Value-based Arrangements

Humana Will Buy One Primary Care Group — and Could Snap Up Another

Humana Inc. will spend between $450 million and $550 million in debt and cash to gain full control of a group of primary care clinics that it launched with private equity firm Welsh, Carson, Anderson and Stowe (WCAS), and company executives said during the firm’s recent investor day that Humana plans to double down on its existing primary care M&A strategy. Health care finance experts tell AIS Health, a division of MMIT, that insurers’ spending spree on providers is only likely to accelerate, but that Humana is in pole position to benefit from deep investments in Medicare Advantage-focused primary care.

Health insurers have spent billions to acquire outpatient providers since the onset of the COVID-19 pandemic. Finance experts tell AIS Health that the spending spree has two sources of capital. Carriers are spending huge cash reserves taken in during the deepest parts of the pandemic, which saw utilization plummet as premium revenues increased. In addition, Wall Street is bullish on managed care: Lenders are lining up to offer generous terms to acquisition-hungry insurers, which have enjoyed strong stock performance since the start of the pandemic era.

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Private Plans in Michigan Stall Under CPC+ Model

A primary care reform model in Michigan failed to deliver intended cost savings and quality improvements among two private payers, casting doubt on whether current value-based model designs in the primary care space have the muscle to exert real benefits.

A study published in the September issue of Health Affairs analyzed the spending and quality results of two large insurers in Michigan that offered a payment reform model designed after the federal Comprehensive Primary Care Plus (CPC+) program. The results were muted: Among the private payers involved, the CPC+ model failed to reduce total spending; the results indicate that, when accounting for care management fees, spending actually rose under the CPC+ program. On the quality side, performance remained unchanged between CPC+ and non-CPC+ participants.

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Health Systems May See More Savings With Medicare Advantage vs. Medicare ACOs

A new study published in JAMA Network Open raises questions about whether health systems can actually achieve significant savings through the Medicare Shared Savings Program (MSSP), or if Medicare Advantage could be a better bet. To identify spending patterns in MA and MSSP’s Accountable Care Organizations (ACOs), researchers studied the characteristics and claims data of about 16,000 Medicare patients at Ochsner Health System (OHS), a large, academic system in Louisiana, from 2014 to 2018. Ochsner joined MSSP in 2013, and its ACO hosts more than 2,200 providers. It also offers MA plans via a partnership with Humana Inc.

APG’s Susan Dentzer Discusses Value-Based Care Goals, Challenges Across Medicare

CMS’s Center for Medicare and Medicaid Innovation last year declared a goal of having all traditional Medicare enrollees in an accountable care arrangement by 2030. America’s Physician Groups (APG), which represents more than 300 physician groups that accept various degrees of risk with all payer types, including Medicare Advantage plans, wants CMS to apply that same goal to MA. In a recent comment letter on CMS’s request for information on the MA program, APG President and CEO Susan Dentzer urged the administration to incentivize the delegation of full risk to providers in MA.

Six Major California Payers Agree to Join Value-Based Primary Care Initiative

Six payers have signed a memorandum of understanding (MOU) to become the first members of the California Advanced Primary Care Initiative, a new program intended to expand the use of value-based primary care in the state.

The initiative is in its early stages, and plenty of work needs to be done to finalize the plans, according to participants in the program who spoke with AIS Health, a division of MMIT. But the agreement calls for the companies to work together to increase their investment in primary care, contract with providers in value-based arrangements, adopt measures that will be publicly released, and hold practices accountable for meeting benchmarks and reward them for strong performance.

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Pharmacist Care Managers Could Help Improve Diabetes Outcomes

Pharmacists and other non-physician care managers can improve the quality of diabetes care in the primary care setting, but structural issues make it difficult to fully leverage their potential, according to research published in the July issue of the journal Health Affairs.

“We need to have a different way of taking care of people with a chronic illness,” said Thomas Bodenheimer, a professor emeritus of family and community medicine at the University of California, San Francisco, who spoke at a Health Affairs briefing on July 19. The briefing convened several researchers who published diabetes-focused articles in the journal’s July issue.

Prediabetes Population Soars, Prevention Programs Stay Unused

Although the prediabetes prevalence rate increased by 4.8 percentage points between 2010 and 2020, access to the National Diabetes Prevention Program remained limited, with only 3% of people with prediabetes participating in the program, according to a recent Health Affairs study. The researchers estimated 13.5% prevalence of diagnosed prediabetes and 30% of potentially undiagnosed prediabetes in 2020, using two national surveys.

The National Diabetes Prevention Program — an intensive 12-month, group-based, lifestyle intervention to prevent or delay type 2 diabetes — remained underused and undersupplied. Only 5% of patients diagnosed with prediabetes were referred to such a program. In general, men were more likely to be referred but less likely to participate than women.

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Quality of Diabetes Care Declines as Health System Grows More Fragmented

In a series of articles in the July issue of the health policy journal Health Affairs, researchers evaluated diabetes care in the United States through several lenses, including care management, prevention, interventions, health equity, quality measures and value-based payment design. Several of them also spoke at a July 19 policy briefing in which a key message was that the fragmented U.S. health system is contributing to a plateau in improving diabetes care — and value-based diabetes payment programs may be causing still more fragmentation.

Despite remarkable advances in clinical understanding and treatments for diabetes, the U.S. has stagnated over the past decade in preventing and managing the condition, said Mohammed Ali, a professor in the Hubert Department of Global Health at Emory University. Ali served as the theme advisor for Health Affairs’ diabetes-focused issue and also was a co-author of the issue’s overview article, “Diabetes And The Fragmented State Of US Health Care And Policy.”

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Centene Will Join Delaware in Value-Based, Person-Centered Medicaid Revamp

With a focus on value-based care, health equity and social determinants of health, Delaware this month selected three managed care organizations to serve some 280,000 Medicaid and CHIP recipients through the statewide Diamond State Health Plan and DSHP Plus managed care programs. Incumbents AmeriHealth Caritas and Highmark Health Options Blue Cross Blue Shield were both selected for the new pacts, while Centene Corp.’s Delaware First Health will round out the trio of plans, the state’s Dept. of Health and Social Services (DHSS) said on July 12.

Delaware’s Medicaid managed care program, comprised of DSHP and DSHP Plus, is currently operating under the authority of a Section 1115 demonstration waiver that was most recently extended through Dec. 31, 2023. It provides integrated physical health, behavioral health and long-term services and supports (LTSS) to eligible Medicaid and CHIP enrollees.

CMS Unveils New Oncology Care Model to Mixed Stakeholder Responses

Only days before the end of CMS’s Oncology Care Model (OCM), the agency unveiled a successor that will start next year. While oncologists have been overall positive about the new program, they still have had some complaints.

Offered through the Center for Medicare and Medicaid Innovation (CMMI), the Enhancing Oncology Model (EOM) is a five-year, value-based, patient-centered care model that will start on July 1, 2023. Participants may include oncology physician group practices, private payers, Medicare Advantage plans and state Medicaid agencies. The application submission period started when the voluntary model was introduced on June 27 and will close Sept. 30.