The move away from fee-for-service healthcare is sweeping across the country as payers and providers come together to search for innovative ways to improve outcomes while lowering costs. With Tennessee’s robust resources, the state is well positioned to take a lead role in transforming the delivery of healthcare.
“In 2013 Governor Haslam launched the Tennessee Health Care Innovation Initiative to move from volume to value,” said Brooks Daverman, director of Strategic Planning and Innovation for the Tennessee Division of Health Care Finance and Administration (HCFA). “Our mission is to reward providers for the outcomes that we want – high quality and efficient treatment of medical conditions and better health over time.”
Key Stakeholders & Background
During a joint session of the Tennessee Legislature in the spring of 2013, Gov. Haslam pledged Tennessee would become “a model for what true healthcare reform looks like.”
Central to achieving this goal is the involvement of key players representing payers, providers, patients and purchasers across the state. “We’re trying to create an aligned approach for all the stakeholders,” noted Daverman. He added that by late May 2015, he and his team had held more than 440 meetings with interested parties to share information and receive input. From consumer groups like the Common Table Health Alliance to employer organizations including the Memphis Business Group on Health and East Tennessee’s HealthCare 21 Business Coalition, Daverman said payment reform could not occur in a vacuum.
Ongoing meetings with payers, providers and workgroups are used to design strategies to be broadly implemented across the state. Routine meetings are held with major provider organizations including the Tennessee Medical Association (TMA), Tennessee Hospital Association (THA), Hospital Alliance of Tennessee (HAT) and Tennessee Nurses Association (TNA), along with a host of specialty statewide organizations representing family physicians, physician assistants, pediatricians, children’s hospitals, mental health organizations, primary care providers, and medical education. In addition, Amerigroup, BlueCross BlueShield of Tennessee, Cigna, and UnitedHealthcare meet regularly with the team.
While the initiative took off in May 2013, Daverman said the roots of payment reform go back even further to a vision task force, which included members of TMA, THA, Darin Gordon from HCFA, and others. “It was a group of likeminded, influential people in the state thinking about how we can move things forward in terms of healthcare payment and delivery,” Daverman noted. “I think the strategies we have chosen are all ones that were discussed in those meetings.”
As a result of stakeholder input, strategies in three key areas are being implemented: primary care transformation, episodes of care, and long-term services and supports. There is a Technical Advisory Group (TAG) for each strategic area to provide guidance on quality measures and program design.
Primary Care Transformation
Daverman noted this component focuses on the “primary care provider – preventing illness, managing chronic illness and coordinating with other providers such as specialists.” He continued, “This is rewarding activities that are very important in primary care that aren’t necessarily paid for now.”
Daverman pointed out coordinating with a specialist takes time and effort for the primary care provider but isn’t necessarily reimbursable. Yet, the results of that coordination are often critical to a patient’s health.
“With all our strategies, we want to put the doctor in the driver’s seat,” he said. Daverman added this focus on outcomes might require changes in communication, clinic hours, phone staffing, and other patient engagement activities in order to improve health and cut down on expensive emergency room visits. “If it results in better outcomes for quality and utilization, we want to reward that.”
Although he praised with work being done by ACOs, Daverman stressed the primary care transformation strategies are different and easily scalable. “All of our strategies are feasible for providers without making significant changes to business relationships,” he said.
The starting point is with patient centered medical Homes (PCMH), health homes for SMPI (serious and persistent mental illness) patients, and provider alerts for hospital and emergency department admissions, discharges and transfers. “We’ll start with about a dozen practices and want to go statewide within a couple of years,” Daverman said of programming, which is slated to launch in mid-2016.
Whether or not providers are in a PCMH, those who sign up can tap into the web-based statewide alert system. “We’re going to work to have real-time notices every time a patient goes to the emergency room of a hospital,” Daverman said of the data being populated by participating payers. In addition, he said the system would be able to generate a ‘gaps in care’ report and alert providers to their patients’ drug fills. “It’s really, really important information to have if you want to manage your patients.”
Episodes of Care
“This is the strategy that’s the furthest along,” Daverman noted of aligning incentives with desired outcomes. Episodes reward high quality care, promote the use of clinical pathways and evidence-based guidelines, and encourage coordination to reduced ineffective or inappropriate care. Under the initiative, episode-based payment is being rolled out in waves with the goal of implementing 75 episodes by the end of 2019.
Wave 1 launched in May 2014 with three episodes of care: acute asthma exacerbation, perinatal, and total joint replacement. For six months, more than 500 providers received detailed preview reports from TennCare and commercial payers before the wave went live in 2015.
“Providers are getting new information they’ve never had before in quality reports,” Daverman explained. “They can see how they compare to their peers on cost, and we break down those costs into categories to make it actionable.”
He continued, “Providers who have the most expensive average episode cost for the year across the state are penalized by a portion of their excess cost.” However, Daverman noted, the threshold for a penalty is set pretty high and is considered only after adjusting for exclusions such as high-risk patients or extraordinary events. Ultimately, the projection is the most expensive 10 percent of providers will face a penalty. On the other hand, he said, “It’s very important we reward providers who meet quality measures and provide efficient care with shared savings.” Daverman predicted, “The majority of providers will have no change or will get rewarded.”
Preview reports for Wave 2 – acute COPD exacerbation, screening and surveillance colonoscopy, outpatient and non-acute inpatient cholecystectomy, and acute and non-acute PCI – began at the end of last month. The advisory group has just completed their process for Wave 3, which will roll out preview reports next year and go live at the beginning of 2017.
Long-Term Services & Supports
Daverman said the main premise of this strategy is to tie payment to quality and acuity. “Some of the measures are around the patient experience, and some of the quality measures are around the caregivers,” he said.
Key points include implementing quality- and acuity-based payment for nursing facilities and home- and community-based services, value-based purchasing initiatives for enhanced respiratory care, and focusing on workforce development.
More Information
Details on each of the strategies is available online in the Strategic Planning and Innovation Group section of HCFA at tn.gov.
RELATED LINKS:
Tennessee Health Care Finance & Administration Strategic Planning & Innovation Group
Episodes of Care to be Implemented