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CMS Grants $1.8B to MA Value-Based ACO Implementation Program

Massachusetts will receive $1.8 billion over the next five years to boost statewide ACO implementation by incorporating more value-based reimbursement in the models.

By Jacqueline LaPointe

- The MassHealth program in Massachusetts will received about $1.8 billion over the next five years to implement value-based reimbursement structures in the statewide accountable care organization (ACO) component of the program, announced CMS.

CMS extended the MassHealth program and approved a value-based ACO implementation program

CMS granted a five-year extension of the MassHealth program, which was scheduled to end on June 30, 2017. As part of the extension, the state intends to boost statewide ACO implementation in the program by implementing value-based payments through the Delivery System Reform Incentive Payment (DSRIP) program.

“This approval incorporates a Delivery System Reform Incentive Payment (DSRIP) program that supports the development of ACOs throughout the state,” wrote CMS Acting Administrator Andy Slavitt. “DSRIP funds will help providers transition towards new care delivery models, improve beneficiary care and experience, and strengthen provider capacity.”

CMS added that the state must use the program funds to implement three types of healthcare reform initiatives that support value-based care delivery, including enhanced care coordination, inclusion of behavioral health and long-term services and supports in delivery, and ACO development.

Under the care coordination funding stream, CMS intends to help ACOs transition to improved care delivery models and build the infrastructure for healthcare reform, while the comprehensive care funding stream will allow providers to partner with the necessary community providers that care for social needs.

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The three ACOs will be financially accountable for healthcare costs associated with physical and behavioral health as well as pharmacy services, CMS stated. Massachusetts will also introduce financial accountability for covered long-term services and supports (LTSS) by the third year of the demonstration.

To help the statewide ACOs achieve financial accountability for the comprehensive range of services, the demonstration requires the organizations to form partnerships with state-certified community providers that address health-related social needs that may not be covered by the state Medicaid benefit. Developing working relationships with community providers is required for additional infrastructure funding.

“These community partners will be empowered to support ACOs with care coordination and management for members with complex behavioral health and LTSS needs,” Slavitt wrote. “Community partners will serve as resources not just to MassHealth ACOs but also to MassHealth MCOs, and will be integral parts of a more integrated, member-centered Massachusetts delivery system.”

The ACO development funding component, on the other hand, aims to better “support primary care provides employed at community health centers, support to providers for participation in alternative payment methodologies, investments to reduce the boarding of members with Substance Use Disorder (SUD) or mental illness in emergency departments, and to support provider investments in improved accessibility to medical care for people with disabilities.”

CMS pointed out that the DSRIP program funding is partially at risk depending on the state’s performance on cost, quality of care, and ACO implementation measures.

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Value-based reimbursement under the DSRIP program will be distributed to three types of ACOs in Massachusetts. The MassHealth ACO program includes the following three different ACO models to improve provider variation in the Massachusetts care delivery system:

• Accountable Care Partnership Plans with managed care organizations (MCOs) that each exclusively partner with an ACO with which the MCO provides vertically integrated care coordination under a global payment

• Primary Care ACOs that are provider-led and contract directly with the state Medicaid agency as Primary Care Case Management entities to take financial accountability for a specific population through retrospective shared savings and risk

• MCO-administered ACOs that are provider-led and contract directly with the state Medicaid MCO contractors to take financial accountability for beneficiaries through a retrospective shared savings and risk arrangement

Through the DSRIP program, Massachusetts will be able to contract with ACOs through these three models and reimburse the organizations using upside and downside risk arrangements, CMS stated.

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“Under the extension beginning July 1, 2017, Massachusetts will move forward with the implementation of a statewide ACO program, centered around three ACO models in which Massachusetts providers can choose to participate,” Slavitt wrote. “Massachusetts’ ACO models aim to improve integration of care, coordination among providers and the member experience of care, while reducing the rate of growth in the cost of care and in avoidable utilization, and while maintaining clinical quality and access.”

MassHealth beneficiaries who are currently mandated to enroll in either the MassHealth Primary Care Clinicians plan or a MCO are eligible to participate in the new ACO options, reported HHS. Approximately 1.3 million beneficiaries out of the total 1.9 million members will be eligible.

CMS also plans to authorize MassHealth to offer lower-cost sharing options consistent with Medicaid rules to beneficiaries as an incentive for members to join an ACO or MCO.

Additionally, Massachusetts will also redesign its safety net care pool (SNCP) funding under the HHS-approved program extension. The funding will be subject to an aggregate cap of $4.489 billion in addition to a provider cap for Disproportionate Share Hospital-like pool.

The SNCUP funding must be distributed to uncompensated care payments, time-limited incentive based pool payments, and Health Connector subsidies. The expenditures will also be connected to the state’s federal Disproportionate Share Hospital allotment.

CMS expects uncompensated care payment spending to phase down by July 2018 based on updated CMS-measured level of uncompensated care for low-income uninsured individual. The uncompensated care pool will start at a transitional level of $313 million and the pool will be $100 million each year beginning in July 2018.

Dig Deeper:

Understanding the Value-Based Reimbursement Model Landscape

What Are the Benefits of Accountable Care Organizations?


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