Kentucky has a long history of healthcare innovation. In May of 1993, it submitted its first 1115 waiver (under section 1115 of the Social Security Act, the federal government may grant the state flexibility to experiment with projects that are likely to promote the same objectives as the federal program – for more information, see this key fact sheet), called the Health Care Partnership Program.
In 1997, implementation of the project began. The demonstration project was set to create eight partnerships of public and private providers, one for each identified geographic region, to deliver Medicaid acute services through managed care arrangements. One of the hopes was that by developing a capitated payment system, under which the fee is based on enrollment rather a fee-for-service scheme, and improving coordination of care, the rate of Medicaid expenditure growth would decrease.
Ultimately, only two of the eight partnerships were fully implemented. In 2000, one of those two terminated its contract, leaving only the partnership in charge of the Medicaid delivery system for Louisville and surrounding counties. The commonwealth of Kentucky filed for extensions several times, and the waiver eventually expired December 31, 2012. A report by the CMS hypothesized that low population density meant many regions simply did not have the membership base to be financially viable. In addition, setting feasible capitation rates was an important strategic choice that determined the fate of the two established partnerships.
Although that particular demonstration did not go completely as planned, Kentucky seemed to continue to move in the direction of improved care coordination. According to a report by the state government, by September 2014, Kentucky had over 200 National Committee for Quality Assurance (NCAQ) recognized Patient Centered Medical Home (PCMH) clinicians, as well as 21 – 61 PCMHs.
Furthermore, Kentucky participated in the CMS’ Comprehensive Primary Care Initiative (CPCI) from 2012 to December, 2016. This is a multi-payer initiative that fosters collaboration between public and private health care payers to strengthen primary care, which, historically, has been underfunded. Under this model, participating primary care practices receive a monthly non-visit-based care management fee and have the opportunity to share in any net savings.
In addition, Kentucky was part of the project lead by TransforMED that won the Health Care Innovation Award in 2012. This was a three-year initiative to create “medical neighborhoods” to promote care coordination among PCMH, specialty practices, and hospitals. This project used a sophisticated analytical engine to identify high-risk patients and coordinate care across the medical neighborhood to provide comprehensive care while reducing costs. Outcome research conducted by the CMS suggests that, overall, the project had statistically significant favorable effects in terms of service use, while having no substantive effect on quality-of-care processes or spending.
In 2015, as winner of the State Innovation Model Initiative Model Design Awards Round Two, Kentucky received 2 million dollars from the CMS to improve statewide health care quality and access while reducing costs. Kentucky planned to enhance delivery system for behavioral health, long term services and support, and end-of-life care. Innovation projects include the introduction of Complex Chronic Condition Health Homes, the Episode of Care (EOC) payment model, telehealth to connect primary care providers and patients in rural areas with specialists, and “Citizen Portal” for consumer direct access of personal health records as part of the Health Information Exchanges (HIE) expansion. The projected saving from the project is $104.1 million to $270.5 million. The state proposed a two-year implementation timeline. (For more information on this initiative, you can read the state’s grant application.) [In my research, I found that the CMS website has a very interesting interactive map, where you can select a state and see all the innovation models run at the state level.]
In 2015, Kentucky also won an award of nearly a million dollars from the Substance Abuse and Mental Health Services Administration (SAMHSA) to, as part of the initiative to integrate behavioral health with physical health, promote evidence-based practices and increase access to high quality care.
One challenge facing the commonwealth of Kentucky is the cost of operation, especially after their recent expansion of Medicaid eligibility. In 2014, Kentucky expanded its Medicaid program to cover all newly eligible adults with income below 138% of the federal poverty level (FPL), as part of the Affordable Care Act (ACA). The number of insured people in Medicaid/CHIP increased 107.65% percent from 606,805 in 2013 to 1,260,001 in 2017.
This cost challenge was one of the driving forces behind Kentucky’s second application for a 1115 waiver. Under the new proposal, adults with income below 138% of the FPL would generally no longer be automatically insured through the Medicaid program. Instead, enrollment would be provided through their employment, with the state offering employers a premium assistance program. To make it a consumer-driven health plan, each person would have a deductible account and a reward account. The state would contribute $1000 a year toward the deductible account to help consumers afford the deductible required by various plans. In the reward account, individuals could receive enhanced healthcare benefits such as vision, dental, over-the-counter medications, and gym memberships by completing specified health-related or community engagement activities. A decision on the application will come soon, and should significantly impact the healthcare landscape in Kentucky!
From this overview of Kentucky’s recent healthcare initiatives, it is clear that the commonwealth has been actively exploring alternatives to improve the efficiency and quality of its healthcare system. At this stage, it is difficult to know the outcome of Kentucky’s newest proposal. If the most recent 1115 waiver is accepted, we will be watching closely to see how it works out!
As always, it is important for clinicians to understand the changing landscape and advocate from their perspective, so policy-makers and administrators can better plan and implement relevant proposals. Please leave us a comment if you would like to share more about what is going on in Kentucky or another state regarding Collaborative Care!
Note: Special thanks to Jessica Beal, who has provided valuable insights and support in writing of this blog.
Xiaodi Chen, MSMFT, is a recent graduate of Northwestern University's program in Marriage and Family Therapy, where she had extensive clinical training at The Family Institute's Bette D. Harris Family and Child Clinic. She previously received a Bachelor of Arts in Economics from Cambridge University and a Master of Education focusing on Human Development and Psychology from Harvard University's Graduate School of Education. Ms. Chen is particularly interested in interdisciplinary work to promote patient-centered healthcare.