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Medicaid's early payment reform efforts appear "very promising"
Many of the payment reform approaches outlined by the Center for Medicare and Medicaid Innovation (CMMI) established by The Centers for Medicare & Medicaid Services are initiatives that states have pursued for some time, such as medical homes, says Neva Kaye, managing director for health system performance at the Washington, DC-based National Academy for State Health Policy (NASHP).
With CMMI, not only can Medicaid programs get support for implementing payment innovations, but they can also join with multipayer efforts including Medicare, notes Anne Gauthier, a senior fellow at NASHP.
"That is huge, not only for serving duals but also joining with the private sector," says Ms. Gauthier. "There are states that are poised to take advantage of this. It will have the effect of propelling payment reform."
While payment reform will probably not solve budget problems immediately, Ms. Kaye says, the results of some early state efforts are "really very promising."
"It's not often a short-term solution," says Ms. Kaye. "But states and other payers are going to have to change how they pay for things, to sustain what they are doing over the long haul."
However, Ms. Gauthier notes that there are some significant savings that Medicaid programs can realize by not paying for ineffective care or "never events."
Reducing avoidable hospitalizations, says Ms. Gauthier, not only has "great promise for saving a fair amount of money, but also greatly improving the patient experience."
The Affordable Care Act includes most of the promising approaches, says Ms. Kaye, such as medical homes, improving care of dual eligibles, smoothing the transition in and out of hospitals, bundling payments, and non-payment for health care-acquired infections.
"None of these approaches are untested. All have been tried somewhere, at least on a small scale, in at least one state," says Ms. Kaye. "Already, they are starting to show some returns."
Evidence is building
There is "very clear evidence" that payment reform policies work, and have the intended effect, says Ms. Gauthier. When there is no reimbursement for "never events," she says, the occurrence of these events decreases.
There is also strong evidence that medical homes save costs at the state level, says Ms. Kaye, pointing to Oklahoma's program, which is now showing improved Healthcare Effectiveness Data and Information Set measures.
"The program is showing savings and the improvements are real," says Ms. Kaye. "Oklahoma is seeing the results they were hoping for. You see some of that in other states as well."
Ms. Gauthier says that the private sector is adding to the body of evidence that payment reforms work.
She gives the example of ProvenCare, a program implemented by Danville, PA-based Geisinger Health System.
"They guarantee, for a price, that if there are complications then the payer doesn't have to pay more," says Ms. Gauthier. "They are finding that the quality is going up and the costs are going down."
The CMMI is well aware of the payment reform models that have been shown to reduce costs, according to Ms. Gauthier. "I think they will be fairly generous in awarding states the opportunities for states to take on these models," she says. "I also think they will be very much geared toward anything that has a multipayer aspect to it."
Leaders and pioneers
States that pair with the private sector to put reforms in place are likely to be encouraged by CMMI, says Ms. Gauthier, along with Medicaid programs that work with the state employee purchasing program to do so.
The Medicaid expansion, says Ms. Gauthier, means that the need to reform payment is greater than ever. "As Medicaid is covering more of the population, it will have more of an impact on overall care delivery for everybody," she says. "That is a very positive thing."
There are always the leaders and pioneers that are going to try new approaches, says Ms. Kaye, and these are now becoming proven models. She points to managed care in the 1990s.
"Once it started showing savings, it spread quite far and rapidly within Medicaid," says Ms. Kaye. "When all is said and done, we are going to look back and say that these payment reforms indeed resulted in improved quality and access to care."