N.H. Medicaid weighs paying for performance

New Hampshire’s Medicaid program is among 15 in the nation that are considering new initiatives for paying physicians and other providers based on the quality of the care they provide where such a protocol does not currently exist, according to a new survey.

“Pay-for-Performance in State Medicaid Programs: A Survey of State Medicaid Directors and Programs,” a nationwide survey of state Medicaid programs was released April 12 by nonprofit health analysis firm IPRO Inc. and the New York-based Commonwealth Fund.

The survey found 28 of the nation’s Medicaid programs have existing measures providing “financial incentives to health-care providers for quality care,” and another 15 states — including New Hampshire — without one but have similar initiatives under development.

“Medicaid is a major source of funding of health care in every state and, therefore, has a significant influence on the health-care system,” said Thomas Hartman, vice president for health care quality improvement for IPRO and co-author of the study. “But each state operates its program independently of the others. We thought it would be helpful to provide a detailed snapshot of what is taking place around the nation so that state officials have solid information on which to base decisions about pay-for-performance.”

The Medicaid program is a federal- and state-funded program serving individuals and families that meet financial and other eligibility requirements and certain other individuals who lack adequate resources to pay for medical care.

According to the survey, New Hampshire is currently evaluating two pay-for-performance initiatives.

A key component of the GraniteCare program, created in 2004 as part of the state’s Medicaid modernization initiative, calls for paying physicians and other practitioners based on performance with financial incentives for prevention, office-based systems and outcomes.

These incentives will result in increased use of practice guidelines, improved patient safety, better clinical outcomes and reductions in medical errors and cost, according to the GraniteCare program outline on the Department of Health and Human Services Web site.

“The network of primary care providers willing to care for New Hampshire’s Medicaid consumers has eroded due to reimbursement rates that are below the market rate and, in many cases, even below the cost of delivering the service. By increasing reimbursement, while providing incentives for desired provider behavior, the state will increase its provider network base while driving quality improvement,” said John Stephen, commissioner of the New Hampshire Department of Health and Human Services, in his 2004 presentation of the GraniteCare program to the Legislature.

At the time of the survey, HHS had yet recommended specific measures.

The second program, the New Hampshire’s Citizen’s Health Initiative, was launched in 2005 as part of a public/private effort to improve health and disease prevention, improve health-care quality, and to promote the openess of information.

The NHCHI has recommended performance-based reimbursements for:

• The use of appropriate medications for patients with asthma
• Appropriate testing for children with pharyngitis and/or appropriate treatment for children with upper respiratory infection
• Use of technology by physicians, specifically electronic medical records and prescribing systems
• Management of diabetes based on HbA1c levels (a test which indicates blood sugar levels over time) and LDL-C (a type of cholesterol) levels

Ned Helms, chair of the quality of care policy team for NHCHI, said the workgroup met last year to work on selecting the measures with representatives from Medicaid and the state’s major insurers.

“The insurers agreed to use NHCHI’s metrics for its providers that were enrolled in their pay-for-performance programs, which they started to do in January,” said Helms.

He said it was a “good first step” and is planning to have the group reconvene this summer and “continue to move forward.”

Of the New England states, only Maine and Rhode Island currently have Medicaid pay-for-performance programs, with Maine proposing an additional program involving all of its state payers. Connecticut and Vermont are both developing two new programs, and Massachusetts is proposing four programs.

“New programs are still focused mainly on managed care and PCCM [primary care case management] providers but appear to be shifting their emphasis to the quality and cost issues related to chronic diseases like asthma and diabetes,” said IPRO study co-author Kathryn Kuhmerker, president of the Kuhmerker Group and former Medicaid director for New York state.

Also nine Medicaid programs are or will be working with payers, employers, consumers and providers in statewide and regional pay-for-performance and quality improvement efforts, including New Hampshire’s Citizen’s Initiative and a program in Maine. The goal with these programs is to promote consistency and stability.

A majority of Medicaid directors said that the priority behind conducting pay-for-performance programs was to improve quality of care rather than reduce costs.

Many directors also voiced concerns in the survey about the potential unintended consequences of pay-for-performance programs, especially that providers might cherry-pick beneficiaries with less complicated conditions, might decide to leave the Medicaid program and that mandatory participation in pay-for-performance might actually result in providers leaving the program.

Medicaid directors from all 50 states and Washington, D.C., were surveyed May through October 2006 for the report, which included follow-up interviews and documents from multiple sources focused on programs that provide financial rewards for quality, efficiency and other components.

“Very few states have conducted formal evaluations of their pay-for-performance programs, but most Medicaid officials believe that the overall quality of care being provided is improving as a result of these programs,” said Hartman. “More research clearly needs to be done to assess the effects of pay-for-performance on the quality of care provided to Medicaid recipients.”

A copy of the report may be downloaded at cmwf.org. — CINDY KIBBE