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Policy Innovation Profile

County-Based Accountable Care Organization for Medicaid Enrollees Features Shared Risk, Electronic Data Sharing, and Various Improvement Initiatives, Leading to Lower Utilization and Costs


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Snapshot

Summary

A county-based accountable care organization integrates medical, behavioral, and social services with the goal of improving outcomes and reducing costs for newly enrolled Medicaid beneficiaries in Hennepin County, Minnesota. Known as Hennepin Health, the organization is a partnership of several organizations within the county government that share financial risk (a medical center, health plan, social services organization, and Federally Qualified Health Center). An assigned care coordinator works to ensure that each enrollee receives appropriate services based on his or her medical, mental, and social service needs. Partners share data electronically to allow for complete information on each enrollee, and jointly implement initiatives to improve care and promote appropriate utilization. The organization has experienced a growth in enrollment over time; has reduced hospital admissions, readmissions, emergency department visits, and the costs of caring for enrollees with historically high usage; and has generated high enrollee satisfaction.

Evidence Rating (What is this?)

Moderate: The evidence consists of post-implementation data on enrollment growth and enrollee satisfaction, along with pre- and post-implementation comparisons of key outcomes measures, including hospital admissions and readmissions, ED visits, and total utilization and medication costs for high users of health services.
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Developing Organizations

Hennepin County (MN) Human Services and Public Health Department; Hennepin County Medical Center; Metropolitan Health Plan; Northpoint Health and Wellness Center
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Date First Implemented

2012
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Patient Population

Hennepin Health serves single, nondisabled adults 21 years to 64 years who do not have children and have incomes at or below 75 percent of the Federal poverty level.Insurance Status > Medicaidend pp

Problem Addressed

Traditional models of health care financing and delivery often lead to ineffective or inefficient care.1 In particular, traditional fee-for-service (FFS) reimbursement creates incentives for providers to deliver more (but not necessarily higher quality) care, which increases costs and forces health plans to raise premiums. Accountable care organizations (ACOs) have the potential to effectively align incentives for health plan and provider partners and generate better quality at lower cost, but to date only approximately 10 percent of Americans receive care under this model. Better quality and care coordination is particularly important for Medicaid enrollees, who disproportionally experience chronic conditions.
  • Misaligned incentives under FFS, leading to high costs: The FFS payment system creates a financial incentive to provide more services (regardless of whether they are needed), which leads to higher costs and insurance premiums but not necessarily better quality.1,2
  • Unrealized potential of ACOs: Providers and payers are developing alternative payment and delivery models to help align incentives for physicians, hospitals, and health plans, focusing them on improving quality and managing costs. ACOs represent one such model. ACOs are alliances of health plans and providers that agree to take on responsibility for a defined population of patients, typically under a global budget in which partners share in any deficits or surpluses. Although this model has shown promise in reducing costs and improving quality,2 less than 10 percent of the U.S. population is served by ACOs. As of early 2013, roughly 330 ACOs existed, serving between 25 million and 31 million people. These include ACOs recognized by the Centers for Medicare & Medicaid Services, which provide care to approximately 2.4 million Medicare beneficiaries and 15 million other individuals as well as ACOs sponsored by commercial insurers, which serve an additional 8 million to 14 million individuals.3
  • Particularly for Medicaid populations: Although medical, mental, and social service providers working alone can provide interventions to address one aspect of an enrollee's health problems, they generally do not have the tools or support to execute a coordinated approach to managing their overall health, either individually or at a population level. ACOs can offer this type of coordinated approach, which can be particularly valuable for Medicaid beneficiaries who disproportionally experience chronic conditions and often face socioeconomic challenges. For example, a study of female Medicaid beneficiaries 18 years to 64 years found that 33 percent had high blood pressure and 20 percent had depression, rates that are significantly higher than in the general adult population.4

What They Did

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Description of the Innovative Activity

A county-based ACO integrates medical, behavioral, and social services, with the goal of improving outcomes and reducing costs for newly enrolled Medicaid beneficiaries in Hennepin County, Minnesota. Known as Hennepin Health, the organization is a partnership of several organizations within the county government that share financial risk (a medical center, health plan, social services organization, and Federally Qualified Health Center [FQHC]). An assigned care coordinator works to ensure that each enrollee receives appropriate services based on his or her medical, mental, and social service needs. Partners share data electronically to allow for complete information on each enrollee, and jointly implement initiatives to improve care and promote appropriate utilization. Key program elements are outlined below:
  • Partner relationship: Enabled by State legislation, four organizations that are part of the Hennepin County government signed a business associates’ agreement to form Hennepin Health. Partners share in financial risk and contract with affiliated providers to round out geographic coverage and to provide services they cannot offer.
    • Enabled by State legislation: In 2010, the Minnesota State Legislature passed legislation (Statute 256B Hennepin and Ramsey Counties Pilot Program) giving Hennepin County the authority to conduct a demonstration project for the care of newly eligible individuals under the expansion of Medicaid in the Accountable Care Act (ACA).
    • Shared risk among four county government partners: All four partners are part of the county government. Three of them (NorthPoint Health and Wellness Center, Metropolitan Health Plan, and Hennepin County’s Human Services and Public Health Department) are entities within the county government, whereas the fourth (Hennepin County Medical Center) is a subsidiary with its own board that includes county government representatives. This county-level link facilitated the development of the partnership, which consists of a signed agreement to create a formal ACO. The agreement specifies a risk-sharing arrangement (see bullet below for more details) and allows the partners to rationalize services to avoid duplication.
    • Affiliated providers to round out services: Hennepin Health contracts with 85 affiliated providers to round out geographic coverage and to offer services not available through the partners. These affiliates include dental, vision, and mental health providers; pharmacies; and other FQHCs.
  • At-risk contract to provide services to enrollees: The Minnesota Department of Human Services awarded a contract to Hennepin Health to provide services for up to 10,000 State residents who are newly eligible for Medicaid under ACA.
    • Beneficiary enrollment: A total of four health plans, including Hennepin Health, offer services to this population in Hennepin County. Individuals apply for Medicaid benefits via the usual process; those approved can select from among the plans or are assigned to a plan based on geographic location.
    • Full-risk payment structure: The state pays Hennepin Health a set per-member-per-month (PMPM) fee to cover the cost of care for enrollees, with four different rates being paid based on gender and age (with separate rates for those younger than 40 years and those 40 years and older). In exchange for payment, Hennepin Health must provide all Medicaid-covered services, with the exception of long-term care.
    • Risk sharing among partners: Partners are at full risk financially for any surpluses or deficits at the end of the year. Although most savings are reinvested in enhancing program services, a small amount goes to participating providers according to an annual gain-sharing formula. In its first year, the ACO tied these incentives to reducing admissions, readmissions, and emergency department (ED) visits by at least 10 percent, and to improving performance on preventive care measures (such as engagement in primary care, health care homes, and behavioral health outpatient services) by at least 5 percent. If care costs exceed reimbursement, the partners cover financial losses according to a prearranged formula based on several factors, including location of care.
  • Enrollment and assignment to care coordinator: Hennepin Health receives a list of new members each month and assigns each new enrollee to a care coordinator. The assigned coordinator contacts the enrollee and invites him or her to come in for an assessment and primary care visit. Those who cannot be reached by telephone are assigned to a primary care provider near their home, and then linked to the care coordinator and that primary care provider once they present at a Hennepin Health site for services.
  • Assignment to risk tier that guides level of care management: The care coordinator assesses the patient’s medical, behavioral, and social needs and reviews information on the individual's historic use of services. Based on this information, the coordinator assigns the enrollee to one of three tiers. These tiers dictate the degree of ongoing care coordination, management, and monitoring the enrollee will receive, as outlined below:
    • Tier 3: These high-risk enrollees have had three or more hospitalizations or ED visits in the last year. In addition to regular preventive care, they receive intensive management and referral for issues such as chronic pain, mental illness, and chemical dependency.
    • Tier 2: These enrollees have multiple chronic conditions and have experienced one or two hospitalizations or ED visits in the past year. They receive medical management for their conditions, ongoing preventive care and risk factor assessment, and connection to social services.
    • Tier 1: These enrollees have relatively few medical, psychological, and behavioral issues and have not been hospitalized or visited the ED in the past year. They receive preventive medical care and referral to needed social services.
  • Electronic data sharing to allow for comprehensive enrollee report: Providers share data electronically, thus giving all partners comprehensive information on each enrollee.
    • Shared electronic medical record (EMR): The health plan and medical providers use an EMR to document and track health and utilization data on all enrollees. (Individuals within the Human Services and Public Health Department can view—and some can enter—data in this EMR; the department uses its own electronic system to enter client data.)
    • Data warehouse: The electronic systems of the four partners and their affiliated providers transmit data to a central warehouse, thus allowing any partner to access comprehensive information on each enrollee. The data warehouse pools clinical and utilization data and lists the patient’s social services case worker in a single patient record. Because enrollee-specific details on social services cannot legally be imported, providers can call the case worker to discuss individual cases and share information as needed.
    • Patient-level "radar reports": The data warehouse organizes the patient’s health and utilization information into a patient-specific summary known as a “radar report.” Information is organized by type of provider to facilitate usability. Medical providers, care coordinators, social service providers, and health plan representatives access the radar reports on a regular basis to track a patient’s ongoing interventions and outstanding needs.
  • Joint initiatives to coordinate care and improve health: The ACO pursues a number of joint activities that facilitate coordinated, effective care; selected examples include the following:
    • Focused management of high utilizers: The ACO identifies the top 200 users of health services (who collectively account for 64 percent of total health costs) and provide a targeted intervention that involves a review of their care, design and implementation of different treatment approaches, focused care coordination, and facilitated entry into appropriate care settings.
    • Same-day dental care: When patients present to the ED with dental pain during normal business hours, the triage nurse calls a hospital volunteer, who escorts the patients to an onsite dental clinic. In January and February 2012 (when usage data was temporarily tracked), 111 patients were referred to dental care.
    • Colocation of medical and behavioral health services: ACO partners have embedded mental health and chemical health clinicians in primary care clinics to expedite access to therapy and provide referrals for more intensive services.
    • Urgent care option in ED: The ACO established an urgent care clinic in the ED to treat patients’ nonemergent needs and link them to primary care.
    • Medication management for high users: The ACO identifies enrollees who use the pharmacy benefit heavily; on average, these individuals receive prescriptions from 11 providers and have them filled at 7 pharmacies. Pharmacists contact the enrollees to perform medication reconciliation, answer any questions they may have, and offer advice about therapy.
  • Performance monitoring and reporting: The ACO tracks cost, usage, and health outcomes using a scorecard that pulls data from the data warehouse. The ACO also reports performance on Minnesota Community Measures (which are specified by the state), Healthcare Effectiveness Data and Information Set (HEDIS) measures, and Press Ganey patient satisfaction survey data.

Context of the Innovation

As noted, Hennepin Health is a partnership among four county government–affiliated organizations in Hennepin County, MN: Hennepin County Medical Center, NorthPoint Health and Wellness Center, Metropolitan Health Plan, and Hennepin County’s Human Services and Public Health Department.

Hennepin County Medical Center is a 462-bed hospital that handles more than 20,000 inpatient admissions and nearly 100,000 ED visits annually; the medical center also operates several ambulatory care clinics. NorthPoint Health and Wellness Center is an FQHC  that offers multispecialty medical, dental, and mental health services in North Minneapolis. Metropolitan Health Plan is a not-for-profit, state-certified health maintenance organization serving Medicare and Medicaid enrollees. Hennepin County Human Services and Public Health Department provides a broad range of health and human services to approximately 70,000 county residents each year.

The impetus for this program came after the economic downturn began in 2008. At this time, the Hennepin County Human Services and Public Health Department began experiencing a growing demand for its safety net health and social services. Coupled with shrinking budgets, this increase in demand led county leaders to consider how to better manage the overall health care budget. Leveraging the authority provided by the aforementioned State legislation, Hennepin County Human Services and Public Health Department leaders brought together leaders of the three other organizations (which served many of the same clients) to develop a demonstration project to improve care and service for Medicaid enrollees.

Did It Work?

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Results

The ACO has enrolled an increasing number of clients over time and has reduced admissions, readmissions, ED visits, and the costs of caring for enrollees with historically high utilization. The program has generated high enrollee satisfaction.
  • Growing enrollment: Hennepin Health launched in January 2012 with 4,884 enrollees. By February 2013, it had enrolled more than 6,000 clients.
  • Fewer admissions, readmissions, and ED visits: Inpatient admissions have declined by 29 percent—from 17 per 1,000 enrollees in January 2012 to 12 per 1,000 by December 2012. The readmission rate for ACO enrollees fell by 2 percent between January and July 2012. ED visits by ACO enrollees fell by 39 percent between January and December 2012, due primarily to the aforementioned program to better manage high users and the creation of the urgent care center adjacent to the ED.
  • Lower costs for high users: Intense care coordination and management have led to reductions of 40 percent to 95 percent in the costs of caring for previously high-utilizing enrollees. A 90-day review indicated that more intense medication management for these enrollees has led to a 50-percent reduction in their medication costs.
  • High enrollee satisfaction: Enrollee satisfaction surveys reveal that the percentage of enrollees who are satisfied with the ACO is 87 percent.

Evidence Rating (What is this?)

Moderate: The evidence consists of post-implementation data on enrollment growth and enrollee satisfaction, along with pre- and post-implementation comparisons of key outcomes measures, including hospital admissions and readmissions, ED visits, and total utilization and medication costs for high users of health services.

How They Did It

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Planning and Development Process

Selected steps included the following:
  • Holding meetings with potential partners: Leaders from the four partner organizations met to confirm their commitment to creating an ACO and to design the business associates’ agreement.
  • Convening work group: Each partner identified a high-level employee to serve on a development team and design a proposal. The development team discussed staffing needs, identified gaps in services and potential affiliated partners to meet those needs, and discussed potential care coordination initiatives.
  • Obtaining contract: The development team met with representatives of the Minnesota Department of Health Services to pitch its proposal for an ACO demonstration project. Hennepin Health was awarded the contract.
  • Hiring project manager: The Hennepin County Human Services and Public Health Department hired a project manager to oversee ACO development and implementation.
  • Developing workgroups: The development team created a series of workgroups to address various issues, including technology, finance, care models, data and quality reporting, behavioral health, and communications. Made up of representatives from the partner organizations, each workgroup assessed and defined relevant issues and reported back to the development team.
  • Refining information technology (IT): The IT workgroup met with attorneys to determine what data could be shared and then issued requests for proposals from vendors to build the data warehouse and to enable data sharing through the EMR. Relevant personnel in the partner organizations received training on how to use the new IT systems and how to analyze data from the different organizations.
  • Developing and implementing improvement initiatives: The workgroups took the lead in identifying, developing, and implementing the various care improvement initiatives, including those described previously. As part of this work, the workgroups provide necessary training to affected staff within the partner organizations; they continue to meet on an ongoing basis to identify additional programs to reduce costs and improve care.

Resources Used and Skills Needed

  • Staffing: The Hennepin County Human Services and Public Health Department hired a full-time project manager and two additional staff to oversee ACO development and implementation. Each of the four partner organizations reassigned one employee to oversee ACO-related activities; for example, the hospital reassigned its director of innovations to this role. As part of their ongoing duties, other staff devote a portion of their time to ACO activities as well.
  • Costs: Data on program development and operating costs are unavailable.
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Funding Sources

Minnesota Department of Human Services
The program is funded by PMPM fees paid by the Minnesota Department of Human Services for those enrolled in the ACO; to date, these fees have exceeded costs, obviating the need for ACO partners to contribute to program costs.end fs

Tools and Other Resources

More information about ACOs is available at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ACO/index.html?redirect=/aco/.

Adoption Considerations

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Getting Started with This Innovation

  • Ensure leadership commitment: The chief executives and other top leaders must support ACO development, particularly given the financial risks involved. In Hennepin County, all partners made the ACO a strategic priority, which helped create a framework for cooperation and facilitated development of the program.
  • Identify neutral party to manage development: A neutral party should be hired to guide the development process. Although this individual may be employed by one of the partners, he or she should evaluate the needs of each partner, highlight them during the development process, and identify ways in which the partners can support each other in pursuit of the shared mission. For example, although the area director at the Human Services and Public Health Department served in this capacity for Hennepin Health, she repeatedly emphasized that her role was to represent the interests of all partners, not just those of her employer.
  • Delineate tasks and milestones upfront: Define each task and associated action steps and milestones for each initiative. This step helps ensure progress toward goals.

Sustaining This Innovation

  • Remind partners of importance of sustainability: The partners know that they must continue to support the ACO or face escalating costs they cannot afford and the possibility of having to deny needed services to beneficiaries. This reality helps sustain a sense of urgency to ensure the ACO's ongoing success.
  • Be vigilant in overseeing new processes: New initiatives should be carefully monitored on an ongoing basis to ensure that old patterns of care do not resume.
  • Seek opportunities for expansion: Consider how the ACO can expand to serve new populations. For example, Hennepin Health is lobbying the Minnesota Department of Health Services to serve the disabled population and Medicaid families with children.

More Information

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Contact the Innovator

Jennifer DeCubellis
Area Director
Human Services and Public Health Department
Government Center
300 South 6th Street
Minneapolis, MN 55487-0106
(612) 596-9416
E-mail: jennifer.decubellis@co.hennepin.mn.us

Innovator Disclosures

Ms. DeCubellis reported having no financial interests or business/professional affiliations relevant to the work described in the profile, other than the funders listed in the Funding Sources section.

References/Related Articles

Hennepin Health: the County’s health care. Available at: http://www.hennepin.us/healthcare.

Lowen T. On the path to ACOs. Minn Med. 2012;95(11):20-5. [PubMed]

Footnotes

1 Markovich P. A global budget pilot project among provider partners and Blue Shield of California led to savings in first two years. Health Aff. 2012;31(9):1969-75. [PubMed]
2 Landon BE. Keeping score under a global payment system. N Engl J Med. 2012;366:393-95. [PubMed]
3 Elliott VS. ACOs, already surging, poised for even more growth. Am Med News. 2012 Dec. Available at: http://www.ama-assn.org/amednews/2012/12/10/bisc1210.htm.
4 Khoury AJ, Hall A, Andresen E, et al. The association between chronic disease and physical disability among female Medicaid beneficiaries 18–64 years of age. Disabil Health J. 2012 Dec (in press).
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Original publication: May 08, 2013.
Original publication indicates the date the profile was first posted to the Innovations Exchange.

Last updated: May 08, 2013.
Last updated indicates the date the most recent changes to the profile were posted to the Innovations Exchange.