The Journal of the Arkansas Medical Society Issue 6 Volume 115 | Page 12

EDITORIAL PANEL: Chad T. Rodgers, MD, FAAP | Elena M. Davis, MD, MPH | William L. Mason, MD | Michael Moody, MD | Pramod K. Nelluri, MD | J. Gary Wheeler, MD, MPS
Episodes of Care Enhance
Quality and Cost-Efficiency
I
n 2011, Arkansas Medicaid started
the process to transform Arkansas’
health care and payment system
to a higher-quality and more
cost-efficient system of care. Called
the Arkansas Health Care Payment
Improvement Initiative (AHCPII), this
was a collaboration that included
many of the state’s major private
commercial insurance payers.
AHCPII’s leadership felt the collabo-
ration included a large enough portion
of the market that there would be a
strong incentive for health care provid-
ers to achieve the objectives of more
efficient and sustainable utilization of
Medicaid funds, higher quality of care
and improved patient satisfaction.
Working closely with hundreds of phy-
sicians, hospital executives, patients,
families and advocates, the collabora-
tors worked for nearly a year to design
and build the new payment system.
EPISODES OF CARE
The result is a bold initiative
tailored to the needs of Arkansas
patients and providers. The first
Episode of Care (EOC) was launched
in 2012, the Patient Centered Medical
Home (PCMH) soon followed, and in
2017, Arkansas Medicaid launched
the first Medical Neighborhood
JAMES GALLAHER
Performance Reports. This year, the
initiative continues to evolve and
expand into various value-based
payment models and informational
transparency efforts.
An Arkansas Medicaid EOC is a
retrospective bundle of paid medical
claims submitted from all providers
that were generated by a beneficiary’s
medical procedure, ailment or condi-
tion. Each claim in the bundle is exam-
ined for relevancy, excluding claims
that are not related to the episode’s
focus. Each beneficiary is profiled and
selected for possible risk adjustment.
About half of the time, beneficiaries
are excluded from the episode, based
on either a global exclusion or an
episode-specific exclusion. Global
exclusions include conditions such as
terminally ill patients, patients with
certain cancers or patients with other
insurance coverage in addition to
Medicaid. Episode-specific exclusions
are related specifically to the epi-
sode’s focus. Examples may include
pregnancy, age limits of the episode
or various comorbidities. Exclusions
allow a uniform comparison with
other providers.
A principal accountable provider
(PAP) is identified as the provider
with the most influence towards the
132 • THE JOURNAL OF THE ARKANSAS MEDICAL SOCIETY
cost and quality of care. Quarterly
reports are delivered to PAPs describ-
ing the cost and quality of care in
comparison to other providers.
Financial EOCs are a shared-risk-
incentive program providing both
positive and negative incentives, com-
monly referred to as gain share and
risk share. Each PAP’s average episode
cost is measured against financial
thresholds and is determined to be
either commendable, acceptable or
unacceptable. Thresholds are set for
measurements related to selected
quality-of-care metrics. PAPs who are
determined to be commendable in
cost and meet quality standards will
be rewarded with a positive incen-
tive payment. This is in addition to
the previously reimbursed fee-for-
service claims. PAPs whose costs are
determined to be unacceptable are
subject to the recovery of their excess
cost. Incentives are realized over a
12-month performance period.
Active financial EOCs include
asthma, cholecystectomy, chronic
obstructive pulmonary disease,
colonoscopy, coronary artery bypass
graft, heart failure, perinatal, ton-
sillectomy, total joint replacement
(hip and knee), upper respiratory
infection-nonspecific, upper respira-
VOLUME 115