A provider group that is not yet ready for comprehensive risk outlines steps it is taking to prepare.

Oct. 27—Some providers offering to take on risk have been turned down by one of the fastest-growing U.S. health insurance companies because they were found to be unprepared, according to the insurance company’s leader.

Amid the ongoing national push by federal and state government policymakers for more providers to take on financial risk for the care they deliver, Michael Neidorff, chairman, president, and CEO of Centene Corp., waved a caution flag.

“Everyone likes to talk about risk sharing, value-based contracting; I’m not sure anyone has really defined it,” Neidorff said at a Medicaid meeting conducted by America’s Health Insurance Plans. “A lot of people think they can take risk, but they don’t have the capabilities to manage it, and we won’t give it to them. We either say ‘no’ or we create a situation where they have a problem.”  

Among the insurer’s requirements for providers seeking to collaborate on risk arrangements is a willingness to use the patient data provided by the insurer.

“If an enterprise says, ‘We don’t need it, we know it,’ that worries me,” Neidorff said in an interview.

Neidorff described the growing number of “accountability reports” Centene gives its providers to track their performance as “really important.”

Other requirements for providers include a willingness to use the technology the insurer provides. Neidorff, who described Centene as a “technology company that does health care,” highlighted the company’s growing funding of telehealth, which is used for needs such as connecting rural and urban intensive care units.

“If they’re not willing to look at the technology we have and what we can bring to the party, that’s kind of a red flag,” Neidorff said.

Against Trend

The insurer’s caution ran counter to a nationwide push by many public and private payers for widespread provider adoption of risk-based payment. Most prominently, the U.S. Department of Health and Human Services is continuing an initiative to move 50 percent of Medicare provider payments to alternative payment models (APMs) by the end of 2018, having reached the 30 percent threshold this past spring.

Similar efforts by private payers resulted in 23 percent of their payments flowing through APMs by 2016, according to Oct. 25 results released by the Health Care Payment Learning & Action Network (LAN).

Centene’s cautious approach also was apparent among other Medicaid insurers. Among the plans surveyed by LAN, 41 percent of Medicare Advantage plan spending and 22 percent of commercial plan spending came through APMs. But only 18 percent of Medicaid managed care plan spending was through such models.

Despite hailing the overall APM participation of private payers, Sam Nussbaum, a former Anthem executive vice president and a member of the LAN’s Guiding Committee, acknowledged that not all providers likely will participate in such models. Participation “will not be readily achieved in every market, nor will it be achieved for every patient population,” Nussbaum said at an Oct. 25 LAN event.

“What we believe is that this a vital goal to work to achieve,” Nussbaum said. “And the LAN anticipates that some regional markets will move forward and make the transition, while others will not do that.”

A Transitioning Provider

A growing number of provider organizations are looking for ways to move into risk-based payment and delivery models.

Allegheny Health Network is not yet able to take on capitated risk for a population, Tony Farah, MD, chief medical officer for the network, said at an Oct. 19 congressional briefing. To eventually move toward a comprehensive model that has an impact at a population level, the provider has begun standardizing clinical pathways in concert with its health plan and embedding them in the electronic health record.

“The fact is that there is a tremendous amount of clinical variation, which is why costs are so high,” Farah said.

Other preparatory steps include redesigning patient flows for every major condition “from a patient’s perspective,” Farah said.

“For the last two years that we have done that with joint replacements—we’re performing same-day hip replacements right now—patient satisfaction is pretty close to 100 percent, outcomes are better, safety metrics are improved, and costs by definition have come down,” Farah said.

Additionally, to address costs among the more expensive patient populations requiring chronic care, the network created several physician-led teams to compare baseline costs to those that occur under standardized care pathways and improved patient flow. It also asked physicians to examine “tangible, reproducible” patient metrics and select the ones under which they would like to be paid.

“If you pay the physician based on those metrics, you can truly move the needle—in other words, improve outcomes and reduce costs,” Farah said.

Insurer Risk

Centene has sought to keep its plans viable during the transition to value-based payment and delivery in part by carrying over the “traditional providers” serving the 11 million enrollees in its Medicaid managed care plans to its rapidly growing Affordable Care Act (ACA) marketplace plans. The company expects its ACA-plan enrollment to jump from roughly 600,000 to more than 1 million after the upcoming open-enrollment period, Neidorff said.

The shared use of those providers also offers more continuity to enrollees who move (i.e., “churn”) between eligibility for Medicaid and exchange coverage.

“These are patients we’ve had, they know us, we know them, they know their doctor, and we maintain that continuity,” Neidorff said.

In a marketplace in which many other insurers suffered steep losses, the $40 billion company achieved strong financial results also by operating as though none of the three federal backstop programs for insurers existed and by conducting careful analysis of its data to determine expected ACA enrollee costs, Neidorff said.

Still, Neidorff said changes are needed in the ACA marketplaces to bring in more young and healthy enrollees.

“It does need structural changes,” Neidorff said. “We need to put in incentives to get a balanced book of business.”

Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare


Publication Date: Thursday, October 27, 2016