Dive Brief:
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UMass Memorial Health Care, a four-hospital system that is central Massachusetts’ largest healthcare provider, has dropped out of Massachusetts’ revamped Medicare program.
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The system's departure will leave 17 healthcare organizations taking part in the program, called MassHealth. The health system will be the only large network of doctors and hospitals in Massachusetts that won’t participate in the overhauled program, which will use accountable care organizations (ACOs).
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UMass Memorial said it will continue to take MassHealth patients, but felt the “financial risks were too great” in the revamped program. About 27% of UMass Memorial’s patients are on MassHealth.
Dive Insight:
UMass Memorial Health Care’s decision to pull out of the ACO leaves it as the only major hospital in the state to not take part. Other huge players, both nonprofit and for-profit, such as Partners HealthCare, Steward Health Care System and Lahey Health, have all signed five-year contracts. Payers taking part include Tufts Health Plan and Boston Medical HealthNet Plan.
Healthcare is moving further into value-based contracts tied to quality and health outcomes as a way to cut costs and improve care, but some systems, like UMass Memorial Health Care, are concerned about the financial impacts of value-based contracts.
In a similar case, Mission Health, a western North Carolina health system, recently said it's leaving the Blue Cross and Blue Shield of North Carolina (BCBSNC) network in October and rejecting a new value-based contract. More than 40 other hospitals agreed to the BCBSNC contract, but Mission Health said the payments would not keep up with rising healthcare costs.
Massachusetts officials hope moving the Medicaid program to ACOs will lead to lower costs and improved outcomes. The main goals are to avoid unnecessary hospitals stays and procedures. The ACOs will be held financially accountable for cost, quality and member experience for more than 850,000 MassHealth members starting on March 1, 2018. MassHealth covers about 1.9 million people.
Massachusetts Gov. Charlie Baker, who is a former CEO of the nonprofit health benefits company Harvard Pilgrim Health Care, said the ACO agreements will "directly lead to better and more coordinated care for MassHealth members."
The ACO program is part of Massachusetts’ five-year 1115 Medicaid waiver, which includes $1.8 billion to restructure the MassHealth system. ACOs will receive more than $100 million “in new investments throughout the remainder of 2017 to support the transition of healthcare providers providing value-based care.” The money will be used to enhance care coordination, improve EHRs and ACO analytic capabilities, reduce avoidable inpatient and emergency department utilization and implement “other key initiatives for ACOs to improve health outcomes and member experience under the new payment models.”
As healthcare moves further into value-based contracts, payers and governments will need to find ways to keep pace with healthcare costs so providers can take part, find savings, improve outcomes and become or remain profitable.