Better Care, Better Health, Lower Costs M U L T I - Y E A R A C T I O N P L A N

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1 A Plan t Transfrm the Empire State s Medicaid Prgram Better Care, Better Health, Lwer Csts M U L T I - Y E A R A C T I O N P L A N

2 TABLE OF CONTENTS Intrductin... page 3 Health System Redesign in New Yrk: Triple Aim... page 6 Key Refrm Elements: New Yrk Achieving the Triple Aim... page 7 Aim #1 Imprving Care... page 8 Care Management fr All... page 9 Ensure Universal Access t High Quality Primary Care... page 12 Health Hmes... page 13 Health Care Wrkfrce fr the 21st Century... page 15 HIT Interperable EHR fr All New Yrkers... page 16 Imprving Behaviral Health... page 18 Aim #2 Imprving Health... page 21 Eliminating Health Disparities... page 22 Affrdable and Supprtive Husing... page 25 Redesigning New Yrk s Medicaid Benefit... page 27 Aim #3 Reducing Csts... page 29 Glbal Medicaid Spending Cap... page 30 Strengthening and Transfrming the Health Care Safety Net... page 31 Payment Refrm... page 33 Medical Malpractice Refrm... page 34 Redefining the State/Lcal Relatinship in Medicaid... page 35 Measuring Success... page 36 Cnclusin... page 41 Appendix A... page 42 Appendix B... page 43 Appendix C... page 46 Appendix D... page 48 2 P a g e

3 INTRODUCTION Ever rising health care csts are a natinal challenge. The United States currently spends 16 percent f its GDP n health care which is nearly twice as much as any ther natin. At the same time, key health indicatrs suggest that we are nt getting ur mney s wrth. Figure 1. Over the Past Five Years Ttal New Yrk State Medicaid Spending Increased by 14 Percent t $52.9B New Yrk is a micrcsm f the natin. New Yrk s Medicaid prgram, the natin s largest, spends nearly $53 billin t serve 5 millin peple, which is twice the natinal average when cmpared n a per recipient basis. At best, New Yrk is in the middle f the pack when it cmes t health care quality. Similar t the natin as a whle, New Yrk taxpayers are nt getting their mney s wrth when it cmes t its Medicaid prgram. In additin t a high spending base, New Yrk s Medicaid prgram has seen significant grwth in recent years. Sme f this grwth has been driven by the recessin; hwever, ther cst drivers have played a key rle in prgram-wide spending which has risen frm $46 billin in April 2007 t the current 2011 Medicaid budget f $53 billin. Upn taking ffice, Gvernr Andrew M. Cum identified the prblem. Buried within the cmplexity f the Medicaid prgram lie numerus plicies (smetimes taking the frm f frmulas) that have led t runaway cst grwth. The Gvernr quickly determined that unless these underlying issues are addressed, and spending grwth is cntained, New Yrk s Medicaid prgram will n lnger be sustainable. In additin t a cst prblem, New Yrk has sme significant quality issues. As mentined, while natinal rankings tend t shw New Yrk in the middle f the pack when it cmes t verall health care quality, thse verall statistics mask majr prblems in areas such as avidable hspital use, where New Yrk ranks 50th in the cuntry. Majr disparities exist in health status amng racial, ethnic, and sciecnmic grups in New Yrk State. These quality issues are nt limited t Medicaid but are reflected in the entirety f the health care system. T address these underlying health care cst and quality issues, Gvernr Cum pursued a unique apprach t refrm. He invited key Medicaid stakehlders t the table in a spirit f cllabratin t see what culd be achieved cllectively t change curse and rein in Medicaid spending, while at the same time imprving quality. Figure 1: Ntes: *Reflects estimates that are awaiting final clseut by Divisin f Budget. ** Calculatin des nt reflect UPL and DSH Payments, which are included in 5-Year Medicaid spending ttals. Surce: Medicaid Spending Data - Divisin f Budget Final Enacted Financial Plan; Beneficiary Data - DOH /OHIP Datamart Database. 3 P a g e

4 Gvernr Cum s visin fr cllabratin was effectuated thrugh Executive Order #5 which created the New Yrk Medicaid Redesign Team (MRT). The MRT, made up initially f 27 stakehlders representing virtually every sectr f the health care delivery system, including patient advcates, wrked fr nearly tw mnths and develped a series f recmmendatins that nt nly lwered immediate spending - state share savings f $2.2 billin in SFY but als prpsed imprtant refrms that will lead t imprved health utcmes, as well as further savings in years t cme. The MRT cntinued its innvative wrk in a secnd phase, breaking int wrk grups t address mre cmplex issues, as well as mnitring the implementatin f key recmmendatins enacted frm their initial wrk. Perhaps the mst imprtant element f the MRT s Phase 1 plan was t enact a glbal Medicaid spending cap. This cap, which applies t the state share f Medicaid spending and is under the cntrl f the Cmmissiner f Health, has fundamentally changed hw state fficials and stakehlders view the prgram. Every plicy change must nw be viewed in terms f what, if any, impact it will have n the allcatin f finite Medicaid resurces. Expenditures are tracked mnthly and the figures are psted t the Department f Health web site s the public can bserve hw the prgram is perfrming relative t the spending cap. If spending appears n path t exceed the cap, the Cmmissiner f Health nw has super pwers t change reimbursement rates and implement utilizatin cntrls t rein in spending. T survive and thrive within the Medicaid budget cap, significant refrm and innvatin is required. New Yrk embraces the Centers fr Medicare and Medicaid Services (CMS) triple aim apprach (as delineated herein) t health system redesign. All f the strategies identified in New Yrk s Medicaid redesign effrt are cnsistent with the triple aim, and the state has develped a cmprehensive set f perfrmance measures that will allw the state t track its prgress tward achieving these imprtant gals. New Yrk is als well psitined t ensure that Medicaid refrm als means mre cmprehensive health system refrm. Medicaid has a large ftprint in New Yrk, especially in New Yrk City. Changes in Medicaid payment plicies have prven that they can drive brader system-wide innvatins such as the statewide expansin f Patient Centered Medical Hmes. New Yrk is cmmitted t wrking with ther payers t drive innvatin. The implementatin f the health insurance exchange is just ne pprtunity t align health care payers t drive system-wide refrm, and the state is willing t explre hw best t use all the tls at its dispsal t bend the verall health care cst curve, as well as imprve the health f the state s ppulatin. Thanks t Gvernr Cum s leadership, New Yrk is well n its way t ensuring that the state s Medicaid prgram is bth successful and sustainable. Hwever, New Yrk needs the federal gvernment s help if it is t be truly successful in achieving meaningful refrm. T be successful, a renewed partnership with the federal gvernment is needed. Nte: The wrk grup recmmendatins are included in their final reprts, as utlined in the cmpanin dcument f this reprt, and all were apprved by the MRT and are adpted by reference int this Actin Plan. 4 P a g e

5 That s why New Yrk will seek t establish a new Medicaid 1115 waiver that will allw the full depth and breadth f the MRT s recmmendatins t be implemented. The gals f this waiver include: Allwing New Yrk t lwer health care csts, imprve patient utcmes and reduce health disparities by successfully implementing and maintaining the wide array f critical refrms apprved by the MRT; Ending the state s Medicaid fee-fr-service system and replacing it with a cmprehensive, high-quality and integrated care management system that will lwer csts and imprve health utcmes, and Implementing the prgram changes called fr in the Affrdable Care Act (ACA) quickly and efficiently. While this actin plan is nt intended t fully capture the Medicaid Redesign Team s in-depth discussins, the wrk grup reprts included in the cmpanin dcument t this reprt highlight the wrk grup s intentins and recmmended guidelines fr the wrk ging frward. The staff f the Department f Health has wrked t draw the wrk grup recmmendatins tgether in this reprt, t detail an actin plan that is truly cmprehensive and cnsistent with the MRT wrk grup recmmendatins. This multi-year actin plan cmbines Phase 1 and Phase 2 recmmendatins and translates thse int a path fr the future f Medicaid in New Yrk. The state recgnizes that as sweeping as these Medicaid prgram changes are, we maintain an bligatin t make certain that individuals enrlled in the Medicaid prgram d nt fall thrugh the cracks. Cmmunity educatin will be paramunt in assisting members understand hw these prgrammatic changes will affect them. New Yrk is pised t fundamentally transfrm its Medicaid prgram int a natinal mdel fr csteffective health care delivery. Thanks t the wrk f the Medicaid Redesign Team the State f New Yrk nw has a multi-year rad map that pints the way tward a prgram and system that are affrdable and prduce gd utcmes fr all New Yrkers. Nw it is up t the state, stakehlders and the brader New Yrk cmmunity t cntinue t wrk tgether t successfully implement this multiyear actin plan. 5 P a g e

6 HEALTH SYSTEM REDESIGN IN NEW YORK: TRIPLE AIM New Yrk embraces the Centers fr Medicare and Medicaid Services (CMS) visin fr health care system redesign which prvides a three-part aim fr delivery refrm: Imprving the quality f care by fcusing n safety, effectiveness, patient-centeredness, timeliness, efficiency and equity. Imprving health by addressing rt causes f pr health e.g., pr nutritin, physical inactivity, and substance use disrders. Reducing per capita csts. In rder fr New Yrk t ultimately cntrl health care csts, it must ensure that better care is prvided, including prven-effective preventin initiatives resulting in imprvements in verall health status and reductins in health disparities. In particular, the biggest prblem with the state s health care system is that it is nt successful in ensuring that cmplex, high-cst ppulatins btain the crdinated care they require. In New Yrk, this failure t deliver is nt due t a lack f access t vital services. New Yrk maintains ne f the natin s mst cmprehensive Medicaid prgrams and health care safety net systems. The prblem, hwever, is that fr far t many peple, care is nt effectively managed. Mrever, health disparities persist in New Yrk as in ther states thrughut the natin. Prviding Medicaid cverage t persns f clr and residents f urban and rural areas cntributes t reducing racial/ethnic and rural/urban health disparities. While cverage helps, additinal effrts are needed if persistent disparities are t be eliminated. This new MRT actin plan will lead t refrms cnsistent with the triple-aim that will nt nly benefit the Medicaid prgram, but als the state s verall health care delivery system. In New Yrk, Medicaid refrm has the ptential t translate int meaningful health care refrm, due t the size f the state s Medicaid prgram and New Yrk s prgressive plitical traditin, which can facilitate the successful replicatin f Medicaid initiatives in ther key state-administered health care prgrams. In particular, a key cmpnent f New Yrk s visin fr the health insurance exchange is t utilize the cllective purchasing pwer f the state (Medicaid, exchange and state emplyees) t drive delivery system refrm. New Yrk s visin is t implement Medicaid system redesign and then drive successful refrms int these ther prgrams. New Yrk als wants t wrk clsely with Medicare, an effrt already underway frm a data-sharing and planning perspective, which will further strengthen the state s ability t drive change and will ensure that the triple-aim is achieved in a measurable way. 6 P a g e

7 KEY REFORM ELEMENTS: NEW YORK ACHIEVING THE TRIPLE AIM New Yrk s path t achieving the triple-aim began with the wrk f the Medicaid Redesign Team. MRT Phase 1 led t the develpment f 78 distinct initiatives which are nw being implemented. These initiatives were a mix f traditinal cst cntainment ideas (rate reductins, utilizatin cntrls), systemic refrms and traditinal public health interventins. MRT Phase 2 generated additinal prpsals that bth transcend the earlier wrk by addressing cmplex tpics set aside in Phase 1, and help prvide clarity t certain key Phase 1 refrms. This MRT actin plan is built upn these recmmendatins and cnnects the dts t ensure that the state s plan is a cmprehensive apprach t redesign and will cllectively achieve the triple-aim. Outlined in this reprt are the key initiatives in the plan. It shuld be nted that these initiatives are nt necessarily mutually exclusive. There is verlap relative t their ptential fr enhancing quality, imprving beneficiary utcmes and increasing the value f care. Sme initiatives will require new investments while thers will require the waiving f certain federal requirements in rder t be fully enacted. The Department f Health will cntinue t revise the strategies identified in the plan ver time t ensure effectiveness. The refrm prpsals are arranged by the specific aim they best help New Yrk achieve. While ver time strategies may change New Yrk s cmmitment t imprving care, imprving health and cntrlling csts will remain. The refrm prpsals identified in this plan make significant strides tward these imprtant gals, hwever, the state remains pen t ther strategies that will blster its effrts. 7 P a g e

8 IMPROVING CARE New Yrk is cmmitted t ensuring that every Medicaid member has access t high quality, cst-effective health care that is effectively managed. Care management fr all was a key cmpnent f the MRT s recmmendatins and the state is nw n a path t eliminate the uncrdinated fee-fr-service (FFS) payment system within three years. Replacing FFS with high-quality care management is New Yrk s primary strategy t achieve Aim #1. AIM#1 New Yrk has a number f care management strategies currently in place and has plans t enact even mre. The state s challenge will be t weave tgether these varius strategies int an effective care management plan that cvers the entire state and all apprpriate ppulatins. New Yrk s care management apprach is nt ne-size-fits-all and big insurance cmpany fr all. New Yrk s visin is that care management services will be delivered in a crdinated fashin by bth prviders and health plans. A key element f New Yrk s apprach will be t integrate patient centered medical hmes, health plans (including Special Needs Plans), and the latest innvatin -- health hmes, int a single system f effective care management. New Yrk s lng term gal is t ensure that every Medicaid member has access t fully-integrated care management. This means that health plans and their netwrk partners will need t manage the cmplete health, lng term care, behaviral health and scial needs f the ppulatins they serve. It may take up t five years fr plan partners t evlve and develp cmprehensive, high-quality netwrks that are sufficient t meet the unique needs f all members. 8 P a g e

9 CARE MANAGEMENT FOR ALL The MRT has set New Yrk n a multiyear path t care management fr all. Care management fr all is nt simply traditinal mandatry managed care in which states rely slely n insurance cmpanies. New Yrk s visin is that virtually every member f the prgram will be enrlled in sme kind f care management rganizatin. Sme care management rganizatins will be traditinal insurance cmpanies, while thers will be prvider-based plans uniquely designed t meet the needs f special ppulatins. Figure 2: Care Management fr All Evlutin Cycle Step 1 Step 2 Step 3 Mve all members and services int care management Years 1-3 Expand fullyintegrated ptins Years 1-3 Enrll all members int fullyintegrated plans GOAL Years 3-5 All members enrll in high-quality, fully-integrated care management plans in five years New Yrk sees full capitatin as its preferred financial arrangement, but is pen t ther financing systems, especially fr special ppulatins. New Yrk als acknwledges that a perid f transitin is necessary t achieve its ultimate gal f fully-integrated care management fr virtually the entire Medicaid ppulatin. Fully-integrated means that a single care management rganizatin wuld be respnsible fr managing the cmplete needs f a member (acute, lng term and behaviral care). It may take time t reach this final destinatin (mre than three years) and existing care management rganizatins will need t evlve while new rganizatins will need t be created. In the interim, New Yrk will use a wide range f care management tls including behaviral health rganizatins, existing health plans, managed lng term care plans and special needs plans t ensure it reaches its initial gal f ending FFS Medicaid in three years. Care management fr all is especially imprtant fr high needs/high cst ppulatins, including thse wh suffer frm mental illness and substance use disrders. Systems f care fr these ppulatins must be prvided that prmte health thrugh an integrated and crdinated apprach that is bth effective and efficient. Currently, New Yrk spends 56 percent f its Medicaid budget prviding services t this imprtant ppulatin (see Appendix A). Histrically, New Yrk has relied n an ften disparate netwrk f service prviders t meet the needs f the prgram s mst cmplex patients. These prviders must be supprted in a prcess f transfrmatin t becme a true crdinated system which prvides evidence-based interventins that are prven t be effective. A number f MRT initiatives are specifically designed t assist in this transfrmatin. The prper alignment f Medicare and Medicaid is essential if care management fr all is t be successful. Currently, there is little effective crdinatin between the state s tw largest health care purchasers. New Yrk is currently wrking with the federal Medicare Medicaid Crdinatin Office t blend Medicaid and Medicare financing streams t prmte efficiency and eliminate cst-shifting, while bending the cst curve fr bth prgrams. 9 P a g e

10 The dual-eligible ppulatin includes the state's mst chrnically ill and cstliest patients, accunting fr apprximately 45 percent f the state's annual Medicaid spending (2009) and 41 percent f Medicare. Yet, many f the state's mre than 700,000 dual eligibles lack effective care crdinatin. The mve t full integratin fr duals will likely begin in 2014 but the exact pace and scale f transitin will be subject t federal apprval and stakehlder feedback. An imprtant interim care management strategy is the mve t mandatry managed lng term care fr duals. In MRT Phase 2 a wrk grup fcused n develping a list f guiding principles fr successful implementatin f this imprtant initiative. Nn-institutinal FFS lng term care has been a majr cst driver in Medicaid. Over the last five years these prgram csts have dubled while the number f peple served has declined. At the same time per member, per mnth csts fr managed lng term care have been flat. Refrm is clearly needed. While mandatry managed lng term care is nw the law in New Yrk, the Department f Health was charged with develping specific guidance fr what types f care crdinatin mdels wuld meet the state s standards. The MRT wrk grup s guiding principles have served as the basis fr the develpment f the Care Crdinatin Mdels (CCM) guidance, which has been released. Figure 3 summarizes the guiding principles which will prvide the state with clear directin n hw t effectively implement this imprtant part f care management fr all. A remaining challenge facing New Yrk in its quest fr full-integratin will be hw t ensure behaviral health services are effectively prvided. While Special Needs Plans fr individuals with significant behaviral health challenges will be ne strategy, New Yrk will als lk at ptins that integrate behaviral health rganizatins with ther care management rganizatins that ensure cntinuity, as well as prevent the medical mdel f care frm displacing cmmunity-based behaviral health service delivery. Fully-integrated care management fr all must mean expanded access t evidence-based behaviral health services. Effective care management is essential t health care refrm. New Yrk stands ready t implement bth shrt- and lng-term strategies with the eventual gal f full integratin, which if successful, culd be a natinal mdel fr hw t lwer csts fr bth f America s majr health care entitlement prgrams. 10 P a g e

11 Figure 3. The Guiding Principles Principle #1 A CCM must prvide r cntract fr all Medicaid lng term care services in the benefit package. CCM will be at risk fr the services in the benefit package and rates will be risk adjusted t reflect the ppulatin served. Principle #2 A CCM must include a persn-centered care management functin that is targeted t the needs f the enrlled ppulatin. Principle #3 A CCM must be invlved in care crdinatin f ther services fr which it is nt at risk. Principle #4 The member and his/her infrmal supprts must drive the develpment and executin f the care plan. Principle #5 Care crdinatin is a cre CCM functin. Fr benefit package services, CCM members will have a chice f prviders. Principle #6 A CCM will use a standardized assessment tl t drive care plan develpment. Principle #7 A CCM will prvide services in the mst integrated setting apprpriate t the needs f qualified members with disabilities. Principle #8 A CCM will be evaluated t determine the extent t which it has achieved anticipated gals and utcmes and t drive quality imprvement and payment. Principle #9 Existing member rights and prtectins will be preserved. Principle #10 A CCM with demnstrated expertise will be able t serve specified ppulatin(s). Principle #11 Mandatry enrllment int CCMs in any cunty will nt begin until and unless there is adequate capacity and chice fr cnsumers and pprtunity fr apprpriate transitin f the existing service system in the cunty. Principle #12 Members shall have cntinuity f care as they transitin frm ther prgrams. Principle #13 Prspective members will receive sufficient bjective infrmatin and cunseling abut their chices befre enrlling. 11 P a g e

12 ENSURE UNIVERSAL ACCESS TO HIGH-QUALITY PRIMARY CARE New Yrk envisins a health care delivery system in which every Medicaid recipient has access t, and apprpriately utilizes, high-quality patient centered primary care. T achieve the triple-aim, New Yrk needs t mve individuals, services and resurces frm avidable institutinal care t cmmunity and utpatient-based care. High quality primary care is essential if New Yrk is ging t effectively rebalance its health care delivery system. In New Yrk, an imprtant cmpnent t creating high quality primary care is achieved by prmting advanced Patient-Centered Medical Hmes (PCMHs). Currently, 1.4 millin Medicaid recipients utilize primary care frm a Natinal Cmmittee fr Quality Assurance (NCQA) recgnized medical hme, mst f them at Level 2 r 3 (the highest level). This achievement was made pssible since the state invested mney in care management payments fr thse primary care clinicians and practices that met the standard. New Yrk will further expand its effrts as a result f the MRT. The current plan is t expand access t PCMHs t all Medicaid recipients ver the next several years. New Yrk is clearly a natinal leader in PCMHs. Despite that fact, New Yrk needs assistance frm the federal gvernment t achieve its visin f every Medicaid member having access t, and fully taking advantage f, a Level 3 PCMH. T attain this gal, New Yrk must accmplish fur things: 1) Maintain and expand the current Medicaid incentive payment fr achieving PCMH recgnitin, while prmting transfrmatin t Level 3 alng with highest levels f care integratin and health infrmatin exchange. 2) Eliminate barriers t Level 3 recgnitin fr all types f eligible prviders thrugh technical assistance and grants, s they can implement systems/prcesses necessary t reach Level 3; have tls and supprt t cntinue t imprve the delivery f care and be able t meaningfully participate in care integratin activities with ther prviders, in ther settings acrss the cmmunity including, but nt limited t, health hmes and accuntable care rganizatins. 3) Recruit and retain mre primary care physicians and nurse practitiners, especially access challenged regins f New Yrk including but nt limited t rural areas. 4) Expand the physical plant f primary care prviders such as Federally Qualified Health Centers (FQHCs) and rural clinics. Tgether these strategies will nt nly expand access t high quality primary care within Medicaid, but there will be an additive impact acrss the entire health care delivery system. New Yrk envisins a wrld in which state emplyee plans, exchange plans and ther cmmercial plans als adpt Medicaid reimbursement strategies fr PCMHs and as a result virtually all primary care prviders are Level 3 PCMHs within five t seven years. 12 P a g e

13 HEALTH HOMES The Affrdable Care Act (ACA) has created new pprtunities fr states t effectively manage the health, behaviral health and lng term care needs f cmplex, high-cst ppulatins. New Yrk views ne new ACA tl health hmes as the care crdinatin vehicle fr many f the state s mst challenging ppulatins including dually eligible members. New Yrk s visin fr health hmes relies n a wide array f current prviders frming new partnerships and stretching their list f services in ways that ensure recipients with cmplex health issues are effectively managed. New Yrk has significant experience and infrastructure upn which t draw fr this brad initiative. It includes a large number f PCMHs, lessns frm ISSUE SPOTLIGHT #1 FITTING THE PIECES TOGETHER: Care Management, PCMH and Health Hmes New Yrk envisins a health care delivery system in which incentives align t reward quality and cst-effectiveness ver vlume and pr patient utcmes. N lnger can New Yrk cntinue t supprt a system in which a dctr, hspital r nursing hme is financially punished when a patient gets well and needs less care. T align incentives t reward quality and lwer csts, the state is fcused n creating integrated care in which prviders and health plans are rewarded fr better patient utcmes. Integratin must ccur at the risk level, care management level, and the prvider level. New Yrk hpes t enrll all Medicaid patients in fully-integrated health plans within five years. While an imprtant step, this alne will nt align the incentives t reward quality. Integratin must als ccur at the care management and prvider level. Prviders must be rewarded t wrk tgether t meet the cmplete needs f patients, especially fr thse patients with significant needs that cut acrss health care sils. Care management integratin will be achieved by health hmes, PCMH s and, in sme cases, health plans and ACOs. Health Hmes and PCMH s will cntinue t be vital state strategies even when all members are enrlled in fully-integrated care management plan. New Yrk needs integratin and incentive alignment at bth the plan and prvider levels in rder t be successful. demnstratins in chrnic illness management within FFS Medicaid, large investments in Health Infrmatin Technlgy (HIT) and Health Infrmatin Exchange (HIE) and the experience frm ur HIV Special Needs Plans. Health hmes will be led by prviders, health plans and even cmmunity-based rganizatins. Health hmes will be integrated int current managed care prvider netwrks and will be a permanent fixture f the state s care management fr all strategy. Health hme netwrks will always include cmmunitybased rganizatins because they are uniquely psitined t meet the scial needs f patients that ften transcend health care needs. The challenge t health hmes will be t break dwn traditinal sils and create partnerships that ensure that New Yrk s rigrus health hme standards are met and that care is crdinated fr New Yrk s mst vulnerable ppulatins. 1 A Nvember 2009 reprt prepared by the Lewin Grup fund that using this mdel dramatically lwered inpatient csts by as much as 52 percent. The rate f hspital admissins fr SNP members als decreased by percent and the average length f stay per admissin was lwered by percent. Reprt available at: Evaluatin f New Yrk s HIV Special Needs Plan Prgram: Cst and Usage Impacts. Prepared by The Lewin Grup in cllabratin with the AIDS Institute, NYSDOH. Authrs include Franklin Laufer (New Yrk State Department f Health AIDS Institute) and Jel Menges, Maik Schutze and David Zhang (The Lewin Grup). 13 P a g e

14 Figure 4. Care Management fr All The Visin Anther key challenge t health hmes will be the implementatin f Health Infrmatin Technlgy (HIT) and Health Infrmatin Exchange (HIE). New Yrk plans t supprt health hmes s they can build their capacity t cmmunicate electrnically. New Yrk currently has a statewide netwrk f functining Reginal Health Infrmatin Organizatins (RHIOs) upn which t begin this wrk. The gal is that every health hme will eventually have a methd t electrnically share vital infrmatin (including care plans) amng cntracted prviders, in real time. T achieve this visin, New Yrk will likely need resurces frm the federal gvernment. While the ACA prvides enhanced federal funding t begin health hmes, this funding is time limited. New Yrk will lk t the waiver t prvide additinal funding fr this new initiative. As mentined, New Yrk sees health hmes as an essential part f the care management fr all strategy. Health hmes will act as prviders administering a benefit within a care management netwrk. Care management rganizatins will be required by cntract t cnnect challenged ppulatins with health hmes that are certified by the state (unless the health plan serves as the health hme.) Thanks t Health Hmes, New Yrk is pised t redesign the manner in which Medicaid s mst challenged patients access health care services. This redesign will lead t bth better patient utcmes and lwer csts. 14 P a g e

15 HEALTH CARE WORKFORCE FOR THE 21ST CENTURY The ACA will add hundreds f thusands f new beneficiaries t the New Yrk Medicaid prgram, and many mre t the ranks f the privately insured. This will require delivery system restructuring and expansin, including training additinal prviders and wrkers and retraining clinical and nn-clinical wrkers t fcus n chrnic disease management and care crdinatin. T help address the health care wrkfrce challenges f the 21st Century, a special MRT wrk grup was established. This grup, cmprised f a wide array f stakehlders, met multiple times and attempted t achieve cnsensus n challenging issues such as scpe f practice. MRT Phase 1 initially included scpe f practice changes but thse changes were nt apprved by the legislature. The Wrkfrce MRT wrk grup verwhelmingly apprved a series f sweeping recmmendatins which, if adpted, culd substantially recalibrate the health care wrkfrce and lead t mre cst-effective care. A key theme resulting frm the wrk grup recmmendatins was the need t ensure that mid-level prviders were allwed t wrk at the tp f their licenses. In particular, the wrk grup made a series f imprtant recmmendatins t expand the scpe f practice fr certified nurse practitiners, dental hygienists, hme care aides and advanced aides. The wrk grup als recmmended the creatin f a new Advisry Cmmittee, which wuld assist the Office f the Prfessins within State Department f Educatin with assessments f prpsals designed t imprve health wrkfrce flexibility in New Yrk. The hpe is this grup will allw New Yrk t break-ut f the traditinal prfessinal sils, and utilize medical evidence and independent research t infrm scpe f practice decisin-making. While sme stakehlders remain cncerned abut certain prvisins, the state will wrk with the brader health care cmmunity, legislature and the State Department f Educatin t implement them in cst-effective ways. 15 P a g e

16 HIT INTEROPERABLE EHR FOR ALL NEW YORKERS In rder fr Medicaid redesign t be successful, New Yrk must find a better way t crdinate and manage care fr high needs/high cst patients. T effectively crdinate care, a wide array f prviders and plans must be able t effectively cmmunicate. Universal prvider-t-prvider cmmunicatin is nly pssible if we can develp an interperable HIT system, thrugh which prviders can share vital infrmatin abut patients in ways that prtect patient cnfidentiality and d nt add extra burdens t prviders. While the MRT did nt have a specific wrk grup dedicated t HIT, many f the MRT initiatives are dependent upn a high functining HIT system in New Yrk. Strategic investments, crdinated with existing state and federal initiatives targeted at HIT adptin and use, will help lead t a statewide HIT infrastructure that will allw patient recrds t be shared. This will reduce redundant tests and help cntain csts by enabling prviders t better track the care given t patients. New Yrk envisins a health care delivery system in which every prvider has access t the vital patient infrmatin they need t effectively prvide and manage care. New Yrk has made prgress in this area, but additinal investments will help ensure that by the end f the decade every New Yrker will benefit frm a statewide, interperable EHR system. New Yrk State has already made an unprecedented cmmitment t advance brad HIT adptin and use. Since 2006, the state has invested mre than $400 millin in cmbined state and federal dllars t establish plicies and technical services t facilitate health infrmatin exchange, as well as increase the number and success f physicians utilizing EHRs. Additinal federal supprt fr these bjectives has cme thrugh three initiatives: EHR incentive payments fr eligible prfessinals and hspitals serving a significant vlume f Medicare and/r Medicaid beneficiaries; the award f cntracts t the New Yrk ehealth Cllabrative t administer the State HIE Cperative Grant Prgram and the statewide Reginal Extensin Center (REC) prgram (utside New Yrk City); as well as the REC cntract award t NYC Reginal Electrnic Adptin Center fr Health (REACH). The cmbined NYC REACH gal is t implement EHRs and supprt 10,000 physicians t achieve meaningful use and qualify fr the incentive payments. Despite these investments, we recgnize that there are significant gaps in health IT capabilities which will be necessary t achieve the ambitius Medicaid refrms New Yrk envisins. The need fr additinal resurces and assistance can be brken int fur categries: (1) eligible prfessinals (EPs) and hspitals that may qualify fr Medicaid utilizatin but are nt served by the REC prgram because f limited resurces r categrical restrictins; (2) prfessinals and hspitals that wuld therwise meet the definitin f EPs and hspitals, and serve large numbers f Medicaid beneficiaries, but d nt hit the 30 percent patient vlume threshld; (3) additinal health care prviders mental health, lng term care and substance use disrders, fr example wh were nt included in the Meaningful Use (MU) incentive prgram and are actively invlved in Health Hmes; and (4) ther categries f prviders (e.g., Health Hme Case Managers) wh need t access infrmatin thrugh HIE but may nt have r need full EHR capabilities. 16 P a g e

17 Additinal wrk is needed t quantify the implementatin gap and define specific pririties t advance the state s health refrm gals. At this time, the state des nt have a reliable estimate f the ttal number f Medicaid prviders wh lack EHRs. The state will need t develp criteria t priritize these needs in the cntext f brader MRT prgrammatic bjectives, including the implementatin f Health Hmes. Frtunately, the state has an extensive tl kit fr implementatin supprt and lcal and statewide rganizatins that are experienced in managing and prviding these services. New Yrk cmmits t cmpleting this analysis and develping a specific prpsal fr the number f prviders, the package f technical assistance services and the dllars necessary t advance brad HIT adptin and use in supprt f Medicaid redesign and brader health care transfrmatin. 17 P a g e

18 IMPROVING BEHAVIORAL HEALTH New Yrk s behaviral health system (which prvides specialty care and treatment fr mental health and substance use disrders) is large and fragmented. The publicly funded mental health system alne serves ver 600,000 peple and accunts fr abut $7 billin in annual expenditures. Apprximately 50 percent f this spending ges t inpatient care. The publicly funded substance use disrder treatment system serves ver 250,000 individuals and accunts fr abut $1.7 billin in expenditures annually. Despite the significant spending n behaviral health care, the system ffers little cmprehensive care crdinatin even t the highest-need individuals, and there is little accuntability fr the prvisin f quality care and fr imprved utcmes fr patients/cnsumers. This fragmentatin prblem is cmpunded since mental health and substance use care and treatment systems are separated, with discrete regulatins and funding streams, thugh there are substantial rates f peple with c-ccurring serius mental illness and substance use disrders. Behaviral health als is nt well integrated r effectively crdinated with physical health care at the clinical level r at the regulatry and financing levels. The behaviral health system is currently funded primarily thrugh fee-fr-service Medicaid, while a substantial prtin f physical health care fr peple with mental illness r substance use disrders is financed and arranged thrugh Medicaid managed care plans. This als cntributes t fragmentatin and lack f accuntability. This lack f crdinatin extends well beynd physical health care int the educatin, child welfare, and juvenile justice systems fr thse under the age f twenty-ne. The fragmented and uncrdinated payment and delivery systems have cntributed t pr utcmes, including: O Peple with serius mental illness die years earlier n average than the rest f the ppulatin. The leading cntributrs t this disparity are chrnic, c-ccurring physical illnesses, which are nt prevented and are treated inadequately. (Cngruencies in Increased Mrtality Rates, Years f Ptential Life Lst, and Causes f Death amng Public Mental Health Clients in Eight States The majrity f preventable admissins paid fr by fee-fr-service Medicaid t Article 28 inpatient beds are fr peple with behaviral health cnditins, yet the majrity f expenditures fr these peple are fr chrnic physical health cnditins. There is an ver-reliance n State psychiatric hspitals, adult hmes and nursing hmes, partly due t the system s inability t assign respnsibility fr integrated cmmunity care. In New Yrk State, under the current Medicaid fee-fr-service system, 20% f patients discharged frm psychiatric inpatient units are readmitted within 30 days. ( 18 P a g e

19 T address the prblems in New Yrk s behaviral health system, a specific MRT wrk grup was established. This wrk grup, which brught tgether a wide array f stakehlders, develped cmprehensive recmmendatins, and a refrm agenda that is a key part f the verall MRT actin plan. First and fremst, the wrk grup embraced the cncept f effective care management fr patients with serius mental illness and substance use disrders. The wrk grup went beynd simply advcating fr care management, and actually identified a number f key elements f design and practice needed fr a managed and crdinated behaviral health care system in New Yrk relevant acrss the age span. Savings n behaviral and physical healthcare attributable t imprved care crdinatin shuld be fcused n high pririty areas including husing, emplyment services, peer services and family supprt. The wrk grup reached cnsensus n key principles and identified critical metrics and indicatrs that shuld be measured t determine the extent t which the principles are met. The guiding principles can be fund in Appendix B f this dcument. One f the key recmmendatins f the wrk grup is t establish Special Needs Plans and Integrated Delivery System mdels fr prviding fully-integrated care management fr patients with significant behaviral health needs. These rganizatins wuld be risk-bearing and manage the cmprehensive needs f the patients they serve. In additin this wrk grup strngly supprted the MRT recmmendatin f a Behaviral Health Organizatin ptin which wuld be a carved-ut service that wrks in tandem with a health plan t achieve service integratin. This recmmendatin is entirely cnsistent with the verall MRT theme f care management fr all and creates a new mdel f integratin that is highly specialized t an imprtant sub-ppulatin. The wrk grup als prvided specific recmmendatin fr hw t effectively implement Behaviral Health Organizatins as an initial step t effective care management, as mre cmprehensive care management mdels are allwed t develp. BHOs were a key MRT Phase 1 initiative and are already being implemented. BHOs have prven effective at managing behaviral health services in ther states, and will begin by managing high cst FFS behaviral health services thrugh a cncurrent review prcess fr FFS inpatient care and a fcus n high-quality engagement pst discharge. Eventually BHOs will bear risk, and the wrk grup prvided very specific recmmendatins fr hw t ensure they are effective. This wrk grup als discussed the need fr integratin f behaviral health int primary care settings cvered under mainstream plans. Cllabrative care and a mre rbust set f behaviral perfrmance measures were recmmended fr mainstream plans. A mechanism fr funding an apprpriate level f services t the uninsured and underinsured needs t be maintained as the system mves int managed Medicaid fr all clients with mental health and substance use disrders, and previus funding streams (such as disprprtinate share hspital (DSH) payments) are reduced r n lnger available. The wrk grup als created a special team that fcused n the behaviral health needs f children. The team prvided recmmendatins n hw the state shuld step up enfrcement f health plans t ensure children with behaviral health needs get the services they need, as well as specific utcme measures the state shuld track t ensure that children are apprpriately served. 19 P a g e

20 Finally, the wrk grup als prvided recmmendatins n hw t expand access t peer services, and prvided the state with further guidance n hw t effectively implement health hmes. The wrk grup s full recmmendatins, which can be fund in the cmpanin dcument f this reprt, are perhaps the mst cmprehensive radmap New Yrk has ever had fr creating an effective behaviral system that is efficiently integrated with ther health sectrs in rder t ensure that the cmplete needs f cmplex patients are addressed. 20 P a g e

21 IMPROVING HEALTH Medicaid refrm in New Yrk State must be abut imprving ppulatin health. Histrically, Medicaid refrm has ften fcused n lwering csts fr taxpayers r imprving health care quality measures. New Yrk wants t break the mld and lk t use the Medicaid prgram t drive deeper and mre lasting change. In additin, New Yrk wants t bring a whle new grup f scial entrepreneurs t the table t assist the state in managing cmplex ppulatins thrugh a mix f services that transcend the traditinal Medicaid fferings. AIM#2 Medicaid, as the largest insurer in the State f New Yrk, has a vested interest in addressing preventable cnditins and prmting health t ensure a healthy and prductive ppulace and t reduce expenditures. While Medicaid has traditinally been viewed slely as an insurer f lw-incme and vulnerable ppulatins, the prgram s cverage f essential public health services and financing f public hspitals and clinics imprves the health status and utcmes f prgram beneficiaries and the ppulatin as a whle. New Yrk must implement pwerful new health and public health strategies t eliminate health disparities, significantly expand access t supprtive husing, and re-invent the Medicaid benefit t imprve ppulatin health. New Yrk s apprach t imprving ppulatin health is built n its years f experience in ther areas, such as the fight against AIDS. By utilizing lessns learned frm ther effrts, as well as bringing t scale successful pilt effrts, New Yrk will be uniquely pised t lead the natin in imprving verall ppulatin health Cmmnwealth New Yrk State Screcard n Health System Perfrmance Care Measure Percentage f Uninsured Adults Quality f Health Care Public Health Indicatrs Avidable Hspital Use and Cst Natinal Ranking 28th 22nd 17th 50th 21 P a g e

22 ELIMINATING HEALTH DISPARITIES Medicaid refrm must be abut mre than health care system redesign and payment refrm. Medicaid refrm and brader refrm f the entire New Yrk health system must als be abut imprving verall ppulatin health. Thrughut New Yrk s histry, the state has been a natinal leader in advancing imprtant public health causes. New Yrk must reclaim its rle as a natinal leader in ppulatin health management. Perhaps the mst pressing ppulatin health prblem facing New Yrk is the ever present reality that significant disparities in health utcmes exist in ur state. T address these cncerns an MRT wrk grup was established t develp specific recmmendatins fr hw t reduce r eliminate disparities based n race, ethnicity, gender, age, physical r psychiatric disability, sexual rientatin and gender expressin. This wrk grup experienced sme challenges when it came t defining its scpe and fcus. Disparities are caused by a wide array f cmplex factrs and pssible slutins cut acrss traditinal health care sils. The wrk grup reviewed a substantial amunt f data and cnsidered 69 specific prpsals befre agreeing n 14 pririty recmmendatins which were included in their wrk grup reprt. These recmmendatins are prvided belw: 1) Data Cllectin/Metrics t Measure Disparities: New Yrk shuld implement and expand n data cllectin standards required by Sectin 4302 f the Affrdable Care Act by including detailed reprting n race and ethnicity, gender identity, the six disability questins used in the 2011 American Cmmunity Survey (ACS), and husing status. In additin, funding shuld be prvided t supprt data analyses and research t the state s wrk with internal and external partners t prmte prgrams and plicies that address health disparities, imprve quality and prmte apprpriate and effective utilizatin f services including the integratin and analysis f data t better identify, understand and address health disparities. 2) Imprve Language Access t Address Disparities: Medical Assistance rates f payment fr hspital inpatient and utpatient departments, hspital emergency Departments, diagnstic & treatment centers, and federally-qualified health centers shuld prvide reimbursement fr the csts f interpretatin services fr patients with limited English prficiency (LEP) and cmmunicatin services fr peple wh are deaf and hard f hearing. 3) Prmte Language Accessible Prescriptins: Actins shuld be taken t require all chain pharmacies t prvide translatin and interpretatin services fr limited English prficient (LEP) patients, that standardized prescriptin labels be required t ensure understanding and cmprehensin especially by LEP individuals and that prescriptin pads be mdified t allw prescribers t indicate if a patient is LEP, and if s, t nte their preferred language. Nte: All MRT initiatives were evaluated fr their impact n health disparities, as recmmended by the Health Disparities wrk grup. 22 P a g e

23 4) Prmte Ppulatin Health thrugh Medicaid Cverage f Primary and Secndary Cmmunity-Based Chrnic Disease Preventive Services: Medicaid shuld be expanded t include cverage f Pre-Diabetes grup and individual cunseling services (fee-fr-service and managed care); lead pisning, asthma, hme visits and autmated hme bld pressure mnitrs fr patients with uncntrlled hypertensin. 5) Streamline and Imprve Access t Emergency Medicaid: The state shuld take actins t increase awareness abut emergency Medicaid amng cnsumers, prviders, and lcal Scial Services districts, streamline the applicatin prcess thrugh prequalificatin and extend certificatin perids fr certain medical cnditins t enable prviders t receive apprpriate reimbursement frm federal funds and reduce hspital and institutinal reliance n state charity care dllars. 6) Address Disparities in Treatment at Teaching Facilities: Actins shuld be taken t ensure that existing standards f care are enfrced in teaching hspitals and training clinics t ensure that the care prvided t persns wh are uninsured, t peple cvered by Medicaid, and t the privately insured is cnsistent and is f the highest quality and equivalent t thse services prvided by the private faculty practices in the same institutins. 7) Address Disparities Thrugh Targeted Training fr NYS Health Care Wrkfrce: Cultural cmpetency training shuld be required t prmte care and reduce disparities fr all individuals including but nt limited t peple with disabilities, Lesbian, Gay, Bisexual and Transgender persns, persns with mental illness, substance use disrders and persns at risk f suicide. 8) Enhance Services t Prmte Maternal and Child Health: The fllwing Medicaid enhancements and expansins shuld be implemented t prmte maternal and child health: Expanded access t cntraceptin and ther family planning services including intercnceptinal care fllwing an adverse pregnancy; breastfeeding educatin and lactatin cunseling during pregnancy and in the pstpartum perid; and supprt f initiatives t demnstrate effective and efficient use f HIT technlgy between hspitals/health care systems and cmmunity-based health rganizatins t imprve care delivery. 9) Enhanced Services fr Yuth in Transitin with Psychiatric Disabilities: Cmprehensive prgrams t serve yuth in transitin with psychiatric disabilities shuld be develped acrss all systems f care including fster care, schl ppulatins that have yuth with a serius emtinal disrder diagnsis and the juvenile justice ppulatin t ensure that yuth with psychiatric disabilities d nt end up hmeless r in the criminal justice system. 10) Prmte Effective Use f Indigent Care Funds: The charity care reimbursement system shuld be revised t ensure that indigent care funding is transparent, is used t pay fr the care f the uninsured and that there is greater accuntability fr use f these funds. 11) Prmte Hepatitis C Care and Treatment thrugh Service Integratin: Effrts shuld be taken t prmte the integratin f hepatitis care, treatment and supprtive services int primary care settings including cmmunity health centers, HIV primary care clinics and substance use treatment prgrams. 23 P a g e

24 12) Prmte Full Access t Medicaid Mental Health Medicatins: Actins shuld be taken t ensure that all Medicaid recipients wh are in managed care plans where the pharmacy benefit is n lnger carved ut cntinue t have full access t mental health medicatins. 13) Medicaid Cverage f Water Fluridatin: T address disparities in access t dental services, Medicaid funding shuld be made available t supprt csts f fluridatin equipment, supplies and staff time fr public water systems in ppulatin centers (ppulatin ver 50,000) where the majrity f Medicaid eligible children reside. 14) Medicaid Cverage f Syringe Access and Harm Reductin Activities: Actins shuld be taken t prmte and address health care needs f persns with chemical dependency including allwing medical prviders t prescribe syringes t prevent disease transmissin; and by authrizing NYS DOH AIDS Institute Syringe Exchange prviders t be reimbursed by Medicaid fr harm reductin/syringe exchange prgram services prvided t Medicaid eligible individuals. These recmmendatins cut acrss the entire health care delivery system and shw just hw brad a lk the wrk grup tk at the causes f health disparities. Sme f these initiatives were apprved as part f the state budget, hwever, t fully implement these recmmendatins new funding surces will be necessary. One pssible surce f funding is the new MRT waiver which the state will pursue in The hpe is that all f these recmmendatins will be implemented, within existing financial cnstraints, ver the next three t five years. 24 P a g e

25 AFFORDABLE AND SUPPORTIVE HOUSING The Medicaid Redesign Team identified early n in its deliberatins that increasing the availability f affrdable and supprtive husing fr high-need Medicaid beneficiaries wh are hmeless, precariusly hused r living in institutinal settings is a significant pprtunity fr reducing Medicaid cst grwth. There is strng and grwing evidence in New Yrk and arund the cuntry that a lack f stable husing results in unnecessary Medicaid spending --n individuals in nursing hmes and hspitals wh cannt be discharged nly because they lack a place t live, and n repeated emergency department visits and inpatient admissins fr individuals whse chrnic cnditins cannt be adequately managed n the streets r in shelters. The lack f apprpriate affrdable husing, especially in New Yrk s urban areas, may be a majr driver f unnecessary Medicaid spending. In New Yrk City, fr example, amng Medicaid beneficiaries with expected high future csts identified fr participatin in the Chrnic Illness Demnstratin Prject, up t 30 percent were hmeless and even mre were precariusly hused r living in transitinal settings. New Yrk has an impressive recrd f making investments in supprtive husing, bth in the mental hygiene system and fr frail elders. These investments have helped stabilize thusands f high-risk New Yrkers with cmplicated medical, lng term care, mental health and substance use disrder needs. Thanks t the MRT, the state is taking a new lk at hw husing can lead t a reductin in verall Medicaid spending. In fact, an nging annual apprpriatin f $75 millin has been pledged in the NYS financial plan as part f MRT Phase I. In additin, an MRT wrk grup was established t see what mre culd be dne t expand access t affrdable/supprtive husing fr Medicaid members. This wrk grup was made up f a diverse set f stakehlders, including sme f the largest peratrs f supprtive husing in New Yrk. Their final reprt included seven prpsals fr investments in new affrdable husing capacity, as well as five cllabratin/crdinatin recmmendatins which are designed t ensure that varius state and lcal agencies (bth gvernmental and nn-prfit) are wrking tgether t maximize the value f all affrdable husing prgrams. Als, the wrk grup prvided a series f recmmendatins fr hw the state culd expand access t the Assisted Living Prgram. Assisted living is ften a lwer cst and mre apprpriate living arrangement fr individuals. Unfrtunately, the regulatins assciated with the prgram have nt kept up with changing events, which has restricted access. In additin, the prgram needs t mdernize in rder t prepare fr care management fr all. New Yrk is especially interested in using the 1115 Medicaid waiver as a funding surce fr a significant new investment in affrdable/supprtive husing specifically targeted at high needs/ high cst Medicaid members. New Yrk hpes this investment culd amunt t millins f dllars per year and wuld allw the state t fully implement the wrk grup recmmendatins. 25 P a g e

26 The wrkgrup made numerus ther recmmendatins abut hw t imprve access t husing and healthcare. Examples include but are nt limited t: c-lcate behaviral and health services in husing, expand and imprve independent senir husing, evaluate ways t create pprtunities fr diversin frm hspitals, ensure crdinatin with Health Hmes, streamline cmmunity siting prcesses, ensure the viability f existing husing resurces, and design a Mving On initiative t help mve individuals t mre independent settings thereby freeing up needed resurces fr thse mst in need. Affrdable/supprtive husing is a classic example f where the current Medicaid financing system deters states frm making the kinds f investments that can truly reduce csts. New Yrk is interested in wrking with the CMS t see hw federal funds can help establish mre supprtive husing, s that Medicaid beneficiaries receive the care they need in the mst cst-effective settings pssible. 26 P a g e

27 REDESIGNING NEW YORK S MEDICAID BENEFIT Medicaid benefits, cvered services, as well as recipient cst-sharing, are rarely examined n a systematic basis. The nly time such an examinatin ccurs is during very difficult budget situatins when savings are needed and the ptins mst ften cnsidered are either benefit cuts r increases in cst-sharing. As New Yrk prepares fr ACA implementatin, the state wants t engage its stakehlder cmmunity as well as natinal experts in a cmprehensive discussin abut hw the Medicaid benefit shuld be structured t ensure that all members have access t the clinically effective, efficiently delivered services they require. New Yrk hpes t learn frm the experiences f ther states and cmmercial payers and implement refrms that are cnsistent with value-based benefit design. T lead this cmprehensive review, an MRT wrk grup was established under the leadership f Health Cmmissiner, Dr. Nirav R. Shah. Dr. Shah is a natinally-recgnized health sciences researcher, with substantial experience in cmparativeeffectiveness research. Dr. Shah c-chaired the grup with Frank Branchini, a veteran health plan executive. The wrk grup included prviders and cnsumer advcates and prpsed specific Medicaid benefit changes as well as a prcess fr mving frward in value-based benefit design. Befre launching int the cnsideratin f specific recmmendatins the wrk grup established guiding principles. These principles frm the base upn which nt nly the wrk grup functined but hw New Yrk will seek t implement value-based benefit structures. The ten principles, which can be fund in Appendix C, stress the imprtance f treating all Medicaid patients equitably while at the same time acknwledging that effective stewardship f finite public resurces requires respnsible use f empirical evidence regarding the benefits, harms and csts f benefits/services in making benefit design decisins. The wrk grup als prvided a very detailed recmmendatin fr hw the Department f Health shuld review benefits in the future. Specifically, the wrk grup recmmended that the state create an expert advisry panel t prvide guidance t the Medicaid prgram in regard t nging benefit design. This panel will include cnsumer/members representatin t ensure that thse imprtant vices are heard. The wrk grup als prvided clear directin n the types f analysis that shuld be used in making benefit decisins and the imprtant advice that the panel fcus n benefits r services that fall int the fllwing categries: New technlgy with significant csts r utilizatin r health impact(s); Requests frm utside stakehlders fr changes in cverage; Prpsed new cdes fr services (CPT and HCPCS); New federal r state statute/regulatry changes that mandate review. 27 P a g e

28 In additin t the creatin f a prspective review prcess and the establishment f an expert advisry cmmittee, the wrk grup als made a series f recmmendatins regarding specific benefit changes. These changes, which were apprved in the FY state budget, are designed t bth imprve Medicaid s cst effectiveness as well as demnstrate hw medical evidence can imprve benefit design. New Yrk will seek t implement these recmmendatins in a cst-effective manner which ensures that they d nt create any additinal pressure n the state s glbal spending cap. 28 P a g e

29 REDUCING COSTS Upn taking ffice, Gvernr Cum quickly determined that New Yrk s Medicaid prgram was n lnger sustainable. New Yrk taxpayers, while generus, had reached the pint where they were n lnger able t affrd the ever-increasing burden the prgram placed n the state budget. It is fr this reasn that Gvernr Cum created the Medicaid Redesign Team (MRT). The MRT radically changed the Medicaid budget discussin by creating a new glbal Medicaid spending cap and by giving the Cmmissiner f Health the pwer t enfrce that cap. AIM#3 The glbal spending cap has changed the way the prgram is perceived by bth state fficials and stakehlders. All new expenditures must be analyzed t assess their impact n bth cst and quality. This level f scrutiny is unprecedented in New Yrk. The glbal spending cap means savings nt nly fr state taxpayers, but als fr the federal gvernment. The cap represents the cre f the state s budget neutrality argument fr a future 1115 Medicaid waiver. While the implementatin f the spending cap was an imprtant first step, mre needs t dne if csts are t be cntrlled. In particular, New Yrk must lead the natin in payment refrm. While this actin plan will get New Yrk ut f the Medicaid FFS business, the state must ensure that its care management partners als shift away frm vlume-based payments and adpt ther payment systems that reward quality. T truly lwer csts and imprve quality, New Yrk must als imprve the verall efficiency f its health care safety net system. New Yrk relies n a variety f public and nn-prfit institutins t prvide care. The safety net system must evlve and becme mre efficient, especially given the significant expansin in access that will cme with the ACA. Lastly, New Yrk must btain cntrl ver its ever-rising medical malpractice csts while at the same time balancing the needs f vulnerable patients and their families. These csts pse a significant financial challenge. 29 P a g e

30 GLOBAL MEDICAID SPENDING CAP New Yrk nw has a statutry glbal cap n Department f Health cntrlled Medicaid expenditures. This cap is n the state s share nly. The cap is linked t the annual rate f grwth in the 10-year rlling average in CPI-Medical. The cap can be adjusted by the state s Divisin f Budget, but nly under very limited circumstances. Enrllment grwth due t macrecnmic factrs is nt ne f these circumstances; hwever, since the cap is set in state law, the Legislature culd adjust the cap if New Yrk were t face anther ecnmic crisis. ISSUE SPOTLIGHT #2 TRACKING SPENDING NEW YORK S NEW APPROACH The Medicaid glbal spending cap has frced New Yrk t track Medicaid expenditures mre clsely than ever befre. Every mnth a glbal spending reprt is published s that the public can track perfrmance relative t a spending target. Spending is tracked by sectr and the reprt clarifies why spending is deviating frm target. T effectively track Medicaid spending as well as t better understand what factrs are driving the trend, the state has cntracted with Salient, an innvative New Yrk cmpany. Salient prvides New Yrk with a state f the art visual data mining technlgy that allws analysts t drill dwn int data even dwn t the individual patient r prvider level s as t understand what factrs are driving spending. Infrmatin can be gemapped and utlier prviders can be clearly identified fr targeted interventins. New Yrk s statutry cap will lead t significant federal savings. Current estimates are that ver the next five years the federal Thanks t this new tl New Yrk is well psitined t nt nly ensure that state taxpayers get their mney s wrth when it cmes t Medicaid, but t ensure that budget neutrality is maintained under a new waiver. gvernment will save $18.3 billin. It is this savings which will ensure that a prpsed 1115 waiver is budget neutral. In rder t functin within the statutry cap New Yrk needs the ther elements f its cmprehensive plan t be implemented. Given New Yrk s size, a successful state spending cap culd play a rle in the natin s verall deficit reductin effrts. 30 P a g e

31 STRENGTHENING AND TRANSFORMING THE HEALTH CARE SAFETY NET The financial perfrmance f New Yrk s hspital sectr remains well belw the natinal average. In 2009, New Yrk hspitals generated an average perating margin f 1.6 percent, significantly belw the natinal average f 4.3 percent and the 3 percent level generally recgnized as necessary t maintain infrastructure. The margin fr New Yrk s safety net hspitals was far wrse. Hspitals with Medicaid patient lads in the highest quartile ran an average perating margin f negative 1.3 percent. Maintaining a strng safety net system is abslutely critical t preserving services, including primary care services, fr the Medicaid ppulatin. In additin t prviding critical inpatient acute and trauma services, New Yrk hspitals are the majr prvider f primary care services t the Medicaid ppulatin, particularly in New Yrk City. New Yrk s safety net institutins generally have very high Medicaid and Medicare vlume and very little cmmercial vlume. Recessin-driven reductins in Medicaid reimbursement rates, alng with flat Medicare reimbursement, have placed these institutins in increasingly precarius situatins. Indeed, 11 hspitals have clsed in New Yrk since These institutins struggle frm day-t-day t maintain basic services, and have n capacity t invest in the infrastructure necessary t implement delivery system refrm. Perhaps the mst telling case study fr the challenges facing New Yrk s health care safety net can be fund in Brklyn. A special MRT wrk grup was established t examine the challenges facing the brugh. Its specific missin was t assess the strengths and weaknesses f Brklyn hspitals and their future viability and make specific recmmendatins that will lead t a high-quality, financially secure and sustainable health system in Brklyn. After mnths f wrk which included site visits, public hearings, expert testimny and extensive plicy analysis, the wrk grup determined that Brklyn s healthcare delivery system is at the brink f dramatic change. This change will either be characterized by a recnfiguratin f services and rganizatin t imprve health and health care r by a majr disruptin in services as a result f the financial crises at three hspitals. The Brklyn wrk grup recmmended bth the develpment and implementatin f a series f tls fr change as well as a series f hspital-specific recmmendatins that if implemented culd effectively lead t a mre stable delivery system in New Yrk City s largest brugh. 31 P a g e

32 The tls fr change are prvided belw while the hspital specific recmmendatins can be fund in Appendix D. Expand the State Health Cmmissiner s Pwers ver Healthcare Facility Operatrs Appint a Brklyn Healthcare Imprvement Bard Prvide Financial Supprt fr Restructuring thrugh an Applicatin Prcess Ratinalize the Distributin f DSH/Indigent Care Pl Funds 2 1 Prvide funding fr a Multi-Stakehlder Planning Cllabrative in Brklyn Supprt Invlvement f Private Physician Practices in Integrated Health Systems Develp New Alternatives fr Capital Supprt f Primary Care Prviders. While nt all f these tls were apprved in the mst recent state budget, the Department f Health will wrk with Brklyn hspitals and ther cmmunity stakehlders t build ff the recmmendatins f the MRT wrk grup. 3 The state stands ready t wrk with willing prviders t transfrm the brughs health care delivery system t ensure that it prvides highquality care in a cst-effective manner. Brklyn is nt the nly cmmunity facing significant health care delivery prblems. New Yrk will seek t build ff the Brklyn prcess t address the needs f ther parts f the state. Sme safety net prvider funds are nw available statewide, but mre federal financial assistance will be necessary given the state s limited resurces. The bvius vehicle fr this funding is the MRT 1115 waiver. In rder t ensure that New Yrk has a cst-effective health care safety net that is prepared t survive and thrive in a pst-aca wrld, additinal investments will be necessary and New Yrk believes an 1115 waiver is the tl t make thse vital investments. Finally, a majr challenge facing safety net prviders is the grwing ppulatin f undcumented residents with significant health care needs. These individuals are nt eligible fr full Medicaid and are ften limited t emergency rm care t treat their chrnic health care needs. One MRT wrk grup, Health Disparities, recmmended that Indigent Care Pl funds be re-directed t finance a primary care benefit fr this ppulatin. The challenge assciated with the undcumented ppulatin will be a challenge even after ACA is implemented. New Yrk will lk t wrk with the federal gvernment and stakehlders t address this majr cst driver. 2 Three MRT wrk grups prvided recmmendatins regarding pssible changes t the allcatin f DSH/Indigent Care Pl funds. The Department f Health is currently lking fr CMS guidance n what ptins fr changes in the prgrams will allw the state t mre effectively prtect these vital funds which are nw at risk because f recent changes in federal law. 3 The Brklyn wrk grup did nt reprt back t the full MRT but rather t the Cmmissiner f Health, Dr. Nirav Shah. 32 P a g e

33 PAYMENT REFORM New Yrk is cmmitted t eliminating the Medicaid FFS payment system. Specifically, New Yrk wants t end the practice f paying fr vlume rather than fr value. While care management fr all is an imprtant step, it des nt guarantee true payment refrm will ccur. If the care management partners simply use FFSlike payment systems t pay prviders, the misaligned incentives assciated with the current system will remain. T permanently break ut f the current cycle, New Yrk will aggressively pursue ther payment mdels. New Yrk currently has prviders wh wrk with health plans n a sub-capitatin basis. This arrangement will be further encuraged, and the state will watch clsely as Medicare and ther payers pursue ther innvative mdels. The mst cmmnly discussed payment refrm initiative is Accuntable Care Organizatins (ACOs). New Yrk and its prvider cmmunity are very interested in this cncept. New Yrk has reviewed the ISSUE SPOTLIGHT #3 PAYMENT REFORM OPPORTUNITY: ADVANCED HEALTH HOME New Yrk is prepared t aggressively pursue innvative payment refrm mdels. Additinally, New Yrk wants t effectively crdinate its effrts with Medicare and ther large payers t ensure that prviders experience a cnsistent set f financial incentives and d nt face barriers t refrm and innvatin. In particular, New Yrk seeks t integrate the Health Hme cncept with ther payment refrm prpsals such as Accuntable Care Organizatins. T this end, New Yrk wants t wrk with the federal gvernment and the prvider cmmunity t pursue an Advanced Health Hme cncept that wuld merge the best features f the New Yrk s upcming health hme initiative with the accuntable care cncept t deliver fully crdinated health care t patients. A reginal and sustainable Advanced Health Hme wuld functin as a crdinated netwrk f prviders, share a cmmn care plan that is managed by a single case manager, and reprt results acrss diverse rganizatinal entities. Significant investment in health infrmatin technlgy (HIT) infrastructure, wrkfrce develpment and cmmn plicies and prcedures wuld allw fr the effective integratin f medical and behaviral care key t achieving savings. The Advanced Health Hme wuld als perate under a mre rbust shared savings mdel. Reimbursement fr the health hme wuld mre clsely track cmparable Medicare effrts, fr example under the Pineer Accuntable Care Organizatin (ACO) mdel. Aligning the tw prgrams wuld make it easier fr capable prviders t participate in bth initiatives. New Yrk wuld lk t start its Advanced Health Hme mdel with prvider netwrks that participate in Medicare s Pineer ACO prgram. final rules frm Medicare n this tpic and is prepared t wrk with interested prviders t pursue this refrm pprtunity. Finally, true payment refrm will nly be pssible if Medicare and Medicaid align their purchasing strategies. The MRT Payment Refrm wrk grup recmmended that the state mve frward with an innvative new partnership with the federal gvernment under which true integratin wuld be achieved fr dual eligible members. This partnership must ensure that prviders and payrs realize financial savings while at the same time patient utcmes imprve. New Yrk is cnfident that the cmbined impact f payment refrm, effective care management and a new state/federal partnership will lead t bth lwer csts and imprved utcmes. Nte: The Payment Refrm wrk grup s guiding principles are included in their final reprt, as utlined in the cmpanin dcument t this reprt. 33 P a g e

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