As providers push for MassHealth ACOs, UMass Memorial CEO calls for more focused approach

Courtesy of UMass Memorial Health Care

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By Emily Micucci

Two weeks ago, Steward Health Care, the state’s second-largest health care system, made headlines when Chief Strategy Officer David Morales called for a new approach to managing the state’s Medicaid patients under the state insurance provider MassHealth.

Morales, according to State House News Service, said the use of accountable care organizations by MassHealth could save the agency $200 million to $400 million annually while reducing fraud.

In an interview with Central Mass Health Care last week, Morales explained that while Steward and other health care systems that serve large numbers of low-income patients, known as “disproportionate share” providers, do well in managing the health care of patients covered by risk-based contracts with commercial insurers and the federal Medicare program for seniors, MassHealth has yet to embrace that model.

That means there’s considerable waste within the system, which operates on a fee-for-service basis and therefore doesn’t encourage population health management the way an accountable care organization system does, according to Morales.

Accountable care organizations assume risk for a certain patient population, and their payment is determined in part by the quality of care received. Under the traditional fee-for-service system, which still dominates the U.S. health care system even as public and private payers are inking more risk-based contracts, providers are paid by the service, regardless of the outcome for the patient.

Health care providers across the state like Steward and other groups, such as unions representing health care workers, have been working to change that over the last two years. They seem to be gaining traction, with Gov. Charlie Baker favorable to the idea, according to Morales.

Spilka declines comment on ACO plans

Meanwhile, the House budget plan for fiscal year 2016 included a provision that would require Medicaid, through MassHealth, to contract with a provider organization for a "prospective, global payment pilot program," State House News Service reported. A similar provision was rejected by the Senate, and the matter will be dealt with by a conference committee this month. Sen. Karen Spilka, an Ashland Democrat, is a member of the conference committee, though she declined comment on the matter.

“If it’s worked in commercial, if it’s worked in Medicare, it must work for Medicaid,” said Morales, who estimated that 15 to 20 percent of Steward patients receive coverage through MassHealth.

Dickson: Focus on top health care users

The UMass Memorial Health Care system, Central Massachusetts’ largest and, like Steward, a “disproportionate share” provider, favors the ACO model for MassHealth, according to CEO Eric Dickson. But he said a more targeted approach is needed.

Dickson said health care systems should focus on the patients that require the most health care; about 5 percent of the population generates 50 percent of the health care services rendered, Dickson said. It’s that population that UMass Memorial has asked Baker and state lawmakers —“anyone who will listen,” according to Dickson — to zero in on as they draft health care policy.

“We think that it really has to be about taking risk and managing risk for that five percent of the population,” said Dickson, who said that evidence shows that risk-based contracts for the young, healthy population don’t seem to generate significant savings.

An emergency room physician, Dickson said he’s seen patients who have visited the ER as many as 200 times a year. Those patients are getting lost in a fee-for-service system that does not consider the big picture when addressing their health care needs, according to Dickson. Often, these patients are low income and have behavioral health and substance abuse problems that need to be addressed, he said.

“What can you offer somebody on their 175th ER visit?” Dickson said.