Community Based Medicaid ACOs in New Jersey: A Signature Away

tara-ragoneAlmost daily, there is a new article or study emphasizing the need for innovative reform to save Medicaid amidst growing threats of deep cuts to the already struggling program.  New Jersey, as one of the states with the highest Medicaid spending per beneficiary in the country, is paying attention.  And help may be on the way in the form of a medical home/safety net.

Showing promise, the medical home model of care is an oft proposed reform.  As Mary Takach explains in the July 2011 edition of Health Affairs, “[a] patient-centered medical home is an enhanced model of primary care in which care teams, led by a primary care provider, attend to the multifaceted needs of patients and provide whole-person, comprehensive, coordinated, and patient-centered care.”  (See “Reinventing Medicaid: State Innovations to Qualify and Pay for Patient-Centered Medical Homes Show Promising results,” Health Affairs, July 2011, 30(7):1325-34.)

According to the National Academy for State Health Policy, thirty-nine states are working to implement medical homes for Medicaid and CHIP participants, and New Jersey is one of them.  In September 2010, Governor Christie signed Assembly Bill 226 into law, which established a three-year Medicaid medical home demonstration project that, at minimum, will include “primary care providers utilizing a multi-disciplinary team that provides patient-centered care coordination through the use of health information technology and chronic disease registries across the patient’s life-span and across all domains of the health care system and the patient’s community.”  The statute requires that the payment system “be structured to reward quality and improved patient outcomes” and that Medicaid “[c]onsider payment methodologies that support care-coordination through multi-disciplinary teams, including payment for care of patients with chronic diseases and the elderly, and that encourage services such as: (a) patient or family education for patients with chronic diseases; (b) home-based services; (c) telephonic communication; (d) group care; (e) oral health examinations, when applicable; and (f) culturally and linguistically appropriate care.”   You can learn about various medical home initiatives in New Jersey at the National Center for Medical Home Implementation web site.

Takach’s report focuses on seventeen states that have aligned “patient-centered medical home standards with incentive payments to support reform in the delivery of primary care” — Colorado, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nebraska, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, Rhode Island, Vermont, Washington, and West Virginia.

Although these programs are in their infancy, Takach interprets limited early data from a few states as encouraging. Vermont, for example, documented that inpatient use had decreased twenty-one percent, with a corresponding twenty-two percent decrease in per person per month inpatient costs, and that emergency department use had decreased thirty-one percent, with a corresponding reduction of thirty-six percent in per person per month costs (although its second pilot community had what Takach describes as “mixed results”).  Colorado similarly has seen decreases in its median Medicaid costs per patient for children.

Both Colorado and Oklahoma also have seen increases in participating providers since the medical home model started operating.  In Oklahoma, more than 244 new physicians enrolled in Medicaid.  Ninety-six percent of pediatricians now accept Medicaid in Colorado, up from only twenty percent before the program began.  Increasing the number of Medicaid providers is critical, given national shortages of available primary care Medicaid providers.

As Takach summarizes:

Some of the early findings from Colorado and Oklahoma, which have statewide Medicaid initiatives, demonstrate that modest increases in payment aligned with quality improvement standards have not only resulted in promising trends for costs and quality, but have also greatly improved access to care.  This is an important finding for other states as they consider how to meet the tremendous increase in demand for care that will result from the expansions to Medicaid in the Affordable Care Act of 2010.

But beyond a medical home, there needs to be a safety net for the most vulnerable urban populations who are, in a sense, medically homeless– and are, by EMTALA default,  frequent utilizers of high cost emergency room services.

As this blog and other sources, including The New Yorker, have discussed, New Jersey  is home to the Camden Coalition of Healthcare Providers, which describes itself as “a citywide organization of social workers, nurses, physicians, administrators, hospitals, health services organizations, and clinics that serve the health needs of Camden, New Jersey residents.  [It] work[s] in a variety of settings — from small neighborhood based practices to hospital based offices — with the goal of improving the coordination and capacity of the healthcare system for residents of Camden.” Dr. Jeffrey Brenner has been leading this effort since 2002.  His work offers promising program models for safety-net providers throughout the country to “improve the quality, capacity, and accessibility of the healthcare system for vulnerable populations.” Indeed, even though the budget bill signed by Governor Christie slashed Medicaid funding in New Jersey by $540 million, his Commissioner of Human Services has expressed continuing support for the Coalition’s pilot because it is seen as a smart reform that could save money while improving care.  Newark and Trenton also have established citywide healthcare coalitions to improve medical care for their vulnerable, underserved residents. And we at the Center for Health and Pharmaceutical Law and Policy have worked closely with the Greater Newark Healthcare Coalition.

In a recent post on the Health Affairs blog, Dr. Brenner and Nikki Highsmith note that although the Camden Coalition “has had preliminary successes and offers potential long-term savings, such community-based endeavors are difficult to initiate and sustain without start-up financing, ground-level technical assistance, and buy-in from state and local policymakers, health plans, patients, and community members.”  They thus call on CMS to “jump start investments in safety-net ACOs” by pursuing a national demonstration project to support programs similar to Camden’s pilot.

New Jersey is poised to be ready if CMS heeds this call for a national Safety Net ACO demonstration project because the Coalition and other New Jersey stakeholders, including Seton Hall Law Professor John Jacobi, have been active in advocating for a bill (S2443) authorizing geography-based Medicaid ACOs in New Jersey. As the Coalition’s web site summarizes:

The proposed New Jersey law would authorize a three-year Medicaid ACO demonstration project whereby community-based, non-profit coalitions can apply for recognition by the State of New Jersey as a Medicaid ACO.  The applicants must propose a geographic focus and will need 100% of the [general] hospitals, 75% of the primary care providers, [four] behavioral health providers, and two community [organizations] from that geography on the board of the organization.  The providers in the community will continue to receive their usual Medicaid payments and the ACO, if its providers meet quality benchmarks, would be eligible to receive shared savings payments, that can be distributed to participants based on a proposed gain sharing plan.

The proposed legislation specifically recognizes that patient-centered medical home models are one way, among others, to achieve coordination. On June 27, 2011, the Assembly and Senate passed S2443, and it is awaiting Governor Christie’s signature.

New Jersey’s proposed Medicaid ACOs go beyond Medical Homes. They are built on a foundation of sound primary care, but they offer the promise of reaching vulnerable populations in many settings, and of assuring that the right care is provided at the right location for people who are often left out of health reform efforts. The financing mechanisms provided by the bill awaiting the governor’s signature go some way towards financing these innovating community organizations, although, as Brenner and Highsmith point out, more needs to be done –particularly in the way of providing start-up funding for community providers.

Appropriately cultivated, patient-focused collaborations such as these may  yield synergies in care and cost of a substantial scale.   But another recent Health Affairs article suggests that adoption of the medical home may well develop at a slower pace in states, like New Jersey, where physicians tend to be organized in smaller practices.  New Jersey’s Medicaid ACO pilot could  help to accelerate the development of practice reformation in New Jersey — particularly if CMS provides the support advocated by Jeff Brenner and Nikki Highsmith.

It’s an exciting time for growth and innovation in the Garden State … if we just get that signature.

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  1. Lewis Bivona says:

    Great article, very well written and incisive

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