Skip to main content
By Monica E. Oss

A series of news stories released over the past year out of Texas has caught my attention—and the attention of legislators and advocates in Texas. Last year The Dallas Morning News published a series of investigative reporting articles, Pain & Profit, on the services delivered under the state’s Medicaid health plans. The series is extensive, but the overall theme was that the state’s Medicaid consumers suffer from “poor state oversight” allowing “companies to skimp on essential care for sick kids and disabled adults” and that “8,000 and 14,000 people were probably not receiving the care they needed.”

The article ends with a series of recommendations, including pushing state policymakers to address the problems with capitated funding (specifically medical loss ratio requirements), mandating care coordination, addressing access issues, approving medical guidelines, standardizing the appeals process, providing opt outs of bad health plans for vulnerable populations, and tracking performance. As is common in the wake of investigative journalism that publicizes problems, there is now a bipartisan groundswell to revamp the Texas Medicaid system, with more than a dozen bills proposed (see ‘Pain & Profit’ Investigation Spurs Sweeping Bipartisan Fix For Texas’ Medicaid Managed-Care Mess).

I think there are two issues at play here: One, there needs to be some standards of care that are uniformly agreed to by policymakers, payers, health plans, and provider organizations. And two, it is important to have standardized systems for incentivizing health plans and provider organizations to meet and exceed those standards of care.

The first issue comes down to the challenge of defining what constitutes “good care.” One of the ubiquitous challenges across the U.S. health and human service system is in definitions. This is not limited to Medicaid health plans. Determining what is “legally acceptable care” is one issue—this relates to the contract terms when states and counties buy health care systems and services from health plans, ACOs, provider organizations, and individual professionals. Less clear is what the “commonly accepted standards of care” are and whether these “commonly accepted standards of care” are what we want (this was the terminology used by the judge in the recent California decision, Judge Rules United Behavioral Health Medical Necessity Criteria More Restrictive Than Accepted Standards). Finally, there is the question of what “guidelines” (for medical/clinical necessity, appropriateness, and/or entitlement) should be incorporated in service contracts. These issues are some of the most fundamental to health and human service policy, budgeting, operations management, and consumer experience. Performance cannot be measured until it is defined.

The second issue is about incentives and accountability. I’m all for incentivizing health plans and provider organizations to deliver “value”, however it is defined. But the usual caveats apply: Aligning measures to performance objectives is key. The cost of tracking and measuring performance must be taken into consideration. And, incentives (particularly financial incentives) do change behavior, which means states, counties, and health plans must “choose wisely” when it comes to those incentives. Our team has designed enough value-based contracting systems that we have created a standard development process that starts with objectives, focuses on priorities and feasibility testing, and requires structured implementation testing. Measuring performance should be a given—and paying for that performance should be incorporated in contracting plans.

In addition, states and counties buying health and human services should move beyond measuring and paying for performance—and introduce consumerism into the equation with public performance reporting. Making performance metrics public—in a format that allows easy comparisons between health plans or provider organizations by both consumers and professionals—is key to creating a continuously improving delivery system. Even if the state, county, or health plan doesn’t pay financial incentives, public performance data is powerful. I once worked for a state Medicaid director who created a public performance dashboard for mental health service provider organizations in his state. When I asked why he did this, since he wasn’t allowed to pay penalties or bonuses, he said it changed the behavior of the worst performers. His exact phrase: “No CEO wants to be on the bottom of the list for more than one quarter.” That lesson has stuck with me.

I’m not hopeful that there is an easy path to resolving the issue of health and human service “best practice” guidelines. There is great work going on for some disease states, in some geographies—but there appears little agreement about how best to make decision support a reality across the system of care. I do think that payers can agree on some minimum metrics of what constitutes good performance. And, I think that the payers can speed the discussion of “best practices” by making their performance data comparable and public. I believe that most people working in the health and human service field—at every level, in most types of organizations—want to do well for the consumers they serve. Making performance data available (for their own organization and others) is a fundamental piece of making that happen.

For more on public performance reporting in the health and human service field, check out our coverage of these performance-based programs:

  1. CMS To Resume Terminating Medicare Advantage Plans With Low Quality Star Ratings
  2. ACOs Saved Medicare $660 Million Over Four Years
  3. CMS Awards 7 Agreements For Performance Measure Development For Medicare’s Quality Payment Program
  4. 74% Of Medicare Advantage Enrollees In Four & Five Star Plans In 2019
  5. Nearly 11,000 Skilled Nursing Facilities Receive Medicare Rate Cut Due To Hospital Readmission Rates
  6. New Hampshire Medicaid Implements MCO Capitation Rates Linked To Performance
  7. New York Medicaid Releases Revised 2019 Health & Recovery Plan VBP Quality Measure Set
  8. Pay-For-Performance Initiative At 8 Connecticut Hospitals Shortens Medicaid-Covered Youth Psychiatric Inpatient Stays By 25%

For more on the current state of value-based contracting with health plans, join OPEN MINDS Senior Associate Deb Adler on August 12 for her seminar, How To Build Value-Based Payer Partnerships: An OPEN MINDS Executive Seminar On Best Practices In Marketing, Negotiating, & Contracting With Health Plans.

Login to access The OPEN MINDS Circle Library. Not a member? Create your free account now!


Support Request

Need help now?

Call our toll-free phone number 877-350-6463