State Asks Feds To Align Medicare, Medicaid Incentives
By Dan Goldberg Capital New York October 16, 2015
New York State health officials want to align Medicare payment reform efforts with the state’s own efforts to change how Medicaid is delivered.
That would let Medicaid providers in the state take advantage of Medicare payment reforms, such as accountable care organizations. And it would mean New York’s Medicare providers could use the alternative payment models outlined in the state’s Medicaid payment reform roadmap.
“The problem is providers are often asked to choose between Medicare and Medicaid,” state Medicaid director Jason Helgerson said last month.
Under his new plan, a provider could choose a payment model offered by either the state or federal government for both their Medicare and Medicaid patients.
The Centers for Medicare and Medicaid Services hasn’t said whether it will grant New York’s request — a potential administrative hassle for the federal government, because it would create a separate set of rules for New York.
The state is suggesting that it act as the administrator, calculating baseline data and managing the shared savings. Health officials would then provide quarterly reports to the CMS.
The state is proposing doing this for free for two years but then wants the CMS to share in any overall health savings. Helgerson said Thursday that it’s too soon to know how much money that might bring back to New York.
Though the state’s proposal provides certain advantages, federal officials may be wary to entrust New York with so much authority —particularly just before a new administration takes over the agency.
CMS officials did not immediately respond to a request for comment.
Both the state and federal government want to move away from a fee-for-service system toward alternative payment models that emphasize population health instead of reimbursement for each visit and service.
The challenge is that the state, which runs Medicaid, and the federal government, which runs Medicare, have different options for doctors and hospitals, offering programs that can have contradictory incentives and administrative requirements.
This makes little sense, Helgerson said.
“Having non-aligned ambitious payment reform programs running in parallel is a grave risk to both programs,” state officials wrote in their proposal to the federal government.
Given that Medicare and Medicaid patients make up about half of all reimbursements in New York, aligning the two would prove a powerful incentive, the proposal argues.
“Aligning value-based payments would be a major step toward getting payers on the same page, which would speed the adoption of payment reforms by providers throughout the state,” Chad Shearer, director of the Medicaid Institute at United Hospital Fund, said in an email. “This is especially important for providers who care for large numbers of Medicare and Medicaid patients since it increases opportunities for providers to benefit from shared savings incentives.”
The move would prove particularly valuable for safety net providers in the more rural parts of the state, the proposal says.
They, like all providers, are being encouraged to keep patients out of the hospital through incentives such as the state’s Delivery System Reform Incentive Payment program. But fewer patients means less revenue, and that can hurt these already financially struggling hospitals.
If the CMS accepts the state’s proposal, those upstate providers, who treat a large number of Medicare patients, could take advantage of care models they are already being pushed toward for their Medicaid population.
“The state’s proposal to align Medicare and Medicaid on a voluntary basis represents a real benefit in allowing providers to follow one set of rules to leverage resources and infrastructure as they pursue value-based payment models,” Valerie Grey, executive vice president of the Healthcare Association of New York State, said in an email. “This would be a helpful tool and we encourage CMS to approve it, but continue to believe the state also needs to have a comprehensive set of supports and policies that will ensure hospitals serving vulnerable communities across the state can continue to provide access to essential health care during this transformation.”