Steward Health Care urges alternate payment model
One of the state's largest health care providers hopes the state budget that's being assembled might spur the state's most expensive program to embrace an alternative payment model.
Accountable care organizations (ACOs) have been touted as an alternative to the traditional fee-for-service and a way to trim health care costs while also improving health outcomes.
David Morales, chief strategist at Steward Health Care, estimates the use of accountable care organizations by MassHealth, the state's Medicaid program, could save the agency $200 million to $400 million annually and would reduce fraud.
The House, Senate and Gov. Charlie Baker all put the bottom line for MassHealth at about $14.7 billion in their roughly $38.1 billion fiscal 2016 budgets, according to the Senate Committee on Ways and Means.
Rather than paying doctors per procedure, an accountable care organization takes on the health needs of a population, with payment contingent on the provision of quality care.
The House budget included an amendment sponsored by Rep. Nick Collins (D-South Boston) requiring Medicaid to contract with a provider organization for a "prospective, global payment pilot program."
The Senate rejected a similar amendment offered by Sen. Bruce Tarr (R-Gloucester), meaning the issue will be decided by the conference committee that will try in June to reach agreement on a compromise House-Senate budget. Reps. Brian Dempsey of Haverhill, Stephen Kulik of Worthington and Todd Smola of Warren will represent the House on the conference committee, with Sens. Karen Spilka of Ashland, Sal DiDomenico of Everett and Vinny deMacedo of Plymouth representing the Senate.
The Office of Health and Human Services (HHS) declined to comment on the amendment. HHS officials said the health administration is conducting "stakeholder meetings" and it is "committed" to implementing "value-based payment models" including ACOs.
The administration is also in discussions with the federal Centers for Medicare and Medicaid Services to check whether it has the necessary federal approvals for alternative payment models, according to an official.
The administration would not require legislation to implement ACOs, according to Morales, who praised the leadership of MassHealth and HHS and said they are "really, really understanding about the need to move toward alternative payments like ACOs."
In April, Baker administration MassHealth officials announced that new payment models, including accountable care organizations, will be launched from the program by Ipek Demirsoy, who moves to the agency from the Health Policy Commission.
Medicare, which covers people with disabilities and those over the age of 65, offers ACO plans, as do private insurers and Medicaid programs in other states, including Vermont, according to a Steward official. MassHealth, which covers health costs for lower-income people, is "virtually all fee for service," said Morales, a former top member of Gov. Deval Patrick's administration.
Steward bills itself as an accountable care organization with 3,000 physicians and 10 hospitals.
Morales said that at ACOs the quality of care is ensured and people on Medicaid currently use emergency rooms for a relatively large amount of medical treatment that could be covered elsewhere. "You want to avoid that," he said. "There's ways to avoid that."
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