Featured Health Business Daily Story, Oct. 18, 2013

Highmark Builds ‘ACO Without Walls’ Based on PCMH Tenets

Reprinted from THE AIS REPORT ON BLUE CROSS AND BLUE SHIELD PLANS, a hard-hitting independent monthly newsletter on new products, market share, strategies, conversions, financing, profitability and strategic alliances of BC/BS plans. (Not affiliated with the Blue Cross and Blue Shield Association or its member companies.)

October 2013Volume 12Issue 10

In a bid to improve care and make it more affordable to individuals and employer groups in western Pennsylvania, Highmark Health Services recently added six Allegheny Health Network (AHN) hospitals and affiliated physicians to its Accountable Care Alliance (ACA).

The Blues insurer, which describes the alliance as being “like an ACO without walls,” launched the model in October 2012 with independent physician groups. It is part of Highmark’s effort to accelerate the shift from volume-based, fee-for-service (FFS) payment to a system that pays for value.

Highmark describes the alliance as a way to foster more integrated care, moving beyond primary care physicians (PCPs) in its Patient-Centered Medical Home (PCMH) program to add specialists and hospitals to the mix. But in its effort to create greater teamwork among community PCPs, specialists, hospitals and health systems, Highmark acknowledges a glitch: The alliance is a tough sell to small community hospitals in outlying areas that worry the model will drive patients to Pittsburgh despite the insurer insisting that the aim is to keep care local.

Currently, Highmark has 62 contracted entities and 609 PCPs in the ACA model, covering just shy of 226,000 members, says Deborah Donovan, director of provider strategy and innovation for Highmark Health Services. Highmark’s PCMH program has 75 entities and 1,600-plus PCPs, covering about 329,000 attributed members, she adds. (Members must have at least two visits to PCPs in the PCMH program to be attributed to them.)

The broad goal? By 2016, Highmark wants 75% of its membership to receive care and services from providers contracted in the ACA or PCMH pay-for-value programs, Donovan tells The AIS Report.

The bottom line for Highmark is trying to find ways to integrate hospitals, health plans and physicians, and to “get your whole delivery system to start thinking in accountable ways,” says Mark Piasio, M.D., medical director of provider strategy for Highmark Health Services. “Hospitals, PCPs and specialists didn’t talk to each other. Now they are….We’re trying to get everybody on the same page so that the patient experience is better and we can move into better payment methodologies, paying for care more globally,” he says.

Piasio describes PCMH and ACA as “the glide path to build systems we don’t have today.”

PCMH Is Foundation for ACOs

John Nimsky, vice president for the provider innovations practice at Gorman Health Group LLC, says he is not directly familiar with Highmark’s programs. But he says that, based on general information, “it makes a lot of sense” since PCMHs are “a key [ACO] building block.”

“At the end of the day, my view is that the structure isn’t as important as the process that underpins the structure,” Nimsky tells The AIS Report. “You need to do a better job” of coordinating care, measuring health outcomes and tying outcomes to reimbursement, he says. “As long as that’s accomplished, the structure is secondary.”

According to Highmark, the alliance’s overall aim is to align incentives for delivering the best care in the most appropriate setting by building on tenets of the PCMH program. The difference is that, in certain markets where Highmark has a larger footprint, the Blues insurer can use the ACA model for a broader medical home that includes specialists and facilities along with PCPs.

Similar to PCMH’s large number of covered lives, Piasio tells The AIS Report that Highmark needs a large cohort of patients, as well as aligned incentives among groups, for the alliance. “Our approach, since we have such a big footprint, is to pick partners to work on quality and cost of care.” He says that under the non-exclusionary alliance, “any business model can participate and any member can participate,” with providers being held accountable for various measures.

Both Piasio and Donovan describe primary care as Highmark’s “backbone” for its pay-for-value programs. Piasio explains that the alliance is building a primary-care foundation with PCPs, and then expects to bring in cardiology as its first specialty — followed by orthopedics.

Highmark said in August that the alliance had added six AHN hospitals — Allegheny General Hospital, Allegheny Valley Hospital, Canonsburg Hospital, Forbes Hospital, Jefferson Hospital and West Penn Hospital — and affiliated physicians. But Piasio stresses that the alliance isn’t the same as the AHN. “The ACA is open to any hospital,” he says.

He concedes that the “ACA model now is only with AHN facilities, but other community hospitals are being courted. We’re trying to explain it drives care back to them…but hospitals must understand we’re trying to keep costs down.” He says Highmark is looking for ways to keep small community hospitals’ boards independent, and to set up local hospitals as “mini-hubs” for shared information technology. Small, outlying facilities must remain viable to provide access to obstetrical and other services for Highmark members, he notes.

Nevertheless, Piasio says, small facilities in outlying areas of western Pennsylvania continue to worry that Highmark is trying to move its members to Pittsburgh with the alliance. But he asserts that the opposite is true: The Blues insurer is trying to create a system of “mini-ACO pockets working together, keeping as much care in the communities as possible…and letting us help.”

Donovan says Highmark is “in discussions across all of our markets with our provider community at large” about joining the alliance. “It doesn’t require ownership. It doesn’t require consolidation,” she says. She also notes that the alliance has limits: “It’s not our goal to create a mega-ACA across every area. The ACA would be launched in markets where it makes sense.”

Evolving Payment Models

Donovan explains that all providers in the alliance are measured on total cost per member per month, and their performance assessment has goals they’re driving toward. “We want to maintain and increase quality of care, but also bend the trend and drive costs down.”

“We’re also looking to evolve these reimbursement models to gain-share on to risk arrangements, down the road to more global capitation models,” Donovan says. But “you can’t just upend the infrastructure.” Historically, Highmark has supported its providers’ technological needs, she says, and the insurer is launching a hospital and its associated physicians, along with an independent physician group, on its information exchange.

Physicians “must meet the threshold for bonus payments,” Piasio says, “and then it is ‘gated’ after that. The higher you perform, the more you earn.”

Under the alliance’s payment model, Highmark sets targets that are not necessarily a percentage of savings, he says. “We built the program so rewards go to get our health care inflation cost trends consistent with the economy,” he says, thus creating a sustainable rate for health care inflation that isn’t double or triple other sectors. He says the ACA’s payment model remains FFS, but physicians are paid additional amounts for the evaluation and management codes they bill the insurer. He notes that Highmark’s operational and claims systems aren’t ready yet for global payments, but the insurer is trying gradually to prepare for that — starting with the alliance.

Piasio says the ACA initiative is about more than payment changes. The goal is to get participants to “think in a more coordinated fashion,” and “work... as a group, which will allow us to move into better models of care by letting us share data and goals.” “You need facilities, specialists and PCPs all engaged with the same incentives,” he says, “and the ACA [will] let communities really manage care and not just office visits.”

For more timely news and business strategies on accountable care organizations, check out the monthly newsletter ACO Business News at the AIS Marketplace.

© 2013 by Atlantic Information Services, Inc. All Rights Reserved.

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