New Jersey to Put Payment Reform Scorecard to the Test

October 12, 2017

Catalyst for Payment Reform will use 3 states to pilot new metrics to measure how well healthcare transformation is penetrating individual markets.

Despite the unrest in Washington, DC, payment reform is very much alive in markets across the country, as employers and large purchasers of healthcare look for new ways to deliver care. In fact, Catalyst for Payment Reform (CPR), a group of progressive purchasers looking to create high-quality, affordable care, is already moving to the “next generation” of measuring the effects of reform.

CPR has launched Scorecard 2.0, a project to update its metrics for measuring how much, how well, and what types of payment reform are taking place in both the commercial and Medicaid sectors. Designed to update the Scorecards that CPR issues now, the project will ensure that the new tool “adds quality and efficiency metrics to efficiency metrics to existing Scorecard metrics, and reflects the reality of the market today,” according to information from CPR.

To test the metrics, CPR in September selected 3 state-level partners to spend the next year testing the new Scorecard. One of those partners is the New Jersey Health Care Quality Institute (NJHCQI), which serves as the regional leader for the Leapfrog Group and earlier this year issued Medicaid 2.0, a wide-ranging blueprint with 24 specific recommendations for updating and streamlining a program that spends $15 billion a year, covers 1 in 5 state residents, and consumes 20% of the state budget.

The American Journal of Managed Care® (AJMC®) recently spoke with Linda Schwimmer, president and CEO of NJHCQI about the Scorecard process and what partners will gain from the experience. Schwimmer described CPR as “very focused on improving the quality as well as reducing the cost” of healthcare services, and said the Scorecard process will offer the employers and purchasers of healthcare service the opportunity to see if the shifts from fee-for-service to alternative payment models are working.

In selecting New Jersey, CPR will test its metrics in a place where the pace of reform has been mixed. Schwimmer’s group has championed some important projects, like leading an effort to design an episode of care (EOC) to reduce C-section rates in Medicaid. She said some individual health systems and physician groups are working hard to transform the system. Data-sharing remains a sticking point—it’s one that must be addressed in the Scorecard 2.0 process, but one where everyone stands to gain.

VIDEO: Linda Schwimmer Discusses How New Scorecard Will Give Healthcare Purchasers a Better Sense of Whether APMs Are Working

“The health plans, as well as the State of New Jersey, are the largest holders of that data,” Schwimmer said. “To support this project, we’ve reached out to all those payers, and we’re going to be meeting with them to brief them on the project and to explain the benefits—both to them as well as to all New Jerseyans.”

Schwimmer explained that when it comes to saving healthcare costs, purchasers have lots of choices today: they can shift costs, they can use narrow networks, and they can try high-deductible health plans.

“One strategy is moving toward alternative payment models—and people think that they’re working, they have a sense that they’re working, because it’s aligning incentives, but we really need to know for sure—at least, whether they’re working directionally,” Schwimmer said. “So that’s really the purpose of this Scorecard. It’s to help purchasers and policymakers to know, 'Are we moving in the right direction? Are we improving quality with this focus on new models?' And if we are, let’s keep at it. And that’s what we’re really trying to show directionally, how things are going.”

The Marriage of Data and Payment Models

New Jersey’s effort to lower its above-average C-section rates is an example of how just making data available and building awareness is starting to make a difference, Schwimmer said. Two years ago the state was first in the country for C-sections among low-risk mothers, and last year it was third highest, tied with Louisiana and behind only Mississippi and Florida. NJHCQI has worked with the Leapfrog Group to collect and publicize these data—and having the data revealed some troubling things, Schwimmer said.

“It was even in the case of what we would describe as avoidable situations, where it’s a first-time mother, the head is down, it’s a single birth. One of the reasons we even know that is because of the use of data in a transparent way,” she said. “Just having that data and creating an awareness of what those rates are and then sharing those rates with physicians and nurses and showing them what their rate is, is one huge step forward that is happening now that the Quality Institute is part of.”

The next step, she said, will be changing the payment system to reward better outcomes. The state’s largest payer, Horizon Blue Cross Blue Shield, already does this with an EOC in the commercial sector; the key now is to design an EOC in Medicaid—and to get state policymakers to embrace what is produced.

“So, the marriage between the data and the payment system is really where New Jersey needs to go, and I would say we’re in the early stages of that,” she said.

Transforming Medicaid

In selecting NJHCQI to for the Scorecard 2.0 initiative, CPR cited the group’s work on Medicaid 2.0, a process that engaged an array of stakeholders to find ways to improve New Jersey’s payment, procurement, care coordination, and social support areas—including housing and employment assistance. Because of Medicaid expansion, New Jersey added 550,000 enrollees and now covers 1.7 million, yet faces limitations in the way it rewards providers as well as technology. Early on in expansion, published reports uncovered massive problems that new enrollees faced due to a meltdown during the launch of a long-planned computer upgrade.

A key recommendation of Medicaid 2.0 is the creation of an Office of Healthcare Transformation, within the Governor’s office, to cut the silos that result with different healthcare functions spread across 7 departments of state government.

Schwimmer is optimistic that the idea will come to fruition. “We’ve seen this model work in other states," she said.

She added that NJHCQI has spoken with the candidates, as well as other key healthcare leaders about the idea. “We’ve had a broad consensus for this type of action.”

No matter who wins the race for New Jersey governor next month—Democrat Phil Murphy has been ahead in the polls, but many reports gave Republican Lt. Governor Kim Guadagno high marks after the first debate—Medicaid transformation and payment reform need to continue, Schwimmer said.

“We have transformed our Medicaid system to some extent over the last 5 years, just through the expansion of the Medicaid population and a lot of the work that’s been done through the current waiver," she said. "But we still have a lot more to do.” (New Jersey’s Comprehensive Medicaid waiver, recently renewed, includes provisions for managed long-term services and supports, multiple programs for children, and a Delivery System Reform Incentive Payment program.)

The transformation isn't over, according to Schwimmer. Medicaid 2.0 brought together all the stakeholders in New Jersey to discuss where the state's Medicaid system needs to go.

"Given that 20% of our population receives its healthcare through Medicaid, and over 40% of our births are paid for by Medicaid, and a high percentage of seniors receive care through Medicaid, we’re really talking about care for a lot of people and some of our neediest and most vulnerable residents in New Jersey, there’s a lot we can do," she said.