NY Rural Providers Turn Medical Homes into an ACO

One health network has improved physician recruitment, quality outcomes, and utilization by building medical homes, which form the backbone of a new ACO in upstate New York.

Providers in upstate New York serve a region the size of Massachusetts but with only 3 percent of its population. Just five years ago, the community faced a shortage of physicians, and reimbursement was largely to blame.

In New York, Medicare rates exceed commercial rates, which are designed for high-volume urban and suburban areas, not low-volume rural settings. Physicians were reluctant to practice upstate, and those who did were expected to do more with less.

A coalition of local hospitals and medical practices worked with state government and payers to find a solution that would draw primary care physicians into the area. In 2010, several rural health organizations in the area launched the five-year Adirondack Regional Medical Home Pilot. Their original goal: to transform 30 small physician practices into medical homes recognized by the National Committee for Quality Assurance (NCQA). Today, that pilot serves as the foundation of a new ACO.

Involving All Payers

What makes the medical home project different from many others around the country is that it is an all-payer pilot, says John Rugge, MD, CEO, Hudson Headwaters Health Network, which is based in Queensbury and operates 16 community health centers in upstate New York. “We went to our payers and convinced them that we were their best partners to change the system and reduce the total cost of care,” says Rugge, who is also a co-organizer of the Adirondack Regional Medical Home Pilot.

New York providers met with payers one-on-one while public policymakers also encouraged health plans to work with providers to find a better payment solution, Rugge says. State legislators also invoked the escape clause of the Sherman Antitrust Act so that providers were able to collectively negotiate the payment rate for medical home services.

After lengthy negotiations between providers and payers, the health plans agreed to pay the medical homes $7 per member per month to care for some 100,000 patients during the first year. Today, the Adirondack Regional Medical Home Pilot is still going strong and includes more than 90 percent of the region’s primary care practices in three geographic “pods” in upstate New York.

Using Data to Drive Care

The participating providers needed an umbrella organization to oversee care coordination across the medical home pilot. So they converted the research arm of Hudson Headwaters into Adirondack Health Institute (AHI). Today, AHI is a joint venture among four providers participating in the medical home pilot: Adirondack Health, Glen Falls Hospital, UVM Health Network-Champlain Valley Physicians Hospital, and Hudson Headwaters.

AHI houses two data warehouses: one for payer claims data, and the other for quality and utilization data from the organizations’ electronic health records (EHRs).

The claims data warehouse includes predictive analytics software that allows pilot leaders to perform risk adjustments for the population and identify patients in different risk categories who might be candidates for disease management or disease prevention programs. Each month, AHI generates a list of patients at-risk for poor health outcomes so that care coordinators can reach out to those who need intervention.

Other data tools help track the medical homes’ performance in meeting financial metrics, including how effective they are at reducing costs related to inpatient admissions and emergency department use, as well as the total cost of care.

In addition, the quality and utilization data warehouse tracks performance on a number of metrics similar to ACO quality measures, although they are broader and include pediatric quality metrics. AHI shares this data with the medical homes each month.

Creating a Care Management Foundation

“Being in the pilot has helped us better understand our patient population and where the care gaps are,” says Cyndi Nassivera-Reynolds, PCMH-CCE, CRM, vice president, transformation and clinical quality at Hudson Headwaters. “The medical home really brought forward how much communication and collaboration is needed for care coordination to actually work.”

During the past few years, Hudson Headwaters has been working on improving patient transitions from the hospital to other care settings. Staff also developed a mechanism that allows care managers to document patient care plans in the network’s EHR so they can be shared with other Hudson Headwaters providers.

Quality metrics. Hudson Headwaters has improved in nearly every quality measure as well as patient satisfaction since the beginning of the medical home pilot five years ago, Nassivera-Reynolds says. One of the most significant improvements was related to asthma. Hudson Headwaters improved its use of asthma-appropriate medication management for patients with persistent asthma by more than 70 percent in two years.

Although ED visits have not decreased, 30-day readmissions have decreased from 20 percent in 2010 to 12 percent in 2013. In addition, provider satisfaction has improved in several areas, including care team dynamics. From 2011 to 2013, providers in the Lake George pod improved their level of satisfaction with care team dynamics from 68 percent to 83 percent.

Financial payoff. On the financial side, the medical homes have saved 15 percent to 20 percent per capita for Medicaid patients, Rugge says. The pilot also has helped Hudson Headwaters bring 27 new primary care providers to the underserved area.

Based on their success, providers in the Adirondack Region Medical Home Pilot launched a Medicare ACO in January 2014. Primary care physicians in the ACO will receive 50 percent of the shared savings, hospitals will receive 40 percent, and specialists will get 10 percent.

Offering Advice

Rugge and Nassivera-Reynolds offer the following advice for other organizations that want to build a network of medical homes as a possible launch pad for an ACO:

Seek medical home accreditation from the NCQA. Having this designation is absolutely critical to secure the additional compensation needed from payers to make population health management work, Rugge says.

Build bridges with payers. Since starting the medical home pilot, Hudson Headwaters’ CFO approaches negotiations as a collaborator instead of as an antagonist with all of its participating insurers, Rugge says.

Invest in the right people. Hudson Headwaters created eight new job descriptions and has hired more than 40 FTEs who are involved in population health management for the medical homes and ACO. This includes embedded care managers in the medical homes and hospital-based transition care coaches, who help patients after discharge. They also have hired social workers who act as community resource advocates to help patients find stable housing and address other challenges that affect their health.

Create a forum for providers to share best practices. Each year, AHI hosts a summit where providers can discuss issues in care management, patient engagement, and using technology to improve rural health care. AHI also serves as the regional hub for enrolling uninsured patients in the state’s health insurance exchange.

Designate lead providers. Each Hudson Headwaters facility has a designated physician who is responsible for mentoring other providers in their organization. Lead providers help their peers improve their performance on metrics like clinical documentation, citizenship, and patient use of portals.

Give and take. “In rural areas, a medical home office may include a physician, a nurse, and an office manager. Asking them to join an ACO increases their responsibilities, so they need a way to share resources,” Nassivera-Reynolds says.

Leaders at Hudson Headwaters collaborate and consult with independent medical practices (not owned by or affiliated with the network) that are part of the ACO and offer resources, training, or support. But the learning goes both ways, she says. “Oftentimes, we’ll learn from them what it takes to care for their population.”

Looking Ahead

Rugge believes the five-year medical home pilot has given leaders at Hudson Headwater the tools they need to be successful partners in an ACO.

“The medical home is really the best possible platform for moving to that next generation of effort and risk in an ACO,” he says. “The pilot really helped us develop relationships among providers who are geographically disperse. It also gave us some level of standardization across practices so we are all trying to meet common goals.”

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Laura Ramos Hegwer is a freelance writer and editor based north of Chicago.

Interviewed for this article:
John Rugge, MD, is CEO, Hudson Headwaters Health Network, Queensbury, N.Y.

Cyndi Nassivera-Reynolds, PCMH-CCE, CRM, is vice president, transformation and clinical quality, Hudson Headwaters Health Network, Queensbury, N.Y.

This article is based in part on a presentation at the Congress of the American College of Healthcare Executives in Chicago in March 2014.

Discussion Starters

Forum members: What do you think? Please share your thoughts in the comments section below.

• What are the biggest challenges for CFOs in rural organizations?
• What have been your key obstacles in establishing medical homes or an ACO?