Arkansas – ACO

The Arkansas Health Care Payment Improvement Initiative grew out of a 2011 Arkansas Department of Human Services proposal, “Transforming Arkansas Medicaid” (in later documents, “Transforming Arkansas Health Care”). Arkansas Department of Human Services (which oversees Arkansas Medicaid) is partnered with two large private insurers in the state, Arkansas BlueCross BlueShield and Arkansas QualChoice, to implement this broad payment reform initiative.

The initiative’s first phase was introduced in summer 2012. This model attempts to move away from fee-for-service payments and towards a system that rewards value and outcomes. The state defines “episode of care” as “the collection of care provided to treat a particular condition for a given length of time.” More detailed definitions of each episode are available in the provider policy manual update for upper respiratory infections, ADHD, and perinatal care episodes proposed by Arkansas Medicaid in June 2012 and the provider policy manual update for congestive heart failure and total joint replacement episodes proposed by Arkansas Medicaid in September 2012.

Payers will designate principal accountable providers (PAPs) to be responsible for cost and quality of care throughout each episode, including care provided by other members of the patient’s care team.

Arkansas received a State Innovation Model (SIM) testing award in early 2013. Under this grant, Arkansas intends to expand its payment model to 75-100 episodes of care over the next three years (up from the 5 episodes of care currently covered). This will occur in two more phases of implementation:
  • Wave 2: in the first 9-12 months of the SIM grant, participating payers intend to implement a modular, scalable infrastructure platform for launching and administering episodes. During this period, the initiative will have 1-2 launches of 5-10 episodes. Episode rollout will occur at a significantly more rapid pace than Wave 1. The launch and administration of these episodes will use the Wave 1 infrastructure platform.
  • Wave 3: Through mid-2016, the initiative will rapidly achieve scale through quarterly launches of 5-10 sub-waves of episodes. The state expects the scalable infrastructure model will be in place and able to support the rapid launch and administration of these episodes.
To learn more about about Arkansas’s medical homes initiatives, visit the Arkansas page of NASHP’s medical homes map.
Last updated: November 2013.
Project Scope

Provider Population: The Arkansas Health Care Payment Improvement Initiative includes all providers who provide care for Medicaid, Arkansas BlueCross BlueShield, and Arkansas QualChoice; participation is mandatory. Five episodes are initially included in this initiative; providers who do not provide these services or who have limited case-volume are also excluded.
Patient Population: Arkansans insured by Arkansas BlueCross BlueShield, Arkansas QualChoice and Medicaid are included in the five retrospective risk-sharing payment episodes that have been launched.
In 2013, the initiative will expand to include assessment-based episodic payments. Individual assessments of support and health care needs will determine payment for episodes of care for the developmentally disabled (DD) and long-term services and supports (LTSS) populations. The results of these individual assessments will be used to determine tiered episode funding targets. Initially, all adults in institutional or waiver settings will be included in this approach; children and others receiving care outside of these settings will be included in future iterations.
Scope of Services: The initiative will begin with five episodes of care, though the initiative’s long-term goal for is to have episode-based payment for the majority of episode types within five years. The five initial episodes will be Attention Deficit Hyperactivity Disorder (ADHD), upper respiratory infections, congestive heart failure, hip and knee replacement, and perinatal care. A preparatory phase for these five episodes, which serves as a time for providers to adjust to the new system and for payers to begin collecting preliminary data, launched in July 2012; the performance period began in October 2012.
Episodes are defined differently for each episode type (see slide 10):
  • Attention Deficit Hyperactivity Disorder (ADHD): Defined as care over a twelve-month period, and includes all ADHD services and pharmacy costs.
  • Upper respiratory infections: Defined as the care delivered in the 21 days following initial consultation; includes colds, sore throats and sinusitis. Hospital stays and surgical procedures are excluded.
  • Congestive heart failure: Defined as care given from the time of hospital admission for heart failure to 30 days following discharge.
  • Hip and knee replacements: Defined as care delivered from 30 days prior to 90 days after surgery.
  • Perinatal care: Defined as care 40 weeks before to 60 days after delivery; includes prenatal care, delivery, and postnatal maternal care. Excludes neonatal care.
In Wave 2 of implementation, under the state’s State Innovation Model grant, episodes around additional health conditions are being added to the initiative:
Attribution: Payers use claims data to designate a principal accountable provider (PAP) (a “care quarterback”) for each episode based criteria for each episode type; the PAP can be a provider, a group of providers, or a practice or hospital.  The PAP is identified differently for each episode type; for example, the PAP for a hip or knee replacement (see slide 10) is the orthopedic surgeon. PAPs are responsible for cost and quality of care throughout each care episode, including care provided by other members of the patient’s care team.
Authority

CMS approved a State Plan Amendment authorizing this payment model in September 2012.

Governance

The Arkansas Department of Human Services (which oversees Arkansas Medicaid) partnered with two large private payers, Arkansas Blue Cross and Blue Shield and Arkansas QualChoice, to form the Arkansas Care Payment Improvement Initiative. This group worked with providers, health administrators, patients and advocacy groups to design the payment reform that has begun to be put into effect. For more information, visit the state’s archive for this initiative.

Criteria for Participation

The Arkansas Health Care Payment Improvement Initiative includes all providers who provide care for Medicaid, Arkansas BlueCross BlueShield, and Arkansas QualChoice; participation is mandatory.

Payment
Under the Arkansas Health Care Payment Improvement Initiative, providers will submit claims for all care they deliver and continue to be reimbursed based on existing fee schedules.
Providers are eligible for risk- and gain-sharing based on average cost of care per-episode, assessed yearly based on claims data. Payers are using claims data to assess historical average per-episode costs for each episode type, and identifying thresholds that they believe will maximize provider incentives to provide high quality, cost effective care. For each episode, payers will identify three ranges (see slide 18) against which to assess principal accountable providers’ (PAPs’) average per-episode costs and determine provider eligibility for risk- and gain-sharing:
  • Unacceptable: Average per-episode costs above the “Acceptable” threshold indicate inefficient care or overtreatment. PAPs will pay 50% of average per-episode costs above the “Acceptable” threshold back to payers (“negative supplemental payment”).
  • Acceptable: There will be no change in payment to providers whose average per-episode costs fall within this range.
  • Commendable: PAPs will receive incentive payments equal to 50% of average per-episode savings below this threshold if they achieve quality standards.
Gain-sharing is dependent on achievement of “must pass” quality indicators which differ for each episode type; providers who achieve commendable average per-episode costs but fail to achieve these standards will not receive shared savings payments. However, providers who fail to fully report or who do not achieve these standards remain eligible for risk-sharing. A lower gain-sharing limit for each episode and minimum quality requirements disincent under-treatment; stop-loss provisions provide some financial protection to PAPs whose costs are above the “unacceptable” threshold. Risk- and gain-sharing percentages are defined in provider policy manual updates proposed by Medicaid for upper respiratory infections, ADHD, and perinatal care episodes (proposed in June 2012) and for congestive heart failure and total joint replacement episodes (in September 2012).
Payers will make patient- and provider-level adjustments (see slide 20) to ensure fairness to providers.
  • Patient-level adjustments include adjustments for patient risk and severity, and outlier exclusions for high-cost episodes.
  • Provider-level adjustments include “adjustments for providers in areas with poor physician access, adjustments for cost-based facilities (e.g., critical access hospitals), adjustments for differences in regional pricing, [and] adjustments or exclusions for providers with low case-volume.
Regulatory language proposed by Arkansas Medicaid in June 2012 provides more detail on each episode type, including exclusions and proposed payment thresholds, as well as Medicaid’s methodologies for calculating risk- and gain-sharing payments.
Support for Infrastructure

The Arkansas Health Care Payment Improvement Initiative has created a HIPAA-compliant online database, the Provider Portal, to provide feedback to principal accountable providers (PAPs). Arkansas providers received a letter in July 2012 explaining the portal and the necessary steps to participate. The letter also explains that providers will gain access to the state’s statewide health information exchange, the State Health Alliance for Records Exchange (SHARE).

For assessment-based episodic payments for developmentally disabled and long-term services and supports populations that will begin in 2013, the state has identified and contracted with an appropriate assessment tool (InterRAI ID), contracted with a supplier to conduct assessments across the state, and contracted with a supporting IT tool for the assessments (CH Mack).
Measurement and Evaluation
Providers are required to report on “to pass” quality indicators which differ for each episode type; providers who achieve commendable average per-episode costs but fail to achieve these standards will not receive shared savings payments. In addition, providers will report “to track” quality indicators
Providers will have access to individualized quarterly performance reports through the Provider Portal. Performance reports will include data on quality across episodes, cost effectiveness relative to cost thresholds and other providers, and the provider’s utilization patterns and cost drivers. Reports available through the Provider Portal will draw on claims data as well as clinical data entered into the Portal by PAPs.
Report contents are under development; more information regarding reports can be found here. Providers have access to quarterly reports during the initial preparatory period to gain comfort with this system and assess current performance.