Medica has partnered with four accountable care organizations to offer diverse products — each targeting individuals with different health concerns — in a private health exchange in the Minneapolis region that it hopes will drive acceptance and uptake of the ACO model.

The My Plan program, which is being offered to Medica’s fully insured and self-funded employers, also includes an open network option. But Medica hopes the focus will be on the four ACOs with which it has contracted, says Simeon Schindelman, Medica’s senior vice president of commercial markets.

Medica believes that the My Plan by Medica private exchange is the most advanced of its kind, and offers each ACO the opportunity to showcase what it can offer potential members, Schindelman tells ABN. “We expect this to be a very important contributor to our success in the market,” he says. “We like the position we’re in.”

The exchange uses a defined-contribution financing model. Employers contribute a fixed amount, and the employees take that amount — plus however much they want to contribute themselves — and shop for coverage on the exchange.

Typically, employers contribute approximately 75% of the cost of full coverage, Schindelman says, leaving the worker to bear about 25% in out-of-pocket costs.

Choosing one of the four ACO-based products, however, can save about 8% of total premium costs, or approximately one-third of the typical employee’s out-of-pocket expenses, he says. That potentially means about $400 per year in savings for an employee, he says. In exchange, members shoulder a hefty copayment if they leave the ACO for care.

Medica began offering the first ACO — Fairview Health Services — in April 2012 in its exchange and since has added Ridgeview Medical Center, Park Nicollet Health Services and HealthEast Care System, all of which are signing up members for a Nov. 1 effective date. Between the four ACOs, they cover the Minneapolis metropolitan area well geographically, says Schindelman.

Medica anticipates having about 15,000 enrollees in the My Plan exchange as of January 2013. It’s not clear how many of those will choose an ACO over the open-access network, but approximately 35% of exchange members chose Fairview when it was the only ACO option available, Schindelman says.

The ACOs that work with Medica must agree to bring down costs immediately through fee reductions, to work with Medica on improving quality, and to improve the consumer experience, Schindelman says. In addition, Medica sits down with each ACO and discusses tasks like pre-certification and care coordination to determine if the ACO can or should take those on as part of the contract, he says.

Medica also partners closely with the ACOs — for example, it will coordinate moving physician and pharmacy records to a new provider for a new ACO member. In addition, Fairview has a shared call center with Medica, where members can get both insurance and medical questions answered in the same phone call.

Each ACO offers different benefits designed to lure different types of customers. For example, Ridgeview offers a free “meet and greet” for a member choosing a new primary care physician, Schindelman says, while HealthEast focuses on wellness.

The physicians in the ACOs still are paid via fee-for-service, and to get the guaranteed savings, each ACO agreed to cut all its fees by a significant percentage, Schindelman says. In exchange, the ACOs have the opportunity to share in the savings, and are at risk for any excess, he says, adding, “it’s more complex and more nuanced than just a care management fee.” Medica also helped each ACO fund care management and data functions, he says.

The ACOs “work within a similar contract, but also reflect the unique needs and values of each care system,” Schindelman says.

First ACO Sees Savings, Quality Improvements

Fairview has been working with Medica on a new care system for about four years, says Mark Hansberry, Fairview’s senior vice president of strategic and business development, and has seen significant progress on patients attributed both to Fairview and Medica. “We’ve actually held the cost curve flat or began to reduce it,” while increasing quality and patient satisfaction, he tells ABN.

As “the first ACO on the shelf” in Medica’s private exchange, Fairview worked extremely closely with Medica to design the product, Hansberry says. The joint call center stems from those meetings. In addition, the ACO places an outbound call to each new member to help that person transition into the ACO program, he says.

So far, Fairview has about 500 members from the private exchange, Hansberry says, adding, “there are no limitations of internal capabilities to continue to expand the product.”

Tom Schmitt, senior vice president of accountable care organizations, clinics and outpatient services at HealthEast, tells ABN that Medica’s model allows the ACOs to focus on what they’re best at doing. “Ours — Inspiration Health — is really about patient activation,” he says.

For example, Inspiration Health offers a free advanced wellness physical that includes time with a personal trainer and a health and wellness coach who will work with the member on nutrition, fitness, emotional health and social connectedness, Schmitt says. The ACO also offers access to a 24/7 fitness center for a nominal additional fee, he says.

Schmitt says there’s been “a fair amount of infrastructure investment” for the ACO, including a patient registry and the fitness center. HealthEast wants to sign up 2,000 members for its first year on Medica’s exchange, and “then see where it goes from there,” Schmitt says. “We’re ready for anything.”

© 2012 by Atlantic Information Services, Inc. All Rights Reserved.

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