- The New Jersey Health Care Quality Institute (NJHCQUI) recently partnered with the Nicholson Foundation to release a 25-point plan for modernizing and improving New Jersey’s Medicaid program.
“The current program has too often failed to meet the basic needs of Medicaid recipients because of obstacles to access, fragmented care, and limited capacity to concurrently address recipients’ multiple physical, behavioral, and health-related social needs,” wrote researchers. “Also, outdated technology, misaligned incentives, and lack of access to timely and accurate data hamper the efforts of providers to deliver the highest quality care.”
Through the Medicaid reform suggestions, the state’s program could save between $100 million and $300 million of New Jersey’s anticipated annual direct Medicaid spending of $11 billion, researchers reported. Although, the Medicaid spending cuts do not reflect upfront investments in new programs.
The report recommended improvements that span five broad categories, including infrastructure modernization, foundational Medicaid reforms, value-based purchasing, care delivery modifications, and population health management implementation.
7 methods for modernizing New Jersey’s Medicaid program infrastructure
The New Jersey Medicaid program serves about 20 percent of the state’s residents. Yet, the program’s infrastructure, including old health IT systems, outdated contracts, and antiquated regulations, cannot support the needs of the large program, researchers argued.
To bring the state Medicaid program into the 21st century, NJHCQUI recommended the following seven changes to help the state better oversee and manage the program:
• Develop a state Office of Health Transformation to bring Medicaid spending administration under one roof
• Increase Medicaid spending and utilization data transparency to allow providers, policymakers, and advocacy groups to better identify program and provider performance, especially with value-based purchasing models
• Create a consumer-focused, streamlined Medicaid eligibility process that allows various eligibility entities to communicate and reduce termination notices
• Expand telehealth services, especially for specialist care, to increase care access
• Unify physician and mental health licensing processes to better integrate behavioral and physical healthcare
• Align Medicaid regulations with managed care reimbursement, rather than fee-for-service
• Focus more on reducing Medicaid fraud, waste, and abuse
“These foundational systems must be modernized to support a higher quality, more efficient and effective Medicaid system for New Jersey,” stated the report. “These recommendations address the foundational steps needed to modernize the infrastructure that governs and supports the program.”
3 updates needed to improve foundational Medicaid functions
NJHCQUI recommended three upgrades to the Medicaid program’s administrative functions. The upgrades included improving provider credentialing processes, enhancing managed care organization network directories, and streamlining quality metrics.
New Jersey is currently facing a provider shortage in the Medicaid program, but using a universal credentialing process for each managed care organization could boost provider numbers. The state should contract a third-party entity to build a credentialing system that simplifies the process.
Using a universal credentialing system would also reduce administrative costs and capture more accurate data for network directories.
In terms of network directories, NJHCQUI also recommended that the state Medicaid program improve directory accuracy. The network directories also need to be more consumer-focused to ensure that Medicaid beneficiaries have access to the necessary provider information to make appointments.
To improve the directories, the report detailed the following recommendations:
• Use a third-party clearinghouse for universal provider credentialing and provider data maintenance
• Develop comprehensive provider attestation processes that include attestation every 120 days as well as incentives and penalties to build the process into provider workflows
• Ensure that primary care providers are actually primary care providers as defined by the managed care organization contract and state regulations
• Include a required data field for providers to input their primary practicing locations and whether new patients are being accepting at that office
The New Jersey Medicaid program should also develop a core set of quality measures for adult care and pediatrics. NJHCQUI previously reported that providers and payers engaged with over 800 quality measures through state and federal healthcare programs in 2016.
To reduce administrative burdens and costs, the organization pushed for New Jersey to adopt a set of 31 core quality measures to use across Medicaid programs. An independent organization should also manage the quality measure set, taking responsibility for regularly updating measures and gathering stakeholder feedback.
7 suggestions for increasing Medicaid purchasing power and transitioning to value-based purchasing
The state was the largest healthcare services purchaser in New Jersey in 2016, spending over $15 billion on Medicaid. However, NJHCQUI suggested that New Jersey could increase its purchasing power by maximizing pharmaceutical cost savings and improving managed care organization performance incentives.
New Jersey anticipates spending $1.9 billion on pharmacy payments in 2017. The payments will go to five managed care organizations each with their own pharmacy benefits managers.
However, the state Medicaid program could be more efficient by combining pharmacy programs and implementing more value-based purchasing models, the report stated. New Jersey should consider using a statewide pharmacy benefits manager, reviewing managed care organizations quarterly to ensure rebates are being used, and developing pricing legislation that prevents some price hikes.
NJHCQUI also suggested that the state explore value-based or multistate purchasing models as well as patient-specific medication risk management tools to create more targeted medication pathways for patients.
To boost purchasing power, New Jersey should also update managed care organization contracts to align performance incentives with value-based purchasing models.
The Medicaid program currently sets reimbursement rates based on cost and utilization data. But Incorporating more performance incentives for value-based care could encourage managed care organizations to improve care quality and reduce costs.
Additionally, the report listed five recommendations for moving New Jersey’s Medicaid program to value-based purchasing. The state has implemented few value-based purchasing Medicaid models despite a federal push to tie more healthcare payments to alternative payment models.
To promote more value-based purchasing in the New Jersey Medicaid program, NJHCQUI suggested the following actions:
• Develop bundled payment model demonstrations for three to five care episodes, such as total joint replacements, maternity care, and cardiac care, and gradually implement prospective and risk-based payments
• Expand the statewide patient-centered medical home for another five years and open participation to federally qualified health centers and hospital-based primary care clinics
• Encourage hospitals and pediatricians to create a clinically integrated network of care for pediatrics by offering financial incentives for managed care organizations that contract with a certified network
• Establish a patient-centered medical home for medically complex children that includes monthly care coordination payments
• Create a value-based purchasing advisory council that ensures Medicaid programs are successfully implementing alternative payment models
Medicaid care delivery updates and population health management implementation
In the report, NJHCQUI also identified care delivery reforms and population health management implementation as key Medicaid program improvements.
The organization advised New Jersey to focus on integrating physical and mental health as well as substance abuse treatment. As part of better healthcare integration, the state should reconvene the Behavioral Health Integration Advisory Council.
New Jersey should also work on developing Medicaid reimbursement for long-term residential services for substance abuse disorders.
Population health management implementation should also help the Medicaid program address their population’s long-term healthcare in a more cost-effective manner. NJHCQUI recommended the following population health management improvements:
• Boost maternal and family health care by developing a maternity bundled payment model and increase contraception access
• Expand the Medicaid Accountable Care Organization demonstration to community-based providers and focus more on social determinants of health
• Use the state’s Next Generation Delivery System Reform Incentive Payment Program to financially incentivize providers to focus on population health
• Improve end-of-life care by promoting more hospice use, creating a statewide registry for Practitioner Orders for Life Sustaining Treatment (POLST) forms, integrating palliative and curative care, reimbursing providers for advance care planning, and educating potential providers on end-of-life conversations
Through the 25-point blueprint, NJHCQUI intends to improve New Jersey’s Medicaid program regardless of funding and political concerns.
“Each year, the state budget process demands more efficient ways to operate the program,” stated Linda Schwimmer, NJHCQUI President and CEO. “While the blueprint is not a solution to drastic cuts in federal funding, it identifies multi-year solutions and provides an effective roadmap that will improve the State’s Medicaid program.”