DSS picks medical home pay plan many advocates oppose

The state Department of Social Services is preparing to roll out its final plan to encourage the use of a form of primary care known as a medical home in Medicaid, with a four-part method for making extra payments to health care providers who taken on additional responsibilities for keeping their patients healthy.

The plan has drawn skepticism from patient advocates, who want the department to instead pay providers a monthly fee for each Medicaid patient in their practice, which advocates say will make the providers more likely to participate and improve patient care.

The system DSS described in a draft document this week does not use that method, but Mark Schaefer, the department’s director of medical care administration, said that in the future, Medicaid could move toward the approach the advocates favor. He said he, too, prefers the monthly payment approach, but did not believe it would be possible to implement by Jan. 1, when the medical home program is set to begin.

At issue in the dispute is the design of a program aimed at getting primary care providers in Medicaid to embrace a popular but sparsely used concept, one that requires additional time and infrastructure but, supporters say, could significantly improve patient care and reduce costs.

In a practice that serves as a medical home, doctors and other health care providers play a more active role in monitoring patients’ health, often using electronic medical records to keep track of which patients need help managing their conditions and offering extended hours so patients can get care when they need it. Practices that serve as medical homes also typically allow patients to communicate by phone or email, educate patients about managing their conditions and keep track of care patients get from other providers.

Multiple groups offer standards for medical homes. DSS is expected to require practices to meet the requirements of the National Committee for Quality Assurance, the most commonly cited accrediting organization. Practices would also have to meet additional requirements set by DSS, including meeting all federal requirements for child screening and treatment, participating in the state’s Medicaid smoking cessation initiative, and committing to decrease racial and ethnic health disparities.

Although the medical home concept has gained popularity in recent years and is being embraced by public and private insurers, few medical practices in the state meet the requirements. To encourage practices to become medical homes, and to support the added costs of serving as one, DSS plans to give medical home providers increased payments.

The method for doing so has been a matter of dispute.

The model DSS described in its draft document, and during a meeting Wednesday, uses a hybrid approach, with four ways providers can get paid. Providers serving as medical homes would get an increase in the fees they usually get for patient care. They would also be eligible for two types of performance-based payments, paid annually and based on practices’ ability to coordinate care, meet quality targets and improve their performance from year to year.

Practices that don’t yet meet the medical home standards could also qualify for increased fees if they have a plan to become medical homes, and independent practices with five or fewer primary care practitioners could receive lump-sum start-up payments while they move toward meeting the medical home standards. Those that don’t meet the standards in 24 months would have to repay the money.

Patient advocates have criticized the department’s approach, particularly the plan to increase the fees providers already receive. Because providers are currently paid when patients come in for visits or procedures, but not when they’re healthy, tying additional money to the existing system would reinforce incentives for providers to see patients in their offices and wouldn’t encourage the use of alternative approaches, like using email or phone to reach patients, advocates say.

They say that paying a monthly fee for each patient–on top of the usual patient care fees–would give providers a reliable source of income that they could use to hire care coordinators or make other investments to improve patient care.

On Wednesday, Schaefer said he also liked the monthly payment system.

“I’ve had a preference for a while for a monthly per member, per month approach,” he said.

But Schaefer added that he didn’t think the department would be able to set up a program with monthly fees by January, when the medical home program is to begin. He noted that the department has also been working to restructure the entire Medicaid program, which has more than 550,000 clients, moving the HUSKY program for low-income children and their parents out of managed care while moving it and the state’s other Medicaid programs into a new administrative system that is to start Jan. 1.

Schaefer said a monthly payment system would add layers of complexity that he did not think the department’s medical care administration team could adequately manage. That system would also require the department to get federal approval through a state plan amendment, Schaefer said, which would have been difficult within the resources the department had.

Schaefer said increasing the usual fees paid to providers was a good place to start, and that the program could evolve once it starts. He noted that the department intends to introduce monthly fees for complex care next year, and would also examine it for routine care.

But Sheldon Toubman, an attorney with the New Haven Legal Assistance Association who favors the monthly fee model, questioned the feasibility of starting with one model, then moving to another. Providers in Medicaid are already paid low rates, he said, and if the state begins raising their fees, it will be hard to remove it later on. And he disagreed that the timing made it impossible to develop a monthly payment system.

“We’ve gone through so many changes in HUSKY, why would we do all the work to set up this cockamamie system only to change it a year later?” he said.

Toubman noted that most other states that use medical homes in Medicaid use monthly payments, as will a recently announced federal program. When Toubman asked during a recent conference call why the federal program uses monthly fees rather than adding on to existing fees, Dr. Richard Baron, director of the seamless care models group at the Center for Medicare & Medicaid Services’ Innovation Center, said that most core functions of primary care are not delivered during office visits.

“So we didn’t want to develop a system that pushed people further in the direction of visit-based care and expect them to rely on visits as the way that they generated revenue for their practices,” Baron said.

“I am just hopeful that other policymakers will be willing to get involved and say this is not the way to go, this doesn’t make sense,” Toubman said Wednesday.

The department is expected to release the finalized details of the design in a policy transmittal next week.