Health Care

With $300 million at stake, Medicaid reform effort reaches year four 


Al Hammonds of Millennium Collaborative Care talks strategy with Paige Prentice of Horizon Health, one of 1,800 providers in the health network.


By Tracey Drury  – Reporter, Buffalo Business First

March 23, 2016

It’s been more than three years since area hospitals teamed up with other health care providers to change the way they operate and how patients seek care, part of a statewide effort to reform the Medicaid system.

Though the effort was not without risk or headaches, the reward promised real change – and $300 million in Delivery System Reform Incentive Payments (DSRIP) for providers.

While the first three years focused on planning and setup, 2018 represents the first year where providers will only be paid based on performance. And a portion of those payments will rely on the performance of others, since a percentage of the funds will only be awarded if 25 different groups statewide succeed.

Locally, those two performing provider systems are Millennium Collaborative Care, with 1,800 providers in eight counties serving 230,975 Medicaid recipients; and Catholic Medical Partners, with 1,200 providers in Erie, Niagara and Chautauqua counties covering 80,618 individuals.


Millennium Collaborative Care Executive Director Al Hammonds says health care providers are ready for a shift to performance-based payments.


Al Hammonds is executive director of Millennium, where providers have the potential to receive $243 million over the five-year period. He said providers are prepared for year one of implementation.

“A lot of this environment we’re in now is like Robin Hood – all for one and one for all,” he said. “It’s all around performance and how we do on the measure.”

So far, so good, he said. In all, the organization will be measured on 54 areas based on 12 projects, the population it serves and 30 claims-based metrics. So far, more than half of the 30 metrics are trending up, with June 30 ending measurement year four.

“Those were incentive dollars so we’re going to be drawing down those dollars, which are all dollars we didn’t budget for,” Hammonds said. “Our budget is built on a conservative base, so any performance dollars are incentives we can pass on to the providers.”

How prepared are providers for the change? He said it’s been challenging to make changes and implement all these programs.

“This is a shift in focus because it’s really complex and really taking time. We’ve done everything we can to position ourselves and the providers to successfully move into that new realm of things,” he said.

Providers are grouped into several categories, which determines their risk and reward. The majority are part of the base master participation group while a smaller group of larger providers are part of a clinically integrated network that receives bonus incentives

These 14 providers represent about 80 percent of the Medicaid patients Millennium covers in the region, including the higher-volume hospital emergency departments.

“The base network feeds into that, and that’s where our energy and our excitement is in this clinically integrated network,” Hammonds said. “There’s more engagement and a sense of urgency based on that bonus.”

In addition to the payments from DSRIP, the entire effort helps all the providers get ready for the shift to value-based payments from the traditional fee-for-service model. It’s something that all payers have shifted toward, both government and private commercial insurers.

“This is the runway or the ramp-up for providers,” he said.

So far, Millennium has earned 95 percent of the funding it was eligible to receive, or $70 million spread across the system. Moving ahead, it’s unlikely the group will receive 100 percent of funds since that’s based on the performance of all 25 groups statewide.

But it’s not easy, especially when targets shift, Hammonds said.

“We identified the number of lives and percentage of improvement we have to make and we’re working toward the number, but then the numbers change. Quite frankly, in this world, the needle moves,” he said.

Still, the work completed already has resulted in significant change. That’s especially true when it comes to collaborative efforts among providers that were siloed and fragmented for so many years.

“It takes a tremendous amount of work and heartache just to bring it all together,” he said. “Providers acted as competitors in the past and now have to collaborate to realize some of those dollars.”


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