A state pilot program aimed at improving accountability and coordination of healthcare provided to Medicaid recipients has attracted eight applicants from across the state – a sign of the potential that healthcare providers see for the program.
The Medicaid Accountable Care Organization demonstration project will provide incentives for organizations that reduce costs while still improving their patients’ health.
By realigning incentives, the project aims to attain those healthcare goals while also reducing the frequency of costly visits to hospitals and doctors’ offices.
The New Jersey project is unique compared to other ACO programs around the country because it includes all Medicaid patients within a geographic area, rather than just those whose healthcare is managed by certain insurers.
In addition, the ACOs in New Jersey must include all of the hospitals that serve people who live with the ACO’s ZIP codes, as well as 75 percent of the primary-care providers and at least four mental-health providers.
While established regional coalitions of healthcare providers – the Camden Coalition of Healthcare Providers, the Trenton Health Team and potentially the Greater Newark Healthcare Coalition – were expected to apply for the three-year project, five other groups joined them.
“Last year it was looking like two, maybe three, so to have eight applicants is a big win for New Jersey and a big win for better care in Medicaid,” said Jeff Brown, executive director of the Affiliated Accountable Care Organizations, a project of the nonprofit New Jersey Health Care Quality Institute that aims to serve as a trade group for the ACOs.
In addition to the Camden, Trenton and Newark coalitions, the applicants include Coastal Healthcare Coalition Inc., including Atlantic City and Ventnor; the Health Cumberland Initiative Inc., including Bridgeton, Millville, Vineland and rural areas in Cumberland County; the Healthy Gloucester Initiative Inc., including Paulsboro, Woodbury and Woodbury Heights; New Brunswick Health Partners, including New Brunswick and sections of Franklin Township; and Passaic County Comprehensive Accountable Care Organization Inc., including sections of Paterson.
Coastal Healthcare Coalition’s Vincent Papaccio said the coalition chose to focus on Atlantic City and Ventnor because the narrowly defined geographic area would allow its partners to better target their resources and measure their success. Papaccio is senior vice president and chief operating officer of Reliance Medical Group, a private medical practice and coalition partner.
While the Coastal Healthcare Coalition partners are already doing chronic disease management and coordinating patient care, joining the Medicaid ACO will allow them to share data and prevent patients with chronic health problems from slipping through the cracks by shifting from one provider to another, Papaccio said.
“With shared information, we’re hoping that there’s shared effort,” said Papaccio, adding that if the coalition can identify and help patients who use healthcare services the most to manage their conditions, it will significantly reduce costs and improve patient health.
First Meeting in August
The coalition will have its first board meeting in August and plans to form its community advisory group this fall, noting that behavioral health, pain management and community groups must participate for the ACO to be successful.
“The (healthcare) system still seems to be high-cost and still broken,” Papaccio said, but he added that is hopeful that, by collaborating, the ACO partners won’t repeat past mistakes and learn from one another.
Brown said his organization has been working with the eight ACOs to complete their applications, adding that the strength of the applications was a testament to the work done by the groups, as well as to the support of the Nicholson Foundation, which has provided funding to the Affiliated Accountable Care Organizations.
Brown added that while all of the ACOs will feature collaborations among providers, each organization reflects the unique features of its community.
“New Jersey was a good opportunity for testing the success of these collaborations” because of the range of participants, Brown said. He said he was pleased that the organizations seeking to participate run the gamut from dense urban areas to sprawling rural sections of the state.
Rutgers Center for State Health Policy Director Joel Cantor noted that several of the ACO applicants cover geographic areas similar to those studied in a paper he co-wrote last year. That study found that there was wide variation in how residents in different areas use hospitals, and that significant savings could be realized if areas with more intense hospital use changed their usage patterns to match the areas with less intense use.
The range of applicants encouraged Cantor, who is an NJ Spotlight columnist.
“There’s tremendous diversity among the applicants,” including geography, socioeconomic characteristics and density, Cantor noted. “The possibility of learning from the demonstration is that much greater.”
The Rutgers center has been hired as part of the project to help measure whether savings occur, as well as to provide some measurements of the quality of care, although the ACOs themselves are primarily responsible for tracking healthcare quality.
The center also will assist the state in assessing “gain sharing” plans – how the ACO organizations will divide payments they will receive if they save money while meeting the healthcare quality goals. In addition, the center will help the state write annual reports evaluating the three-year project.
Outreach Deemed Essential
One element that several of the new applicants must work on is engaging with community mental or behavioral health and social-service providers, which will be essential to providing the coordinated care that many Medicaid recipients need. Brown said these organizations can learn from the Camden, Trenton and Newark groups, which have already actively engaged with local organizations.
Another major project for all of the applicants will be to sign contracts with the five Medicaid managed care organizations, the insurers who manage care for Medicaid recipients.
“The governor has trumpeted the potential to improve care and save money” through the project, Brown noted.
Brown suggested that insurers have a stake in the anticipated cost savings.
“I’m confident that the managed care companies are going to engage with ACOs in the near future and work with them collaboratively,” he said.
State Department of Human Services spokeswoman Nicole Brossoie said in an email that the state expects to certify applicants in the late fall and that the demonstration project will start later in the year.
AACO representatives are recommending that the project start on January 1, 2015, which would coincide with the start of many managed care organization contracts.
New Brunswick Health Partners Executive Director Dr. Alfred F. Tallia said the organization sees significant opportunities to improve healthcare quality and contain costs through the ACO, which includes longtime rivals Robert Wood Johnson University Hospital and Saint Peter’s University Hospital, as well as Rutgers University’s Robert Wood Johnson Medical School.
“We’re pretty lucky that we have university resources,” which will support behavioral health in the ACO, said Tallia, who also leads Robert Wood Johnson Partners, which includes providers in a partnership between RWJUH and Rutgers.
Negotiations with insurers will occur once the state has certified New Brunswick Health Partners’ participation in the project, Tallia said.
“We’re anticipating that we’ll be able to have a good outcome in terms of those negotiations,” Tallia added, noting that Horizon NJ Health has signaled interest in participating in the ACO. Tallia also credited the AACO with making his organization’s application possible.
The Cumberland and Gloucester organizations are both partnerships between Inspira Health Network, which operates the hospitals in the areas covered by the organizations, and CompleteCare Health Network, which operates the federally qualified health centers in the area.
“We applied because we believe that the current system needs to have some strong revisions in terms of encouraging cooperation among the many people who provide care and engage patients in an a higher degree of responsibility in their own well-being,” said A. James Boote, Inspira vice president of ambulatory services and the executive director of the Cumberland and Gloucester groups.
Boote emphasized that most of the factors that affect patients’ health aren’t under the direct control of healthcare providers, so the ACOs must engage in a wide range of partnerships. He cited as an example a patient with a respiratory condition that is worsened by hot summer weather and seasonal allergies, who may benefit from having a window-unit air conditioner installed in a bedroom.
He noted that Cumberland has a large number of agricultural workers who haven’t lived in the area long enough to develop a relationship with a doctor, which presents a challenge to providers in that area.
St. Joseph’s Healthcare System in Paterson is the key partner in the Passaic County Comprehensive Accountable Care Organization Inc. Organization President Howard Tepper also serves as St. Joseph’s vice president for physician practices and ambulatory services.
Tepper said in an emailed response to questions that St. Joseph’s believes in the ACO concept and is eager to increase care coordination for the Medicaid population. He described his organization as being in its early stages.