quality initiatives as deputy ex- ecutive commissioner for the new Office of Health Policy and Clinical Services. “Transformation is not easy. Right now we need stakeholders working together to find ways we can all collaborate.”
The state plans to build on existing public and private quali- ty initiatives to bring about that change in Medicaid. The move to managed care, for example, gave the state a way to collect and compare quality data across Texas and across health plans, something the fee-for-service model lacked, Dr. Chassay says. Texas’ Medicaid managed care strategy starts by targeting
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