Colorado is moving ahead with an experiment for Medicare-Medicaid eligible beneficiaries, or "dual-eligibles," using a payment system many others are trying to abandon. But the state's approach incorporates a variation on the concept of the accountable care organization that's showing promise elsewhere.
Starting in July, Colorado will extend its accountable care collaborative program to some 48,000 Medicare-Medicaid dual eligibles, under a three year demonstration recently approved by the Centers for Medicare & Medicaid Services.
Of the eleven dual eligible demonstrations approved by CMS since 2011, Colorado's is only the second to use a managed fee-for-service reimbursement model, something state and federal health officials think could pair well with Colorado's Medicaid accountable care collaborative.
Launched in 2011, the state's collaborative program is a kind of hybridized medical home and accountable care model, using primary care providers for general and preventative care and regional care collaborative organizations for case management and coordination with hospitals, and with a statewide data and analytics contractor measuring the performance of all involved.
Now covering about half the state's Medicaid beneficiaries, in the 2013 fiscal year Colorado's accountable care program saw a 15 percent reduction in hospital admissions and a 25 percent reduction in high-cost imaging, contributing $44 million in savings, according to the Department of Health Care Policy and Financing. Most of that went to providers as incentive bonuses, while $6 million was returned to state coffers.
CMS regulators are expecting at least some of those successes to be transferrable to Colorado's dual eligible demonstration by incentivizing collaboration among providers and promoting self-directed care and independent living for patients.
Each Medicare-Medicaid beneficiary will be enrolled in one of seven regional care collaborative organizations, or RCCOs, who will work with the primary care medical providers, or PCMPs, who receive per member per month payments in exchange for offering more accommodations, like same day appointments and extended hours. RCCOs are also charged with ensuring that patients can access prescription drugs, behavioral health and long-term services and supports -- in addition to crucial transition and case management following hospitalizations.
Payments to providers will continue to be on a fee-for-service basis, with beneficiaries free to chose among participating Medicaid and Medicare providers. The program veers from simple fee-for-service in some ways, though, because "RCCOs create an accountability structure missing from a typical unmanaged FFS delivery system," CMS regulators wrote in the agency's memorandum of understanding with Colorado.
That starts with a "plan of care" that RCCOs and PCMPs have to create in collaboration with beneficiaries. The plan is meant to offer "a single, comprehensive view of all elements needed to coordinate a demonstration enrollee's physical, behavioral, and social health care, services, and supports," and ensure "communication and coordination with the beneficiary, across delivery systems, and among providers."
If the demonstration goes well and achieves at least a two percent Medicare minimum savings rate, Colorado will be eligible for retrospective performance payments, tied to the savings rate and staggered over the years. The state's performance payments will also be determined in part based on how RCCOs, PCMPs and participating providers score on a range of quality measures, including all cause- hospital readmissions, ambulatory care-sensitive hospital admissions, ED visits for ambulatory care-sensitive conditions, follow-ups for mental illness hospitalizations and screening for fall risks.
The only other state so far testing managed fee-for-service models in dual eligible care is Washington, whose demonstration covering 30,000 beneficiaries under three-way contracts between health plans, the state and CMS started last April. The other nine projects approved to date by CMS are testing the capitated model, where CMS and states contract with health plans or provider organizations that receive prospective, blended payments and varying shares of the risk.