DE Shifts Managed Medicaid Contracts to Value-Based Agreements
The state of Delaware is shifting its managed Medicaid contracts into value-based agreements in order to lower the cost of healthcare within Medicaid populations
Source: Thinkstock
By - Delaware’s Department of Health and Social Services (DHSS) announced it is translating the state’s managed Medicaid Contracts into value-based agreements to improve the outcomes and costs of the state’s public healthcare programs.
Delaware has some of the nation’s highest healthcare costs and spending totals, according to CMS, and DHSS believes that much of the state’s spending could be more efficient. The analysis suggests that without major administrative or purchasing changes, Delaware’s total healthcare spending per year will more than double from $9.5 billion in 2014 to $21.5 billion by 2025.
But the high healthcare spending hasn’t equated to better healthcare outcomes, DHSS points out. Data from America’s Health Rankings, a review of state healthcare data conducted by the United Health Foundation, found that Delaware ranks 30th in the US for overall health.
Steve Groff, director of DHSS’ Division of Medicaid and Medical Assistance (DMMA), explained the two major components of the new value-based care initiative that will aim to increase quality while reducing waste.
The first is an overhaul of quality performance measures for providers working in managed Medicaid organizations.
Medicaid will select measures that relate to care quality, access, utilization, long-term services and supports, provider participation, spending, and member satisfaction ratings of providers. The measures build on the state’s Common Scorecard which was created in collaboration with the Statewide Innovation Model (SIM) Award and the Delaware Center for Health Innovation.
DHSS will monitor seven key performance measures during the first three years of the new contract, including diabetes management, asthma management, cervical cancer screenings, breast cancer screenings, obesity management, timeliness of prenatal care, and 30-day hospital readmission rates. The measures are also tied to provider penalties if performance goals are not achieved.
The second part of the new initiative restructures value-based purchasing strategies within managed Medicaid organizations.
The managed Medicaid organizations are required to implement provider payment and contracting strategies that promote value over volume and reach minimum payment threshold levels.
Providers would be subject to penalties if they fail to meet minimum payment thresholds. The payment changes are subject to approval by CMS.
Private payers that operate managed Medicaid organizations in the state, including Highmark Health Options Blue Cross Blue Shield of Delaware and Amerihealth Caritas Delaware, would be affected by this change.
Roughly 200,000 of the 250,000 Medicaid beneficiaries in the state are served by Highmark BCBS and Amerihealth managed Medicaid organizations.
DHSS Secretary Dr. Kara Odom Walker believes that these value-based agreements align with Governor John Carney’s goal of lowering healthcare costs and improving health outcomes at the same time.
Carney signed legislation in September 2017 that limits the growth of healthcare spending in the state.
“The health care spending path we are on is unsustainable,” Carney said at the time.
“If these health care spending rates were to continue to increase at this pace, we would price too many Delawareans out of the health care system, put too high a financial burden on employers, and eat up larger and larger portions of the state government budget.
Walker sees the movement towards value-based care as a way to reshape the state’s healthcare spending into an efficient, cost-effective value-based system.
“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,” 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.”
