MassHealth’s New World of ACOs — and a Mighty Upstart

[I wrote this commentary for the spring issue of Commonwealth Magazine.  I am watching the new crop of 17 Accountable Care Organizations — ACOs — with great interest.  This is a nationally important demonstration that also holds risks for the medical care of many MassHealth enrollees.]

ON MARCH 1, the state’s Medicaid program—known as MassHealth—entered a new era with the launch of 17 accountable care organizations, or ACOs, aiming to provide better coordinated care at lower costs to its low-income enrollees. It’s an ambitious effort with lots of risk and big potential rewards. Within this is another compelling effort to redefine how community health centers fit into the changing health care landscape of Massachusetts and the nation.

Christina Severin, CEO of C3, the new accountable care organization formed by community health centers.

It began with a serendipitous encounter at a grocery store. Sometime in the fall of 2014, Christina Severin bumped into Lori Berry at the seafood counter of the Brighton Whole Foods market. Severin, a long-time leader in the MassHealth scene, had been mulling the creation of a community health center-based non-profit to join the cohort of ACOs being planned for as many as two-thirds of the 1.9 million Massachusetts residents who rely on the program.

Severin had been a savvy player in Boston-area health care organizations for 20-plus years, at Codman Square Health Center in Dorchester, at the Medicaid managed care organization called Network Health, at Beth Israel Deaconess Hospital’s new ACO, and more. Berry, now retired, was the long-serving CEO of the Lynn Community Health Center. They agreed that, under the likely scenario, the state’s highly regarded community health center network would play second banana at best in the emerging, hospital-dominated MassHealth ACO sweepstakes. Severin floated an out-the-box idea: “Why don’t health centers start their own ACO?” Berry was intrigued.

Manny Lopes, the energetic CEO of the East Boston Neighborhood Health Center, the state’s largest community health center, had the same idea and organized four other health center leaders, including Berry, to promote it.  An early stop in 2015 took them to Marylou Sudders, Gov. Charlie Baker’s new secretary of health & human services and the key driver in the complex, high-stakes ACO deal with the US Centers for Medicare and Medicaid Services.

At her first meeting with the rebels, Sudders and her MassHealth director, Daniel Tsai, expressed skepticism, worried that the earnest health center directors didn’t sufficiently grasp the concept of risk. She was concerned that failure could bankrupt some of the state’s most important community health resources.  At their next meeting, the health center leaders brought Severin as their CEO for the new “Community Care Cooperative,” or C3. Berry saw in their faces the changing attitudes of Sudders and Tsai.

With the March 1 launch of 17 MassHealth ACOs, C3 stands as the second largest, with 113,000 enrollees as of early March and 15 participating health centers. A new player, led by Lopes as chairman and Severin as CEO, has emerged on the Massachusetts health scene.

What is an accountable care organization and why is this happening now to 830,000 low-income MassHealth enrollees? ACOs are networks of health providers such as hospitals, physicians, health centers, post-acute providers, home health organizations, and others that join together to provide coordinated care to a set of patients, assuming financial risk and clinical responsibility to improve enrollees’ health, quality of care, and costs.

ACOs were legitimized in the Affordable Care Act to move US health care away from fee-for-service medicine that rewards quantity and toward value-based care that rewards quality and efficiency. Since 2010, more than 1,000 ACOs have formed in Medicare, in commercial insurance, and increasingly in state Medicaid programs. The track record in Medicare shows improved quality and little—if any—progress on costs.

This value-based transformation was an overarching goal for the Obama administration. On November 4, 2016, days before the election that brought Donald Trump to the White House, the federal and Massachusetts state governments agreed on a five-year waiver allowing 1.3 million of MassHealth’s 1.9 million members to move into ACOs. The first wave includes 830,000. Importantly, the waiver lasts until 2022, beyond Trump’s first term. The deal authorizes $52 billion in federal and state spending, including a $1.8 billion investment fund to help providers build ACOs. In return, the state commits to quality improvements and 2.8 percent annual savings with financial penalties for failure. The 17 ACOs—with affiliated managed care, behavioral health, and community partners—are at risk at the sharp end of that promise.

For MassHealth enrollees whose plans changed on March 1, the promise is better coordinated and more effective care to keep them healthy and better treated when sick (see table for list of ACOs). New integrated networks of behavioral health and long-term service providers are mandatory for each ACO. East Boston’s Lopes hopes patients “will see better coordination and more resources in nurse managers and care coordinators, better hospital follow-up, and medication reconciliation.” Dr. Tim Ferris of Massachusetts General Hospital’s ACO says, “the most important and positive thing about the ACO is that it is asking people who deliver the care to manage the care.”

Most of the 830,000 MassHealth clients were auto-enrolled in an ACO based on the affiliation of their primary care physician. For many, their ACO network will not include specialists or other providers with whom they have prior relationships. Enrollees have until June 1 to change plans and/or work through new relationships. For many, notified of the change by letter sent in February, confusion reigns as MassHealth, ACOs, and advocacy groups scurry to navigate care transitions and negotiate exceptions.

While consumer advocates praise MassHealth’s efforts, Bill Henning, executive director of the Boston Center for Independent Living, a key disability advocate, worries about “lots of moving parts and people getting lost.” Vicky Pulos of the Massachusetts Law Reform Institute is “concerned that some people with complex needs who were assigned to the plan their primary care provider joined may lose access to specialists or not understand what steps to take to maintain access. MassHealth is working hard to get the word out but the changes are complex and confusing.”

All ACOs had to decide early whether to partner with a private managed care organization such as Tufts Health Public Plans or Boston Medical Center’s HealthNet for financial and administrative services (Model A) or to work directly with MassHealth (Model B).  Only Steward Medicaid Care Network, Partners HealthCare, and C3 chose Model B.

Severin appreciated that this model emphasizes keeping primary care practice as the focal point and sends money directly to them, not through an intermediary managed care organization.

A surprise was the non-inclusion among the final 17 ACOs of UMass Memorial Health Care in Worcester, the biggest institutional player in Central Massachusetts. UMass was an original pilot ACO in 2017 but couldn’t reach a financial agreement with Tufts Health Public Plans on an ACO for the full-fledged program. The development, a blow for UMass as a system that has embraced value-based programs, was a win for C3 which then added Worcester’s two major community health centers to its network.

In this new MassHealth ACO world, size is not an advantage. Across the nation, ACOs not tied to hospital systems tend to outperform their institutional counterparts. Three MassHealth ACOs fit that category: Atrius Health, Reliant Medicaid Group in Central Massachusetts, and C3. For C3, this is central to their identity. Berry, the former Lynn health center CEO, recalls: “We feared that unless primary care providers made the decisions, savings from reducing unnecessary hospital care would be appropriated by the hospitals. This is an opportunity to use savings to enhance primary care, behavioral health, and prevention relating to social needs such as housing, transportation, and food insecurity for our vulnerable clients.”

All in all, it’s a mighty complex undertaking, in many ways exceeding the massive 1997 Massachusetts Medicaid transformation into today’s MassHealth. That era anointed managed care organizations as system organizers for 20 years. But MCOs proved unable to align, integrate, and coordinate medical providers, who were always kept at arm’s length. This new era seeks to put providers in the driver’s seat, with or without an MCO. Will it happen, and will it matter enough in quality and costs to satisfy the federal government? We have to wait and see—though we will see winner and loser ACOs along the way.

We don’t have to wait for judgments on the key architects, Sudders, and her staff, led by Tsai, the MassHealth director. Praise for their skill, transparency, and collaboration is close to universal. “Nobody has done this in the country,” Severin said of the state putting so much of its Medicaid program into ACOs, with all the risks that carries.

Most ACOs across the country take “one-sided risk,” meaning “heads we win, tails we’re held harmless.” In Massachusetts, all 17 are accepting risk, even some who know they will lose financially because providers recognize this as a new reality, not a passing fad. Across the nation, ACO networks are expected to pay for all the sizable infrastructure costs. In Massachusetts, state officials negotiated a $1.8 billion pool from the federal government to subsidize those costs. This is an important and fascinating experiment, and an historic moment for MassHealth.

THE NEW MASSHEALTH ACOS

ACCOUNTABLE CARE ORGANIZATION FISCAL AGENT INITIAL NUMBER OF ENROLLEES
Steward Medicaid Care Network Plan B ± State 122,000
Community Care Cooperative (C3) Plan B ± State 113,000
Boston Accountable Care Organization (BACO) Plan A ± BMC HealthNet 102,000
Partners HealthCare ACO Plan B ± State 97,000
Children’s Hospital Integrated Care Organization Plan A ± Tufts Health Public Plans 79,000
Wellforce Plan A ± Fallon Community Health 50,000
Baystate Health Care Alliance Plan A ± Health New England 36,000
Beth Israel Deaconess Care Organization Plan A ± Tufts Public Health Plans 33,000
Merrimack Valley ACO Plan A ± Neighborhood Health Plan 30,000
Cambridge Health Alliance Plan A ± Tufts Public Health Plans 28,000
Mercy Health ACO Plan A ± BMC HealthNet 26,000
Atrius Health Plan A ± Tufts Public Health Plans 25,000
Reliant Medical Group Plan A ± Fallon Community Health 25,000
Signature Healthcare Corporation Plan A ± BMC HealthNet 17,000
Health Collaborative of the Berkshires Plan A ± Fallon Community Health 15,000
Southcoast Health Network Plan A ± BMC HealthNet 15,000
Lahey Health ACO Plan C ± State 10,000

John E. McDonough teaches at the Harvard T. H. Chan School of Public Health.

Author: John McDonough

I offer insights and opinions on how to improve health care systems for everyone

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