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Medicaid pays for about 20 percent of all
hospital stays nationwide, but its share is
closer to half for obstetric, pediatric and
newborn care. The Medicaid share for adult
mental health is 25 percent and higher still
for particularly vulnerable patients. Medicaid
also covers more than 40 percent of stays
for HIV/AIDS, sickle cell anemia, asthma and
congenital heart defects.
7
Clearly Medicare’s
focus on only three conditions for readmission –
heart failure, heart attack and pneumonia –
does not suit a Medicaid population.
Kevin Quinn, Vice President of the
prefers
a clinically meaningful casemix-adjusted
categorical model as a foundation for quality
measurement. “A rate-based, value-based
payment approach has a broader impact for a
Medicaid population. The Medicaid approach
cannot be limited to just the three conditions
for readmissions that Medicare focuses on.
There are numerous examples across the
nation of improved outcomes, which lead
to lowered costs. These methodologies can
be applied in your state whether you are
predominantly MC or a combination of
MC and FFS.”
Even if you have not yet started, you
can establish a foundation for pay-for-
performance during 2016. Start by compiling
your claims and encounter data for analysis.
This data can then be run through clinically
sophisticated, established algorithms to
create a report you can use as the basis
for your pay-for-performance program.
We recommend statewide performance
as a common sense starting point to set
benchmarks. Hospital-specific data is
compared to benchmarks and then shared
with hospitals (subject to a minimum claim
volume), so they can take the necessary
action to monitor, conduct root cause
analysis and improve their performance.
Meanwhile, states should develop a strategy
for implementing and rolling out value-
based purchasing. Pay-for-performance
can be accomplished in a budget-neutral
environment, but Medicaid agencies must
first consider key questions from a variety of
perspectives. How will value-based payment
be structured, paid – and to whom? How can
patient experience be measured? And how
will the agency’s role change?
Xerox has performed similar analyses for
several states. Our experienced payment
method consultants and statisticians can
help you design and implement a pay-for-
performance program three months to
six months after compiling the data.
References
1. NY State Department of Health,
DSRIP Frequently Asked
Questions (FAQs): New York’s MRT Waiver Amendment
Delivery Reform Incentive Payment (DSRIP) Program
,
August 2015, p.33.
2. Smith, V., Gifford, K., Ellis, E., Rudowitz, R., Snyder, L., and
Hinton, E. (2015).
Medicaid reforms to expand coverage.
Control costs and improve care: Results from a 50-state
Medicaid budget survey for state fiscal years 2015 and
2016
. Washington, DC: Kaiser Family Foundation.
3. Texas Health and Human Services Commission
(2013).
Potentially Preventable Readmissions in the
Texas Medicaid Population, State Fiscal Year 2012
and
Potentially Preventable Complications in the
Texas Medicaid Population, State Fiscal Year 2011
.
Public reports retrieved from
and
4. U.S. Agency for Healthcare Research and Quality,
National Quality Measures Clearinghouse (n.d.).
Measures inventory retrieved December 2015, from
5. Blumental, D., and McGinnus, J.M. (2015).
Measuring
Vital Signs: An IOM Report on Core Metrics for Health
and Health Care Progress
. Journal of the American
Medical Association, 313(19), 1901-1902.
6. Cassel C.K., Conway, P.H., Delbanco, S.F., Jha, A.K.,
Saunders, R.S., and Lee, T.H. (2014).
Getting More
Performance from Performance Measurement
.
New England Journal of Medicine, 371(23), 2145-47.
7. Quinn, K., Weimar, D., Gray, J., and Davies, B. (2016).
Thinking About Clinical Outcomes in Medicaid.
Journal
of Ambulatory Care Management, 39(2).
For more information
about how we develop
payment strategies, visit
