shows a red cross with the word Medicaid printed on it, in front of a pile of dollar bills. For Medicaid transformation

And those changes are not just driven by lawmakers in Raleigh.

By Rose Hoban

After a three-year debate over the future shape of Medicaid in North Carolina, lawmakers in the General Assembly passed HB 372, a reform plan to remake the combined state and federal program covering poor and low-income beneficiaries.

Medicaid-LogoWhile some have argued the Medicaid reform plan was a strictly political move, Tara Larson, who worked in leadership positions at North Carolina Medicaid for decades under Democratic administrations, argued last week the changes are simply in line with what’s been happening nationally with the program.

“Eighty percent of the national Medicaid population is in some sort of managed care for some level of their Medicaid benefit,” Larson said during a presentation at the annual conference of the North Carolina Council of Community Programs, held in Pinehurst. That’s up from 58 percent of the total national Medicaid population in 2010.

Larson argued that some of the changes baked into this fall’s Medicaid reform bill were simply reflections of national trends, many of which were driven by passage of the federal Affordable Care Act in 2010.

The federal bill, she said, was a reflection of what was happening already in health care, with payers demanding more accountability, the rise of data analytics driving health care decision-making and a move away from paying for care on a fee-for-service basis towards paying for improved patient outcomes.

Now federal regulators are working on new rules to make oversight and reporting stricter for Medicaid managed care companies. Those rules are expected to be completed by next summer.

“It’s here; get over it,” Larson said.

She said people should take a similar attitude towards the North Carolina law.

“[HB] 372 was passed. Will it get changed? Will it get tweaked? Maybe, maybe not,” said Larson, who now works as a consultant. “But the reality is, it is a law and we have to move forward with implementation.”

‘Population health’

In the past, medical decisions were driven almost solely by what was happening between individual doctors and their patients inside the exam room. Medicaid worked the same way.

Tara Larson. Photo courtesy Cansler Collaborative Resources
Tara Larson. Photo courtesy Cansler Collaborative Resources

But Larson said one the biggest changes in health care is the increasing emphasis placed on looking at health care outcomes for large groups of people, so-called “population health,” more than just what’s happening with a given patient.

“Population health allows you, through analytics, to direct your resources,” Larson said. She said the point of population health was to use data and place a heavy priority on preventive care.

She acknowledged the role Community Care of North Carolina has played in creating both the mindset and the tools to make this shift.

CCNC is credited with creating the patient-centered medical home model, in which patients are matched up with a clinic that helps to address all of their needs and improve their health. CCNC also was an early innovator in using data to look at overall trends in patient results and push doctors into making clinical decisions that were informed by aggregated evidence rather than “how we’ve always done it.”

Larson pushed back against the idea that this would make health care less “individualized.” Instead, she argued, focusing on population health allows for better comprehensive care for the individual.

“It starts to look at every possible agency, every natural support, and starts to put together the person and system as a whole,” she said. The idea is to create plans of care for patients that go beyond just the clinic office, encompassing how the person is plugged into their church, family, community, and use those resources to improve health.

“The national your trend has been to move forward with this,” she said. “We are behind in this state.”

She also said that taking this managed care approach has been the way that many states have expanded Medicaid – to have care management, whether it be through state-funded, publicly run managed care or by hiring private, for-profit managed care organizations to run the program.

North Carolina’s plan has proposed a combination of the private MCOs and locally created “provider-lead entities.”

As if to punctuate the point, as Larson was giving her presentation a consortium of North Carolina hospitals issued a press release announcing the formation of a plan to create a PLE that includes a dozen of the state’s largest hospital systems, including Mission Health, Carolinas HealthCare System, Duke University Hospital and Cape Fear Valley Health System.

Big data

Then, to an audience comprised largely of people representing mental health providers, she asked how many were using data to drive decision-making.

Only a few raised their hands.

”If you do not have a robust analytics system, or be able to access it in real time, you are going to have problems in the new environment. It’s got to be real time, not six months later,” Larson said. “Because that’s where you start [being] able to use your analytics to direct your resources, to direct who needs to be served when and how.”

Larson gave an example from her own care, telling how last year she logged into her electronic medical record and learned that she was obese.

“Part of the question was whether I was going to take personal responsibility, because this population health management was a way of doing that,” she said. “So, you know, I did go get my FitBit, I did work on it … and I talked to my doctor when I went back for my physical this year, and she was freaking out that the web portal actually made a difference in my health care.”

“That’s population health management,” she said.

Larson said the national trend is to use the data to identify high-risk patients, systemic problems and failures in a physician practice.

“It’s something we have to be working on.”

She added that NCTracks, the management information system rolled out by the state Department of Health and Human Services in mid-2013, is not ready to help drive this kind of decision-making among Medicaid providers.

Paying for quality

The other big change coming to Medicaid will parallel the other big movement in health care: paying for quality of care and better patient outcomes instead of for the task performed.

It’s a trend that’s insurers and government programs such as Medicare, the federal program that pays for seniors and people with disabilities, have been exploring and phasing in for about a decade.

States’ Medicaid programs and anyone providing care in the Medicaid system will soon be required to have quality-improvement strategies that are listed online and searchable by the public, Larson said. They’ll also have to make performance measurements available and offer transparent methods of comparing what’s happening in other programs.

One new initiative that’s coming is a star rating system of all Medicaid managed care plans, similar to the systems for nursing homes and child-care agencies.

“This is going to be huge,” said Larson’s co-worker Melanie Bush, who spent years in health care policy in the legislature’s Fiscal Research Division and at DHHS.

“It’s another way of creating transparency in the private company,” Larson added.

And the changes are not just in Medicaid. Actually, Medicare is ahead of Medicaid, she said.

Larson said federal Medicare regulators have signaled to hospitals that by the end of the decade more than half of Medicare payments will not be on a fee-for-service basis. Instead, payment will be made based on measures of how well a patient remains or becomes.

“There are experiments, pilots, statewide implementations in most states going on today in some form or fashion,” Larson said.

“We are not doing that here in North Carolina,” she said. “We need to get moving.”

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