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CMS opening up options for states to better manage dual-eligible patients

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CMS opening up options for states to better manage dual-eligible patients

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According to data from CMS, while dual-eligible patients make up only 15 percent of Medicaid enrollees, they are responsible for 33 percent of the program’s expenditures.

The Centers for Medicare & Medicaid Services is looking to partner with states to determine better models to treat the 12 million dual-eligible Medicaid and Medicare beneficiaries in the country.

CMS and states spend more than $300 billion annually on this patient population, many of whom suffer from multiple chronic conditions made more difficult to treat by social and economic barriers.

The cost for dual-eligible population is outsized when compared to its size. According to data from CMS, while dual-eligible patients make up only 15 percent of Medicaid enrollees, they are responsible for 33 percent of the program’s expenditures.

“Less than 10 percent of dually eligible individuals are enrolled in any form of care that integrates Medicare and Medicaid services, and instead have to navigate disconnected delivery and payment systems,” CMS Administrator Seema Verma said in a statement.

“This lack of coordination can lead to fragmented care for individuals, misaligned incentives for payers and providers, and administrative inefficiencies and programmatic burdens for all.”

The goal from the agency is to promote new models which can better integrate Medicare and Medicaid services and create a more seamless experience for both beneficiaries and providers working across the two programs.

One major goal is to allow states to share in savings and benefits gained from investment in better care for the dual-eligible population.

In a letter addressed to state Medicaid leaders, Verma laid out a few potential payment approaches to address the issue of dual eligible patients, including a capitated payment model which would provide the full array of Medicare and Medicaid services with a set dollar reimbursement amount.

Nine states are currently piloting the model, which creates a three-way contract between the state, CMS and Medicare-Medicaid Plans. So far, CMS said state savings for states have averaged 4.4 percent in these test markets.

Through the experiments, Verma said the agency has been able to foster a competitive marketplace with multiple offerings that incentivizes health plans to invest in services that address the patient population.

CMS said it is currently open to extending the initial state pilots and expanding the geographic scope of the capitated programs.

For states that administer dual-eligible patients on a fee-for-service basis, Verma laid out a merged managed care model that would allow states to share in Medicare savings for metrics like reducing hospital readmissions.

Washington and Colorado are currently testing out the model. In one instance, providers in Washington are using Medicaid health homes to deliver high-intensity care to high-risk beneficiaries and sharing in the cost savings.

CMS said preliminary data from Washington’s program has been positive, with gross savings for Medicare Part A and Part B of 11 percent over three years. This has resulted in $36 million in performance payments to the state.

The letter from CMS also opens up the opportunity to potentially partner on state-specific models developed internally meant to better serve dual eligible patients and reduce Medicare and Medicaid expenditures.

CMS has made payment delivery reform a key initiative, with the ultimate goal of moving towards a outcomes-based payment system and reducing expenditures as Medicare faces an uncertain future.

A few recent initiatives include the launch of the agency’s Primary Cares Model, as well as the recent expansion of supplementary benefits for Medicare Advantage beneficiaries meant to tackle social determinants of health.

 

 

 

Living Like a Leader: A day with Scripps Health CEO Chris Van Gorder

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“Healthcare is always going through a lot of change, and sometimes employees, managers and even physicians think we are making those changes because somebody in administration decided it’s the right thing to do. The reality is, we’re reacting to what’s changing in the marketplace or what we believe will be coming in the marketplace. If we don’t adjust fast enough then it will negatively affect our organization and employees.”

From police officer to healthcare executive, Chris Van Gorder’s career trajectory is far from ordinary.

Mr. Van Gorder began his career as a police officer in a town bordering Los Angeles. After being injured on the job and retiring from the police force, Mr. Van Gorder had to reinvent himself.

He eventually took a job as a hospital security director for the facility where he received care for his injury. This job, unbeknownst to him at the time, would shape the rest of his work life.

After spending time in the hospital as a guard and observing leadership, Mr. Van Gorder decided to return to school to get a degree in healthcare administration.

Since, Mr. Van Gorder has held several prominent healthcare leadership positions, including vice president, COO and CEO of Anaheim Memorial Hospital and CEO of Long Beach (Calif.) Memorial, the flagship facility of MemorialCare Health System in Fountain Valley, Calif.

Now Mr. Van Gorder serves as CEO of one of the top medical institutions in the U.S., San Diego-based Scripps Health, a $3.1 billion integrated network with 15,000 employees and 3,000 physicians. He has held the role since 1999.

Here, Mr. Van Gorder spoke with Becker’s Hospital Review for our “Living like a leader” series, which examines influential decision-maker’s daily routines to offer readers an idea of how they manage their energy, teams and time.

Question: What is the first thing that you do when you wake up?

Chris Van Gorder: Get a cup of coffee. Then I go to my home office and prepare what I call “market news.” I do this every day of the year, including holidays, vacations and weekends. The market news is a summary of all the major healthcare and business articles that I think may have an impact on Scripps Health. I’ll scour several websites, including The San Diego Union Tribune, The Los Angeles Times, The New York Times, The Washington Post and Becker’s, among other healthcare publications. I’ll put those links into a document and send them to my senior leadership team, most doctors and the alumni of our leadership academies. It takes me about an hour.

My rationale for sending the relevant links to my team is that healthcare is always going through a lot of change, and sometimes employees, managers and even physicians think we are making those changes because somebody in administration decided it’s the right thing to do. The reality is, we’re reacting to what’s changing in the marketplace or what we believe will be coming in the marketplace. If we don’t adjust fast enough then it will negatively affect our organization and employees.

Q: What is the first thing you do when you arrive at work?

CVG: I will grab another cup of coffee. Then I log onto the computer and start answering emails. Daily, I will answer every email that comes to me. I don’t go to bed at night without looking at my iPhone and making sure I’ve responded to every email that came to me during the day. So the first thing I do when I get to work is respond to any emails that came during the middle of the night. One of our core values is respect, and I think it is a sign of respect when I am responsive to the people who work in this organization and people outside of it.

Q: Is there any work that you like to get done before lunch or work that you save for the afternoon?

CVG: Unless it’s a lunch meeting, I never eat lunch. What I usually do is read my own market news, because when I put it together, I don’t have enough time to thoroughly read the articles. But my daily routine is so variable. Sometimes we have board meetings that start at 7:00 a.m. It’s rare if I don’t have something that starts very early in the morning. From there, my schedule is packed, but it is always different.

Q: Is there anything that makes your physical office setup unique?

CVG: I have a Microsoft hub on the wall that allows me to have video meetings with anybody in leadership across the system. In the case of a natural disaster, the hub also allows me to monitor what’s going on inside and outside of Scripps.

I also have a picture of a patient’s heart hanging on my wall. I was working in trauma with our physicians one night and a younger patient came to the hospital with a stab wound to the heart. We cracked this patient’s chest open, stapled the heart shut and took the patient upstairs to heal. The patient came into our hospital almost dead, but the patient went home a week later. I have a picture of that heart on my wall to remind me of the work that we do every single day — the most important work we do.

I also have a few awards and about 100 challenge coins that law enforcement, fire and military units have given me. I also have my own challenge coin that I give out to employees when they’ve done something extraordinary outside their normal work responsibilities.

Q: How often do you meet with clinical staff or perform rounds?

CVG: Several times a week. I’m in a corporate office but not far from the hospitals, so I spend a lot of time with them. I also teach our leadership academies and most of the people in attendance are clinical staff. Usually rounds are on Fridays.

Q: How much of your time is spent with direct reports?

CVG: I do not have standing regular meetings with my direct reports. They are all on the same floor as me and I have an open-door policy. Some of them will schedule meetings with me to brief me on certain items, but I’m a big believer in not having redundant meetings that are just happening because they’re scheduled. I want people to meet with me when they need to meet with me. My staff are in and out of my office all day long. I see all of them daily. I have one scheduled meeting with all of them as a group once a week, but the rest of the meetings are ad hoc.

Q: How do you think your routine is different from that of other healthcare executives?

CVG: I spend a lot of time with management and employees. I suspect more than most CEOs do, because I’ve made it a personal commitment since joining Scripps. I spend a lot of time with the front-line staff and our front-line management team. The key leaders in an organization are those front-line supervisors and managers. Because of that belief, I created the Scripps Leadership Academy 18 years ago, the Front-Line Leader Academy in 2015 and The Employee 100 in 2010. These academies help develop leaders at every level.

I also spend a lot of time teaching. And after I teach, I stay. I don’t teach, make a presentation and leave. My understanding of most CEOs is that they’re very busy, and I don’t blame them, but most would depart to make it to the next meeting on time. I will never leave right at the end of the class. The reason for that is it builds trust and gives employees who may have been too shy in the lecture a chance to ask questions.

Additionally, things are constantly changing in healthcare. The “whats” and “whys” this year will likely be different next year, so I also make a point to meet with the alumni of the leadership academies once a month where we just do a Q&A about leadership and any changes.

Q: What is the hardest part of your day?

CVG: Running a big organization like Scripps is like running a city. There are great things that are happening all the time, and there are bad things that happen occasionally. That burden falls on me, and that’s probably the worst part of the job. Fortunately, those bad things don’t happen often, but when something happens to a patient that shouldn’t have happened or if one of my employees is attacked by a patient, those days are difficult. At Scripps, we’re trying to push forward legislation on workplace violence, because I’m very concerned that workplace violence is on the rise in hospitals. CMS has very strict rules about what we’re allowed to do to protect our staff, because they’re looking out for the wellbeing of the patients, as are we, but we have an obligation to protect both. That’s a very difficult thing to do.

Q: What is the most rewarding part of your day?

CVG: Any time the organization succeeds, one of our employees thrives or I get a chance to award a challenge coin — those are the rewarding moments. A few weeks ago, one of our environmental service workers broke up a fight where one patient was choking another. He broke it up and called the police. He could have very easily stood back and done nothing. He would not have been in trouble, because he’s not trained to intervene in situations like this, but he did and in a safe way. He prevented people from getting hurt or killed. That was one of our environmental service employees, who is phenomenal. So, when our employees excel and go beyond what was expected of them, it is extraordinarily rewarding. Additionally, I’m going to go visit a patient who struggled and was very sick but is now getting better. This patient and the family are thrilled with the care they received and they asked to see me. Obviously, those moments with patients are also highlights.

Q: What is the last thing you do before you leave the office?

CVG: Mother Mary Michael Cummings started the Catholic side of the health system in 1890. Ellen Browning Scripps founded the Scripps side of the system in 1924. Today, we are one system. One of the funny things I do when I get in the car at the end of the day is pause for a minute I and just ask myself, “Would Mother Mary Michael Cummings and Ellen Browning Scripps be proud of what we did today?” And the answer is almost always, “Yes.” When I answer that question, I feel good about that day. Then I drive home and start my post-work routine.

Q: Do you do any work at home?

CVG: Yes. Beyond checking emails and creating the market news reports, I also take home longer reports if I didn’t have time to read them at work. So often, I’ll just take those home and read and study those at night when I have more time.

Q: How do you unwind at the end of the day?

CVG: I volunteer with the sheriff’s department. A lot of that work is done in the evenings and on weekends. I’m a reserve assistant sheriff, which means I’m in charge of the reserves and the search and rescue team. I’m also an instructor of first aid and CPR at the search and rescue academy. My volunteer work is a complete diversion because I’m very often the caregiver, not the supervisor. It’s a great mental change from what I do on a day-to-day basis. I think that creates some balance. I also have family time. I have two boys and a wife. I always consider the weekends my family time.

 

 

 

Cheerleadership is not Leadership. Cheerleadership creates fake believers.

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Imagine for a second that your boss is miles away from the day-to-day. A sufferer of Corner Office Syndrome he or she continues to make command decisions without consulting the team. The decisions are astounding to you and you start to question these far-off choices.

Now, your attention isn’t on doing the right thing for the business, but on how to stop the wrong thing your boss has put in play. You have two options. You could bite your lip and go with the flow. …Or …try to address this head-on which is no easy feat.

It could be too big of a risk to put your livelihood at stake. Your mind drifts again — pondering if this company is the right place for you. You wonder why you care so much. The easy thing to do would be to care less.

The truth is your faith in the business has splintered.

This inner conversation happens to many of us. When it does, you are officially not a believer anymore. You are transgressing into a fake believer.

When you lose belief, or don’t have something to believe in, it’s easy to fake believe.

But as Navy SEALs Jocko Willink & Leif Babin remind us in their book, “Extreme Ownership: How U.S. Navy SEALS Lead & Win”, “They must believe in the cause for which they are fighting, they must believe in the plan they are asked to execute, and most important, they must believe in and trust the leader they are asked to follow.”

Building a cultural rocket ship is more rocket art than rocket science.

If your responsible for hiring talent in your company, then you already know it comes down to creating, retaining and sustaining internal believers.

Why is this so important?

Because believers aren’t just wanted—they are needed in order to create the necessary conviction that makes your organization thrive.

Consider these questions for a second: Do you often feel like you are on an island alone in your company? Do you have coworkers you can genuinely trust? Do you feel you’re being sucked into corporate politics? Are you in a Watch-Your-Back Culture or a Got-Your-Back Culture?

These are the questions that need to be openly talked about with your teams. And these are the types of conversations that are welcomed by true leaders.

This might be a good time to share a truth. I have a major gripe with the word leadership. Make no mistake that I believe we are in dire need of courageous leaders. However, I’ve seen too many poor leaders turn leadership into cheerleadership.

Poor leaders start ra ra’ing to their employees, which may work with some of your workforce, but your elite producers can see right through it. Internal discord starts the minute you send staff down inside themselves questioning, wondering and calling out a faulty decision.

Management guru Ken Blanchard is spot on when he writes……“It takes a whole team of people to create a great company but just one lousy leader to take the whole business down the pan.”

Making Believers all starts at the top with what I call your Believership.

I’m sure you noticed the world choice. The clear mission of leadership is to transform into the company’s Believership. The Believership’s job is to create believers in all directions: making believers out of your employees, your prospects, your customers and, when appropriate, your board.

One final reason I like calling it a “Believership” is because successful leading is not simply about one person. There’s a checks and balances system working together at the top – if you’re lucky, that group shares values but brings breadth of experience to the table. Courage and business are both team games.

Having an aligned Believership makes it easy for employees to believe. They set the vision for the company, deliver the truth (no matter how hard the circumstance) and create trust – the most essential ingredient – that unlocks a successful team.

 

Ballad Health Relies on Partnerships to Excel With Difficult Payer Mix

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Ballad CFO Lynn Krutak said the health system faces significant financial challenges but has the discipline and leadership to navigate obstacles ahead.

KEY TAKEAWAYS

CFO Lynn Krutak said the system’s most significant challenge is its payer mix.

Luckily, she says, Virginia’s decision to expand Medicaid will help somewhat in terms of recouping from years of cuts.

Ballad Health also has a $308 million, 10-year spending plan in the works.

Last year, Mountain States Health Alliance (MSHA) and Wellmont Health System, merged to form Ballad Health. The fact that the two rural systems merged was not typical because it formed under a certificate of public advantage (COPA).

This legal agreement governs the merger through joint oversight from both the state of Tennessee and Virginia and also includes “enforceable commitments” to invest in population health, expand patient access, and boost research and education opportunities.

According to the Millbak Memorial Fund, the COPA acts as a “state-monitored monopoly—or a public utility model of healthcare delivery.”

Related: Ballad Health Launches Changes Across Newly Merged Hospital Network

Lynn Krutak, who served as CFO for both MSHA and its corporate parent Blue Ridge Medical Management, was elevated as CFO at Ballad Health. In an interview with HealthLeaders, Krutak emphasized how she implemented effective cost-cutting strategies within a challenging payer mix and low-wage index area.

This transcript has been lightly edited for brevity and clarity.

HealthLeaders: Can you describe the challenges and opportunities for Ballad Health in its provider market?

Krutak: The majority of our hospitals are either in southwest Virginia or northeast Tennessee, so we have high-use rates. From the payer standpoint, as more people move into managed Medicare and managed Medicaid, we know those use rates are going to fall.

Our population growth is flat to even declining; a lot of our counties in southwest Virginia are coal counties that have been hit hard by the [employment] reductions. So, with the use-rates decline, population decline, and the reimbursement decline that we’re all faced with, we know that there are going to be issues going forward.

As far as our payer mix, we’re heavily governmental. Over 70% of our payer mix is Medicare, Medicaid, or self-pay. We can continue to see the payer mix decline as well. We are also faced with high-deductible health plans out there now, with the patient portion of those deductibles being so high our bad debt has increased over 30%.

Fortunately, Virginia has implemented a Medicaid expansion program, so we will get some relief. However, we’ve had years of ACA cuts and this is a small portion. With the cuts that we’ve had versus what we’re going to gain back from Medicaid expansion, we’ll still be in the red.

Our wage index with Medicare is another hurdle we have. We are in the fourth-lowest wage index area in the country; we’re getting about half of what other [systems] are getting. We’ve done a good job of controlling our costs because we have to.

We’re excited about the potential with some of the things that we’re going to be able to do as a merged organization. We have $308 million in spending commitments over the next 10 years, but we have about twice as much in estimated savings. We’ve been able to achieve a lot of that already and we’re working hard on our continued integration.

This merger’s unique and what we’re going to be able to do is take costs out of the system, as far as redundant and duplicative costs go, and then reinvest them back.

HL: Can you describe some initiatives Ballad is looking to pursue in the next few years?

Krutak: As far as the labor costs, we’ve done a great job controlling our labor by not using contract labor for nursing. During the nursing shortage, other systems were using contract labor, it was something that MSHA did not have to do.

We have East Tennessee State University right in our backyard in Johnson City, where we work with them to develop nursing programs and offer scholarships to students in return for a work commitment.

Of the investments through COPA, where we have committed $308 million over a 10-year period, [is] $75 million is going to common health issues facing children. We’ve made a commitment to bring on specialists—specifically pediatrics—and be able to keep these patients and their families in the region and not have to send them elsewhere.

We’ve also committed $140 million to mental health, addiction, or rural health [initiatives] with $85 million going to behavioral health. That’s an issue for our service area in northeast Tennessee and southwest Virginia.

Finally, we have $8 million set for clinical effectiveness and patient engagement mainly related to health information exchange. Wellmont was on Epic, MSHA was on Cerner, so we agreed to convert the whole system to Epic, which will happen in April 2020.

HL: How is Ballad best positioned to navigate the direction healthcare is going while still providing the best quality service to its patients?

Krutak: We’ve been working with our state representatives to craft a fair wage index bill, where Ballad would get some relief and revamp how those calculations are done. In other words, you would not be penalized if you do a good job controlling your costs.

Our CEO, Alan Levine was secretary of health in Florida and secretary of health in Louisiana. We have Tony Keck, who is the executive vice president of our development, innovation, and population health improvement, who was secretary of health in South Carolina. We have a lot of insight on the [governmental] side of things from them.

We’re positioning ourselves to take costs out of the system but also to switch over from fee-for-service plans to looking at risk-based contracts. How do we get paid more for showing better patient outcomes? We’re looking over the next five years to transition into more of that than your traditional payments.

HL: What advice would you give to CFOs from rural systems to make the most of what are sometimes challenging financial situations?

Krutak: As a result of the merger, I’m relieved that we’re going to be able to have these savings to reinvest in rural areas. The largest issue we face with the payer mix shift is that it’s hard to get physicians in rural areas.

My advice to them is just make sure that you are controlling your costs as much as you possibly can and look to partner with other systems that may be near you that could provide physician-sharing arrangements.

For the reimbursement side, it’s always actively looking at how you’re being paid and what you’re being paid. Work with your government officials and partner with your hospital associations, to say, ‘Hey, if we’re going to continue to keep these rural hospitals and provide access, then there’s going to have to be changes as far as how that reimbursement is calculated and how those facilities are compensated.’

On the cost side, make sure that that you’ve situated yourself appropriately and then as things transition to outpatient, be sure the investments that you’re making are being made in the right places.