Oregon - CMS Duals RFP
State Demonstrations to Integrate Care for Dual Eligible Individuals –
Oregon Proposal for Design Contract
1. High level description of Oregon’s proposed approach to integrating care
Oregon proposes to substantially realign the full range of Medicare and Medicaid acute, behavioral health, and long-term supports and services for people who are eligible for both Medicare and Medicaid. The state will also pursue the same initiative for its Medicaid/CHIP populations. In keeping with the Triple Aim and in recognition of the need for radical measures to address new health care and service delivery and payment models that will enhance the quality of care for people dually eligible for Medicare and Medicaid, improve the health of the population, and lower costs through innovation, Oregon submits its proposal to design and implement a state demonstration that blends Medicare and Medicaid funding streams and integrates care and services for those dual eligible individuals.
Commitment to this demonstration begins with the governor. In a December 17, 2010 press conference, Governor John Kitzhaber, MD, called for a new delivery system that will produce higher value at lower cost through better integration of care, meet the objectives of the Triple Aim, and operate within a fixed budget or rate of growth. The proposed demonstration will develop an integrated care and services strategy that expands and improves on the Medicaid managed care system currently in place in Oregon. It will eliminate the fragmentation of acute physical health, behavioral health, and long-term care services and supports and make it possible to effectively integrate the overall financing and delivery responsibilities for Medicare and Medicaid with the beneficiary at the center of the system.
Recognizing that fragmented funding leads to fragmented delivery of services, Oregon proposes to blend Medicare and Medicaid funding and share savings. This strategic blending will help to align incentives, manage delivery of services, and improve outcomes and beneficiary experience.
Capitation payments and/or global budgets will be set at levels appropriate to achieve best practices and to address unsustainable increases in the cost of care and services. The proposal assumes that provider payment methods will evolve beyond fee-for-service and that savings will be achieved through effective case management and strengthened support services, rather than through purely mechanical reductions in rates of payment. The new payment systems will create financial incentives for investment in community prevention efforts for those dually eligible, including efforts that focus on particular needs such as falls/injury prevention, early psychosis intervention, nutrition/obesity programs, and other interventions to improve health and independence.
a. Target population and subpopulations
The target population is dually eligible persons enrolled in Medicare and Medicaid or CHIP (hereafter, “Medicaid”), if they are entitled to the full Medicaid benefit. It will not include the dually eligible who receive only premium or cost-sharing assistance through the Medicaid program. (The target population may be referred to in this proposal as “beneficiaries.”)
The proposed demonstration together with a parallel state initiative will serve all recipients of state medical assistance for whom state assistance is sufficiently broad that there is real potential for improving population health (including access to appropriate services), enhancing patient experience, and reducing the cost of services by assigning responsibility for integrated care delivery to a single entity.[1] The goal of this broad inclusion principle is two-fold: (1) To integrate behavioral health, physical health, long-term care services and supportive services for the greatest possible number of Oregonians and (2) to ensure, to the extent possible, that when individuals move among programs and services the responsibility for working with them on issues related to their health and well-being will remain clearly defined and accountable.
Key subpopulations whose needs will require particular attention in development of the proposed demonstration and the parallel state initiative include more than 14,000 Medicaid eligibles who have persistent mental illness or severe emotional disorders, nearly half of whom are dually eligible, and more than 27,000 Medicaid eligibles who receive long-term care services, all but about 4,000 of whom are Medicare beneficiaries.
The proposal and the parallel state program will also serve approximately 30,000 other dual eligible individuals and approximately 320,000 children and 155,000 adults who are enrolled in Medicaid (including a low-income waivered population currently numbering approximately 55,000).
b. Covered benefits
The program will provide the full range of Medicaid services to which beneficiaries are entitled under state law based on their eligibility category and, for Medicare beneficiaries, the full range of services covered by the traditional Medicare program and Medicare Part D. Particular attention will be given to providing benefits that are not strictly medical but are designed to assure good outcomes, including preventive services, behavioral health services, and services supporting independence and continued residence at home.
Beneficiaries will have access to case management services. For those meeting criteria established by the state, these services will include individualized service plans.
c. Proposed delivery system
Oregon will build on the effective elements of its current managed care delivery system to develop person-centered health homes and regional accountable care organizations to deliver services to the dually eligible across the full spectrum of covered Medicaid and Medicare benefits and support services. This will include such strategies as person-centered health homes and person-centered planning for long-term care, as well as programs similar to the Program for All-inclusive Care of the Elderly (PACE).
Oregon has a high managed care penetration in both Medicaid and Medicare; but the delivery systems remain unnecessarily fragmented and in need of service integration. The proposed demonstration and the parallel state program will address this fragmentation through a system of contracts with regional plans that are prepared to administer an integrated service delivery model. State contracts will require these regional plans to provide both Medicare and Medicaid covered services and appropriate support services to improve the health and well-being of beneficiaries at a total cost consistent with risk-adjusted global payment or capitation rates. Some managed care organizations currently with the state may take on the responsibilities envisioned for these regional plans, but they must be prepared to serve larger geographic areas and to assume broader service, support, and coordination responsibilities.
Assuming blended Medicare and Medicaid funds, payment to regional plans will be primarily through capitation, and incentives will be aligned to maximize efficient care choices, eliminate cost shifting, and develop intensive care management that addresses social supports as well as health care. The state will contract with more than one qualified plan in each region where feasible, offering clients a choice of managed care entities as well as choice of provider.
Outcomes-based standards for regional plan performance and provider payment, realigned incentives, and a fundamental redesign of plan selection, contracting, and compliance oversight will drive fundamental reform of the delivery system. This approach will increase opportunities to improve the beneficiary experience through increased access to appropriate services in the proper setting.
d. Problem statement
Oregon’s (and the nation’s) current methods for financing and delivering health care and long-term care services are unsustainable. Fragmented funding, inadequate coordination of care, poorly aligned incentives in the delivery and administration of care, and disjointed payment methodologies for Medicare and Medicaid services all combine to produce inadequate treatment planning and perverse incentives for treatment choices. Beneficiaries are all-too-often treated in settings that are unnecessarily costly, unpleasant, and counter-productive. All this leads to a service system that beneficiaries find confusing, and that makes them struggle to receive the care they need. For example, when a beneficiary remains in hospital even though alternative care is more appropriate, the result is wasteful expenditure of resources and diminished quality of life.
These problems are endemic to the health care system but are most acute in relation to individuals with multiple significant health issues—many of whom are dually eligible. Their needs are great and we serve them at a very high cost; yet, because their needs are rarely fully served by either program alone, high program spending does not necessarily translate into good quality of life for beneficiaries. Services covered by Medicare and Medicaid are not strictly complementary. Some service categories are covered by both and require coordination of benefits at substantial cost with no added value to the beneficiary. Some services are covered partly by Medicare and partly by Medicaid, producing coverage gaps that contribute to waste and sub-standard outcomes. Cost shifting between Medicare and Medicaid makes for treatment choices that can be wasteful, clinically inappropriate, and degrading to the patient.
Mental illness and/or substance disorders and other chronic conditions drive cost: AHRQ data indicates that those eligible for Medicare, Medicaid and long-term care services have four to seven times the rates of many chronic conditions and over six times the preventable hospitalization rate, compared to other dual eligible individuals.[2] This high needs group represents about 40% of Oregon’s dually eligible population targeted by this proposal. Medicare beneficiaries with five or more chronic conditions use about 65% of available resources.[3] Inability to coordinate and manage the services for this population has resulted in poor health outcomes, inefficient use of resources, cost-shifting and diminished quality of experience for beneficiaries. Oregon would like to use the planning period to identify these individuals and fine tune strategies that will address these issues.
Despite the strengths of Oregon’s health reform initiatives to date, there is a need to integrate the currently “siloed” components into a single service delivery system that effectively manages physical and behavioral health services based on the person-centered services home model and long-term care services using a home and community-based services approach. The proposed demonstration depends on CMS assistance and collaboration with Oregon to overcome some of the current regulatory requirements and coverage issues in Medicare and Medicaid.
e. How or why changes would lead to improvements in access and quality and reductions in Medicare and Medicaid expenditures over time
The creation of a single, fully integrated program covering acute health (referred to in Oregon as physical health in order to clearly include preventive and chronic care services), behavioral health, and long-term care services for dual eligible individuals will mean an improved beneficiary experience, increased cost-effectiveness, and a higher level of health and satisfaction for a population requiring intensive medical and support services.
To address disproportionate resources incurred by Medicaid’s highest-need, highest-cost beneficiaries, Oregon will build on historical strengths in implementing integration of care strategies to improve outcomes and reduce inappropriate utilization.
The proposed demonstration program and blended funding approach will create an environment in which beneficiaries will get the right care, outcomes will improve, and costs will be reduced. This will be accomplished by:
a)Designating a Single Responsible Plan: Assigning a single regional plan responsibility for delivering all health and long-term care services and doing case management and care coordination for each beneficiary enables all providers to work together effectively with the beneficiary.
b)Assigning Beneficiaries to Person-Centered Health Homes: Linking all program beneficiaries, beginning with disabled dual eligible individuals and others with complex care management requirements, to a person-centered health home with capacity to address behavioral health issues will produce improved outcomes. This will ensure that beneficiaries are involved in the design of a plan for appropriate care and support services.
c)Improving Access to Health Information: Integrating responsibility for delivery of all Medicare and Medicaid services (acute, behavioral, and long-term care) and supporting strengthened administrative and clinical health information systems will foster appropriate care and avoid unnecessary expense. Economies of scale will enable regional plans to improve regional structures for coordination of care such as interoperable electronic health records systems and protocols for cooperation among primary care physicians, specialists, hospitals, and long-term care providers.
d)Aligning Financial Incentives: Giving a single plan responsibility for a risk-adjusted health and long-term care services budget will create incentives for improved delivery system efficiency. The plan will have a clear incentive to provide needed services in the most appropriate and least restrictive setting desired by the beneficiary.
e)Improving Oversight: Reducing the number of plans and combining the contracts for Medicare and Medicaid services for those dually eligible will improve the state’s ability to ensure quality. The state will develop more rigorous contracting standards, reporting requirements, and performance monitoring.
State estimates suggest that more than $2.5 billion in state and federal funds could be saved over five years by implementing the demonstration proposal and a parallel state initiative to improve care coordination, reduce avoidable complications, provide appropriate preventive care and management of chronic conditions, reduce errors and inefficiency, and reduce inappropriate utilization. By addressing unwarranted use of intensive rather than palliative care services at the end of life, these savings might be increased.
f. Policy rationale
Like many states, Oregon is facing a crisis in its health system. The cost for state publicly funded health care is an estimated 16 % of the state general fund budget and growing. Services are inadequately integrated, which leads to poorer health outcomes and higher costs. Treatments for physical health, behavioral health, and long-term care needs are fragmented and are insufficiently tailored to the needs of an increasingly diverse population. If we do not act today to rein in these costs and change the delivery system, they will continue to overwhelm the state budget and produce unexplained and unnecessary variations in cost, quality and outcomes.
In short, our health care system rests on a “burning platform.” Oregon must design a new, more sustainable platform by fundamentally restructuring our delivery system through an innovative model that will produce higher value at a lower cost through better integration and better care coordination. This model must achieve the Triple Aim objective of better health, better care, and lower cost and must operate within a fixed budget or rate of growth. This will require shared sacrifice, strong leadership and a vision for a better future.
In brief, Oregon’s policy rationale for this demonstration is to focus our Triple Aim objectives of improving the health of our dual eligible population (and, ultimately, of all Oregonians) by improving quality in terms of clinical outcomes, patient safety, and patient satisfaction, and, thereby reducing per capita costs. This strategy will include the coordination of all benefits and social supports that promote health and keep individuals out of high cost medical care, improvements in person-centered care management, reduction of avoidable complications, improved transitions of care from institutional to home-and-community-based, and the substitution of hospice care for hospital services where appropriate to the patient’s well-being. We believe this demonstration sets in motion a process for realizing Oregon’s vision of a transformed delivery system.
g. Who will benefit and why
The new program will benefit beneficiaries, providers, and taxpayers. The effective management of Medicare and Medicaid funds and elimination of carve out programs in Medicaid, combined with strategic restructuring of the delivery system, will help ensure that beneficiaries are provided appropriate care in the right setting at the right time. Involving beneficiaries in developing and carrying out individualized service plans will ensure that beneficiary values and goals are central. This should improve health outcomes, support independence and choice, and maximize engagement and satisfaction.
A comprehensive service management program and improved data flow will support providers in delivering high quality services and partnering with beneficiaries to improve health and well-being. By requiring the entities responsible for delivery of care to negotiate provider payment approaches that establish constructive incentives aligned with quality and to pay for more effective care management, the state will undo the perverse financial incentives of fee-for-service payments.