In Hawaii, a public-private partnership—known as the Hawaii Healthcare Project— between the Office of the Governor and Hawaii’s health care industry identified priorities for the state’s health care system in 2012. Among these transformation priorities is the development of “Accountable Care-Like (ACO-like) Organizations” that build on a state strategy to develop patient-centered medical homes (PCMH) and community care networks (defined by the Project as “a team of ancillary providers and care managers whose function is to coordinate care for patients within or between a PCMH, specialist, hospital, and other setting.”)
The ACO-like structures—with support from the community care networks—will coordinate and share responsibility for care provided across the continuum of health services. Additional legal and structural agreements between participating providers will be developed to harmonize outcome expectations, enable the sharing of clinical and performance data, and govern the distribution of payments. The ACO-like structures will employ innovative payment mechanisms, including pay-for-performance, shared savings, and bundled payments.
The Hawaii Healthcare Project identified implementing these innovations in the state’s public programs as a key goal. The public programs it identified include: MedQuest, the state’s Medicaid managed care program; the Hawaii Employer-Union Health Benefits Trust Fund; and the Hawaii Health Connector, the state’s health insurance marketplace under the Affordable Care Act. In early 2013, the state received a State Innovation Model planning grant from the Center for Medicare & Medicaid Innovation to develop an implementation plan for bringing the Project’s priorities to fruition.
At present, some Medicaid managed care plans in Hawaii are participating in the Accountable Health Care Alliance of Rural Oahu (AHARO), a “virtual accountable care organization” formed in late 2010 between three Federally Qualified Community Health Centers. Together, these community health centers on Oahu contracted with two Medicaid managed care plans to identify quality goals and shared savings. More information about the initiative can be found in the table below.
Last updated: November 2013.
Project Scope
Eligible Patient Population:  The three health centers that comprise the Accountable Healthcare Alliance of Rural Oahu (AHARO) serve a total of approximately 40,000 patients through over 200,000 clinical visits annually. Approximately 50% of these patients (20,000) are enrolled in the Hawaii QUEST (Medicaid) program.
QUEST members continuously enrolled in a participating health plan and assigned to a participating health center for at least 3 months are considered to be enrolled in AHARO for the purpose of defining financial performance metrics (see Appendix F).
Eligible Provider Population: AHARO is forming partnerships both with a vertical network of providers and with selected Medicaid managed care organizations. Providers are affiliated with the three participating health centers: Koolauloa Community Health and Wellness Center, Waimanalo Health Center, and Waianae Coast Comprehensive Health Center.
The Accountable Healthcare Alliance of Rural Oahu (AHARO) was established via interagency agreement between the three participating Federally Qualified Health Centers in 2010. Contracts with the two participating Medicaid managed care plans support “health care home” standards (additional standards, beyond NCQA patient-centered medical home recognition, for care enabling services, cultural proficiency, community involvement, and workforce and economic development), performance-based reimbursement, and shared savings partnerships.
The Accountable Healthcare Alliance of Rural Oahu (AHARO) serves as a contracting arm for three Federally Qualified Community Health Centers (FQHCs): the Koolauloa Community Health and Wellness Center, Waimanalo Health Center, and Waianae Coast Comprehensive Health Center. AHARO was established via an interagency agreement and answers to the three community-elected governing boards of the participating FQHCs. 
Criteria for Participation
Participation in the Accountable Healthcare Alliance of Rural Oahu (AHARO) is currently limited to the three Federally Qualified Health Centers that established it in partnership with 2 Medicaid managed care plans: Koolauloa Community Health and Wellness Center, Waimanalo Health Center, and Waianae Coast Comprehensive Health Center.
The Accountable Healthcare Alliance of Rural Oahu (AHARO) seeks to utilize contracts with Medicaid managed care organizations based on aligned incentives and shared savings.
AHARO’s payment model uses a per member per month payment for medical home proficiency, as well as a $5 per member per month match from health plans for investment in health information technology and care coordination. Shared savings are built into the contracts with health plans, based on seven metrics. AHARO receives 50-75% of the savings, depending on the relative health center and health plan performance on financial metrics and accountability measures.

Support for Infrastructure
The Accountable Healthcare Alliance of Rural Oahu (AHARO) has proposed the establishment of a $5 per member per month matching fund by Medicaid managed care organizations that would fund health information technology and care coordination activity.
AHARO is using a data exchange and data repository that combines information from electronic health records at participating health centers and those of the two Medicaid health plans to create real-time dashboards reflecting the status of performance by providers. Incentives are proposed linked to improved performance on selected metrics by each individual health care home.
Measurement and Evaluation
Providers participating in the Accountable Healthcare Alliance of Rural Oahu (AHARO) are evaluated on metrics developed as a part of the Pacific Innovation Collaborative (PIC) project. These metrics were negotiated with two Medicaid health plan partners and include measures with subsets of patients demonstrating co-morbidities to psychosocial conditions as well as metrics that measure access to primary care.
Practices participating in AHARO are further evaluated not only on NCQA patient-centered medical home standards but also on a set of supplemental “health care home” standards. These standards measure practices’ capacity along four dimensions:
  • Care enabling services,
  • Cultural proficiency,
  • Community involvement, and
  • Workforce and economic development.
AHARO has developed a set of performance standards for the Medicaid health plans that focus on the following capabilities:
  • Primary Care and Specialty Network Capability: designed to measure a plan’s ability to provide vertical networks of providers under contract and accessible to patients.
  • Claims Processing Capability: designed to measure the technical capabilities of a Plan’s claims adjudication effectiveness.
  • Care Coordination and Health Information Systems: designed to measured collaborative efforts in managing patient care and targeting improved quality and shared savings.
  • Health Care Home Model and Value Added Support: designed to measure the flexibility and support offered by the Plan to the medically underserved area-based health care home.
  • Aligned Incentives and Shared Savings: designed to assess the Pay For Performance and shared savings model with emphasis on transparent assessment of the relative value provided by health care home/payer partners.
  • Effectiveness and Efficiency Initiatives: designed to assess levels of cooperation in paperwork reduction and automation of processes while improving reporting quality.
  • Inpatient Management and Care Transition Management: designed to manage inpatient hospital stays and support effective care transition after discharge.
  • Non-Emergent ER Reduction: designed to reduce unnecessary hospital emergency room visits.