Value-Based Care Intelligence Digest - October 2018

Every month, Evolent Health rounds up some of the latest value-based care news from the previous month, spanning policy research, the provider community and how our partners are helping to improve the health of their communities.

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Top Trending Topics

1. The Department of Justice (DOJ) approved Cigna’s $52 billion acquisition of Express Scripts, helping to pave the path for other vertical integrations.
   1. Cigna and Express Scripts are still working on final approvals from state regulators, but they expect the deal to close by the end of the year.
   2. DOJ’s decision on Cigna / Express Scripts is positive for CVS Health and Aetna’s aspirations to become an integrated pharmacy benefits manager (PBM) and health insurer. (DOJ approved that merger, with conditions, on Oct. 10.)
   3. UnitedHealth Group is currently the largest integrated insurer and PBM, and Anthem is building its own PBM unit called IngenioRx.
2. Humana pledges $15 million to develop primary care capacity.  
   1. Humana pledged $15 million over 10 years to the new University of Houston College of Medicine to bolster the emphasis on primary and value-based care in medical education. The school’s inaugural class begins in fall 2020.
   2. In addition to population health, the school will focus on rebuilding the primary care workforce; the school wants half of its graduates to enter primary care and plans to accept nearly 400 residents by 2025.  
   3. The announcement of the pledged gift coincides with Humana’s announcement that it will open another 10 primary care clinics for Medicare Advantage members with its clinic partner, Iora Health.
3. CMS continues to tout the positive performance of Next Generation ACOs (NGACOs), which bear the greatest risk in Medicare ACO programs.
   1. CMS released a report showing that NGACOs generated $62 million in net savings for Medicare during the model’s first performance year (2016) while maintaining quality of care.
   2. Last month, CMS issued a proposed rule for the Medicare Shared Savings Program (MSSP) that would move ACOs to two-sided risk more quickly; the agency estimates 109 of the 561 ACOs participating in the MSSP will leave the program by 2028 if the proposed changes become final, underscoring the need for providers to buy, build or outsource risk-taking capabilities if the shift to value-based care is to succeed.
4. Payers and providers are collaborating to create insurance products.
   1. Minnesota-based Mayo Clinic and Medica are expanding upon their existing partnership to develop insurance products and services for consumers across the country.
   2. Nonprofit health plan UCare and integrated health system EssentiaCare are expanding their joint venture MA Plan in three western counties in Wisconsin.

Accountable Care Organizations in Action

1. A new coalition has been launched by 29 of the 51 NGACOs to advocate for ongoing policy support of the risk-bearing model. As a strong and experienced group, coalition members will continue their individual dialogues with CMS and the Innovation Center, intending to create predictability in the Next Generation program and move to a fair and transparent risk-adjustment policy. Over the long-term, the Next Gen ACO Coalition will seek to ensure the program meets the needs of a delivery system transitioning to higher levels of accountability for both financial and health outcomes. Evolent is a proud sponsor of the coalition.
2. Innovation Care Partners, a clinically integrated network and ACO, announced it received a shared savings payment as part of the MSSP. Innovation Care Partners saved Medicare over $46 million dollars and earned a shared savings payment of $19.5 million dollars for 2017. It was one of two Arizona-based MSSPs that earned revenue for 2017, and it performed in the top three of 472 MSSPs nationally for savings rates to CMS.
3. MetroHealth’s ACO, MetroHealth Care Partners, will receive nearly $5.5 million for its performance in the MSSP. Based in Northeast Ohio, MetroHealth Care Partners had the 18th-highest savings rate in the country, among the 472 participating ACOs, and the highest in the state.
4. Michigan's 19 MSSP ACOs received nearly $72 million in shared savings payments in 2017, compared with $49 million in 2016. Thirty-six percent of Michigan ACOs earned money in the program, but two lost a total of $1.8 million. Affirmant Health Partners' Federation ACO, Beaumont Health ACO and the University of Michigan's POM ACO, three of 19 MSSP ACOs operating entirely in Michigan, earned $38 million in 2017, more than half of the total for such ACOs in the state.

Value-Based Performance Studies

1. In an evaluation of the Next Generation ACO model’s first performance year (2016), CMS reported that the initial group of Next Generation ACOs generated net savings of $62 million to Medicare while maintaining care quality. The evaluation was performed by NORC at the University of Chicago. The 18 Next Generation ACOs that treated over 477,000 beneficiaries decreased Medicare spending by $18.20 per beneficiary per month in 2016, or $218.40 annually.
2. An independent study commissioned by the National Association of ACOs found that MSSP ACOs reduced federal spending by $542 million for 2013-2015 after accounting for shared savings payments earned by the ACOs. This study, the largest ever of ACO performance based on Medicare claims, contrasts CMS’s recent claims that Medicare Shared Savings Program ACOs increased Medicare spending by $344 million during the same time frame.
3. A new analysis of Medicare’s most recent bundled payment pilot, the Comprehensive Care for Joint Replacement (CJR) program, showed that bundled payments may not be as effective as hoped in reducing episode costs. Researchers found no significant difference in total episode cost of care for lower extremity joint replacements performed by CJR participants as compared to a control group during the program’s first year. However, CJR participants did have lower post-acute care cost and utilization, suggesting some positive changes in care patterns. CJR participants had a 5 percent, upside-only savings potential in the study year; however, in coming years downside risk and a higher savings potential may provide more motivation for cost reduction.

Provider spotlight

Each month, we highlight new or novel steps being taken toward value-based care and population health.

Evolent News

1. Evolent announced its acquisition of New Century Health (NCH), a technology-enabled, specialty care management company with a special focus on cancer and cardiology patients. NCH brings together clinical capabilities, pharmacy management and physician engagement to assist its customers in managing the larger and complex specialties of cancer and cardiac care. Together, the organizations will be able to offer comprehensive specialty care management services and technology across Medicare Advantage, Medicaid and commercial populations in support of both NCH and Evolent clients.

General Updates

1. A national collaborative of 17 health systems announced a two-year initiative with the goal of transforming the Medicaid program through “digital solutions and innovative care models.” David Smith, Medicaid Transformation Project executive at Avia, stated that hospital systems traditionally have come together for collaborative purchasing, accountable care ventures and to influence policy. He describes the Medicaid project as being distinct in bringing systems together “to identify unique solutions — care models and technology — to more efficiently render care to vulnerable individuals where they are.”
2. Town Hall Ventures has closed its inaugural fund at $115 million, exceeding the target size by more than 50 percent. The firm, which focuses on improving the health of underserved populations, was formed in May 2018 and began fundraising soon after. Town Hall has brought together four of the five largest nonprofit health systems and nonprofit health payers that collectively serve 23 million individuals in 42 states. It is led by Andy Slavitt, former CMS Administrator and Group Executive Vice President of Optum; Trevor Price, Founder and CEO of Oxeon Holdings; and David Whelan, Managing General Partner of predecessor firm Oxeon Ventures and former General Partner and CFO of investment firm Accretive LLC.
3. Blue Shield of California and OODA Health, a San Francisco-based technology startup, are partnering to build a new, cloud-based software platform to provide real-time claims payments to providers immediately after they deliver care to patients. Blue Shield and OODA Health plan to roll out the new technology as a pilot program with Dignity Health and Hill Physicians in Oakland. Further, Blue Shield is providing a $1.5 million equity investment to OODA Health, which recently raised $40.5 million in its Series A fundraising round.
4. Amerigroup Texas and CareMore Health, both divisions of Anthem, announced a partnership to expand care options for chronically ill Amerigroup Medicaid members who live in the Dallas-Fort Worth area. A new CareMore Health clinic has been opened in Fort Worth, which offers comprehensive medical, social and behavioral health services. Chronically ill members age 14 or older who are enrolled with Amerigroup Texas and choose CareMore as their primary care provider will receive comprehensive assessments and have access to a team of CareMore doctors, nurse practitioners, community health workers and behavioral health specialists.
5. Humana is expanding availability of its value-based care bundled payment model for Humana Medicare Advantage members undergoing total hip or knee joint replacement procedures. Through additional agreements with orthopedic specialty groups, the Total Joint Replacement Episode-Based Model will be offered in more than one-third of the country, including for the first time in Arizona, Iowa, Missouri, New York and Wisconsin.
6. AmeriHealth Caritas signed a letter of agreement with the Advancing NC Whole Health Coalition — a partnership of three high-performing North Carolina local management entities / managed care organizations — to develop integrated care solutions for North Carolina Medicaid enrollees under the state’s Medicaid Transformation plan. AmeriHealth Caritas will seek to win a contract in response to the state’s recent request for proposals for Medicaid managed care prepaid health plans. Under their agreement, the coalition will provide certain functions necessary to help AmeriHealth Caritas build and grow a successful Medicaid health plan in North Carolina.

Government, Regulatory & Industry Pulse

CMS

1. In an address to an advisory group on physician-focused payment models, HHS Secretary Alex Azar said the Center for Medicare & Medicaid Innovation would be launching "bold" new models to reform value-based models that include turning physicians and hospitals into "accountable navigators of the health system." Azar was most critical of ACOs and their ability to achieve savings, saying “the burgeoning number of accountable care organizations have not delivered significant savings when all costs and incentives are taken into account.”

Federal

1. UnitedHealthcare won a challenge of CMS’ 2014 Overpayment Rule, which they claimed caused an underpayment of Medicare Advantage insurers. Payments to Medicare Advantage insurers are based on a risk-adjustment model that considers unaudited fee-for-service Medicare costs as well as enrollees' demographic information and medical diagnoses. UnitedHealth insurers argued that the CMS violated the mandate of actuarial equivalence because it did not audit or verify the fee-for-service data, which they claimed is riddled with errors. The judge agreed with UnitedHealth, writing that "the rates at which CMS pays Medicare Advantage insurers are based on flawed data across the millions of people in traditional Medicare."
2. Seven health care industry and advocacy groups sued the Trump administration to block a rule expanding the availability of short-term health plans. The short-term plan rule, which was finalized last month and took effect Oct. 2, would allow people to buy short-term plans that last up to 364 days and let insurers renew coverage for up to 36 months. Short-term plans do not comply with Affordable Care Act consumer protection rules for the individual market, so advocates are concerned that they will “increase unfair competition [to ACA plans] from plans that aren’t subject to the same rules.”
3. A federal advisory panel offered moderate support for the launch of a new primary care model called Innovative Model for Primary Care Office Payment. The Physician-Focused Payment Model Technical Advisory Committee (PTAC) voted to propose limited testing for the model, which includes two tiers of fixed monthly payments to providers based on patients' risk level. The goal of the model was meant to provide additional financial resources, reduce the administrative burden and increase the flexibility of primary care practices to deliver additional services beyond office visits. However, PTAC members were concerned that the model would not improve safety or quality of care for patients since practices would be paid the same amount regardless of how many face-to-face visits or other services were provided.

States

1. Over 4,300 Medicaid enrollees in Arkansas will lose coverage for the rest of this year because they did not comply for three consecutive months with the state's first-in-the-nation work and reporting requirements. Those losing benefits this month were among 27,140 people aged 30-49 who were notified in May that they were required to electronically file a report demonstrating that they qualified for an exemption or spent 80 hours a month working, volunteering, going to school or receiving job training. The work and community engagement requirements will be extended in January to people between the ages of 19-29. Nearly 260,000 people are enrolled in Arkansas' Medicaid expansion program, called Arkansas Works, which has helped cut the state's uninsured rate nearly in half.

Evolent in the News

1. As rural hospitals across the country continue to shut down and health care inequalities remain present, providers are rethinking how they deliver care to patients, especially in rural areas. So, what does the future of care management look like in these locations? See what Anita Cattrell, Evolent’s Chief Innovation Officer, had to say in this Modern Healthcare article.  

Survey Says / Studies Show

1. CNBC interviewed experts in health care to obtain perspectives on why Apple and Amazon are choosing to “build” their own clinics for their employees rather than outsource clinic start-up and operations, which technology companies have historically done. The main reasons the experts cited for the decision to build were “to control health costs,” “to test new products without risking leaks,” and “money, money, money.”
2. As part of an annual forum, executives participating in the HealthCare Executive Group (HCEG) voted on and ranked the 2019 HCEG Top 10 critical challenges, issues and opportunities they expect to face in their organizations in the coming year. Data analytics, comprehensive management of consumer health and population health services were cited by leaders as the top issues.
3. According to a new Health Affairs study, premiums and outpatient prices rose as California health systems acquired physician groups. In 41 highly concentrated California counties, the percentage of hospital-employed physicians increased from roughly 25 percent in 2010 to more than 40 percent in 2016. Researchers estimated that the shift in ownership translated to a 12 percent increase in Affordable Care Act premiums, a 9 percent hike in specialist prices and 5 percent boost in primary care prices from 2013 to 2016. Nationally, the share of hospital-employed physicians increased from 30 percent to 48 percent from 2010 to 2016.

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