In 2012, Oregon launched its coordinated care organization (CCO) program, a regional Medicaid managed care program closely tied to local providers and communities. Through a global budget approach that projected spending for physical, behavioral, and oral health services, the CCO model was designed to improve the quality of care for its patient population and control cost growth. In January, Oregon released its CCO 2.0 Request for Applications (RFA), with broad aims to further integrate care, address social determinants of health and health equity, advance value-based payment, and contain costs.
CHCS recently spoke with Chris DeMars, MPH, Director of the Oregon Health Authority’s (OHA) Transformation Center, to learn more about the goals and changes of the CCO 2.0 program.
Q: What makes Oregon’s CCOs distinctive from managed care organizations (MCOs) in other states?
CCOs have one integrated global budget for behavioral health, physical health, and oral health services, and have budget flexibility to provide services outside traditional medical services.
First, CCOs are locally governed. Decisions are made through partnerships among health care providers, community members, Oregon Health Plan (OHP, Oregon’s Medicaid program) members, and health systems that have financial responsibility and risk. CCOs are also required to have a Community Advisory Council (CAC), which is comprised of at least 51 percent Medicaid members, as well as representatives from the local governments and community-based organizations. The CACs oversee development of a community health assessment and a community health improvement plan, which lay out a population health framework for the entire community served by the CCO — not just the CCO’s members.
Second, CCOs have one integrated global budget for behavioral health, physical health, and oral health services, and have budget flexibility to provide services outside traditional medical services — what we call “health-related services.” This flexibility is designed to meet the Triple Aim. Through health-related services, CCOs can support new care models that are patient-centered, team-focused, and reduce health disparities.
Q: What were the accomplishments of the CCO 1.0 model?
Since 2013, the cost of the CCO program statewide has grown at a rate of 3.4 percent per member per year. Before Oregon’s transformation, the growth rate was at 5.4 percent, which means about $2.2 billion in costs were avoided over the last five years.
CCOs are also improving health care quality and other health indicators, especially in the areas tied to incentive payments. Some highlights are: increased enrollment in Patient-Centered Primary Care Homes (Oregon’s version of patient-centered medical homes); improvement in developmental screenings from ages 0-3 (from 21% in 2011 to almost 70% in 2017); and a 50 percent decrease in avoidable emergency department visits from 2011 to 2017. In addition, an evaluation of Oregon’s 1115 waiver found an improved experience of care, improved self-reported health status, and a strong association between financial incentives and improvements in CCO metric performance.
Q: What were your goals for the CCO 2.0 procurement? What did you want to improve?
In September 2017, Governor Kate Brown directed the Oregon Health Policy Board (OHPB) to provide recommendations to advance Oregon’s transformation efforts in four key areas: (1) improving the behavioral health system and addressing barriers to the integration of care; (2) increasing value and pay for performance; (3) focusing on social determinants of health and health equity; and (4) maintaining sustainable cost growth.
To do so, we engaged in a year-long public process. We heard directly from hundreds of Oregonians who participated via public meetings across the state and multiple surveys and online outreach tools. OHP members and other stakeholders let us know that we have areas where we can improve; indicated support for the policy direction we identified; and expressed satisfaction with Oregon’s coordinated care system and the care they receive.
Q: The RFA emphasized not only uptake of VBP models, but also a mindful approach to payment reform. What factors did Oregon consider when choosing its VBP targets?
In CCO 2.0, Oregon will require that CCOs pay providers using VBP models, and will expect CCOs to have a larger proportion of payments tied to VBP over time, moving away from the fee-for-service payment model toward annually increasing their paying providers for quality of care and improved health outcomes.
In CCO 2.0, Oregon will require that CCOs pay providers using VBP models, and will expect CCOs to have a larger proportion of payments tied to VBP over time, moving away from the fee-for-service payment model toward annually increasing their paying providers for quality of care and improved health outcomes. We decided to base our definitions on the Refreshed Health Care Payment Learning and Action Network’s (LAN’s) Alternative Payment Models Framework. To establish our VBP targets, we collected information on the statewide prevalence of existing VBP models in Oregon and looked at VBP targets in other states. We wanted our targets to be achievable, but also firmly establish VBP as the primary method of payment.
By 2024, no less than 70 percent of each CCO’s provider payments must be in the form of a VBP in LAN Category 2C (Pay for Performance) or higher, and at least 25 percent of the CCO’s provider payments should include downside risk (fall within LAN Category 3B or higher). As part of their work toward achieving their VBP targets, CCOs must also develop new or expanded VBPs in five areas: hospital care, maternity health care, children’s health care, behavioral health care, and oral health care. In addition to these targets, CCOs will also be required to make monthly infrastructure and operations payments (LAN Category 2A) to all of their patient-centered primary care homes.
Since a shift to VBP could lead to an unintentional increase in health disparities, we also want CCOs to develop plans to mitigate these risks. Applicants responding to our CCO 2.0 RFA are required to describe their plan for mitigating any adverse effects VBP implementation may have on health inequities, health disparities, or any adverse health-related outcomes for at-risk populations. Beginning in 2020, the CCO’s executive leadership team must meet annually with OHA to describe the outcomes of the mitigation plan. The OHA Transformation Center will share lessons distilled from CCOs’ efforts to spread VBP innovations.
Q: CCO 2.0 also includes new incentives and requirements relating to SDOH-HE. Could you speak to some highlights?
Since a shift to VBP could lead to an unintentional increase in health disparities, we also want CCOs to develop plans to mitigate these risks.
CCOs have the ability to use health-related services to invest in both individual-level and population-level solutions to address their members’ social determinants of health. In the first round of CCO contracts, spending on health-related services was a very small part of the CCO’s budgets — about 0.14 percent of total member expenses. We know that to be successful in achieving the Triple Aim, we have to do a better job of addressing the social factors at the root of many health issues. As such, CCO 2.0 includes various requirements to increase spending on health-related services and social determinants of health and health equity (SDOH-HE) initiatives overall.
First, we are creating an SDOH-HE Capacity Building Bonus Fund to reward CCOs that reach SDOH milestones and build capacity to address SDOH and improve health equity over the long term. The fund will be dependent on the availability of funds in the rate development process, since we are committed to keeping under a 3.4 percent growth rate. A related legislative change will also require CCOs to spend a portion of net income or reserves on services to address health disparities and SDOH, which will further increase investments in this area. CCOs will be required to give their CACs a role in their process for SDOH-HE spending, so that the spending is community-driven.
Second, CCOs will be required to align their community health assessment and community health improvement plans with local public health departments and hospitals to increase impact. Further, their spending on SDOH-HE must be aligned with their community health improvement plan priorities, and support housing-related services, which is a statewide priority.
Third, CCOs will be required to develop a Health Equity Plan to institutionalize their commitments to health equity and provide more standardization of health equity infrastructure across communities. These requirements include identifying a single point of accountability for health equity and incorporating cultural responsiveness and implicit bias components in their training for CCO staff and provider networks.
Fourth, CCO 2.0 includes requirements to increase infrastructure for effectively utilizing traditional health workers (THWs), like community health workers, which are an important workforce to address SDOH. For example, CCOs will have to develop a plan for integrating and using the THW workforce — in conjunction with the state’s Traditional Health Worker Commission — and will have to designate a THW liaison as a central point of contact.
Finally, OHA is also considering a number of other initiatives to address SDOH-HE, including risk adjusting capitation rates based on social factors.