A Primer on Using Medicaid For People Experiencing Chronic Homelessness and Tenants in Permanent Supportive Housing. 7.3. Payment Reform: Emerging Structures for Improving Health Outcomes and Reducing Costs

Publication Year: 2014
Patient Need Addressed: Behavioral health, Care Coordination/Management, Homelessness/housing, Substance Use
Population Focus: Medicaid beneficiaries
Demographic Group: Adult
Intervention Type: Service redesign, Staff design and care management
Type of Literature: Grey


Insights Results

Overview of article/programs

  • This article examines several approaches that state Medicaid officials could consider as ways to meet the needs of people who are experiencing chronic homelessness or living in permanent supportive housing (PSH). There are opportunities to incorporate services delivered in or linked to PSH as a component of emerging payment and delivery system reforms in some states
  • Overarching goals for the proposed strategies are: 1) Integrating care across physical health, mental health, and substance use treatment or at least across mental health and substance use; 2) Identifying and targeting the people who have the highest levels of avoidable costly care; 3) Paying attention to social determinants of health and developing working relationships with community agencies that can help alleviate them; 4) Making maximum use of available data, improving data adequacy, developing shared data systems, using targeting, monitoring and evaluation; 5) Using payment mechanisms that cover the costs of care integration and coordination such as team meetings and face to face care management; 6) Using payment mechanisms that facilitate flexibility in care delivery, moving toward capitation, payment per episode-of-care, or payment for a defined bundle of services; 7) Developing effective ways to adjust payments on the basis of patient risk/complexity/level of care needed, both across patients and within patients over time as level of functioning changes; and 8) Developing appropriate incentives like pay for performance, opportunities to reinvest a share of savings
  • A super utilizer program targets Medicaid beneficiaries for whom healthcare costs are extraordinarily high and impactable. Super utilizer program information includes:
  • Program components: Often include case managers or outreach workers in primary care settings, where they work closely with medical providers to assure appropriate care. Alternatively, they may be housed in community organizations that work with high-utilizers who receive care from multiple primary care providers. Some programs create interdisciplinary care teams that have a geographic focus, accepting referrals from and working with primary care providers in the region. These teams may be based in Community Health Centers, home health agencies, or other community-based organizations
  • State-level payment mechanisms: 1) A fixed per-member per-month primary care case management or other care coordination fee to fund care managers; 2) Multi-payer case management payments involving Medicaid, Medicare, and commercial insurers for privately insured individuals; 3) A single per-episode-of-care payment that covers all costs associated with a particular episode of care; 4) A risk-based per-member per-month capitation payment to a managed care health plan; and 5) shared savings arrangements with care teams if program clients incur lower-than-expected costs for total care over a fixed time period. These payment mechanisms may be tiered or adjusted based on the complexity of an individual’s medical, psychosocial, and behavioral health conditions
  • Financing for super-utilizer programs often incorporate benefits covered under Medicaid state plans, including Medicaid optional benefits such as health homes or TCM, and Federally Qualified Health Center (FQHC) payment mechanisms. States may also use payment mechanisms included in Medicaid 1115 waivers or federally-funded demonstration programs such as the Multi-Payer Advanced Primary Care Practice Demonstration and FQHC Advanced Primary Care Practice Demonstration. States may also want to consider the 90% match rate from Medicaid funding for activities related to data system design, development and implementation costs
  • Accountable Care Organizations (ACOs) and Integrated Care Models information includes:
  • Background: Both models emphasize person-centered, continuous and comprehensive care for a defined patient population. ACOs for Medicaid beneficiaries are still works in progress and will be so for years to come, in part because there is no specific current statutory authority for ACOs within the Medicaid program. ACOs or similar integrated care models for Medicaid beneficiaries are being implemented by states using a mix of financing mechanisms that include fee-for-service, managed care, and primary care case management. Increasingly states are working to implement ACOs or similar models within a managed care environment, working to define and align responsibilities and financing incentives between managed care health plans and ACOs
  • 3 ACO model types: 1) Provider-driven model in which providers establish integrated delivery systems or collaborative networks that assume some level of financial risk and responsibility for coordinating care and achieving client outcomes; 2) Managed care health plan-driven model where health plans assume a greater role in supporting data systems and building provider capacity for care management; and 3) Regional or community partnership models in which community organizations join together to develop care teams that manage the care a client receives and work to improve health outcomes while avoiding unnecessary care. Notably, hybrid models between provider and managed care driven models are possible and build on the strengths of health plans and providers strengths of implementing targeted care management and linkages to community partners