Continuing my last post, I think the Delivery System Reform Incentive Payment (DSRIP) has a lot of teach anyone learning how to change an entire industry from the throne of the main payer. It’s happening right now, like an experiment in action, to reduce preventable hospital admissions by 25% over five years. The same program from the Centers for Medicare and Medicaid Services (CMS) at the federal level, DSRIP, has been implemented in different ways by different states.
Lesson #6: Give participants many ways to accomplish an objective, and let them choose the ones that suit them.
Medicaid has the reputation among payers of offering break-even compensation at best, and CMS has reformulated it under DSRIP as a potential money-maker. How? CMS offered states a menu of programs they could take on.
Lesson #7: Setup projects to share the risk and incent behaviors that accomplish the change you envision.
Each program comes with a tradeoff. The revenue per patient per month in the program has a cap. There are a bunch of factors that affect the cap, influencing your choices and strategies in pursuit. But setting that aside for a moment, if it costs you more than the cap to take care of your population, you lose. Likewise, if it costs you less then you gain. CMS and the state Department of Health have chosen projects that they believe will lead to more efficient delivery of care, so that CMS and the State can ultimately target spending less while providers keep a larger share than they do today – a win for both sides. Going further, the state even setup a High Performance Fund worth up to 30% of DRSIP project value for closing the gap to goal to 20% or placing within the 90th percentile of all PPSs in the state.
Lesson #8: Pay for performance, and give time to get the process down initially followed by actual outcomes later.
Looking at those factors affecting the cap again, some cover outcomes: projected ones at the start and actual ones later. Also, the state expects participants to report on defined metrics at the start and real performance later.
Lesson #9: A project advisory committee can increase partner accountability and investment in the team.
Many of the safety net, behavioral health, and community health providers partnered with hospital systems have never collaborated before. Who will charter project committees, enforce compliance with reporting and metric gathering, oversee financial transactions? The state requires each PPS to establish a Project Advisory Committee made of representatives from each collaborating partner.
Lesson #10: Identify key resources for your program to succeed and make sure they’ll survive the transition.
Earlier, we mentioned Medicaid’s reputation as a low-reimbursement program. Some of the hospitals serving Medicaid patients may not survive the uncertain transition to payment for value. This risks losing some of the critical capacity to serve the population, which would likely cost more to replace than to bridge. To counter this, in parallel NYS is offering $20M in Interim Access Assurance Funds to four WNY hospitals.
Lesson #11: By tying all providers in the state together to avoid a penalty, you can encourage collaboration.
Under DSRIP, a lead PPS can do great but still not earn its full incentive. How? There are four statewide goals that must be satisfied, or all PPSs will suffer a proportional reduction in payments. The goals include statewide metrics, composite success of projects, growth in Medicaid spending kept to less than the trend, and overall adoption of reimbursement for value (not service). The state formalized a Learning Collaborative program to transparently share best practices, but I suspect this will only work in the absence of competition. This also gives the state a relief valve to re-negotiate the program or pull the plug if it fails to hit its big picture goals, regardless of how the blame gets dished out.
- State urges collaboration on Medicaid waiver dollars. Tracy Drury, May 22, 2014, Business First Buffalo.
- State awards $20M to WNY hospitals. Tracy Drury, July 9, 2014, Business First Buffalo.
- DSRIP Web Site, NYS Department of Health.