DHSS Moves Medicaid Managed Care Contracts to Value-Based Purchasing to Accelerate Health Care Delivery Reforms

Delaware’s health care delivery system, Department of Health and Social Services (DHSS) Secretary Dr. Kara Odom Walker announced today that DHSS has entered into a value-based purchasing care initiative through contracts in its Medicaid Managed Care Program. This initiative applies to all managed car

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e organizations participating in the Delaware Medicaid program.

Beyond accelerating reforms, Secretary Walker said the purpose of the agreement is to transition the system away from traditional fee-for-service, volume-based care to a system that focuses on rewarding and incentivizing improved patient outcomes, value, quality improvements and reduced expenditures. DHSS seeks to align the incentives of the managed care organizations, providers and members through innovative value-based strategies.

“Through this historic initiative, we will reward our Medicaid managed care partners for embracing innovation and for providing our clients with high-quality care that focuses on improved outcomes and reduced expenditures,” Secretary Walker said. “Rather than paying solely for volume of care – hospital stays, tests and procedures, regardless of outcomes – we will pay for achieving optimal health for our Medicaid clients and give our MCO partners flexibility in meeting that goal.”

Steve Groff, director of DHSS’ Division of Medicaid and Medical Assistance (DMMA) said the initiative has a two-part approach: quality performance measures and value-based purchasing strategies. Through quality performance measures, Medicaid will select measures that relate to the following: quality, access, utilization, long-term services and supports, provider participation, spending and/or member/provider satisfaction, Groff said. Key measures build on the Common Scorecard created in collaboration with the Statewide Innovation Model (SIM) Award and through the Delaware Center for Health Innovation’s work. In the three years of this contract, seven key measures will be monitored including management of diabetes cases, asthma management, cervical cancer screening, breast cancer screening, obesity management, timeliness of prenatal care and 30-day hospital readmission rates.

These measures also will be tied to desired performance levels, with potential penalties being imposed if performance levels are not achieved. Through the value-based purchasing strategies, the managed care organizations will be required to implement provider payment and contracting strategies that promote value over volume and reach minimum payment threshold levels. If minimum threshold levels are not met, potential penalties could be imposed. The changes are subject to approval by the Centers for Medicare and Medicaid Services.

About 200,000 of the current 225,000 Medicaid clients in Delaware are served by Medicaid’s two managed care organizations, Highmark Health Options Blue Cross Blue Shield Delaware and AmeriHealth Caritas Delaware.

Secretary Walker said the value-based purchasing initiative within Medicaid’s Managed Care Program is another step forward in embracing Governor John Carney’s goal of lowering health care costs while improving patient outcomes. In last week’s State of the State, the Governor said we are spending too much money on health care and not getting the best results. He said now is the time to change the way we deliver health care.

In 2014, Delaware’s per capita health care costs were more than 27 percent above the U.S. average, ranking the state third-highest in the country, behind only Alaska and Massachusetts. The Centers for Medicare and Medicaid Services (CMS) analysis of all insurance payers – Medicaid, Medicare and private – found per-capita spending in Delaware was $10,254. Without changes, the analysis estimates Delaware’s total health care spending will more than double from $9.5 billion in 2014 to $21.5 billion in 2025. While Delaware ranks high in terms of health care spending, the state ranks in the bottom half – No. 30 – for overall health, according to the 2017 America’s Health Rankings.

To learn more about the work in Delaware to slow the growth of health care spending while improving the overall health of Delawareans, go to ChooseHealthDE.com

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The Department of Health and Social Services is committed to improving the quality of life of Delaware’s citizens by promoting health and well-being, fostering self-sufficiency, and protecting vulnerable populations.

Secretary Walker Sends Report on Progress Toward Implementing a Health Care Spending Benchmark to Joint Finance Committee Co-Chairs

NEW CASTLE (Dec. 20, 2017) –Delaware Health and Social Services Secretary Dr. Kara Odom Walker sent to the Joint Finance Committee Co-Chairs of the General Assembly and the Office of Management and Budget on Dec. 15 her report on the feasibility and progress toward creating a total cost of care, health care spending benchmark, writing “the importance of accelerating these efforts is now critical.”

The report – a requirement of Section 192 of the budget bill, House Substitute 1 for HB 275 – makes the case for health care spending and quality benchmarks as necessary tools for better understanding and directing health care quality and spending growth in Delaware, as envisioned by House Joint Resolution 7. Signed into law Sept. 7 by Governor John Carney, HJR7 authorizes DHSS to consult with stakeholders to establish a health care spending benchmark as a way to evaluate the total cost of health care in the state. Delaware ranked No. 3 in the nation in per-capita health care spending in 2014 – the latest year data is available – according to the Centers for Medicare and Medicaid Services (CMS). The CMS analysis of all insurance payers – Medicare, Medicaid and private – found per-capita spending in Delaware was $10,254, which is higher than the U.S. average of $8,045. Without changes, the analysis estimates Delaware’s total health care spending will more than double from $9.5 billion in 2014 to $21.5 billion in 2025.

“Rising healthcare costs are unsustainable for Delaware families, businesses, and our state government,” said Governor John Carney. “That’s why we are creating this healthcare benchmark – to help reduce costs while improving the standard of care that Delawareans receive. This report identifies steps we can take to meet both of those goals.”

In the report to the Joint Finance Committee, Secretary Walker listed five strategies “we believe will reduce Delaware’s health care cost growth and improve our health outcomes.” The five strategies:

Recommend the establishment of state health care spending and quality benchmarks, and that those benchmarks be developed by DHSS in concert with stakeholders and “be used to foster transparency of performance and support progress on payment and delivery system reform.”
Analyze and report on variation in health care delivery and costs, leveraging data within the new Health Care Claims Database and the Delaware Health Information Network to produce a standard set of health care spending reports.
Implement Medicaid and state employee total cost of care risk-based contracting using alternative payment and delivery models to share risk and accountability with providers.
Support care transformation and primary care workforce through better integration of behavioral health care integration and adding to population health management and data analytics.
Focus on improving the underlying social and economic issues affecting health outcomes by working with stakeholders to develop and implement a strategy that builds upon existing work and resources in this area.

“This report is another important step forward for Delaware in addressing our high health care costs and improving the quality of care that Delawareans receive,” Secretary Walker said. “I appreciate the response we have received to date from health care stakeholders and the public and we know the conversation about how to slow the growth of health care spending and improve the health status for Delawareans will continue.”

“The Report to the Delaware General Assembly on Establishing a Health Care Benchmark” is posted on the DHSS website. Public comments are welcome. Please send them to ourhealthde@delaware.gov

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DHSS Awards Contract to Mercer Health & Benefits to Help State with Accelerating Health Care Payment Reform

NEW CASTLE (Oct. 18, 2017) – As part of the Department of Health and Social Services’ work to develop a health care spending benchmark, the Delaware Health Care Commission has awarded a contract to accelerate payment reform to Mercer Health & Benefits LLC. The $889,947 contract, which takes effect immediately, will support the state’s efforts in four main areas: health care payment reform implementation models, legal analysis, economic modeling and analysis, and open data transparency strategies.

Governor John Carney signed House Joint Resolution 7 in September, which authorized DHSS to develop a health care spending benchmark that is linked to the state’s rate of economic growth. Mercer’s contract will dovetail with the work being done with stakeholders to develop the benchmark and come under the $35 million federal grant Delaware received from the Center for Medicare and Medicaid Innovation (CMMI) to change the way health care is delivered and paid for in the state.

“Mercer brings a strong level of expertise to help us accelerate health care payment reform in our state,” said DHSS Secretary Dr. Kara Odom Walker, a board-certified family physician. “With Mercer and its subcontractors on the ground, we will be able to explore what is needed to change the way health care is paid for in Delaware that, ultimately, will lead to better health for the people of our state, an improved health care experience and at a lower cost. We look forward to working with Mercer and stakeholders in Delaware to accomplish our goal of payment reform.”

In a federal analysis released this summer, Delaware had the third-highest per capita spending for health care in the country, behind only Alaska and Massachusetts. In 2014, Delaware’s per-capita rate of $10,254 was 27 percent higher than the U.S. average. The Centers for Medicare and Medicaid Services (CMS) estimated that if Delaware continues at that pace, total health care spending in the state will more than double from $9.5 billion in 2014 to $21.5 billion in 2025. In terms of overall health, Delaware ranks only 31st among the states, according to America’s Health Rankings.

The benchmark also will serve as a major step in transforming Delaware’s health care system to a more outcome-driven system and away from a system that pays for care based solely on the number of room days, visits, procedures and tests. Mercer has enlisted the support of key subcontractors to provide subject matter expertise in specific areas to bring the full complement of perspectives and experience to this work. The subcontractors include:
• Bailit Health Purchasing, LLC
• Center for Health Care Strategies, Inc.
• National Committee for Quality Assurance
• Advances in Management, Inc.

Mercer and its four subcontractors will work with DHSS and stakeholders in four areas:

Health care payment reform implementation models: Mercer will develop solutions for assessing and implementing any combination of value-based alternative payment models. The modeling will include limited-, shared- and full-risk arrangements.

Legal analysis: Mercer will work with the State to provide a legal analysis of the development of parameters and framework for alternative payment models. A proposed authority to monitor ongoing activities under payment reform and assistance in developing contracts for new value-based payment arrangements will also be included.

Economic modeling and analysis: Mercer will propose an economic analysis of current payer data, attribution and estimates of global payments. The proposed solution will include recommended timelines for payment system transition and performance milestones. The economic analysis will include, but is not limited to, a staged, three-year model of a global payment system with various levels of health care growth targets and benchmark growth rates.

Open data transparency strategies: Mercer will provide guidance in developing a strategy to enable the use of any available claims and/or clinical data for transparent reporting and monitoring performance against common, shared metrics measuring health care quality and access to appropriate care. The strategy should incorporate recommendations to leverage the existing structures of the Common Scorecard and the Health Care Claims Database, which will include working collaboratively with the Delaware Health Information Network

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Governor Carney’s Statement on President Trump’s Decision to End Health Care Cost-Sharing Reductions

WILMINGTON, Del. – Governor John Carney on Friday released the following statement after President Trump’s decision to end federal cost-sharing reductions that make health insurance and health care affordable for low-income Delawareans:

“President Trump’s decision to end cost-sharing reductions will hurt thousands of low-income Delawareans who use those subsidies to make their health insurance and health care affordable. Less than three weeks away from the start of open enrollment on Delaware’s Health Insurance Marketplace, the President’s action will lead to thousands of Delawareans deciding that health insurance is no longer affordable for them and their families. That will lead to more people being uninsured in our state, which eventually means increased premiums for all of us. Ultimately, these changes could lead to insurers deciding to leave the Delaware market. That’s bad for health care in Delaware, bad for the health of Delawareans and bad for the economy of our state. My administration will work with our Congressional Delegation to restore the cost-sharing reductions as soon as possible.”

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Governor Carney’s Statement on Graham-Cassidy Health Care Legislation in U.S. Senate

WILMINGTON, Del. – Governor John Carney on Thursday released the following statement on the Graham-Cassidy Health Care legislation in the U.S. Senate, which could cost Delaware more than $2 billion in federal funding reductions by 2026, cuts that would reduce access to quality health care and shift costs onto Delaware families and the state budget:

“This bill would be a disaster for Delaware seniors, Delawareans with disabilities, and children and adults in low-income households who depend on Medicaid as their connection to care. It would force our Medicaid program to limit eligibility, cut benefits or pay a far greater share of the cost for the Delawareans who are covered today. This bill also would eliminate the Affordable Care Act’s federal assistance for individuals and families buying coverage on the Health Insurance Marketplace, raising premiums for most of the 27,000 Delawareans who get their coverage there. This bill is clearly the wrong direction for Delaware and the wrong direction for our country.”

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