Community Health Centers and Medicaid Delivery and Payment Reform: A Closer Look at Massachusetts and New York Geiger Gibson / RCHN Community Health Foundation Research Collaborative Sara Rosenbaum, JD Vikki Wachino, MPP Rebecca Morris Rachel Gunsalus, MPH Author Note Vikki Wachino established Viaduct Consulting in 2017. Between 2015 and 2017, Ms. Wachino headed the Center for Medicaid and CHIP Services for the Obama Administration, where, among other responsibilities, she oversaw the Massachusetts and New York DSRIP demonstrations. Acknowledgements The authors extend their deepest thanks to the state officials in both New York and Massachusetts, as well as the health center and PCA leaders in both states, who made this report possible through their time and expertise. About the Geiger Gibson / RCHN Community Health Foundation Research Collaborative The Geiger Gibson Program in Community Health Policy, established in 2003 and named after human rights and health center pioneers Drs. H. Jack Geiger and Count Gibson, is part of the Milken Institute School of Public Health at the George Washington University. It focuses on the history and contributions of health centers and the major policy issues that affect health centers, their communities, and the patients that they serve. The RCHN Community Health Foundation is a not-for-profit foundation established to support community health centers through strategic investment, outreach, education, and cutting-edge health policy research. The only foundation in the U.S. dedicated solely to community health centers, RCHN CHF builds on a long- standing commitment to providing accessible, high-quality, community-based healthcare services for underserved and medically vulnerable populations. The Foundation’s gift to the Geiger Gibson program supports health center research and scholarship. Additional information about the Research Collaborative can be found online at https://publichealth.gwu.edu/projects/geiger-gibson-program-community-health-policy or at www.rchnfoundation.org. Geiger Gibson / RCHN Community Health Foundation Research Collaborative 2 Executive Summary The relationship between Medicaid and community health centers is especially strong. Health centers care for 1 in 6 Medicaid beneficiaries nationally, and Medicaid accounts for nearly half of all health center financing. As a result, health centers in many states have been extensively involved in the effort to achieve delivery and payment reform. This analysis focuses on health center participation in delivery transformation in New York and Massachusetts as part of both states’ § 1115 Medicaid delivery transformation demonstrations known as DSRIP. It illustrates how long-standing relationships between health centers and Medicaid agencies, as well as statewide and community- level approaches to achieving deeper health system change, both shape health center involvement. served 1 in 6 Medicaid and CHIP beneficiaries that year; in Background some states this figure reached 1 in 4.3 Health centers play State Medicaid programs are engaged in wide-ranging a major role in integrated care delivery networks, and over efforts to improve health care and more effectively align 60 percent of all Medicaid-covered health center patients care with broader strategies to promote population health. are enrolled in managed care.4 Furthermore, in many The Affordable Care Act has helped spur these initiatives by communities, health centers are not only a source of significantly expanding Medicaid’s reach and by comprehensive care but also provide an entry point into encouraging delivery reform. This encouragement has nutrition, housing, educational programs, and social taken the form of expanded use of managed care, patient- services aimed at addressing the underlying social centered medical homes and health homes, and the determinants of health.5 Strengthening the ability of health introduction of accountable care organizations.1 care providers to address population health needs has emerged as a major theme for Medicaid agencies. Delivery transformation, like high-performing health systems generally, rests on a foundation of comprehensive Likewise, Medicaid is essential to health centers. In 2017, primary care.2 Because of their location, whom they serve, Medicaid insured 49 percent of all health center patients and what they do, community health centers thus assume a and accounted for 44 percent of health center operating potentially important role in Medicaid agency delivery revenue,6 a figure more than double the proportion of transformation efforts. In 2017, over 1,300 health centers health center revenue derived from federal grant funding. operating in more than 11,000 locations served more than Medicaid’s central role in insuring their patients means that 27 million children and adults. Nationally, health centers health centers have an especially great interest in delivery 1 Gifford, K. et al (2017). Medicaid Moving Ahead in Uncertain Times: Results from a 50-State Medicaid Budget Survey for State Fiscal Years 2017 and 2018. Kaiser Family Foundation. Available at https://www.kff.org/report-section/medicaid-moving-ahead-in-uncertain-times-emerging-delivery-system-and-payment-reforms/ 2 Shih, A., Davis, K., Schoenbaum, S. C., Gauthier, A., Nuzum, R., & McCarthy, D. (2008). Organizing the US Health Care Delivery System for High Performance. The Commonwealth Fund. Available at https://www.commonwealthfund.org/publications/fund-reports/2008/aug/organizing-us-health-care-delivery-system-high-performance 3 Sharac, J., Shin, P., Gunsalus, R., & Rosenbaum, S. (2018). Community health centers continued to expand patient and service capacity in 2017. Geiger Gibson/RCHN Community Health Foundation Research Collaborative, George Washington University. Policy Research Brief No. 54. Available at https://www.rchnfoundation.org/?p=7172 4 Bureau of Primary Health Care. (2018). 2017 Health Center Data: National Data. Health Resources and Services Administration. Available at https://bphc.hrsa.gov/uds/ datacenter.aspx?q=tall&year=2017&state= 5 National Association of Community Health Centers. (2012). Powering Healthier Communities: Community Health Centers Address the Social Determinants of Health. Available at http://www.nachc.org/wp-content/uploads/2016/07/SDH_Brief_2012.pdf 6 Sharac, J., Shin, P., Gunsalus, R., & Rosenbaum, S. (2018). Community Health Centers Continued to Expand Patient and Service Capacity in 2017. Geiger Gibson/RCHN Community Health Foundation Research Collaborative, George Washington University. Policy Research Brief No. 54. Available at https://www.rchnfoundation.org/?p=7172 Geiger Gibson / RCHN Community Health Foundation Research Collaborative 3 and payment reform, and across the country, health centers § 1115 authority, they are experiments, and their impact are active participants in delivery reform initiatives. This will be measured through a formal evaluation process that active engagement extends to initiatives in several states in can inform future policy. which Medicaid agencies and health centers are jointly We chose New York and Massachusetts because both have testing alternative payment approaches designed to move fully implemented the ACA insurance reforms, both are from Medicaid’s federally qualified health center (FQHC) recognized Medicaid policy leaders, and both have made encounter-based prospective payment system to payment better primary care a key DSRIP element. At the same time, structures using value-based capitation and global payment the two states are quite distinct in how their Medicaid approaches.7 programs are financed and in their approach to Medicaid Given the importance of the Medicaid - health center policy-making. Additionally, both have different histories relationship, the Geiger Gibson/RCHN Community Health where health center collaboration is concerned. For these Foundation Research Collaborative undertook a study reasons, we concluded that a focus on these two states whose purpose was to more deeply explore this relationship would offer an important policy learning opportunity. in a delivery and payment reform context. Because delivery We conducted our study over the spring and summer of reform strategies vary significantly and are complex, we 2018. Our approach combined detailed inspection of focused on two states – Massachusetts and New York – relevant documents with focused interviews with key state both of which are engaged in comprehensive delivery officials leading delivery reform efforts, and in-person, round system and payment reform efforts and as such, participate -table discussions with health centers in both states, which in Delivery System Reform Incentive Payment (DSRIP) were organized by the Community Health Care Association program demonstrations under § 1115 of the Social Security of New York State (CHCANYS) and the Massachusetts Act. DSRIP enables states to introduce new care models League of Community Health Centers (Mass League). (such as Massachusetts’ move to greater use of accountable care organizations, a core element of its comprehensive Delivery System Reform in effort). DSRIP also supports state efforts to test new payment structures tied to performance and value and to Massachusetts and New York make investments in delivery transformation. Examples of New York and Massachusetts share similar DSRIP goals: to the types of investments made possible through DSRIP are increase provider collaboration and integration in order to new delivery sites, development of team-based care, reduce health care system “silos”; to increase the use of addition of key personnel, investments aimed at integrating value-based payment strategies that incentivize quality; to physical and behavioral health care, broadening the use of strengthen primary care; and to improve access to telehealth care and consultation, expanded use of health behavioral health and social services. In implementing their information technology, and developing provider networks strategies, both states have sought to promote the concept that have the capacity to bridge clinical and social services.8 of shared savings, using methods similar to those that In 2017, ten states maintained active DSRIP Medicare is deploying. Importantly, both states have sought demonstrations.9 Because DSRIP models operate under to have more direct involvement in matters of health care 7 Rosenbaum, S., Shin, P., & Sharac, J. (2016). Community Health Centers and the Evolution of Medicaid Payment Reform. The Commonwealth Fund. Available at https:// www.commonwealthfund.org/blog/2016/community-health-centers-and-evolution-medicaid-payment-reform 8 Center for Health Care Strategies. (2016). Delivery System Reform Incentive Payment (DSRIP): State Program Tracking. Available at http://www.chcs.org/media/DSRIP-State- Program-Tracking-120516-FINAL.pdf; National Academy for State Health Policy. (2018). Exploration of the Evolving Federal and State Promise of Delivery System Reform Incentive Payment (DSRIP) and Similar Program. Available at https://www.macpac.gov/wp-content/uploads/2018/03/Exploration-of-the-Evolving-Promise-of-DSRIP-and-Similar- Programs.pdf 9 National Academy for State Health Policy. (2018). Exploration of the Evolving Federal and State Promise of Delivery System Reform Incentive Payment (DSRIP) and Similar Pro- gram. Available at https://www.macpac.gov/wp-content/uploads/2018/03/Exploration-of-the-Evolving-Promise-of-DSRIP-and-Similar-Programs.pdf Geiger Gibson / RCHN Community Health Foundation Research Collaborative 4 organization and delivery rather than relying solely on high- New York DSRIP level contracts with managed care organizations with broad With a monthly Medicaid and CHIP enrollment of 6.5 million discretion over network, performance, and payment matters. in 2018, New York faces a massive challenge in its effort to Both the New York and Massachusetts DSRIP transform care.10 Developed following an extensive demonstrations are the result of lengthy and complex stakeholder involvement process using Medicaid Redesign negotiations with CMS, and both approved demonstrations Teams to discuss and develop delivery system reform are subject to detailed federal conditions regarding the priorities, DSRIP in New York was rooted in a determination activities to be undertaken, as well as the delivery, payment, by the state and key stakeholders that prioritizing and performance matters to be tested. In other words, both population health was central both to managing costs and state DSRIPs are carefully designed federal demonstrations. to improving the performance of the state’s health care 10 Kaiser Family Foundation. (2019). Total Monthly Medicaid and CHIP Enrollment. Available at https://www.kff.org/health-reform/state-indicator/total-monthly-medicaid-and- chip-enrollment/ • • • • • • * See more at https://www.medicaid.gov/medicaid/section-1115-demo/downloads/evaluation-reports/1115-ib12-508-dsrip-attribution.pdf Geiger Gibson / RCHN Community Health Foundation Research Collaborative 5 system. DSRIP reflects the state’s effort to meet this complex local community health center-led PPS, Refuah Community challenge, through two specific goals: (1) a 25 percent Health Collaborative, serves primarily members of the reduction in avoidable hospitalizations; and (2) by 2020, Orthodox Jewish community, and reaches over 45,000 move to value-based payments for between 80 percent and patients in Rockland and Orange Counties. It competed 90 percent of all provider payments. These specific goals, successfully in the state’s PPS leadership application and the broader population health objectives underlying process, and the state considers Refuah to be a leader in them, led to the development of large provider networks delivery and payment reform.13 New York also has one that provide integrated care and manage financing and independent physician association (IPA)-led PPS. quality improvement. Although the PPS governance models are intended to serve To achieve these results, New York has used DSRIP to help as local care collaboratives that engage multiple system stimulate the development of integrated provider networks stakeholders, hospitals are generally key actors, reflecting entailing formal, broadly-structured collaborations among their historic and central role in New York’s Medicaid providers in their service areas. These local networks – program, and their growing emphasis on providing more twenty-five in all as of summer 2018 — are termed integrated care. This emphasis on hospital-led PPS is Performing Provider Systems (PPS). These systems consist illustrated by the state’s attribution system, which uses a of regional networks of hospitals, primary care and other complex provider utilization algorithm that considers both outpatient providers, clinics, behavioral health providers, primary care and specialty care and seeks to align patients and community and social service organizations that meet with the providers they visit most often. This means that, for specific requirements. PPS systems work alongside, but are attribution purposes, use of specialty care, such as organizationally separate from, the state’s managed care behavioral health, could outweigh where patients receive system; the efforts of managed care organizations (MCOs) primary care. New York historically also has relied on local and PPS’ alike are guided by a value-based payment public hospital financing to meet its state Medicaid roadmap that is updated regularly.11 The twenty-five PPS spending obligations, using federal intergovernmental integration models cover nearly the entire state, with some transfer (IGT) authority. Thus, hospitals are critical not only overlap. Under DSRIP they are expected to implement to delivery reform but to DSRIP financing. quality improvement projects, earning DSRIP financing that All health centers in the state are part of at least one PPS, in turn enables them to make performance-based payments while many are members of more than one. In most cases, to providers.12 health centers serve on PPS governing boards. According to Most of the twenty-five PPS systems are hospital-led. One of CHCANYS, one-third of the state’s health centers have the hospital-led systems is the only hospital-linked health achieved what the association terms meaningful center in the state – Lutheran/Sunset Park, now known as involvement in designing at least one PPS payment NYU Langone Brooklyn. Another is Adirondack Health structure used to reward network providers for meeting Institute (AHI), an established health care collaborative performance goals, while nearly one-quarter have achieved whose governing members include Hudson Headwaters meaningful involvement with the networks in which they Health Network, a health center network. In addition, one participate.14 New York State Department of Health. (2017). A Path toward Value Based Payment: Annual Update, New York State Roadmap for Medicaid Payment Reform. Available at 11 https://www.health.ny.gov/health_care/medicaid/redesign/dsrip/vbp_library/docs/2017-11_final_vbp_roadmap.pdf 12 PPS member hospitals must demonstrate high Medicaid involvement. They must have at least 35 percent of outpatient volume and at least 30 percent of inpatient volume as Medicaid, uninsured and dual eligibles, or serve at least 30 percent of all Medicaid, uninsured, and duals in the PPS service area. Nonhospital based providers must have a total volume with at least 35 percent as Medicaid, uninsured, and duals. Non-qualifying organizations for participation in a PPS are also eligible subject to state and CMS approval if DSRIP payments to these organizations are less than 5 percent of the total project valuation. 13 Refuah Health Center. Available at http://refuahhealthcenter.com/ 14 Interview with CHCANYS and New York health centers, June 26, 2018 Geiger Gibson / RCHN Community Health Foundation Research Collaborative 6 Massachusetts DSRIP Like New York, Massachusetts has used § 1115 to achieve Implementation of the Massachusetts DSRIP model began broader changes in health care organization, delivery, and in 2017, two years after New York launched its payment. As part of this effort, the state has promoted the demonstration. As a result, Massachusetts is at an earlier growth of Accountable Care Organizations (ACOs), which, stage; indeed, New York’s approach informed the like the New York model, are charged with collaborating development of the Massachusetts demonstration. with the state to drive delivery and payment reform within an overall budgeting context. • • • • • ’ ’ • • ’ • * for the DSRIP component of Massachusetts’ broader delivery transformation effort Geiger Gibson / RCHN Community Health Foundation Research Collaborative 7 A smaller state, Massachusetts enrolled approximately 1.8 Health Centers’ Roles in New York million Medicaid beneficiaries as of November 2018.15 As in New York, some Massachusetts hospitals have historically and Massachusetts DSRIP played a role in Medicaid financing through use of IGTs. Development and Implementation However, in developing its DSRIP model, Massachusetts In both New York and Massachusetts, community health decided to move forward without hospital financing of the centers represent a significant part of the state’s primary reform plan, thereby creating a different set of operational health care system for low-income and medically and political relationships between the state Medicaid underserved communities and populations. But the history agency and local health care delivery systems. IGTs thus of health centers as a policy and political presence within play a diminished role in Massachusetts’ overall delivery each state is quite distinct. These distinctions came through transformation effort. The Massachusetts model also bases in our discussions with the states, the state associations its patient attribution on primary care utilization patterns. and health centers themselves, as we sought to understand Massachusetts is testing three distinct ACO models, each of each state’s delivery system transformation effort. which is accountable for quality and cost but varies in its approach to risk and payment. Health centers participate in New York all 3 models, and in the case of two models – MCO In 2017, 65 health centers, operating in more than 681 sites, partnerships and primary care-led systems – health centers served over 2.1 million state residents in New York State16 – play leadership roles. In the case of the health center/MCO/ one in nine residents17 and 22 percent of Medicaid/CHIP hospital-led model, classical vertical integration principles beneficiaries in the state.18 New York’s health centers carry apply within a risk-bearing system. By contrast, within the out their work in a state characterized by size, diversity, state’s primary care model is a health center-led ACO, regional variation, and a long tradition of local control on known as Community Care Cooperative (C3). This model, many social matters, including health care. New York chose which also includes two other non-health center-led a delivery reform structure that would reflect these basic participants, tracks Medicaid’s long-standing primary care social, political and economic contours. Furthermore, the case management (PCCM) principles while also introducing state’s emphasis on driving system change through local efficiency innovations. With 17 health centers, C3 accounts collaboratives inevitably shapes health centers’ thinking for between 115,000 and 120,000 members and uses its about how best to address many issues, including delivery state investment to test the use of vertical integration system transformation. management techniques within a more open network environment. At the same time, C3 is able to limit These themes carried through in our discussions with health downstream risk to individual health centers by means of a center leaders and CHCANYS staff. In New York, the state stress test that assesses member capabilities to manage association tends to play a coordinating and technical financial risk. support role. Although the organization engages in considerable state-level advocacy, its members historically have placed less emphasis on this particular aspect of CHCANYS’ work. 15 Kaiser Family Foundation. (2019). Total Monthly Medicaid and CHIP Enrollment. Available at https://www.kff.org/health-reform/state-indicator/total-monthly-medicaid-and- chip-enrollment/. Interviewees reported that the number, updated since the Kaiser report, stands at 1.8 million. 16 Bureau of Primary Health Care. (2018). 2017 Health Center Data: New York Data. Health Resources and Services Administration. Available at https://bphc.hrsa.gov/uds/ datacenter.aspx?q=tall&year=2017&state=NY 17 US Census Bureau. (2018). Current Population Survey, Annual Social and Economic Supplement. Available at https://www.census.gov/cps/data/cpstablecreator.html GW analysis of 2017 UDS data (numerator) and CMS Medicaid/CHIP enrollment numbers for December 2017 (denominator); Kaiser Family Foundation. (2019). Total Monthly 18 Medicaid and CHIP Enrollment. Available at https://www.kff.org/health-reform/state-indicator/total-monthly-medicaid-and-chip-enrollment/ Geiger Gibson / RCHN Community Health Foundation Research Collaborative 8 Health center participation in DSRIP is consistent with the eager to advance local transformation efforts in order to state’s approach to reform. To be sure, New York’s improve care, better manage care shortages, improve development process was global and statewide, with heavy provider relationships, and test new value-based payment local consultation in developing the overall state approach models. Prior to DSRIP, health centers had participated in toward system transformation. State officials described a local or regional efforts to strengthen primary care and process that attempted to meld statewide priorities and coordination. Still, health centers viewed health care in New policies in a manner driven by improved collaboration and York as locally focused. As the state developed DSRIP, performance at the local level, particularly with respect to health centers described tracking the effort closely and elevating the role of primary health care in order to reduce ultimately engaging the state, but at a later stage of the potentially preventable hospital admissions. Officials also process. They ramped up their advocacy substantially after noted the important role played by health centers in the DSRIP was approved and as state officials were making achieving the state’s goal of integrating physical and key decisions about PPS composition. behavioral health care. The second was the need to accommodate to political However, while New York officials recognized the realities. Health centers understood that in the New York importance of health centers, they did not appear to identify DSRIP model, control would focus on local hospitals and them as a distinct, statewide asset to be deployed in hospital systems, as reducing Medicaid hospital spending achieving statewide goals. Instead, they were viewed as an would fund the state share of transformation. Thus, while important local care resource. Indeed, state officials viewed health centers had a longstanding relationship with the local PPS arrangements as the entities in charge of value- state over issues involving Medicaid’s FQHC payment based payment decisions. Consistent with that objective, methodology, they viewed DSRIP as (and the state designed PPS leadership requirements include the ability to manage DSRIP to be) a more localized undertaking. Within this local money across the entire delivery system, distribute DSRIP focus, however, a key theme for health centers remains funding in alignment with performance goals, pay retaining the types of protections inherent in the health participating providers, and manage a network. State center payment methodology, which by its very encounter- officials indicated that although the PPS application process based structure, offers protection, in their view, against high was an open one and not limited to hospitals, the basic patient volume unaccompanied by sufficient global requirements for PPS sponsorship tended to favor entities financing. that could run large performance networks, were vetted Consistent with New York State political realities, health fiduciaries, and could attract a sufficient number and range centers assumed a “die has been cast” position, seeing the of community service providers to create a comprehensive core DSRIP model as hospital-based and immutable. They network. saw little likelihood of alternative models such as the health Not surprisingly, the state’s approach has, in turn, led health center-led models that have emerged in Massachusetts (an centers to focus predominantly on achieving leadership important exception is the health center-led PPS, Refuah). roles in local transformation efforts. Although CHCANYS has Although the association proposed a health center-led maintained active involvement in statewide implementation, statewide model, they also found that the very basic it did not play a major role in the earlier state/CMS provisions of PPS as envisioned by the state did not easily negotiation process that set the terms for the lend the model to health center control. Health centers did demonstration. not view themselves as possessing the capabilities that the state established for PPS leaders. In their view, the model Several themes emerged from our discussions. The first was favored larger lead entities. Additionally, the structure of the importance placed by health centers on local patient attribution and payments favored the creation of inclusiveness and leadership. New York health centers are large PPS entities. Geiger Gibson / RCHN Community Health Foundation Research Collaborative 9 Reflecting on DSRIP implementation thus far, state officials Massachusetts credited health centers with being strong performers on In 2017, 39 health centers operated in 279 sites throughout both primary care and behavioral health, meeting or Massachusetts and served 773,139 patients,21 representing 1 exceeding their initial expectations. Health centers are “the in 9 state residents22 and 18 percent of Medicaid/CHIP model for behavioral health integration,” one official told us. beneficiaries.23 The state has a fabled history with health Though not necessarily reflective of health center centers, having served as home to the nation’s first experience but relevant to primary care access, state community health center. Massachusetts’ health centers not officials also noted that DSRIP implementation has only provide care to a significant portion of the state’s increased attention to meeting the needs of small primary population but also have a long history of leadership in care practices, particularly in rural areas, to help advance state health policy transformation, one that has focused on integration, coordinated care, and value-based payment. both expanding coverage and improving care.24 As in New Both the health centers and the state described significant York, Massachusetts health centers have been active in progress in care integration since the establishment of the managed care formation and their respective state’s DSRIP. “We keep hearing, ‘We worked in the same medical homes initiative. The Massachusetts League of community, but we had never talked before,’” one New York Community Health Centers (Mass League) was extensively official told us. involved in shaping the state’s large-scale shift to Medicaid Health centers have experienced local implementation managed care in the mid-1990s and played a major role in challenges. Some have raised issues with the flow of funds the enactment of the landmark Massachusetts health through PPS entities to providers and the limited access to reform law that in turn served as the prototype for the investment funds. According to state officials, hospitals Affordable Care Act. have received 29 percent of all DSRIP funds, while 16 Consistent with their long history of state-level advocacy on percent of funds have flowed to clinical providers, which coverage and delivery reform, and distinct from the include health centers.19 The remaining funds have been experience of New York’s health centers, Massachusetts distributed to other activities.20 In addition, state officials health centers played a significant, direct role in helping the noted that the terms of the § 1115 demonstration require 95 state shape DSRIP, from the time of its early proposal, and percent of funding to flow to safety net providers; however, throughout its implementation. In this respect, it is this state the provider participation standards established under the -level involvement from the earliest point of development § 1115 waiver have foreclosed involvement by a number of that most clearly sets Massachusetts apart from New York. community-based social service organizations, a problem that had not been resolved by the time of our interview, What also became clear was that rather than seeing health although state officials noted that this result was centers solely as important local assets, state officials came inadvertent and occurred because these organizations did to view the Mass League as an important source of not fit within the definition of safety net providers used to statewide policy development and as affirmatively allocate financing. important, from a state policymaking perspective, to its 19 New York State Department of Health. (2018). DSRIP Updates. Available at https://www.health.ny.gov/health_care/medicaid/redesign/dsrip/paop/meetings/2018/docs/2018- 11-29_updates.pdf 20 New York State Department of Health. (2018). Midpoint Assessment Action Plan Final Summary. Available at https://www.health.ny.gov/health_care/medicaid/redesign/dsrip/ mid-pt_assessment/2018-03_mid-pt_action_final.htm 21 Bureau of Primary Health Care. (2018). 2017 Health Center Data: Massachusetts Data. Health Resources and Services Administration. Available at https://bphc.hrsa.gov/uds/ datacenter.aspx?q=tall&year=2017&state=MA 22 US Census Bureau. (2018). Current Population Survey, Annual Social and Economic Supplement. Available at https://www.census.gov/cps/data/cpstablecreator.html GW analysis of 2017 UDS data (numerator) and CMS Medicaid/CHIP enrollment numbers for December 2017 (denominator); Kaiser Family Foundation. (2019). Total Monthly 23 Medicaid and CHIP Enrollment. Available at https://www.kff.org/health-reform/state-indicator/total-monthly-medicaid-and-chip-enrollment/ 24 Mass League. (2018). Massachusetts Community Health Centers — Get the Facts. Available at http://www.massleague.org/About/FactsIssuesBrief.pdf Geiger Gibson / RCHN Community Health Foundation Research Collaborative 10 overall success in transforming primary care. While state health centers could be involved formally from the point of officials varied in the level of support they had for options conceptualization and informally with state leaders as CMS put forth by the associations, in their view health centers negotiations progressed. For their part, Mass League staff, were “well-positioned to be the focal point of care,” in the along with health center leaders, viewed state officials as words of one — part of the cost and quality solution to fundamentally supportive of and committed to health primary care. centers’ ability to weather large-scale transformation without sacrificing their fundamental stability as primary Although the Massachusetts DSRIP demonstration is in an health care anchors in their communities. Although state early stage and has not yet yielded significant impact officials initially raised questions in the early stages of information, both the state and health centers viewed the DSRIP development about the best role and structure of ACO rollout favorably. “We are much better positioned to do health centers in the ACO model, the state and health what we want to do with ACOs because we have such a centers worked through these concerns collaboratively. strong relationship with health centers,” the Massachusetts official observed. Having made primary care a focus of the This mutual respect and understanding about the need for ACO model, the state effectuated this vision designing an engagement meant that although state officials expressed ACO attribution system that turns on primary care, with the initial concerns about the viability and stability of a health patient’s primary care provider as the focal point. center-led ACO, they also agreed to certain modifications of the model, especially the level of risk that ACOs otherwise In keeping with their history of statewide health policy are expected to carry. These adaptations include a modified involvement, Massachusetts health centers began their approach to risk sharing, a greater level of flexibility in how DSRIP engagement with state officials when the initiative referral systems work in practice (with more leeway to was in its formative stages in order to ensure that under a preserve local variation in provider referral arrangements), DSRIP award, creation of a health center-led ACO would and adjustments in performance time frames. In addition, remain a policy implementation pathway choice. The state’s within the DSRIP transformation funding, specific funding aim was to test multiple models rather than a single delivery mechanisms support full participation of primary care mechanism, and the state remained free to adjust specific providers, including workforce development and behavioral elements of transformation design (such as the phase-in of health provider recruitment. risk sharing or modification of payment rules) in order to be able to test transformation in multiple structural contexts. This assurance of flexibility as a feature of the state’s DSRIP What Are the Lessons for Health award meant that health centers could, as implementation Centers and Medicaid from the proceeded, start down distinctly different pathways: as Massachusetts and New York Health active participants in local ACO models; or as the creators of health center-led models, whether as primary care-led ACOs DSRIP Experiences? or through partnerships with MCOs and hospitals. What lessons can be drawn for community health centers While Massachusetts health centers, like those in New York, and for state Medicaid programs from the implementation have had continuous dialogue with Medicaid on a variety of experiences of health centers under two states’ ambitious payment issues, it is also the case that Massachusetts DSRIP models? health centers have a long history of close collaboration A shared mission and a mutual dependence. The first point, with the Commonwealth. This longstanding, robust working one seen in each state’s DSRIP’s design and the desire on relationship on matters of both delivery and payment, the part of health centers to be part of DSRIP coupled with health centers’ commanding position as implementation, is how much each depends on the other primary care providers, paved the way to DSRIP where payment and delivery reform are concerned. This is collaboration. The long working relationship also meant that not surprising. Medicaid and health centers share a mission Geiger Gibson / RCHN Community Health Foundation Research Collaborative 11 and focus; Medicaid, the vastly larger of the two, focuses on payment reform experiments underway or under discussion coverage while the job of health centers is complementary – in twelve states and a willingness on health centers’ part to to create a pathway to health care itself for vulnerable test global and bundled payment models, models tied to populations. Health centers’ existence depends on annualized patient costs over an enrollment period Medicaid’s fortunes. Grant funding is essential for uninsured (capitation), and models that trade volume for greater populations and services, but Medicaid represents one out efficiencies.27 of every four dollars used to operate a health center today.25 Health centers in both states have assumed leadership This figure is even higher in expansion states such as New roles, although in distinctly different ways that reflect York and Massachusetts, where Medicaid covers virtually all tradition and each state’s own customs and priorities. In low-income patients. New York, health centers as leaders have tended to focus on Likewise, Medicaid agencies depend on health centers as their own localities, through participation in local models the single most important source of primary health care. specific to health centers’ individual service areas. One One in every six Medicaid beneficiaries is a health center health center leads a PPS, having competed successfully for patient, a figure even more pronounced in New York and inclusion. Massachusetts, where health center penetration is By contrast, in Massachusetts, health center engagement as exceptionally high, and where health center patients a matter of statewide policy is an embedded feature of that account for approximately one in four Medicaid state’s DSRIP design. The historically strong relationship beneficiaries, respectively.26 To succeed, delivery and between Massachusetts Medicaid and the state’s health payment reform depends on more than reducing waste; centers – shaped by the public’s dependence on the health their success is tied to agencies’ ability to better connect center model and the features of the model itself – in turn beneficiaries with high-value primary care more strongly led to a delivery reform experiment that literally has placed integrated with social services. From its origins as a Great some of the state’s health centers at the payment reform Society experiment, the health center model was designed helm; others remain just active participants in payment to be exactly this type of bridge. Achieving high reform. The state’s interest here is not altruistic; instead, it performance among health centers thus becomes a major reflects the state’s desire to strengthen the health center element of transformation success. primary care model, as well as to put health centers in a Health centers want to be leaders in delivery and payment position from which they lead the effort to move from reform; local conditions and circumstances will largely volume to value. shape their pathway. In both New York and Massachusetts, Where payment reform is concerned, there is much to gain health centers are eager to think differently and innovatively from a strong working partnership between Medicaid and about payment models as an extension of health care community health centers. Along with rural health clinics, quality and efficiency. Health centers in a number of states community health centers represent the only remaining are engaged in developing alternative payment models, health care providers that enjoy certain protections against which can be negotiated under federal Medicaid law Medicaid’s traditionally discounted payment arrangements. without the need for special waivers. This interest has led to Congress established the FQHC payment system, as it is 25 Sharac, J., Shin, P., Gunsalus, R., & Rosenbaum, S. (2018). Community Health Centers Continued to Expand Patient and Service Capacity in 2017. Geiger Gibson/RCHN Commu- nity Health Foundation Research Collaborative, George Washington University. Policy Research Brief No. 54. Available at https://www.rchnfoundation.org/?p=7172 26 Sharac, J., Shin, P., Gunsalus, R., & Rosenbaum, S. (2018). Community Health Centers Continued to Expand Patient and Service Capacity in 2017. Geiger Gibson/RCHN Commu- nity Health Foundation Research Collaborative, George Washington University. Policy Research Brief No. 54. Available at https://www.rchnfoundation.org/?p=7172; GW analysis of 2017 UDS data (numerator) and CMS Medicaid/CHIP enrollment numbers for December 2017 (denominator); Kaiser Family Foundation. (2019). Total Monthly Medicaid and CHIP Enrollment. Available at https://www.kff.org/health-reform/state-indicator/total-monthly-medicaid-and-chip-enrollment 27 National Academy for State Health Policy. (2018). Exploration of the Evolving Federal and State Promise of Delivery System Reform Incentive Payment (DSRIP) and Similar Pro- gram. Available at https://www.macpac.gov/wp-content/uploads/2018/03/Exploration-of-the-Evolving-Promise-of-DSRIP-and-Similar-Programs.pdf Geiger Gibson / RCHN Community Health Foundation Research Collaborative 12 known, in order to ensure that federal grant funding – the Can health centers develop improved relationships with only other major source of federal funding – would not be specialty and institutional providers, and what mechanisms used to offset any losses associated with Medicaid among them foster collaboration and break down silos? payments. What challenges do health centers face in adapting to a higher financial risk climate? How does financial risk shape The essence of that model is avoiding financial stress in a the decisions health centers make about populations provider system that lacks basic cost-shifting capability served, services offered, patient management strategies, because of the poverty of its patients and the high number prioritization of practice improvements, and resource and of uninsured patients served. The larger question raised by quality measurement? What is the effect, if any, on health the application of delivery system reforms to health centers centers’ capacity to serve uninsured patients, to offer is whether avoiding unmanageable financial exposure services that insurance does not cover, and to offer related requires a volume-driven, fee-for-service payment approach. health and social support services? Finally, how can the Or is it instead possible to develop a financial mechanism payment and practice transformation experience of New that can set efficiency and quality targets, and support York and Massachusetts health centers inform efforts in transformation by helping health centers adapt their other states, particularly as health centers and states pursue practices to be able to achieve those targets, while alternative payment models? simultaneously ensuring the necessary guardrails (such as stop-loss and risk corridors) against inappropriate financial These questions, and others, will help shape not only the risk, given health centers’ importance to both Medicaid and future of health centers in a transforming health system but uninsured patients? Such an approach might test bundled also the feasibility of system transformation itself, given payments and global budgeting, thereby letting health their central role in health care delivery, not only for centers move away from volume and toward a care delivery Medicaid patients, but for their communities as a whole. model that produces high-quality results while avoiding the kind of unmanageable encounter frequency that can cause high clinical staff turnover and challenge recruitment. It is too early to assess how either state’s model will affect health centers specifically or the broader, underlying currents of health care for low-income and vulnerable populations. In both models, health centers are playing an essential role, however. In New York, their influence can be seen in local delivery systems and their leadership in integrating behavioral health and primary care. In Massachusetts, this local impact is joined by health centers’ leadership at the state level, offering a model of broader delivery reform in which primary care drives the allocation of resources and the evolving relationships among community providers. As the New York and Massachusetts models continue to evolve, evaluating payment and delivery reform in the context of health centers emerges as an important issue. How do health centers perform as ACO participants and how does their performance compare to that of other providers? Geiger Gibson / RCHN Community Health Foundation Research Collaborative 13