Texas State Healthcare Innovation Plan

February 13, 2014

Table of Contents Executive Summary ...... 1

Vision Statement for Health System Transformation ...... 1

Current “As Is” Health Care Environment of Texas ...... 2 Health Care System Performance ...... 2 Health Care Cost Trends ...... 4 Health Care Delivery System...... 5 Delivery System Payment Models in Texas ...... 6 Health Information Technology ...... 7 Multi-payer Collaboration ...... 7

Future “To Be” Health Care System of Texas ...... 8 Transform the Delivery System to Models of Patient-centered Care ...... 8 Transition Away from Fee-for-service to Quality-based Payment ...... 9 Build Capacity for Continuous, Ongoing Improvement and Innovation throughout the Health Care and Public Health Systems in Texas ...... 9

State Health Care Innovation Plan ...... 10 Model I: EHR and HIE Expansion and Sustainability Initiatives ...... 11 Model II: Clinical Care Transformation Programs ...... 11 Model III: Spreading and Sustaining Innovations ...... 12 Model IV: Community-Based Public Health Innovations ...... 13 Model V: Multi-Payer Engagement and Alignment ...... 14

Implementation ...... 18 Texas State Healthcare Innovation Plan ...... 21 A. Goals for Health Care Transformation in Texas ...... 21

Vision Statement for Health System Transformation ...... 21 Meeting Providers Where They Are ...... 22

Current “As Is” Health Care Environment of Texas ...... 23 Health Care System Performance ...... 23 Health Care Cost Trends ...... 26 Health Care Delivery System...... 26 Delivery System Payment Models in Texas ...... 28 Health Information Technology ...... 28 Multi-payer Collaboration ...... 29

Future “To Be” Health Care System of Texas ...... 29 Transform the Delivery System to Models of Patient-centered Care ...... 30

Transition Away from Fee-for-service to Quality-based Payment ...... 30 Build Capacity for Continuous, Ongoing Improvement and Innovation throughout the Health Care and Public Health Systems in Texas ...... 31 B. Description of State Health Care Environment ...... 32

Population Demographics ...... 32 Population Overview ...... 32 State Population Growth ...... 32 Aging Population ...... 33 Race/Ethnicity ...... 34 High Poverty and Income Disparity ...... 34 Education and Income...... 35

Population Health Status of Texas ...... 37 Perception of Poor Health ...... 37 Infectious Diseases ...... 38 Prevalent Chronic Conditions and Mortality ...... 38

Factors Impacting Health Status ...... 42 Racial and Ethnic Disparities ...... 44 Regional Disparities ...... 45

Special Needs Populations ...... 45 Special Needs Populations in Medicaid and Medicare ...... 46 Special Needs Populations in Private Coverage ...... 46 Factors Impacting Care and Costs ...... 47

Profile of Major Health Providers in Texas ...... 48 Providers ...... 48 State Public Health System ...... 59

Profile of Major Health Payers in Texas...... 62 Medicaid and CHIP...... 63 Children’s Health Insurance Program ...... 68 Medicare ...... 70 County Health Indigent Care Program ...... 70 Teacher Retirement System of Texas ...... 71 Employees Retirement System of Texas ...... 71 Commercial Insurance Carriers ...... 71

Delivery System Payment Methods in Texas ...... 72 Medicaid Payment Methods ...... 72 Private-Sector and Federally-sponsored Payment Methods in Texas...... 74

Health Care Delivery System Performance in Texas ...... 80 Aggregate Measures of System Performance ...... 80 Potentially Preventable Events ...... 82 Birth Outcomes ...... 85

Quality Performance among Major Payers ...... 90 Medicaid Managed Care ...... 90 Medicare ...... 92 Commercial Carriers ...... 92 NCQA Accreditation in Public and Private Plans ...... 93 Factors Affecting Performance ...... 94

Health Care Cost Trends ...... 94 State Spending on Health Care ...... 94 Private Spending on Health Care ...... 96 Factors Impacting Cost Trends ...... 97

Opportunities and Challenges of HIE Adoption, Meaningful Use, HIT Strategy ...... 98 Overview of Health Information Technology (HIT) Infrastructure in Texas ...... 98 Status of EHR Adoption ...... 101 Status of Local HIEs ...... 103

Current Federally-supported Initiatives in Texas ...... 108

Federally-Supported Program Waivers in Texas ...... 108 The Texas Health Care Transformation and Quality Improvement Program 1115 Medicaid Waiver (1115 Transformation waiver) ...... 108 Medicaid Home and Community-Based Services (HCBS) Waiver Programs ...... 111 C. Design Process Deliberations ...... 114

Stakeholder Engagement ...... 114 SIM Kick-off Webinar ...... 114 Texas SIM Website ...... 114 SIM Regional Stakeholder Meetings ...... 115 Stakeholder Update Webinar ...... 115 Health IT Data Analytics Webinar ...... 116 Medical/Health Home Webinar ...... 116 Key Stakeholder Meetings ...... 116 Statewide SIM Stakeholder Survey ...... 117 Statewide Stakeholder Conference ...... 117

Strategies Considered During Design Process Deliberations ...... 119 Creating Multi-payer Strategies ...... 120 Improving Workforce ...... 120

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Aligning State Regulatory Authorities...... 121 Restructuring Medicaid Supplemental Payment Programs ...... 121 Aligning regulations and requirements ...... 122 Developing Community Awareness and Engagement ...... 122 Coordinating State-based Health Insurance Marketplace Activities ...... 123 Integrating Financing and Delivery of Public Health Services ...... 123 Leveraging Community Stabilization Development Initiatives ...... 124 Integrating Early Childhood and Adolescent Health Prevention Strategies ...... 124 Creating integrated models ...... 125 Creating or expanding LTSS models ...... 125 Using Other Policy Levers ...... 126 Leveraging Technology ...... 126 D. Health System Design and Performance Objectives ...... 128

Health System Design ...... 128

Performance Objectives ...... 131 Better Care and Lower Costs ...... 131 Better Health ...... 132 Patient Satisfaction ...... 133

Texas SIM Goals on Key Performance Objectives ...... 133 E. The Innovation Plan ...... 135

Overview ...... 135

Model I. EHR and HIE Expansion and Sustainability Initiatives ...... 138 Overview ...... 138 Barriers to EHR Adoption and Meaningful Use ...... 138 Barriers to HIE Use and Sustainability ...... 139 Innovation 1: EHR Adoption Incentive Program ...... 141 Innovation 2: Expanding HIE Participation ...... 142 Innovation 3: HIE Sustainability ...... 142 Program Components of EHR and HIE Initiatives ...... 143

Model II. Clinical Care Transformation Programs ...... 145 Overview ...... 145 Defining Models of Care ...... 146 Innovation 1: Medical Home Training Program ...... 152 Innovation 2: Medical Home Recognition Program ...... 152 Innovation 3: Chronic Disease Care Recognition Program ...... 153 Sustaining the Clinical Care Transformation Gains ...... 154

Model III. Spreading and Sustaining Innovation ...... 154 Overview ...... 154

How to Spread Innovations ...... 155 How to Sustain Innovations ...... 156 Barriers to Spreading and Sustaining Innovations ...... 156 Innovation 1: Health Innovation Learning Network ...... 157 Innovation 2: Sustaining Practice Transformation in Medicaid Managed Care ...... 160 Innovation 3: Texas Health Care Innovations Tracking Center ...... 164

Model IV. Community-based Public Health Innovations...... 166 Overview ...... 166 Diabetes: A Public Health Priority for Texas ...... 167 A National Leader in Addressing the Diabetes Epidemic ...... 167 Texas Diabetes Council (TDC) ...... 168 Innovation 1: Public Health-Medicaid Managed Care Diabetes Education Project ...... 171 Innovation 2: Scaling the National Diabetes Prevention Program in Texas ...... 172

Model V. Multi-payer Engagement and Alignment ...... 173 Overview ...... 173 Innovation 1: Building Capacity for Multi-payer Collaboration ...... 174 Innovation 2: Multi-payer Alignment on Diabetes Care Transformation and Prevention ...... 178 Innovation 3: Collaboration for Public-Private Data Sharing ...... 178 F. Health Information Technology ...... 180

Leveraging Health IT Initiatives in Texas to Advance Health IT Adoption ...... 180 Cost Allocation Plan for Planned IT System Solutions ...... 180 Potential SIM Project Impact on the MMIS ...... 181 G. Workforce Development ...... 182

Overview ...... 182

Texas Statewide Health Coordinating Council ...... 182

Texas 1115 Medicaid Transformation Waiver ...... 183

Recent State Legislation Related to Workforce Issues ...... 184 Medical and Graduate Education ...... 184 Community Health Workers ...... 184 Scope of Practice of Advanced Practice Registered Nurses and Physician Assistants .. 185

Federal Grants to Texas Universities ...... 186

SIM Approach to Health Care Workforce Goals in Texas ...... 186 Team-based Care ...... 187 Patient-Centered Medical/Health Homes ...... 187 Health Information Technology ...... 188

H. Financial Analysis ...... 189

Target Population ...... 189

Service Costs ...... 189 Total Expenditures ...... 189 Per Capita Costs ...... 190 Health Expenditure Projections ...... 191

Estimated Investments ...... 191 SIM Council Personnel ...... 192 Consultants ...... 193 Infrastructure Costs ...... 194 Incentive Payments ...... 194 Evaluation ...... 195 Travel ...... 195 Total Budget...... 195

Anticipated Impact on Costs ...... 196

Expected Total Cost Saving and Return on Investment ...... 196 Cost Savings for Texas Population with Diabetes ...... 197

Sustaining Success ...... 197 I. Evaluation Plans ...... 199

Commitment to CMS Evaluation of the Texas SIM Initiative ...... 199

Preliminary SIM Evaluation Measures ...... 199 Dashboard Measures ...... 200 Driver Measures ...... 200 SIM Project Innovation Model Measures ...... 200 Target Population ...... 200 Data Sources ...... 201

Texas SIM Evaluation Partners ...... 201 J. Roadmap ...... 214

Overview ...... 214 Importance of Stakeholder Participation ...... 214 Leveraging Initiatives Underway in Texas ...... 215

Proposed Roadmap ...... 215 Appendix 1. Table of Federally-supported Innovation Initiatives in Texas ...... 221

Appendix 2. Table of SIM Stakeholder Regional Meeting Participants ...... 227 Appendix 3. Texas Institute of Health Care Quality and Efficiency Board of Directors (current as of 11/1/2013) ...... 235

Voting Members ...... 235

Ex Officio Members ...... 236 Appendix 4. Letter of Support from the Texas Institute of Health Care Quality and Efficiency 239 Appendix 5. Selected Components of SB 7 (83rd Legislature, 2013) ...... 242

Outcome-Based Performance Measures & Incentives within Contracts ...... 242

Consultation by Stakeholders for Development of Quality-Based Payment System ...... 242

Payment Initiatives towards Quality-Based Payment Systems ...... 242

Clinical Improvement Program ...... 242 Glossary of Common Abbreviations ...... 243

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List of Figures

Figure 1. Texas SIM Conceptual Model for Health Care Innovation ...... 2 Figure 2. Integration of 5 Proposed Models for Continuous Health Care Innovation and Learning in Texas ...... 15 Figure 3. Texas SIM Conceptual Model for Health Care Innovation ...... 22 Figure 4. Continuum of Accountability ...... 23 Figure 5. Distribution of Population by Age, Texas and U.S., 2010, 2011 ...... 33 Figure 6. Distribution of Population by Race/Ethnicity, Texas and U.S., 2010, 2011 ...... 34 Figure 7. Distribution of Population by Poverty, Texas and U.S, 2011 ...... 35 Figure 8. Distribution of Adult Population by Educational Attainment and Income Level in Texas, 2010 ...... 36 Figure 9. Age-Adjusted Prevalence of “Physical Health Not Good 5+ Days” by Income Level in Texas, 2011 ...... 37 Figure 10. Age-Adjusted Prevalence of “Mental Health Not Good 5+Days” by Income Level in Texas, 2011 ...... 38 Figure 11. Prevalence of Overweight and Obese Adults, Texas and U.S., 2011 ...... 40 Figure 12. Prevalence of Diabetes by Race/Ethnicity, Education Status and Age in Texas, 2010 ...... 41 Figure 13. Prevalence of Pre-diabetes by Race/Ethnicity, Education Status and Age in Texas, 2010...... 41 Figure 14. Selected Diabetes Complications in Texas, 2010 ...... 42 Figure 15. Federally Designated Primary Care Health Professional Shortage Areas in Texas, March 2010 ...... 50 Figure 16. Texas Physician Practice Size, 2012 ...... 51 Figure 17. Total Population Health Insurance Coverage, Texas and U.S., 2011 ...... 63 Figure 18. Texas Medicaid Enrollment by Eligibility Category, 2013 ...... 65 Figure 19. Texas Medicaid Beneficiaries and Expenditures, 2011 ...... 66 Figure 20. CHIP Enrollment by Poverty Level in Texas, 2013 ...... 68 Figure 21. NCQA-Recognized PCMHs Level 1-3 in Texas, July 2013 ...... 76 Figure 22. Infant Mortality Rate, Texas and U.S., 2000-2010 ...... 86 Figure 23. Low Birth Weight Births, Texas and U.S., 2010 ...... 87 Figure 24. Preterm Birth Rates, Texas and US, 2000-2010 ...... 88 Figure 25. Percent of Women Receiving Prenatal Care in the First Trimester by Race/Ethnicity in Texas ...... 90 Figure 26. Annual Increase in Medicaid Spending over the Previous Year, 1994-2011 ...... 98 Figure 27. The Texas HIE Vision for State-level Shared Services ...... 100 Figure 28. EHR Implementation Status of Clinicians in Texas, 2012 ...... 102 Figure 29. Participation Status of 12 Local HIEs in Texas, August 2013 ...... 104 Figure 30. Map of Local HIE Service Areas ...... 105 Figure 31. HIE Participation by Practitioner Type in Texas, 2012 ...... 106 Figure 32. Organization Chart for Proposed Placement of the SIM Council and Staff...... 129 Figure 33. Integration of 5 Proposed Models for Continuous Health Care Innovation and Learning in Texas ...... 136 Figure 34. Innovation Adoption Lifecycle ...... 156 Figure 35. Annual Per Capita Cost by Payer ...... 191

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Figure 36. 2011 Estimated Diabetes Related Expenditures in Texas ...... 197

List of Tables Table 1. Public and Private Sector Innovations Leverage Points to Support Proposed 5 Innovation Models of the Texas SHIP ...... 17 Table 2. Driver Diagram for the Texas SIM State Healthcare Innovation Plan, by December 31, 2019*...... 20 Table 3. Ten Leading Chronic Conditions among Adults in Texas, 2012 ...... 39 Table 4. Projected Health Improvements if Texas Performed at the Level of the Best-Performing State, 2009...... 43 Table 5. Healthcare Usage and Health of Nonelderly Adults by Race in Texas, 2011 ...... 44 Table 6. Number of Individuals with a Disability by Age in Texas, 2011 ...... 45 Table 7. Actively Practicing Physicians per 100,000 Residents, Texas and U.S., 2011 ...... 48 Table 8. Non-Physician Providers, Texas and U.S., 2010, 2011 ...... 52 Table 9. Community Health Workers and Promotoras in Texas, July 2013 ...... 53 Table 10. Long-Term Care Facilities in Texas, 2012 ...... 54 Table 11. Home Health and Hospice Agencies in Texas, 2012 ...... 55 Table 12. FQHCs per 100,000 residents under 200% FPL, Texas and U.S., 2010 ...... 55 Table 13. Texas Health System Performance Rankings with Select Indicators, 2009 ...... 81 Table 14. Top Diagnoses of Potentially Preventable Admissions for Adults in Texas, 2006-2011 ...... 83 Table 15.Texas Discharge Disposition after Inpatient Hospitalization and 30-day Readmission Rates, Medicare, 2012 ...... 84 Table 16. Texas Medicaid and Newborn Diagnoses-Related Groups (DRGs) Clients and Costs, SFY 2010 ...... 89 Table 17. Texas Ratings of Hospital Mortality Compared to National Rates, 2011 ...... 92 Table 18. Texas Insurers and Health Plans with NCQA Accreditation by Type of Market, 2013- 14...... 93 Table 19. Texas State Health Care Expenditures by Agency, SFY 2009 ...... 95 Table 20. Medicare Health Expenditure Data in Texas, 2009 ...... 96 Table 21. Texas Employer-Based Health Insurance Trends, 2005, 2012 ...... 96 Table 22. Texas SIM Regional Stakeholder Meeting Locations and Dates ...... 115 Table 23. Unique Organizations Attending the Texas SIM Conference, August 20-21, 2013 .. 118 Table 24. Driver Diagram for the Texas SIM State Healthcare Innovation Plan, by December 31, 2019*...... 134 Table 25. Public and Private Sector Innovations Leverage Points to Support 5 Proposed Models of the Texas SHIP ...... 137 Table 26. Medical Home Elements and Practice Transformations ...... 147 Table 27. Transformation “DSRIP” Projects that Expand the Healthcare Workforce in Texas 184 Table 28. Texas Aggregate Annual Health Expenditures by Payer (in Billions) ...... 189 Table 29. Annual Per Capita Cost by Payer ...... 190 Table 30. Evaluation Measures for Texas SIM Project ...... 203 Table 31. Roadmap for Implementation of the Proposed Texas State Healthcare Innovation Plan ...... 216

Executive Summary

Vision Statement for Health System Transformation Texas has a large, diverse and growing population spread across a wide and varied geography. The world’s best and largest medical centers are located in Texas, in stark contrast with some of the most medically underserved areas in the country. Our vision for Texas is the development and continuous improvement of coordinated health care delivery systems across the State’s communities—both urban and rural—that strive to achieve the Triple Aim: better health outcomes and greater patient satisfaction while containing the rate of growth in total health care spending. Our long-term goals for achieving this vision are three-fold:

 transform the delivery system to models of patient-centered care;  transition away from fee-for-service to quality-based payment; and  build capacity for continuous, ongoing improvement and innovation throughout the health care and public health systems in Texas.

The State Innovation Models (SIM) Model Design process that the State has undertaken since April 2013 has helped stakeholders better understand and appreciate the multitude of public and private initiatives currently underway in Texas to transform the delivery of and payment for health care. The SIM planning team, comprised of state officials from HHSC and consultants from Health Management Associates and Deloitte, convened 14 community stakeholder meetings, several webinars on special topics of interest and a statewide conference to present preliminary models. The SIM initiative has provided Texas an opportunity to develop a State Healthcare Innovation Plan (SHIP) that moves the State forward on each of these goals.

This SHIP, developed through the SIM Model Design process, builds on the strong foundation of private and public state, local and federal initiatives, as well as existing and emerging innovations in Texas. Within the framework of the SIM Model Design criteria, extensive stakeholder input led us to propose five SIM innovation models from which to leverage this foundation:

I. Electronic Health Record (EHR) and Health Information Exchange (HIE) expansion and sustainability initiatives; II. Clinical care transformation programs; III. Spreading and sustaining innovations; IV. Community-based public health programs; and V. Multi-payer engagement and alignment.

As illustrated in the figure below, these models are intended to develop and expand the “drivers” of transformation that stakeholders have identified as necessary for impacting our triple aim outcomes:

 adopting healthy lifestyle behaviors;  patient/family engagement and accountability;  evidence-based screening and appropriate care; and  coordinated and clinically integrated care.

Figure 1. Texas SIM Conceptual Model for Health Care Innovation

Current “As Is” Health Care Environment of Texas

Health Care System Performance In its 2009 Scorecard on Health System Performance, the Commonwealth Fund ranked Texas 46th overall out of the 50 states and the District of Columbia. The Texas health system has much room for improvement in delivering better care, for which outcomes vary by region, and many opportunities to contain the rate of growth across the system.

Potentially Preventable Events Texas has undertaken a number of strategies to improve the delivery of health care, contain costs and improve health outcomes for Texans, as described throughout this SHIP. For example, through the passage of Senate Bill (SB) 7, 82nd Legislature, First Called Session, 2011, the State of Texas adopted an ambitious outcomes-based payment strategy for advancing accountability for quality and cost in the delivery of health care services by focusing on a common set of quality-based, risk-adjusted outcomes that can apply across all provider systems, including hospitals, managed care plans, medical homes, managed long-term care plans and Accountable Care Organizations.1 These outcomes include reductions in:

 potentially preventable hospital admissions (PPAs);  potentially preventable readmissions (PPRs); and  potentially preventable emergency department visits (PPVs).2

The innovation models included in this SHIP are designed to have an impact on these outcomes for targeted populations, including people with chronic conditions, chronic conditions with behavioral health comorbidities and pregnant women. The models would also leverage the state’s Medicaid 1115 waiver, called the Texas Health Care Transformation and Quality Improvement Program (Transformation waiver), which includes these outcome measures as part of its pay-for-performance program, called Delivery System Reform Incentive Payment (DSRIP) projects, with participating providers, most of which are safety net hospitals or academic medical centers, community mental health centers and other facilities.

Prevalent Chronic Conditions The most prevalent chronic conditions among adults and children in Texas are related to lifestyle, suggesting tremendous opportunities for reducing incidence through changes in diet and exercise, outreach and education, and regular sources of care and care management. The top three conditions for adults – overweight/obesity, high cholesterol and hypertension – are each risk-factors for diabetes and other chronic conditions.

1 Millwee, B. et al. “Payment System Reform, One State’s Journey,” Journal of Ambulatory Care Management, 2013. Vol. 36, No. 3: 119-208. 2 Other outcomes include potentially preventable complications and potentially preventable ancillary visits.

prevalence of diabetes increased by 56.6 percent between 2000 and 2010.3 An estimated 9.7 percent of adult Texans 18 years or older reported they had been diagnosed with diabetes in 2010—nearly two million adults. The State Demographer projects a quadrupling of the number of adult Texans with diabetes to almost 8 million by 2040.4

One in three adults in Texas is either: diagnosed with diabetes, has diabetes but is unaware of it, or has pre-diabetes and is at high risk of developing the disease within a decade.5

Direct medical spending on diabetes in Texas topped $12.5 billion in 2011: $7.4 billion in public sector and $49.9 billion in private sector spending.6 Diabetes is also the number one reason Medicaid patients access the health care system.7 Focusing clinical care transformation first on chronic diseases, including diabetes, hypertension and overweight/obesity, as proposed in this SHIP is a pragmatic way to spread best practices in engaging patients and providers in controlling, managing and preventing a variety of chronic diseases and their complications.

Texas Priority to Improve Birth Outcomes Poor birth outcomes including low birth weight, premature birth, and infant death, are often signs of inadequate perinatal care, much in the same way that a hospitalization for a preventable condition signals lack of adequate primary care. Texas lags the U.S. on low birth weight, preterm birth and infant mortality rates. Over half of all births in Texas are paid for by Medicaid. Poor birth outcomes are a driver of rising health care costs, and HHSC finds newborns have the highest cost Medicaid diagnoses for inpatient hospital stays. Texas Medicaid spent $2.2 billion, or 10 percent of its total budget, in 2010 on birth and delivery-related services.8 While extreme immaturity accounted for less than three percent of clients, the average cost per claim was more than $65,000, comprising more than half of the cost associated with all newborn DRGs.

3 DSHS. The Burden of Diabetes in Texas. Prepared by the Office of Surveillance, Evaluation, and Research Health Promotion and Chronic Disease Prevention Section, April 2013. 4 Texas Diabetes Institute. Strategies for Improving Diabetes Care in Texas, November 2010. 5 Ibid. 6 HHSC. Report on the Direct and Indirect Costs of Diabetes in Texas (As Required By S.B. 796 82nd Legislature, Regular Session, 2011) December 2012. See: http://www.hhsc.state.tx.us/reports/2012/direct-indirect-costs-diabetes-texas.pdf 7 Ibid. 8 Maureen Milligan, Medicaid-CHIP division. “Medicaid and CHIP Prenatal and Perinatal Services”, April 2010. See: http://www.coderedtexas.org/files/presentations/2010-05/Milligan.pdf

annual average rate of 4.1 percent in Texas, compared to 3.7 percent for the U.S.9 For Medicare, the average annual rate increase was 7.2 percent for Texas compared to 6.3 percent for the U.S. Employer-based coverage has risen dramatically in the last seven years. Between 2005 and 2012, average annual premiums for single coverage rose 24 percent among small firms in Texas and 25 percent among large firms.10 Average annual premiums for family coverage rose 34 percent and 26 percent, respectively, among small and large firms over the same time period.

Combined federal and state spending on Texas Medicaid in 2011 was $29.4 billion.11 Medicare spending in Texas in 2009 was $33.2 billion. Insurance carriers participating in the commercial health insurance market in Texas generated more than $38.2 billion in premiums in 2011.12

Health Care Delivery System

Hospitals, Health Centers and Long‐term Care Facilities Texas hospitals are a mix of facilities providing general acute care, pediatric, long-term care, psychiatric, rehabilitation and other specialized services. In 2012, there were 630 hospitals of these varying types, with 83,000 licensed beds. In 2010, Texas hospitals provided care to 2.7 million inpatients and treated more than 38 million patients in an outpatient setting. Additionally, 9.8 million were treated in Texas emergency rooms.16 Texas is home to 69 Federally Qualified

9 CMS. National Health Expenditure Data, State Health Expenditures by State of Residence, 1991-2009. 10 AHRQ. Medical Expenditure Panel Survey, 2005 and 2012 Insurance Component. 11 HHSC. Texas Medicaid and CHIP in Perspective, Ninth edition, January 2013. 12 TDI. Annual Report, 2012. 13 DSHS, Health Professions Resource Center, Center for Health Statistics. Supply trends among licensed health professions, Texas, 1980-2011, 5th edition, January 2012. See: http://www.dshs.state.tx.us/chs/hprc/Supply-Trends- Among-Licensed-Health-Professions,-Texas,-1980-2011/ 14 Association of American Medical Colleges. 2011 State Physician Workforce Data Book, November 2011. See: https://www.aamc.org/download/263512/data 15 Henry J. Kaiser Family Foundation. State Health Facts, Provider & Service Use Indicators, Texas, 2013. RN and NP rates are based on 2011 data; PA rates are based on 2010 data. See: http://kff.org/statedata/?state=TX 16 Texas Hospital Association. Fast Facts on Texas Hospitals, 2012-2013. See: http://www.tha.org/HealthCareProviders/Advocacy/Hospital%20Facts.pdf

Health Centers (FQHCs) in Texas with more than 300 delivery sites.17 The Texas Department of State Health Services contracts with 39 private local mental health authorities (LMHAs) that deliver mental health services for specific geographic areas across Texas.18 Texas also has 3,436 long-term care facilities, comprised of adult day care, assisted living, skilled nursing, and intermediate care for individuals with an intellectual disability (ICF/IID).19

Purchasers and Payers Three-quarters of Texas’ 26 million residents are covered by some type of health insurance. Fifty-five percent are covered by private insurance and 28 percent are covered by government insurance.20 Blue Cross Blue Shield of Texas has the largest share—31 percent—of the private commercial insurance market based on premium collections.21 Approximately 1 in 7 Texans, or 14 percent of the state population (25.6 million people), receives services from Medicaid.22 Medicare covers about 12 percent of the population, and military health care covers 5 percent of the population.23 The remaining quarter of the population (24.6%), over 6 million people, are uninsured. According to the Texas Medical Foundation, “35 of the state’s 254 counties account for 80 percent of the uninsured.”24 Several of the state’s large urban areas, including Dallas, El Paso, and Houston, have rates of uninsured in excess of the state average. Texas has the highest percentage of uninsured residents in the nation.

17 DSHS. Texas Primary Care Office. See: http://www.dshs.state.tx.us/chpr/fqhcmain.shtm. 18 Hogg Foundation for Mental Health. A guide to understanding mental health systems and services in Texas, November 2012. See: http://hoggblogdotcom.files.wordpress.com/2013/01/hoggmentalhealthguide.pdf. 19 DADS. Annual Report, 2012, February 2013. See: http://www.dads.state.tx.us/providers/reports/sb190/RS- AnnualReport-FY12.pdf 20 U.S. Census Bureau, Current Population Survey, 2013. Annual Social and Economic Supplement Table 105: Health Insurance coverage Status and Type of Coverage by State and Age for All People. 21 TDI. 2012 Annual Report–Part II. 22 U.S. Census Bureau, Current Population Survey, 2013. Annual Social and Economic Supplement Table 105: Health Insurance coverage Status and Type of Coverage by State and Age for All People. 23 Individuals may have more than one type of public coverage; sub-group percentages of public coverage add to more than the total. 24 Texas Medical Association, The Uninsured in Texas. See: http://www.texmed.org/uninsured_in_texas/#geographic. 25 The Catalyst for Payment Reform, a national organization, is tracking adoption of payment innovations by state, but this is based on voluntary reporting and therefore is limited.

providers in Texas have direct, comprehensive experience transforming billable, fee-for-service payments into quality-based payment alternatives, such as bundled payments for episodes of care, medical home payment arrangements, or accountable care organization (ACO)-type financing that rewards expected health care outcomes for a defined population.

Patient‐Centered Medical Care Stakeholders agreed that advancing medical, health and maternity home models in Texas should be a priority given the broad consensus of their value and effectiveness across the continuum of care and across payers to improve care coordination and outcomes. This is particularly true for adults with chronic conditions, who drive the bulk of health care spending, and for pregnant women, given the large number of births in Texas and the state’s priority for improving birth outcomes. Yet, significant barriers, primarily related to cost, lack of expertise and technical knowledge, and skills, have prevented wider adoption of medical/health home models than desired.

Health Information Technology Texas, like many other states, has invested significant resources into development of health information exchanges and provider adoption of health information technology (IT) and EHRs. Stakeholders frequently identified health information technology as a critical component of true patient-centered care, particularly regarding care coordination and integration of services. Yet, adoption and meaningful use of EHRs and participation in a local HIE varies significantly across Texas by region and provider type. For example, behavioral health providers and Long Term Services and Supports (LTSS) agencies were largely left out of federal programs to incentivize EHR adoption among Medicaid- and Medicare-participating providers. Strategies to spread and sustain medical home models of team-based and integrated care must also address gaps in EHR adoption and the ability to exchange clinical information. Ultimately the beneficiaries of HIE, the payers, should play a significant role in sustaining local HIEs and statewide HIE.

Multi‐payer Collaboration Meaningful delivery system transformation in Texas is dependent on the health care marketplace moving from a largely fee-for-service payment model to one that rewards quality and promotes evidence-based care. Differences in corporate culture (local versus national), market share, product lines (such as insurance products versus administrative services-only contracts for self- insured employees), and different population demographics of covered lives also hinder multi- payer collaboration.26 Medicaid and commercial health plans that met separately with the SIM Planning Team, while conceptually open to further discussion on ways to collaborate on payment models that incentivize and reward quality-based care, expressed similar concerns.

26 Cavanaugh S., Burke, G. A Multi-payer Approach to Health Care Reform, United Hospital Fund, 2010.

As noted across SIM stakeholder meetings, providers are often frustrated with a mix of different measures, payment structures, incentives and performance outcomes from multiple payers that apply to subsets rather than all of their patients. Texas lacks a formal engagement process to align payers on the medical home model as well as on evidence-based public health innovations to control, manage, prevent or delay chronic disease.

Future “To Be” Health Care System of Texas Texas envisions a future health care environment that achieves three long term goals aligned with our triple aims for better health, better care and lower costs. These goals are to:

Below are the expectations for a future health care environment in Texas based on implementing the SHIP’s five models:

Transform the Delivery System to Models of Patient‐centered Care

The future “to be” health care environment of Texas will deliver health care services based on a patient‐centered medical/health/maternity home model.

 Patients with chronic conditions or a high-risk pregnancy will have the education and training they need to actively engage in the self-management of their condition.  Primary care practices throughout the state will adopt team-based care models that enable health care professionals to practice at the full potential of their scope of practice.  Through multi-payer collaboration, providers will have the ability to aggregate data from multiple payers so they have more meaningful and actionable information to improve practice performance.

Transition Away from Fee‐for‐service to Quality‐based Payment

The future “to be” health care environment of Texas will adopt payment models that reward quality rather than volume of care.

 Texas will create an infrastructure for providers and payers to define new payment systems and models in a way that conforms to antitrust laws.  HHSC and Medicaid managed care organizations will use the Patient-Centered Medical Home model for people with chronic conditions and pregnant women as a conceptual framework for collaborating on alignment of payment models.  Across Medicaid, commercial healthcare and Medicare, new payment models will be designed to provide flexibility to stakeholders in identifying and testing strategies specific to their population, guided by common principles. These include: o Financial rewards must be available to a broad range of providers (primary care, specialty care, hospitals, care coordinators, community care workers, etc.) in order to incentivize participation in the models. o Incentives must reward improved care delivery, patient outcomes and reductions in health care costs. o Quality of care and improved health outcomes are promoted in a cost-effective manner, through an integrated health care model that enhances care coordination and focuses on chronic disease management.  Health plans and other payers will have the ability to merge both claims and clinical data (e.g., labs, vitals, prescription medicines) to develop accountable care models with integrated delivery systems, including safety net providers.

Build Capacity for Continuous, Ongoing Improvement and Innovation throughout the Health Care and Public Health Systems in Texas

The future “to be” health care environment of Texas will foster state, local, public and private collaboration in spreading and sustaining best practices in service delivery and payment across the health care and public health systems.

 Texas will have an infrastructure in place that enables multi-payer collaboration to support the financial sustainability of local and state-level HIEs.

 Texas will have an infrastructure in place that enables multi-payer collaboration to support regional medical home initiatives.  Texas will have an infrastructure in place to monitor and publicly report on payment and delivery system innovations across the public and private sectors on a regular basis.  Public health services agencies that provide or pay for patient care and Medicaid will collaborate in developing an infrastructure to exchange data with local HIEs and the Medicaid HIE.  Texas will have a health learning innovation network in place with experts and mentors in every health services region to spread adoption of best practices in clinical care transformation learned from existing initiatives in Medicaid, public health and the private sector to promote sustainability of innovations related to: health information technology (HIT), including telemedicine and patient registries; team-based care models, including the use of community health workers, physical and behavioral health integration; and care management models for people with diabetes and other chronic conditions.  Medicaid managed care plans, Texas Collaborative for Healthy Mothers and Babies and Center for Medicare and Medicaid Innovation’s (CMMI) Strong Start participants in Texas will collaborate in spreading best practices in maternity home models.  Learning exchanges will be designed to allow members from communities with advanced, integrated delivery systems and a high degree of HIT functionality and exchange capabilities with their local HIE to partner with members of other communities in Texas seeking to learn and adapt their systems.  Communities with relatively high rates of chronic diseases will have an opportunity to collaborate with state and private stakeholders in implementing evidence-based public health initiatives designed to help high-risk residents manage or prevent chronic diseases.  Communities that have adopted evidenced-based public health initiatives designed to help high-risk residents manage or prevent chronic diseases will be engaged with local health plans in measuring program impacts and sustaining effective programs.

State Health Care Innovation Plan The Texas State Health Care Innovation Plan (SHIP) is designed to leverage many of the delivery system and payment innovations underway in Texas by: disseminating best practices, bringing community-driven, evidence-based programs to a wider scale, and providing leadership to remove administrative or legislative barriers to payment reform while, most importantly, promoting multi-payer collaboration on the alignment of value-based payment models.

We propose the following five models, as described in Section E and briefly summarized here, to achieve the long term goal meet the state’s goals for health care delivery and payment.

Model I: EHR and HIE Expansion and Sustainability Initiatives The goal of Model I is too expand EHR adoption and meaningful use, expand HIE participation and support public and multi-payer participation in local HIE sustainability to support and promote clinical care transformation initiatives.

Innovation 1: EHR Adoption Incentive Program We propose that the Texas SIM project support Medicaid HIT in developing a plan to augment the EHR Incentive Program by supporting providers initially excluded from participation in this program to adopt and meaningfully use certified EHRs. The program would target small, rural and behavioral health and LTSS providers.

Innovation 2: Expanding HIE Participation We propose to develop a use case for building capacity for acute care hospitals to exchange admissions, discharge and transfer (ADT) notifications with a set of outpatient clinics, such as the local mental health authorities, all of which have EHRs. This test case would provide an opportunity to measure the clinical and financial impact of electronic ADT notifications build community support for HIE participation among providers payers and other stakeholders in support of local and state-level HIE sustainability.

Innovation 3: HIE Sustainability In collaboration with the Texas State Health Services Authority, we propose three strategies to promote payer participation in the financial sustainability of local and state-based HIE. These strategies proposed to be developed include payer-sponsored payments to all provider types for HIE utilization; payer-sponsored payments to certified HIEs for connecting providers; and provider incentives to electronically report quality measures to Medicaid.

Model II: Clinical Care Transformation Programs The goal of Model II is to expand adoption of team-based, coordinated and clinically integrated care among practices that serve people with chronic conditions and pregnant women through nationally recognized programs and promising practices.

Innovation 1: Medical Home Training Program We propose to develop and implement a patient-centered medical home (PCMH) training program to assist small and medium practices in achieving or improving one or more aspects of medical home functionality, for practices that have not obtained PCMH recognition through a national accrediting body. To demonstrate improvement within three years, we propose that up to 36 regional collaboratives be undertaken each year of the SIM project to support prospective medical homes, health homes and maternity homes in Texas.

Innovation 2: Medical Home Recognition Program We propose to leverage National Committee for Quality Assurance (NCQA) recognition to promote medical home adoption for practices that meet eligibility criteria for participation and are selected through a process that would be developed during implementation. In keeping with our approach to meet providers where they are, we propose to support practices at any recognition level, and include support for NCQA specialty home recognition.

Innovation 3: Chronic Disease Care Recognition Program To support small and rural practices along the continuum of accountable care, we propose to introduce the Bridges to Excellence (BTE) Care Recognition program27 to Medicaid managed care. This project would build on the successes of commercial plans’ experiences with BTE to test a payment model in Medicaid managed care for targeted providers that attain BTE care recognition in diabetes, hypertension, depression, and potentially other conditions, such as childhood asthma.

Model III: Spreading and Sustaining Innovations The goal of Model III is to spread adoption of best practices in clinical care transformation; positively affect Medicaid managed care policy and contracting to sustain clinical care transformation; and build an infrastructure for tracking, analyzing and reporting on delivery system and payment innovations in Texas to promote and sustain continuous learning and improvement.

Innovation 1: Health Innovation Learning Network Texas proposes to develop a statewide Health Innovation Learning Network (Network) that will teach best practices and provide in-person assistance and technical support to providers within each of Texas’ 11 public health regions through learning exchanges.28 We anticipate a hub and spoke design with a statewide leadership and administrative team, coordinated through the SIM staff, working to support regional teams that have clinical and training experience.

Innovation 2: Sustaining Practice Transformation in Medicaid Managed Care To help sustain the progress being made around the state to advance clinical care transformation, proposed SIM Council and project staff would serve in a consultation, networking, convening, research and in other capacities to guide HHSC and Medicaid managed care stakeholders in elevating the recommendations of several legislatively created committees or mandated state agency reports that have already reached consensus on strategies to improve the delivery of

27 See: http://www.hci3.org/. 28 There are 11 public health regions in eight geographically distinct areas.

patient-centered care and, in particular, promote quality-based payment strategies in Medicaid/CHIP.

Innovation 3: Texas Health Care Innovations Tracking Center We propose that SIM project staff serve as a centralized support team—a health care innovation tracking center (Tracking Center)—for monitoring and communicating a broad range of delivery system and payment reform innovation activities and outcomes throughout the Texas Health and Human Services enterprise and private sector. The SIM project would support development of an online, interactive, searchable database of health innovation activities within Texas and project staff would maintain the database. Staff would track, monitor and analyze delivery system and payment reform innovations proposed within the SHIP and beyond, as well as disseminate periodic reports through the Texas Institute of Health Care Quality and Efficiency (Institute) to inform its work, and further support the rollout of the proposed Health Innovation Learning Network activities.

Model IV: Community‐Based Public Health Innovations The goal of Model IV is to expand opportunities for individuals to adopt healthy diet and fitness practices and follow prescribed health treatments that help manage, control or prevent the onset of chronic conditions and reduce risks for pre-term births.

Innovation 1: Public Health‐Medicaid Managed Care Diabetes Education Project To better integrate and target state public health and Medicaid resources on diabetes self- management education (DSME), we propose collaboration on a data analysis project with the Texas Diabetes Council (TDC), DSHS and Medicaid to assess the impact and potential overlap of the Community Diabetes Projects overseen by DSHS, and DSME policies and utilization in Medicaid managed care. The project would inform discussion and debate about policies on sustaining and reimbursing DSME programs in Medicaid and the Community Diabetes Projects in DSHS. Topics would include standards, the role of allied health professionals (e.g., CHWs, clinicians trained as diabetes educators) in providing DSME, and measurement and reporting.

Innovation 2: Scaling the National Diabetes Prevention Program in Texas We propose to leverage multi-payer (commercial and Medicare) interest in Texas in the National Diabetes Prevention Program (DPP)—a nationally-recognized, cost-effective model for preventing the onset of diabetes for those with prediabetes—by developing a model for multi- payer alignment on coverage of the DPP as a health benefit in Medicaid and potentially the Employee Retirement System (ERS) of Texas. A DPP pilot program in STAR+PLUS is proposed to test the program’s efficacy and cost-effectiveness in the Medicaid population. In collaboration with DSHS, development of a multi-payer DPP database is proposed to track key statistics on participation and spending, by payer, over the course of the SIM project. Efforts

would include developing protocols for matching clinical data outcomes with DPP participation data to support potential multi-payer alignment on DPP as a covered benefit.

Model V: Multi‐Payer Engagement and Alignment The goal of Model V is to build and sustain clinical care transformation in Texas through infrastructure and capacity-building for multi-payer collaboration on regional medical, health, and maternity home initiatives, and for evidence-based care and public health programs that control, manage or prevent chronic diseases.

Innovation 2: Multi‐payer Alignment on Diabetes Care Transformation and Prevention We propose that the SIM project provide research, technical assistance and support in convening HHSC leadership and other key stakeholders, to explore Medicaid’s alignment with commercial payers and Medicare in their adoption of provider incentive programs or coverage of benefits related to the treatment and prevention of diabetes. Examples would include the BTE diabetes care recognition program, the DPP, and exploration of aligning Medicaid policies on DSME and Medical Nutrition Therapy (for beneficiaries diagnosed with diabetes or renal disease) with Medicare reimbursement policies.

Innovation 3: Collaboration for Public‐Private Data Sharing We propose that SIM project resources be applied to support additional research, technical assistance and policy analysis around needed legislation and sources of other financing, to conduct a detailed feasibility analysis of a establishing a multi-payer data warehouse and reporting service in Texas. The Institute did not endorse mandatory reporting requirements on private health insurance carriers for an all-payer claims database in its 2012 Legislative recommendations, but does support continued study of the issue as well as voluntary, public/private sector, multipayer collaboration to expand information available on health services utilization and reimbursement for the commercially insured population.29

29 Raimer B.G., et al. The Texas Institute of Health Care Quality and Efficiency, Report to the Texas Legislature on Activities to Improve Health Care Quality and Efficiency, November 30, 2012.

Integrated Approach to Delivery System Transformation These five models are a set of integrated strategies, as shown in the figure below, designed to support continuous innovation and learning across the state’s health care environment well after the completion of a SIM project. To help build and sustain clinical care transformation in Texas, we propose a multi-payer engagement and alignment model that directs resources to developing leadership capacity and infrastructure for planning and implementing multi-payer collaboration on medical home models and other evidence-based initiatives. This capacity-building would be a long-term strategy to capitalize on spreading and sustaining innovations proposed in Model III. Those innovations build on the EHR and HIE initiatives proposed in Model I, the clinical care transformation programs proposed in Model II and the community-based public health innovations proposed in Model IV. Experience and learning across the activities of each of the four models would build the evidence-base that helps make the case for multi-payer collaboration on a medical home initiative in the first two years of the SIM.

Figure 2. Integration of 5 Proposed Models for Continuous Health Care Innovation and Learning in Texas

EHR and HIE Clinical Care Initiatives Transfor‐ mation

Public Health Innovations Spreading and Sustaining Innovations

Year 1 Year Year Year Year

The proposed models are a series of interlinking programs that build on the strong foundation of health system innovation within Texas. Leveraging the existing infrastructure across the public and private sectors is expected to accelerate the pace of clinical care transformation of the health

care delivery system in Texas; improve integration of health care services with chronic disease prevention initiatives overseen by the state public health agency; and slow the rate of growth in health care spending. The table below summarizes existing infrastructure and initiatives across public and private sectors that we propose to leverage across the five models.

Table 1. Public and Private Sector Innovations Leverage Points to Support Proposed 5 Innovation Models of the Texas SHIP

EHR and HIE Clinician and Community- Spreading and Multi-payer Expansion and Practice based Public Sustaining Engagement Sustainability Transformation Health Innovations and Alignment Initiatives Programs Innovations State Administrative Initiatives 1115 Medicaid Transformation waiver X X X DSHS Adult Potentially Preventable X Hospitalizations Initiative DSHS Community Diabetes Projects X X Medicaid MCO Quality Strategies X X Texas Collaborative for Healthy Mothers and X X Babies State Legislative Initiatives NICU Council X SB 7: Outcome- and quality-based payment X X reforms Texas Institute of Health Care Quality and X X X X X Efficiency Texas Quality Based Payment Advisory X X Committee Texas Diabetes Council X X Private sector Innovations Bridges to Excellence X X X Private sector medical home payment models X TMF’s Learning and Action Network model X Federally-sponsored Innovations Comprehensive Primary Care (CPC) initiative X X HIE Cooperative Agreement Program (THSA and X X local HIEs) Medicaid EHR Incentive Program X X Strong Start for Mothers and Newborns initiative X X National Diabetes Prevention Program X X

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Implementation Within three years of implementing the proposed SHIP, we would expect that 80 percent of insured residents of Texas who are included in the target population would be included in a plan participating in one or more of the proposed innovations across the five models. In the first three years, the target population of the project would include adults in Medicaid managed care with diabetes, hypertension, pre-diabetes, and/or overweight or obesity, including those with a behavioral health co-morbidity, as well as pregnant women in Medicaid managed care. The target population is expected to extend to all chronic illnesses for Medicaid-Medicare dual eligibles and commercially-covered adults, as well as commercially insured pregnant women, by year three.

The proposed roadmap to health care transformation in Texas is an ambitious undertaking that reflects the state’s commitment to collaborating with stakeholders and advancing strategies that will ensure long-term success. The state would face some significant challenges in implementing the proposed models outlined in this SHIP, including its geographic size, significant variations in patient demographics and provider practice patterns, and a complex private insurance market with a large number of payers. The proposed plan tries to addresses these challenges through a variety of initiatives that provide opportunities for participation throughout the entire state, while supporting innovation at the regional level.

To manage these regional variations, we propose three key strategies that would guide the planning and implementation of each of the five models, and ensure consistency, while supporting local and regional flexibility, as needed:

 effective governance structure that provides a mechanism for widespread, continuous communication and engagement of multiple state agencies and state leaders;  stakeholder involvement throughout planning and implementation phases to ensure stakeholders are personally invested in the success of the program; and  effective program evaluation and reporting to demonstrate progress, identify opportunities for improvement, and support long-term sustainability of transformation initiatives.

Infrastructure for the SIM Project A major innovation to support transformation of the health care system in Texas was the establishment of the Texas Institute for Health Care Quality and Efficiency (Institute), through legislation in 2011 (82nd legislature). An independent, statewide body, supported primarily by staff in the Health Policy and Clinical Services division of the HHSC, the role of the Institute is to improve health care quality, accountability, education, and cost containment by encouraging health care provider collaboration, effective health care delivery models, and coordination of

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health care services.30 We propose to create a SIM Council, under the auspices of the Institute, and supported by a professional SIM project staff, to carry out the proposed Texas SIM project. The SIM Council and staff would support all implementation-related activities through strategic planning; provide guidance and direction to participants; monitor progress and provide regular feedback to participants and stakeholders.

Continued Stakeholder Engagement Maintaining and facilitating stakeholder engagement and collaboration is essential to implementation of the proposed SIM project. Success in the implementation of proposed SHIP innovations within each model is highly dependent on stakeholder engagement. This includes the creation of collaborative relationships; sharing information and lessons learned to promote best practices; and providing effective technical assistance and support for both providers and payers to encourage new partnerships in transformation. The “roadmap” presented for implementing the SIM project plans for stakeholders to play an active role in every phase of the SIM project, including early planning, program design and implementation, program evaluation, and sustainability.

Measurement and Evaluation We have developed a set of potential measures for consideration in finalizing the evaluation plan for this SHIP. They are aligned with our proposed Driver Diagram, shown below, which presents our conceptual model for evaluation. We intend to give preference to measures that are currently available in the state to ease the burden of data collection and to allow for comparisons to previous reporting periods. Secondly, preference would be given to measures emphasized nationally (e.g., CMMI’s recommended set of core measures) to allow for inter-state comparisons. Where no measures currently exist, we would consider the development of alternate measures based on meaningful use and availability of existing data sources.

HHSC proposes to use a competitive bidding process to select a research partner to conduct the data collection, analysis and management of the SIM initiative, in coordination with the SIM Council and staff, under the leadership of the Institute. The Texas external quality review organization (EQRO) for Medicaid/CHIP would also expected to be a key research partner on the project regarding the collection and analysis of data from those programs. HHSC’s Strategic Decision Support staff would also play a vital role in providing Medicaid/CHIP data and analysis.

30 Texas Institute for Health Care Quality and Efficiency website. See: http://www.ihcqe.org/.

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Table 2. Driver Diagram for the Texas SIM State Healthcare Innovation Plan, by December 31, 2019* 5-Year Aims for the Target Population Primary Drivers Secondary Drivers SIM Innovation Models by 12-31-19  EHR and HIE Expansion and Sustainability Initiatives: To expand EHR adoption and meaningful use, expand HIE participation and support public and multi-payer participation in local HIE

1. Reduce the rate of potentially sustainability to support and promote clinical care transformation

preventable hospitalizations by initiatives. 5% from baseline  Weight management and  Clinical Care Transformation Programs: To expand adoption of control  Evidence-based team-based, coordinated and clinically integrated care among 2. Reduce the rate of potentially prevention, screening, practices that serve people with chronic conditions and pregnant preventable ED visits by 5%  Diabetes and treatment women through nationally recognized programs and promising from baseline management and practices. control  Care coordination and 3. Reduce the rate of potentially integration of primary,  Spreading and Sustaining Innovations: To spread adoption of best preventable 30-day  Prediabetes acute, behavioral and practices in clinical care transformation; positively affect Medicaid readmissions by 5% from management (later) long term managed care policy and contracting to sustain clinical care baseline services and supports transformation; and build an infrastructure for tracking, analyzing  Hypertension and reporting on delivery system and payment innovations in Texas 4. Reduce the percentage of management and  Patient/family to promote and sustain continuous learning and improvement. deliveries with a pre-term control engagement and birth by 10% from baseline accountability  Community-Based Public Health Innovations: To expand 5. Reduce the percentage  Management of opportunities for individuals to adopt healthy diet and fitness reporting fair or poor health behavioral health  Adopting Healthy practices and follow prescribed health treatments that help manage, status by 10% from baseline comorbidities Lifestyle Behaviors control or prevent the onset of chronic conditions and reduce risks for pre-term births. 6. Increase consumer satisfaction  Pregnancy on CAHPS surveys among management  Multi-Payer Engagement and Alignment: To build and sustain adults by 10% from baseline clinical care transformation in Texas through infrastructure and capacity-building for multi-payer collaboration on regional 7. Limit the increase in total cost medical/health/maternity home initiatives, and for evidence-based of care by 5% from baseline care and public health programs that control, manage or prevent chronic diseases. *Assumes a start date of January 1, 2015. Initial target population: Adults in Medicaid managed care with diabetes, hypertension, pre-diabetes, and/or overweight or obesity, including those with a behavioral health co-morbidity, expanding to other chronic conditions in subsequent years; and pregnant women in Medicaid managed care. Target population is expected to extend to Medicaid-Medicare dual eligible with any chronic illnesses, including behavioral health co-morbidities; commercially- covered adults with chronic conditions, and pregnant women by year 3.

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Texas State Healthcare Innovation Plan

A. Goals for Health Care Transformation in Texas

The State Innovation Models (SIM) Model Design process that the State has undertaken since April 2013 has helped stakeholders better understand and appreciate the multitude of public and private initiatives currently underway in Texas to transform the delivery of and payment for health care. The SIM planning team, comprised of state officials from the Texas Health and Human Services Commission (HHSC) and consultants from Health Management Associates and Deloitte, convened 14 community stakeholder meetings and hosted several webinars on special topics of interest and a statewide conference to present preliminary models to seek stakeholder input. The SIM initiative has provided Texas an opportunity to develop a State Healthcare Innovation Plan (SHIP) that moves the State forward on each of these goals. Within the framework of the SIM Model Design criteria, this extensive stakeholder input led us to propose five models from which to leverage a strong foundation of innovation in Texas:

I. EHR and HIE expansion and sustainability initiatives; II. Clinical care transformation programs; III. Spreading and sustaining innovations; IV. Community-based public health programs; and V. Multi-payer engagement and alignment.

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 adopting healthy lifestyle behaviors;  patient/family engagement and accountability;  evidence-based screening and appropriate care; and  coordinated and clinically integrated care.

Figure 3. Texas SIM Conceptual Model for Health Care Innovation

Meeting Providers Where They Are Input from a statewide SIM stakeholder engagement process that HHSC began in April 2013 made clear that to support these long-term goals, the Texas SIM model design must account for the wide diversity in health care delivery systems, resources and challenges across the state. This includes a wide range of provider practice types and sizes, levels of delivery system integration, health information exchange infrastructure, degrees of managed care penetration in local health care markets, and diversity in population demographics and cultural experiences.

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The Texas SHIP recognizes and embraces this diversity. An overall guiding approach to the development of the Texas SHIP was to “meet providers where they are along the stages of health care transformation.”

We describe the stages of delivery system transformation as the “Continuum of Accountability” for financial risks and health outcomes. As providers and systems move away from fee-for- service and toward global capitation, accountability for financial risk and health outcomes increases.

Figure 4. Continuum of Accountability

The models and strategies presented in this SHIP, as described in Section E, take into consideration where providers and health plans currently are along this continuum.

Current “As Is” Health Care Environment of Texas

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Potentially Preventable Events Through recent legislation and administrative initiatives, Texas has undertaken a number of strategies to improve the delivery of health care, contain costs and improve health outcomes for Texans, as described throughout this SHIP. For example, through the passage of Senate Bill (SB) 7, 82nd Legislature, First Called Session, 2011, the State of Texas adopted an ambitious outcomes-based payment strategy for advancing accountability for quality and cost in the delivery of health care services. Targeted to Medicaid and CHIP, but relevant to all payers, SB 7 bases payment adjustments on a common set of quality-based, risk-adjusted outcomes that can apply across all provider systems, including hospitals, managed care plans, medical homes, managed long-term care plans and Accountable Care Organizations.31 These outcomes include reductions in:

 potentially preventable hospital admissions (PPAs);  potentially preventable readmissions (PPRs); and  potentially preventable emergency department visits (PPVs).32

Potentially preventable events (PPEs) are indicators of poor availability, accessibility, and/or effectiveness of primary care, as well as insufficient attention to transitions in care. While not all PPEs can be avoided, working to reduce PPEs can have a big payoff for the entire health care system. The innovation models included in this SHIP are designed to have an impact on these outcomes for targeted populations, including people with chronic conditions and chronic conditions with behavioral health comorbidities and pregnant women. The models will also leverage the state’s Medicaid 1115 waiver, called the Texas Health Care Transformation and Quality Improvement Program (Transformation waiver), which also includes these outcome measures as part of its pay-for-performance program, called Delivery System Reform Incentive Payment (DSRIP) projects, with participating providers.

Just in Medicaid, Texas spent approximately $90 million in 2010 on PPVs and $120 million on PPAs. In 2009, it spent $104 million on PPRs.33

31 Millwee, B. et al. “Payment System Reform, One State’s Journey,” Journal of Ambulatory Care Management, 2013. Vol. 36, No. 3: 119-208. 32 Other outcomes include potentially preventable complications and potentially preventable ancillary visits. 33 Readmissions data are from: http://www.hhsc.state.tx.us/reports/2011/PPR-Report-011811.pdf; admissions and ED use data are from: http://www.hhsc.state.tx.us/1115-docs/MMC-Quality-Strategy.pdf. Spending on the latter two categories are lower because of a smaller volume of hospital users compared to ED users, and because Medicare’s coverage of hospital stays for people over age 65.

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exercise, outreach and education, and regular sources of care and care management. The top three conditions for adults – overweight/obesity, high cholesterol and hypertension – are each risk-factors for diabetes and other chronic conditions.

Texas Priority to Reverse Diabetes Trends The reach, impact and costs to the State of Texas, its taxpayers and those suffering from diabetes has made prevention and effective management and treatment of this disease a statewide priority. Despite recent efforts to improve the social and lifestyle factors that often lead to diabetes, the prevalence of diabetes increased by 56.6 percent between 2000 and 2010.34 An estimated 9.7 percent of adult Texans 18 years or older reported they had been diagnosed with diabetes in 2010. This is nearly two million adults living with diabetes. The State Demographer projects a quadrupling of the number of adult Texans with diabetes to almost 8 million by 2040.35

One in three adults in Texas is either: diagnosed with diabetes, has diabetes but is unaware of it, or has pre-diabetes and is at high risk of developing the disease within a decade.36

Direct medical spending on diabetes in Texas topped $12.5 billion in 2011: $7.4 billion in public sector and $49.9 billion in private sector spending.37 Diabetes is also the number one reason Medicaid patients access the health care system.38 Focusing clinical care transformation first on chronic diseases, including diabetes, hypertension and overweight/obesity, as proposed in this SHIP is a pragmatic way to spread best practices in engaging patients and providers in controlling, managing and preventing a variety of chronic diseases and their complications.

34 DSHS. The Burden of Diabetes in Texas. Prepared by the Office of Surveillance, Evaluation, and Research Health Promotion and Chronic Disease Prevention Section, April 2013. 35 Texas Diabetes Institute. Strategies for Improving Diabetes Care in Texas, November 2010. 36 Ibid. 37 HHSC. Report on the Direct and Indirect Costs of Diabetes in Texas (As Required By S.B. 796 82nd Legislature, Regular Session, 2011) December 2012. See: http://www.hhsc.state.tx.us/reports/2012/direct-indirect-costs-diabetes-texas.pdf 38 Ibid.

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or 10 percent of its total budget, in 2010 on birth and delivery-related services.39 While extreme immaturity accounted for less than three percent of clients, the average cost per claim was more than $65,000, comprising more than half of the cost associated with all newborn DRGs.

Health Care Cost Trends As another indication of room for improvement in the state’s health care delivery system, growth in costs for Medicaid and Medicare in Texas have grown faster than the average U.S rate. Between 1991 and 2009, growth in Medicaid per-enrollee personal health care costs grew at an annual average rate of 4.1 percent in Texas, compared to 3.7 percent for the U.S.40 For Medicare, the average annual rate increase was 7.2 percent for Texas compared to 6.3 percent for the U.S. Employer-based coverage has risen dramatically in the last seven years. Between 2005 and 2012, average annual premiums for single coverage rose 24 percent among small firms in Texas and 25 percent among large firms.41 Average annual premiums for family coverage rose 34 percent and 26 percent, respectively, among small and large firms over the same time period.

Combined federal and state spending on Texas Medicaid in 2011 was $29.4 billion.42 Medicare spending in Texas in 2009 was $33.2 billion. Insurance carriers participating in the commercial health insurance market in Texas generated more than $38.2 billion in premiums in 2011.43

Health Care Delivery System The Texas health care delivery system is extremely diverse. On one hand, most physicians’ practices in Texas are small, having three or fewer physicians.44 On the other hand, Texas is home to some of the largest and most sophisticated public and private health systems in the country. The most integrated systems of care—typically concentrated among the large hospital and children’s hospital and health systems in large metropolitan regions of the state—have adopted innovative delivery system and payment reform activities, including accountable care organizations (ACOs) and/or patient-centered medical home models, either independently or with commercial health plans.

39 Maureen Milligan, Medicaid-CHIP division. “Medicaid and CHIP Prenatal and Perinatal Services”, April 2010. See: http://www.coderedtexas.org/files/presentations/2010-05/Milligan.pdf 40 CMS. National Health Expenditure Data, State Health Expenditures by State of Residence, 1991-2009. 41 AHRQ. Medical Expenditure Panel Survey, 2005 and 2012 Insurance Component. 42 HHSC. Texas Medicaid and CHIP in Perspective, Ninth edition, January 2013. 43 TDI. Annual Report, 2012. 44 Texas Medical Association. Results are part of a biennial survey of Texas physicians conducted by TMA. Survey of Texas Physicians, 2012.

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Health Care Workforce Despite pockets with some of the best medical services in the country, much of Texas lacks an adequate number of health professionals. A large portion of counties in Texas are federally designated primary care health professional shortage areas and the majority of counties are federally designated as mental health professional shortage areas.45 Texas was ranked 47th in the ratio of total active primary care physicians per 100,000 population in 2010.46As with physicians, practitioner-to-population ratios for physician assistants and nursing professions are lower than U.S. rates.47 The state is undertaking many strategies to increase the pipeline of primary care professionals through various incentive programs, by addressing scope of practice standards for advanced practice nurses and physician assistants through legislation, and promoting broader use of community health workers (CHWs), among other strategies that the proposed SHIP is designed to leverage.

Texas is home to 69 FQHCs in Texas with more than 300 delivery sites.49 The Texas Department of State Health Services contracts with 39 private local mental health authorities (LMHAs) that deliver mental health services for specific geographic areas across Texas.50 Texas also has 3,436 long-term care facilities, comprised of adult day care, assisted living, skilled nursing, and intermediate care for individuals with an intellectual disability (ICF/IID).51

45 DSHS, Health Professions Resource Center, Center for Health Statistics. Supply trends among licensed health professions, Texas, 1980-2011, 5th edition, January 2012. See: http://www.dshs.state.tx.us/chs/hprc/Supply-Trends- Among-Licensed-Health-Professions,-Texas,-1980-2011/ 46 Association of American Medical Colleges. 2011 State Physician Workforce Data Book, November 2011. See: https://www.aamc.org/download/263512/data 47 Henry J. Kaiser Family Foundation. State Health Facts, Provider & Service Use Indicators, Texas, 2013. RN and NP rates are based on 2011 data; PA rates are based on 2010 data. See: http://kff.org/statedata/?state=TX 48 Texas Hospital Association. Fast Facts on Texas Hospitals, 2012-2013. See: http://www.tha.org/HealthCareProviders/Advocacy/Hospital%20Facts.pdf 49 DSHS. Texas Primary Care Office. See: http://www.dshs.state.tx.us/chpr/fqhcmain.shtm. 50 Hogg Foundation for Mental Health. A guide to understanding mental health systems and services in Texas, November 2012. See: http://hoggblogdotcom.files.wordpress.com/2013/01/hoggmentalhealthguide.pdf. 51 DADS. Annual Report, 2012, February 2013. See: http://www.dads.state.tx.us/providers/reports/sb190/RS- AnnualReport-FY12.pdf

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Within and across these types of providers there is a wide range of experience with managed care and quality-based incentives, and significant urban-rural disparities in clinical care transformation to models of patient-centered care and use of health information technology.

Purchasers and Payers Three-quarters of Texas’ 26 million residents are covered by some type of health insurance. Fifty-five percent are covered by private insurance and 28 percent are covered by government insurance.52 Blue Cross Blue Shield of Texas has the largest share—31 percent—of the private commercial insurance market based on premium collections.53 Approximately 1 in 7 Texans, or 14 percent of the state population (25.6 million people), receives services from Medicaid.54 Medicare covers about 12 percent of the population, and military health care covers 5 percent of the population.55 The remaining quarter of the population (24.6%), over 6 million people, are uninsured. Texas has the highest percentage of uninsured residents in the nation.

Delivery System Payment Models in Texas Fee-for-service is still the predominant method of provider payment by payers. All payers, including Medicaid, Medicare and commercial plans have adopted a wide range of alternative payment methods along the continuum of accountability for value-based purchasing. There is no centralized repository of the adoption of delivery system payment models in Texas, nor has any formal survey been conducted.56 Based on anecdotal evidence, relatively few payers and providers in Texas have direct, comprehensive experience transforming billable, fee-for-service payments into quality-based payment alternatives, such as bundled payments for episodes of care, medical home payment arrangements, or accountable care organization (ACO)-type financing that rewards expected health care outcomes for a defined population.

52 U.S. Census Bureau, Current Population Survey, 2013. Annual Social and Economic Supplement Table 105: Health Insurance coverage Status and Type of Coverage by State and Age for All People. 53 TDI. 2012 Annual Report–Part II. 54 U.S. Census Bureau, Current Population Survey, 2013. Annual Social and Economic Supplement Table 105: Health Insurance coverage Status and Type of Coverage by State and Age for All People. 55 Individuals may have more than one type of public coverage; sub-group percentages of public coverage add to more than the total. 56 The Catalyst for Payment Reform, a national organization, is tracking adoption of payment innovations by state, but this is based on voluntary reporting and therefore is limited.

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meaningful use of EHRs and participation in a local HIE varies significantly across Texas by region and provider type. For example, behavioral health providers and LTSS agencies were largely left out of federal programs to incentivize EHR adoption among Medicaid- and Medicare-participating providers. Strategies to spread and sustain medical home models of team- based and integrated care must also address gaps in HER adoption and the ability to exchange clinical information. Ultimately the beneficiaries of HIE, the payers should play a significant role in sustaining local HIEs and statewide HIE.

Multi‐payer Collaboration Differences in corporate culture (local versus national), market share, product lines (such as insurance products versus administrative services-only contracts for self-insured employees), and different population demographics of covered lives can hinder multi-payer collaboration.57 Medicaid and commercial health plans that met separately with the SIM Planning Team, while conceptually open to further discussion on ways to collaborate on payment models that incentivize and reward quality-based care, expressed similar concerns.

Below are the expectations for a future health care environment in Texas based on implementing the SHIP’s five models:

57 Cavanaugh S., Burke, G. A Multi-payer Approach to Health Care Reform, United Hospital Fund, 2010.

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Transform the Delivery System to Models of Patient‐centered Care

The future “to be” health care environment of Texas will deliver health care services based on a patient‐centered medical/health/maternity home model.

 Practices that serve a relatively high volume of Medicaid or Medicare patients and have been excluded from federal EHR incentive programs will have wider opportunity to adopt and meaningfully use an EHR.  Practices will have the capability and be incentivized to exchange administrative, diagnostic and treatment data with hospitals and emergency rooms through their local health information exchange.  Providers, particularly in small practices and in rural areas, will gain access to technical assistance and resources, including support for earning good standing in a chronic disease care-recognition program or as a medical/health/maternity home.   Providers will have the ability to use evidence-based assessment tools to identify high- risk patients, including people with chronic conditions and pregnant women.  Patients with chronic conditions or a high-risk pregnancy will receive clinically appropriate, evidence-based prevention, screening and treatment to help manage their condition.  Patients with a chronic condition and an accompanying behavioral health co-morbidity will receive high quality care that integrates and coordinates physical and behavioral health services based on their needs.  Patients with chronic conditions or a high-risk pregnancy will have the education and training they need to actively engage in the self-management of their condition.  Primary care practices throughout the state will adopt team-based care models that enable health care professionals to practice at the full potential of their scope of practice.  Through multi-payer collaboration, providers will have the ability to aggregate data from multiple payers so they have more meaningful and actionable information to improve practice performance.

Transition Away from Fee‐for‐service to Quality‐based Payment

The future “to be” health care environment of Texas will adopt payment models that reward quality rather than volume of care.

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 Across Medicaid, commercial healthcare and Medicare, new payment models will be designed to provide flexibility to stakeholders in identifying and testing strategies specific to their population, guided by common principles. These include: o Financial rewards must be available to a broad range of providers (primary care, specialty care, hospitals, care coordinators, community care workers, etc.) in order to incentivize participation in the models. o Incentives must reward improved care delivery, patient outcomes and reductions in health care costs. o Quality of care and improved health outcomes are promoted in a cost-effective manner, through an integrated health care model that enhances care coordination and focuses on chronic disease management.  Health plans and other payers will have the ability to merge both claims and clinical data (e.g., labs, vitals, prescription medicines) to develop accountable care models with integrated delivery systems, including safety net providers.

Build Capacity for Continuous, Ongoing Improvement and Innovation throughout the Health Care and Public Health Systems in Texas

 Texas will have an infrastructure in place that enables multi-payer collaboration to support the financial sustainability of local and state-level HIEs.  Texas will have an infrastructure in place that enables multi-payer collaboration to support regional medical home initiatives.  Texas will have an infrastructure in place to monitor and publicly report on payment and delivery system innovations across the public and private sectors on a regular basis.  Public health services agencies that provide or pay for patient care and Medicaid will collaborate in developing an infrastructure to exchange data with local HIEs and the Medicaid HIE.  Texas will have a health learning innovation network in place with experts and mentors in every health services region to spread adoption of best practices in clinical care transformation learned from existing initiatives in Medicaid, public health and the private sector to promote sustainability of innovations related to: health information technology (HIT), including telemedicine and patient registries; team-based care models, including the use of community health workers, physical and behavioral health integration; and care management models for people with diabetes and other chronic conditions.  Medicaid managed care plans, Texas Collaborative for Healthy Mothers and Babies and CMMI’s Strong Start participants in Texas will collaborate in spreading best practices in maternity home models.

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 Learning exchanges will be designed to allow members from communities with advanced, integrated delivery systems and a high degree of HIT functionality and exchange capabilities with their local HIE to partner with members of other communities in Texas seeking to learn and adapt their systems.  Communities with relatively high rates of chronic diseases will have an opportunity to collaborate with state and private stakeholders in implementing evidence-based public health initiatives designed to help high-risk residents manage or prevent chronic diseases.  Communities that have adopted evidenced-based public health initiatives designed to help high-risk residents manage or prevent chronic diseases will be engaged with local health plans in measuring program impacts and sustaining effective programs.

B. Description of State Health Care Environment

Population Demographics

Population Overview Texas’ demographics shape its health and health care environment. Texas has a large, diverse and growing population spread across a wide and varied geography. Texas is the second largest and second most populous state in the U.S.58 As of 2012, there are over 26 million individuals residing within more than 261,000 square miles.59 While more than 77 percent of the state’s land area is considered rural,60 according to the 2010 U.S. Census Bureau, only 15 percent of the Texas population lives in a rural area.61

State Population Growth Texas is growing faster than the United States as a whole. While the U.S. population increased 1.7 percent between 2010 and 2012, the population of Texas increased by 3.6 percent. The Texas Data Center and the Office of the State Demographer project that the state’s population will increase by 71.5 percent between 2000 and 2040, from 20.9 million to 35.8 million.62

Prominent increases in population growth are predicted among the elderly and in the Hispanic populations. These population sectors will continue to exert demands on the existing and future

58 U.S. Census Bureau. Texas Quick Facts. See: http://quickfacts.census.gov/qfd/states/48000.html 59 Ibid. 60 U.S. Census Bureau. Statistical Abstract of the United States, 2012. See: http://www.census.gov/compendia/statab/2012/tables/12s0369.pdf 61 U.S. Census Bureau. Census Urban and Rural Classification and Urban Area Criteria, 2010. See: http://www.census.gov/geo/reference/ua/urban-rural-2010.html 62 Texas Comptroller of Public Accounts. Texas in focus: A statewide view of opportunities, January 2008. See: http://www.window.state.tx.us/specialrpt/tif/population.html

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health care delivery system of Texas. The aging population is expected to have greater financial security, have more health insurance coverage, and access more health care services. The increasing Hispanic population is expected to be younger, have less health insurance coverage, and have an increased incidence of chronic lifelong health conditions, such as diabetes and obesity.

Aging Population Texas has a young population, with 29 percent of the population under 18 years old, compared to 25 percent for the U.S. Ten percent of the population is over 65 years old.63 Whereas Texas currently has a younger population than the U.S. overall, the fastest growing segment is persons 65 years or older. By 2040, one-sixth of the state’s population is expected to be age 65 and older compared to one-tenth of the population today.64 This will place a rapidly increasing demand for medical care, chronic care and long term supports and services.

Figure 5. Distribution of Population by Age, Texas and U.S., 2010, 201165

100% 10% 12% 90% 80% 70% 60% 61% 61% 50% 40% 30% 20% 29% 10% 25% 0% Texas U.S.

0‐18 19‐64 65+

63 Kaiser Family Foundation. State Health Facts, Population Distribution by Age. See: http://kff.org/other/state- indicator/distribution-by-age/?state=TX 64 Statewide Health Coordinating Council. 2011-2016 Texas state health plan. See: http://www.dshs.state.tx.us/chs/shcc/default.shtm 65 Kaiser Family Foundation. State Health Facts, Population Distribution by Age. See: http://kff.org/other/state- indicator/distribution-by-age/?state=TX

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Race/Ethnicity Texas is predominantly a minority state: in 2011, 42 percent of Texans identified themselves as white, 12 percent as black, 40 percent as Hispanic, and 7 percent as other.66 Texas’ Hispanic population is significantly larger as a proportion of population than in the U.S. as a whole, and growth of this group as a percentage is expected to continue. Hispanics have the highest rate of uninsurance among ethnic groups both nationally and in Texas.

Figure 6. Distribution of Population by Race/Ethnicity, Texas and U.S., 2010, 201167

100% 7% 8% 90% 80% 17% 40% 70% 12% 60% 50% 12% 40% 30% 63% 20% 42% 10% 0% Texas U.S.

White Black Hispanic Other

High Poverty and Income Disparity In 2011, 23 percent of the Texas population, about 5.8 million people, was living below the Federal Poverty Level (FPL). In comparison, the national poverty rate was 20 percent. According to the Center for Public Policy Priorities (CPPP), four Texas cities are among the top five highest poverty percentages for U.S. metropolitan areas.68

Texas has a higher proportion of poor and near-poor residents than the U.S. overall. Nearly one of three Texans (32%) had incomes less than 139 percent of the federal poverty level in 2011, compared with 28 percent nationally. More than one quarter (25.5%) of children in Texas are in

66 Kaiser Family Foundation. State Health Facts, Population Distribution by Race/Ethnicity. See: http://kff.org/other/state-indicator/distribution-by-raceethnicity/?state=TX 67 Kaiser Family Foundation. State Health Facts, Population Distribution by Race/Ethnicity. See: http://kff.org/other/state-indicator/distribution-by-raceethnicity/?state=TX 68 Center for Public Policy Priorities. How Texas Measures Up in the 2010 American Community Survey, September 2011. See: http://library.cppp.org/files/092211_ACS_PolicyPage.pdf

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poverty in 2012, ranking Texas 47th among states, with no appreciable improvement since 1990.69

The impact of poverty on health is well documented, resulting in higher rates of many chronic diseases and shorter life expectancy.70 The effect of poverty on children is even greater, limiting access to health care, the availability of healthy foods, and choices for physical activity.71 Poor children also have higher rates of low birth weight, infant mortality, and engagement in risky or unhealthy behaviors. The distribution of poverty in Texas, compared to the U.S., is shown below.

Figure 7. Distribution of Population by Poverty, Texas and U.S, 201172

100% 90% 29% 33% 80% 70% 60% 18% 19% 50% 21% 40% 20% 30% 9% 8% 20% 10% 23% 20% 0% Texas U.S.

<100% 100‐138% 139‐250% 251‐399% >400%

Education and Income In 2010, a significantly higher percentage, 13.6 percent of Texas adults, did not graduate from high school compared to 10.2 percent of adults in the U.S., as shown in the figure below. About one in four Texas adults (24.5%) graduated from high school or received their GED as their

69 United Health Foundation, America’s Health Rankings, 2012. See: http://www.americashealthrankings.org/TX/2012 70 Government Accounting Office. Poverty in America: Economic Research Shows Adverse Impacts on Health Status and Other Social Conditions as well as the Economic Growth Rate, January 2007. See: http://www.gao.gov/new.items/d07344.pdf 71 U.S. Department of Health and Human Services, Health Resources and Services Administration, Maternal and Child Health Bureau. Child Health USA, 2011. See: http://mchb.hrsa.gov/chusa11/popchar/pages/102cp.html 72 Kaiser Family Foundation. State Health Facts, Population Distribution by Federal Poverty Level. See: http://kff.org/other/state-indicator/distribution-by-fpl/

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highest level of education completed.73 Approximately one in four (24.8%) had some college education and less than four out of ten (37.1%t) graduated from college. This has major implications for health and the health care system in Texas, as educational attainment is a strong predictor of overall adult health and life expectancy. Education facilitates more effective health care visits by promoting patients’ understanding of and participation in their care and ability to create and maintain a healthy lifestyle. Increasing educational levels has been shown to improve the health status of the population.74

Educational attainment is also strongly correlated with income. As shown in the figure below, Texas has higher rates of adults with income below $25,000 compared to the U.S. Further, Texas ranks poorly (43rd) among states in income disparity, which has been slowly growing in the state since 1990. Like poverty, income disparity is associated with poorer health.75

Figure 8. Distribution of Adult Population by Educational Attainment and Income Level in Texas, 201076

60.0

50.0

40.0 (%)

30.0

Percent 20.0

10.0

0.0 No H.S. Highscho Some Less than $15,000 ‐ $25,000 ‐ $35,000 ‐ Graduate College + $50,000+ ol College $15,000 $24,999 $34,999 49,999 or GED Diploma Texas 13.6 24.5 24.8 37.1 11.7 17.4 9.0 12.1 49.7 U.S. 10.2 27.8 26.2 35.9 10.8 16.0 10.5 13.7 49.1

73 DSHS, BRFSS and National Behavioral Risk Factor Surveillance System. 74 United Health Foundation, America’s Health Rankings, 2012. See: http://www.americashealthrankings.org/TX/Graduation/2012 75 Income disparity ranking are based on the Gini coefficient, which measures distribution of income (0 is perfectly distributed and 1 is perfectly skewed to the wealthiest individual). United Health Foundation, America’s Health Rankings, 2012. See: http://www.americashealthrankings.org/TX/gini/2012 76 DSHS, BRFSS, 2010.

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Population Health Status of Texas

Perception of Poor Health When asked to assess their own health, about 20 percent of Texans reported in 2010 that their physical health was not good for five or more days in the past 30 days and about 20 percent of Texans reported that their mental health was not good for 5 or more days in the past 30 days.77 This has serious implications for health care costs, work productivity, and quality of life. Perceptions of physical health and mental health are directly correlated with household income, as illustrated in the two figures below.

Figure 9. Age-Adjusted Prevalence of “Physical Health Not Good 5+ Days” by Income Level in Texas, 201178

77 DSHS. Health Status of Texas 2011, June 2013 78 Ibid.

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Figure 10. Age-Adjusted Prevalence of “Mental Health Not Good 5+Days” by Income Level in Texas, 201179

Infectious Diseases Texas ranked 48th among states on an Infectious Disease measure that combines the incidence of measles, pertussis, Hepatitis A and syphilis per 100,000 population. Infectious diseases pose a threat to all residents and are particularly severe in young children and the elderly, leading to hospitalizations or even death. This measure is an indication of the burden that largely preventable diseases are placing on Texans, and suggests much room for improvement through public health education, outreach, and treatment.80

Prevalent Chronic Conditions and Mortality Chronic diseases are generally characterized by multiple risk factors, a long period of development, a prolonged course of illness, non-contagious origin, functional impairment or disability, and low curability. The most prevalent chronic conditions among adults and children in Texas are related to lifestyle, suggesting tremendous opportunities for reducing incidence through changes in diet and exercise, outreach and education, and regular sources of care and care management. A shown in the table below, the top three conditions for adults – overweight/obesity, high cholesterol and hypertension – are each risk-factors for diabetes and other chronic conditions. Moreover, the chronic disease burden in Texas isn’t limited to adults.

79 Ibid. 80United Health Foundation. America’s Health Rankings, 2012. See: http://www.americashealthrankings.org/TX/2012

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In 2012, 13 percent of Texas children had asthma and 5 percent had been diagnosed with depression.81

Table 3. Ten Leading Chronic Conditions among Adults in Texas, 201282

Condition Prevalence Overweight/obese (BMI ≥25) 65.2% High cholesterol* 27.8% Hypertension* 27.8% Arthritis* 23.7% Asthma 10.9% Diabetes 10.6% Chronic Obstructive Pulmonary Disease (COPD) 5.2% Other cancer 5.2% Skin cancer 4.9% Coronary heart disease 3.9%

Overweight and Obesity Trends Texas ranked 40th among states in adult obesity in 2012 and 38th in obesity among youth, meaning only 10 states had higher adult obesity rates and only 12 states had higher youth obesity rates.83 Obesity trends are worsening in Texas as with the U.S. generally. Since 1980, estimated obesity rates for adults have doubled and rates for children have tripled. Obesity rates among all groups in society, regardless of age, gender, race, ethnicity, socioeconomic status, education

level, or geographic region, have increased markedly. In 2011, more than 65 percent of adults and nearly one-third of children in Texas were overweight or obese.84 Poor diet, decreased physical activity, the social and physical environment, genes and medical history all contribute to obesity. In turn, obesity contributes significantly to a variety of serious diseases, including heart disease, diabetes, stroke, and certain cancers, as well as poor general health, and it is a leading cause of preventable death.85

81 National Survey of Children's Health 2011/12, Texas. See: http://childhealthdata.org/browse/survey?q=2415&r=1 82 BRFSS. Prevalence and Trend Data Texas, 2012. See: http://apps.nccd.cdc.gov/brfss/page.asp?yr=2012&state=TX&cat=CH#CH. Rates for high cholesterol, hypertension and arthritis are from BRFSS 2010, as reported in: Texas Chronic Disease Burden Report, April 2010. 83 United Health Foundation. America’s Health Rankings, 2012. See: http://www.americashealthrankings.org/TX/2012 84 DSHS. Health Status of Texas 2011, June 2013. 85 United Health Foundation. America’s Health Rankings, 2012. See: http://www.americashealthrankings.org/TX/Obesity

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Figure 11. Prevalence of Overweight and Obese Adults, Texas and U.S., 201186

Diabetes Trends The reach, impact and costs to the State of Texas, its taxpayers and those suffering from diabetes has made prevention and effective management and treatment of this disease a statewide priority. Despite recent efforts to improve the social and lifestyle factors that often lead to diabetes, the prevalence of diabetes increased by 56.6 percent between 2000 and 2010.87 An estimated 9.7 percent of adult Texans 18 years or older reported they had been diagnosed with diabetes in 2010. This is nearly two million adults living with diabetes. The State Demographer projects a quadrupling of the number of adult Texans with diabetes to almost 8 million by 2040.88

As shown in the figure below, the burden of diabetes is greater among older adults as well as African Americans and Hispanics. Almost one in four elderly adult Texans (23%) had been diagnosed with diabetes in 2010.89 Among African Americans in Texas aged 18 and older, 16.5 percent of the population has diabetes.90 The State Demographer’s study projects that the Hispanic population will increase by 77 percent over the next 30 years, and by 2040, Hispanics will account for the majority of diabetes cases. Diabetes prevalence steadily increases with lower education levels and as annual household income level decline. In addition, estimates suggest another 425,000 adults in Texas have undiagnosed diabetes.

86 DSHS. Health Status of Texas 2011, June 2013. 87 DSHS. The Burden of Diabetes in Texas. Prepared by the Office of Surveillance, Evaluation, and Research Health Promotion and Chronic Disease Prevention Section, April 2013. 88 Texas Diabetes Institute. Strategies for Improving Diabetes Care in Texas, November 2010. 89 DSHS. The Burden of Diabetes in Texas. Prepared by the Office of Surveillance, Evaluation, and Research Health Promotion and Chronic Disease Prevention Section, April 2013. 90 Texas Diabetes Institute. Strategies for Improving Diabetes Care in Texas, November 2010.

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Figure 12. Prevalence of Diabetes by Race/Ethnicity, Education Status and Age in Texas, 201091

Texans at Risk for Diabetes

In 2010, about one in twenty adults (5.2%) in Texas had been diagnosed with pre-diabetes, or about one million adults.92 Prediabetes is a condition in which individuals’ blood glucose levels are higher than normal but not high enough to be classified as diabetes (100-125 mg/dl).

Overall, one in four adults in Texas is affected by prediabetes or diabetes.93

Figure 13. Prevalence of Pre-diabetes by Race/Ethnicity, Education Status and Age in Texas, 201094

Complications from Diabetes

Diabetes can lead to serious complications, such as blindness, kidney damage, cardiovascular disease, and lower-limb amputations. Diabetes is the leading cause of new cases of blindness in adults 20 to 74 years old. Diabetes is also the leading cause of kidney failure in the U.S.95 In

91 DSHS, BRFSS, 2010. 92 DSHS. The Burden of Diabetes in Texas. Prepared by the Office of Surveillance, Evaluation, and Research Health Promotion and Chronic Disease Prevention Section, April 2013. 93 Ibid. 94 DSHS, BRFSS, 2010. 95 Texas Diabetes Council. Changing the Course: A Plan to Prevent and Control Diabetes in Texas, 2013. See: http://www.dshs.state.tx.us/diabetes/preports.shtm

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2010, about 23 percent of individuals in Texas with diabetes had heart disease; 27 percent had cardiovascular disease; and 9 percent of Texans with diabetes have had a stroke.96 Heart disease and stroke account for about 65 percent of deaths in people with diabetes.

Figure 14. Selected Diabetes Complications in Texas, 201097

80 69.4 70 64.5 60 (%)

50 37.7 40 27.2 30 22.8 25.0 16.1 Percent 20 13.2 6.2 9.2 10 4.9 2.1 0 Heart Disease CVD Stroke High Blood High Current Pressure Cholesterol Smoker (2009) (2009)

With Diabetes Without Diabetes

Mortality Chronic diseases make up a majority of the leading causes of death in Texas and the U.S. Heart diseases and cancer are the leading causes of death in Texas, as they are in the U.S. overall. Mortality in Texas from heart disease is slightly higher than the U.S. rate, while all-cause cancer rates are somewhat lower in Texas than in the US as a whole. Overall death rates due to congestive heart failure, heart disease, and stroke are declining, but Texas continues to have higher rates than the U.S. as a whole.98

Factors Impacting Health Status The Commonwealth Fund ranks Texas 21st among states in “Healthy Lives,” a synthesis of multiple health indicators. However, this ranking masks numerous aspects of population health that could be improved. Key among these are a lack of health insurance, lack of convenient access to health care, and poor socio-economic conditions that limit healthy food choices and opportunities for physical fitness, which contribute to obesity and chronic diseases. Improvements could reduce the incidence of chronic diseases, prevent or delay disease

96 DSHS. The Burden of Diabetes in Texas. Prepared by the Office of Surveillance, Evaluation, and Research Health Promotion and Chronic Disease Prevention Section, April 2013. 97 DSHS, BRFSS, 2010. 98 DSHS. Health Status of Texas 2011, June 2013.

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complications, reduce hospital admissions and readmissions, decrease premature mortality, and reduce health care costs.

As shown in the table below, if Texas improved its health system to the level of the best- performing state, there would be 3 million more adults with a usual source of care and more than 5000 fewer deaths. Texas ranks 32nd in mortality amenable to health care, indicating opportunities to reduce deaths that are potentially treatable or preventable with timely and appropriate health care and increased opportunities to live a healthy lifestyle.99

Table 4. Projected Health Improvements if Texas Performed at the Level of the Best-Performing State, 2009100

Outcome If Texas improved its performance to the level of the best-performing state for this indicator, then: Insured Adults 3,559,309 more adults (ages 18–64) would be covered by health insurance (public or private), and therefore would be more likely to receive health care when needed.

Insured Children 1,107,314 more children (ages 0–17) would be covered by health insurance (public or private), and therefore would be more likely to receive health care when needed.

Adult Preventive 866,089 more adults (age 50 and older) would receive recommended Care preventive care, such as colon cancer screenings, mammograms, pap smears, and flu shots at appropriate ages. Diabetes Care 504,948 more adults (age 18 and older) with diabetes would receive recommended services (eye exam, foot exam, and hemoglobin A1c test) to help prevent or delay disease complications. Childhood 84,364 more children (ages 19–35 months) would be up-to-date on all Vaccinations recommended doses of five key vaccines. Adults with a 3,012,775 more adults (age 18 and older) would have a usual source of care to Usual Source of help ensure that care is coordinated and accessible when needed. Care Children with a 1,255,030 more children (ages 0–17) would have a medical home to help Medical Home ensure that care is coordinated and accessible when needed. Preventable 60,132 fewer hospitalizations for ambulatory care sensitive conditions Hospital would occur among Medicare beneficiaries (age 65 and older) and Admissions $408,595,206 would be saved from the reduction in hospitalizations. Hospital 17,306 fewer hospital readmissions would occur among Medicare Readmissions beneficiaries (age 65 and older) and

99 The Commonwealth Fund. Aiming Higher Results from a State Scorecard on Health System Performance, October 2009. See: http://datacenter.commonwealthfund.org/scorecard/state/45/texas/ 100 Ibid.

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Outcome If Texas improved its performance to the level of the best-performing state for this indicator, then: $243,610,186 would be saved from the reduction in readmissions. Hospitalization of 10,714 fewer long-stay nursing home residents would be hospitalized and Nursing Home Residents $88,207,043 would be saved from the reduction in hospitalizations. Mortality 5,028 fewer premature deaths (before age 75) would occur from causes Amenable to that are potentially treatable or preventable with timely and Health Care appropriate health care.

The factors that affect health status also have racial/ethnic and regional disparities, as described below.

Racial and Ethnic Disparities Health disparities by race and ethnicity are pronounced in Texas. In 2010, 17 percent of white nonelderly adults had no regular health care provider, compared to 23 percent of blacks and 38 percent of Hispanics, as shown in the table below. Almost 23 percent of Hispanics and 19 percent of Blacks reported being in fair or poor health, compared to 11 percent of whites; and a larger percentage of blacks (11%) and Hispanics (10%) have diabetes than whites (7%). Similarly, more blacks (69%) and Hispanics (63%) were overweight or obese than whites (60%) in 2010.101 Black and Hispanic women who were pregnant had much lower rates of prenatal care during their first trimester (54 and 55 percent, respectively), than white pregnant women (73%). Like other states, racial disparities in infant mortality are persistent. In 2010, the infant mortality rate for black babies was 11.4 compared to 5.5 for Hispanic and white babies.

Table 5. Healthcare Usage and Health of Nonelderly Adults by Race in Texas, 2011102

Measure White Black Hispanic Do not have a regular health care provider 17% 23% 38% Do not use prenatal care during first trimester 27% 46% 45%

Report being in fair/poor health 11% 19% 23% Diagnosed with Diabetes 7% 11% 10% Overweight or Obese 60% 69% 63%

101 The Henry K. Kaiser Family Foundation. The Texas Health Care Landscape, December 2011. See: http://kaiserfamilyfoundation.files.wordpress.com/2013/01/8267.pdf 102 Ibid.

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Regional Disparities Population health varies geographically across Texas, with rural counties faring worse, on average, than urban areas. Regional differences have been recorded in overall adult morbidity and mortality measures, as well as in access to care. Rural areas are also more likely to be designated physician shortage areas, and may lack adequate access to hospital care. With respect to health outcomes, 16 percent of people in rural areas report being in fair or poor health, compared to 13 percent of people in urban areas, and nearly 65 percent of rural residents are overweight or obese, compared to 60 percent of those in urban areas.103

Special Needs Populations Texas has a large population of individuals with special needs, many of whom have special health care needs. The services they require are often extensive and long-term depending on their circumstances, and frequently include both medical and social assistance. Because of the complexity of their conditions and the social supports often required, per person health care costs can be significantly higher than those without disabilities. Identifying the population with special needs, the types of services they use and the associated health care costs is challenging because there is no single definition of individuals with special needs. Nonetheless, the following table presents a comprehensive picture of Texans with disabilities.104 While these data are not reflective of all special needs populations, they illustrates the extent to which Texas residents are impacted by one or more type of disability—hearing difficulty, vision difficulty, cognitive difficulty, ambulatory difficulty, self-care difficulty and independent living difficulty— and the challenges of addressing their varied and often costly needs.

Table 6. Number of Individuals with a Disability by Age in Texas, 2011105

Population Age Category Total Number in Texas by Number with Percent with and Disability Age Category Disability Disability Under 5 years 1,951,613 16,111 0.80% 5 to 15 years of age 4,262,745 219,254 5.10% 16 to 24 years of age 3,341,853 184,845 5.50% 25 to 64 years of age 13,122,851 1,433,767 10.90% 65 to 74 years of age 1,518,466 457,817 30.10% 75 years and over 1,101,723 610,227 55.40%

103 Ibid. 104 Texas Workforce Investment Council, People with Disabilities: A Texas Profile, April 2013. The data included in the table is based on analyses of the American Community Survey, 2011. 105 Ibid.

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The following overview provides a sampling of some of the initiatives among various types of payers, and a description of factors related to the care, health and costs of individuals with special or complex health care needs.

Special Needs Populations in Medicaid and Medicare Medicaid is the leading program for serving people with special needs. Through the STAR+PLUS managed care program, which serves the aged, blind and disabled population, and through many waiver programs described later in this section, the state offers an extensive network of providers, programs and services to support the health needs of this diverse population. Dual-eligible STAR+PLUS clients receive long-term services and supports through STAR+PLUS and acute care services through Medicare. Senate Bill 7, from the 83rd legislative session ending June 2013 directs the Health and Human Services Commission (HHSC) to implement a managed care program for SSI and SSI-related disabled children. As of this writing, the program is still under development.

Special Needs Populations in Private Coverage While a large number of individuals with special needs receive care through public programs, many others are covered under private health plans. Insurers that participated in stakeholder discussions during the development of the SIM Plan reported that high cost, special needs populations are high utilizers and account for a disproportionate share of health care spending, similar to the trends among Medicaid and Medicare populations.

Similar to data for Medicaid and Medicare populations, commercial carriers in Texas also report that a small number of enrollees – many of whom have special needs – account for the majority of spending. In a survey of the 21 largest health insurers, less than one percent of enrollees were responsible for all claims above $50,000 annually, representing more than 20 percent of all claims paid. Only 5.5 percent of enrollees accounted for more than 50 percent of all claims.106

While benefits provided under Medicaid and, to a lesser extent Medicare, are designed specifically to serve individuals with disabilities or special health care needs, commercial insurance plans often exclude some services that many individuals with special needs require. While policies vary by insurer and health plan, benefits that have more commonly limited or unavailable include: mental health, substance abuse treatment, rehabilitative therapy, habilitative therapy, nursing home services, home health care, assistive living devices, and durable medical equipment. Implementation of “essential health benefits” under the Affordable Care Act,

106 Presentation to the Texas Senate Finance Committee, August 19, 2008; available at http://www.tdi.texas.gov/reports/documents/scp08_uninsured.ppt

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however, expands coverage requirements for mental health, substance abuse, and rehabilitative and habilitative therapies.107

To address the rising cost of treating individuals with special health care needs and complex medical conditions, commercial insurers have focused their efforts on development of integrated care programs using care coordination specialists who develop individualized care plans for certain patients. Commercial carriers also have turned to managed care plans, including both HMOs and PPOs, for the vast majority of their enrollees in order to better control costs and manage utilization.

Factors Impacting Care and Costs The challenges faced by the state in serving the growing population of residents with special health care needs are common across payers. The costs of treating individuals with special needs and complex conditions continue to rise and are driven largely by technological advances that include new services, higher utilization and improved access to care; availability of new pharmaceuticals; an aging population; and a sicker population that utilizes more health care services for extended periods of time.108

During SIM Planning Team meetings with several of the state’s largest health insurers,109 (including commercial, Medicare and Medicaid health plans) representatives described a number of challenges impacting the care of their special needs populations, and their ability to manage costs:

 Lack of insurance: Not all individuals with special needs qualify for public coverage or have access to private coverage, leaving the uninsured to go without treatment until their condition becomes an emergency, which can lead to higher costs than would have otherwise occurred. These costs are shifted to the insured through higher premiums.  Access to Care: Accessing necessary services is a problem throughout Texas and varies depending on the type of care needed and location of the individual. While special needs clients who are uninsured have relatively more challenges, health care workforce

107 TDI. Essential Health Benefits – Summary of Benchmark Plan Coverage and State Mandates. See: http://www.tdi.texas.gov/consumer/documents/FHR_page-EHB_su.pdf; and U.S. Department of Health and Human Services. “Essential Health Benefits: Comparing Benefits in Small Group Products and State and Federal Employee Plans,” ASPE Research Brief, December 2011. See: http://aspe.hhs.gov/health/reports/2011/marketcomparison/rb.pdf 108 Dianne Longley, TDI. “Texas Health Insurance Market –Insuring the Uninsured.” Presentation to the Texas Senate Finance Committee, August 19, 2008. See: http://www.tdi.texas.gov/reports/documents/scp08_uninsured.ppt. 109 Health plans that participated in SIM meetings included representatives of Blue Cross Blue Shield of Texas, Centene/Superior Health Plan, Driscoll Children’s Health Plan, Molina Healthcare of Texas, Seton Health Plan, Texas Children’s Health Plan, United Healthcare of Texas.

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shortages, and lack of transportation, especially for those living in rural communities, may also prevent or delay insured individuals from obtaining necessary and timely care.  Increasing Demand for Services: The demand for services among special needs individuals continues to increase across all programs, but is especially high for long-term services and support (LTSS), especially for individuals with behavioral health issues. This growth has occurred despite significant increases in waiver funding, and reflects the public’s increasing awareness of and desire for community-based services over institutionalized care.110  Diversity of Clients: The demographic and cultural characteristics of individuals with special needs are very diverse. Texas has a large population of individuals who speak a primary language other than English, creating an unmet need for providers who can communicate with and provide culturally appropriate services.

Profile of Major Health Providers in Texas

Providers

Physicians The State of Texas is home to 54,034 physicians,111 of which 36 percent are practicing in primary care.112 The state was ranked 47th in 2010 on the ratio of active primary care physicians to population.113 As of November 2012, there were 102 actively practicing primary care physicians and 113 actively practicing specialty care physicians for every 100,000 residents, which is well below national rates of 129 primary care physicians and 142 specialty care physicians per 100,000 U.S. population.114 In every primary or specialty care category, the physician to population rate for Texas is less than the U.S. rate.

Table 7. Actively Practicing Physicians per 100,000 Residents, Texas and U.S., 2011115

Actively Practicing Physicians per 100,000 Residents, Texas and United States Texas United States

110 HHSC. Texas Medicaid and CHIP in Perspective, Ninth edition, January 2013. 111 Includes medical doctor (MD) and doctor of osteopathy (DO). 112 Texas Medical Board. Physician Demographic, September 2013. See: http://www.tmb.state.tx.us/agency/statistics/demo/docs/d2013/0913/stats.php. Primary care specialties include family medicine, general practice, internal medicine, obstetrics and gynecology, and pediatrics. 113 Association of American Medical Colleges. 2011 State Physician Workforce Data Book, November 2011. See: https://www.aamc.org/download/263512/data 114 Henry J. Kaiser Family Foundation. State Health Facts, Provider & Service Use Indicators, Texas, 2013. Data is based on November 2012 State Licensing Information from Redi-Data, Inc. and the Census Bureau’s March 2011 and 2012 Current Population Surveys (CPS; Annual Social and Economic Supplements). See: http://kff.org/statedata/?state=TX 115 Ibid.

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Actively Practicing Physicians per 100,000 Residents, Texas and United States Texas United States Total Primary Care 102 129 Internal Medicine 36 53 Family Medicine/General Practice 33 38 Obstetrics/Gynecology 13 15 Pediatrics 20 23 Total Specialty Care 113 142 Anesthesiologists 13 14 Emergency Medicine 9 13 Oncology 4 5 Psychiatry 10 15 Surgery 12 15 Endocrinology, Diabetes, & Metabolism 1 2 Cardiology 7 9 Other 56 69 Total Primary and Specialty Care 215 271

Physician Workforce Shortages

Despite pockets with some of the best medical services in the country, much of Texas lacks an adequate number of health professionals. A large portion of counties in Texas are federally designated primary care health professional shortage areas and the majority of counties are federally designated as mental health professional shortage areas.116

Texas has a higher percentage of population living in a federally-designated primary care health professional shortage area (HPSA) compared to the U.S. (22.2% v. 19.1%). Additionally, 173 out of 254 Texas counties have been designated as having a shortage of mental health professionals, including social workers, counselors, psychologists and psychiatrists.117 One in three Texans lives in a federally designated HPSA for mental health.118 Although the number of newly licensed Texas physicians increased 37% from 2006-2011119, 127 counties experienced a

116 DSHS, Health Professions Resource Center, Center for Health Statistics. Supply trends among licensed health professions, Texas, 1980-2011, 5th edition, January 2012. See: http://www.dshs.state.tx.us/chs/hprc/Supply-Trends- Among-Licensed-Health-Professions,-Texas,-1980-2011/ 117 Hogg Foundation for Mental Health & Methodist Healthcare Ministries. Crisis point: Mental health workforce shortages in Texas, March 2011. See: http://www.hogg.utexas.edu/uploads/documents/Mental_Health_Crisis_final_032111.pdf 118 Kaiser Family Foundation. Texas: Mental health professional shortage areas, 2012. See: http://www.statehealthfacts.org/profileind.jsp?cat=8&sub=156&rgn=45 119 Statewide Health Coordinating Council. Texas State Health Plan 2013-2014 Update: Using an integrated model in the health professions. See: http://www.dshs.state.tx.us/chs/shcc/reports/TSHP-Report,-2013-14-PDF.pdf

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decrease in physician-to-population ratios for direct patient care physicians during that time period.120

Several studies have shown that communities with greater numbers of primary care physicians per 100,000 residents have demonstrated lower health care costs and report higher quality of health.121 The majority of increases to the Texas physician workforce, however, have occurred in the specialties and subspecialties that are not defined as primary care specialties.122 Federally- designated primary care HPSAs are shown in the map below.

Figure 15. Federally Designated Primary Care Health Professional Shortage Areas in Texas, March 2010123

As described in more detail in Section G. Workforce Development, Texas has a well-established infrastructure for undertaking initiatives to address the workforce shortage, including implementing legislative mandates. Recently passed legislation (HB 2550) requires the Higher Education Coordinating Board to establish the Primary Care Innovations Program, which will

120 DSHS, Health Professions Resource Center, Center for Health Statistics. Supply trends among licensed health professions, Texas, 1980-2011, 5th edition, January 2012. See: http://www.dshs.state.tx.us/chs/hprc/Supply-Trends- Among-Licensed-Health-Professions,-Texas,-1980-2011/ 121 Statewide Health Coordinating Council. 2013-2014 Texas State Health Plan Update, October 31, 2012. See: http://www.dshs.state.tx.us/chs/shcc/ 122 Ibid. 123 DSHS. Map of Primary Care HPSAs, March 2010. See: http://www.dshs.state.tx.us/Layouts/ContentPage.aspx?PageID=35614&id=66988&terms=health+professional+shor tage+area+maps

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provide incentives to medical schools for creating innovate ways to increase the number of primary care physicians in the state.124

Physician Practice Size

According to the 2012 Texas Medical Association (TMA) Physician Survey, smaller size practices (one to three physicians) in Texas represent 71 percent of total physician practices.125

Figure 16. Texas Physician Practice Size, 2012126

12%

1 to 3 physicians

11% 4 to 8 physicians

9 to 49 physicians 71% 50+ physicians

Physician Assistants and Nurses As of 2010, there were 5,518 physician assistants (PAs) practicing in Texas, for a rate of 22 per 100,000 residents, as shown in the table below. This is well below the U.S. rate of 27. In 2011 there were about 185,000 registered nurses or 720 per 100,000 population, and just under 10,000 nurse practitioners, at a rate of 38 per 100,000.127 As with physicians, practitioner-to-population rates for PAs and nursing professions are lower than U.S. rates, as shown in the table below.

124 Texas Higher Education Coordinating Board. Program funding is $2.1 million for 2014-2015. See: http://www.thecb.state.tx.us/index.cfm?objectid=4F431144-0F56-66C7-EED9A4D6AF6E8A35 125 Ibid. 126 Ibid. 127 Henry J. Kaiser Family Foundation. State Health Facts, Provider & Service Use Indicators, Texas, 2013. See: http://kff.org/statedata/?state=TX

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Table 8. Non-Physician Providers, Texas and U.S., 2010, 2011128

Texas United States Total Rate per 100,000 Rate per 100,000 population population Physician Assistants (2010) 5,518 22 27 Nurse Practitioners (2011) 9,713 38 80 Registered Nurses (2011) 184,890 720 874

In response to mounting concern about Texas’ nurse shortage, the 78th Texas Legislature created the Texas Center for Nursing Workforce Studies (TCNWS) under the governance of the Statewide Health Coordinating Council (SHCC) in 2004.129 The TCNWS serves as a resource for data and research on the nursing workforce in Texas.130

Community Health Workers and Promotors/Promotoras A Community Health Worker (CHW) or Promotor/Promotora is a trained and certified individual who is a liaison and provides cultural mediation between health care, social services, and the community. CHWs are eligible to be certified in Texas by completing Department of State Health Services (DSHS)-certified training of at least 160 hours, or based on experience, through providing at least 1,000 hours of community health work services in the most recent six years.131

In Texas, the number of certified CHWs continues to increase steadily. There were 2,097 certified CHWs at the end of 2012, an increase of 32 percent over the previous year. As of July 1, 2013, the number of certified CHWs stands at approximately 2,200; they are located within 112 counties covering all of the state’s Health Service Regions (HSR).132

128 Ibid. 129 DSHS, Center for Health Statistics and the Statewide Health Coordinating Council Center for Nursing Workforce Studies Advisory Committee. Nursing Workforce in Texas – 2009: Demographics and Trends, 2009. See: http://www.dshs.state.tx.us/chs/cnws/2009_nursing_workforce.pdf 130 Texas Center for Nursing Workforce Studies. For more information, see: http://www.dshs.state.tx.us/chs/cnws/ 131 DSHS. Promotor(a) or Community Health Worker Training and Certification Advisory Committee, Annual Report, 2012. 132 DSHS. Promotor(a) or Community Health Worker Training and Certification Program, July 2013. See: http://www.dshs.state.tx.us/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=8589979244

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Table 9. Community Health Workers and Promotoras in Texas, July 2013133

Number of Certified CHWs or Promotoras Number of Counties 0-9 93 10-19 3 20-49 6 50-100 3 101-200 6 201+ 1 Total 112

Long‐term Care Facilities Long-term care facilities are a vital link in the health care continuum, particularly for elderly and disabled residents and post-acute care patients. Medicaid is the largest payer of nursing home services, spending $125 billion on nursing facilities nationally in 2011.134 Texas has 3,436 long- term care facilities, comprised of adult day care, assisted living, skilled nursing, and intermediate care for individuals with an intellectual disability (ICF/IID). Within these facilities, there are 189,776 licensed spaces/licensed or certified beds and a total of 149,687 occupants. In 2012, assisted living facilities represented the largest number of long-term care facilities.

Adult day care has experienced the largest growth in number of facilities and in number of occupants, followed by assisted living. However, the majority of occupants are located in skilled nursing facilities, which have the greatest number of licensed or certified beds. ICF/IID facilities experienced declines in occupancy as well as licensed or certified beds in the period between 2008 and 2012 (16.3 and 6.2 percent, respectively).

133 Ibid. 134 Kaiser Family Foundation State Health Facts. See: http://kff.org/state-category/medicaid-chip/medicaid- spending/

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Table 10. Long-Term Care Facilities in Texas, 2012135

Licensed No. of Facilities Occupants Spaces*/Licensed or Certified beds % Change % Change % Change Facilities Count Count Count 2008-2012 2008-2012 2008-2012 Adult Day Care 498 15.3 21,826 16.4 43,586 22.0 Assisted Living 1,723 14.9 35,017 10.6 54,773 14.5 Skilled Nursing 1,215 3.1 92,844 2.3 135,003 4.9 Intermediate Care 861 0.9 9,570 -16.3 12,170 -6.2 Facility for Individuals with an Intellectual Disability (ICF/IID) Total 3,436 149,687 189,776 * Licensed spaces refer to adult day care facilities.

Home and Community Support Services Agencies Medicaid is the primary source of public funding for LTSS, as well. It plays a leading role in determining the extent to which low-income older people, people with disabilities, and their families receive support through home- and community-support services agencies (HCSSAs).136

HCSSAs provide the following services:

 nursing;  physical, occupational, speech, respiratory or intravenous therapy;  social services;  dialysis;  personal assistance services;  nutritional counseling; and  terminal and palliative care (through hospice agencies).

There are 6,063 HCSSAs in Texas. These agencies served over 1.1 million consumers in fiscal years 2011 and 2012. The number of HCSSAs grew 30.1 percent from 2008 to 2012.

135 DADS. Annual Report, 2012, February 2013. See: http://www.dads.state.tx.us/providers/reports/sb190/RS- AnnualReport-FY12.pdf 136 S. C. Reinhard, E. Kassner, A. Houser, and R. Mollica, Raising Expectations: A State Scorecard on Long-Term Services and Supports for Older Adults, People with Physical Disabilities, and Family Caregivers. September 2011. See: http://www.commonwealthfund.org/sitecore/content/Scorecard-Home/Report.aspx?page=4

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Table 11. Home Health and Hospice Agencies in Texas, 2012137

Consumers served Agencies SFY 2011 & 2012* % Change % Change Count Count 2008-2012 2008-2012 Home Health and Hospice/Home and Community Support Services 6,063 30.1 1,119,309 N/A Agencies (HCSSAs)** * Agencies provide statistics on unduplicated consumers serves, based on a 2-year licensing period. Figures for 2008 were not available. **Statistics include parent, branch and alternative delivery sites. N/A: Not available.

Federally‐Qualified Community Health Centers Federally qualified community health centers (FQHCs) are vital providers in the health care safety net of Texas. FQHCs provide primary care through physicians, nurse practitioners and physician assistants. They receive funding from federal grants, Medicaid, Medicare, private insurance payments and state and local contributions. Nearly 71 percent of their patients have family incomes at or below the poverty line. About 40 percent are uninsured and another 35 percent depend on Medicaid.138

There are 69 FQHCs in Texas with more than 300 delivery sites.139 The rate of FQHC delivery sites per 100,000 residents with incomes below 200 percent of the federal poverty level (FPL) is much lower in Texas than in the U.S. (3.2 v. 6.4).

Table 12. FQHCs per 100,000 residents under 200% FPL, Texas and U.S., 2010140

Texas U.S. Federally Qualified Health Center (FQHC) Delivery Sites, Per 100,000 population 3.2 6.4 under 200% FPL 2010

Rural health clinics (RHCs) also serve Medicare and Medicaid beneficiaries through qualified clinics in rural and medically underserved communities. Some clinics carry both designations. There are 321 facilities with RHC designation in Texas.141

137 DADS. Annual Report, February 2013. 138 Texas Comptroller of Public Accounts. State Health Care Spending, April 2011. See: http://www.window.state.tx.us/specialrpt/healthcare/2011/pdf/HealthcareReport.pdf 139 DSHS, Texas Primary Care Office. See: http://www.dshs.state.tx.us/chpr/fqhcmain.shtm. 140 National Association of Community Health Centers, Key Health Center Data by State, 2010; and population data from the American Community Survey.

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Local Mental Health Authorities and NorthSTAR Approximately 80,000 adults each month receive community mental health services in Texas.142 Designated local mental health authorities (LMHAs), commonly known as community mental health centers, are primary providers of publicly sponsored mental health services. The Texas Department of State Health Services contracts with 39 private LMHAs to deliver mental health services for specific geographic areas across Texas.143 However, in Dallas and surrounding counties, the North Texas Behavioral Health Authority—the state’s only Medicaid managed care program for behavioral health services—provides local oversight of a behavioral health “carve- out” program, referred to as NorthSTAR. This program provides mental health and substance use services to indigent residents and most Medicaid recipients within this service area.

LMHAs serve as the point of entry for the publicly funded Medicaid waiver programs for persons with physical, intellectual and developmental disabilities, as well as for general revenue safety-net services, intermediate care facilities, nursing facilities and state supported living centers. Depending on the program, local authorities have varying levels of responsibility for determining eligibility and enrollment, conducting assessments, developing service plans, coordinating and providing services, and maintaining wait lists. LMHAs also operate crisis hotlines and provide continuity of care by conducting referrals for aftercare psychiatric treatment services and pre-release screenings for individuals in the criminal justice system, for example. The state spent $514.1 million on services provided by LMHAs, or 29.1 percent of total spending on mental health and substance abuse services.144

Hospitals Texas hospitals are a mix of facilities providing general acute care, pediatric, long-term care, psychiatric, rehabilitation and other specialized services. In 2012, there were 630 hospitals of these varying types, with 83,000 licensed beds. In 2010 Texas hospitals provided care to 2.7 million inpatients and treated more than 38 million patients in the outpatient setting. Additionally, 9.8 million were treated in Texas emergency rooms.145

141 CMS Report 0006D Name and Address Listing For Rural Health Clinic Based on Current Survey Texas, August 20, 2013. See: http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network- MLN/MLNProducts/downloads/rhclistbyprovidername.pdf 142 DSHS. Behavioral Health Data Book, FY 2013. See: http://www.dshs.state.tx.us/mhsa/databook/ 143 Hogg Foundation for Mental Health. A guide to understanding mental health systems and services in Texas. November 2012. See: http://hoggblogdotcom.files.wordpress.com/2013/01/hoggmentalhealthguide.pdf. 144 Texas Comptroller of Public Accounts. State Health Care Spending, April 2011. See: http://www.window.state.tx.us/specialrpt/healthcare/2011/pdf/HealthcareReport.pdf 145 Texas Hospital Association. Fast Facts on Texas Hospitals, 2012-2013. See: http://www.tha.org/HealthCareProviders/Advocacy/Hospital%20Facts.pdf

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More than half of hospitals in Texas are investor owned (51%) while the rest are either nonprofit hospitals (28%) or government-owned (21%). Seventy-three percent of Texas hospitals are located in urban areas and the remaining 27 percent are located in rural areas. Texas hospitals employ 369,000 full- and part-time staff of which 122,000 – more than one third – are nurses.146

There are 17 children’s hospitals in Texas, of which about half are non-profit entities.147 Texas children’s hospitals have a capacity of nearly 1,700 beds.148

State Inpatient Psychiatric Hospitals

The state of Texas owns, and DSHS operates, nine state inpatient psychiatric hospitals and one inpatient residential youth treatment facility.149 Each LMHA and NorthSTAR receives an allocation of state hospital resources to coordinate inpatient mental health services for residents within a corresponding state hospital’s service area. DSHS designates LMHAs as responsible for achieving continuity of care in meeting a person’s need for mental health services in the least restrictive environment. Within this continuum of care, the state hospitals’ primary purpose is to stabilize persons admitted by providing inpatient mental health treatment, defined as residential care including medical services, nursing services and social services, as well as therapeutic activities and psychological services ordered by the treating physician.150

Across all bed types by population served – adult, adolescent and children – there are 2,461 beds available among the state-owned inpatient psychiatric hospitals. The State, through DSHS, also contracts with four community hospitals for an additional 372 psychiatric beds. In 2010, Texas had 18.1 psychiatric beds per 100,000 adults compared to the national average of 23.7.151

Integrated Health Care Delivery Systems Texas is home to some of the largest and most sophisticated public and private health systems in the country. The most integrated systems of care – with employed and/or contracted physicians and spanning acute, behavioral health, outpatient, rehabilitation and long term care and other services – are typically based in the large metropolitan areas of the state, such as Dallas, Houston, San Antonio and Austin, with some multi-hospital systems located in the South Texas

146 Ibid. 147 This figure comes from the National Association of Children’s Hospitals and Related Institutions. 148 DSHS, Directories of General and Special Hospitals. See: http://www.dshs.state.tx.us/hfp/apps.shtm#hosp_psych_csu 149 Hogg Foundation for Mental Health. A guide to understanding mental health systems and services in Texas, November 2012. See: http://hoggblogdotcom.files.wordpress.com/2013/01/hoggmentalhealthguide.pdf. 150 Texas Legislative Budget Board. Managing and funding state mental hospitals in Texas: Legislative primer, February 2011. 151 SAMHSA. Texas 2010 mental health national outcomes measures: CMHS Uniform Reporting System, 2010. See: http://www.samhsa.gov/dataoutcomes/urs/2010/Texas.pdf

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region. Innovative delivery system and payment reform activities occurring in Texas – including accountable care organizations (ACOs) and adoption of patient-centered medical home models is largely concentrated among the large hospital and children’s hospital and health systems in these metropolitan regions, either independently or with commercial health plans. Increasingly, some of the medium-sized health systems outside these regions are also adopting medical home models, as described in the next section.

Examples of delivery system and payment reform among the most advanced integrated delivery systems include, but are not limited to the following:

 Integrated Care Collaborative is a non-profit, public-private partnership between Central Health (Travis County hospital district) and the Seton Healthcare Family152 that serves the medically indigent in Central Texas (including Austin)—through affiliations or contracts with a local mental health authority, an information technology company that supports the local health information exchange for Central Texas, and several FQHCs, including Lone Star Circle of Care, a level-3 NCQA-recognized medical home.  Baylor Health Care System (BHCS) is affiliated with the Baylor Medical Center and the Baylor Research Institute. BHCS is a member of the High Value Healthcare Collaborative (HVHC), a national collaboration of top health care organizations, including Mayo Clinic, Cleveland Clinic and others that have committed to sharing care pathways, costs, and outcomes data with their partners and the public as they adopt best practices and new, expanded standards of measurement.153  Texas Health Resources (THR) is the largest faith-based, nonprofit health care delivery system in North Texas, with 25 acute care and short-stay hospitals that are owned, operated, joint-ventured or affiliated with the system. THR is establishing the Texas Health Population Health, Education and Innovation Center, which will coordinate community-based well-being collaborations and promote patient-centered practices to expand the system’s focus from acute care to prevention, well-being, managing chronic disease and post-acute care.  Parkland Hospital formed Parkland Center for Clinical Innovation (PCCI), an affiliated non-profit research and development corporation, which specializes in the development of software that helps clinicians predict patient problems before they occur. The PIECES™ software system – used at Parkland since 2009 and now adopted by other health systems – is a clinical decision support software system that reviews electronic

152 Seton Healthcare Family is a member of Ascension Health, the nation's largest faith-based, non-profit health care system. 153 Dartmouth-Hitchcock. High Value Healthcare Collaborative Expands, June 2011. See: http://www.dartmouth- hitchcock.org/news/newsdetail/59724

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health records, “reads” physicians’ notes, analyzes and assesses data, and helps the clinician identify patients that are potentially at high risk for an adverse event.154

Additionally, nine medical schools and health science centers in Texas155 that serve as research and training centers for the state’s health care workforce professions also are major health care providers, typically affiliated with other leading community-based health systems.

State Public Health System As a state umbrella agency, the Health and Human Services Enterprise delegates select responsibilities to state agencies under its authority, including DSHS. DSHS is responsible for oversight and implementation of public health and behavioral health services in Texas. The agency’s core responsibilities include: disease surveillance and prevention, licensing and regulating health service providers, food safety, collecting and reporting vital statistics, and administering the statewide public mental health and substance abuse (MHSA) system. DSHS plays a critical role in leading statewide initiatives related to maintaining and improving public health and behavioral health, in coordination with HHSC and other state agencies and stakeholder partners. Some of the key programs and activities relevant to the SIM initiative are highlighted below.

Mental Health and Substance Abuse Services The Mental Health and Substance Abuse (MHSA) Division of DSHS offers a continuum of mental health and substance abuse services ranging from prevention and early identification to residential treatment and inpatient hospitalization. Additional programs target specific demographics including the elderly, homeless, veterans, and forensic populations, while others address tobacco prevention and cessation, disaster behavioral health response, and vocational or other supportive services.156

As described earlier, the continuum of services offered and funded by DSHS include those community-based mental health services provided under contracts with the LMHAs and through the NorthSTAR program as well as inpatient hospital services provided through the state and community mental health hospitals. Substance abuse services are provided under contracts with a number of specialty providers.

In SFY 2010 Texas reported the following prevalence data of behavioral health conditions:

154 Parkland Health and Hospital System. Parkland announces launch of Parkland Center for Clinical Innovation, October 2012. See: http://parklandnewsroom.qsigroup.com/news_detail.php?id=1554 155 Texas Medical Association. See the list of medical schools at http://www.texmed.org/template.aspx?id=86 156 Hogg Foundation for Mental Health & Methodist Healthcare Ministries. Crisis point: Mental health workforce shortages in Texas, March 2011. See: http://www.hogg.utexas.edu/uploads/documents/Mental_Health_Crisis_final_032111.pdf

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 488,520 adults had a serious mental illness;  154,724 children and adolescents had a serious emotional disturbance;  1,752,460 adults had a substance use condition; and  174,568 youth had a substance use condition.

The three major sources of funding for DSHS mental health and substance use services are:

 state general revenue (59%);  federal funds (25 percent, including both Medicaid dollars from the Centers for Medicare and Medicaid Services (CMS) as well as block grant funding from the Substance Abuse and Mental Health Services Administration (SAMHSA); and  local funds (16%).157

Access and funding for MHSA services fall far short of demand. The Kaiser Family Foundation ranked Texas 51st in the nation in per capita spending by a state mental health agency. 158 In SFY 2009, the state’s annual spending for mental health services equaled $38 per capita—just 30 percent of the national average of $123 per capita.

Despite limited resources, DSHS is making significant efforts to plan and implement innovation in service delivery by supporting a reorientation of the service delivery models to focus on resiliency and disease management, behavioral and physical health integration of services and continuity of care.

Chronic Disease Prevention The DSHS has undertaken many initiatives in recent years to help prevent obesity and related chronic diseases through grants from the federal Centers for Disease Control and Prevention (CDC). For example, the Nutrition, Physical Activity, and Obesity Prevention (NPAOP) program supports and promotes projects that focus on CDC’s six evidence-based target areas for reducing obesity: increasing physical activity; increasing consumption of fruits and vegetables; decreasing consumption of sugar-sweetened beverages; reducing consumption of high-calorie foods; increasing breastfeeding initiation, duration, and exclusivity; and decreasing television viewing. 159 The program targets large segments of the population by promoting strategies to reduce environmental barriers to healthy living and policies that facilitate healthy choices.

157 HHSC & DSHS. Analysis of the Texas public behavioral health system, table IV.1, June 2012. See: http://www.publicconsultinggroup.com/client/txdshs/documents/Analysis%20of%20the%20Texas%20Public%20Be havioral%20Health%20System.pdf 158 Kaiser Family Foundation. State health facts. See: http://www.statehealthfacts.org/comparemaptable.jsp?cat=5&ind=278 159 Health and Human Services Enterprise. HHS System Strategic Plan 2013-17. See: http://www.hhs.state.tx.us/StrategicPlans/SP-2013-2017/Volume-I.pdf

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Additionally, the DSHS staffs the Texas Diabetes Council, which provides public education on diabetes issues and advises the Texas Legislature on legislation that is needed to develop and maintain a statewide system of quality education services for all people with diabetes and health care professionals who offer diabetes treatment and education.160

Immunizations The DSHS has made concerted efforts to improve immunization rates among children, adolescents and adults. Coverage levels for Texas children measured in the National Immunization Survey for 2010 were 70 percent, statistically similar to the 2009 survey.161 Coverage levels for adolescents are increasing as a result of policy changes made in 2009 that require seventh-graders to be vaccinated against diphtheria/tetanus/pertussis meningococcus, and varicella. Improving coverage levels for adults is more challenging, however, because the recommendations and licensure for adult vaccines vary over the lifespan. DSHS has adopted strategies to increase adult immunization rates and sustain recent successes by using the statewide immunization registry, educating providers and the public, and implementing reminder/recall systems.

Healthy Texas Babies Led by DSHS, in collaboration with the HHSC and the Texas Chapter of the March of Dimes, the Healthy Texas Babies initiative helps communities decrease infant mortality using evidence- based interventions.162 The initiative, involves community members, health care providers, and health plans serving both Medicaid and commercial markets. Activities focus on educating the public, providers, and patients, and include but are not limited to:

 evidence-based interventions led by local coalitions in communities identified at high risk for infant mortality and preterm birth;  survey of hospitals to determine where neonatal intensive care units and obstetrical units are in the state and how DSHS can improve access to care for high-risk pregnancies;  collaboration between the Women, Infants, and Children (WIC) program and the March of Dimes to improve patient education on the importance of the last weeks of pregnancy; and  provider education to reduce disparities in birth outcomes between racial and ethnic groups, improve adherence to national standards of care, and provide support for clinical decision-making.

160 DSHS. Texas Diabetes Council. See: http://www.dshs.state.tx.us/diabetes/. 161 Health and Human Services Enterprise. HHS System Strategic Plan 2013-17. See: http://www.hhs.state.tx.us/StrategicPlans/SP-2013-2017/Volume-I.pdf 162 Ibid.

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Health Care Quality The DSHS is increasingly involved in efforts to improve the quality and safety of health care in Texas. A major effort, as mandated through state legislation, is the Potentially Preventable Hospitalization initiative. The state found that adult Texans experienced almost 1.5 million potentially preventable hospitalizations (PPHs) from 2005 to 2010, resulting in nearly $40 billion in hospital charges. To assist communities in addressing this issue, DSHS provides information to state, regional, and local stakeholders on the impact of PPHs in their geographical area of interest.163 DSHS is also developing a plan for how it will assist the Texas Institute of Health Care Quality and Efficiency with completing the assessment of all health-related data collected by the state, identifying all information available to the public, and determining how the public and health care providers currently benefit and could potentially benefit from health care cost and quality information.

Texas Center for Health Care Statistics The DSHS Center for Health Statistics provides an online access point for Texas health-related data to support research and evaluation, assessment of community health, and public health planning.164 Information available through the DSHS Center for Health Statistics includes vital statistics, population and demographic information, geographic material and survey data on risk factors and disease prevalence, supply trends for health professions, hospital discharge records, and surveys of Texas hospital facilities and charity and community benefits. Located within the Center for Health Statistics is the Texas Health Care Information Collection (THCIC). The THCIC collects and reports on data related to the quality performance of hospitals and health maintenance organizations operating in the state.165 The goal is to provide information that enables consumers to make choices based on, and thereby impact, the cost and quality of health care in the Texas.

Profile of Major Health Payers in Texas Just over three-quarters (76%) of Texas’ 26 million residents were covered by some type of health insurance in 2011, well below the national rate of 84 percent. Fifty-one percent are covered by private insurance, also below the U.S. rate of 56 percent. In Texas, 47 percent have employer-sponsored coverage and four percent are in the individual market. One-quarter of

163 The following ten conditions are classified as PPHs because hospitalization would potentially have not occurred if the individual had had access to, and/or cooperated with, out-patient health care: bacterial pneumonia, dehydration, urinary tract infection, angina (without procedures), congestive heart failure, hypertension, asthma, chronic obstructive pulmonary disease, diabetes short-term complications, and diabetes long-term complications. 164 DSHS. Center for Health Statistics. See: http://www.dshs.state.tx.us/chs/ 165 DSHS. Texas Health Care Information Collection. See: http://www.dshs.state.tx.us/thcic/default.shtm.

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residents of Texas are covered by the major government insurance programs Medicare (12%) or Medicaid/CHIP (13%), as shown in the figure below.166

Figure 17. Total Population Health Insurance Coverage, Texas and U.S., 2011167

100% 16% 90% 24% 80% 15% 70% 12% 60% 13% 13% 5% 50% 4% 40% 30% 47% 51% 20% 10% 0% Texas U.S.

Employer Individual Medicaid/CHIP Medicare Uninsured

Below is a brief overview of Medicaid, CHIP, Medicare, and the County Indigent Health Program, which is an important payer for the medically indigent in Texas. Also present is a description of the commercial plans in Texas, as well as the major public employee programs in Texas, the Teachers Retirement System of Texas (TRS) and the Employee Retirement System of Texas (ERS).

Medicaid and CHIP Texas Medicaid is a vital health program that provides comprehensive health services and LTSS to approximately 4.57 million unique individuals statewide.168 The monthly enrollment average was 3.54 million in SFY 2011.169 Approximately 1 in 7 Texans, or 14 percent of the state population (25.6 million people), receives services from Medicaid.170 Medicaid serves primarily

166 This data is from a federal source which combines Medicaid and CHIP. Data for SFY 2011 Medicaid enrollment presented later is from a state source. State Health Access Data Assistance Center. Texas State Profile. See: https://www.hhsc.state.tx.us/hhsc_projects/Innovation/SHADAC-TX-profile.pdf 167 Ibid. 168 HHSC. Texas Medicaid and CHIP in Perspective, Ninth edition, January 2013. 169 Ibid. 170 U.S. Census Bureau, Current Population Survey, 2013. Annual Social and Economic Supplement Table 105: Health Insurance coverage Status and Type of Coverage by State and Age for All People.

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low-income families, children, related caretakers of dependent children, pregnant women, people age 65 and older, and adults and children with disabilities. Combined federal and state spending on the Texas Medicaid program totaled $29.4 billion in SFY 201; the state’s portion accounted for 26 percent of the Texas budget.

The Texas Health and Human Services Commission (HHSC) is the single state agency responsible for administering the Medicaid program. Texas Medicaid offers several longstanding managed care programs and home and community based services (HCBS) waiver programs. As described below, HHSC, with legislative direction, is moving the Medicaid program increasingly toward a fully managed care model in order to improve the coordination and integration of services and enable wider adoption of quality-based payment systems.

HHSC administers three managed care programs offered statewide:

 through the Medicaid State of Texas Access Reform (STAR) program, HHSC contracts with managed care organizations (MCOs) to provide, arrange for, and coordinate comprehensive health care services for pregnant women, children, and TANF clients;  through STAR+PLUS program, HHSC contracts with MCOs to integrate acute care services and long-term services and supports for SSI recipients with a disability or individuals who are age 65 and older; and  through the STAR Health program, HHSC contracts with a MCO to coordinate and deliver acute care services, dental, and behavioral health services for children and young adults in foster care.171

As shown in the figure below, the largest Medicaid eligibility category in Texas is children (72%). Medicaid enrollment among disabled and blind makes up 15 percent and the aged eligibility category makes up 7 percent of enrollment. The remaining enrollment is split between pregnant women (3%) and TANF adults (3%).

171 SB 7 (83rd Legislature, Regular Session, 2013) directs HHSC to implement a managed care model for SSI and SSI-related children, who are all currently FFS.

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Figure 18. Texas Medicaid Enrollment by Eligibility Category, 2013172

3% 3%

15% Children's Medicaid

Aged 7%

Disabled & Blind

TANF Adults 72%

Pregnant Women

The figure below illustrates the disparity between non-disabled children and the aged, blind and disabled populations on enrollment size and spending. While non-disabled children made up the majority (66%) of all Medicaid clients in 2011, they accounted for a relatively small portion (33%) of Medicaid spending on direct health care services. In contrast, people who were elderly, blind, or have a disability represented 25 percent of clients but accounted for 58 percent of expenditures.

172 Texas Health and Human Services Commission. Medicaid Enrollment by Month. See: http://www.hhsc.state.tx.us/research/MedicaidEnrollment/ME-Monthly.asp#1

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Figure 19. Texas Medicaid Beneficiaries and Expenditures, 2011173

9% 9%

25% Parents and Pregnant 58% Women (non‐disabled) Aged (65+) and Disabled 66% Children (non‐ disabled) 33%

% of All Medicaid Clients % of Medicaid Spending

Medicaid Managed Care Expansions in 2011 and 2012

Under HHSC’s stewardship, the Texas Medicaid program is moving away from a fee-for-service system to managed care and integrated care models. In state fiscal year (SFY) 2011, 76 percent of the 4.57 million unique individuals enrolled in Medicaid received benefits through one of the three statewide managed care models.174

The Texas Legislature, through the 2012-2013 General Appropriations Act (GAA), House Bill (HB) 1, 82nd Legislature, Regular Session, 2011; and Senate Bill (SB) 7, 82nd Legislature, First Called Session, 2011, directed HHSC to expand its use of Medicaid managed care through a Medicaid section 1115 waiver demonstration. In December 2011, HHSC gained federal approval of the Texas 1115 Healthcare Transformation and Quality Improvement waiver demonstration, referred to informally as the Transformation waiver.

Under the five-year 1115 Transformation waiver, Texas is expanding the STAR and STAR+PLUS Medicaid managed care programs to new geographic regions and incorporating new services into managed care during 2011 and 2012 by:

 including inpatient hospital services previously provided through fee-for-service (FFS) system into the MCO contracts across for the STAR+PLUS program;  expanding STAR and STAR+PLUS into 28 counties contiguous to the programs’ service areas, and expanding both programs into select new counties;

173 HHSC. Texas Medicaid and CHIP in Perspective, Ninth edition, January 2013. 174 Ibid.

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 transitioning Medicaid recipients from STAR PCCM program to the STAR MCO program in 164 rural counties;  including pharmacy benefits previously provided through the FFS system into MCO contracts across all statewide managed care programs; and  transitioning dental services for children from FFS system to a risk-based Medicaid managed care dental plan that offers a dental home and improved care coordination of preventive, routine, and specialty dental services.

HHSC transitioned select section 1915(b) Medicaid managed care waivers and CBA HCBS waiver services for STAR+PLUS enrollees into the Section 1115 Transformation waiver program. This change was seamless to waiver participants and provided an opportunity for HHSC to streamline administrative operations and improve care integration for STAR+PLUS participants.

Populations and Services Carved Out of Managed Care

The Section 1115 Transformation Waiver covers most Medicaid populations; however, select populations, services, and geographic areas remain outside of the waiver demonstration and exempt from managed care.

Medicaid recipients who are excluded from the Section Transformation 1115 waiver include:

 medically needy population;  STAR health enrollees;  individuals residing in nursing facilities; and  women in the Breast and Cervical Cancer Program.

Medicaid LTSS benefits are largely exempt from managed care and the Section 1115 Transformation waiver, including:

 nursing facility services and  HCBS waiver programs (except for STAR+PLUS recipients enrolled in CBA HCBS waiver).

Pending Changes

The Texas Legislature passed SB 7, 83rd Legislature, Regular Session, 2013, which requires further transition of Medicaid services into managed care; populations to be transitioned include children on SSI, individuals residing in a nursing facility, and individuals with intellectual or developmental disabilities. By 2020, Texas plans to have transitioned most Medicaid LTSS and long-term care programs into a single managed care system.

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Children’s Health Insurance Program The Children’s Health Insurance Program (CHIP) is designed for families who earn too much money to qualify for Medicaid, yet cannot afford to buy private health insurance. There were just over 602,000 individuals enrolled in CHIP as of October 2013.175 To qualify for CHIP, a child must be under age 19, a Texas resident and a U.S. citizen or legal permanent resident, living in a family whose income is at or below 200 percent of FPL, and a in a family that passes an asset test if family income is above 150 percent of FPL.176 The largest group, by income, 57 percent, is within 101 to 150 percent of FPL, as shown in the figure below.

Figure 20. CHIP Enrollment by Poverty Level in Texas, 2013177

7% 6%

FPL <101% 30% FPL 101%‐ 150% FPL 151%‐185% FPL 186%‐200% 57%

Medicare and Medicaid Dual Eligibles

Texas has long recognized the need to integrate care for older adults and persons with disabilities in the state’s Medicaid program. Texas was one of the first states with an innovative Medicaid capitated managed care program—STAR+PLUS—designed specifically to integrate acute care services with LTSS for at-risk populations, including aged/Medicare-related/blind and disabled. Texas has an estimated 328,000 individuals statewide who are fully dually eligible.178 About two-thirds of dual eligibles (217,000) reside in the more urban areas of the state and are enrolled in STAR+PLUS, while the remaining dual eligibles—those living in the rural parts of the state—

175 HHSC. CHIP enrollment by coverage area, plan and age. See: http://www.hhsc.state.tx.us/research/CHIP/enrollmentbyPlan_results.asp 176 HHSC. CHIP program. See: http://www.hhsc.state.tx.us/chip/families/ 177 HHSC. Texas Medicaid and CHIP in Perspective, Ninth edition, January 2013. 178 Individuals who are eligible for Medicare and full Medicaid benefits are considered “full dual eligibles.”

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will be fully transitioned to STAR+PLUS by 2020, as noted above. The state provides community-based LTSS to these individuals, including personal assistance services, assisted living, nursing, consumer directed services, dental services and others. Some categories of services, including home health, durable medical equipment, and physical therapy, overlap with those provided under Medicare Part B.

The State of Texas has proposed a three-party agreement between a managed care organization (MCO) that has both an existing STAR+PLUS contract and a Medicare Advantage/Special Needs Population (MA/SNP) contract with the federal government to provide a single point of accountability for the delivery, coordination and management of primary, preventive, acute, specialty and behavioral health services; LTSS and prescription medications.179 Under this demonstration project proposal, Texas is targeting full dual eligible individuals enrolled in the STAR+PLUS program (excluding the voluntary child population). As of this writing, the contract agreement is still under negotiation.

Program of All‐Inclusive Care for the Elderly (PACE)

The Program of All-Inclusive Care for the Elderly (PACE) is another model for coordinating and integrating health services for qualified dually eligible Medicare and Medicaid enrollees. The PACE model serves individuals who are 55 or older, certified by the state to need nursing home care, able to live safely in the community at the time of enrollment, and living in a PACE service area. While all PACE participants are certified for nursing home services, only about seven percent of PACE enrollees nationally actually reside in a nursing home. Instead, PACE provides an array of community-based services that allows participants to avoid nursing home care.180 Services include:

 inpatient and outpatient medical care;  specialty services, such as dentistry and podiatry;  social services;  in-home care;  meals;  transportation;  day activities; and  housing assistance.

Current access to PACE is severely limited in Texas since only three locations are available for eligible residents. However, in 2011, the Texas Legislature enacted House Bill 2903 (82nd

179 HHSC, “Texas Dual Eligible Integrated Care Project”. See: http://www.hhsc.state.tx.us/medicaid/dep/ 180 HHSC. Texas Medicaid and CHIP in Perspective, Ninth edition, January 2013.

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Legislature, Regular Session, 2011) to ensure that PACE is available as an alternative to Medicaid managed care for eligible recipients and that MCO plans consider the availability of PACE when determining whether a health plan member needs long-term nursing or other facility-based care. The legislation also created a PACE program team and requires the Department of Aging and Disability Services (DADS) to make PACE on option under the “Money Follows the Person” demonstration or related projects.

Medicare More than 3.1 million individuals in Texas are enrolled in Medicare, or 12 percent of the state’s population as of 2012.181 Of these beneficiaries, about 600,000 – 19 percent of all Medicare beneficiaries – are enrolled in a Medicare Advantage plan (Medicare Part C).182 There are 41 Texas private insurance companies with Medicare Advantage contracts. The average quality rating of a Texas Medicare Advantage Plan in 2011 was 3.2 out of 5 stars. Only 2.8 percent of Texas Medicare Advantage enrollees, however, enrolled in a plan with 4 or 5 stars.183

County Health Indigent Care Program The County Indigent Health Care Program serves Texas residents with incomes at or below 21 percent of the FPL who are not categorically eligible for Medicaid. The program is locally administered in counties not fully served by a public hospital or hospital district, with program oversight provided by DSHS.184 Counties are required to provide a basic set of health care services and may elect to provide additional optional health care services and expanded eligibility up to 50 percent of the FPL.185 Counties may qualify for state assistance funds to help administer the program by meeting certain financial eligibility criteria. In fiscal year 2013, ending September 30, seven of the participating counties qualified for just over $269,000 of state assistance.186

181 U.S. Census Bureau. Current Population Survey, Annual Social and Economic Supplement Table 105: Health Insurance coverage Status and Type of Coverage by State and Age for All People., 2013. 182 PlanPrescriber, Texas Medicare Advantage Plans. See: http://www.planprescriber.com/medicare-texas/medicare- advantage/ 183 Ibid. 184 Health and Human Services Enterprise. HHS System Strategic Plan 2013-17. See: http://www.hhs.state.tx.us/StrategicPlans/SP-2013-2017/Volume-I.pdf 185 DSHS. County Indigent Health Care Program. See: http://www.dshs.state.tx.us/cihcp/default.shtm 186 DSHS. CIHCP Summary, FY 2013. See: http://www.dshs.state.tx.us/cihcp/cihcp_spending_data.shtm

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Teacher Retirement System of Texas TRS is the largest public retirement system in Texas in both membership and assets.187 The agency serves 1.3 million participants and about 331,000 are retirees. The system’s net assets totaled $117.5 billion as of April, 2013. TRS has a self-funded plan that is administered by Blue Cross Blue Shield of Texas, and also offers three HMOs: Scott and White Health Plan, FIRSTCARE, and Valley Baptist Health Plan.188

Employees Retirement System of Texas ERS administers retirement, health and other insurance benefits for state employees and retirees. In SFY 2012 ERS served more than 510,000 participants of whom 40 percent were current state employees and 40 percent were dependents, with retirees making up the difference. 189 In SFY 2012, ERS had $2.4 billion in estimated health plan expenditures, and members spent approximately $537 million on insurance costs (excluding costs associated with dependent coverage).190

Commercial Insurance Carriers Insurance carriers participating in the commercial health insurance market in Texas generated more than $38.2 billion in premiums in 2011 among the HMO, PPO and other indemnity plans.191 Blue Cross Blue Shield of Texas has 31 percent of the PPO market, based on premium amounts, followed by UnitedHealthcare with 15 percent. Rounding out the top five are Aetna and Humana, each with 7 percent and Connecticut General with just under 3 percent. The top five plans accounted for 63 percent of the $24.2 billion in total PPO insurance premiums in 2011. The top 40 insurance companies accounted for 86 percent of total PPO premiums.

In the HMO market, which accounts for $14 billion in health insurance premiums, there is less concentration among a few companies compared to the PPO market. UnitedHealthcare has the largest HMO share of premiums, with 16 percent. Rounding out the top five HMO plans are three Medicaid-only plans and one commercial plan. These top five plans account for 47 percent of total premiums in the HMO market in Texas.

187 Teacher Retirement System of Texas. See: http://www.trs.state.tx.us/info.jsp?submenu=about&page_id=/about/about_trs 188 Teacher Retirement System of Texas. See: http://www.trs.state.tx.us/active.jsp?submenu=trs_activecare&page_id=/TRS_activecare/introduction 189 Employees Retirement System. Insurance, 2012: See: http://www.ers.state.tx.us/About_ERS/Reports/Annual/Insurance_Facts/ 190 Ibid. 191 TDI. Annual Report, 2012.

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Delivery System Payment Methods in Texas While fee-for-service is still the predominant method of provider payment, payers, including Medicaid, Medicare and commercial plans have adopted a wide range of alternative payment methods along the continuum of accountability for value-based purchasing. There is no centralized repository of the adoption of delivery system payment models in Texas, nor has any formal survey been conducted.192 Based on anecdotal evidence, relatively few payers and providers in Texas have direct, comprehensive experience transforming billable, fee-for-service payments into quality-based payment alternatives, such as bundled payments for episodes of care, medical home payment arrangements, or accountable care organization (ACO)-type financing that rewards expected health care outcomes for a defined population. However, this is changing, as indicated by recent local media coverage and stakeholder input, which we drew on to describe examples of value-based payment methods, below.

Medicaid Payment Methods

Pay‐for‐Performance or Recognition

Medicaid in Texas has been on a steady move toward capitated managed care for health plans, but most participating providers are still paid FFS. A number of Medicaid health plans interviewed during the SIM stakeholder engagement process described having pay-for- performance programs for some practices in some service delivery regions, based on their meeting a benchmark on certain process or outcome measures.

Health plans that contract with Medicaid are encouraged, through the standard managed care contract, to adopt policies and programs that reward providers for good outcomes and share savings with providers. Beginning December 1, 2013, MCOs will be required to submit an annual plan detailing their proposed structure for provider incentive payments and/or cost sharing, along with the quality metrics that will inform this structure. HHSC will conduct retrospective reviews to evaluate the implementation of these plans.

For some providers participating in Medicaid, the Delivery System Reform Incentive Payment (DSRIP) program – being implemented as part of the 1115 Medicaid waiver program from 2011 to 2015 – is their first experience with value-based payments, as reported by respondents to the Texas SIM online survey.193

192 The Catalyst for Payment Reform, a national organization, is tracking adoption of payment innovations by state, but this is based on voluntary reporting and therefore is limited. 193 Health Management Associates. Texas State Innovation Models (SIM) Initiative: Program Overview & Draft Model Design Options. August 20, 2013. Survey was conducted between June 12 and 28, 2013.

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The DSRIP program enables hospitals and providers to receive federal matching funds for completion of delivery system reform project metrics in addition to provision of otherwise uncompensated care under the waiver. By designing and implementing evidence-based projects that will enhance access to health care, increase the quality of care, and/or improve the cost- effectiveness of care provided, regions are laying the groundwork to developing innovative models of delivering and paying for care. Projects fall into one of the four following categories:

1. Infrastructure development: Lays the foundation for the delivery system through investments in people, places, processes, and technology. Project areas may include: Expand Primary Care Capacity; Increase Training of Primary Care Workforce; Implement and Use a Chronic Disease Management Registry; Expand Specialty Care Capacity; and Enhance Performance Improvement and Reporting Capacity. 2. Program innovation and redesign: Pilots, tests and replicates innovative care models. Project areas may include: Enhance/Expand Medical Homes, Expand Chronic Care Management Models, Establish/Expand a Patient Care Navigation Program, Use Palliative Care Programs, Conduct Medication Management, Implement/Expand Care Transitions Programs; and Integrate Primary and Behavioral Healthcare Services. 3. Quality improvements: Health care delivery process and outcome improvement targets related to the two categories above. 4. Population-based improvements: All Regional Healthcare Partnerships report on same measures. This may include potentially preventable admissions and complications, 30- day readmissions, patient-centered healthcare, and emergency department use.

Financial Risk and Performance Penalties in Medicaid Medicaid has also adopted performance–based capitation rates. During quality calendar year 2013, five percent of MCOs’ capitation is at risk based on their ability to meet certain performance criteria.194 MCOs must meet all performance expectations or lose some portion or the entire at-risk amount. Performance criteria in 2013 include measures aimed at improving health outcomes for patients with chronic conditions and adherence to nationally recognized benchmarks. Currently, MCOs are ranked relative to each plan’s performance, and at-risk funds lost by one MCO may be reallocated to another plan through the Quality Challenge Awards. HHSC has also recently adopted financial penalties for hospitals based on their performance on potentially preventable readmissions (PPRs) for Medicaid patients. Legislation passed in 2009 required HHSC to identify PPRs in the Medicaid population and report the results to each hospital annually.195 Each hospital is required to distribute the information to its care providers. In 2011, additional legislation required HHSC to implement payment adjustments to hospitals,

194 HHSC. Medicaid Managed Care Quality Strategy, 2012-2016, 2011. For 2014, the at-risk percentage will be four percent and the quality challenge measures aligned with the quality improvement targets. 195 HHSC. Potentially Preventable Readmissions in the Texas Medicaid Population, State Fiscal year 2011, November 2012. See: http://www.hhsc.state.tx.us/reports/2012/PPR-Readmissions-FY2011.pdf.

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based on an algorithm created from the results of the earlier PPR analysis, beginning in 2013. Hospitals are at risk for up to a two percent reduction in payment among patients in fee-for- service and managed care.

Private‐Sector and Federally‐sponsored Payment Methods in Texas Stakeholders participating in SIM meetings indicated that health plans vary significantly in the extent to which they offer pay-for-performance or other reward programs for improving patient outcomes. A 2012 survey conducted by TMA indicated that 13 percent of physicians participate in a private payer’s quality reporting program including Bridges to Excellence (BTE), described below.196 Several health plans provide financial payments for providers achieving patient- centered medical home (PCMH) certification or for meeting Healthcare Effectiveness Data and Information Set (HEDIS) performance targets or other benchmark goals. Both providers and health plans reported that these incentives are helpful in encouraging more aggressive management of patients with chronic conditions, but payers vary in how they implement them.197

Bridges to Excellence

BTE is a national quality recognition program that measures the quality of care delivered by physicians and other clinicians. The program focuses on managing patients with chronic conditions. Care recognition programs include: diabetes, hypertension, cardiac care, depression, asthma and others.198 Quality of care is analyzed using standardized sets of measures and criteria from nationally recognized organizations such as the National Quality Forum, the American Medical Association, the Physician Quality Reporting System (PQRS), and the National Committee for Quality Assurance (NCQA). A panel of primary care physicians and specialists develop each program. BTE recognition is incentivized by payers who offer financial rewards to providers who earn recognition. Within Texas, several national plans are participating in BTE Care Recognition programs. About 3,000 physicians in Texas participate in at least one BTE Care Recognition program according to the Texas Medical Association.199

Blue Cross Blue Shield of Texas (BCBSTX) is implementing the Diabetes, Cardiac Care, and Asthma recognition programs. The goal of the statewide programs is to improve the care provided to patients diagnosed with diabetes, cardiovascular disease, and asthma, and to

196 Texas Medical Association. Results are part of a biennial survey of Texas physicians conducted by TMA. Survey of Texas Physicians, 2012. 197 Based on comments during public presentations at Texas SIM events and one-on-one meetings with the SIM planning team. 198 Health Care Incentives Improvement Institute (HCI3). Recognition Programs. See: http://www.hci3.org/recognition_programs 199 Sorrel, A. “Recognition and reward: TMA supports Bridges to Excellence model,” Texas Medicine, September 2013.

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financially reward BCBSTX network physicians for providing exceptional care. As of October 31, 2013, 932 clinicians have BTE Diabetes Care recognition, according to BCBSTX.200 Physicians with BTE Diabetes Care recognition are eligible for a financial reward of $150 per covered diabetic patient, per year (payments vary for other BTE Care Recognition programs), and receive a one-time bonus for gaining recognition or having their recognition renewed.201

The TMA and the Harris County Medical Society launched a Diabetes Reporting Pilot Program in 2011 to test the BTE Diabetes Care Recognition program. Among the 48 participating TMA member physicians in 17 practices in family medicine, endocrinology and internal medicine, they saw potential earnings of $3,950 on average and $189,363 as a group for the initial submission of their quality data to both the diabetes and cardiac care programs.202

In addition to BCBSTX, other national health plans offer BTE Care Recognition programs to contracted providers in select markets. In mid-2012, Aetna began offering the BTE Diabetes Care Recognition program to physicians treating members of the Teacher Retirement System of Texas.203 Providers are eligible to receive $100 per covered diabetic patient per year from Aetna.204 Cigna also administers BTE on behalf of clients it serves as an administrative services organization (ASO), on a national or local scale.205 In United Healthcare’s United Premium Designation program, where available, eligible physicians who are board-certified in internal medicine receive a Premium Quality designation if they are BTE-recognized as an individual physician for asthma, cardiac, coronary heart disease, congestive heart failure, diabetes, or spine care.206

Patient‐Centered Medical Home Programs

NCQA and The Joint Commission sponsor two of the nationally best known PCMH recognition programs. As of August 2013, six organizations and 35 sites in Texas have received Joint Commission PCMH certification.207 NCQA recognition is much more widespread in Texas, with 258 sites as of July 2013.

200 Robert Morrow, BlueCross BlueShield of Texas. “Bridges to Excellence: Rewarding Quality across the Healthcare System,” presentation to the Board of Directors of the Texas Institute of Health Care Quality and Efficiency, November 5, 2013. 201 Ibid. 202 Ibid. 203 Sorrel, A. “Recognition and reward: TMA supports Bridges to Excellence model,” Texas Medicine, September 2013. 204 Ibid. 205 HCI3. National Health Plan Implementations. See: http://www.hci3.org/?q=node/17/ 206 Ibid. 207 The Joint Commission, August 8, 2013. See: http://www.jointcommission.org/assets/1/18/PCMH_org_list6.PDF

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According to NCQA statistics, of the 258 sites in Texas with a Level 1, Level 2 or Level 3 PCMH-recognition, most sites are based in the larger metropolitan areas, as shown in the figure below. For example, only Harris County (Houston) and Dallas and Tarrant counties (Dallas metropolitan area) have up to 65 sites with PCMH recognition from NCQA. Only 32 of 254 counties have one or more NCQA-recognized PCMHs in Texas. In total, 201 sites including 1,084 physicians have Level 3 recognition, the highest level achievable for primary care organizations.

Figure 21. NCQA-Recognized PCMHs Level 1-3 in Texas, July 2013208

No statistics are available, however, of how many practices or clinicians are rewarded by a payer for having attained or for maintaining NCQA-PCMH recognition or receive an increase in payment through an ongoing fixed or per-member-per month fee. Organized by the Texas Medical Home Initiative209, the first Texas Health/Medical Home Summit, held May 4-5, 2013, presented examples of both PCMH and health home models that delivery systems have established independently, or in cooperation with a payer, were described at. Most of the efforts underway to date appear to be pilot programs with unclear plans for financial sustainability, but

208 NCQA provided statistics to HHSC on July 25, 2013. 209 Members of the Texas Academy of Family Physicians established TMHI in 2008.

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are moving forward to prepare for new value-based payment arrangements with health plans and other payers. Four examples are described below.

 Methodist Health System (MHS) is located in the Dallas metro area. MHS applied the PCMH model to 6,000 of its own employees in a pilot program with United Healthcare. In comparing outcomes of patients served in an NCQA-recognized PCMH versus those served in non-recognized practices, ER utilization decreased and body mass index (BMI) went down four percentage points, on average.  Mother Frances Hospitals: Trinity Clinic/Whitehouse an integrated delivery system in Tyler, Texas and part of the Mother Frances Hospitals, worked with TransforMED (affiliated with American Academy of Family Physicians) to gain NCQA’s PCMH recognition. They used HEDIS210 metrics for establishing provider incentives, developed regular peer reports, created a “patient portal”, hired care coordinators, and assigned a nurse navigator to provide coaching to the top five percent of their sickest patients.  Blue Cross Blue Shield of Texas (BCBSTX): In February 2010, BCBSTX announced a three-year pilot PCMH program with large physician groups. The pilot currently operates in five sites in Dallas, Houston, Austin, and Tyler.211 Three pilot sites, Austin Regional Clinic, Kelsey-Seybold Clinic in Houston, and Trinity Clinic in Tyler largely serve the state’s public employee health plan (ERS) enrollees, but also include patients in BCBSTX’s fully insured products. Participating practices have agreed to collect a standard set of quality metrics based on NCQA medical home criteria, such as disease management, preventive care services, patient satisfaction, and chronic diseases such as diabetes, coronary artery disease and asthma. Practices receive a per-member-per-month care management fee and share in the savings realized by achieving cost and quality benchmarks. The fees and shared savings are negotiated between the practices and BCBSTX.  Children’s Hospital Systems: Several children’s hospital systems have also adopted medical home models. For example, Children’s Medical Center - Dallas has implemented a plan to achieve NCQA’s Level 3 PCMH recognition across all of its primary care clinics.212 Texas Children’s Pediatrics, the nation’s largest primary pediatric care network,

210 HEDIS is a set of health care performance measures maintained by NCQA. For more information, see: http://www.ncqa.org/HEDISQualityMeasurement/WhatisHEDIS.aspx 211 Orton, K. Finding a home: Blue Cross medical home pilot targets quality, costs. Texas Medical Association, May 2011. See: http://www.tafp.org/news/tfp/summer-2011/medical-home 212 Ray Tsai, Children’s Medical Center – Dallas. Untitled presentation for the Texas SIM Medical Home webinar, July 23, 2013.

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and affiliated with Texas Children’s Hospital in Houston, has also undertaken efforts to achieve Level 3 recognition among its affiliated outpatient clinics.213

Federally Qualified Health Centers

The Bureau of Primary Health Care (BPHC), a division of the Health Resources and Services Administration (HRSA) has put significant focus on medical/health home transformation for all FQHCs.214 BPHC has not endorsed a specific accrediting organization, which could include The Joint Commission, NCQA or the Accreditation Association for Ambulatory Health Care (AAAHC), for example. The agency allocated funds to the National Primary Care Association to build its capacity to provide medical home transformation assistance to FQHCs. At the beginning of 2012, five FQHCs in Texas had NCQA-recognition as a PCMH. By the end of 2013, more than 40 FQHCs will have PCMH recognition from NCQA.215

CMS awarded 11 grants to FQHCs in Texas (476 nationally) through the Medicare FQHC Advanced Primary Care Practice Demonstration. This program is testing the effectiveness of the medical home model to improve quality of care, promote better health, and lower costs.216 Participating FQHCs are expected to achieve Level 3 PCMH recognition from NCQA, help patients manage chronic conditions and actively coordinate care for patients. To support these investments in patient care and infrastructure, FQHCs are paid a monthly care management fee for each eligible Medicare beneficiary receiving primary care services.

Patient‐Centered Specialty Practices

Six clinics in Texas are leading the way in becoming NCQA-recognized patient-centered specialty practices in Texas.217 They are located in Greater Austin, North Texas, Dallas/Fort Worth, and Houston, and represent practices in the specialties of: allergy and immunology; nephrology, obstetrics, internal medicine, oncology and cardiology.

Bundled Payment Initiatives

Through grants from the Center for Medicare and Medicaid Innovation (CMMI), 14 entities in Texas are testing Bundled Payment for Care Improvement within three of four model categories.

213 Texas Children’s Hospital news, May 8, 2013. See: http://www.texaschildrens.org/About-Us/News/Corinthian- Pointe-awarded-NCQA-designation/ 214 HRSA.Patient-Centered Medical/Health Home Initiative. See: http://bphc.hrsa.gov/policiesregulations/policies/pal201101.html 215 Davelyn Eaves Hood, Texas Association of Community Health Centers. “Medical Home Transformation: Lessons Learned.” Presentation to the Texas SIM Conference, Austin, Texas, August 20, 2013. 216 For more information, see: http://www.fqhcmedicalhome.com/ 217 NCQA. Patient-Centered Specialty Practice Early Adopters. See: http://www.ncqa.org/Programs/Recognition/PatientCenteredSpecialtyPracticePCSP/EarlyAdopters.aspx

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Under the Bundled Payments for Care Improvement initiative, organizations enter into payment arrangements that include financial and performance accountability for episodes of care in an effort to improve quality and coordination of care, while lowering costs to Medicare.218

Accountable Care Organizations (ACOs)

ACOs are gaining popularity in Texas among a variety of providers and systems, due in large part to the availability of federal funding to test the ACO model. Through CMMI, 18 grantees received funding to implement a number of Medicare ACO models. Of these, 3 are Advance Payment ACOs, 2 are Pioneer ACOs, 11 are Medicare Shared Savings ACOs, and 2 are combined Advance Payment and Shared Savings ACOs.219 However, in July 2013 CMS announced that a number of Pioneer ACOs would not continue in the second year of the program, including the two in Texas, Seton Health Alliance and Plus! (North Texas Specialty Physicians and Texas Health Resources).220

In addition to the federally-funded Medicare ACOs, many large, integrated delivery systems are involved in private ACO efforts. Some examples include the following:

 Kelsey-Seybold is a private, multi-specialty physician group operating in the Houston area. In February 2011, Kelsey-Seybold Clinic participated in a month-long ACO pilot test with the NCQA to test ACO standards for NCQA’s ACO accreditation program. Kelsey-Seybold Clinic was one of only 10 multispecialty group practices selected nationally to participate in this pilot, and the only one based in a southern state. It was the first NCQA-accredited Accountable Care Organization in the country.221  Memorial Hermann is the largest not-for-profit health system in Southeast Texas and the primary teaching hospital for The University of Texas Health Science Center at Houston Medical School. In addition to operating a Medicare Shared Savings ACO, the system is partnering with Aetna to provide Aetna Whole HealthSM to employers through a Memorial Hermann Accountable Care Network.222  Texas Health Resources (THR) is the largest faith-based, nonprofit health care delivery system in North Texas. In partnership with BCBSTX, THR formed an ACO available to patients served by its 25 hospitals and 18 outpatient facilities in North Texas. The Texas Health ACO is designed to improve outcomes in three key categories: quality of care,

218 Participating organizations in Texas are listed in Appendix 1. 219 Ibid. 220 Zigmond, J. “CMS names ACOs leaving Pioneer program,” Modern Healthcare, July 16, 2013. See: http://www.modernhealthcare.com/article/20130716/NEWS/307169945 221 Leon Jerrels, Kelsey-Seybold. Comments made during an HHSC-sponsored webinar, Accountable Care Organizations (ACOs) in Texas – A Combined Perspective, May 14, 2013. See: http://www.youtube.com/watch?v=BQEgkRpBO3o&list=PLDACF4F3F56F4488A&index=22 222 The Aetna & Memorial Hermann Accountable Care Network. See: http://www.memorialhermann.org/aetna/

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patient experience and satisfaction, and cost efficiency. The new alliance, launched in January 2013, extends a previous agreement that allows more than 1.6 million BCBSTX members access to in-network health care services at THR’s hospitals and outpatient facilities. The ACO is available to the general and commercial (fully insured /self- funded) populations, and other populations in Collin, Dallas, Denton, Ellis, Erath, Grayson, Hood, Johnson, Kaufman, Parker, Rockwall and Tarrant counties.223  The Seton Healthcare Family is an integrated delivery system of hospitals and clinics in Austin, Texas. Seton established the Seton Health Alliance, which also includes Austin Regional Clinic, Lone Star Circle of Care FQHC and Seton Community Health Centers. The Seton Health Alliance partnered with United Healthcare in June 2013 to offer the first commercial ACO in Central Texas.224  Baylor Scott & White Health, two large health systems in Dallas and Central Texas, respectively, recently merged to create the largest not-for-profit health system in Texas.225 Scott & White Health recently established an ACO-agreement with Walgreens and participates in a Medicare ACO.

Health Care Delivery System Performance in Texas

Presented below are aggregate measures of system performance followed by indicators demonstrating the connection between poorer quality of care and higher health care costs. Linking patients with regular sources of timely and appropriate outpatient care and coordinating care for high risk patients can lower preventable health care costs. The first set of examples is related to preventable, excess hospital use. The second set is related to outcomes for pregnant women and newborns who have not received adequate, high quality care. Though much of the savings for chronic care for older adults will lower Medicare costs, Medicaid is paying disproportionately for high maternity and neonatal costs as well as hospital use by patients with comorbidities of mental health and substance abuse. Improvements will benefit all payers.

Aggregate Measures of System Performance The Texas health system has much room for improvement. In its 2009 Scorecard on Health System Performance, the Commonwealth Fund ranked Texas 46th overall out of the 50 states and the District of Columbia. Texas’ low relative rating makes it clear that there is much that Texas

223 Texas Health Resources. Blue Cross and Blue Shield, Texas Health Resources Implement Innovative Reforms to Improve Quality of Care, Reduce Costs, January 14, 2013. See: http://www.texashealth.org/body.cfm?id=1629&action=detail&ref=1499 224 Roser, M. “Two Central Texas health care giants teaming up in new federal program for Medicare patients,” Austin Statesman, December 19, 2011. See: http://www.statesman.com/news/news/local/two-central-texas-healthcare-giants-teaming-up--1/nRh9J/ 225 The merger was publicly announced September 30, 2013. See: http://bizbeatblog.dallasnews.com/2013/09/baylor-health-care-system-scott-white-complete-their-merger.html/

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can do to improve access, quality, and equity. The table below shows how Texas ranked in 2007 and 2009 overall and on five indicator categories, as well as its rankings on the same indicators for low income populations (under 200% FPL), in 2010-2011. Poor health system performance is consistent across the state: nearly all Texas communities’ overall score is in the bottom quartile nationally. In the five major categories measured by the report card, Texas ranked last in both Access and Equity, the latter reflecting the greatest gaps between vulnerable populations and the national averages across numerous measures. Texas also ranked very poorly for Prevention and Treatment (43rd) and Avoidable Hospital Use and Cost (42nd).226 Texas’ best rankings are on measures of adults living healthy lives free of impairment, where performance generally ranked in the middle of other states and the District of Columbia.

Table 13. Texas Health System Performance Rankings with Select Indicators, 2009227

Performance Indicator 2007 Rank 2009 Rank 2010-2011 Rank for Low- Income Population Overall 48 46 38 Access 51 51 51 Percent of at-risk adults who have visited a doctor 44 36 - for a routine checkup in the past two years Prevention & Treatment 45 43 43 Percent of adults age 50 and older received 46 39 41 recommended screening and preventive care Percent of adult diabetics received recommended 45 40 - preventive care Percent of adults with a usual source of care 48 49 49 Avoidable Hospital Use & Costs 46 42 24 Medicare 30-day hospital readmissions as a 44 37 19 percent of admissions Hospital admissions among Medicare beneficiaries 38 35 for ambulatory care–sensitive conditions, per 100,000 beneficiaries Percent of home health patients with a hospital 44 47 - admission Potentially avoidable hospitalizations from - - 22 complications of diabetes among adults, per 100,000 Equity 51 51 - Healthy Lives 22 21 11 Mortality amenable to health care, deaths per 27 32 - 100,000 Percent of Nonelderly Adults (Ages 18–64) 18 21 - Limited in Any Activities Because of Physical, Mental, or Emotional Problems

226 The Commonwealth Fund. Scorecard on Health System Performance, 2009. See: http://datacenter.commonwealthfund.org. 227 Ibid.

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Potentially Preventable Events Potentially Preventable Events (PPEs) are inpatient stays, hospital readmissions, and emergency department (ED) visits that may have been avoidable had the patient received timely, high quality primary and preventive care prior to the event. Potentially preventable events are indicators of poor availability, accessibility, and/or effectiveness of primary care, as well as insufficient attention to transitions in care. While not all PPEs can be avoided, working to reduce PPEs can have a big payoff for the entire health care system. The added burden of PPEs to hospital resources can adversely impact the quality and accessibility of care for all in need of services.

Texas Medicaid spent approximately $90 million in 2010 on potentially preventable emergency department visits and $120 million on potentially preventable hospitalizations. In 2009, it spent $104 million on potentially preventable readmissions.228

Potentially Preventable Hospitalizations

Between 2006 and 2011, Texans experienced over 1.4 million potentially preventable admissions (PPA) that cost payers more than $44 billion in hospital charges. (See the below table.) Congestive heart failure is the leading preventable hospitalization condition among Texas adults, costing all payers about $13.5 billion dollars over the period of 2006-2011. Bacterial pneumonia admissions cost in excess of $9.6 billion during that period. Chronic obstructive pulmonary disease and asthma in older adults cost all payers in excess of $6.7 billion.

Many of these conditions are more common among the elderly; thus the largest share of the costs, nearly two-thirds, is paid by Medicare. Private insurance covers 18 percent, and Medicaid patients and the uninsured account for 17 percent of PPA charges.229

The State’s share of PPA expenditures, though just a fraction of the federal government’s, still cost Texas over $120 million in 2010. A quarter of all admissions for Medicaid STAR+PLUS patients (aged 65 and older or with disabilities) were potentially preventable, resulting in an estimated $42 million in excess expenditures by STAR+PLUS MCOs (most of the expenditures for this population are made by Medicare).

Chronic obstructive pulmonary disease (COPD) is the most common PPA for this population, accounting for roughly 14 percent of all PPAs in the program. PPAs are less common among women and children in the STAR Medicaid managed care program, with just 7.5 percent of

228 Readmissions data are from: http://www.hhsc.state.tx.us/reports/2011/PPR-Report-011811.pdf; admissions and ED use data are from: http://www.hhsc.state.tx.us/1115-docs/MMC-Quality-Strategy.pdf. Spending on the latter two categories are lower because of a smaller volume of hospital users compared to ED users, and because Medicare’s coverage of hospital stays for people over age 65. 229 DSHS. State of Texas Preventable Hospitalizations Profile. See: http:/www.dshs.state.tx.us/ph/state.shtm.

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eligible admissions deemed potentially preventable. However, the full cost is paid by the state, and totaled $79 million in excess expenditures among STAR MCOs in 2010. Pneumonia is the most common PPA among STAR MCOs, accounting for nearly one-fifth (19%) of PPAs.

Table 14. Top Diagnoses of Potentially Preventable Admissions for Adults in Texas, 2006-2011230

Potentially Preventable Total Hospital Hospitalizations for Average Charges Divided Number of Total Hospital Adult Residents of Hospital by 2011 Adult Hospitalizations Charges Texas (2006-2011) Charge Texas Population Congestive Heart Failure 346,568 $38,979 $13,508,718,276 $703 Bacterial Pneumonia 293,860 $32,788 $9,635,043,041 $501 Chronic Obstructive 242,764 $27,851 $6,761,253,267 $352 Pulmonary Disease or Asthma in Older Adults Urinary Tract Infection 200,156 $22,411 $4,485,606,631 $233 Diabetes Long-term 128,586 $40,327 $5,185,446,131 $270 Complications Dehydration 94,102 $18,181 $1,710,843,122 $89 Hypertension (High Blood 62,201 $22,424 $1,394,810,330 $73 Pressure) Diabetes Short-term 54,962 $23,969 $1,317,396,616 $69 Complications Angina (without 17,488 $20,954 $366,441,112 $19 procedures) TOTAL 1,440,687 $30,795 $44,365,558,525 $2,308

Potentially Preventable Readmissions

Nationally, hospital readmissions within 30 days of discharge231 account for about one in five hospitalizations.232 While not all readmissions are deemed avoidable, an estimated 14 percent to 46 percent could have been prevented if the patient’s transition out of the hospital with the right monitoring and care coordination was more successful. In Medicare, readmissions account for 25 percent of Medicare hospital costs, or $26 billion. 233 A study in 14 Texas communities found

230 DSHS. Potentially Preventable Hospitalizations. See: http://www.dshs.state.tx.us/ph/state.shtm 231 The definition of a readmission has undergone much analysis and for payment purposes, CMS defines a readmission as occurring within 30 days, for any cause, though the vast majority are for the same cause as the initial admission. 232 Yale New Haven Health Services Corporation/Center for Outcomes Research and Evaluation. Hospital-wide (All Condition) 30-day Risk-Standardized Readmission Measure, 2011. Prepared for the Center for Medicare and Medicaid Services. 233 Lynn J, Straube BM, Bell KM, Jencks SF, Kambic RT. “Using population segmentation to provide better health care for all: The ‘Bridges to Health’ model,” Milbank Quarterly, 2007; 85:185-208.

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that readmission rates among Medicare patients in 2010 were highest after patients had been discharged to their home (19.3%) or to a nursing home (22.7%), as shown in the table below.

Table 15.Texas Discharge Disposition after Inpatient Hospitalization and 30-day Readmission Rates, Medicare, 2012234

Setting Number of % of Discharges 30-Day Readmits Rate of 30-day Discharges Readmits Home Health Agency 98,872 13.7% 14,390 14.6%

Home 424,509 58.7% 81,777 19.3% Hospices 27,122 3.8% 1,024 3.8% Inpatient 35,336 4.9% 5,771 16.3% Rehabilitation Facility Long-Term Acute 27,534 3.8% 3,571 13.0% Care Skilled Nursing 109,300 15.1% 24,837 22.7% Facility TOTAL 722,673 100% 131,370 18.2%

The state’s share of PPRs is about $104 million a year.235 About three percent of inpatient admissions in STAR had a potentially preventable readmission, resulting in STAR MCOs paying over $39 million in excess expenditures in SFY 2010. About 16 percent of admissions in STAR+PLUS had a potentially preventable readmission within 30 days. This translates to over $30.6 million paid in excess expenditures related to potentially preventable readmissions in SFY 2010. One-third of readmissions in STAR+PLUS were due to continuation or recurrence of mental health or substance abuse problems for which the initial admission occurred.236

Additional key findings from 2009 hospital data include:

 mental health and substance abuse conditions comprised 8.5 percent of initial admissions but 25.8 percent of PPRs. Heart failure, pulmonary disease, pneumonia, sickle cell crisis and diabetes also represented substantial numbers;  overall, two-thirds of readmissions were to the same hospital and one-third to a different hospitals;  DRGs with notably high PPR rates include psychiatric disorders, major abdominal surgeries, liver disorders, and cardiac procedures;

234 Jennifer Markley, Director of Quality, TMF Health Quality Institute. “Reducing Readmissions by Improving Care Transitions,” presentation to the Texas IHCQE, Workgroup B, July 2, 2013. 235 HHSC. Potentially Preventable Readmissions. See: http://www.hhsc.state.tx.us/reports/2011/PPR-Report- 011811.pdf. 236 HHSC. Texas Medicaid Managed Care Quality Strategy, 2012-2016. See: http://www.hhsc.state.tx.us/1115- docs/MMC-Quality-Strategy.pdf

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 in most cases, patients who had more comorbidities were at higher risk for readmission;  patients who had medical surgical conditions were at higher risk for readmissions if they also had a major mental health or substance abuse disorder; and  the risk of readmission peaked two to three days after discharge.237

Potentially Preventable ED Visits

Like PPAs, potentially preventable emergency department (ED) visits (PPVs) are considered an indicator of inadequate systems of primary care. In 2006, the National Association of Community Health Centers estimated that over $18 billion was wasted on PPVs nationally. In Texas, the cost of PPVs was estimated at $1.2 billion. These events are considered an indicator of poor availability, accessibility, and effectiveness of primary care, and their added burden to emergency department resources can adversely impact the quality of care for all in need of urgent medical attention.

Medicaid beneficiaries experience a disproportionate share of ED visits. Rates are higher for small children than for older adults; nonetheless, people with chronic conditions also tend to be regular ED users. Many PPVs are for the same ambulatory care sensitive conditions that lead to hospitalizations, such as asthma, COPD, congestive heart failure, diabetes, and hypertension. Research has shown that PPVs are also associated with lack of ongoing primary care.238

An analysis conducted by the state Medicaid program’s external quality review organization (EQRO) of SFY 2010 claims data calculated that 63 percent of ED procedures in STAR were potentially preventable, at a cost of nearly $80 million in excess expenditures by STAR MCOs. Nearly 4 out of 10 (39%) PPVs in STAR were for acute infections that could have been treated in a primary care setting. The same analysis found that 53 percent of ED visits in STAR+PLUS were potentially preventable, resulting in STAR+PLUS MCOs spending nearly $10 million in excess expenditures.

Birth Outcomes Poor birth outcomes including low birth weight, premature birth, and infant death, are often signs of inadequate perinatal care, much in the same way that a hospitalization for a preventable condition signals lack of adequate primary care. The U.S. has higher rates of all three types of poor birth outcomes than most other industrialized countries, including infant mortality, low

237 HHSC. Texas Medicaid Managed Care Quality Strategy, 2012-2016. See: http://www.hhsc.state.tx.us/1115- docs/MMC-Quality-Strategy.pdf 238 Ibid.

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birth weight (LBW), and preterm births. For example, the U.S. ranks 54th in the world with a rate of 12 preterm births (before 39 weeks) per 100 live births. 239

Preterm and low birth weight babies are at increased risk of a number of health, neurological, and developmental problems that lead to longer and more intensive hospitalizations, and can also impact their readiness for school and beyond. In 2005, the most recent year for which there is available data, the annual societal economic cost (medical, educational, and lost productivity) associated with preterm birth in the U.S. exceeded $26 billion.240

Infant Mortality

In 2000, Texas’ infant mortality rate was far better than that of the U.S. as a whole. However, over the subsequent decade from 2000 to 2010, the infant mortality rate in Texas became worse and the U.S. rate improved, such that in 2010, the two had nearly converged. Texas had 6.1 infant deaths per 1,000 live births, compared to the U.S. rate of 6.2 infant deaths per 1,000 live births. Deaths among black infants occur much more frequently than do deaths of white or Hispanic infants. In 2010, the infant mortality rate for black babies was 11.4 compared to 5.5 for Hispanic and white babies.

Figure 22. Infant Mortality Rate, Texas and U.S., 2000-2010241

239 DSHS, Healthy Texas Babies Expert Panel. Infant and Maternal Health Data, Updated July 2012. 240 March of Dimes. Born Too Soon and Too Small in Texas, January 2013. See: www.marchofdimes.com/PeriStats/pdflib/195/99.pdf 241 DSHS. Healthy Texas Babies Infant and Maternal Health Data, Updated July 2012. See: www.dshs.state.tx.us/HTBExpertPanelHomework2010.pdf

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Low Birth Weight

In Texas, the rate of low birth weight (LBW) births, defined as less than 2500g (approximately 3 and one-third pounds), is slightly worse than the U.S. average (8.4 percent in Texas versus 8.2 percent in the U.S.). The rate of LBW births also worsened in the last decade, from 7.4 percent in 2000 to 8.4 percent in 2010. The rate of very low birth weight (VLBW), defined as less than 1500 grams, has remained fairly constant at 1.3 percent in 2000 and 1.4 percent in 2010. Only 49 percent of very low birth weight Texas infants in 2010 were born in a facility having the appropriate level of services for their condition (e.g., a level III NICU facility), resulting in Texas’ ranking in the bottom 5 percent of the country on this indicator of quality and access. Nationally, 74.7 percent of VLBW births occurred in facilities with a level III NICU.242

Figure 23. Low Birth Weight Births, Texas and U.S., 2010243

Preterm Births

Texas also ranks worse than the rest of the U.S. in preterm births, with rates increasing over the last decade. Preterm births occur when an infant is born at under 39 weeks gestational age. The percent of preterm infants in Texas climbed from 12.6 percent in 2000 to 13.2 percent in 2010. The Texas rate was higher than the national average of 12 percent in 2010.244,245 As with most health indicators, rates vary by region of the state and by race/ethnicity. Rates are highest in

242 Ibid. 243 Ibid. 244 HHSC. NICU Council Report, January 2013. See: http://www.hhsc.state.tx.us/reports/2013/NICU-council- report.pdf 245 Preterm is less than 37 completed weeks of pregnancy. Late preterm is between 34 and 36 weeks gestation. Very preterm is less than 32 completed weeks. Low birth weight is less than 5.5 pounds. Very low birth weight is less than 3 1/3 pounds.

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South and East Texas, as well as Central West Texas.246 In 2010, all racial/ethnic groups in Texas had preterm birth rates in excess of the Healthy People 2020 target of 11.4 percent.247 A greater percentage of black infants was born preterm when compared to all other races/ethnicities (17.5% versus 11.6% for white infants and 13.5% for Hispanic infants in 2010).

Figure 24. Preterm Birth Rates, Texas and US, 2000-2010248

One of the trends contributing to the rise in preterm and low birth weight rates is the increased frequency with which labor is induced, a procedure often conducted for patient or provider convenience.249 In 2010, more than 25 percent of deliveries were induced in Texas, compared to just over 23 percent nationally. White mothers have the highest induction rates (32%).250

246 March of Dimes. Born Too Soon and Too Small in Texas, January 2013. 247 Ibid. 248 DSHS. Healthy Texas Babies Infant and Maternal Health Data. Updated July 2012. See: www.dshs.state.tx.us/HTBExpertPanelHomework2010.pdf. 249 Moore LE, Rayburn, WF. “Elective Induction of Labor,” Clinical Obstetrics and Gynecology. 2006; 49(3):698- 704. 250 DSHS. Healthy Texas Babies Infant and Maternal Health Data. Updated July 2012. See: www.dshs.state.tx.us/HTBExpertPanelHomework2010.pdf

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Texas Medicaid spent $2.2 billion, or 10 percent of its total budget in 2010 on birth and delivery- related services.251 Over half of all births in Texas are paid for by Medicaid. Poor birth outcomes are a driver of rising health care costs, and HHSC finds newborns have the highest cost Medicaid diagnoses for inpatient hospital stays. While extreme immaturity accounted for less than three percent of clients, the average cost per claim was more than $65,000, comprising more than half of the cost associated with all newborn DRGs, as shown in the table below.

Table 16. Texas Medicaid and Newborn Diagnoses-Related Groups (DRGs) Clients and Costs, SFY 2010252

Percent Average of Cost Per Percent Diagnoses-Related Groups (DRG) Code _ Description Clients Claim of Cost 385 / 789 _ Neonates, Diet / Transferred to Another Acute Care 1.4% $13,020 5.3% Facility 386 / 790 _ Extreme Immaturity 2.8% $65,576 54.6% 387 / 791 _ Prematurity With Major Problems 2.1% $21,963 12.9% 388 / 792 _ Prematurity Without Major Problems 4.2% $4,856 5.7% 389 / 793 _ Full Term Neonate With Major Problems 4.3% $6,993 8.3% 390 / 794 _ Neonate with Other Significant Problems 14.1% $1,356 5.2% 391 / 795 _ Normal Newborn 71.0% $418 8.1% TOTAL 100% NA 100%

Early Initiation of Prenatal Care

Early prenatal care is the most important means of preventing poor birth outcomes. Regular care beginning in the first trimester increases the likelihood that pregnancy-related complications will be detected and managed. Early prenatal care improves birth weight and decreases the risk of preterm delivery. Infants born to women who received no prenatal care have an infant mortality rate five times that of women who received appropriate prenatal care in the first trimester of pregnancy.253 Research indicates that prolonging a birth from 33 weeks gestation to 35 weeks gestation can result in a savings between $29,000 and $64,000 per infant.254

Texas ranks 50th among states in early prenatal care. The portion of women in Texas receiving prenatal care in the first trimester varies significantly by race and ethnicity, with rates for all groups well below the Healthy People 2020 goal.255 On average, 58 percent of pregnant women

251 Maureen Milligan, Medicaid-CHIP division. “Medicaid and CHIP Prenatal and Perinatal Services”, April 2010. See: http://www.coderedtexas.org/files/presentations/2010-05/Milligan.pdf 252 Jimmy Blanton, IHCQE Staff, Texas Health and Human Services Commission. “Data on High-cost Admissions in Medicaid,” presentation to the Texas IHCQE, Workgroup D, July 2, 2013. Source of neonatal care: Utilization & Expenditure Trends, March 2012. 253 HRSA. Prenatal – First Trimester Care Access. See: http://www.hrsa.gov/quality/toolbox/measures/prenatalfirsttrimester/ 254 HHSC. Neonatal Intensive Care Unit Council Annual Report. January 2013. 255 DSHS. Health Status of Texas 2011, June 2013.

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in Medicaid had a prenatal care visit in the first trimester of their pregnancy (or soon after joining Medicaid if they joined after becoming pregnant), and only half had a timely postpartum visit. Just 40 percent of women had at least 80 percent of the recommended number of prenatal visits.256

Figure 25. Percent of Women Receiving Prenatal Care in the First Trimester by Race/Ethnicity in Texas 257

Quality Performance among Major Payers

Medicaid Managed Care Texas has made significant strides in its approach to quality measurement and performance requirements for Medicaid managed care plans since the inception of managed care. With the continued shift of Medicaid away from the traditional fee-for-service model, HHSC has focused on ensuring an effective, comprehensive quality strategy within the MCO contracting model. To assess compliance with access to, satisfaction with and quality of care for all managed care programs, HHSC contracts with its EQRO to evaluate and compare MCOs in each of the state’s programs. Following is a summary of selected measures from the EQRO’s 2010 evaluation of MCOs.258

256 Institute for Child Health Policy. Texas Medicaid STAR Health Program Quality of Care Report, Fiscal Year 2010. September 26, 2011. See http://www.hhsc.state.tx.us/reports/2012/ann-qual-care-rep-STAR-fy2010.pdf 257 DSHS. Health Status of Texas 2011, June 2013.

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STAR  Quality of care: 63 percent of Medicaid clients enrolled in STAR managed care plans received one or more well-child visits in the first months of life and 80 percent received on or more visits in their 3rd, 4th, 5th and 6th years of life. Among adolescents enrolled in STAR, 63 percent had on or more well-child visits. Both measures exceeded the HHSC standards for these measures of 46 percent for well-child visits and 38 percent for adolescents.  Access to care: 83 percent of pregnant women received prenatal care in their first trimester and 60 percent had a postpartum visit three to eight weeks after giving birth.  Satisfaction with care: 78 percent of caregivers were able to get an appointment for their child within three days. Eighty-three percent of caregivers “always” or “usually” had positive experiences getting care quickly. Sixty-three percent of caregivers reported they never experienced delays in getting health care due to waiting on approval from their MCO.  Access to specialty care: Of the 15 percent of caregivers who attempted to make an appointment with a specialist, 68 percent indicated it was “always” or “usually” easy to get an appointment.

STAR+PLUS

 Quality of care: On six key inpatient admission rates, which are associated with potentially preventable admissions, the overall STAR+PLUS rates were more than four times greater than the corresponding Agency for Healthcare Research and Quality (AHRQ) national rates for the following conditions in 2010: o Diabetes short-term complications: 417 per 100,000 members in the STAR+PLUS program, compared to 62 per 100,000 nationally. o Uncontrolled diabetes: 150 per 100,000 members in the STAR+PLUS program, compared to 23 per 100,000 nationally. o Diabetes long-term complications: 747 per 100,000 members in the STAR+PLUS program, compared to 128 per 100,000 nationally. o Adult asthma: 696 per 100,000 adult members in the STAR+PLUS program, compared to 129 per 100,000 nationally. o Lower extremity amputation: 167 per 100,000 members in the STAR+PLUS program, compared to 36 per 100,000 nationally. o Hypertension: 288 per 100,000 members in the STAR+PLUS program, compared to 62 per 100,000 nationally.  Access to care: For adults age 45 to 64, 88 percent had an outpatient or preventive care visit; among adults 65 or older, 87 percent had a visit. For each of these age groups, members had higher rates of preventive care visits than reported by Medicaid managed care plans nationally.

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 Satisfaction with care: The majority of members reported high ratings of their health care, doctors and MCO with a rating of a 9 or 10 on a 10-point scale.  Access to specialty care: The majority of members (64%) reported it was always or usually easy to get a specialist referral.

Medicare AHRQ reports on payer-specific quality data indicate that Texas Medicare payers’ performance is comparable to the national average. As shown in the table below, Texas has fewer deaths per 1,000 admissions for abdominal aortic aneurysm repair, adult admissions with congestive heart failure, and admissions with pneumonia. The state has a slightly higher than average death rate for coronary artery bypass surgery performed on patients age 40 and over and acute myocardial infarction discharges.

Table 17. Texas Ratings of Hospital Mortality Compared to National Rates, 2011259

Hospital Care Measures for Medicare Texas Rate U.S. Rate Hospital Mortality Deaths per 1,000 admissions with abdominal aortic 43.4 48.5 aneurysm (AAA) repair Deaths per 1,000 admissions with coronary artery bypass 27.3 25.8 surgery (CABG), age 40 and over Deaths per 1,000 discharges for acute myocardial infarction 57.4 57.3 (AMI) Deaths per 1,000 adult admissions with congestive heart 27.2 27.4 failure (CHF) Deaths per 1,000 admissions with pneumonia 33.1 34.3 Deaths per 1,000 adults with percutaneous transluminal 14.6 13.0 coronary angioplasty (PTCA), age 40 and over

Commercial Carriers Texas law requires basic-service commercial HMOs to annually report certain HEDIS measures to the Texas Health Care Information Collection (THCIC), a division of the Department of State Health Services (DSHS). Each year THCIC identifies the required reporting measures using the following principles to guide its recommendations:

 the measures must reflect the types of plans and products currently available in the Texas marketplace;

259 CMS. State Snapshots: Texas. See: http://statesnapshots.ahrq.gov/snaps10/SnapsController?menuId=53&state=TX&action=payer&level=90

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 sufficient encounter data must be available; if a majority of plans cannot report a specific measure due to a low number of members qualifying for the measure, the measure is not required to be reported;  the reporting requirements must minimize duplication in reporting to other state agencies; and  the reporting requirements and technical specifications must be consistent with those of NCQA.

The results are published in an annual report through a joint effort of DSHS and the Texas Office of Public Insurance counsel. Results for calendar year 2011 reported in the 2012 report indicated, that in 34 out of 35 measures (excluding Access to Care – All Members), Texas scores performed worse than NCQA’s National Quality Compass average of health plans nationally.260

NCQA Accreditation in Public and Private Plans NCQA publicly reports on health plans that have obtained NCQA accreditation for Medicare, Medicaid, Commercial, or health information exchange (HIE) benefit plans. The accreditation process is an intensive evaluation process that requires plans to demonstrate proficiency in the following areas:

 quality management and improvement;  utilization management;  credentialing and recredentialing;  members rights and responsibilities;  standards for member connections;  HEDIS/CAHPS performance measures; and  Medicaid benefits and services for Medicaid benefit plans.

The following table identifies Texas health plans that have satisfied the requirements for accreditation, by type of plan. Note that not all insurers offer plans in all four markets (Medicaid, Medicare, Commercial, Exchange).

Table 18. Texas Insurers and Health Plans with NCQA Accreditation by Type of Market, 2013-14261

Health Plan Medicare Medicaid Commercial Exchange Aetna Health Inc. X X Aetna Life Insurance Company X X AMERIGROUP Texas X

260 Office of Public Insurance Council. Guide to Texas HMO Quality: 2012. See: http://www.opic.state.tx.us/health/guide-to-texas-hmo-quality 261 NCQA. Health Plan Report Card. Interactive website allows selection of Texas plans. See: http://reportcard.ncqa.org/plan/external/plansearch.aspx

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Health Plan Medicare Medicaid Commercial Exchange Cigna Health and Life Insurance Company X Cigna HealthCare of Texas X Connecticut General Life Insurance X Company Humana Health Plan of Texas X X X Humana Insurance Company X X X Molina Healthcare of Texas X Scott and White Health Plan X X X Superior Health Plan X X United Healthcare Community Plan of X Texas United Healthcare Services X United Healthcare Benefits of Texas X X United Healthcare Insurance Company X X

Factors Affecting Performance Key issues affecting health plan performance may include demographic variations among health plan populations, regional variations in access to care, health status of the insured population, as well as patient accountability and compliance. Additionally, health plans’ usage of provider incentives and payment rewards may also contribute to variations in performance.

Health Care Cost Trends Health care accounts for more than 34 percent of all Texas government spending, including state, federal and other sources of funding.

State Spending on Health Care As the table below illustrates, in fiscal year 2009, more than 50 state agencies and higher education organizations spent in excess of $30 billion on Medicaid, community and institutional mental health services, medical benefits for state employees and retirees, and health care for prisoners.262

Five agencies accounted for 89 percent of all health care spending and 87 percent of general revenue health care spending. Those five agencies include the Texas Health and Human Services Commission, Texas Department of Aging and Disability, Texas Department of State Health Services, Employee Retirement System, and the Texas Department of Criminal Justice. The State Comptroller estimates that annual health care spending from state general revenue increased 22.3 percent from 2005 to 2009, from a total of $9.45 billion to $11.57 billion in 2009.

262 Texas Comptroller of Public Accounts. State Health Care Spending, 2011. See: http://www.window.state.tx.us/specialrp2011t/healthcare//pdf/HealthcareReport.pdf

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Table 19. Texas State Health Care Expenditures by Agency, SFY 2009263

State Agency Health Care Health Care Expenditures -All Expenditures – State Funds General Revenue (in millions) (in millions) General Government Agencies Employees Retirement System $1,199.0 $786.3 State Office of Risk Management $50.7 $43.1 Health and Human Services Agencies Health and Human Services Commission $17,460.7 $5,765.8 Department of Aging and Disability Services $5,886.0 $1,852.3 Department of State Health Services $1,766.8 $1,105.8 Department of Assistive & Rehabilitative Services $135.8 $40.7 Department of Family Protective Services $1.9 $1.1 Education Agencies Teacher Retirement System $267.6 $267.6 Texas Education Agency $228.6 $228.6 Texas School for the Deaf $3.3 $3.3 Texas School for the Blind & Visually Impaired $4.6 $4.4 University of Texas $298.2 $196.4 Workers’ Compensation $4.8 $3.4 Texas A&M University $101.7 $94.7 Workers’ Compensation $3.1 $2.7 Health-Related Institutions of Higher Education $1,932.1 $334.7 Health –Related Research at Higher education $272.4 $272.4 Institutions Public Safety and Criminal Justice Agencies Texas Department of Criminal Justice $574.8 $538 Texas Youth Commission $19.9 $19.9 Texas Juvenile Probation Commission $1.9 $1.9 Business and Economic Development Agencies Texas Department of Transportation Workers’ Compensation $5.8 $5.8 Texas Department of Rural Affairs $2.2 $2.2 Total Health Care Expenditures $30,194.9 $11,571.3

CMS also shows significant growth in health care spending from 1991 to 2009. As the table below shows, during this nearly 20-year time span, Texas Medicaid spending increased by an average of 9.1 percent per year, slightly lower than the Texas Medicare average of 9.9 percent per year. In both programs, Texas’ growth rate was higher than the national average. Texas Medicaid enrollment grew at a rate of 4.7 percent a year, nearly twice the rate of Medicare

263 Ibid.

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enrollment which increased an average 2.5 percent. Both rates are higher than the national average, which is consistent with the high population growth in Texas.

Table 20. Medicare Health Expenditure Data in Texas, 2009264

2009 Average Annual % of Growth 1991- 2009 Texas Texas National Medicare Total Personal Health Care Costs $33,288,000,000 9.9% 8.0% Medicare Per-Enrollee Personal Health Care $11,479 7.2% 6.3% Cost Medicare Enrollment 2,900,000 2.5% 1.6% Medicaid Total Personal Health Care Costs $22,509,000,000 9.1% 7.8% Medicaid Per-Enrollee Personal Health Care $6,469 4.1% 3.7% Cost Medicaid Enrollment 3,479 4.8% 4.0%

Private Spending on Health Care The cost of health insurance is a factor in increases in uncompensated care expenses and cost shifting to individuals who do have either public or private coverage. Increasing medical costs and health insurance premiums have priced many individuals out of the market and have reduced the availability of affordable employer-based insurance for workers employed by small firms.

As shown in the table below, from 2005 to 2012, the rate of small businesses offering insurance declined from 35.2 percent to 27.2 percent. During the same time period, the annual cost of health insurance for single enrollees increased by approximately 25 percent for employees in both small and large firms. Workers in large firms also saw a 25 percent increase for family coverage while employees in small firms have seen family coverage premiums increase by 33.5 percent. 265

Table 21. Texas Employer-Based Health Insurance Trends, 2005, 2012266

Small Firms Large Firms Year 2005 2012 2005 20012 Total Number of Firms 292,925 349,571 111,112 141,842 Total number of Employees 1,976,805 2,177,905 6,176,778 6,669,752 Percentage of Firms Offering 35.2% 27.2% 93.4% 95.9% Insurance Average Annual Premium for $4,270 $5,313 $4,065 $5,083 Single Coverage Percentage Increase in Cost 24.4% 25.0%

264 CMS. National Health Expenditure Data, State Health Expenditures by State of Residence, 1991-2009. 265 AHRQ. Medical Expenditure Panel Survey, 2005 and 2006. 266 AHRQ. Medical Expenditure Panel Survey, 2005 and 2012 Insurance Component.

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Small Firms Large Firms Year 2005 2012 2005 20012 Average Annual Premium for $10,970 $14,647 $11,613 $14,613 Family Coverage Percentage Increase in Cost 33.5% 25.8%

Factors Impacting Cost Trends In an analysis of various state health care services and regional variations in cost, the State Comptroller identified several key cost drivers, including:

 Technological advances as newer and more effective products, services and drugs become available, usage has increased and has replaced less expensive older treatments.  Increased usage and rising costs of prescriptions drugs between 1997-2007, U.S. retail prescription drug prices rose by an average 6.9% annually, more than 2.5 times the rate of inflation.267  Increased utilization of health care services according to the CDC, U.S. physician office visits increased 15.4 percent between 1995 and 2006 while hospital outpatient visits increased by 34.6 percent.  Provider shortages across the state have led to increased demand on existing providers and higher costs for services; about 3.6 million Texans live in a federally designated primary care health professional shortage area.268

The economic slowdown that occurred during the early 2000s contributed to increases in enrollment, and expenditures also rose due to cost increases in prescription drugs and medical procedures, and greater utilization of drugs and health services.

As the figure below illustrates, between 2000 and 2003, Medicaid costs rose by ten percent or more each year, but increased at significantly lower rates between 2004 and 2006.269 Beginning in 2007, caseload began growing again at a slightly higher rate and drug costs and utilization also increased. The state also began to see important changes in the composition of the Medicaid caseload, with a higher proportion of high-cost clients with disabilities. In March, 2009, caseloads again began rising, but the state managed to limit cost increases for services through expansion of managed care and rate reductions for certain providers and services in subsequent years.270

267 Henry J. Kaiser Family Foundation, “Prescription Drug Trends,” Fact Sheet (#3057-07), September 2008. 268 Texas Comptroller of Public Accounts. State Health Care Spending, 2011. See: http://www.window.state.tx.us/specialrp2011t/healthcare//pdf/HealthcareReport.pdf 269 HHSC. Texas Medicaid and CHIP in Perspective, Ninth edition, January 2013. 270 Ibid.

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Figure 26. Annual Increase in Medicaid Spending over the Previous Year, 1994-2011271

Growth in enrollment of individuals age 65 and older and with disabilities is expected to contribute to continued cost growth. As noted earlier, this risk group represents only 25 percent of Medicaid clients but accounts for the majority of expenditures (58%). In state fiscal year 2011, average monthly costs of non-disabled children were $259 per month compared to adults (pregnant women and parents) at $640 per month, and people age 65 and over with disability- related conditions at $1,350 per month.272

Opportunities and Challenges of HIE Adoption, Meaningful Use, HIT Strategy

Overview of Health Information Technology (HIT) Infrastructure in Texas The State of Texas continues to fulfill its vision of a health care environment in which patient health care information is stored in standardized electronic health records (EHRs) that can be transmitted between providers and other lawful users through a secure network of health information exchanges (HIEs). The State of Texas has made significant progress toward this vision in the last few years, but additional resources and infrastructure are needed to further promote, sustain, and improve on the infrastructure developed.

271 HHSC. Texas Medicaid and CHIP in Perspective, Ninth edition, January 2013. 272 HHSC, HHS System Forecasting.

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Texas Health Services Authority (THSA)

In 2007, the State legislature created the Texas Health Services Authority (THSA) to support improvement of the Texas healthcare system by promoting and coordinating HIE and HIT throughout the state.273 A public-private, nonprofit corporation, with a governor-appointed board, the THSA engages over 200 individuals through a Collaboration Council and subject matter task forces. Under contract with HHSC, the THSA is supporting state-level operations to enable the establishment, operations, and interoperability of HIE infrastructure statewide. As illustrated in the figure below, the planned state-level shared connectivity services include:

• Clinical Document Exchange (treatment); • Federal Trust Framework (Security/Confidentiality/Accuracy); • Patient Consent Management; • eHealth Exchange; and • potentially, medication history delivery.274

The Texas HIE visions calls for federated HIEs to connect to a thin state layer in order to connect to Texas Medicaid, DSHS, the eHealth Exchange, and other state level data sources.

273 Stephen Palmer, Office of e-Health Coordination. “HIE Programs in Texas,” SIM webinar, July 10, 2013. 274 Office of e-Health Coordination, State of Health IT in Texas, June 2013.

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Figure 27. The Texas HIE Vision for State-level Shared Services

Additionally, Texas-based organizations have received over $101 million through the Health Information Technology for Economic and Clinical Health (HITECH) Act of 2009 and other federal grants to support HIT and HIE infrastructure. The programs include:275

 State HIE Cooperative Agreement program;  EHR Incentive Program;  HIT Regional Extension Centers (RECs);  Education and Research grants;  Implementation grants; and  Broadband expansion.

Office of e‐Health Coordination The Office of e-Health Coordination (OeHC) serves as a single point of coordination for HIT initiatives in the State of Texas. The office ensures that HIT projects and programs are coordinated across the State’s health and human services agencies, facilitates coordination

275 Office of e-Health Coordination. State of Health IT in Texas, June 2013.

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between Texas and federal or multi-state projects, and provides assistance to local and regional HIT projects.276

Electronic Health Information Exchange System Advisory Committee The Electronic Health Information Exchange System Advisory Committee advises HHSC on the development and implementation of an electronic health information exchange system to improve the quality, safety and efficiency of healthcare services provided through Medicaid and CHIP.277

Status of EHR Adoption EHR adoption rates among Texas providers have risen sharply in the last few years, and the state has had very high participation rates in the EHR Incentive Program. Texas Medicaid implemented the EHR Incentive Program and began disbursement of incentive payments to eligible providers in May 2011. As of February 26, 2013, 278 of Texas’ eligible hospitals had received a total of $364.1 million, and 5,493 of Texas’ eligible professionals had received $123.5 million through this program.278

EHR Utilization among Providers279 The OeHC began surveying Texas providers annually in 2011. The survey reaches physicians, dentists, physician assistants and nurse practitioners, including both Medicaid and non-Medicaid providers. The survey captures data on provider demographics, EHRs, HIE, broadband access, EHR incentives, and communication.

The most recent survey conducted in June 2012 received responses from 1,891 providers (physicians, dentists, physician assistants and nurse practitioners). More than half of providers surveyed participate in Medicaid (57%). Most of the 923 physicians surveyed indicated that they practice in a small clinic setting of 2 to 10 providers (49%) or in a solo practice (41%). The 2012 survey showed that nearly 38 percent of respondents practice in a paperless environment, with an EHR system fully implemented. About 14 percent of respondents reported partial EHR implementation. As shown in the figure below, physician assistants and nurse practitioners have the highest rates of full EHR implementation (55 and 54 percent, respectively).

276 Ibid. 277 Ibid. 278 Ibid. 279 HHSC. Prepared by the Office of e-Health Coordination. Health Information Technology. 2012 Practitioner Survey Report, September 2013.

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Figure 28. EHR Implementation Status of Clinicians in Texas, 2012280

Fully implemented (paperless) Partially implemented Planned in the next year Planned in the next two years Not planned Unknown

44% 13% Physicians 11% 6% 23% 1% 28% 15% Dentists 5% 9% 38% 2% 55% 20% Physician Assistants 14% 7% 4% 0% 54% 20% Nurse Practitioners 11% 8% 4% 1%

0% 10% 20% 30% 40% 50% 60%

Respondents reported using a variety of systems, with no one solution being used by more than 16 percent of respondents. More than 90 percent of current EHR users intend to continue using their systems and indicated that they are most satisfied with their system’s capabilities around communication of patient information, ease of use, efficiency, and improvement in the quality of patient care. Of those providers without an EHR system, only 8 percent have plans to install one in the next year and 28 percent said that they have no plans to implement an EHR system.

The functions most used by providers with EHRs are clinical documentation, medical/dental charting, medical/dental history, problem lists, and electronic prescribing. Providers are much less likely to use quality reporting, patient health indicators, discharge planning and public health reporting.

280 HHSC. Prepared by the Office of e-Health Coordination. Health Information Technology 2012 Practitioner Survey Report, September 2013.

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Status of Local HIEs In March 2010, HHSC received a four-year, $28.8 million award from the Office of the National Coordinator for Health Information Technology (ONC) for its share of funding through the State HIE Cooperative Agreement Program. Through this program the State of Texas established an HIE infrastructure that includes certified local HIEs and health information service providers (HISPs) connected through state-level shared services managed by the Texas Health Services Authority (THSA).

After an extensive planning process, 12 local HIEs have approved Business and Operations (B&O) plans. The HIEs have used the implementation funding to support their overall operations, including personnel; HIE technology selection and deployment; development of marketing materials; and ongoing outreach and provider and patient engagement activities. In 2013, the 12 HIEs have been working to achieve or maintain operations, as well as to plan for and conduct self-evaluations.

The THSA regularly updates a progress report on the local HIEs in Texas, as shown in the figure below. Of the 43,829 physicians targeted for participation in one of the 12 HIEs, 52 percent were participating as of August 2013, the most recent reporting period available, and 62 percent of 554 hospitals targeted were participating. Not all of those committed to participate have yet been connected. However, the Integrated Care Collaborative (ICC), the local HIE in Central Texas, has made the most progress on participation rates. ICC has achieved all program milestones and obtained commitment from half of physicians targeted. More than 1,100 providers are actively exchanging patient information via ICC.281

281 THSA. Texas Local HIE Grant Program: At-a-glance Progress Report, August 2013. See: http://hietexas.org/local-hies/local-hies

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Figure 29. Participation Status of 12 Local HIEs in Texas, August 2013282

282 Ibid.

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The HIEs cover the majority of Texas counties, providers, hospitals, and residents, as shown in the map below.283 The different colors refer to separate HIE regions. In 2012 the THSA established a marketplace of qualified health information service providers, or HISPs, to provide “lite” HIE connectivity services to physicians and hospitals located in counties that do not have a local HIE. This area is otherwise referred to as the “White Space” in Texas, which is also represented in the map. A HISP is an organization that supports the secure, encrypted transport of data on behalf of the sending or receiving organization or individual by adhering to federal technical standards and operational policies. Based on low participation rates in this program and feedback from stakeholders in the area, in October 2013 a plan was developed to re-align the White Space program which included contracting with the West Texas HIT Regional Extension Center for the development and implementation of a query-based local HIE in the White Space.

Figure 30. Map of Local HIE Service Areas

283 Office of e-Health Coordination. State of Health IT in Texas. June 2013. Some of the regions represented on this map have been consolidated. There are a total of 12 HIE regions.

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HIE participation among clinicians is mixed, according to the latest survey, leaving much room for improvement. As shown in the figure below, physicians had the lowest participation rate among clinician types surveyed, at 7 percent, followed by physician assistants. Among providers utilizing or intending to utilize HIE, the functions they are most interested in are checking patient eligibility and processing claims electronically.284

Figure 31. HIE Participation by Practitioner Type in Texas, 2012285

100%

90% 87% 86% 80% 80% 72% 70% Yes 60% No 50% Unknown

40%

30% 20% 20% 12% 8% 10% 10% 10% 7% 5% 2% 0% Physician (n=696) Dentist (n=658) Physician assistant Nurse practitioner (n=25) (n=80)

Opportunities and Challenges The main HIT challenge to Texas is that several of the federal grant programs supporting EHR adoption and HIE are near their funding expiration, while much work remains to fulfill the HIT vision for Texas.

EHR Adoption and Meaningful Use, and Optimization

Despite its success, there are still many providers who have been excluded from the EHR incentive program either because they did not meet specific Medicaid or Medicare thresholds or due to their provider type. Additionally, this federal program ends in 2016 for Medicare and in 2021 for Medicaid.

284 HHSC. Prepared by the Office of e-Health Coordination. Health Information Technology 2012 Practitioner Survey Report, September 2013. 285 Ibid.

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Continuing to support and extend these initiatives that have laid the foundation for HIT adoption and an HIE infrastructure is critical. The SIM initiative provides an opportunity to leverage the expertise of the THSA, Office of e-Health Coordination, their program grantees and other stakeholders in Texas with advanced HIT infrastructure. As part of a broader patient-centered medical home/health home technical assistance program that is described in this State Healthcare Innovation Plan, this expertise could be used to help enable many more providers to implement and meaningfully use an EHR system or to optimize the use of systems in place. The State seeks to promote EHR adoption to all providers who practice in Texas; the SIM initiative would play a role in this goal, with special emphasis on behavioral health specialists, long term care providers, and other types of high-volume Medicaid providers.

Four RECs received $35.7 million over four years to assist primary care providers (PCPs) and critical access and rural hospitals in their geographic service areas to select, successfully implement, and meaningfully use certified EHR technology. RECs also help providers achieve the ability to exchange of health information, in compliance with applicable statutory and regulatory requirements, and patient preferences.286

The Texas RECs are comprised of four regional, independent organizations:

 West Texas REC, based out of the Texas Tech University Health Sciences Center;  CenterEast REC, based out of Texas A&M University;  Gulf Coast REC, based out of the University of Texas at Houston; and  North Texas REC, based out of the Dallas/Fort Worth Hospital Council.

Texas RECs are contracted to enroll and support 5,831 PCPs and 111 CAHs/RHs of 50 beds or less. As of March 2013, each Texas REC had reached 100 percent of its enrollment target of PCPs and continues to over-enroll eligible providers to account for a small amount of attrition. Of the enrolled PCPs, 85 percent, on average, have implemented an EHR and 32 percent, on average, have reached meaningful use.287

HIE Sustainability

The Local HIE Grant Program will conclude at the end of the HIE Cooperative Agreement Program in March 2014. In the short term, the infrastructure supporting the local HIEs will be sustained through the participation of hospitals and providers at the local level, and through a state appropriation to the THSA. However, for long term sustainability the State would like the primary beneficiaries of HIE to be its primary supporters, namely, public and private payers.

286 Office of e-Health Coordination. State of Health IT in Texas. June 2013. 287 Ibid.

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The SIM initiative, with its emphasis on multi-payer engagement, provides an opportunity to expand payer participation in advancing provider participation in and financial sustainability of HIE in Texas. And with initial emphasis also on the Medicaid program, the SIM initiative provides an opportunity to develop incentive programs for providers to report quality measures to Medicaid through their local HIE.

Current Federally‐supported Initiatives in Texas Texas is home to a wide variety of federally-supported initiatives to further improve the quality, efficiency and safety of health care as well as improve public health outcomes. A table in Appendix 1 highlights initiatives overseen by the following five federal agencies: the Centers for Medicare and Medicaid (CMS), the Centers for Disease Control and Prevention (CDC), the Substance Abuse and Mental Health Services Administration (SAMHSA), the Office of the National Coordinator for Health Information Technology through the American Recovery and Reinvestment Act (ONC/ARRA), and the Health Resources Services Administration (HRSA).

Many of the initiatives listed are aligned with overarching delivery system innovation and payment reform goals of the SIM initiative and some will be leveraged in this State Healthcare Innovation Plan (SHIP). Initiatives include accountable care organizations, patient-centered medical homes, bundled payments, post-acute transitions in care, workforce development, public health programs, expansion of EHRs and HIE programs and primary care/behavioral health integration. Most are regional initiatives based in the larger metropolitan areas of the state. Others specifically target rural, low-income areas, or are statewide.

Federally‐Supported Program Waivers in Texas CMS has approved several HHSC waiver requests over the past several years, as described below.288

The Texas Health Care Transformation and Quality Improvement Program 1115 Medicaid Waiver (1115 Transformation waiver) In December 2011, CMS approved the Texas Health Care Transformation and Quality Improvement Program 1115 Medicaid Waiver (Transformation waiver). The Transformation waiver expanded statewide the existing Medicaid managed care programs, STAR and STAR+PLUS. The waiver calls for using the savings from the managed care expansion as well as the discontinuation of current supplemental provider payments to finance two new statewide funding pools worth $29 billion over five years. These new funding pools, briefly described

288 For a detailed description of long term services and supports waiver programs in effect in Texas, see: http://www.dads.state.tx.us/providers/waiver_comparisons/LTSS-Waivers.pdf.

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below, were created to assist hospitals and other providers with uncompensated care costs and to promote health system transformation.

Uncompensated Care Pool The Uncompensated Care (UC) pool payments are designed to help offset the costs of uncompensated care provided by the hospital or other providers.

Delivery System Reform Incentive Payment Pool Payments The DSRIP pool payments are designed to incentivize hospitals and other participating providers to develop and implement programs or strategies that enhance access to health care, increase the quality and cost-effectiveness of care, and improve the health status and satisfaction of patients and families served.

Under the Transformation waiver, eligibility to receive Uncompensated Care or DSRIP payments requires participation in a regional healthcare partnership (RHP). Within a partnership, participants may include governmental entities providing public funds known as intergovernmental transfers (IGT), Medicaid providers and other stakeholders. Each partnership must have one “anchoring” entity, which acts as a primary point of contact for HHSC in the region and is responsible for seeking regional stakeholder engagement and coordinating development of a regional plan.289 The plan is required to identify partners, community needs, described proposed projects, and the funding distribution for meeting project milestones and performance targets.

Status of the Transformation Waiver In March 2013, HHSC submitted over 1,300 DSRIP plans from 20 RHPs for CMS review and approval. The plans were developed with a focus on the following primary areas, listed below.

 Infrastructure development: expand primary care capacity, increase training of primary care workforce, implement and use a chronic disease management registry, expand specialty care capacity, enhance performance improvement and reporting capacity  Program innovation and redesign: enhance/expand medical home/health homes, expand chronic care management models, establish/expand a patient care navigation program, use palliative care programs, conduct medication management, implement/expand care transitions programs, integrate primary and behavioral health care services

289 For more information on the Transformation waiver, see: http://www.hhsc.state.tx.us/1115-Waiver- Overview.shtml

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 Quality improvements: pay for outcomes and achieving designated levels of performance on metrics designed to measure these outcomes  Population-based improvements: improve potentially preventable admissions, complications, readmissions, emergency department visits and patient centered delivery of care.

By successfully implementing this waiver, the State aims to:

 support the development and maintenance of a coordinated care delivery system;  improve outcomes while containing cost growth;  protect and leverage financing to improve local health care infrastructure; and  transition to quality-based payment systems across the continuum of care and delivery of client services.

NorthSTAR Behavioral Health Program 1915 (b)

NorthSTAR is a publicly funded managed care approach to the delivery of mental health and chemical dependency services for eligible residents of seven counties in North Texas: Dallas, Ellis, Collin, Hunt, Navarro, Rockwall and Kaufman. Under the direction of the Department of State Health Services (DSHS), NorthSTAR provides a comprehensive mental health/substance abuse benefit package for all eligible individuals. Access to benefits is determined by clinical need, not funding source. The available care includes substance abuse treatment and mental health services such as inpatient and outpatient hospital services, psychiatric physician care, and community mental health services.

Some of the unique aspects of the NorthSTAR Behavioral Health Program include the following:

 Blended funding: State and local agencies contribute wrap-around funds for a person's treatment. No longer does a person have to mine the various agencies and departments to receive services.  Integrated services: Mental health and chemical dependency treatment are coordinated under behavioral health, allowing integrated treatment in a single system of care.  Care management: Individuals receive the proper amount of cost-efficient care.  Data-based decision support: A modern data warehouse and decision support software is used to evaluate and manage the system of care.  Behavioral Health Organization: Services are provided via a fully capitated contract with a licensed behavioral health organization.290

290 DSHS. Medicaid Services Unit: NorthSTAR. See: http://www.dshs.state.tx.us/mhsa/northstar/northstar.shtm

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Medicaid Home and Community‐Based Services (HCBS) Waiver Programs Texas currently operates eight separate program waivers under Section 1915 (c) of the Social Security Act. These waivers, briefly described below, provide services that allow individuals (children and adults, depending on the specific program) to remain in their community or home in support of their self-determination and independence.

STAR+PLUS 1915 (c) Incorporated into the State’s 1115 waiver, STAR+PLUS is a Medicaid managed care program for people who have disabilities or are age 65 or older. Through the acute care component of the program, all enrollees have access to the full array of Medicaid services. Through the home and community-based services waiver component of the program, STAR+PLUS provides an additional array of benefits, including personal assistance, respite, financial management services, support consultation, adaptive aids and medical supplies, adult foster care, assisted living, dental, emergency response services, home delivered meals, minor home modifications, nursing, occupational therapy (OT), physical therapy (PT), speech/hearing/language therapy, transition assistance for individuals ages 65 and older and physically disabled individuals 21 to 64 years of age. Another key feature of the STAR+PLUS program is service coordination. A STAR+PLUS staff member works with the member, the member’s family and the member’s doctors and other providers to help the member get the medical and LTSS needed. STAR+PLUS services are currently available in the following Service Delivery Areas (SDAs): Bexar, Dallas, El Paso, Harris, Hidalgo, Jefferson, Lubbock, Nueces, Tarrant and Travis.291 The STAR+PLUS program will expand statewide effective September 1, 2014.

Youth Empowerment Services 1915 (c) The Youth Empowerment Services (YES) program allows more flexibility in the funding of intensive community-based services and supports for children with serious emotional disturbance (SED), and their families. The YES Waiver targets children and youth at risk of psychiatric hospitalization and out-of-home placement and provides respite, adaptive aids and supports, community living supports, family supports, minor home modifications, non-medical transportation, paraprofessional services, professional services, supportive family-based alternatives and transitional services for individuals with SED ages 3 to 18 years.

DSHS and HHSC submitted the YES waiver proposal to the CMS in June 2008 and received waiver approval in February 2009. The waiver was renewed in April 2013, with Harris County targeted to begin YES waiver services in March 2014. In the last legislative session ending June

291 For a map of counties covered by STAR+PLUS, see: http://www.hhsc.state.tx.us/starplus/Map.pdf

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2013, Rider 80 directed the YES waiver to expand statewide within the next biennium. DSHS is developing implementation plans for this expansion.292

Medically Dependent Children Program 1915 (c) The Medically Dependent Children Program (MDCP) provides services to support families caring for children who are medically dependent and to encourage the transition of children in nursing homes. This program promotes deinstitutionalization of children in nursing facilities. The program provides respite, adaptive aids, financial management services, flexible family support, minor home modifications and transition assistance for medically fragile individuals up to 20 years of age.

Community Based Alternatives 1915 (c) As a cost-effective alternative to a nursing home, the Community Based Alternatives (CBA) program provides home and community-based services to people who are older or who have disabilities. The CBA program provides personal assistance, respite, PT, OT, prescribed drugs, speech/hearing/language therapy, financial management services, support consultation, adaptive aids and medical supplies, adult foster care, assisted living, dental, emergency response system, home delivered meals, minor home modifications, nursing and transition assistance for individuals 65 years and older and for physically disabled individuals 21 to 64 years of age.

Home and Community‐based Services 1915 (c) The Home and Community-Based Services (HCS) program provides individualized services and supports to people with intellectual disabilities who are living with their family, in their own home or in another community setting, such as a small group home, where no more than four people live. The HCS program provides day habilitation, respite, supported employment, prescribed drugs, financial management services, support consultation, adaptive aids, dental treatment, minor home modifications, residential assistance (foster/companion care, supervised living, residential support), nursing, speech and language pathology, audiology, OT, PT, dietary, behavioral supports, social work and supported home living for individuals with Mental Retardation and Developmental Disabilities (MR/DD), regardless of age.

Community Living Assistance and Support Services 1915 (c) The Community Living Assistance and Support Services (CLASS) program provides home and community-based services as a cost-effective alternative to an intermediate care facility for individuals with an intellectual disability or related condition (ICF/IID). A related condition is a disability, other than an intellectual disability, that originated before age 22 that affects the

292 For more information, see: http://www.dshs.state.tx.us/mhsa/yes/

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ability to function in daily life. The CLASS program provides case management, prevocational training, residential habilitation, respite, supported employment, adaptive aids/medical supplies, dental treatment, OT, PT, prescriptions, skilled nursing, speech/hearing/language, financial management services, support consultation, behavioral support, continued family services, minor home modifications, specialized therapies, support family services and transition assistance for individuals with DD, regardless of age.

Deaf Blind with Multiple Disabilities 1915 (c) The Deaf Blind with Multiple Disabilities (DBMD) program provides home and community- based services to people who are deaf, blind and have another disability. This is a cost-effective alternative to an intermediate care facility for individuals with an ICF/IID. The DBMD program focuses on increasing opportunities for consumers to communicate and interact with their environment. The program provides case management, day habilitation, residential habilitation, respite, supported employment, prescribed drugs, financial management services, support consultation, adaptive aids and medical supplies, assisted living, audiology, behavioral support, chore, dental treatment, dietary, employment assistance, intervener, minor home modifications, nursing, OT, orientation and mobility, PT, speech, hearing and language therapy and transition assistance for individuals with DD, regardless of age.

Texas Home Living Program 1915 (c) The Texas Home Living (TxHmL) program provides selected essential services and supports to people with an intellectual disability or a related condition who live in their own home or their family's home. TxHmL provides day habilitation, respite, supported employment, prescription medications, financial management services, support consultation, adaptive aids, audiology, behavioral support, community support, dental, dietary, employment assistance, minor home modifications, OT, PT, skilled nursing and speech/language therapy for individuals with MR/DD, regardless of age.293

293 For more information, see: http://www.dads.state.tx.us/services/faqs-fact/index.html

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C. Design Process Deliberations

Stakeholder Engagement As described in the State Innovation Models (SIM) Application for Texas,294 a primary goal of the SIM Model Design process was to bring together a diverse group of key stakeholders to reach consensus on how the state can best move from a fragmented, volume-driven, fee-for- service system to one that is integrated, coordinated, efficient, quality-based and accountable for improving health outcomes.

In order to design a comprehensive strategy that is supported by providers, health plans and consumers, stakeholder participation was a critical feature of the development of the Texas State Healthcare Innovation Plan (SHIP). Maintaining and facilitating stakeholder engagement and collaboration would also be essential to implementation of the proposed SIM project, as described in Section J.

The initial four months of the project planning were devoted largely to collaboration with stakeholders from communities across the state through a series of regional public meetings, webinars, an online survey, one-on-one meetings with specific individuals and organizations, and a statewide conference. A SIM planning team comprised of Health and Human Services Commission (HHSC) officials and Health Management Associates consultants organized the stakeholder activities, as briefly described below.

SIM Kick‐off Webinar A statewide webinar offered by the SIM planning team presented an overview of the SIM project, including the state’s goals and opportunities for stakeholder involvement. (April 19, 2013)

Texas SIM Website Early in the project, HHSC created a website for posting information related to the SIM program activities.295 Stakeholders were encouraged to sign up for regular updates and notices regarding meetings and webinars. All meetings, presentations, webinars and conference materials were posted on the site, and visitors were able to submit questions via the website.

294 HHSC. State Innovation Models Initiative. See: https://www.hhsc.state.tx.us/hhsc_projects/Innovation/sim.shtml. 295 All public presentations described in Section C. are available at: https://www.hhsc.state.tx.us/hhsc_projects/Innovation/sim.shtml

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SIM Regional Stakeholder Meetings The SIM planning team hosted 14 regional stakeholder meetings to describe the project and facilitate discussion about local health care delivery and payment concerns systems, as well as seek input on priorities and recommendations for designing innovative models. Meetings were held in rural and urban regions, in all areas of the state, including Abilene, Austin, Corpus Christi, Dallas, Edinburg/McAllen, El Paso, Ft. Worth, Houston, Laredo, Lubbock, Midland, San Antonio, Tyler and Waco, as shown, by date, in the table below.

Table 22. Texas SIM Regional Stakeholder Meeting Locations and Dates

SIM Regional Stakeholder Meetings Location Date Waco May 8 Lubbock May 14 Abilene May 15 San Antonio May 17 Ft Worth May 21 Dallas May 22 Tyler May 29 Corpus Christi May 31 Houston June 4 Edinburg/McAllen June 5 Laredo June 6 Midland June 11 El Paso June 12 Austin June 18

Attendees included a broad cross-section of health care providers including representatives of hospitals, primary care practices, a wide range of specialty practices of varying sizes, home health care agencies, community mental health centers and other mental health providers, federally qualified health centers, university medical schools and health science centers, and local indigent care programs. Also in attendance were representatives of public and private health plans, state and local public health officials, consumers and patient advocacy organizations. See Appendix 1 for a list of SIM stakeholder meeting attendees and the organizations they represent.

Stakeholder Update Webinar The SIM planning team hosted a webinar to provide stakeholders with an update on the SIM model design process for anyone unable to attend an in-person regional stakeholder meeting, and to present an overview of stakeholder feedback from the regional meetings and the online Texas SIM survey, as described below. (July 9, 2013)

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Health IT Data Analytics Webinar Along with the Director of the Office of e-Health, an office within HHSC, the SIM planning team hosted a statewide webinar on federal, state and local initiatives related to the status of and plans for health information technology (IT) initiatives in Texas, and to solicit stakeholder input on recommendations for incorporating health IT into the SHIP. (July 10, 2013)

Medical/Health Home Webinar The SIM planning team hosted a webinar on patient-centered medical/health home models with a panel of experts from the Texas Medical Home Initiative, Blue Cross Blue Shield of Texas and Children’s Medical Center of Dallas. Each panelist provided an overview of current medical/health home initiatives in which his or her organization is participating, followed by a discussion of opportunities and challenges in advancing adoption of medical/health home recognition programs, as well as potential payment reform initiatives for encouraging and incentivizing providers. (July 23, 2013)

Key Stakeholder Meetings More than 30 separate meetings were held with a wide variety of stakeholders, in some cases, more than once. The SIM planning team met with representatives from hospitals, health plans, community health organizations; statewide trade associations representing hospitals and physicians, indigent care providers; and a number of private organizations and state agencies providing technical assistance and expertise on areas that included HIT and HIE initiatives, patient engagement and accountability, health care needs of special needs populations, quality of care and performance evaluation, and payment reform. These meetings provided a more focused discussion of SIM model design considerations and allowed the SIM planning team to further identify areas of consensus and divergence on particular models. Examples of participants in key informant meetings included, but were not limited to:

 Ally Align Health;  American Medical Technologies;  Blue Cross Blue Shield of Texas;  Centex System Support Services/Lone Start Circle of Care FQHC;  Conexia;  County Indigent Health Care Program;  Harden Health Care/Girling Healthcare;  HealthSpring;  Meadows Foundation;  Molina Healthcare of Texas;  National Committee for Quality Assurance;  Seton Healthcare Family;

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 Superior Health Plan;  Texas Association of Community Health Centers;  Texas Association of Home Care and Hospice;  Texas Council of Community Centers;  Texas Institute of Healthcare Quality and Efficiency;  Texas Medical Association;  United Healthcare; and  Your Doctor Program.

Statewide SIM Stakeholder Survey To obtain more specific input on various initiatives identified during stakeholder meetings, the SIM planning team conducted a statewide, online survey in June 2013. The survey was distributed via e-mail to a large list of individuals who registered for SIM information updates and to a more extensive list of email subscribers to HHSC’s public notifications. The survey results were generally consistent with information and recommendations provided during stakeholder meetings, but provided more detailed information on the range of support for specific initiatives. The survey was completed by 132 individuals.296 Key findings included:

 Inadequate payment to support ongoing care coordination staff was viewed as a “significant impediment” to care coordination by approximately 75 percent of survey respondents, followed by a lack of adequate access to specialty care and insufficient levels of dedicated care coordination staff.  More than 85 percent of respondents identified the inability to electronically exchange health information with other providers as a significant (56%) or somewhat (30%) of an impediment to care coordination.  Among a range of model design options that included shared-savings, ACOs (Medicare or other types) and other models, development of patient-centered medical/health homes or medical neighborhoods received the highest percentage of support, with 71 percent “very interested.” Bundled payments received the least support with 32 percent being very interested.  Respondents expressed the strongest interest in models that prioritize patient accountability and education (72%), behavioral and physical health integration models (69%), and efforts to improve disease prevention and public health (65%).

Statewide Stakeholder Conference On August 20 and 21, 2013, the Texas SIM planning team hosted a free, two-day conference in Austin to present draft concepts for the SHIP, obtain comments and recommendations, and

296 246 individuals started the survey.

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further develop consensus on SIM model design approaches. Nearly 200 people representing 113 different organizations attended the conference. As the table below illustrates, 20 different health plans were represented, 19 different hospital/health systems attended, six academic health centers and four children’s hospitals. The Texas Medicaid director kicked-off the conference, highlighting innovation priorities for Medicaid, including behavioral health integration, advancing EHR adoption and health information exchange, constraining costs through accountability for potentially preventable events, improving care coordination by putting patients at the center of the health care system via patient-centered medical and health home models, and expanding adoption of evidence-based patient-engagement practices and tools.

Table 23. Unique Organizations Attending the Texas SIM Conference, August 20-21, 2013

Types of Organizations Attending the Texas SIM Conference* Count Health Plan (Medicaid only, Medicaid-commercial) or payer (TRS) 20 Health-hospital system, hospital-medical center, RHP anchor 19 Consultant 12 Trade Association 12 Community Mental Health Center 10 Care management services, specialty care provider, practice mgt. co 8 Local or state government agency 7 Long-term services and supports (SNF, Home health, specialty equipment) 7 Academic health sciences center or university 6 Children's hospital 4 Clinic (FQHC or private) 4 Other (advocate, faith-based organization, foundation) 4 Total 113 *240 individuals registered for the conference; 195 individuals attended. Conference participants heard panel discussions that included both public and private payers and providers on existing innovative payment and delivery models in Texas and lessons learned that could help guide model design strategies. Following the panel presentations, the SIM planning team provided an overview of a draft “straw man” proposal to serve as a starting point for more detailed breakout group discussions on the following topics:

 patient-centered medical/health homes and building an effective care coordination program;  patient engagement and accountability;  payment reform models and incentives; and  health information technology and quality measurement and evaluation.

Following completion of all presentations and breakout discussions, the conference concluded with an interactive “poll the audience” activity that allowed attendees to register their opinions on and support for various payment and delivery reform options that were projected to the audience in real time. Key findings from the audience survey included the following:

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 Providing financial assistance for implementation of the medical/health home model of care was “strongly supported” by 80 percent and moderately supported by 14 percent of participants.  Providing technical assistance for implementing an EHR system received strong support from 71 percent of participants and moderate support from 20 percent.  Inclusion of strategies for improving patient engagement and accountability was strongly supported by 85 percent of attendees and moderately supported by 12 percent.  Providing financial rewards for physician who meet targets for clinical outcomes was strongly supported by 76 percent of participants and moderately supported by 18 percent.  Standardization of insurer administrative requirements was strongly supported by 85 percent of participants and moderately supported by 5 percent.  Standardization of quality of care reporting requirements among commercial payers and Medicaid was strongly supported by 91 percent and moderately supported by 6 percent.  A uniform approach by all payers for payment of care coordination activities was strongly supported by 80 percent and moderately supported by 11 percent.

Strategies Considered During Design Process Deliberations As described previously in this report, the State of Texas is in the midst of a significant, statewide health care delivery system reform initiative in the form of the Texas 1115 Medicaid waiver, known as the Health Care Transformation and Quality Improvement Program. Key among the waiver’s innovations are the Delivery System Reform Incentive Payment (DSRIP) projects, which impact every region of the state. Participating providers have designed more than 1,300 projects to reach improvement targets that will help transform the local healthcare infrastructure of their communities. Examples of projects underway include, but are not limited to:

 expansion of primary care capacity;  increased training of primary care workforce;  implementation of chronic disease management registry;  expansion of specialty care capacity;  expansion of medical homes;  expansion of chronic care management models;  development or expansion of patient care navigation programs; and  integration of primary and behavioral healthcare services.

Throughout the stakeholder meetings and conference described above, discussion covered how to develop a SHIP model that enhances and supports, but does not duplicate the DSRIP waiver projects. Additionally, stakeholders also expressed interest in developing a plan that would benefit as many Texans as possible. This is a challenging task given the geographic size of the

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state and the large population, as well as the uncertainty regarding the monetary size of future SIM Model Testing grants that may be available to states.

Stakeholders felt that the most effective approach for the SIM initiative would be to include a variety of opportunities that vary based on urban and rural areas of the state and to support practices and health systems where they are along the accountable care continuum described in Section B. These themes guided discussion and consideration of specific models. As a result, several potential options and approaches identified early in the process were considered but ultimately discarded for not meeting the guidance expressed by stakeholders. These design criteria are reflected in the consideration of the 14 topics described below, as required in Section 7 of the CMS Terms and Conditions of the Model Design.

Creating Multi‐payer Strategies Virtually all payers and providers supported the concept of transitioning from traditional fee-for- service to value-based payment systems. Stakeholders agreed that the wide variations in the composition and sophistication of local health care delivery systems would influence which options providers in different regions would support. Specific options that were considered but did not receive significant support included: 1) development or expansion of accountable care organizations, 2) shared savings payment arrangements, or 3) bundled payments.

Stakeholders generally felt organizations that were interested in forming an ACO would do so without the assistance of the SIM grant, and that the impact of funding such a strategy would be very limited. Providers expressed limited support for shared savings options due to the lack of data that can support taking financial risk for accountability. Because the state has such a large number of small, independent physician practices, financial stability is a critical requirement, particularly in smaller communities. Payment options that received broad support included: 1) providing one-time incentive or bonus payments, or enhanced reimbursement rates for providers who adopt and implement certain care coordination processes for treating patients with chronic or high cost medical conditions; 2) providing incentive payments or increased reimbursement rates to reward providers who achieve medical/health home recognition from a national organization; and 3) a pay-for-performance scheme based on meeting clinical outcome benchmark measures, such as those used in Bridges to Excellence.297

Improving Workforce Stakeholders consistently raised access to care and shortages of providers as significant problems for both rural and urban communities. Specific workforce initiatives that received widespread support included: 1) developing payment policies that allow physicians to be reimbursed for services provided by care coordinators or case workers who work with patients with chronic

297 This program is described in Section B. on the topic of delivery system payment methods.

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conditions; 2) expanding the utilization of advanced nurse practitioners; 3) incentivizing physician practices to develop team-based care strategies; and 4) providing training and technical assistance to physician practice staff to better utilize the data available from electronic health records.

As described in Section G. Workforce Development, Texas has a significant and long-standing infrastructure for recommending legislation on health care workforce policy and supporting implementation of legislation to reduce shortages and expand scope of practice. The Statewide Health Coordinating Council (SHCC), the key body for setting healthcare workforce priorities in the state, has statutory oversight of the Health Professions Resource Center and the Texas Center for Nursing Workforce Studies, and has two statutorily mandated advisory committees: the Texas Center for Nursing Workforce Studies Advisory Committee and the Health Information Technology Advisory Committee.298

Stakeholders generally viewed the scale of the SIM initiative as limited in its ability to leverage these existing efforts directly and have a significant financial impact within the three-year time frame of the SIM project. With its focus on clinical practice redesign, SIM funding would be better targeted “downstream” on team-based care development within a broader practice transformation effort to expand the medical/health home model. The SIM initiative’s focus on payment reform would also be more suited towards multi-payer efforts to support compensation for alternative health care professionals as part of a team-based medical/health home model. These efforts would also directly support patients in self-management of their chronic conditions and thereby further enable physicians, physician assistants and nurse practitioners more opportunity to practice at the highest levels of their education and training.

Aligning State Regulatory Authorities While this topic was included in the list of potential initiatives for stakeholder discussions, stakeholders proposed no ideas or suggestions during the development of the SHIP options.

Restructuring Medicaid Supplemental Payment Programs As discussed above, in 2011 the Texas Healthcare Transformation and Quality Improvement Program created through the state’s 1115 waiver allowed the state to expand Medicaid managed care and create a new funding method for supplemental payments: the Uncompensated Care (UC) pool and the DSRIP pool. The UC pool allows hospitals to receive payments for their uncompensated care expenses, similar to the previous Medicaid Disproportionate Share method. The DSRIP pool provides incentive payments to hospitals and other providers for achieving quality improvement targets and positive outcomes in patient care. Because of the magnitude and

298 DSHS, Statewide Health Coordinating Council website page. See: http://www.dshs.state.tx.us/chs/shcc/.

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duration of this project, stakeholders did not discuss any additional changes for restructuring the supplemental payment programs.

Aligning regulations and requirements Several Texas agencies, including both the HHSC and the Texas Department of Insurance (TDI), have worked with the Texas Legislature to identify areas where regulations and requirements for commercial health insurers and Medicaid health plans can be coordinated and streamlined in ways that improve efficiency and cost effectiveness, while encouraging plans to continue to develop their own innovative strategies. For example, the state has developed standardized requirements for provider credentialing and recredentialing that benefits both providers and payers. Based on requirements of SB 1216, 83rd Legislature, Regular Session, 2013, TDI is currently in the process of standardizing requirements for prior authorization requests for both private and public payers that will allow physicians to spend less time on paper work and more time caring for patients.

While stakeholders were supportive of the idea of further streamlining administrative processes and aligning regulations to achieve administrative cost savings and facilitate more efficient delivery of care, specific recommendations or proposals never emerged during the stakeholder engagement period.

Developing Community Awareness and Engagement Throughout the SIM planning process and meetings with stakeholders, improving community awareness and patient engagement and accountability were identified as primary goals for the SIM initiative. Both strategies are crucial to achieving full implementation and sustainability of new delivery system and payment models. In addition, the State has implemented mandatory quality of care and patient outcome reporting requirements for Medicaid managed care plans, commercial HMOs and hospitals. Results are publicly available to encourage both providers and payers to be accountable for the care they provide.

One of the key areas of interest among stakeholders is the implementation of the state’s health IT plan and how SIM can be used to encourage adoption of EHRs and utilization of local HIEs to facilitate better care coordination and reduce duplication of services. While many providers use EHRs, in many cases, the records are used primarily for administrative activities such as scheduling appointments. Most physicians do not participate in an HIE and do not share clinical information with other providers or hospitals due to a variety of cost constraints and staff limitations.299

299 Office of e-Health Coordination. State of Health IT in Texas, June 2013.

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Stakeholders also strongly supported initiatives that encourage coordination among community- based public health programs and providers, and between health plans and local public health agencies, for which regular communication is often rare. A key pillar of the Medicaid 1115 waiver DSRIP projects is integration and coordination of services with each of the 20 “regional healthcare partnerships.” To leverage these efforts, but not duplicate them, options identified by stakeholders were limited to the following:

 create opportunities for local providers, community public health agencies, patient advocacy groups/patients and health plans, and other payers to jointly engage in regular discussion of local health care community needs and in developing strategies for sustaining evidence-based initiatives designed to improve population health outcomes;  develop payer reimbursement strategies that incentivize practices to use community health workers and various types of health educators to support patients in self- management of their chronic conditions;  support EHR adoption and expansion through provider incentives and training programs that leverage existing state activities and technical expertise of established practices; and  conduct community focus groups to seek input on physical and behavioral health care needs and suggestions for improving patient engagement and accountability.

Coordinating State‐based Health Insurance Marketplace Activities Because the State of Texas deferred to the federally-facilitated health insurance marketplace, stakeholders were uncertain how the SHIP model could be used to coordinate with the federal program. Due in part to the timing of the meetings and the lack of information from federal Health and Human Services regarding operations of the insurance marketplace in Texas, stakeholders did not specifically consider recommendations for coordinating activities.

Integrating Financing and Delivery of Public Health Services Stakeholders considered several strategies for integrating the delivery of public health services and community prevention strategies with health system redesign. Stakeholders strongly believe that any strategy needs a community-based focus to succeed and be sustainable. Many providers and public health officials would like local managed health care plans to have greater awareness of, and involvement in, some of the CDC- and state-funded programs within DSHS’s Nutrition, Physical Activity, and Obesity Prevention (NPAOP) division, as well as various diabetes prevention and management initiatives. Discussions highlighted the opportunities of a SIM initiative in providing resources and infrastructure for linking payers with public health initiatives, particularly in supporting ways to financially sustain evidence-based efforts, such as the YMCA Diabetes Prevention Program, for example.

Additionally, stakeholders considered ways that the SIM initiative could help expand the reach and results of various DSRIP projects that include community prevention strategies by linking

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other (non-participating) providers with local public health entities and health plans operating in the same region. For example, some DSRIP projects that target patients with chronic conditions have similar goals as public health initiatives that target similar populations. Forums for sharing experiences, successes and lessons learned with other providers and health plans to replicate and sustain best practices could be ways to leverage SIM resources.

Leveraging Community Stabilization Development Initiatives Regardless of where stakeholders reside, all regions of Texas experience significant challenges in meeting the health care needs of low income populations. Many are uninsured, and services for low income adults are especially limited in smaller, rural communities. Conceptually, stakeholders universally supported activities to encourage community investments designed to improve population health in low income communities. However, the stakeholder engagement process did not lead to specific discussions about leveraging U.S. Housing and Urban Development funding of neighborhood stabilization projects in Texas. Instead, as noted above, discussions focused on leveraging DSRIP and public health initiatives that target low income communities where chronic conditions such as diabetes, hypertension, and obesity are above the state average.

Integrating Early Childhood and Adolescent Health Prevention Strategies Stakeholders often expressed concern during public meetings about rising rates of obesity among children, pediatric asthma rates, teen pregnancy, and challenges meeting behavioral health needs of children and teens. Suggestions for leveraging SIM project resources with school-based programs included expanding programs that focus on nutrition and weight management, behavioral health, smoking and substance abuse in secondary education and expanding community-based public health programs that target both primary and secondary students. As part of the Medicaid 1115 waiver’s DSRIP program, however, every region of the state has multiple projects targeted at health care needs of children, including strategies for implementing or expanding school-based health programs. Examples of specific school-based DSRIP projects across various regions include:

 creating and expanding school based clinics providing primary care services to low income populations;  creation of peer-support programs for adolescents with behavioral health problems;  delivery of dental services to low income students through mobile dental vans; and  creation of school-based behavioral health clinics providing psychotherapy, psychiatric assessments, medication management, and group counseling.

Even as stakeholders discussed the role of schools in serving as provider of last resort for many low income children and teens, school-based partnerships with the SIM initiative, through related DSRIP projects or otherwise, never emerged with any locality or state education entity. Over

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time, as discussion focused on the cost-containment goals of the SIM project and with the selection the key aims of the project aligned with the state’s goals for reducing potentially preventable events related to ED visits, hospitalizations and readmissions, the focus of SIM models turned to populations where its impact could be greatest in reducing these types of avoidable costs: adults with chronic conditions and high risk-pregnant women.

Creating integrated models One of the criteria that influenced SIM program options that stakeholders and the state considered was the requirement that 80 percent of the preponderance of care be affected by the SHIP models. Consistent with that requirement, stakeholders agreed that advancing medical and health home models in Texas should be a priority given the broad consensus of their value and effectiveness across the continuum of care and across payers to improve care coordination and outcomes. This is particularly true for adults with chronic conditions, who drive the bulk of health care spending, and for pregnant women, given the large number of births in Texas and the state’s priority for improving birth outcomes. Yet, significant barriers, primarily related to cost, lack of expertise and technical knowledge, and skills have prevented wider adoption of medical/health home models than desired, which is why this SHIP includes both provider incentives to spread their adoption across the state and multi-payer engagement on sustainable payment strategies.

Behavioral and physical health integration, including long-term services and supports (LTSS) were very much at the forefront of discussions of medical/health home models, and regarded as key components of successful delivery system transformation in both effective care coordination and patient education and accountability. The state’s recent Medicaid managed care expansion, which will phase in long term care in 2014, will also facilitate the integration of primary and behavioral health care services and provide additional opportunities for multi-payer collaboration between Medicaid and Medicare.

Creating or expanding LTSS models The State of Texas has invested significant resources in the development of LTSS programs and initiatives to help older adults and people with disabilities make their own choices on how and where to live. As of June 30, 2012, the Money Follows the Person Program enabled more than 30,000 individuals living in nursing facilities to relocate into the community and receive LTSS in their home or another community-based setting.300 The state will receive approximately $185 million in enhanced funding through calendar year 2014 to provide additional community options and support for individuals who prefer to relocate from an institutional setting. Among some of the specific projects the State will be supporting are the following:

300 HHSC. Texas Medicaid and CHIP in Perspective, Ninth Edition, January 2013.

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 community supports for clients with co-occurring behavioral health needs living in several central Texas counties;  incentives for providers of nine or more bed community ICFs/IID who want to voluntarily close their facilities and provide residential choice for their current residents;  provision of attendant-type supportive services for clients who require someone in their home during normal sleeping hours living in two regions of the state;  short-term post-relocation contacts for clients who have moved back into the community to ensure a more successful relocation; and  establishment of a Quality Reporting Office to provide additional in-house capabilities to monitor, discover, describe and create intervention strategies to promote quality across Demonstration activities and Medicaid waivers.301

These projects represent only a sampling of the many activities the State and managed care organizations are supporting to strengthen LTSS and allow clients to remain in their home or a community-based residential facility.

To support these initiatives and other similar programs under the DSRIP projects, stakeholders identified several options that included collaborating with payers to develop common reimbursement strategies to reimburse providers for care coordination in arranging for or providing non-traditional services such as home modifications, family counseling or patient navigation assistance to help individuals avoid institutionalization.

Using Other Policy Levers Throughout stakeholder engagement activities, a wide range of potential initiatives were considered. Some ideas were dismissed in the early stages because stakeholders determined they did not fit within the requirements of the SIM program, were too limited in scope, or were more likely to duplicate rather than leverage existing policy initiatives, Medicaid 1115 waiver DSRIP projects or other programs. Those ideas were not developed into options or recommendations. All other options have been identified in sections a through l and n, below.

Leveraging Technology Texas, like many other states, has invested significant resources into development of health information exchanges and provider adoption of health IT and EHRs. Stakeholders frequently identified health information technology as a critical component of true patient-centered care, particularly regarding care coordination and integration of services. Yet, adoption and meaningful use of EHRs and participation in a local HIE varies significantly across Texas by region and provider type. For example, behavioral health providers and LTSS agencies were

301 Ibid.

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largely left out of federal programs to incentivize EHR adoption among Medicaid- and Medicare-participating providers. As part of a broader strategy to spread and sustain medical/health home models of care, stakeholders were particularly interested in the role of a SIM initiative in facilitating wider EHR adoption, meaningful use, particularly among small, rural, behavioral health or LTSS providers, and wider overall participation in HIEs.

While practices of all sizes reported using EHRs, smaller practices said they generally use the information only for administrative purposes (e.g., scheduling appointments, maintaining patient registration information, or billing processes), while larger practices were more likely to report also using data for care coordination and clinical decision support. Small practices are also less likely than larger practices to implement an EHR system or to participate in other types of HIT due to the upfront investment costs, training and maintenance costs, time constraints, limited staff expertise and other factors, as well as uncertainty about a return on investment.302 Recent health IT surveys in Texas show that while many providers have installed an EHR system, provider participation in an HIE is very low.303 These conclusions were reinforced in SIM survey results and stakeholder discussions. Nearly 60 percent of survey respondents reported that an inability to electronically exchange health information with other providers is a “significant impediment” to care coordination, while only 25 percent reported access to EHR as a significant impediment. As one survey respondent commented:

“The inability to electronically exchange information among providers is one of the most significant barriers to coordinating care effectively. Participation in HIE is low; some providers’ data systems cannot connect and when the system is capable, some providers do not want to participate, [that is] to share information that might give a competitor an advantage into understanding their market share.”

302 Texas Medical Association. Physician Survey, 2012. See: http://www.texmed.org/template.aspx?id=16236 303 Office of e-Health Coordination. State of Health IT in Texas, June 2013.

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D. Health System Design and Performance Objectives

Health System Design The Texas State Health Care Innovation Plan (SHIP) is designed to leverage many of the delivery system and payment innovations underway in Texas by: disseminating best practices, bringing community-driven, evidence-based programs to a wider scale, and providing leadership to remove administrative or legislative barriers to payment reform while, most importantly, promoting multi-payer collaboration on the alignment of value-based payment models.

Texas proposes to create a SIM Council, under the auspices of the Texas Institute for Health Care Quality and Efficiency (Institute). The Institute was created by legislation in 2011 to improve health care quality, accountability, education and cost containment by encouraging health care provider collaboration, effective health care delivery models and coordination of health care services. The Institute is administratively attached to the Texas Health and Human Services Commission (HHSC) and is supported by staff in the Health Policy and Clinical 304 Services area within HHSC. The Institute’s board of directors is made up of a wide range of stakeholders representing public agencies and private organizations across the health care 305 delivery system .

The Institute’s board of directors endorsed this proposal for supporting the implementation of the SHIP within its organizational infrastructure in a vote at its November 5, 2013 full board meeting. A letter of support from the presiding officer during the vote, Dr. Ben G. Raimer, is presented in Appendix 4. We propose that an executive director of the SIM Council be selected to oversee and administer activities related to the SIM project. SIM Council staff would support the executive director, and work in coordination with the Institute’s staff. Through an agreed upon nomination and vetting process, the Institute’s board of directors and HHSC leadership would collaborate in selecting members from within or outside the Institute’s membership to serve on the SIM Council. See the figure below for a proposed organizational structure.

The goals and activities of the Institute are very much aligned with the objectives of the SIM initiative. Indeed, the Institute is engaged in efforts to improve the quality and efficiency of health care delivery in this state, including the following topics:

 quality-based payment systems that align payment incentives with high-quality, cost- effective health care;  alternative health care delivery systems that promote health care coordination and provider collaboration;

304 Texas Institute for Health Care Quality and Efficiency website. See: http://www.ihcqe.org/. 305 See: Appendix 3, Texas Institute of Health Care Quality and Efficiency Board of Directors.

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 quality of care and efficiency outcome measurements that are effective measures of prevention, wellness, coordination, provider collaboration and cost-effective health care; and  meaningful use of electronic health records by providers and electronic exchange of health information among providers. Rather than duplicate efforts, the Institute provides an overarching infrastructure from which to implement the SHIP. Organizing the SIM Council within the Institute’s framework would ensure coordination and effective use of federal and state resources that leverage but do not duplicate state-sponsored activities. Forming the SIM Council within the well-known and well-regarded Institute eases the efforts needed to draw in stakeholders across multiple state agencies and engage health plans and other payers, since the major players are already connected to the Institute. A key addition to the SIM Council membership, however, would be consumer representation.

Figure 32. Organization Chart for Proposed Placement of the SIM Council and Staff

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All of the priorities identified through the SIM stakeholder process and included as part of the SIM model design are inter-related. Part of the Council’s efforts would be to bridge longstanding “silos” within state government, and externally, by serving as a statewide clearinghouse for all SIM-related transformation activities throughout the Health and Human Services enterprise, their related councils and advisory groups, and the private sector. The SIM initiative would be expected to catalyze innovation where it has been slow to ignite, and advance the pace and breadth of innovation already underway, by:

 enabling the Institute to expand its ability to convene stakeholders across public health and health care delivery systems and payers on policy issues that address practice transformation and sustainability through multi-payer engagement;  creating a statewide Learning Exchange for disseminating best practices on health care delivery system and payment reforms linked with state and federal Medicaid and public health initiatives; and  being a resource for technical assistance and incentives for practice transformation and electronic health records (EHR) adoption, particularly in rural areas and among select provider types. Five leverage points for driving transformation shaped the development of the SHIP. They are briefly listed here and described in more detail in Section E. The Innovation Plan:

I. EHR and HIE Expansion and Sustainability Initiatives: To expand EHR adoption and meaningful use, expand HIE participation and support public and multi-payer participation in local HIE sustainability to support and promote clinical care transformation initiatives. II. Clinical Care Transformation Programs: To expand adoption of team-based, coordinated and clinically integrated care among practices that serve people with chronic conditions and pregnant women through nationally recognized programs and promising practices. III. Spreading and Sustaining Innovations: To spread adoption of best practices in clinical care transformation; positively affect Medicaid managed care policy and contracting to sustain clinical care transformation; and build an infrastructure for tracking, analyzing and reporting on delivery system and payment innovations in Texas to promote and sustain continuous learning and improvement. IV. Community-Based Public Health Innovations: To expand opportunities for individuals to adopt healthy diet and fitness practices and follow prescribed health treatments that help manage, control or prevent the onset of chronic conditions and reduce risks for pre-term births. V. Multi-Payer Engagement and Alignment: To build and sustain clinical care transformation in Texas through infrastructure and capacity-building for multi-payer collaboration on regional medical, health, and maternity home initiatives, and for

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evidence-based care and public health programs that control, manage or prevent chronic diseases. These initiatives would be expected to improve the intermediate factors that would lead to improved performance on the following measures tied to the triple aim, as described below.

Performance Objectives

Better Care and Lower Costs Through the passage of SB 7, 82nd Legislature, First Called Session, 2011, the State of Texas adopted an ambitious outcomes-based payment strategy for advancing accountability for quality and cost in the delivery of health care services. The legislation requires that those measures that “have the greatest effect on improving quality of care and the efficient use of services” be used to adjust payment based on “the extent to which the physician or other health care provider reduces potentially preventable events.”306 Targeted to Medicaid and CHIP, but relevant to all payers, SB 7 bases payment adjustments on a common set of quality-based, risk-adjusted outcomes that can apply across all provider systems, including hospitals, managed care plans, medical homes, managed long-term care plans and Accountable Care Organizations.307 These outcomes include reductions in:

 potentially preventable hospital admissions (PPAs);  potentially preventable readmissions (PPRs); and  potentially preventable emergency department visits (PPVs).308

Beginning in 2014, Medicaid managed care plans in Texas will be at risk for four percent of their premium based on their performance—relative to a state-determined benchmark—on these outcomes and several others (e.g., prenatal care, diabetes control). By tying funding to these measures, health plans will be incentivized to make necessary delivery system improvements. Additionally, the state’s Medicaid 1115 waiver, called the Texas Health Care Transformation and Quality Improvement Program, also includes these outcome measures as part of its pay-for- performance program, called Delivery System Reform Incentive Payment (DSRIP) projects with participating providers. The SHIP would support Texas in making further improvements on these three outcomes for adult populations served in the Medicaid program. If, as expected, the state and CMS reach agreement on the Medicare-Medicaid Financial Alignment initiative during the course of the SIM project, improvement targets would extend to the dually-eligible population. The SIM

306 Millwee, B. et al. “Payment System Reform, One State’s Journey,” Journal of Ambulatory Care Management, 2013. Vol. 36, No. 3: 119-208. 307 Ibid. 308 Other outcomes include potentially preventable complications and potentially preventable ancillary visits.

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Council and staff would be responsible for convening health plans that operate commercial, Medicaid and Medicare Advantage product lines to collaborate on defining specific quality measures for incentivizing patient-centered care and rewarding quality-based outcomes. As the population covered by insurance products offered in the health insurance Exchange grows, the SIM project would expect to include Exchange plans in these quality alignment efforts. Within three years of implementing a SIM Model Testing project, we would expect that 80 percent of insured residents of Texas will be included in a plan participating in a SIM-supported initiative.

By improving adherence to quality standards, integrating care across settings, and, most importantly, reducing unnecessary care, Texas expects to reduce the rate at which health care costs will rise over the next three to five years. Toward this goal, we would develop a measure of overall health care spending relevant to the utilization areas targeted and track progress from a baseline, as described in Section H. Financial Analysis.

There is significant opportunity to impact the potentially preventable outcomes listed above. For example, the Department of State Health Services (DSHS) estimates that reductions in unnecessary hospital admissions between 2006 and 2011 could have saved Texas over $44 billion in charges.309 Excess hospital readmissions cost Texas nearly $31 million in 2010.310 The external quality review organization (EQRO) for Medicaid estimated that emergency department use can be reduced to save nearly $80 million in Medicaid managed care.311

Better Health Stakeholders made clear throughout community meetings that patients must be engaged in medical decision-making and take responsibility for their role in improving and maintaining their health. At the same time, medical care alone cannot address the important health improvement priorities of reducing obesity rates and preventing and managing chronic conditions such as diabetes, hypertension and congestive heart failure, for example. Through state and federal funding, Texas has invested extensively in a variety of community-based health promotion and disease prevention programs312 and a potentially preventable hospitalization initiative at the county level.313 Current efforts focus both on education and training to help individuals self- manage their chronic condition through better nutrition and fitness and on developing the community-based infrastructure and partnerships needed to make it easier for Texans to eat more nutritiously and pursue physical fitness activities. Texas also participates in the March of Dimes’

309 See http://www.dshs.state.tx.us/ph/state/shtm. 310 DSHS. Potentially Preventable Hospitalizations. See: http://www.dshs.state.tx.us/ph/state.shtm 311 HHSC. Texas Medicaid Managed Care Quality Strategy, 2012-2016. See: http://www.hhsc.state.tx.us/1115- docs/MMC-Quality-Strategy.pdf 312 DSHS. Community Diabetes Project Sites. See: http://www.dshs.state.tx.us/diabetes/tdcdaecs.shtm 313 DSHS. Briefing Document: Adult Potentially Preventable Hospitalizations Initiative, August 14, 2013. See: www.dshs.state.tx.us/ph/docs/PPHBriefingDocument.doc

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39 Weeks campaign to reduce elective, preterm births that lead to higher NICU use and longer lengths of stay for babies and their mothers.314 The Strong Start programs operating in Texas are also expected to improve birth outcomes and patient engagement in prenatal care best practices.315

The Texas SIM initiative will expand the reach of these programs to more communities, while also promoting their sustainability where the evidence shows promising outcomes. This will be accomplished through convening efforts that engage public health leadership at the state and local level with Medicaid managed care leadership at the agency and plan level on shared responsibilities and rewards for meeting population health goals. Aims for the SIM initiative include improving outcomes on:

 preterm births; and

 overall self-reported health status.

Patient Satisfaction Improved patient satisfaction is a key indicator of improving the delivery of care and therefore a key outcome for the Texas SHIP. Using the Consumer Assessment of Healthcare Providers and Systems® (CAHPS) survey,316 the Texas SIM initiative will track improvement on the following measures:

 Satisfaction with overall health care;  Satisfaction with personal doctor; and  Satisfaction with specialist seen most often.

Texas SIM Goals on Key Performance Objectives The driver diagram below provides an overview of the conceptual model for achieving the performance objectives of the Texas SHIP. Each of the five models includes independent activities and resources for influencing one or more of the secondary drivers, which are then expected to improve one or more clinical outcomes in order to reduce the risk of potentially preventable events, and therefore reduce the overall rate of growth in health care costs and improve consumer satisfaction among the target population.

314 March of Dimes. See: http://www.marchofdimes.com/mission/39-weeks-quality-improvement.aspx 315 CMS. Strong Start for Mothers and Newborns. See: http://innovation.cms.gov/initiatives/strong-start/ 316 CAHPS® is a registered trademark of the AHRQ.

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Table 24. Driver Diagram for the Texas SIM State Healthcare Innovation Plan, by December 31, 2019* 5-Year Aims for the Target Population Primary Drivers Secondary Drivers SIM Innovation Models by 12-31-19  EHR and HIE Expansion and Sustainability Initiatives: To expand EHR adoption and meaningful use, expand HIE participation and support public and multi-payer participation in local HIE

1. Reduce the rate of potentially sustainability to support and promote clinical care transformation

preventable hospitalizations by initiatives. 5% from baseline  Weight management and  Clinical Care Transformation Programs: To expand adoption of control  Evidence-based team-based, coordinated and clinically integrated care among 2. Reduce the rate of potentially prevention, screening, practices that serve people with chronic conditions and pregnant preventable ED visits by 5%  Diabetes and treatment women through nationally recognized programs and promising from baseline management and practices. control  Care coordination and 3. Reduce the rate of potentially integration of primary,  Spreading and Sustaining Innovations: To spread adoption of best preventable 30-day  Prediabetes acute, behavioral and practices in clinical care transformation; positively affect Medicaid readmissions by 5% from management (later) long term managed care policy and contracting to sustain clinical care baseline services and supports transformation; and build an infrastructure for tracking, analyzing  Hypertension and reporting on delivery system and payment innovations in Texas 4. Reduce the percentage of management and  Patient/family to promote and sustain continuous learning and improvement. deliveries with a pre-term control engagement and birth by 10% from baseline accountability  Community-Based Public Health Innovations: To expand 5. Reduce the percentage  Management of opportunities for individuals to adopt healthy diet and fitness reporting fair or poor health behavioral health  Adopting Healthy practices and follow prescribed health treatments that help manage, status by 10% from baseline comorbidities Lifestyle Behaviors control or prevent the onset of chronic conditions and reduce risks for pre-term births. 6. Increase consumer satisfaction  Pregnancy on CAHPS surveys among management  Multi-Payer Engagement and Alignment: To build and sustain adults by 10% from baseline clinical care transformation in Texas through infrastructure and capacity-building for multi-payer collaboration on regional 7. Limit the increase in total cost medical/health/maternity home initiatives, and for evidence-based of care by 5% from baseline care and public health programs that control, manage or prevent chronic diseases. *Assumes a start date of January 1, 2015. Initial target population: Adults in Medicaid managed care with diabetes, hypertension, pre-diabetes, and/or overweight or obesity, including those with a behavioral health co-morbidity, expanding to other chronic conditions in subsequent years; and pregnant women in Medicaid managed care. Target population is expected to extend to Medicaid-Medicare dual eligible with any chronic illnesses, including behavioral health comorbidities; commercially-covered adults with chronic conditions, and pregnant women by year 3.

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E. The Innovation Plan

Overview The Texas State Health Care Innovation Plan (SHIP) is designed to leverage many of the delivery system and payment innovations underway in Texas by: disseminating best practices, bringing community-driven, evidence-based programs to a wider scale, and providing leadership to remove administrative or legislative barriers to payment reform while, most importantly, promoting multi-payer collaboration on the alignment of value-based payment models.

The proposed plan for the Texas SIM initiative is comprised of five major models:

I. EHR and HIE expansion and sustainability initiatives; II. Clinical care transformation programs; III. Spreading and sustaining innovations; IV. Community-based public health innovations; and V. Multi-payer engagement and alignment.

The proposed models are the value-added interventions Texas would implement to leverage the innovations underway or emerging that will help the state achieve the goals identified for our SIM triple aim measures. Each model includes independent activities and resources for influencing one or more of the secondary drivers, as illustrated in the Driver Diagram presented in the last section; however, we also recognize their necessary interdependence in a complex health care system.

To help build and sustain clinical care transformation in Texas, we propose a multi-payer engagement and alignment model that directs resources to developing leadership capacity and infrastructure for planning and implementing multi-payer collaboration on medical home models and other evidence-based initiatives. This capacity-building would be a long-term strategy to capitalize on spreading and sustaining innovations proposed in Model III. Those innovations build on the EHR and HIE initiatives proposed in Model I, the clinical care transformation programs proposed in Model II and the community-based public health innovations proposed in Model IV. Experience and learning across the activities of each of the four models would build the evidence-base that helps make the case for multi-payer collaboration on a medical home initiative in the first two years of the SIM. Integration of the five proposed models, as illustrated in the figure below, is designed to support continuous innovation and learning across the state’s health care environment well after the completion of a SIM project.

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Figure 33. Integration of 5 Proposed Models for Continuous Health Care Innovation and Learning in Texas

EHR and HIE Clinical Care Initiatives Transfor‐ mation

Public Health Innovations Spreading and Sustaining Innovations

Year 1 Year 2 Year 3 Year 4 Year 5

The proposed models include a series of interlinking programs across five models that build on the strong foundation of health system innovation within Texas. Leveraging the existing infrastructure across the public and private sectors is expected to accelerate the pace of clinical care transformation of the health care delivery system in Texas, and improve integration of the delivery of care for people with chronic conditions with chronic disease prevention initiatives overseen by the state public health agency. The table below highlights existing public and private sector infrastructure and initiatives in Texas that we propose to leverage across the five models.

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Table 25. Public and Private Sector Innovations Leverage Points to Support 5 Proposed Models of the Texas SHIP

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Model I. EHR and HIE Expansion and Sustainability Initiatives

Overview The State of Texas continues to work toward achieving its health information technology (HIT) vision of a health care environment in which patient health care information is stored in standardized EHRs that can be transmitted among providers and other lawful users, through a secure network of HIEs. As of February 2013, the State of Texas had disbursed nearly $488 million in EHR incentive payments to 278 eligible hospitals and 5,493 eligible professionals under the federal EHR Incentive Program.317 Additionally, Texas-based organizations have received over $101 million through the Health Information Technology for Economic and Clinical Health (HITECH) Act of 2009 and other federal grants to support health information technology (HIT) and health information exchange (HIE) infrastructure in the state.318

Despite the tremendous progress made through these federal programs and private sector efforts, one of the most significant barriers to delivery system transformation and payment reform is the absence of a robust health information infrastructure equipped to support exchange of critical health information for decision-making at the point of care. Throughout the stakeholder engagement period of the SIM Model Design initiative, limitations in the breadth of EHR adoption, in the meaningful use of EHRs and in the exchange of health information across providers were identified as significant barriers to improving care coordination and integration of services.

Barriers to EHR Adoption and Meaningful Use While the state has had high participation in the EHR Incentive Program, there are still many providers who have been excluded from this program either because they did not meet specific Medicaid or Medicare thresholds or due to their provider type. 319 Examples include long-term services and supports (LTSS) providers, behavioral health providers and others. Not surprisingly, SIM stakeholder discussions identified significant disparities in EHR adoption by region, type of provider and provider size. Stakeholders consistently discussed the need for education to help providers understand the value of EHRs and other HIT. Discussion particularly focused on small and rural provider practices and hospitals, and their need for training and technical assistance to select, adopt and optimally utilize EHRs systems. Additionally, LTSS providers that participated in SIM stakeholder discussions expressed their need for wider EHR adoption, but reported facing face two key barriers: there is no EHR system designed for LTSS providers, and the expense of

317 Office of e-Health Coordination. State of Health IT in Texas. June 2013. 318 Ibid. 319 Ibid.

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currently available systems is prohibitive based on the reimbursement rates for Medicaid LTSS programs.

Peer-to-peer discussion of personal experiences with an EHR system may also be a source for resistance to EHR adoption. For example, the most recent Texas Medical Association (TMA) survey found that nearly 60 percent of physicians with an EHR system strongly agreed or agreed that using an EHR system decreases attentiveness to the patient’s presentation of signs and symptoms (59%) and that data entry at the point of care disrupts a physician’s diagnostic thought process (58%).320 However, peers may also be a valuable “marketing” resource for championing EHR adoption and overcoming resistance, as the benefits of EHR use may offset some of its perceived limitations. According to a recent HIT survey conducted for the Office of e-Health Coordination, more than 90 percent of current EHR users intend to continue using their systems and indicated that they are most satisfied with their system’s capabilities around communication of patient information, ease of use, efficiency and improvement in the quality of patient care.321

Barriers to HIE Use and Sustainability Having an EHR system does not guarantee the ability to participate effectively in a local HIE. As was frequently described during stakeholder meetings, while a number of small to medium-size provider practices have an EHR, most only use it for administrative purposes such as appointment scheduling and record keeping. Yet, having a functional EHR was repeatedly cited as a foundational step in practice transformation to a patient-centered medical/health home model of care. The full potential of an EHR system comes from the ability to electronically exchange vital health information with other providers and payers at the point of care.

EHR Incompatibility with HIEs and other Technical Barriers As described in Section B, provider participation in the state’s 12 local HIEs is relatively low— less than 12 percent among surveyed clinicians in 2012.322 Additionally, fewer than 8 percent of nearly 23,000 physicians who are “committed” to HIE are actively conducting query-based exchanges through their local HIE.323 Stakeholder meeting discussions reflected these statistics. For example, even though all 39 local mental health authorities (LMHAs) in Texas currently use electronic health records, most face technical issues in connecting with HIEs, which limits their ability to effectively receive Admission, Discharge or Transfer (ADT) data from hospitals.324

320 Texas Medical Association. Physician Survey, 2012. See: http://www.texmed.org/template.aspx?id=16236 321 Office of e-Health Coordination. Health Information Technology 2012 Practitioner Survey Report, September 2013. 322 THSA. Texas Local HIE Grant Program, August 2013. See: http://hietexas.org/local-hies/local-hies 323 Ibid. 324 As reported by the Texas Council of Community Centers; in some cases there is a local relationship that exists between a hospital and an LMHA such that the LMHA receives an ADT manually.

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Having this information would help coordinate care for people with behavioral health and medical conditions, who are among the highest cost patients in Medicaid, in part due to their relatively high hospital readmission rates.325 More than two-thirds (68%) of adults with mental disorders have a physical health condition, and 29 percent of adults with a physical medical condition have a mental disorder.326

Hospital Competition Local HIEs view hospitals as important partners in their sustainability planning. Many HIEs depend on hospitals financially, receiving a subscription fee from hospitals that are either part of their governance board or are a parent organization.327 HIEs are also finding ways to provide added value to hospitals through direct clinical messaging or other services. Yet, concerns about losing competitive advantage among larger providers also emerged as a barrier to HIE participation. Throughout stakeholder community meetings, one-on-one meetings and in SIM survey comments, the SIM Planning Team received feedback about providers—hospitals in particular—being resistant to sharing information on the HIE that “might give a competitor an advantage in understanding market share” as one survey respondent claimed. They want to “protect their territory,” cited another respondent. A few stakeholders reported that some hospitals are willing to share their Medicaid data, but not commercial or Medicare data through their local HIE.

Community‐level and Payer Buy‐in Local HIEs in Texas must identify “sustainability partners” as part of their required Business and Operation Plans to the Office of e-Health Coordination (OeHC).328 In addition to hospitals, most have indicated plans for outreach with pharmacies, labs, as well as health plans and large employers.329 However, HIEs view community collaboration as their biggest challenge. Contributing factors are a lack of knowledge among providers or the public about HIE and an inability to make the business case or value proposition sufficiently evident, particularly to payers and large self-funded employers.

Health plans in Texas that met with the SIM Planning Team also expressed skepticism about supporting local HIEs, citing a lack of a strong value proposition. Increasingly, however, states

325 HHSC. Potentially Preventable Readmissions in the Texas Medicaid Population, State Fiscal year 2011, November 2012. See: http://www.hhsc.state.tx.us/reports/2012/PPR-Readmissions-FY2011.pdf. 326 Druss, B., Reisinger Walker, E. “Mental disorders and medical comorbidity,” prepared Robert Wood Johnson Foundation, February 2011. 327 Weaver Consulting. Literature Review of Health Information Exchange Sustainability, prepared for the Texas Health Services Authority, February 2013. 328 Office of e-Health Coordination. State of Health IT in Texas, June 2013. 329 Weaver Consulting. Literature Review of Health Information Exchange Sustainability, prepared for the Texas Health Services Authority, February 2013.

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are recognizing that the savings of HIE largely accrue to payers. A recent environmental scan showed that 31 states have cited interest in payer participation in their HIE sustainability plans.330 Twenty states have explicit revenue plans that include payers contributing to their HIE program or already have payers contributing—through a variety of arrangements—which may also include financial participation from hospitals as well.

Several states and localities have also attempted to quantify the savings and value of HIEs, increasingly with support from payers. In 2010, for example, Alabama partnered with Blue Cross Blue Shield of Alabama in studying the costs and benefits of their statewide HIE program. Based on forecasted annual adoption rates, the HIE program would potentially save approximately $19 million dollars over 5 years.331

Patient Consent and Privacy Patient consent and privacy issues can also be a barrier for providers to participate in HIE. Several providers participating in SIM stakeholder discussions suggested that more state leadership was needed to address information sharing, particularly related to patients with behavioral health conditions.

As part of our SIM strategy of meeting providers where they are and building on the available infrastructure and resources in Texas, our proposed plan includes an EHR expansion and meaningful use component, an expanded HIE participation component, and an HIE sustainability component.

Innovation 1: EHR Adoption Incentive Program The State of Texas would benefit from promoting EHR adoption to all providers who practice in Texas, and especially to rural Medicaid providers, behavioral health specialists and long term care providers with relatively large panels of Medicaid patients. In support of the SIM practice transformation goals to improve care coordination and integration of services through patient- centered medical/health home models in Texas, we propose that the Texas SIM project support Medicaid HIT in developing a plan to augment the EHR Incentive Program by supporting providers excluded from participation in this program to adopt and meaningfully use certified EHRs.

The program would target small, rural and behavioral health and LTSS providers. It would be managed by the Medicaid HIT division, leveraging the same policies and systems used by the

330 The OeHC conducted an environmental scan and analysis of all 50 states in 2013; unpublished study. 331 The OeHC conducted a literature view and summary of findings in 2013; unpublished study. Other states and localities reviewed included Iowa, Maine, Massachusetts, New Mexico, and Wisconsin, and Memphis, Tennessee, among others.

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existing EHR Incentive program. For example, the plan would include technical assistance provided by the four Regional Extension Centers (described in Section B). Technical assistance would help providers select, successfully implement, and meaningfully use certified EHR technology as well as achieve exchange of health information through appropriate and available infrastructure.

Innovation 2: Expanding HIE Participation We propose to develop a use case for building capacity for acute care hospitals to exchange ADT notifications with an outpatient setting. Because all LMHAs have an EHR system in place, a select number of these agencies would serve as test and control sites in various local HIE regions, in collaboration with willing hospitals in the same HIE region. Given the strong overlap between individuals with chronic medical conditions and behavioral health conditions, as well as the strong financial incentive that hospitals have to keep individuals from being readmitted— particularly in the Medicaid program, for which hospitals may face penalties for potentially preventable readmissions332—there is a significant opportunity to reduce hospital readmission rates for this high-risk population with comorbidities.

This test case would provide an opportunity to measure the clinical and financial impact of electronic ADT notifications and would therefore be expected to build community support for HIE participation among providers, and further elucidate the value proposition of HIEs to payers and other stakeholders in support of local and state-level HIE sustainability. Lessons learned throughout the testing period would be incorporated into the proposed learning exchanges related to the Transformation waiver Delivery System Reform Incentive Payment (DSRIP) projects in which LMHAs are also participating.

Innovation 3: HIE Sustainability Through the HIE Cooperative Agreement Program, Texas established an HIE infrastructure that includes certified, local HIEs and health information service providers (HISPs) connected through state-level shared services managed by the Texas Health Services Authority (THSA). In the short term, this infrastructure is being sustained through the participation of hospitals and providers at the local level, as described above, and through a state appropriation to the THSA. However, for long term sustainability, the State of Texas would like the primary beneficiaries of HIE to be its primary supporters, namely public and private payers.

We propose the following three strategies to promote payer participation in HIE:

332 HHSC. Potentially Preventable Readmissions in the Texas Medicaid Population, State Fiscal year 2011, November 2012. See: http://www.hhsc.state.tx.us/reports/2012/PPR-Readmissions-FY2011.pdf.

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1. Payer-sponsored payments to all provider types for HIE utilization. This would be managed through existing (proxy) Current Procedural Terminology (CPT) codes that providers submit to public and private payers. 2. Payer-sponsored payments to certified HIEs for connecting providers. This program would be managed by the THSA, which would aggregate and proportionally allocate funds to certified HIEs. This would be the primary mechanism for payers to support the sustainability of local and state-level HIE. 3. Provider incentives to report quality measures to Medicaid. Texas Medicaid needs reliable quality data from providers in the state to create, track, improve and inform its programs. Incentivizing providers to report quality measures to Medicaid via the HIE would allow the state to learn more about the available data and use-evidence to determine what future reporting requirements should be.

Further planning, development and implementation of these strategies would be coordinated within the proposed Multi-payer Engagement and Alignment model, described later in this section.

Program Components of EHR and HIE Initiatives The proposed EHR and HIE initiatives would include coordinated research, governance, planning and marketing, as briefly described below.

Research and Policy The state needs to monitor EHR and HIE adoption and utilization trends to continue building the body of evidence to support payer participation and measure outcomes. We propose that among other activities, the OeHC would have responsibility to:

 Manage the annual HIT/HIE Adoption Survey and expand the scope of the survey to include all Medicaid providers and facilities.  Coordinate with Medicaid HIT, the THSA, the Texas Institute of Health Care Quality and Efficiency (Institute) and other stakeholders to develop an HIT/HIE research agenda focusing on HIT/HIE contributions to health care quality, safety and efficiency. The OeHC would manage and oversee contracts with universities or university consortiums to conduct the research and develop reports for the Institute and the State.  Coordinate with the THSA to update HIE value estimates. These value estimates would consider Texas’ HIT/HIE infrastructure and estimate its overall value, as well as quantify the value by benefiting entity. Having these estimates would inform policy discussions throughout the state and support payer participation in HIEs.

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Additionally, we propose that SIM project staff, working with the Institute, would coordinate with OeHC, THSA and relevant stakeholders to convene policy discussions on patient privacy and consent issues. Some of these efforts may lead to proposed legislation.

Governance The THSA currently manages a statewide stakeholder governance structure to inform and monitor its activities. To encourage the support of all payers, the THSA would convene a Finance Task Force. The task force would include public and private payers charged with overseeing the planning for the first two HIE sustainability strategies, provider payments for HIE utilization and HIE connectivity payment programs. Medicaid HIT, the QBPAC, and the Institute would collaborate to plan and implement the provider incentives for quality reporting to Medicaid.

Planning Further planning would be undertaken to clarify the full scope, implementation process and responsible parties for each of the three EHR-HIE model components. Examples of planning considerations in the development of a final work plan for each component would include but not be limited to the following activities:

 establish criteria for program participation by region, provider type and other factors;  determine policies and procedures that would need to be modified or developed;  establish incentive levels and payment mechanisms; and  define appropriate measures and develop protocols for measuring, analyzing and reporting results, in coordination with overall evaluation activities.

Marketing The OeHC, Texas Medicaid, and the THSA will collaborate to develop an HIT/HIE marketing strategy focusing on specific provider types and communities including:

 behavioral health providers;  long term care providers;  rural providers; and  consumers.

The marketing strategies would be designed to educate audiences on the role and benefits of HIT/HIE, targeted to the specific audience. Marketing efforts would also encourage consumers and providers about the availability and use of HIT/HIE tools.

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Model II. Clinical Care Transformation Programs

Overview New payment and delivery models must be designed and implemented in ways that deliver on the promise of coordinated, patient‐centered care, generating improved value for dollars spent. A fragmented health care system contributes to much of the overuse, inappropriate use and preventable use of health care services that are well-documented in American health care.333

A growing body of literature shows that the patient-centered medical home (PCMH) model can be effective in overcoming a fragmented health care system through a variety of strategies that help coordinate patients’ care and involve patients and their families in decisions about their care.334 Although the research base has been slow to emerge due to methodological challenges, a number of states have found positive results from their medical home programs that include fewer potentially preventable events—such as hospitalizations, readmissions, and emergency department visits.335 Outcomes have been attributed to the following: access to primary and preventive care is improved, post-discharge care is coordinated, and a clinical or ancillary member of their medical team arranges for the supportive services that patients need to maintain or improve their health.

Similarly, the concept of a “maternity home” is that one person or practice, by coordinating the care of pregnant women, from preconception to post-partum care, will positively influence birth outcomes, particularly by reducing preterm deliveries and C-sections.336 Preliminary research has shown benefits, and a CMS-funded evaluation is now underway. The health home is a newer model of care and as such, has not been evaluated. However, CMS has standardized the measures to be used across states, which will help bring research forward faster than has been the case for medical homes.

333 Shih A., et al. Organizing the U.S. Health Care Delivery System for High Performance. The Commonwealth Fund, August 2008. See: http://www.commonwealthfund.org/Publications/Fund-Reports/2008/Aug/Organizing-the- U-S--Health-Care-Delivery-System-for-High-Performance.aspx 334 Hoff T, Weller W, DePuccio M. "The Patient-Centered Medical Home A Review of Recent Research." Medical Care Research and Review; 69(6): 619-44, 2012. 335 Raskas, R.S., et al. “Early Results Show WellPoint’s Patient-Centered Medical Home Pilots Have Met Some Goals for Costs, Utilization, and Quality,” Health Affairs, 31( 9): 2002-2009, 2012. See: http://content.healthaffairs.org/content/31/9/2002.full. 336 Community Care of North Carolina. Pregnancy Home. See: https://www.communitycarenc.org/population- management/pregnancy-home/

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Defining Models of Care Three of the key models of care that we believe could transform care delivery in Texas are patient-centered medical homes, health homes, and maternity homes. We define and describe these models separately below; however, For ease of discussion, elsewhere section, we use the term “medical home” to refer to the PCMH, health home and maternity home since they share common features and goals.

Patient‐Centered Medical Homes As defined by the “Joint Principles” published by a collaboration of physician societies, patient- centered medical homes shall be:337

 Patient and family-centered: A partnership among practitioners, patients and their families ensures that decisions respect patients’ wants, needs and preferences, and that patients have the education and support they need to make decisions and participate in their own care.  Comprehensive: A team of care providers, led by a personal primary care provider, is wholly accountable for a patient’s physical and mental health care needs, including prevention and wellness, acute care and chronic care.  Coordinated: Care is organized across all elements of the broader health care system, including specialty care, hospitals, home health care, community services and supports.  Accessible: Patients are able to access same day/next day appointments as needed, evening and weekend appointment hours and 24/7 electronic or telephone access.  Committed to quality and safety: Clinicians and staff enhance quality improvement through the use of health IT and other tools to ensure that patients and families make informed decisions about their health.

Health Homes Health homes facilitate access to and coordination of the full array of primary and acute physical health services, behavioral health care and long-term community-based services and supports for people with a behavioral health condition or with a chronic disease and a mental health co- morbidity. Defined in the Section 2703 of the Affordable Care Act, they integrate services historically purchased under two separate payment models, fee-for-service and block grants. The five characteristics of a medical home are consistent with the health home model.

337 AAFP, AAP, ACP & AOA. Joint Principles of the Patient-Centered Medical Home. See: http://pcmh.ahrq.gov/sites/default/files/attachments/Joint%20Principle%20of%20The%20Patient- Centered%20Medical%20Home%202007%20%281%29.pdf

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Maternity Homes Maternity homes provide pregnant women with comprehensive, coordinated maternity care that aims to improve the quality of maternity care, improve outcomes for mothers and babies and reduce medical care costs. Obstetrical care providers work with the patient and a care team, including a nurse coordinator, nutritionist and specialists as needed.

From Model to Practice Putting the medical home model into practice is challenging, but guidance has been developed to help practices translate these concepts into action steps.338 The table below identifies capabilities that align with key features of each medical home element. The left column identifies the principles, and the right column defines those activities that practices either do or could do to achieve high performing primary care.

Table 26. Medical Home Elements and Practice Transformations

Medical Home Elements339 Transformations that Support Medical Home Elements340 Accessibility of the practice: PCMH is an accessible  Open Scheduling. point of entry into the health care system each time  Ease of making appointments and shorter wait new care in needed (i.e. first contact care). times.  Options for patients to communicate with personal physician and office staff.  24/7 phone coverage. Continuity of care: Each patient has an ongoing  Each patient has an identifiable primary care relationship with a personal physician in the PCMH. clinician for ongoing care. Person-focused (not just disease specific) care over  Patient is able to make appointments with that time. particular clinician.  Discussion between personal physician and patient on the roles and expectations for the medical home, including making visible to the patient who the team members are.  Registry of patients. Medical home has a list of patients for which it is responsible.  Complete medical records are retrievable and accessible.

338 Adapted from: Ann S. O’Malley, Deborah Peikes and Paul B. Ginsburg, Qualifying a Physician Practice as a Medical Home. Center for Studying Health System Change, December 2008. 339 AAFP, AAP, ACP & AOA. Joint Principles of the Patient-Centered Medical Home. See: http://pcmh.ahrq.gov/sites/default/files/attachments/Joint%20Principle%20of%20The%20Patient- Centered%20Medical%20Home%202007%20%281%29.pdf 340 These were derived from the Joint Principles, the Primary Care Model, and the Chronic Care Model.

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Medical Home Elements339 Transformations that Support Medical Home Elements340 Coordination of care across all domains of the health  Medical home coordinates care that patients receive care system. from other providers (e.g. specialists, hospitals and health home agencies to ensure patients get the indicated care when and where they need and want it, including medication review and management).  Referral tracking and follow-up.  Evidence-based decision making around referrals. Comprehensiveness: PCMH recognizes and provides  Planned visits. or arranges for care for all stages of life, including:  Registry of patients facilitates comprehensive care acute care, chronic care, preventive services and end- and population health management by enabling of-life care. searches of patients with particular conditions and characteristics.  Range of services offered by medical home. Physician-directed medical practice with a team that  A team approach can, in theory, leverage the takes collective responsibility for ongoing care of relative clinical and organizational training skills of patients. each member (e.g. physician, nurse, medical assistant) to ensure that the increasingly complex and inter-related needs of patients with multiple chronic conditions are met. Teamwork can facilitate comprehensiveness and coordination of care. Quality and Safety: Clinicians and staff enhance  Decision making guided by evidence-based quality improvement through the use of HIT and medicine and decision support tools. other tools to ensure that patients and families make  Quality improvement efforts. informed decisions about their health.  Patients participate in decision making.  Patient feedback is sought to ensure expectations are met. Information Technology: Uses HIT appropriately to  Registry of patients. Consensus statement focused support optimal patient care, performance on aspects of information systems most relevant to measurement, patient education, and enhanced the immediate progress of the medical home communication. emphasizes the use of a registry to identify medical home’s patients and facilitate disease management, population health and evidence-based care.

Patient Involvement in Clinical Care Transformation Patient activation goes hand-in-hand with other clinical care improvements. It increases patient satisfaction with care choices and improves health outcomes.341 To support providers and patients in the team-based care aspects of clinical transformation, we propose to include opportunities for providers and other team members to learn and use techniques in their care transformation programs that can facilitate patients becoming activated in their own care and care planning.

341 National Research Council. Partnering with Patients to Drive Shared Decisions, Better Value, and Care Improvement: Workshop Proceedings. Washington, DC: The National Academies Press, 2013. Also see: http://iom.edu/Reports/2013/~/media/Files/Report%20Files/2013/Partnering-with- Patients/PwP_meetingsummary.pdf

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Researchers at the University of Oregon have developed a measure of patient ability to participate in his or her care called the Patient Activation Measure (PAM). This tool helps providers recognize a patient’s baseline ability and interest in partnering to improve their health, and then meets patients “where they are” to ensure efforts to engage them are successful and do not “deactivate” them.342

PAM is designed to measure the level of activation of patients suffering from chronic diseases. In a recent study, doctors and care coordinators, with access to their patients’ PAM scores, were taught how to tailor education to the patient’s activation level. Providing guidance that fits patients’ ability to use it effectively raised the patients’ activation levels. Patients with diabetes improved ten points on the activation scale and diabetes-related hospitalizations decreased by 17 percent; HbA1c control improved to meet standards by 18 percent, and blood self-testing improved by 34 percent.343

Interest in the Medical Home Model in Texas The Texas Medical Home Initiative (TMHI), founded in 2008 by a group of Texas physicians, nurses, consumer groups and public and private leaders, advocates for a medical home for all Texans by 2015.344 A 2013 spring conference TMHI held in Austin generated a large attendance for showcasing medical home activities (and barriers) in Texas, several of which are described in Section B. SIM stakeholders across the state expressed consensus for advancing the medical home model in Texas, citing its value across the continuum of care to improve care coordination and outcomes. Interest in the model is particularly notable for adults with chronic conditions and physical and behavioral comorbidities, which drive the bulk of health care spending, as well as for pregnant women, given the large number of births in Texas and the state’s priority for improving birth outcomes. Among respondents of the Texas SIM survey, the medical home model generated the most interest as a priority for improving care coordination compared to other delivery system models.

Across the State of Texas, our research found strong consensus that the PCMH should be the core of the delivery system for the majority of the Medicaid population, with the health home as an adaptation of the medical home for serving enrollees with behavioral health needs, in addition

342 Greene, J. and Hibbard, J.H. "Why Does Patient Activation Matter? An Examination of the Relationships Between Patient Activation and Health-Related Outcomes," Journal of General Internal Medicine, November 30, 2011. See: http://www.commonwealthfund.org/Publications/In-Brief/2012/Feb/Why-Does-Patient-Activation- Matter.aspx 343 Remmers C, et al. “Is Patient Activation Associated With Future Health Outcomes and Healthcare Utilization Among Patients With Diabetes?” Journal of Ambulatory Care Management; 32(4): 1–8, 2009. See: http://www.insigniahealth.com/wp-content/uploads/2011/01/Diabetes-Activation-JACM09.pdf 344 Texas Medical Home Initiative. See: http://www.cvent.com/events/2013-texas-health-home-summit/custom-20- 5c46b03575ce41d58a21c8f03a5598d0.aspx

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to their physical health needs. The Quality-Based Payment Advisory Committee (QBPAC), established by legislation in 2011 to advise HHSC on reimbursement policies and delivery care systems in Medicaid and CHIP, strongly supports adoption of the medical home model.345 In its most recent report to HHSC, QBPAC’s recommendations included incentivizing a “Medical Home Model or patient registry model for adults with chronic conditions,” and incentivizing a “Maternity Medical Home Concept” for the general pregnancy population and for high-risk pregnancies. Moreover, SB 7, 83rd Legislature, Regular Session, 2013, requires HHSC to implement a managed care model for SSI and SSI-related children that includes a health home for each client. We believe this could serve as a catalyst for the development of additional medical home infrastructure in the State of Texas and could provide a key leverage point for the innovations proposed as part of this model.

Barriers to Medical Home Adoption Stakeholders participating in SIM-related meetings throughout the state indicated that many providers are interested in implementing a medical home model that includes care coordination and patient engagement, but are unable to afford the expense and lack the technical expertise or staff to do so. Implementing this model requires a significant financial investment and technical expertise that many small and mid-size practices do not have.

According to the Texas Medical Association (TMA), the majority of physicians practice in groups of eight or fewer, and half are in groups of less than five.346 As highlighted in Section B., most of the 258 practice sites in Texas with a Level 1, Level 2 or Level 3 PCMH-recognition from NCQA are based in the larger metropolitan areas. Based on experiences in Texas and other states, it is evident that most practices are likely to need training and support to gain recognition and fully function as a medical home.347 Clinicians may lack appropriate training and tools for key medical home tasks, such as care coordination and patient engagement, barriers that this Clinical Care Transformation model proposes to address.

Further, SIM stakeholder meetings and the online SIM survey showed that respondents strongly support patient engagement as a key component of any proposed clinical care transformation model. However, many providers reported challenges in engaging patients to improve their healthy behaviors and comply with treatment regimens. Of great concern were payment reform models that would hold them financially responsible for poor patient outcomes, for which they lack control due to patients’ non-compliance.

345 HHSC. Annual Report Medicaid and CHIP Quality-Based Initiatives and Recommendations by the Medicaid and CHIP Quality-Based Payment Advisory Committee (As Required By SB 7, 82nd Legislature, First Called Session, 2011), August 5, 2013. See: www.hhsc.state.tx.us/reports/2013/SB7-quality-based-initiatives.pdf 346 Statistic provided at the SIM stakeholder meeting in Austin, Texas, June 18, 2013. 347 This was evident from the many presentations at the Texas Medical-Health Home Summit, May 4-5, 2013, Austin, Texas.

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Bridges to Excellence SIM stakeholders made clear that not all practices are ready candidates for seeking PCMH recognition. Bridges to Excellence (BTE) was frequently mentioned during SIM stakeholder meetings as an interim step for smaller practices that do not have the size or infrastructure to become a PCMH to engage in a value-based model of care. BTE is a condition-specific national quality recognition program that measures the quality of care delivered by physicians and other clinicians, such as physician assistants and nurse practitioners, for which participating payers often elect to reward providers for attaining and retaining BTE care recognition. The BTE program supports clinicians and staff efforts to coordinate care and identify gaps in care for patients with chronic conditions by emphasizing process measures. Through the program, clinicians are exposed to and are educated as to the value of concepts like population health and empanelment, and have the opportunity to demonstrate their ability to provide quality care to patients and value to payers. The TMA recently recognized BTE as a best-practice model for physicians in providing value-based care.348

BTE Experiences and Results in Texas

As described in Section B., the program focuses on managing patients with specific chronic conditions, including diabetes, hypertension, depression and other conditions. An estimated 3,000 physicians in Texas participate in at least one BTE Care Recognition program.349 Blue Cross Blue Shield of Texas (BCBSTX) and Aetna reward providers in their Texas networks for attaining BTE Care Recognition in one or more chronic diseases.

For example, BCBSTX adopted the BTE Diabetes Care Recognition program in 2009 and added Cardiac and Asthma Care programs in 2010 and 2013, respectively. More than 1,200 physicians have enrolled in one these programs and about 28,500 members are currently treated by these physicians.350 BCBSTX pays providers with BTE Diabetes Care Recognition $150 per year for each patient attributed to their practice. For physicians within the BTE Diabetes Care program, spending on professional services increased and spending on hospital admissions and emergency visits decreased compared to physicians that are not BTE-recognized. A BCBSTX analysis of claims found cost savings estimates of $1,200 per member per year in 2010 and $1,000 per member per year for 2012.351

348 Sorrel, A. “Recognition and reward: TMA supports Bridges to Excellence model,” Texas Medicine, September 2013. 349 Ibid. 350 Dr. Robert Morrow. Bridges to Excellence: Rewarding Quality Across the Healthcare System. BlueCross BlueShield of Texas, November 5, 2013. 351 Ibid.

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With this background, we propose three innovation projects to support clinical care transformation in Texas.

Innovation 1: Medical Home Training Program We propose to develop and implement a PCMH training program to assist small and medium practices in achieving or improving one or more aspects of medical home functionality for practices that have not obtained PCMH recognition. Eligibility criteria for participation, along with a selection process, would be developed during implementation planning, as would the design of incentives offered to encourage participation. A highly effective method of achieving medical home transformation is the use of learning collaboratives in which groups of providers attend periodic meetings and calls to discuss improving one or more features of their practice and measure progress collectively.352 The learning collaborative model works well because providers define and implement goals for their practice, and the comparative nature promotes the sharing of ideas. Skilled facilitators are needed to support practice transformation. We propose the development of a medical home training program to train facilitators, recruit practices to participate, measure the impact, and publicize the findings to other providers. Providers engaged in the collaboratives will be able to choose the improvement areas most critical to their practice. Patient engagement will be a process improvement component on their menu, as well as patient empanelment, connecting with community resources, creating and updating care plans, and teamwork. To support practices in improving functionality as a maternity home we propose to incentivize Strong Start grantees in Texas to participate in this learning collaborative process.

Management of the training and learning collaborative activities would be contracted out to a qualified organization with the SIM Council staff providing supervision and oversight. To demonstrate improvement within three years, we propose that up to 36 regional collaboratives be undertaken each year of the SIM project to support prospective medical homes, health homes and maternity homes.

Innovation 2: Medical Home Recognition Program A key milestone for medical home programs is for practices to demonstrate their level of achievement and sophistication by applying for recognition. The recognition program most commonly used in the U.S. is the PCMH program of the National Committee for Quality Assurance (NCQA). Practices complete a self-assessment and submit documentation to the NCQA for scoring. Practices may achieve Level 1, 2, or 3 recognition (or may fail to meet standards). Recognized practices must also seek periodic renewal of their status. For the Texas SHIP, we propose to leverage NCQA recognition to promote medical home adoption for

352 National Center for Medical Home. Spread of the Medical Home Model. See: http://www.nichq.org/pdf/MHLC_2_Final_Report_Final%20Medical%20Home%20footer%20link.pdf

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practices that meet eligibility criteria for participation and are selected through a process that would be developed during implementation. Because of the high cost of becoming a medical home, most initiatives in other states support practices’ implementation costs. For example, they may underwrite the time and expense of participating in the recognition program, or provide technical support to achieve each facet of the medical home model.

We propose to apply SIM funding to support selected providers’ participation in this program. Implementation plans to be developed for this activity would be modeled on HRSA’s Patient- Centered Medical/Health Home Initiative that supports federally qualified health centers (FQHCs) in seeking and obtaining NCQA PCMH recognition. The HRSA initiative includes coverage of fees and provides access to survey-related education, training, and technical assistance resources.353 As described in Section B, a number of FQHCs are participating in this program. In keeping with our approach to meet providers where they are, we propose to support practices at any recognition level, and include support for NCQA specialty home recognition. Alternative credentialing programs that are sometimes used in hospital systems with outpatient departments may also be considered. 354

Innovation 3: Chronic Disease Care Recognition Program To support small and rural practices along the continuum of accountable care, we propose to introduce the BTE Care Recognition program to Medicaid managed care. This project would build on the successes of commercial plans’ experiences with BTE to test a payment model in Medicaid managed care for targeted providers that attain BTE care recognition in diabetes, hypertension, depression, and potentially other conditions.

As described in Section G, new research strengthens the evidence that physician assistants and nurse practitioners can fill a range of roles on primary care teams, even for challenging cases such as older patients with diabetes.355 Adult patients with diabetes on panels with physician assistants (PAs) or advanced practice registered nurses (APRNs) in any role scored the same or better on most outcome measurements compared with patients receiving physician-only care. In support of our goals to create a more efficient and effective workforce and support clinicians in practicing at the highest level of their training, this project would include participation of PAs and APRNs as well as physicians. We propose to engage not only the TMA in designing the

353 HRSA. HRSA Patient-Centered Medical/Health Home Initiative. See: http://bphc.hrsa.gov/policiesregulations/policies/pal201101.html 354 The Joint Commission is launching a health home recognition program next year for its accredited behavioral health organizations. See: http://www.jointcommission.org/joint_commission_to_offer_behavioral_health_home_certification_option_in_2014 355 Everett, C., et al. “Physician Assistants And Nurse Practitioners Perform Effective Roles On Teams Caring For Medicare Patients With Diabetes,” Health Affairs, November 2013 32(11): 1942-1948.

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project – building on its experience with the BTE program – but the PA and APRN societies as well.

The project would be designed to provide technical assistance to selected practitioners, cover initial costs related to achieving BTE care recognition, and reward recognized practitioners with an annual payment per patient diagnosed with the corresponding condition, for one year. A Medicaid claims analysis could help identify the “universe” of practitioners serving patients in service delivery areas where these three conditions are particularly prevalent. Specific eligibility criteria for participation and recruitment, as well as the design and levels of incentives, selection of a technical assistance contractor(s), and other components of the project would be developed in implementation planning.

Sustaining the Clinical Care Transformation Gains Once medical home recognition is achieved, it is common for providers to earn a fee per patient, have new billing codes available, or receive pay for performance bonuses based on agreed upon quality measures. Likewise, payers that sponsor BTE care recognition programs annually reward recognized providers. To further support and promote sustainability of the clinical care innovations included in this model within Medicaid and CHIP, results from ongoing assessment of implementation and evaluation of each of these three projects would be incorporated into the proposed Spreading and Sustaining Innovation model, described next.

Model III. Spreading and Sustaining Innovation

Overview Texas does not lack for innovation. Health providers and institutions, faced with challenging health needs and resource constraints, have created sophisticated programs to meet the population’s needs. As described in Section B, public and private health care organizations in Texas are striving to improve the delivery of high quality health care in Texas. The State is a beneficiary of numerous federally-supported grants to promote delivery system and payment reform, as well as health IT infrastructure and community public health initiatives, as listed in Appendix 1. Several of these initiatives, well-aligned with the goals of SIM, are leverage points to help advance the triple aim goals defined for this SHIP.

The pace of innovation is also accelerating as a result of state and local leadership and federal matching funds from Texas’ Medicaid 1115 Transformation Waiver. The waiver financially incentivizes participating providers to implement DSRIP projects and meet milestones for various process and health outcome measures. DSRIP projects throughout the state cover transformations in the following areas: infrastructure development, program innovation and redesign, quality improvement, and population health management.

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How to Spread Innovations Everett Rogers’ theory of diffusion of innovations seeks to explain the process by which innovative ideas spread throughout groups. Research has documented that “innovators” are a small group of people, about 2.5 percent of the population, as shown in the figure below. Innovators are the first people to try out a new idea and have a higher tolerance, often due to the availability of financial resources, for the risks associated with such innovation. After them are the people considered early adopters, comprising an estimated 13.5 percent of the population. Early adopters have a propensity for seeking out new solutions to their problems and embracing change. The next group, the majority, will follow once they see how a program or idea works and can weigh the evidence against their own need to make change. A small group may never adopt the practice, or may do so much later. They may face additional barriers, or believe the evidence does not apply to them. About 16 percent of the population, known as “laggards,” fall into this last category.

Applying this taxonomy to the Texas SIM project, we expect that some ideas will have the most appeal, at first, to innovators and early adopters. For example, as described in Section B, a relatively small proportion of doctors in Texas have achieved medical home recognition through a national accrediting body. Keeping in mind what social science research tell us about the spread of innovations across groups will allow us to efficiently target our outreach and education to providers who are ready to use it, and fits with our overall approach of meeting stakeholders where they are along a transition toward models of accountable care.

Repeated personal contact, such as through one-on-one coaching and group learning processes, has proven instrumental in spreading innovations.356 We propose to include a coaching component to spreading innovation, using local experts and thought leaders.

356 Gawande A., “Slow Ideas: Some innovations spread fast. How do you speed the ones that don’t?” The New Yorker, July 29, 2013. See: http://www.newyorker.com/reporting/2013/07/29/130729fa_fact_gawande? printable=true¤tPage=all#ixzz2lDSLsPX0.

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Figure 34. Innovation Adoption Lifecycle357

How to Sustain Innovations Sustaining innovation can be difficult once the initial funding behind the innovation is spent. We would expect no less in a statewide effort like our proposed SHIP, where multiple organizations would be involved with diffuse leadership. It is therefore important that clear expectations are set by leadership, that progress is monitored and reported back to participants in a way that motivates participation and perseverance, and helps people at the front line of care remain motivated to hold the gains they would achieve.358 Selected priorities should also be responsive to real needs of each organization in order that they continue to devote resources (both people and financial) to them after potential future grant funding has ended. Building an organizational infrastructure with dedicated staff, regular gatherings of stakeholders to assess progress; spreading activities which help embed changes into the culture of the health care system; and including resource to develop supporting legislation and regulation, as needed, would all be strategies to consider in sustaining progress across the proposed SIM models.

Barriers to Spreading and Sustaining Innovations Texas is a large, diverse, and independent state –which are its strengths, but also may make it difficult for payers and providers to share experiences and replicate best practices across care

357 Rogers, E. M. Diffusion of Innovations, Glencoe: Free Press, 1962. 358 Thomas S. and Zahn, D. Sustainability Improved Outcomes: A toolkit, NY State Health Foundation, 2010. See: http://nyshealthfoundation.org/uploads/general/sustaining-improved-outcomes-toolkit.pdf

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systems. Stakeholders agreed that any proposed SIM project needs to be built and funded to specifically support spreading good ideas, so that a greater proportion of the state’s residents experience best practices, and the system as a whole achieves cost and quality goals. However, those achieving good outcomes may have trouble bringing them to scale because of the cost of change in terms of staff, funding, and health IT capacity.

Competition is an engine of innovation but can also be a barrier to spreading best practices, when proprietary innovations provide a competitive edge in the marketplace and a fragmented delivery system contributes to a lack of transparency about what works in health care. The incentives for collaboration must be stronger than disincentives, and legislation may be needed to overcome these and other barriers, including legal ones.

A further challenge is to ascertain if the causal factors associated with health care improvements are understood and, thus, replicable. This is particularly important when it comes to sharing ideas across delivery systems and patients, and making the business case to sustain a promising practice or cost-effective model. Sustaining innovation often requires legislation, rules and a secure source of funds. Without an ongoing source of funding, providers and payers have seen good ideas fade as attention is diverted to the activities of the latest grant or funding stream.

The priorities identified through the SIM stakeholder process and the proposed models described in this SHIP are interrelated. Three programs, as described below, are proposed to support continuous innovation and learning across Texas health care delivery system as part of our long term strategy to sustain best practices.

Innovation 1: Health Innovation Learning Network Texas proposes to develop a statewide Health Innovation Learning Network (Network) that will teach best practices and provide in-person assistance and technical support to providers within each of Texas’ 11 public health regions through learning exchanges.359 We anticipate a hub and spoke design with a statewide leadership and administrative team, coordinated through the SIM staff, working to support regional teams that have clinical and training experience. This activity would be coordinated with the activities proposed in Model I regarding expanding the spread and usefulness of health IT, including telemedicine and disease registries.

Building the right Network infrastructure would be critical to success. A template for building this type of learning network could be the model that the TMF Health Quality Institute, the Texas Medicare Quality Improvement Organization, has created in serving as the sole contractor to lead and coordinate a national “learning and action network” for the Comprehensive Primary

359 There are 11 public health regions in eight geographically distinct areas.

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Care (CPC) initiative, funded by CMMI.360 The CPC initiative is a multi-payer initiative with commercial plans and Medicare that involves 500 primary care practices across seven states or regions. The TMF model includes a wide range of activities to support learning and adoption. This infrastructure includes discussion forums, an events calendar for webinars, face-to-face conferences and conference calls utilizing online registration, as well as direct contact via email. There is an online library of data resources, including project metrics and progress reports, measurement tools and evidence-based articles, best practices, success stories, videos, links to project partners and a contact form. Each participating provider in their learning and action network is assigned to a TMF quality improvement consultant for which hands-on assistance can be provided to support quality improvement methods.

We propose for the SIM model, that at the regional level, Network leaders would be hired who have expertise in clinical care transformation. They would convene clinical and administrative leaders involved in existing improvement activities, including, but not limited to: DSRIP projects funded through the 1115 Medicaid Transformation waiver, a DSHS chronic disease initiative, and the medical/health/maternity home strategies described in Model II, and the health IT programs described in Model I to support.

1115 Medicaid Transformation Waiver DSRIP Projects DSRIP projects span an array of delivery system transformation projects that include improving health care workforce capacity (including primary care providers, community health workers, promotoras, clinical diabetes educators, peer support specialists, etc.); telemedicine; patient- centered care and team-based care models; patient engagement for self-management of chronic conditions; and physical-behavioral health integration, among many others.

By focusing on DSRIP projects, the SHIP would expand what is primarily a Medicaid- and indigent care-focused activity, to support learning across public and private sectors. Several of the health plans that met with the SIM Planning Team expressed strong interest in staying up-to- date on DSRIP project activities and outcomes. Importantly, the proposed Network activities could provide a forum for participating providers in DSRIP projects to share successes and challenges with Medicaid MCOs.

DSHS’s Potentially Preventable Hospitalizations (PPH) Initiative In 2011 the state legislature (82nd legislative session) appropriated $2 million to DSHS to implement an initiative designed to reduce adult potentially preventable hospitalizations over

360 Tara Richardson, TMF Health Quality Institute. “The TMF Approach to Quality Improvement in Texas.” Presentation to the Texas Institute of Healthcare Quality and Efficiency, November 5, 2013.

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during SFY 2012/13.361 The program funded 16 counties to implement evidence-based interventions through a community-coordinated approach. Interventions include, but are not limited to: diabetes self-management education, nutrition and physical activity, weight management, glycemic control, and blood pressure control. Over the funding period, DSHS found that participating counties had an average 8 percent decrease in hospitalizations for combined targeted PPH conditions, compared to a 3 percent average decrease across non- participating counties.362 This year the legislature renewed this program for 13 of the 16 funded counties.

Collaboratively, Network participants would identify the best opportunities for spreading health care improvement ideas throughout their region. In the first year, we would expect each region to launch two “spreading” projects, and five more in each subsequent year. Each of these will address the primary and secondary drivers of change. Key steps would include the following:

1. Each spread project will use an expert group that includes clinical leaders, leading program administrators, payers, and patients. Practices, hospitals, and health systems will be offered the opportunity to join the spread project. The expert group makes decisions about the design and strategy of the spread project. The expert group will meet in person or virtually to share information. 2. The expert group identifies the most promising local and national practices, focusing on evidence-based practices. They also define the metrics of success. Goals would start small and expand with multiple rounds of improvement. Data monitoring with benchmarking and feeding back comparative data will be done. 3. The expert group will define key tools and resources needed, which are likely to include care coordination, patient activation, electronic information sharing, and workforce changes. 4. Practices or other care sites that wish to participate will apply and have to provide a “champion” who will promote the project within their organization. 5. Provide in-person assistance and technical support to practices or groups of providers to achieve the goals, including practice coaches, quality improvement resources, and frequent video meetings. 6. Escalate any barriers related to regulatory or legislative constraints to the Statewide Network director. 7. Incentivize participation by paying for training and accreditation or recognition costs (if the project lends itself to such).

361 Mike Gilliam, HHSC. “Adult Potentially preventable Hospitalizations in Texas,” presentation to the Regional Healthcare Partnership Summit, August 8, 2012. See: http://www.hhsc.state.tx.us/1115-docs/August-7-8-Summit/7- 2-BehavioralHealthPanel-Gilliam.pdf 362 DSHS. Briefing Document: Adult Potentially Preventable Hospitalizations Initiative, August 14, 2013.

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8. Share lessons in a continuous improvement feedback loop to other regional and state providers.

As evidence is accumulated from local and regional projects, SIM staff, in coordination with the Institute, would disseminate results to payers and plans to consider for inclusion in managed care contracts, performance improvement projects, and pay-for-performance activities. The Network would support multi-payer alignment efforts, described further in Model V of this section, by focusing attention where change is supported by an evidence base. This process would also be instrumental in identifying and addressing administrative and legislative policy barriers to transformation goals.

Further, we propose that providers and program administrators with leading innovations, including DSRIP project leaders, would receive incentives to serve as faculty and mentors to other practices and programs. Recruited faculty may also be supported through training programs to develop their skills in coaching and mentoring.

Innovation 2: Sustaining Practice Transformation in Medicaid Managed Care We propose that SIM project staff serve in a consultation, networking, convening, research and in other capacities to guide HHSC and Medicaid managed care stakeholders in further considering recommendations of several legislatively created committees or mandated state agency reports that have already reached consensus on strategies to improve the delivery of patient-centered care and, in particular, promote quality-based payment strategies. Providing a resource to leverage some of these recommendations, summarized below, with other Medicaid reforms getting under way, through recent legislation and contract changes, would help sustain the progress being made around the state to advance clinical care transformation. SIM staff would be available to convene meetings, monitor progress, and serve as a conduit for disseminating information between participants in the proposed Health Innovation Learning Network and administrative and policy stakeholders. This role would be supported by the third innovation proposed in this model, as described below.

QBPAC Recommendations for Quality‐based Systems in Medicaid Managed Care The most recent report from the Quality-Based Payment Advisory Committee (QBPAC) to HHSC calls for the “development of payment initiatives to test the effectiveness of quality-based payment systems, alternative payment methodologies, and high-quality, cost-effective health care delivery models that provide incentives to physicians and other health care providers to

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develop health care interventions for” enrollees in Medicaid or CHIP, or both.363 The committee’s report included the following recommendations:

 Incentivize a medical home model or a registry model for adult patients with chronic disease;  Incentivize a maternal medical home concept for high risk pregnancies (prenatal diabetic care);  Develop reimbursement for an initial high-risk pregnancy assessment;  Add diabetic education as a benefit for all ages, including education specific to pregnant women, and add certified diabetic educators as performing providers for all ages; and  Work with private carriers and our managed care plans to create billing and payment options for care models other than fee for service. We propose that SIM staff work through the Institute’s board of directors, and with QBPAC members in forming a financial incentives workgroup. The workgroup would include participation of managed care plans and Medicaid. This proposal includes reaching out to Medicare, the state employee benefit plan (ERS), and commercial payers to join the workgroup with the expectation that multi-payer involvement would occur after year one. This process would support HHSC in fulfilling the requirements laid out in SB 7, 83rd Legislature, Regular Session, 2013, summarized below, to consider payment model alternatives to fee-for-service (FFS), and begin engagement with payers beyond Medicaid in pursuing support for implementing a multi-payer medical home model.

Various incentives and supports could be considered, including:

 separate PMPM and/or lump sum payments to medical homes;  enhanced payment rates;  requirements for managed care organizations to encourage and support medical homes;  shared savings or pay-for-performance;  care coordination fees and funding care managers to support team-based care;  provision of data on patients and practice performance; and  supporting patient engagement through patient education and measurement.

We note that because Medicaid managed care contracts may be multi-year and financing incentives may be generated off cycle, it will be important to get health plan buy-in to assure timely implementation of changes, or write into the contracts a provision allowing such incentive payments to be introduced with adequate lead time.

363 HHSC. Annual Report Medicaid and CHIP Quality-Based Initiatives and Recommendations by the Medicaid and CHIP Quality-Based Payment Advisory Committee, August 5, 2013. See: www.hhsc.state.tx.us/reports/2013/SB7- quality-based-initiatives.pdf

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NICU Council Recommendations to Improve Birth Outcomes in Medicaid The Neonatal Intensive Care Unit (NICU) Council, established in HB 2636 (82nd Legislature, Regular Session, 2011), and reporting to HHSC, was created to examine NICU utilization rates in Texas and develop recommendations to reduce inappropriate NICU utilization and improve birth outcomes to lessen the need for NICU admissions. The Council noted that decreases in NICU admissions are principally achieved by reducing preterm delivery, and that the principal method of cost savings will be achieved through prevention of early preterm labor and delivery, particularly births prior to 33 weeks’ gestation.364

The NICU Council, whose work for the legislature is complete, made the following recommendations to help reduce the incidence of preterm births:

 dissemination and implementation of evidence-based practice protocols (for example the use of progesterone by patients with prior spontaneous preterm birth);  education of all health care providers about the need for early risk assessment and indications for 17OHP;  reducing barriers that prevent patients from receiving 17OHP (such as payment for the administration of the injection); and  provision of financial incentives for reaching quality metrics such as Joint Commission PC-03 (antenatal corticosteroids) and tracking the percentage of eligible patients receiving 17OHP.

We propose that the SIM staff engage the Texas Collaborative for Healthy Mothers and Babies, operating under DSHS,365 to coordinate participation in the Health Innovation Learning Network to further explore next steps and strategies related to these recommendations.

DSHS-HHSC Recommendations on Community Health Workers As described in Section G, in 2012, DSHS and HHSC submitted a joint report to the legislature on ways to increase utilization of and payment for CHWs in Medicaid, including the following:

364 HHSC. NICU Council Report, January 2013. See: http://www.hhsc.state.tx.us/reports/2013/NICU-council- report.pdf 365 DSHS. Texas Collaborative for Healthy Mothers and Babies, Operational Plan, September 30, 2013. See: http://www.litakergroup.com/images/2014F-03-HTB/2013F-03-DSHS_TCHMB_Ops_Plan_Sept_2013.pdf

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 promoting CHW education and professional development, and understanding and recognition of the CHW workforce; and  identifying opportunities to increase utilization of CHWs in public health and behavioral health programs and initiatives.366

We propose that SIM staff support an engagement process, perhaps within the leadership of the Institute’s board of directors, and other appropriate stakeholders, including HHSC, DSHS, QBPAC members and MCOs to further explore various strategies for increasing utilization of and payment for CHWs in Medicaid managed care. This endeavor would be coordinated with other efforts proposed within the SIM project to support sustainability of medical home practices in Texas.

Recent Legislation and Contract Changes Affecting Medicaid Managed Care SB 7, 83rd Legislature, Regular Session, 2013, requires HHSC to adopt or consider the feasibility of a number of quality-based payment and clinical quality improvement initiatives within managed care. These include, but are not limited to the following topics, described briefly in Appendix 5:

 outcome-based performance measures and incentives within contracts;  consultation by stakeholders for development of quality-based payment system;  payment initiatives toward quality-based payment systems; and  clinical improvement program.

As described in Section B, Texas Medicaid puts a portion of MCOs’ capitation at risk based on their ability to meet certain performance criteria.367 MCOs must meet all of the performance expectations or lose some portion or all of the payment at risk. Proposed performance criteria in 2014 include measures aimed at improving care coordination for patients with chronic conditions, reductions in preventable events, and development of quality initiatives.

The Medicaid program has also made recent changes to its Medicaid Uniform Managed Care Contract in toward promoting continued improvement in the quality and efficiency of care. These include requiring MCOs to develop and submit to HHSC a written plan for adoption or expansion of alternative payment structures to reward providers for high quality care, and a written plan that described how they will work with HHSC in better identifying and serving

366 DSHS. The Texas Community Health Worker Study Report to the Legislature, December 21, 2012, See: http://www.dshs.state.tx.us/mch/chw.shtm 367 HHSC. Medicaid Managed Care Quality Strategy, 2012-2016, 2011. For 2014, the at-risk percentage will be four percent and the quality challenge measures aligned with a quality improvement targets.

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“super-utilizers.”368 The SB 7 legislation will function as a specific policy lever to drive continued innovation in Medicaid managed care.

Each of the initiatives proposed above would be expected to begin the first year of the SIM project. In years two through five, we propose to consider additional topics that HHSC has identified, as well as topics that the Health Innovation Learning Network participants nominate as best practices worthy of consideration for inclusion in Medicaid managed care contracts, or which may require legislation to fully implement.

Innovation 3: Texas Health Care Innovations Tracking Center Health care innovation is happening all over Texas, along different paths at varying paces, in the public and private sectors; yet there are clearly providers and communities that are struggling to keep up with the transformation that a 21st century health care system demands. For policymakers, program administrators and researchers it is equally challenging to absorb the breadth of innovation activities underway and how they may integrate with or even duplicate other efforts, let alone understand the impact they may—or may not—have on desired outcomes.

The SIM stakeholder engagement process has already helped the state catalogue many health care innovations, both public and private, that are underway or getting started. Our proposed SHIP has the potential to help Texas build on its strong foundation of innovation, particularly in better aligning public and private payers on payment reform, and aligning Medicaid and public health initiatives toward achieving the state’s triple aim goals.

Health Care Innovations Database We propose that SIM project staff serve as a centralized support team—a health care innovation tracking center (Tracking Center)—for monitoring and communicating a broad range of delivery system and payment reform innovation activities and outcomes throughout the Texas Health and Human Services enterprise and private sector. The SIM project would support development of an online, interactive, searchable database of health innovation activities within Texas and project staff would maintain the database. Staff would track, monitor and analyze delivery system and payment reform innovations proposed within the SHIP and beyond, as well as disseminate periodic reports through the Institute to inform its work, and further support the rollout of the proposed Health Innovation Learning Network activities.

The information collected and collated for the database could serve as a valuable tool for synthesizing activities and results related to the recent legislative and administrative initiatives described above; the estimated 1,286 DSRIP projects that are being implemented over the course of the Medicaid 1115 Transformation waiver; the more than 40 CMMI grants currently funded in

368 Texas Medicaid Uniform Managed Care Contract, Sections 8.1.4.8.2, 8.1.14.1.

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Texas; CDC-funded state public health initiatives; SAMHSA-funded grants in behavioral health; university health services research and workforce training; state-supported health IT initiatives; private health care systems innovations; and private research organization and foundation initiatives. We believe that this database, as a clearinghouse for healthcare innovation activities in Texas, can function as an indirect lever for further innovation; payers and providers may be more willing to take risks and make investments if they know that their partners and competitors are doing the same.

Informing Future Innovations, Policy, and Evaluation While there are separate sources for learning about particular types of innovation activities under different funding sources and organizations, there is no single place that stakeholders can go to search and compare initiatives across these multiple sources. Breaking down these information silos could have tremendous benefits in speeding up the spread of best practices, as well as the dismissal of others. Serving as a feedback loop to stakeholders, information shared from the database would be collated to support the ongoing monitoring and evaluation of innovation activities, which could play a key role in sustaining momentum and furthering the adoption of successful delivery system and payment reforms. This data source and the analysis that SIM project staff would conduct could also be an effective tool for informing policymakers’ on future health policy decision-making and health-related services financing.

Stakeholder Outreach and Engagement To ensure that the tracking center and the data generated from it is valuable to stakeholders, project staff would seek engagement from key organizations in Texas that are administering and/or evaluating major innovation activities, including but not limited to, for example:

 HHSC staff managing the DSRIP projects and the evaluator for the Medicaid Transformation waiver, and other institutions, such as the Meadows Foundation, which is involved with tracking DSRIP projects related to improving mental health and substance abuse care;  DSHS staff managing public health initiatives that affect delivery system performance;  state health IT agencies such as the Office of e-Health Coordination and the Texas Health Services Authority;  ICHP, the Texas Medicaid EQRO;  TFM, the Texas Medicare QIO;  Texas Diabetes Council; and  commercial health plans and private health systems testing delivery and payment reform pilots, among others.

Additionally, to further enhance the impact of the Tracking Center on spreading and sustaining delivery and payment reform innovations in Texas, HHSC could potentially join the Catalyst for

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Payment Reform (CPR). CPR is a national, independent, nonprofit organization working on behalf of large employers and other health care purchasers to accelerate payment reforms that promote higher-value care in the U.S. 369 CPR developed a “National Scorecard on Payment Reform” to track the status of the private sector’s progress from volume to value-oriented payment on a national and regional perspective. Current members include Medicaid programs in four states: Arizona, Ohio, South Carolina and Tennessee.

Model IV. Community‐based Public Health Innovations

Overview In its most recent Texas State Health Plan to the Governor and legislature, the Texas Statewide Health Coordinating Council (SHCC) observed that Texas must address structural issues not directly related to health care before it can fundamentally reform the health care system.370 Noting that poor diet and exercise are risk factors for several chronic conditions, including diabetes, high blood pressure and overweight/obesity, the SHCC cited the limited impact that health care interventions alone will have on preventing or controlling these conditions if communities do not have sufficient, safe and affordable places for residents to improve their own health through exercise and healthy food choices. Stakeholders at SIM-sponsored meetings, in discussing the importance of patient accountability in any payment reform model, also noted that many families in Texas lack basic knowledge or experience with healthy food preparation or fitness programs.

Better integrating the delivery of public health services and community prevention strategies with health system redesign is a key goal of CMMI’s vision for the SIM initiative. Many public health officials and providers expressed a need for ongoing interaction with Medicaid and commercial health care plans about initiatives underway in both public health and health care settings that are aimed at preventing and treating chronic conditions, such as diabetes, high blood pressure, and overweight/obesity. As described below, addressing diabetes and prediabetes is a major health priority for Texas and an all-payer concern for which federal and state public dollars and private dollars are being invested around the state. However, a better understanding of the relationships among public and private efforts and their clinical impact is needed to support policies that will sustain cost-effective programs and services. For the Community-based Public Health Innovations model, we propose to leverage several existing public and private initiatives invested in preventing, managing and controlling diabetes to build the evidence-base for integrating them into a financially sustainable model with multi-payer coverage.

369 For more information, see the CPR website: http://www.catalyzepaymentreform.org/ 370 Statewide Health Coordinating Council. 2013-2014 Texas State Health Plan Update, October 31, 2012. See: http://www.dshs.state.tx.us/chs/shcc/

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Diabetes: A Public Health Priority for Texas As described in Section B., the statistical profile of Texans demonstrates significant room for improvement on the prevalence and control of diabetes and related chronic conditions. One in three adults in Texas is either: diagnosed with diabetes, has diabetes but is unaware of it, or has pre-diabetes and is at high risk of developing the disease within a decade.371 Direct medical spending in Texas topped $12.5 billion in 2011: $7.4 billion in public sector and $4.9 billion in private sector spending.372 Diabetes is also the number one reason Medicaid patients access the health care system.373

A National Leader in Addressing the Diabetes Epidemic Fortunately, Texas is also at the forefront of states taking action to prevent and control the diabetes epidemic. The National Association of Chronic Disease Directors cites two states— Texas and Kentucky—as the first, in 2011, to adopt Diabetes Action Plan (DAP) legislation374 that the Diabetes Advocacy Alliance375 is promoting across state legislatures. (Seven additional states passed DAP legislation in 2013.) SB 796, 82nd Legislature, Regular Session, 2011— Texas’s version of DAP legislation—requires HHSC, in coordination with the Texas Diabetes Council (TDC), to prepare a biennial report that identifies HHSC's priorities for addressing diabetes within the Medicaid population.376 The TDC also is required to conduct a statewide biennial assessment of existing programs for the prevention of diabetes and treatment of diabetes that are administered by state agencies within the Health and Human Services enterprise. In the 2013 legislative session, Rider 72 was included in the General Appropriations Act to state the legislature’s intent that Medicaid and HHSC consider any advisory information from the TDC before implementing any new program, rate or initiative that could impact Medicaid patients diagnosed with diabetes or their access to care.377

371 Texas Diabetes Institute. Strategies for Improving Diabetes Care in Texas, November 2010. 372 HHSC. Report on the Direct and Indirect Costs of Diabetes in Texas (As Required By SB 796 82nd Legislature, Regular Session, 2011), December 2012. See: http://www.hhsc.state.tx.us/reports/2012/direct-indirect-costs-diabetes-texas.pdf 373 Ibid. 374 Council of State Governments. “Preparing States for Diabetes Action Plan Legislation,” a webinar presented on August 22, 2013. See: http://knowledgecenter.csg.org/kc/system/files/diabetes_action_plan_webinar_combined_1.pdf 375 The Diabetes Advocacy Alliance includes the American Diabetes Association, Medicare Diabetes Screening Project, and the YMCA of the USA, along with medical academies, societies and health-related organizations. 376 SB 796 was passed in the 82nd Legislature, Regular Session, ending June 2011. For a summary, see: http://www.capitol.state.tx.us/tlodocs/82R/analysis/pdf/SB00796F.pdf#navpanes=0 377 2014-2015 General Appropriations Act, SB 1, 83rd Legislature, Regular Session, 2013 (Article II, Health and Human Services Commission, Rider 72)

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Texas Diabetes Council (TDC) The Texas Legislature established the Texas Diabetes Council in 1983 to promote evidence- based guidelines and best practices in the assessment, diagnosis, treatment and self-management of diabetes.378 The TDC, administratively supported by DSHS, advises the legislature on legislation that is needed to develop and maintain a statewide system of quality education services for all people with diabetes and for health care professionals who offer diabetes treatment and education. Members of the TDC’s Medical Professionals Advisory Subcommittee also have volunteered time and expertise in the development and regular updates of diabetes treatment guidelines and algorithms for almost fifteen years—including creation of the online Diabetes Tool Kit for practitioners and diabetes educators.379 The Tool Kit380 builds on the minimum standards for diabetes care that the legislature, with guidance from the TDC, mandated the Texas Department of Insurance to require of regulated health plans in Texas.381

The TDC and Medicaid Managed Care In its 2012 biennial report, the TDC reported that prediabetes and diabetes self-management education (DSME) is one of four diabetes priorities in Medicaid.382 DSME is the ongoing process of facilitating the knowledge, skill, and ability necessary for diabetes self-care.383 Currently, MCOs must develop and implement disease management/health home services, which include patient self-management education, for members with chronic conditions, including diabetes and a body mass index (BMI) over 25, among other conditions. However, DSME programs or courses are not currently reimbursable under Medicaid (in contrast to Medicare). These courses can be provided as a “value added” service under the managed care contract with HHSC approval, however.

The TDC is conducting a survey of Medicaid managed care plans about their diabetes education programs to obtain a baseline understanding of programs being offered, including, for example, information about curriculum, and whether participation is on an opt-in or opt-out basis. According to DSHS officials, the TDC has a database of the tools and policies health plans are

378 DSHS. Background: Texas Diabetes Council. See: http://www.dshs.state.tx.us/diabetes/tdc.shtm 379 TDC. Texas Diabetes Council Tool Kit. See: http://www.tdctoolkit.org/ 380 Texas Diabetes Council. Changing the Course: A Plan to Prevent and Control Diabetes in Texas, 2013. See: http://www.dshs.state.tx.us/diabetes/preports.shtm 381 Texas Insurance Code - Chapter 1358: Diabetes, subchapter A: Guidelines for Diabetes care; Minimum coverage required. See: http://www.statutes.legis.state.tx.us/Docs/IN/htm/IN.1358.htm 382 HHSC. Texas Medicaid Diabetes Treatment and Prevention Report (As Required By SB 796 82nd Legislature, Regular Session, 2011), December 2012. See: http://www.hhsc.state.tx.us/reports/2012/direct-indirect-costs-diabetes-texas.pdf 383 Funnel MM, et al. “National Standards for Diabetes Self-Management,” Diabetes Care; vol. 31 Supp. 1. January 2010. See: http://care.diabetesjournals.org/content/31/Supplement_1/S97.full?sid=9b759fa8-b450-4639-ba77- 9a4c82390f1d

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using, but does not have information on program implementation or outcomes, which are of particular interest in building the evidence case for advocating Medicaid coverage of diabetes self-management education programs. The TDC does not have Medicaid claims or encounter data associated with DSME. Although reporting encounters associated with DSME are incorporated into Medicaid managed care contracts as part of chronic disease reporting, providers in the network may or may not be utilizing them since Medicaid does not have a standard protocol or payment associated with these types of encounters.384

Additionally, there are no quality assessment measures of the impact that DSME and preventive services, such as those described below, are having on the Medicaid managed care population, including pregnant women with diabetes or prediabetes; however, there is interest among DSHS officials and the TDC members to support development of measurement standards.385

Texas Community Diabetes Projects The Texas Diabetes Program is one of 16 state diabetes control programs that receive comprehensive capacity-building assistance from the Division of Diabetes Translation of the CDC.386 The funds help DSHS coordinate the Community Diabetes Projects, which operate in ten rural and urban settings in Texas and target racial and ethnic minorities through contracts with local health departments, community health centers and grassroots organizations.387 The programs offer people with diabetes a minimum number of nutrition courses and exercise classes each year, typically at places where other services are provided, such as a food bank.388

The state has set up a tracking system for participating communities to submit pre- and post-test data that DSHS can analyze for evaluation. Results have been positive.389 However, outcomes are not clinically based; only BMI, weight and blood pressure are measured. To date, there is no mechanism to link data on Medicaid managed care enrollees who are participants of these programs with their clinical data to assess the program’s clinical impact. The ability to do so could help build an evidence-base to support its sustainability through a reimbursement model in Medicaid managed care.

384 Ibid. 385 Ibid. 386 DSHS. Community Diabetes Projects. See: http://www.dshs.state.tx.us/diabetes/tdcdaecs.shtm 387 According to DSHS officials, 11 sites were originally funded; now there are 10 supported with state general revenues. 388 DSHS Community Diabetes Projects. See: http://www.dshs.state.tx.us/diabetes/tdcdaecs.shtm 389 Ibid.

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National Diabetes Prevention Program in Texas The National Diabetes Prevention Program (DPP) is an evidence-based lifestyle change program for preventing type 2 diabetes.390 The DPP teaches participants strategies for incorporating physical activity into daily life and eating healthy. Lifestyle coaches work with participants to identify emotions and situations that can sabotage their success, and the group process encourages participants to share strategies for dealing with challenging situations. Evaluated by the National Institutes of Health, researchers found that making modest behavior changes helped participants lose 5 percent to 7 percent of their body weight (e.g., 10 to 14 pounds for a 200- pound person) and reduced the risk of developing type 2 diabetes by 58 percent in people with prediabetes. For every 100 high-risk adults (age 50) participating for three years, 15 new cases of type 2 diabetes were averted, along with $91,400 in health care costs.391

The inaugural partners of the DPP were the YMCA and UnitedHealth Group. Since 2011, in the Dallas/Ft. Worth area, these partners have offered the program to UnitedHealthcare members as part of a diabetes prevention and treatment program called “Not Me.” 392

The CDC encourages collaboration among federal agencies, community-based organizations, employers, insurers, health care professionals, academia and other stakeholders to prevent or delay the onset of type 2 diabetes among people with prediabetes.393 Several collaborations are under way in Texas. In 2012, the CDC funded America’s Health Insurance Plans (AHIP) through 2016 to work with four member health plans in four states, including Aetna and Molina Healthcare, in Texas, to implement the National DPP. The health plans will collect data from the intervention sites, and AHIP will compile the data and report outcomes to the CDC, as well as promote the program to health plans and employers.394 Nationally, the YMCA DPP costs about $350 per participant.

390 CDC. National Diabetes Program. See: http://www.cdc.gov/diabetes/prevention/about.htm 391 DPP Research Group. N Engl J Med. 2002 Feb 7;346(6):393-403; and Ackermann, et al. Am J Prev Med, 2008; 35(4):357-363 (estimates scaled to 2008 $US). 392 UnitedHealth Group. New Diabetes Prevention and Control Programs Expand to North Texas to Help Tackle Area's Diabetes Crisis. See: http://www.unitedhealthgroup.com/Newsroom/Articles/News/UnitedHealthcare/2011/0825DiabetesTexas.aspx 393 CDC. National Diabetes Program. See: http://www.cdc.gov/diabetes/prevention/about.htm 394 AHIP. AHIP Partners with CDC to Prevent Type 2 Diabetes in People with Prediabetes. October 9, 2012. See: http://www.ahip.org/News/Press-Room/2012/AHIP-Partners-with-CDC-to-Prevent-Type-2-Diabetes-in-People- with-Prediabetes.aspx

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In 2012, CMMI granted nearly $12 million over three years for the national YMCA to conduct a demonstration project in 17 communities across the nation, including Dallas, to implement the DPP with 10,000 Medicare enrollees and assess the cost savings.395

The YMCA of Greater San Antonio and the San Antonio Metropolitan Health District began offering the DPP program in October 2013 to residents at no cost.396 A similar program is available in Austin. There are 14 organizations in Texas that are listed in the CDC’s national registry of Diabetes Prevention Recognition Programs (DPRP). These organizations have agreed to the curriculum, duration, intensity, and reporting requirements in the DPRP standards.397

Innovation 1: Public Health‐Medicaid Managed Care Diabetes Education Project The Texas Institute of Health Care Quality and Efficiency (Institute), the organization that is proposed as the home of a SIM Council to administer the SHIP, includes representation from DSHS, HHSC and commercial health plans. The SIM Council, working through the Institute, would engage appropriate leadership to develop and implement a project with the TDC, DSHS and Medicaid to better understand and assess the reach, design and impact of DSME in Medicaid managed care for people with diabetes, including pregnant women. The project would incorporate the TDC’s survey results of Medicaid managed care plans about their diabetes education programs.

Analysis of Community Diabetes Projects with Medicaid Managed Care Participants

The project would collect, match and analyze data from the Community Diabetes Projects— which serve individuals diagnosed with diabetes—with Medicaid managed care members to assess the reach of these programs among managed care members, and their clinical impact on managed care participants.

Policy Development on DSME Financing and Sustainability in Medicaid

The results of the project would inform discussion and debate about policies on sustaining and reimbursing DSME programs and support services generally and the Community Diabetes Projects in particular. Topics would include standards, the role of allied health professionals (e.g., CHWs, clinicians trained as diabetes educators) in providing DSME, and measurement and reporting. The project would address sustainability issues in the context of how or to what extent

395 YMCA of the USA. The Y Receives Innovation Grant to Test Cost Effectiveness of Diabetes Prevention Program Among Medicare Population. See: http://www.ymca.net/news-releases/20120618-innovation-grant.html 396 YMCA of Greater San Antonio. YMCA and Metro Health Team Up to Fight Diabetes. See: http://www.ymcasatx.org/news 397 CDC. Diabetes Prevention Recognition Program. See: http://www.cdc.gov/diabetes/prevention/recognition/states/Texas.htm

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Medicaid managed care should support state or local revenues in the financing of Community Diabetes Projects, which serve both a Medicaid and uninsured population of people with diabetes in traditionally underserved areas. Finally, the project would document this collaboration process and assess the lessons learned in order to develop a template for future public health-Medicaid collaboration on data analysis and policy research projects related to other chronic conditions.

Innovation 2: Scaling the National Diabetes Prevention Program in Texas Prevention is key to containing health care costs related to diabetes. The DPP offers a nationally- recognized, cost-effective model for preventing the onset of diabetes for those with prediabetes. Within the State of Texas, DPP has been implemented across multiple payers, including Medicare; United Healthcare and Aetna, for commercially insured members; Molina Healthcare, a Medicaid managed care plan; and through local health districts.

Exploration of the DPP as a Covered Benefit in Medicaid and Public Employee Programs

Our SHIP proposes to leverage this existing multi-payer interest in the DPP in Texas by developing a model for multi-payer alignment on coverage of the DPP as a health benefit. This would include not only Medicaid but the public employees’ insurance program. SIM funding would be used to explore the costs and potential savings of having Medicaid add the DPP program as a covered service in the STAR+PLUS Medicaid managed care program. We propose that SIM funding also support a similar assessment within the Employee Retirement System of Texas (ERS), to the extent that the SIM Council and staff—working through the Institute’s leadership, which includes ERS representation—are able to develop such a plan with ERS officials.

DPP Pilot Program in STAR+PLUS

As part of this exploration of the DPP as a covered benefit in Medicaid, we propose that the SIM project could both contribute to and use the research and analysis of the AHIP DPP project in Texas insofar as STAR+PLUS members are already participants. This could include implementing a pilot in a service delivery area where the DPP is already operational. SIM funds could support the cost of DPP participation for up to 5,000 STAR+PLUS members in order to test the program’s efficacy and cost-effectiveness in the Medicaid population. This would align with the work of the Medicaid EQRO in analyzing STAR+PLUS data on diabetes performance outcomes.

Implications for a Potential Dual Demonstration Project in Texas

This cross-cutting project would leverage the existing DAP legislation in Texas, known as SB 796, to engage the TDC and Medicaid in identifying and proposing additional legislation needed to support Medicaid’s potential coverage of the DPP. The project would also support

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consideration of how the DPP could be sustained within a potential Medicare-Medicaid dual eligible demonstration.

Integration of DPP with Other State and Local Public Health Initiatives

This project would additionally address the role of DSHS and local health districts in financially supporting and monitoring the implementation and operation of the DPP at the local level, for which both insured and uninsured residents would participate. The project staff would also collaborate with DSHS to explore expanding organizations across the state that would seek and gain DRPR recognition, as well as exploring how the Community Diabetes Projects might be integrated into this expansion.

DPP Experience Database

A key aspect of the project would be to work with the existing payers supporting the DPP in Texas, while drawing on the expertise of Institute members and other subject matter experts, to design and implement a DPP database. This would be developed in collaboration with DSHS, to track key statistics on participation and spending, by payer, over the course of the SIM project. SIM staff would work with stakeholders to develop protocols for matching clinical data outcomes with DPP participation data to support continued evaluation, improvement and expansion of the DPP in Texas after SIM project funding has expired.

Model V. Multi‐payer Engagement and Alignment

Overview Meaningful delivery system transformation in Texas is dependent on the health care marketplace moving from a largely fee-for-service payment model to one that rewards quality and promotes evidence-based care. Market fragmentation and competition can impede this transition, which requires alignment among payers to send consistent signals to providers about performance expectations.398 Payer silos are a natural byproduct of the health care system, in which not only is it contrary to cooperate with a competitor, but there are also legal, antitrust concerns. Differences in corporate culture (local versus national), market share, product lines (such as insurance products versus administrative services-only contracts for self-insured employees), and different population demographics of covered lives also hinder multi-payer collaboration.399 Medicaid and commercial health plans that met separately with the SIM Planning Team, while conceptually

398 Townley, C., Yalowich, R. National Academy for State Health Policy. Five Key Strategies to Engage Health Care Payers and Purchasers in a Multi-Payer Medical Home Initiative, September 2013. See: http://www.nashp.org/sites/default/files/pcmh.payer_.purchaser.engagement.pdf 399 Cavanaugh S., Burke, G. A Multi-payer Approach to Health Care Reform, United Hospital Fund, 2010.

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open to further discussion on ways to collaborate on payment models that incentivize and reward quality-based care, expressed similar concerns.

Because each payer typically comprises a small portion of any provider’s revenue stream, none can make a significant impact on their own. 400 In fact, changes by one payer may simply lead to providers cost-shifting to another, less powerful payer. As noted across SIM stakeholder meetings, providers are often frustrated with a mix of different measures, payment structures, incentives and performance outcomes from multiple payers that apply to subsets rather than all of their patients. Given both the potential of multi-payer collaboration to help overcome some of the fragmentation that stands in the way of delivery system transformation and administrative efficiencies, and the constraints for collaboration to occur naturally, we believe that a formal engagement process needs to be developed in Texas.

Innovation 1: Building Capacity for Multi‐payer Collaboration To support and sustain clinical care transformation with quality-based payment methods, we propose to build organizational leadership and capacity through the Institute to promote engagement and collaboration across public and private payers. This collaboration will focus on regionally developed medical home models that also include health homes and maternity homes. The Institute’s board of directors is made up of health care providers, payers, and health care quality experts, as well as ex officio, nonvoting members, from state agencies including HHSC, DSHS, Department of Aging and Disability Services (DADS), the Employees Retirement System of Texas (ERS), the Texas Department of Insurance (TDI), the Teacher Retirement System of Texas (TRS), the state Medicaid program, the Texas Medical Board, the Texas Workforce Commission, the Texas Higher Education Coordinating Board, and a representative from each state agency or system of higher education that purchases or provides health care services.

The Institute also comprises four workgroups with experts who would be recruited to support multi-payer engagement and collaboration throughout the SIM project. The workgroups and their objectives, described below, are very well-aligned with the goals of the Texas SHIP.

 Work Group A – Measurement and Analytics: Develop shared analytical resources; determine effective measures of quality and efficiency; create meaningful use of electronic health records.  Work Group B – Best Practices and Patient and Stakeholder Engagement: Reduce potentially preventable events; identify programs, practices, and assessments to share with stakeholders; engage stakeholders about healthcare quality and efficiency; promote patient/consumer activation; improve transparency.

400 Ibid.

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 Work Group C –Innovative Payment and Delivery Systems: Implement collaborative payment and delivery systems; quality-based payment systems; alternative delivery and payment systems; health care collaborative effectiveness; evidence-based policy and practice.  Work Group D – Productivity and Process Improvement: Maximize reductions in cost and increase service output; health profession education; health care service access; administrative simplification.

Multi‐payer Medical Home Initiative As more payers reward practices to serve as a medical home, practice transformation becomes increasingly viable.401 SIM stakeholders across-the-board support adoption of the medical home model as a framework for practice transformation. Multi-payer alignment on medical home models, including health homes and maternity homes, would help sustain the expected progress expected from implementing the programs outlined in each of the other proposed models, I through IV. Multi-payer initiatives have value to providers who are able to see performance data related to a larger percentage of their population, offering more meaningful and actionable information on which to base practice improvement.402

Aligning payer priorities requires an infrastructure for payers to define new payment systems and models in a way that conforms to antitrust laws. Methodologies for addressing benefit design, patient attribution and differences in claims payment systems could also be stumbling blocks that would need to be addressed. The proposed SIM Council and staff, working closely with Workgroup C, would support efforts to convene payers and providers on a regional basis in developing priority improvement areas, payment incentives and milestones that are aligned with them, and common approaches for recognizing or rewarding implementation of a PCMH model, among other issues. Potential payment strategies that might be considered as a starting point among regional collaborations could include the following:403

 FFS with new codes for PCMH services: Payment for non-traditionally reimbursed codes, such as T codes; new HCPCS (Healthcare Common Procedure Coding System) codes created for medical home payments effective 1-1-10 (e.g., HCPCS T1017 pays for targeted case management);  FFS with higher payment levels: Enhanced rates paid to qualifying practices;

401 Townley, C., Yalowich, R. National Academy for State Health Policy. Five Key Strategies to Engage Health Care Payers and Purchasers in a Multi-Payer Medical Home Initiative, September 2013. See: http://www.nashp.org/sites/default/files/pcmh.payer_.purchaser.engagement.pdf 402 Cavanaugh S., Burke, G. A Multi-payer Approach to Health Care Reform, United Hospital Fund, 2010. 403 Bailit M, Phillips K, Long A. Paying for the Medical Home: Payment Models to Support Patient-Centered Medical Home Transformation in the Safety Net. Bailit Health Purchasing and Qualis Health, October 2010.

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 FFS with lump sum payments: Periodic lump sums are paid to qualifying practices; lump sum payment often covers pre-work and/or recognition of NCQA PCMH achievement;  FFS with a per member per month (PMPM) care coordination payment;  FFS with PMPM payment and pay-for-performance (P4P); and  FFS with P4P, and shared savings: practices that meet quality metrics qualify for shared savings, roughly adjusted for patient case mix.

There are a number of examples of communities and regions around the country where payers have joined forces in supporting the PCMH model, through a multi-payer collaboration. For example, 18 Medicaid programs The PCMH model typically requires practice transformation that is difficult to sustain without aligning payer expectations on the focus, measures, and reporting requirements. 404 Several multi-payer models around the country could guide Texas’ deliberations, including the Pennsylvania Chronic Care Initiative and the federal Comprehensive Primary Care Initiative, briefly described below.

Pennsylvania Chronic Care Initiative

The Pennsylvania Chronic Care Initiative promotes achievement of the NCQA medical home to address chronic conditions: diabetes, pediatric asthma, and other high risk patients. 405 The multi-payer initiative involves 17 Medicaid and commercial payers that pay financial incentives to support startup and NCQA recognition. Key outcomes include patients’ engagement in managing their chronic conditions which contributed to improved health outcomes such as lower cholesterol, better control of blood sugar, increased rates of cancer screening and diabetic tests, and reduced blood pressure. 406 Payers saw a 26 percent reduction in admissions and 18 percent reduction in emergency department visits among patients with diabetes. Patients with asthma had 18 percent fewer inpatient admissions and 42 percent emergency department visits.407

Comprehensive Primary Care Initiative

The Comprehensive Primary Care (CPC) initiative of sponsored by CMMI is a multi-payer initiative bringing together public and private payers to invest in primary care. Medicare works

404 Townley, C., Yalowich, R. National Academy for State Health Policy. Five Key Strategies to Engage Health Care Payers and Purchasers in a Multi-Payer Medical Home Initiative, September 2013. See: http://www.nashp.org/sites/default/files/pcmh.payer_.purchaser.engagement.pdf 405 Ann S. Torregosa. Pennsylvania’s Efforts to Transform Primary Care, February 23, 2010. See: http://www.cthealthpolicy.org/webinars/20100223_atorregrossa_webinar.pdf 406 John Carroll. Lessons Learned in Building The Patient-Centered Medical Home. Managed Care, August 2010. 407 Independence Blue Cross. IBC Medical Home Studies Show Significant Cost Savings for Chronically Ill People. Globe Newswire, July 23, 2013. See: http://www.ibx.com/company_info/news/press_releases/2013/07_23_IBC_medical_home_studies.html

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with commercial and state health insurance plans to test new models of care delivery and payment.408 Primary care practices that choose to participate in this initiative are given resources to better coordinate primary care for their Medicare patients. There are nearly 500 primary care practices in seven regions of the country participating in the CPC initiative, though none in Texas.409 This represents over 2,300 providers serving an estimated 315,000 Medicare beneficiaries.410 Within the first year, practices are expected to implement care management for high-risk patients, 24/7 access, improve outcomes on patient experience, use data to guide quality/utilization management activities, coordinate care, and achieve Meaningful Use Stage 1.

Flexibility, which is paramount in the Texas health care environment, the following principles would guide development of multi-payer medical home models:  Financial rewards available to a broad range of providers (primary care, specialty care, hospitals, care coordinators, community care workers, etc.) in order to incentivize participation.  Rewards would incentivize improved care delivery, patient outcomes and reductions in health care costs.  Common payment agreements for reimbursement of non-traditional care coordination services that include payment for activities related to effective care coordination for patients with chronic conditions.  Promotion of evidence-based care and improved health outcomes in a cost-effective manner through, integrated health care models that enhance care coordination and focus on chronic disease management.  Standardization of administrative activities and processes that contribute to reduced administrative costs and increased time spent on direct patient care. There are also several regional medical home pilots underway in Texas between health plans and health systems, as described in Section B that would provide leveraging opportunities for this proposed initiative. Nevertheless, we expect that securing payer participation will be challenging, and would likely require a long-term commitment over the first two years of the project, based on others’ experiences. Leveraging the expertise of the Institute’s board of directors, the SIM Council and staff would follow key strategies identified with successful multi-payer medical home initiatives in other states:

 Build trust among competitors;

408 CMS. Comprehensive Primary Care Initiative. See: http://innovation.cms.gov/initiatives/comprehensive-primary- care-initiative/ 409 According to a representative from TMF, presenting to the Institute’s board of directors about this program, on November 5, 2013, health plan interest in Texas was not strong enough to establish this initiative in the state. 410 Center for Medicare and Medicaid Innovation. Comprehensive Primary Care Initiative. http://innovation.cms.gov/initiatives/comprehensive-primary-care-initiative/

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 Leverage existing infrastructure;  Use the market to drive demand;  Balance the needs of payers and providers; and  Illustrate the value in proving the model.411 On the last strategy in particular, results and progress from the spreading and sustaining activities associated with the proposed health innovation learning network and health innovation tracking center, described in Model III, would feed into the collaboration efforts. Likewise, SIM staff would also periodically report on lessons learned through multi-payer collaboration efforts as part of a continuous feedback loop for learning and adaptation.

Innovation 2: Multi‐payer Alignment on Diabetes Care Transformation and Prevention We propose that the SIM project also provide research, technical assistance and support in convening HHSC leadership and other key stakeholders, to explore Medicaid’s alignment with commercial payers and Medicare in their adoption of provider incentive programs or coverage of benefits related to the treatment and prevention of diabetes. One example includes the Bridges to Excellence program to improve diabetes care (and car for other chronic conditions) and reward providers who achieve this recognition. As proposed in Model III, Medicaid’s adoption of this program would align with the efforts of the largest commercial payer in the state, Blue Cross Blue Shield of Texas. This would support smaller, rural providers in gaining experience with quality-based payments, potentially paving the way for more comprehensive clinical care transformation. Another example is the National Diabetes Prevention program for which Medicare and private payers are participating in Texas.

Medicare provides reimbursement for Medical Nutrition Therapy (MNT) for beneficiaries diagnosed with diabetes or renal disease. The SIM project could evaluate and explore Medicare and/or other state’s policy criteria and reimbursement for these services and consider aligning or developing similar Medicaid policies supporting reimbursement for DSME and MNT.

Innovation 3: Collaboration for Public‐Private Data Sharing SIM stakeholder meeting discussions touched on the need for effective collaboration among public and private stakeholders to standardize performance measures to improve administrative efficiency and facilitate clinical care transformation. In recent years there has been a significant expansion in the use of provider performance measures for quality improvement, payment, and public reporting. One of the biggest barriers faced by physicians, hospitals, health plans,

411 Townley, C., Yalowich, R. National Academy for State Health Policy. Five Key Strategies to Engage Health Care Payers and Purchasers in a Multi-Payer Medical Home Initiative, September 2013. See: http://www.nashp.org/sites/default/files/pcmh.payer_.purchaser.engagement.pdf

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purchasers, and consumers as they pursue payment and delivery reform efforts is accessing the right types of data and data analyses that can lead to effective interventions at the appropriate level of care. Even among common areas of focus, such as cardiovascular conditions, diabetes, and preventive services, there is wide variation among public and private payers in the use of performance measures.412

Workgroup A of the Institute continues to examine opportunities and barriers to examining At this time, the Institute does not support an approach to place mandatory reporting requirements on private health insurance carriers for an all-payer claims database, but does support voluntary, public/private sector collaboration to expand information available on health services utilization and reimbursement for the commercially insured population.413

The Institute also supports efforts to establish a multi-payer data warehouse and reporting service that collaborates with state health data programs, major academic centers, and other public and private stakeholders to collect and analyze multi-payer data, using business intelligence tools with appropriate governance, security, and privacy protections, to improve health care quality and cost-effectiveness in Texas. The Institute supports this model because it would integrate a wide range of health services claims data that already are available in the public domain or are collected by state agencies, such as Medicaid, Medicare, and health care claims submitted for public employees. We propose that SIM project resources be provided for SIM staff to support Workgroup A in convene public and private experts and stakeholders to support additional research, technical assistance and other resources, including policy analysis around needed legislation and sources of other financing, to conduct a detailed feasibility analysis of a establishing this type of multi-payer data warehouse and reporting service in Texas.

412 Higgins, A., Veselovskiy, G., McKown, L. “Provider Performance Measures In Private And Public Programs: Achieving Meaningful Alignment With Flexibility To Innovate,” Health Affairs, 32:81453-1461, August 2013. 413 Raimer B.G., et al. The Texas Institute of Health Care Quality and Efficiency, Report to the Texas Legislature on Activities to Improve Health Care Quality and Efficiency, November 30, 2012.

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F. Health Information Technology

Leveraging Health IT Initiatives in Texas to Advance Health IT Adoption SIM Stakeholders frequently identified health information technology (IT) as a critical component of true patient-centered care, particularly for care coordination and integration of services. Because adoption and meaningful use of electronic health records (EHRs) and participation in a local health information exchange (HIE) varies significantly across Texas, by region and provider type, stakeholders were particularly interested in a SIM initiative that would facilitate wider EHR adoption, meaningful use and participation in HIEs. As part of our proposed strategy to spread and sustain medical/health home models of team-based and integrated care, health IT is a key component of the Texas State Healthcare Innovation Plan (SHIP).

Our proposed plan would leverage the statewide health IT infrastructure progress already achieved in Texas, as described in Section B. We propose to extend the model currently used for the federally-funded Medicare and Medicaid EHR incentive program to a wider group of Medicaid providers, specifically targeting small, rural, behavioral health and long term services and supports (LTSS) providers. This approach would leverage the networks and expertise of the four Regional Extension Center (RECs) that currently provide technical assistance to providers eligible to participate in the EHR incentive program. Additionally, we propose to leverage the expertise and resources of the Office of e-Health Coordination (OeHC) and the Texas Health Services Authority (THSA), which manages the local HIE program, in developing and implementing a strategy for engaging multi-payer collaboration in promoting provider participation in HIEs and long-term HIE sustainability.

Our proposed plan also calls for establishing an infrastructure for a Health Innovation Learning Network that implements regional learning exchanges as part of a Spreading and Sustaining Innovations model. Among other types of Delivery System Reform Incentive Payment (DSRIP) projects that are part of the Medicaid 1115 Transformation waiver in Texas, the learning exchanges would include a focus on telemedicine and disease or patient registry projects to disseminate best practice and lessons learned. The learning exchanges would also provide a forum for identifying and addressing remaining policy and reimbursement issues – within and beyond Medicaid – to promote optimal use of these technologies.

Cost Allocation Plan for Planned IT System Solutions The Texas Medicaid program is in the process of applying for HIE 90/10 funds as part of its broader HIE funding strategy. As this plan was only recently submitted but has not been approved by CMS, a cost allocation methodology cannot be described as of this writing.

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Potential SIM Project Impact on the MMIS As of this writing, no decisions have been made with regard to the relationship between a potential SIM project and MMIS plans. The Medicaid Health IT division is in active discussions with CMS on how some of their proposed HIE projects will relate to MMIS. Until there is final agreement, Texas cannot make definitive statements about the MMIS business processes the state may utilize for a SIM initiative, and therefore cannot estimate planning and implementation timelines related to any potential changes that may be needed.

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G. Workforce Development

Overview Throughout the stakeholder engagement process, participants discussed access to care issues related to workforce shortages in Texas, as described in Section B. The state is undertaking many strategies to increase the pipeline of primary care professionals through various incentive programs, by addressing scope of practice standards for advanced practice nurses and physician assistants through legislation, and promoting broader use of community health workers (CHWs), among other strategies. Stakeholders generally saw the value of a potential three-year SIM project in a state as big as Texas as having more impact in improving the capacity and efficiency of practices to serve more patients—through, clinical practice transformation initiatives that expand team-based care; adoption of medical/health/maternity home models; and health information technology (HIT)—rather than leveraging workforce expansion efforts directly. Texas has developed a significant infrastructure, as highlighted below, to address both a shortage and maldistribution of health care professionals in the state.

Texas Statewide Health Coordinating Council The Texas Statewide Health Coordinating Council (SHCC) is the key body for setting healthcare workforce priorities is the state. The SHCC is a 17-member council with 13 members appointed by the governor and four ex-officio members representing various state agencies.414 Through the Texas State Health Plan, the SHCC makes recommendations regarding health policies and programs to the governor and legislature. The SHCC has statutory oversight of the Health Professions Resource Center and the Texas Center for Nursing Workforce Studies, and has two statutorily mandated advisory committees, the Texas Center for Nursing Workforce Studies Advisory Committee and the Health Information Technology Advisory Committee.415

The 2013-2014 Texas State Health Plan provided numerous recommendations for growing an appropriately skilled, sufficient, and experienced health care workforce in Texas.416 Among those most closely aligned with the SIM project goals are the following:

 support legislation, regulation and reimbursement methodologies that promote team- based care within integrated delivery systems;

414 DSHS. Statewide Health Coordinating Council website page. See: http://www.dshs.state.tx.us/chs/shcc/ 415 Ibid. 416 Statewide Health Coordinating Council. 2013-2014 Texas State Health Plan Update, October 2012. See: www.dshs.state.tx.us/chs/shcc/reports/TSHP-Report,-2013-14-PDF.pdf

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 expand the training and use of state certified Community Health Workers to assist in the cost-effective management of health care;  explore regulatory changes to ensure non-physician medical professionals, such as advance practice nurses and physician assistants, are working at the top of their training and education; and  increase capacity to underserved communities through initiatives that support the training, recruitment, and retention of a representative and culturally competent health care workforce.

A number of efforts are underway in Texas to act on these recommendations. As highlighted below, these include state agencies carrying out administrative initiatives and implementing legislative mandates, and university medical schools and health sciences centers using federal grants to expand the health care workforce in designated shortage areas.

Texas 1115 Medicaid Transformation Waiver The Medicaid 1115 Transformation waiver, described in Section B., includes participating providers implementing numerous delivery system reform incentive program (DSRIP) projects to improve the health care delivery system. As summarized in the table below, there are an estimated 173 projects that expand the health care workforce.417 For example, there are a total of 20 proposed DSRIP projects that expand training and/or residency slots in either primary care (e.g., family medicine, internal medicine, OB/GYN) for physicians, physician assistants or mid- level professionals and nursing (17); behavioral health/psychiatry (2); or general surgery (1).

Additionally, there are 104 proposed DSRIP projects that add staff to an existing clinic, facility or program and 49 projects that create a new infrastructure. Among these are 95 proposed projects related to primary care; 32 proposed projects related to behavioral health care; and 26 proposed projects related to expanding access to specialty care (e.g., optometry, ENT, orthopedics, cancer care).

417 Summary based on Health Management Associates’ analysis of HHSC’s list of DSRIP projects as of April 2013. For a list of projects, see: http://www.tha.org/HealthCareProviders/Issues/FinanceandReimburse098F/MedicaidBBBFWaiver/DSRIPProposed Projects.pdf

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Table 27. Transformation “DSRIP” Projects that Expand the Healthcare Workforce in Texas

Primary Behavioral Other Total Care Health Specialty Expand training and residency program 17 2 1 20 slots Add staff to an existing clinic, facility or 65 24 15 104 program Create a new clinic, facility or program 30 8 11 49 with new staff

Recent State Legislation Related to Workforce Issues Legislation passed in the 83rd Texas Legislature, Regular Session, ending June 2013 covered graduate medical education, community healthcare workers, and scope of practice issues for nurse practitioners and physician assistants, as described below.

Medical and Graduate Education The legislation created several new programs to support medical and graduate medical education designed to bolster the primary care provider pipeline. For example, House Bill 2550 requires the Higher Education Coordinating Board to establish the Primary Care Innovations Program to incentivize medical schools, on a competitive basis, to increase the number of primary care physicians in the state through innovative programs. The legislature appropriated $2.1 million for the program in State Fiscal Years 2014-2015.418 In the spring of 2014, the Coordinating Board plans to develop rules for the program, with solicitation for applications beginning in fall 2014.

Community Health Workers The Department of State Health Services (DSHS) has operated a Community Health Worker Training and Certification program since 2001.419 In the 82nd legislative session that ended in June 2011, changes to training and certification rules and criteria were amended through HB 2610. This legislation required DSHS, in conjunction with HHSC, to conduct a study and develop recommendations related to maximizing employment of and access to promotoras and community health workers (CHWs) to provide publicly and privately funded health care services and identifying methods of funding and reimbursement, which are described in a report to the State Legislature in December 2012.420

418 Texas Higher Education Coordinating Board. See: http://www.thecb.state.tx.us/index.cfm?objectid=4F431144- 0F56-66C7-EED9A4D6AF6E8A35 419 DSHS. Community Health Workers-Promotor(a) or Community Health Worker Training and Certification Program. See: http://www.dshs.state.tx.us/mch/chw.shtm 420 DSHS. The Texas Community Health Worker Study Report to the Legislature, December 21, 2012, See: http://www.dshs.state.tx.us/mch/chw.shtm

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The recommendations included:

 identifying or exploring amendments to the HHSC Uniform Managed Care Contract to support greater use of CHWs in managed care;  continuing efforts to incorporate CHWs into Patient-Centered Medical Homes and related care management structures;  promoting CHW education and professional development, and understanding and recognition of the CHW workforce; and  identifying opportunities to increase utilization of CHWs in public health and behavioral health programs and initiatives.

As interest in and support for the expansion of CHWs expands in Texas, so has the establishment of CHW networks and associations. There are currently eight regional CHW associations, four of which are located in South Texas.421

Scope of Practice of Advanced Practice Registered Nurses and Physician Assistants Texas has maintained restrictions on the scope of practice of physician assistants (PAs) and advanced practice registered nurses (APRNs) in the following ways:

 prescriptive authority must be delegated by a physician through a practice agreement protocol;  physicians can only delegate prescriptive authority at certain types of practice sites; and  controlled substances are limited to Schedules II-V, and certain limitations apply.422

Senate Bill 406, passed during the 83rd Legislative session ending June 2013, improves the process for physician delegation of prescriptive authority to APRNs and PAs. Beginning November 1, 2013, physicians may now delegate prescriptive authority for up to seven APRNs or PAs, or their full-time equivalents, in most practice sites.423 This legislation allows for certain sites, however, including hospitals, facility-based practices (e.g., long-term care facilities) and practices serving medically underserved populations, to have unlimited delegated prescriptive authority to APRNs and PAs.424 With regard to controlled substances, physicians may delegate the authority to order or prescribe Schedule II medications in hospice settings and hospitals; however, APRNs and PAs practicing in a hospital setting may only order or prescribe Schedule

421 DSHS. Texas CHW Networks and Associations. See: http://www.dshs.state.tx.us/mch/chw.shtm 422 Coalition for Nurses in Advanced Practice. The coalition’s website provides an overview of APRN prescriptive privileges in Texas. See: http://www.cnaptexas.org/general/custom.asp?page=15 423 Texas Board of Nursing. Texas Board of Nursing Bulletin, October 2013. 424 Texas Academy of Physician Assistants, Senate Bill 406 (83rd Legislative Session). See: http://www.tapa.org/displaycommon.cfm?an=1&subarticlenbr=25.

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II medications for patients seen in the emergency department or inpatients who are expected to have a stay of at least 24 hours.425

Federal Grants to Texas Universities In August 2012, the federal Health and Human Services (HHS) agency announced $58.7 million in grants to strengthen training for health professionals and increase the size of the health care workforce.426 Grants totaling more than $2.46 million were awarded to Texas universities and colleges for the following types of projects:427

 Interdisciplinary and Inter-professional Graduate Joint Degree: integrating public health content into medical or clinical curricula;  Nursing Workforce Development: Nurse Anesthetist Traineeship; Nursing Workforce Diversity; Nurse Faculty Loan Program;  Centers of Excellence: improving the recruitment and performance of underrepresented minority students preparing for health professions careers; and  Faculty Development: in General, Pediatric, and Public Health Dentistry and Dental Hygiene.

SIM Approach to Health Care Workforce Goals in Texas We propose that a SIM project in Texas would be better targeted on leveraging the recent scope of practice changes for PAs and APRNs and recommendations about CHWs in the “downstream” efforts of proposed clinical care transformation programs and supporting HIT initiatives. These are initiatives that could improve workforce efficiencies without physician workforce expansions. Along with proposing to expand evidence-based public health initiatives, these proposed models would also directly support patients in self-management of their chronic conditions and thereby further enable physicians, PAs and APRNs more opportunity to practice at the highest levels of their education and training.

This proposed approach for Texas is in line with recommendations the SHCC has proposed to create a more efficient and effective workforce, particularly for meeting the needs of a rapidly growing state and an aging and more ethnically and racially diverse population.428 In fact, the

425 Texas Board of Nursing. Texas Board of Nursing Bulletin, October 2013. 426 HRSA. “HHS awards $58.7 million to bolster America’s health care workforce,” August 30, 2012. See: http://www.hrsa.gov/about/news/pressreleases/120830workforce.html 427 HRSA. “Grant awards to bolster health care workforce,” August 30, 2012. See awards by state: http://www.hrsa.gov/about/news/2012tables/120829workforce.html 428 Ben Raimer, M.D. (former chair of the SHCC). “Health Professions Workforce,” presentation, February, 28, 2011. See: http://www.coderedtexas.org/files/presentations/2011-02/Raimer.pdf; and Statewide Health Coordinating Council. 2013-2014 Texas State Health Plan Update, October 31, 2012. See: http://www.dshs.state.tx.us/chs/shcc/

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primary care physician “shortage” for adults has been portrayed as a gap between the demand for and capacity of primary care, as currently delivered, that cannot be closed simply by producing more primary care clinicians.429 In Texas, as well, there is consensus that closing the gap must include:

 developing inter-professional teams for management of chronic diseases;  creating financially sustainable medical/health home models to support team-based care and better linkages to support services that better engage their patients in self- management of their conditions; and  improving providers’ access to HIT and support services to fully implement the medical/health home model.430

Team‐based Care Results from a newly released study strengthens the evidence that physician assistants and nurse practitioners can fill a range of roles on primary care teams, even for challenging cases such as older patients with diabetes.431 Adult patients with diabetes on panels with PAs or APRNs in any role scored the same or better on most outcome measurements compared with patients receiving physician-only care. The Texas SIM initiative proposes to expand the Bridges to Excellence recognition program for diabetes, hypertension, depression, and potentially other chronic conditions, not only for physicians, but for PAs and APRNs.

As part of our model to spread and sustain local innovations, we also propose to create an infrastructure for “learning exchanges” that will focus on DSRIP projects related to implementing team-based, chronic care models. This includes adding CHWs and promotoras to support team-based care and it will additionally provide a forum for identifying and addressing remaining policy and reimbursement issues. As part of our Multi-Payer Engagement and Engagement model, we propose to implement the joint DSHS-HHSC recommendations regarding CHWs, described above, to further explore various strategies for increasing utilization of and payment for CHWs in Medicaid managed care.

Patient‐Centered Medical/Health Homes In another new study, researchers concluded that broader adoption of patient-centered medical/health homes (and nurse-managed health centers) would expand a practice’s panel size

429 Bodenheimer, T.S, Smith, M.D. “Primary Care: Proposed Solutions To The Physician Shortage Without Training More Physicians,” Health Affairs, November 2013, 32(11): 1881-1886. 430 Ben Raimer, M.D., University of Texas Medical Branch. “Health Professions Workforce,” presentation, February 28, 2011. See: http://www.coderedtexas.org/files/presentations/2011-02/Raimer.pdf 431 Everett, C., et al. “Physician Assistants And Nurse Practitioners Perform Effective Roles On Teams Caring For Medicare Patients With Diabetes,” Health Affairs, November 2013, 32(11): 1942-1948.

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through the medical/health home’s team-based approach, and thereby help relieve the shortage of primary care physicians. Such expansions, in addition to requiring further liberalized scope-of- practice laws than currently exist in Texas, require payment changes that reward providers for population health management.432

The Texas SHIP proposes both to expand the opportunity for selected practices to become recognized as a patient-centered medical/health home and to engage payers in adopting payment models that follow agreed upon principles and criteria for further promoting and sustaining the adoption of medical/health home models.

Health Information Technology HIT can also alleviate shortages and maldistribution of the workforce by reducing demand on physicians’ time and promoting a more efficient use of practitioners. A recent review of the literature found that full implementation of HIT (e.g., interoperable electronic health records (EHRs), clinical decision support, provider order entry and patient web portals with secure messaging) among community-based physician offices would result in efficiencies and greater delegation of care to nurse practitioners and physician assistants, and promote patients’ self- management of chronic conditions. Demand for physicians would decline significantly.433 Further, use of HIT such as remote visits through telemedicine could alleviate regional physician shortages, particularly for psychiatry in rural areas.

As a centerpiece of our plans to improve the health care delivery system, the Texas SHIP proposes to make HIT more available, more effective and sustainable through a multi-pronged approach. We propose several strategies, including extending the opportunities for targeted small and rural providers to adopt an EHR system; incentivizing providers and local health information exchanges (HIEs) to increase provider HIE participation rates; and engaging payers in a multi- payer collaboration to help finance the long-term sustainability of local HIEs.

432 Auerbach, D.I., et al. “Nurse-Managed Health Centers And Patient-Centered Medical Homes Could Mitigate Expected Primary Care Physician Shortagem,” Health Affairs, November 2013, 32(11): 1933-1941. 433 J. P. Weiner, S. Yeh, and D. Blumenthal, "The Impact of Health Information Technology and e-Health on the Future Demand for Physician Services," Health Affairs, November 2013, 32(11):1998–2004.

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H. Financial Analysis

Target Population The populations expected to benefit in the first three years from the rollout of the Texas SIM initiative are adults in Medicaid managed care with diabetes, hypertension, pre-diabetes, and/or meeting overweight and obesity criteria, including those with a behavioral health comorbidity, and pregnant women. In Year 3, additional populations will be included in the proposed payment and system innovation models, including Medicaid-covered adults with other chronic conditions; Medicaid-Medicare dual eligibles with chronic conditions including behavioral health co-morbidities; and commercially-covered adults with chronic conditions and behavioral health co-morbidities, and pregnant women.

Service Costs

Total Expenditures

The total direct healthcare expenditures, including member cost sharing and other third party payments, in Texas were approximately $150 billion in 2009434. Table 1 below provides a summary of the payer specific historical aggregate annual health expenditures for the Texas Medicaid, Medicare, and private commercial populations. As shown in Table 28, actual annual aggregate Medicaid expenditures in Texas have ranged between $17.3 billion and $24.8 billion from 2007 to 2011, increasing on average 9.48% annually. Actual annual aggregate Medicare expenditures in Texas have ranged between $20.6 billion and $24.8 billion from 2007 to 2011, increasing on average 4.83% annually. The estimated annual aggregate private commercial population expenditures435 in Texas have ranged between $47.1 billion and $65.1 billion from 2007 to 2011, increasing on average 10.44% annually.

Table 28. Texas Aggregate Annual Health Expenditures by Payer (in Billions)

Payers 2007 2008 2009 2010 2011 Medicaid436 $17.28 $19.05 $20.80 $22.82 $24.82 Medicare437 $20.57 $21.68 $23.31 $24.27 $24.83

434 From CMS and includes costs from Medicaid, Medicare, Private, as well as out-of-pocket costs, and other third party payers, http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and- Reports/NationalHealthExpendData/Downloads/prov-tables.pdf, page 2 435 Private Expenditures include employer sponsored insurance and other private insurance, which includes Marketplace plans 436 Texas Medicaid and CHIP in Perspective, chapter 8, ninth edition, http://www.hhsc.state.tx.us/medicaid/reports/PB9/TOC.shtml 437 CMS - Medicare Geographic Variation, State/County Report - All Beneficiaries, https://www.cms.gov/Research- Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Medicare-Geographic-Variation/GV_PUF.html

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Private438 $47.06 $47.80 $70.31 $62.42 $65.13

Per Capita Costs

Table 29 and Figure 35 summarize the estimated annual per capita costs of Texas health expenditures over the past five years. As shown below, the actual per capita cost in 2011 for Medicaid in Texas reached approximately $6,900, with an average annual trend of 3.35% between 2007 and 2011. The actual per capita cost in 2011 for Medicare in Texas was approximately $10,600, with an average annual trend of 3.05% from 2007 to 2011. The estimated per capita cost in 2011 for the private commercial population in Texas was approximately $4,950 with an average annual trend of 8.93% from 2007 to 2011.

Table 29. Annual Per Capita Cost by Payer

Payers 2007 2008 2009 2010 2011 Medicaid439 $6,056 $6,597 $6,686 $6,741 $6,896 Medicare440 $9,383 $9,827 $10,459 $10,695 $10,566 Private441 $3,758 $3,738 $5,368 $4,782 $4,952

Per Capita Cost By Payers

438 Center for Financing, Access, and Cost Trends, Agency for Healthcare Research and Quality: Medical Expenditure Panel Survey Household Component, 2009. http://meps.ahrq.gov/mepsweb/data_stats/summ_tables/hc/state_expend/2009/table1.htm#Note2a 439 Actual Per Capita Cost is calculated by taking the aggregate Medicaid cost divided by actual Medicaid enrollment. HHSC Medicaid Enrollment by County, http://www.hhsc.state.tx.us/research/MedicaidEnrollment/me- results.asp 440 CMS - Medicare Geographic Variation, State/County Report - All Beneficiaries, https://www.cms.gov/Research- Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Medicare-Geographic-Variation/GV_PUF.html 441 Estimated Private Per Capita Cost is calculated by taking the aggregate Private cost divided by Private enrollment. Enrollment data is distributed by Employer, Individual, Medicare, Medicaid, Other Public, and Uninsured. Enrollment in Texas: CMS - Medicare Geographic Variation, HHSC Medicaid Enrollment by County, http://www.texmed.org/Template.aspx?id=5519, https://www.tsl.state.tx.us/ref/abouttx/census.html, http://www.cdc.gov/nchs/hus/state.htm,

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Figure 35. Annual Per Capita Cost by Payer

$12,000

$10,000

$8,000 Medicaid Medicare $6,000 Private

$4,000

$2,000

$0 2007 2008 2009 2010 2011

Health Expenditure Projections Overall, historical results displayed above show that both aggregate and per capita health care expenditures in Texas continue to increase. When looking forward, cost projections indicate health expenditures will continue to steadily increase over the next decade. According to national health expenditure trends projected by CMS, Medicaid health expenditures are projected to increase between 2.2% and 12.2% annually, Medicare expenditures are projected to increase between 4.2% and 9.1% annually, and commercial health expenditures are projected to increase between 3.4% and 7.7% annually through 2022442.

When applying the CMS national health expenditure trends by year against current Texas health expenditures, total annual expenditures may reach upwards of approximately $51 billion for Medicaid, $50 billion for Medicare, and $119 billion for the private commercial population by 2022.

Estimated Investments This State Healthcare Innovation Plan (SHIP) offers Texas an opportunity to make significant and meaningful investments in health IT technology, practice transformation, public health innovations and a wide variety of dissemination and collaboration activities that are expected to

442CMS, National Health Expenditure Projections 2012 – 2022, Private, Medicare, Medicaid: Table 3 National Health Expenditures; Aggregate and per Capita Amounts, Percent Distribution and Annual Percent Change by Source of Funds: Calendar Years 2006-2022, http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics- Trends-and-Reports/NationalHealthExpendData/downloads/proj2012.pdf

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improve performance across the state’s health care system. Investments will cover implementation and evaluation of our proposed models and related activities.

SIM Council Personnel The SIM Council will oversee and support all activities related to the transformation program. A staff of six will be responsible for working with community stakeholders, providers, payers and related state programs and initiatives to implement and promote the successful adoption of the SHIP transformation models. The SIM Council personnel would:

 Develop and implement a detailed work plan;  Manage and coordinate all initiatives;  Develop and host learning collaboratives, webinars, and technical training sessions;  Procure the necessary consultants and contractors and oversee their activities;  Develop and manage communication, including the SIM website, outreach materials, and public communication materials; o Prepare legislative updates and presentations for key leaders and legislative committees;  Develop SIM-related reporting and analysis, working with evaluation subcontractors;  Participate in meetings as part of grant management and to meet other federal grant; requirements; and  Perform fiscal management and reporting.

The salary budget figures in the table below give the midpoint of the salary range for the middle year of the project for the six staff: an executive director, program manager, analyst, information specialist, grant manager, and an administrative assistant. All personnel will be eligible for required employee benefits totaling 30 percent of salary. The personnel expenses are projected to be $1,998,777 over the 3-year life of the project. This includes the state’s 19% overhead rate.

Average Annual Personnel Responsibilities Salary The Project Director provides leadership on all aspects of the SIM, particularly on the $111,289 development of the initiatives, building relationships with organizations and individuals, overseeing the work of the project manager, and overseeing the budget. The Director will have primary responsibility for working with CMS. The Project Manager oversees development and implementation of specific initiatives $91,975 with a focus on timelines, deliverables, and internal and external communication related to these initiatives. The Researcher/Analyst is the internal lead for research and statistical analysis and $71,686 reporting, working closely with the evaluation team and consultants. The Information Specialist will focus on communications within regional activities, $62,653 and between the regions and the Council; shared computer space such as SharePoint; website content, use, and maintenance; and data reporting.

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The Grant Coordinator assures compliance with all federal grant requirements; $51,199 manages distribution and tracking of funds to SIM participants (including subcontractors and consultants) and ensures compliance with applicable state regulations and requirements. The Administrative Assistant provides support to all staff and activities of the program. $41,876 Total annual salaries $430,678 Total three-year salaries $1,292,034 Total annual fringe (30%) $387,610 Institutional overhead on salaries and fringe (19% of total) $319,132 Total 3 Year Staff Compensation Costs with benefits and institutional overhead $1,998,777

Consultants Consultants would bring special expertise and experience into the planning and implementation processes when the project’s needs exceed the staff’s capacity.

To develop a budget for consultants, we assumed an average hourly rate of $200. Actual rates and scopes of work will be developed and managed by Council staff, based on prevailing rates. We have budgeted $7 million for consultants for three years, distributed among each model, as shown in the table below. The table also provides examples of ways in which consultants may be used to support each model, but the actual scope of the consulting services will be influenced by the detailed implementation plans.

Model 3-year Estimated Consulting expertise that may be needed Budget hours/year 1. EHR/HIE $1,000,000 1,667  Develop a provider recruitment plan Expansion and  Extend REC contracts to provide additional Sustainability provider TA  Develop a test case for electronic ADT notifications  Update HIE value estimates 2. Clinical Care $2,000,000 3,333  Facilitators for learning collaboratives and coaches Transformation for participating practices  TA and fees for NCQA recognition  TA for BTE recognition 3. Spreading and $2,000,000 3,333  Plans for spread of DSRIP projects Sustaining  Faculty for mentoring, coaching, and policy Innovations development  Plans for integrating community health workers in public health and behavioral health programs 4. Public Health $1,000,000 1,667  Analysis of the impact of community diabetes Innovations projects on Medicaid outcomes 5. Multipayer $1,000,000 1,667  Designing multi-payer programs (from other states) Engagement  Modeling provider payment methodology to estimate cost impact on various payers  Writing the charter for multi-payer infrastructure

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Infrastructure Costs Below is a brief description of the expected infrastructure costs for each Innovation Model, including those costs associated with training, data collection and dissemination, technology, and communication. As with the consulting costs, the actual infrastructure costs will be defined as part of the planning process, but the current estimate based on pilot programs or similar projects in state is $19,750,000.

Model Budget Infrastructure costs associated with each model 1. EHR/HIE $6,500,000  TA and equipment for providers  Coordinating care between providers, such as hospitals and LMHA  Collection and dissemination of payer-sponsored payments for HIE utilization  Expand HIT/HIE survey to include Medicaid providers  OeHC to manage research contracts and policy discussion forum 2. Clinical Care $4,500,000  Information system for providers to be sent benchmarked data for Transformation improvement  Learning Collaboratives, meeting expenses ($1.5 m)  Payments for recognized providers 3. Spreading and $6,000,000  Costs associated with provider education and learning networks Sustaining for spread of all types of innovations (except consultants) Innovations ($2.5m)  Community health worker education  Continuous feedback of information from collaboratives  Innovation tracking database and information dissemination ($500,000)  Payments for recognized providers , enhanced payment rates, care coordination fees, case managers, patient engagement education, high-risk pregnancy assessments, and other tools for the spread of practice transformation 4. Public Health $2,500,000  Support 5000 Medicaid MC enrollees' participation in the National Diabetes Prevention Program at $500 per person  DPP experience database 5. Multipayer $250,000  New payment codes for qualifying practices and services  Data sharing infrastructure

Incentive Payments Incentive payments are critical to garnering the attention of the targeted providers who have numerous demands on their time, helping them to prioritize the work of this grant. In total, we anticipate incentive payment to providers to total $12,250,000. Cost estimates are based on the prevailing incentive payment rates in other states, or in Texas, if such incentives are already being paid.

Model Budget Incentive costs associated with each model 1. EHR/HIE $6,000,000  For the adoption and use of EHR and participation in HIE.  For the HIEs for connecting providers  Quality reporting incentives

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2. Practice $4,500,000  For undertaking transformations to improve clinical care Transformation 3. Spreading and $1,750,000  Training, accreditation, and/or recognition costs for practices Sustaining  For leading practices to serve as faculty and mentors Innovations 4. Public Health 0 None 5. Multipayer 0 None

Evaluation The evaluation will be awarded to a university or firm with the necessary expertise, through a competitive procurement process, with a limit of $2.5 million for 3 years, slightly less than 5% of the total budget. The main components will be a provider survey, oversampling in the Behavioral Risk Factor Surveillance System (BRFSS), statistical analysis of multiple, merged datasets, and multi-media data reporting. The SIM Council staff will have responsibility for writing the RFP which will encompass each Innovation Model and the short and long term outputs.

Travel In-state travel has been budgeted for SIM Council personnel to travel to regional meetings; for consultants to travel to meetings in Austin and regions, and reimbursement costs for local travel to workgroup meetings. $750,000 has been budgeted. Travel for providers participating in learning collaboratives is estimated to be $1,450,000, for a total combined travel budget for practices and meeting participants of $2,200,000 over three years.

Total Budget In total, Texas anticipates that the scope of work described in this SHIP would cost $45,689,777 over three years, as shown in the table below.

SIM 3-Year Budget Models Budget Category EHR/HIE Practice Spreading Public Multi-payer Total Transformation Innovations Health*

Infrastructure $6,500,000 $4,500,000 $6,000,000 $2,500,000 $250,000 $19,750,000 Incentive payments $6,000,000 $4,500,000 $1,750,000 $0 $0 $12,250,000 SIM Council personnel $1,998,777 Consultants $1,000,000 $2,000,000 $2,000,000 $1,000,000 $1,000,000 $7,000,000 Evaluation $2,500,000 Travel $2,200,000 Total $45,689,777

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Anticipated Impact on Costs Cost savings will be manifest primarily as a reduction of unnecessary and inappropriate health care utilization. Planned system changes such as improved care coordination, performance-based payments, integration of information across care settings, medication management, and patient engagement and accountability for self-management and healthy lifestyle behaviors will lead to reductions in three types of potentially preventable events: emergency department visits, hospitalizations for primary care sensitive conditions, and readmissions. Additionally, improvements in care such as adherence to perinatal care guidelines can reduce the rate of preterm births, which reduces the need for higher cost care, such as a neonatal intensive care unit.

It is difficult to estimate the level of savings because Texas’ combination of health system changes has not been implemented in the proposed manner for this specific population. The initial estimate is for Texas to achieve a ten percent reduction in potentially preventable events and their associated costs over a five-year period, from January 1, 2015 to December 31, 2019, above what would have occurred without implementing the SIM initiative. Due to an aging population, inflation and other factors beyond control, health care costs are expected to grow over this period; however, Texas expects to see slower growth in health care spending attributable to the SIM initiative, with an expected five percent reduction in the rate of growth.

Expected Total Cost Saving and Return on Investment Reports documenting savings and return on investment from implementation of the types of models and programs Texas proposes have produced a very wide range of results, even among similar populations, such as aged, blind or disabled Medicaid recipients with chronic conditions.443 However, among the panoply of studies we reviewed on patient-centered medical home and care coordination initiatives that targeted individuals with chronic conditions, savings from potentially preventable ED visits, hospitalizations and readmissions were most consistent for people with diabetes and chronic conditions with a behavioral health co-morbidity.

Within this same literature, there is also wide evidence that implementation of the types of models proposed in our SHIP do not produce net savings in the short-term, even after three years.444 We expect a return on investment to begin within year four or five of this program. However, we expect a non-financial return on investment, by way of increased consumer

443 For example, the Center for Health Care Strategies, a CMMI contractor for the SIM initiative produced a summary report of results from a large number of initiatives that implemented a patient-centered medical home or care coordination in the Medicaid population. 444 Hoff T., Weller W., DePuccio M. "The Patient-Centered Medical Home A Review of Recent Research." Medical Care Research and Review; 69(6): 619-644, 2012; and Jackson G.L., et al. "The Patient-Centered Medical Home A Systematic Review," Annals of Internal Medicine; 158(3):169-178, 2013.

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satisfaction, and a decline in rate of growth of diabetes, hypertension and prediabetes among the target populations within the first three years of the SIM initiative.

Cost Savings for Texas Population with Diabetes

An example of the costs and potential savings specific to the populations impacted by the Texas SIM initiative is shown in the figure below. Figure 36 displays the annual costs by payer related to diabetes in Texas in calendar year 2011. The total estimated medical spending associated with diabetes in 2011 was greater than $10 billion.445. For every 1% of savings under the Texas SIM initiatives for the diabetes population alone, there would be approximately $100 million in annual healthcare expenditure savings.

Figure 36. 2011 Estimated Diabetes Related Expenditures in Texas

Diabetes Cost (in Millions)

$5,675 $6,000 $5,000 $3,701 $4,000 $3,000 $1,481 $2,000 $1,234 $1,000 $247 $0 Medicaid Dual Medicare No Private Only Eligibles Only Insurance

Sustaining Success Expanding the state’s infrastructure and capacity for electronic health records and their meaningful use and the exchange of health information among providers—along with investments in the expansion of medical/health home models and evidence-based public health initiatives—are expected to produce long-term payoffs. Creating an infrastructure for multi- payer engagement and collaboration, and for spreading and replicating best practices across the state will further the reach of these and other existing initiatives the SIM project will leverage,

445 HHSC. Report on Direct and Indirect Costs of Diabetes in Texas, http://www.hhsc.state.tx.us/reports/2012/direct- indirect-costs-diabetes-texas.pdf, page 10

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such as the Medicaid 1115 transformation waiver and Strong Start maternal medical home models.

In large part, the sustainability of the SIM project will occur through newly established networks of collaboration among payers, provider and health IT communities, state and local health agencies, Medicaid consumers and other stakeholders, supported by the infrastructure of the Texas Institute for Health Care Quality & Efficiency (Institute). The Institute will oversee a newly created the SIM Council which will be responsible for the implementation and day-to-day operations of the SIM Project. As a permanent body and by virtue of its membership, the Institute will absorb the SIM Council role in serving as an ongoing resource for linking a wide variety of stakeholders in spreading innovation and disseminating best practices across the State of Texas.

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I. Evaluation Plans Commitment to CMS Evaluation of the Texas SIM Initiative Texas HHSC would agree to cooperate and fully participate with CMS and its contractors in collecting and reporting data on implementation and outcomes related to the SIM initiative. We would facilitate making available for the CMS evaluation team those stakeholders who can discuss progress over the course of the project. As described in Section D, we are proposing that SIM Council and its executive director, under the auspices of the Texas Institute of Health Care Quality and Efficiency (Institute), would have lead responsibility for the overall SIM initiative. This responsibility would include defining the data collection methodologies, evaluating data and using results to inform the continuing implementation of the State Healthcare Innovation Plan (SHIP).

Preliminary SIM Evaluation Measures The SIM Evaluation Measures table presented in this section lists measures the SIM Council would consider in finalizing the evaluation plan. We conducted a detailed review of measures that are available to assess performance related to the SIM project, including metrics that are currently produced in the state, as well as other measures that are available nationally. In narrowing the choices, we intend to give preference to measures that are currently available in the state to ease the burden of data collection and to allow for comparisons to previous reporting periods. Secondly, preference will be given to measures emphasized nationally (e.g., CMMI’s recommended set of core measures) to allow for inter-state comparisons. Where no measures currently exist, we will consider the development of alternate measures.

The measures presented in the table are linked to those displayed in the Driver Diagram presented in Section D. The SIM Evaluation Measures table identifies measures to evaluate each aim, the primary and secondary drivers, and SIM innovation models included in the Driver Diagram. Existing measurement activities for which there is readily available data are shown as non-italicized. Measures in italics address other key components of the project, but are not currently reported in Texas and would need to be programed and calculated. In some cases, italicized measures would need to be defined, as well.

Data for the available measures under consideration come from a variety of sources, including administrative data, clinical information, patient interviews and provider surveys. The abundance of measures under consideration and varied sources of data are needed to address the many goals and proposed outcomes the project is trying to achieve; for example, wider use of evidence-based care and patient engagement strategies through medical, health and maternity home models, better health outcomes, and cost containment. The SIM Evaluation Measures table is laid out according to three sets of measures described below:

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Dashboard Measures Measures that address the five-year aims are highlighted as “dashboard” measures that would be assessed annually in monitoring the project’s progress toward achieving the five-year goals for the targeted population and to support project management and communication. While all measures would be evaluated, the dashboard measures would be the primary tools that the SIM Council and staff would use to assess the achievement of the overall goals of the project in reducing potentially preventable events and preterm births, improving consumer satisfaction and reducing costs.

During further evaluation planning efforts, the SIM Council and staff would develop a set of quarterly, or in some cases monthly, implementation dashboard measures related to each SIM project innovation model.

Driver Measures Driver measures address the primary and accompanying secondary driver measures, where applicable. These measures would also be assessed annually allow the SIM Council to take a deeper look at the project’s progress in driving change. (See notes provided in the SIM Evaluation Measures table to assist in the identification of key drivers of the SIM initiative where state or national measures were not easily identified.) In these cases, additional measures would be identified or developed.

SIM Project Innovation Model Measures The SIM project innovation model measures are process measures developed to assess the progress of a future SIM Model Testing grant in implementing the proposed innovations. The SIM innovation measures included in the table are based on information to date regarding the innovations models described in Section E. Innovation Plan. To the extent that models are modified before or during implementation, some measures may need to be modified as well. Many of these measures would be collected as part of a SIM Council survey, which would be developed and administered by the evaluation contractor. These measures would be produced and reviewed by the SIM Council annually, or more frequently as needed and feasible.

Target Population Data would be collected for the target population, which, in the first three years, would include adults in Medicaid managed care with diabetes, hypertension, pre-diabetes, and/or overweight or obesity, including those with a behavioral health co-morbidity, expanding to other chronic conditions in subsequent years; and pregnant women in Medicaid managed care. The target population is expected to extend to all chronic illnesses for Medicaid-Medicare dual eligibles and commercially-covered adults, as well as commercially insured pregnant women, by year three. To the extent feasible, information would also be collected for a comparison group, with input

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from the national evaluator and the state’s contracted evaluator. Comparative data from existing administrative and statewide data sources would be prioritized over new data collection.

Data Sources Texas is fortunate to have many rich sources of longitudinal data available for evaluating the SIM project. These include Medicaid claims, the Behavioral Risk Factor Surveillance System (BRFSS) survey, and Healthcare Effectiveness Data and Information Set (HEDIS) and CAHPS health plan measures. By year three, Medicare data would be added to track Medicare and dual eligibles as well. As the proposed Health Innovations Learning Network and Tracking Center (described in Section E, Model III) expand to provide linkages between inpatient and outpatient providers, it may be possible to obtain additional quality measures, such as care coordination, from electronic health records for the exchange population as well.

The Department of State Health Services (DSHS) administers the BRFSS for Texas and has the capacity to oversample the target population for analysis purposes in order to have a large enough number of Medicaid managed care enrollees with the selected chronic conditions. The SIM Council would address these options and considerations with appropriate state agencies. Birth outcomes data can be obtained from Vital Records and linked with Medicaid claims (support for the data linkage is being provided through other federal funding). Data on medical/health/maternity home and other practice transformation initiatives could be gathered from practices’ own data submission to national accrediting organizations such as through the NCQA Patient-Centered Medical Home self-assessment tool, Bridges to Excellence or Joint Commission. Any local or national organizations that provide technical assistance to a practice would also be required to report their activities.

The SIM Evaluation Measures table appears at the end of this section.

Texas SIM Evaluation Partners HHSC proposes to use a competitive bidding process to select a research partner to conduct the data collection, analysis and management of the SIM initiative, in coordination with the SIM Council and staff, under the leadership of the Institute. The University of Texas System has health services researchers at many of its location, as do several private universities and health systems in Texas that would be capable of implementing the evaluation component of the project. The Texas external quality review organization (EQRO) for Medicaid/CHIP would also expected to be a key research partner on the project regarding the collection and analysis of data from those programs. HHSC’s Strategic Decision Support staff would also play a vital role in providing Medicaid/CHIP data and analysis.

The selected SIM project evaluation partner would be required to collaborate with the state’s Medicaid/CHIP agencies and contractors in obtaining and analyzing data. The evaluation partner

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would report to the SIM project staff and Institute leadership in preparing progress reports for the Institute’s board, HHSC and DSHS stakeholders, other community stakeholders and CMS, as well as the legislature, as appropriate. Reports would compare changes in health care utilization and outcomes among the target populations compared to other Texas residents, and by payer, as the data for commercial payers and Medicare become available. The SIM project staff would have responsibility for ensuring that the evaluation’s data collection and reporting infrastructure is designed to support a continuous learning and improvement environment. This is essential for informing the Institute as to how and when to spread innovations beyond the initial target population to broader populations, including people with other chronic conditions in Medicaid, among Medicare-Medicaid dual eligibles, and commercially insured populations.

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Table 30. Evaluation Measures for Texas SIM Project

Outcome446 Measure Type/ Metric Data Source447 Additional Info/Rationale Driver DASHBOARD MEASURES 5-Year Aim Outcome Potentially preventable hospitalizations TX DSHS, EQRO Reduce by 5% 5-Year Aim Outcome Potentially preventable ED visits TX DSHS, EQRO Reduce by 5% 5-Year Aim Outcome Potentially preventable 30-day hospital TX DSHS, EQRO Reduce by 5% readmission 5-Year Aim Outcome Percentage of deliveries delivered pre- TX DSHS, EQRO Reduce by 10% term 5-Year Aim Outcome Percentage reporting fair or poor health BRFSS448 Reduce by 10% status 5-Year Aim Outcome Satisfaction with health care CAHPS Increase by 10%, CMMI core measure449 5-Year Aim Outcome Satisfaction with personal doctor CAHPS Increase by 10%, CMMI core measure; HHSC Performance Indicator Dashboard measure 5-Year Aim Outcome Satisfaction with specialist CAHPS Increase by 10%, CMMI core measure 5-Year Aim Outcome Total cost of care HHSC, DSHS, TDI Increase by no more than 5% 5-Year Aim – subset Outcome Total cost of Potentially Preventable HHSC, DSHS, TDI Decrease by 10% Events Driver Measures Weight management/ Process / Evidence- Adult BMI Assessment NCQA/ Calculated by EQRO Medicaid managed care Performance control based care in 2012 as a selected MRR Indicator Dashboard measure in measure 2013450

446 Black: Currently available; Italic: Not currently calculated and/ornot currently defined 447 See end of document for a list of abbreviations. 448 Behavioral Risk Factor Surveillance Survey, which includes a core set of questions, optional modules that a state may select, as well as designated state- specific questions. 449 The Center for Medicare & Medicaid Integration (CMMI) has released a set of recommended core measures to promote alignment and comparison across CMMI initiatives. 450 Established by HHSC for Medicaid managed care, dashboard measures identify key aspects of accountability for managed care organizations’ performance .

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Outcome446 Measure Type/ Metric Data Source447 Additional Info/Rationale Driver Weight Process / Adult Weight Screening and Follow-Up NQF 0421 This overlaps with #1, but also Evidence-based assesses whether a FU plan is care documented if the BMI is outside parameters. It is a CMMI core measure. Weight Outcome BMI – Overweight & Obesity > 25 BRFSS Collected in 2010 Weight Outcome BMI – Obesity > 30 BRFSS Collected in 2012 Weight Process / Adopting Are you eating either fewer calories or BRFSS – state specific State specific question used in several Healthy Lifestyle less fat to lose weight or keep from past years, most recently in 2008 Behaviors gaining weight? Weight Process / Adopting How many times per day do you drink a BRFSS – state specific Used in 2010 Healthy Lifestyle can, bottle, or glass of sugar-sweetened Behaviors beverages? Weight Process / Patient In the past 12 months, has a doctor, nurse BRFSS – state specific State specific question used in several Engagement or other health professional given you past years, most recently in 2008 advice about your weight? Weight Process / Adopting Are you now trying to lose weight? BRFSS – state specific State specific question used in several Healthy Lifestyle past years, most recently in 2008 Behaviors Weight Process / Adopting Are you trying to maintain your current BRFSS – state specific State specific question used in several Healthy Lifestyle weight that is to keep from gaining past years, most recently in 2008 Behaviors weight? Weight Process / Adopting Are you getting physical activity or BRFSS – state specific State specific question used in several Healthy Lifestyle exercise to lose weight or keep from past years, most recently in 2008 Behaviors gaining weight? Weight Process / Adopting During the past month, how many times BRFSS – state specific Used in 2011 Healthy Lifestyle per day, week, or month did you eat a Behaviors meal from a fast food place? Diabetes management Outcome Comprehensive Diabetes Care – poor NCQA/ Calculated by EQRO / control HbA1c control (at least in 2012) as a selected MRR measure Diabetes Outcome Comprehensive Diabetes Care – LDL NCQA/ Calculated by EQRO HHSC Performance Indicator control (at least in 2012 and 2013) as a Dashboard measure in 2013 selected MRR measure Diabetes Process / Evidence- Comprehensive Diabetes Care – HbA1c NCQA/ Calculated by EQRO HHSC Performance Indicator based care tested (claims-based) Dashboard measure in 2013

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Outcome446 Measure Type/ Metric Data Source447 Additional Info/Rationale Driver Diabetes Outcome Comprehensive Diabetes Care – HbA1c NCQA/ Calculated by EQRO HHSC Performance Indicator control (claims-based) Dashboard measure in 2013 Diabetes Process / Evidence- Comprehensive Diabetes Care – eye NCQA/ Calculated by EQRO HHSC Performance Indicator based care exam (claims-based) Dashboard measure in 2013; CMMI core measure Diabetes Process / Evidence- Comprehensive Diabetes Care – LDL NCQA/ Calculated by EQRO HHSC Performance Indicator based care screened (claims-based) Dashboard measure in 2013 Diabetes Process / Evidence- Comprehensive Diabetes Care – NCQA/ Calculated by EQRO HHSC Performance Indicator based care nephropathy monitored (claims-based) Dashboard measure in 2013; CMMI core measure Diabetes Process / Comprehensive Diabetes Care – foot NQF 0056 CMMI core measure Evidence-based exam care Diabetes Process / Proportion of days covered: 5 rates by NQF 0541 CMMI core measure Evidence-based therapeutic category (beta-blockers, Addresses medication management care; medication ACEI/ARB, calcium-channel blockers, management diabetes medication, statins) Diabetes Cost Relative resource use for people with NCQA The Medicaid EQRO is planning to diabetes adopt this measure for Medicaid managed care Diabetes Outcome Comprehensive Diabetes Care – BP NCQA MCOs/EQRO may be calculating control measures these measures Diabetes Process / Patient About how often do you check your BRFSS (optional) This is included as part of an optional engagement blood for glucose or sugar? module, but it appears that TX uses Diabetes Process / Patient Have you ever taken a course or class in BRFSS (optional) this module yearly engagement how to manage your diabetes yourself? Diabetes / Prediabetes Risk Prevalence of pre-diabetes BRFSS (optional) factor/outcome

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Outcome446 Measure Type/ Metric Data Source447 Additional Info/Rationale Driver Diabetes / Prediabetes Process / Evidence- Did a doctor or health care provider BRFSS – state specific question based care; patient instruct you to eat or not eat certain foods used only in 2007 engagement to control your diabetes or high blood sugar? Diabetes Utilization/ Percentage of Medicaid recipients with Diabetes Priority Report451 outcome diabetes related claims (claims) Diabetes Cost Amount paid per claim (Medicaid Diabetes Priority Report recipients with diabetes related claims) (claims) Diabetes Cost Amount paid per client (Medicaid Diabetes Priority Report recipients with diabetes related claims) (claims) Diabetes Outcome Diabetes Short-Term Complications PQI 01 (claims) / Diabetes Medicaid managed care Star+PLUS Admission rate Priority Report “Quality Performance Indicator Dashboard Challenge Award” measure in 2013 Diabetes Outcome Diabetes Long-Term Complications PQI 03 (claims) / Diabetes Medicaid managed care Star+PLUS Admission rate Priority Report “Quality Performance Indicator Dashboard Challenge Award” measure in 2013 Diabetes Outcome Uncontrolled Diabetes PQI 14 (claims) / Diabetes Medicaid managed care Star+PLUS Priority Report “Quality Performance Indicator Dashboard Challenge Award” measure in 2013 Diabetes Outcome Rate of Lower Extremity Amputation PQI 16 (claims) / Diabetes Medicaid managed care Star+PLUS among Patients with Diabetes Priority Report “Quality Performance Indicator Dashboard Challenge Award” measure in 2013

451 In 2011, state legislation (SB 796, 82nd Legislature) required the HHSC to coordinate with the Texas Diabetes Council (TDC) to develop three reports on the prevention and treatment of diabetes in Texas. The Diabetes Priority Report addresses the first requirement of SB 796, in identifying HHSC’s priorities for addressing diabetes within the Medicaid population.

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Outcome446 Measure Type/ Metric Data Source447 Additional Info/Rationale Driver Diabetes Outcome Optimal diabetes care NQF 0729 CMMI core measure The percentage of patients 18-75 with a diagnosis of diabetes, who have optimally managed modifiable risk factors (A1c<8.0%, LDL<100 mg/dL, blood pressure<140/90 mm Hg, tobacco non-use and daily aspirin usage for patients with diagnosis of IVD) with the intent of preventing or reducing future complications associated with poorly managed diabetes. Hypertension (HTN) Outcome HTN admission rate PQI 07 Medicaid managed care Star+PLUS management / control Performance Indicator Dashboard measure in 2013 HTN Outcome Controlling high blood pressure NCQA/ Calculated by EQRO Medicaid managed care Star+PLUS (at least in 2012) as a selected Performance Indicator Dashboard MRR measure measure in 2013; CMMI core measure HTN Process / evidence- Has a doctor or other health professional BRFSS (optional) Used in 2011, 09, 07. based care; patient ever advised you to reduce alcohol use to engagement help lower or control your high blood pressure? HTN Process / adopting Are you reducing alcohol use to help BRFSS (optional) healthy lifestyle lower or control your high blood behaviors pressure? HTN Process / evidence- Has a doctor or other health professional BRFSS (optional) based care; patient ever advised you to cut down on salt to engagement help lower or control your high blood pressure? HTN Process / adopting Are you cutting down on salt to help BRFSS (optional) healthy lifestyle lower or control your high blood behaviors pressure? HTN Process / evidence- Has a doctor or other health professional BRFSS (optional) based care; patient ever advised you to change your eating engagement habits to help lower or control your high blood pressure?

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Outcome446 Measure Type/ Metric Data Source447 Additional Info/Rationale Driver HTN Process / adopting Are you changing your eating habits to BRFSS (optional) healthy lifestyle help lower or control your high blood behaviors pressure? HTN Process / evidence- Has a doctor or other health professional BRFSS (optional) based care; patient ever advised you to exercise to help engagement lower or control your high blood pressure? HTN Process / adopting Are you exercising to help lower or BRFSS (optional) healthy lifestyle control your high blood pressure? behaviors HTN Process / evidence- Has a doctor or other health professional BRFSS (optional) based care; patient ever advised you to take medication to engagement help lower or control your high blood pressure? HTN Process / evidence- Are you currently taking medicine for BRFSS Claims-based data could also be used, based care your high blood pressure? if feasible, but would measures whether the prescription was filled, not compliance HTN Cost Relative resource use for people with NCQA The Medicaid EQRO is planning to hypertension adopt this measure for Medicaid managed care Management of Process / evidence- Follow up after hospitalization for mental NCQA/ Calculated by EQRO CMMI core measures; HHSC Behavioral Health based care illness (7 day and 30 day) (claims-based) Performance Indicator Dashboard (BH) comorbidities measures Management of BH Outcome Readmission within 30 days after an Calculated by EQRO (claims- comorbidities Inpatient Stay for Mental Health based) Management of BH Access Percent of members with good access to CAHPS / Calculated by EQRO HHSC Performance Indicator comorbidities BH treatment or counseling Dashboard measure Management of BH Process / Antidepressant Medication management NCQA/ Calculated by EQRO HHSC Performance Indicator comorbidities medication (Acute and continuation phases) (claims-based) Dashboard measure management Management of BH Process / evidence- Screening for clinical depression NQF 0418 CMMI core measure comorbidities based care Management of BH Process / care Post-Discharge continuing care plan NQF 0557 CMMI core measure comorbidities coordination created

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Outcome446 Measure Type/ Metric Data Source447 Additional Info/Rationale Driver Management of BH Process / care Post-discharge continuing plan NQF 0558 CMMI core measure comorbidities coordination transmitted to next level of care provider upon discharge Management of BH Outcome During the past 30 days, for about how BRFSS (optional) This is included as part of an optional comorbidities many days did a mental health condition module, that was used by TX in 2007 or emotional problem keep you from only doing your work or other usual activities? Pregnancy Process / evidence- Frequency of ongoing prenatal care NCQA/ Calculated by EQRO CMMI core measure management based care (claims-based) Pregnancy Outcome Elective Delivery Prior to 39 Completed NQF 0469 CMMI core measure Weeks Gestation Pregnancy Outcome Induction births Texas Healthy Babies Expert Panel Pregnancy Outcome Cesarean Rate for Low-Risk, First Birth NQF 0471 CMMI core measure; same/similar to Women measure used in national Strong Start evaluations Pregnancy Outcome Cesarean delivery Texas Healthy Babies Expert Same/similar to measure used in Panel national Strong Start evaluations Pregnancy Outcome Healthy Term Newborn NQF 0716 CMMI core measure; same/similar to measure used in national Strong Start evaluations Pregnancy Process / evidence- Prenatal Care NCQA/ Calculated by EQRO HHSC Performance Indicator based care (claims-based) Dashboard measure Pregnancy Process / evidence- Postpartum Care NCQA/ Calculated by EQRO HHSC Performance Indicator based care (claims-based) Dashboard measure Pregnancy Outcome Low birth weight admission rate PQI 09 HHSC Performance Indicator Dashboard measure Pregnancy Outcome Infant mortality Texas Healthy Babies Expert Same/similar to measure used in Panel national Strong Start evaluations Pregnancy Outcome Neonatal mortality (< 28 days of age) Texas Healthy Babies Expert Panel Pregnancy Outcome Pre-term births (< 36 weeks) Texas Healthy Babies Expert Same/similar to measure used in Panel national Strong Start evaluations Pregnancy Outcome Low birth weight (less than 2500 g) Texas Healthy Babies Expert Same/similar to measure used in Panel national Strong Start evaluations

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Outcome446 Measure Type/ Metric Data Source447 Additional Info/Rationale Driver Pregnancy Outcome Maternal depression MRR Currently used in national Strong Start evaluations Pregnancy Cost Medical expenditures for mother and Claims Currently used in national Strong infant in the first year Start evaluations

SIM Innovation Measures (Note: as interventions are fully developed, measures will be modified or added) EHR/HIE Process/Implement Percent of targeted physicians committed Texas Local HIE Grant ation Progress to HIE Program Monthly Progress Report EHR/HIE Process/Implement Percent of targeted hospitals committed Texas Local HIE Grant ation Progress to HIE Program Monthly Progress Report EHR/HIE Process/Implement Number of providers actively conducting Texas Local HIE Grant ation Progress query-based exchange Program Monthly Progress Report EHR/HIE Process/Implement Number of providers actively conducting Texas Local HIE Grant ation Progress direct-based exchange Program Monthly Progress Report EHR/HIE Process/Implement Number of targeted LMHAs, other Texas Local HIE Grant This would need to be added to the ation Progress behavioral health providers and LTC Program Provider Survey current survey of providers providers that: adopt a certified EHR, reach MU, stage 1 or stage 2 Clinical Care Process/Implement Number of targeted providers/practices SIM Council survey To be created. Transformation ation Progress that obtain national recognition as a medical/health/maternity home or achieve a higher level of current recognition Clinical Care Process/Patient Number of targeted practices that use the SIM Council survey PAM is a 13-question survey Transformation Engagement Patient Activation Measure (PAM) with instrument conducted by phone or in their patients provider’s office to assess patients’

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Outcome446 Measure Type/ Metric Data Source447 Additional Info/Rationale Driver Clinical Care Outcome Percent of patients within targeted SIM Council survey/ Medical readiness to engage in their health Transformation practices whose Patient Activation record review care choices; items can be Measure (PAM) scores increased over summarized into a single score.452 baseline Spreading/ sustaining Process/Implement Number of MD/ODs, PAs, and ANPs that SIM Council survey To be created. innovations ation Progress – have BTE, NCQA or equivalent Workforce recognition for diabetes care, hypertension or depression Spreading/ sustaining Process/Implement Number of Community Health Workers, SIM Council survey To be created. innovations ation Progress – Diabetes Education Counselors, Workforce Promotoras in targeted service delivery areas with high-pre-term birth rates Spreading/ sustaining Process/Implement Utilization of telemedicine targeted to Claims To be created. innovations ation Progress - people with diabetes, HTN, or mental Telemedicine illness with a diabetes or HTN co- morbidity Spreading/ sustaining Process/Implement Percentage of eligible and targeted high- Claims To be created. innovations ation Progress - risk pregnant women receiving 17-OHP Policy when recommended Spreading/ sustaining Process/Implement Program and participant counts of CME SIM Council survey To be created. innovations ation Progress – credit programs; direct technical Evidence-based assistance; webinars and other outreach care activities that support provider awareness and education that advances use of evidence-based care in the treatment of diabetes, HTN, high-risk pregnancy care and other chronic conditions or types of practice innovations associated with DSRIP projects; may include provider surveys.

452 The instrument was developed by Judith Hibbard and Jessica Greene at the University of Oregon. It is currently being used by leading health organization, including Minnesota Medicaid, Washington State’s Aging & Disabilities Service Administration, and Molina Healthcare. See evaluation results from its use: http://www.insigniahealth.com/clients-customers/medicaid#sthash.3JPF6jQE.dpuf.

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Outcome446 Measure Type/ Metric Data Source447 Additional Info/Rationale Driver Community-based Process/Implement Number of collaborations that engage SIM Council survey To be created. public health ation Progress DSHS-Medicaid-health plans in local innovations SDAs to adopt YMCA Diabetes Prevention Program model Multi-payer Process/Implement Percent of targeted health plans that SIM Council survey To be created. engagement and ation Progress adopt ADA's national standards for alignment DSME program requirements, authorization criteria and performance measures Multi-payer Process/Implement Percent of targeted health plans that SIM Council survey To be created. engagement and ation Progress provide differential payments based on alignment quality, level of medical home certification, or some other value-based criteria. Multi-payer Process/Implement Percent of health plan payments to SIM Council survey To be created. engagement and ation Progress providers that are based on accountable alignment arrangements (non-FFS) Multi-payer Process/Implement Percent of targeted health plans SIM Council survey To be created. engagement and ation Progress participating in any accountable care alignment arrangements

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Abbreviations for SIM Evaluation Measures Table ADA American Diabetes Association ANP Advanced Nurse Practitioner BRFSS Behavioral Risk Factor Surveillance Survey BTE Bridges to Excellence CAHPS Consumer Assessment of Healthcare Providers and Systems (survey) CMMI Center for Medicare and Medicaid Innovation DSHS Department of State Health Services DSME Diabetes Self-Management and Education DSRIP Delivery System Reform Incentive Payment program under the Medicaid 1115 Transformation Waiver EHR Electronic Health Record EQRO External Quality Review Organization FFS Fee-For-Service HHSC Health and Human Services Commission HIE Health Information Exchange HTN Hypertension LMHA Local Mental Health Authority LTC Long-Term Care MRR Medical Record Review MU Meaningful Use NCQA National Committee for Quality Assurance NQF National Quality Forum PA Physician Assistant PAM Patient Activation Measure PQI Prevention Quality Indicators (from AHRQ Agency for Healthcare Research & Quality SDA Service Delivery Area (for Medicaid managed care) TDI Texas Department of Insurance 17-OHP 17-hydroxyprogesterone a medication to reduce risk of pre-term birth

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J. Roadmap

Overview The roadmap to health care transformation in Texas is an ambitious undertaking that reflects the state’s commitment to collaborating with stakeholders and advancing strategies that will ensure long-term success. The state would face some significant challenges in implementing the proposed models outlined in this SHIP, including its geographic size, significant variations in patient demographics and provider practice patterns, and a complex private insurance market with a large number of payers. The proposed plan tries to addresses these challenges through a variety of initiatives that provide opportunities for participation throughout the entire state while supporting innovation at the regional level. To manage these regional variations, we propose three key strategies that would guide the planning and implementation of each of the five models, and ensure consistency, while supporting local and regional flexibility, as needed:

Importance of Stakeholder Participation Delivery system transformation takes time. The proposed roadmap is designed to allow for incremental success in logical stages that support and sustain stakeholder engagement and participation. Success in the implementation of proposed SHIP innovations within each model is highly dependent on the creation of collaborative relationships; sharing information and lessons learned to promote best practices; and providing effective technical assistance and support for both providers and payers to encourage new partnerships in transformation. As the proposed roadmap demonstrates, stakeholders would play an active role in every phase of the SIM project, including early planning, program design and implementation, program evaluation, and sustainability.

Also reflected in the roadmap is the importance of timely data and evaluation of innovation progress to identify strengths and weaknesses and make necessary adjustments to the implementation plan. The roadmap provides general guidance for planning purposes, but to retain its usefulness and relevance, we anticipate periodic revisions would be required based on the progress of providers and payers in various regions of the state. The proposed SIM Council and staff, under the auspices of the Texas Institute of Health Care Quality and Efficiency (Institute), would support all implementation-related activities through strategic planning;

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provide guidance and direction to participants; monitor progress and provide regular feedback to participants and stakeholders.

Leveraging Initiatives Underway in Texas As referenced throughout this SHIP, the state is currently engaged in numerous initiatives designed to improve the delivery and cost-effectiveness of care and test alternative payment models. Though these initiatives are not specifically referenced in the proposed roadmap, we acknowledge the timelines of some of the key initiatives we’ve proposed to leverage in implementing SHIP models and their innovation programs. Some of these initiatives would expire before the estimated start date of the proposed SIM project and some would continue during the project period. The outcomes resulting from these initiatives, and the status of progress on the proposed SIM project relative to these timelines, may also require adjustments to the proposed roadmap. These initiatives are:

 ongoing expansion of Medicaid managed care and implementation of the Medicaid Delivery System Reform Incentive Payment projects approved as part of Medicaid 1115 Transformation waiver, 2011 – 2016;  Strong Start for Mothers and Newborns initiative in several Texas locations, 2012 – 2015;  Regional Extension Centers, April 2010 – April 2014;  Health Information Exchange (HIE) Cooperative Agreement Program, March 2010 – March 2014; and  Texas Medicaid Electronic Health Record Incentive Program providing funding for incentive payments to eligible hospitals and practitioners, 2011 – 2019.

Proposed Roadmap For purposes of illustration, the roadmap assumes a start date of January 1, 2015, and an ending date of December 31, 2019. If Texas applies for and receives a model testing award, a more detailed implementation plan would be designed, with dates adjusted to reflect the actual award and ending dates.

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Table 31. Roadmap for Implementation of the Proposed Texas State Healthcare Innovation Plan

2015 2016 2017 2018 2019 SIM Project Governance and Oversight Grant oversight and administration X X X X X Organizational meetings with the Institute and appointment of SIM X Council  Bi-monthly oversight meetings with SIM Council X X X X X  Quarterly meetings with Institute X X X X X Staffing decisions and hiring of SIM project staff X Develop RFP and select contractor for SIM project evaluator Reporting to CMS, Texas Legislature X X X X X SIM Project Stakeholder Engagement and Communication Develop SIM project stakeholder outreach and participation plan X Solicit stakeholder participation X X X X X Host quarterly SIM project public meetings X X X X X Develop and Maintain SIM project website X X X X X Model I: EHR and HIE Expansion and Sustainability Initiatives Develop plan to extend EHR Adoption Incentive Program  Develop draft provider participation plan, including criteria for X participation by region, provider type, incentive levels and payment mechanisms; solicit stakeholder feedback; finalize plan  Develop technical assistance agreements with Regional X Extension Centers  Amend and finalize existing contracts with Regional Extension X Centers  Develop and implement outreach and marketing plan to solicit X X X X X provider participation and encourage adoption and utilization of HIT/HIE  Award, administer and track grant funds for technical X X X X assistance  Develop process and protocols for program evaluation and X X X outcome measurement; complete annual program evaluation and make modifications as needed Develop and Implement test case for Expanding HIE Participation and Data Sharing  Finalize model design and develop model participation X requirements, including criteria for program participation by region, incentive levels, payment mechanisms  Select participants, administer incentive payments, oversee X X X X HIE expansion program  Organize and host statewide learning exchange to disseminate X X X strategies for success and lessons learned, and identify opportunities for engaging additional providers  Continue oversight and administration of HIE expansion X X X model; modify as necessary based on outcomes and lessons learned Develop Long-Term HIE Sustainability by Promoting Payer Participation  Develop strategy with public and private payers to enhance X X provider payments for HIE utilization; obtain stakeholder feedback and finalize plan  Implement program for payer-sponsored enhanced payments to X X providers; monitor impact on provider participation and ROI

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2015 2016 2017 2018 2019  Develop strategy for incentivizing provider reporting of new X X quality of care measures for Medicaid patients using data available as a result of HIE/EHR participation; obtain stakeholder feedback and finalize plan  Implement program for new Medicaid quality of care X X reporting; evaluate impact and opportunities for expansion of reporting requirements EHR/HIE Governance and Research  Define program evaluation measures and protocols for X X measuring, analyzing, and reporting results of HIT/EHR innovations  Administer evaluation program to determine effectiveness of X X X X strategies  Develop research agenda focused on HIT/HIE contributions to X X health care quality, safety and efficiency  Contract with universities or university consortiums to oversee X X X X research program and develop SHIP innovation reports for the State and Institute  Implement program modifications as necessary based on X X X evaluation and research results Model II: Clinical Care Transformation Programs Medical Home Training Program  Draft Patient-Centered Medical Home (PCMH) training X program, including eligibility criteria and provider incentives for participation; solicit stakeholder input and finalize model  Recruit and train program facilitators X X  Select provider participants, administer program and oversee X X X X X administration of incentive payments  Develop RFP and select contractor for administration of X X learning collaborative; finalize plan for learning collaboratives throughout state  Organize, promote and host up to 36 annual regional learning X X X collaboratives to share best practices, lessons learned and promote adoption of PCMH by other providers Medical Home Recognition Program  Develop draft implementation plan based on HRSA’s initiative X for FQHCs seeking NCQA PCMH recognition; include criteria for provider participation and incentive payments; solicit stakeholder input and finalize plan  Develop and implement marketing/outreach program to solicit X X providers  Select providers, oversee administration of program, adding X X X X additional providers in each year Chronic Disease Care Recognition Program  Develop draft implementation plan for provider adoption of X X Bridges to Excellence Care Recognition program; solicit stakeholder input and finalize plan  Develop and implement marketing/outreach program to solicit X X provider participation, targeting Medicaid providers in service areas with high rates of diabetes, hypertension and depression  Select providers, oversee administration of program, adding X X X X additional providers in each year

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2015 2016 2017 2018 2019 Program Evaluation  Define program evaluation measures and protocols for X measuring, analyzing, and reporting results of clinical care transformation initiatives  Administer evaluation program to determine effectiveness of X X X X strategies  Implement program modifications as necessary based on X X X evaluation outcomes Model III: Spreading and Sustaining Innovation Health Innovation Learning Network  Develop plan for implementation of network development and X operations  Develop criteria for network leaders; recruit and enroll X X qualified applicants  Conduct outreach program to attract local healthcare leaders X X and DSRIP providers  Develop and host learning programs throughout 11 health care X X X X regions to support and spread innovation activities  Launch health care improvement initiatives for spreading X X X X projects in each region in years 2-5  Enroll local practices and care sites for participation; provide X X X X incentive payments for training and accreditation/recognition where applicable  Work with payers to adopt pay-for-performance X X X strategies/policies based on outcome and evaluation results  Recruit and train faculty and technical mentors to provide local X X X support and coaching to further spread innovations Sustaining Practice Transformation in Medicaid Managed Care  Develop SIM project staff team to evaluate existing X X X X recommendations on delivery system reforms and quality- based payment strategies  Organize and host meetings with appropriate state agencies X X X X X and committees; monitor SHIP program progress; and disseminate information to stakeholders, providers, and program participants to share SHIP progress and accomplishments  Develop financial incentives workgroup to support and enable X X X X X multi-payer involvement and support implementation of multi- payer medical home model  Create workgroup to evaluate strategies for increasing X X X X utilization and payment of community health workers in Medicaid managed care; coordinate activities and implementation plans with other SIM project activities supporting medical home practices Texas Health Care Innovation Tracking Center  Create Health Care Innovation Tracking Center team to X X X X X monitor reform activities and outcomes, and communicate information on program accomplishments  Develop and oversee online, interactive, searchable database of X X X X health innovation activities across the state; support and coordinate with Health Innovation Learning Network activities

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2015 2016 2017 2018 2019  Utilize database and stakeholder feedback to support X X X monitoring and evaluation of SIM project activities and other state delivery system reform, including DSRIP projects  Engage key organizations involved in implementation and X X X monitoring of innovation activities to enhance and maximize impact of the Tracking Center Model IV: Community-Based Public Health Innovations Public Health-Medicaid Managed Care Diabetes Education Project  Working with the Texas Diabetes Council, Department of X State Health and Services and Medicaid Program, develop a plan for evaluating the reach, design and impact of the Texas Diabetes Self-Management and Education (DSME) program used by Medicaid clients with diabetes  Develop plan for collecting and analyzing data from the X Community Diabetes Projects (CDP) to assess reach of programs within Medicaid managed care, and impact on clinical outcomes  Develop and issue RFP to solicit a contractor to oversee data X collection and analysis and develop reports  Contractor oversees data collection, provides analysis and X final report to the SIM Council and staff  SIM Council and staff evaluate research results and develop X X plan for improvements, expansion and long-term sustainability of DSME and CDP Scaling the National Diabetes Prevention Program in Texas  Develop implementation plan for evaluating the costs and X potential savings of mandating inclusion of the Diabetes Prevention Program (DPP) as a covered service in STAR+PLUS Medicaid managed care program and potentially the state employee health insurance program  Develop implementation plan for DPP pilot project in an X existing STAR+PLUS service area to test program efficacy and cost effectiveness  Develop RFP and select contractor to administer X implementation and oversight of program  Implement and administer pilot project for up to 5,000 X X enrollees  Working with commercial and public payers participating in X X X DPP, develop plan to design and implement a DPP experience database to collect data and evaluate effectiveness of program  Develop and maintain data base for collection of information; X X X provide summary reports and evaluation of program; evaluate opportunities for improvement and expansion Model V: Multi-Payer Engagement and Alignment Building Capacity for Multi-Payer Collaboration  SIM Council and staff develops process and criteria for X X convening regional collaboration of payers and providers to design and agree on common approaches for provider payment incentives  Regional workgroups are established and meet at least X X X X X quarterly to develop strategies for payer/provider collaboration

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2015 2016 2017 2018 2019  Workgroups provide annual progress evaluation report to SIM X X X X Council for consolidation and inclusion in annual progress report  SIM staff hosts annual statewide conference of payers and X X X providers to share relevant experience, lessons learned, regional progress and initiatives and develop a strategy for future transformation Multi-Payer Alignment on Diabetes Care Transformation and Prevention  Establish collaborative research and support team to consider X opportunities for Medicaid payment alignment with commercial/Medicare  Conduct research and develop criteria for Medicaid X X reimbursement policies for Medical Nutrition Therapy for diabetes; develop plan and timeline for implementation Collaboration for Public Private Data Sharing  Develop SIM support team to provide technical assistance to X the Institute  Conduct feasibility research and provide technical analysis of X X establishing multi-payer data warehouse and reporting service; provide recommendations to the Institute for consideration  If consistent with Institute decision, take appropriate action to X X X establish data warehouse

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Appendix 1. Table of Federally‐supported Innovation Initiatives in Texas

Federal Initiatives Texas Recipients

Agency Type Name Organization Location CMS Rio Grande Valley ACO Donna Health Providers, LLC Advance Payment Rio Grande Valley Health McAllen ACO Alliance Texoma ACO, LLC Wichita Falls Plus Fort Worth Pioneer ACO* Seton Health Alliance Austin Accountable Care Coalition of Texas (Universal Houston/Beaumont American) Amarillo Legacy Medical Amarillo ACO BHS Accountable Care, LLC San Antonio BHS Accountable Care, LLC San Antonio Accountable (Vanguard Health) Care Essential Care Partners II, Organizations Austin LLC (ACO) Medicare Shared Essential Care Partners, Austin Savings ACO LLC(FQHCs) Memorial Hermann Accountable Care Houston Organization Meridian Holdings, Inc. Multi-state Methodist Patient Centered Dallas ACO Rio Grande Valley Health McAllen Alliance Scott & White Walgreens Central Texas Well Network Advance Payment Physicians ACO, LLC Houston & Shared Savings ACO Texoma ACO, LLC Wichita Falls Bundled Payments Bundled for Care Payments Improvement Baptist Medical Center San Antonio (BPCI) Initiative: Model 2 Encompass Home Health of Southlake BPCI Initiative: DFW Model 3 Encompass Home Health of Dallas Greater Dallas Encompass Home Health of Houston, Richmond Houston Encompass Home Health of Dallas, Fort Worth, North Central Texas Granbury

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Federal Initiatives Texas Recipients

Agency Type Name Organization Location Encompass Home Health of McKinney Northeast Texas Encompass Home Health of Beaumont Southeast Texas Baptist Medical Center San Antonio CHRISTUS Santa Rosa BPCI Initiative: San Antonio Model 4 Health Care Corporation Valley Baptist Medical Harlingen Center-Harlingen Bayside Clinic Sterling Anahuac CentroMed South Park San Antonio Medical Clinic CentroMed Southside San Antonio Medical Clinic CommUnityCare-North Austin Federally Qualified Central CHC Medical Patient- Health Center CommUnityCare-Rosewood Austin Centered (FQHC) Advanced Zaragosa CHC Medical Homes Primary Care David Powell CHC Austin (PCMH) Practice Demonstration Mt. Enterprise Community Enterprise Health Clinic Regence Health Network Hereford Hereford South Plains Rural Health Levelland Services, Inc. Brownsville, Su Clinica Familiar Raymondville National House Call Independence at Austin Home-based Practitioners Group Home Primary Care Visiting Physicians Demonstration Irving Association of Texas, PLLC Area Agency on Aging of Beaumont Southeast Texas Care Connection Aging and Disability Resource Center Houston (Care Connection) Central Texas Aging and Belton Community-based Disability Resource Center Transitions in Care Transitions Deep East Texas Council of Care Program Governments (DETOG) Jasper Area Agency on Aging (AAA) El Paso, Texas Aging and El Paso Disability Resource Center Lower Rio Grande Valley Weslaco Development Council

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Federal Initiatives Texas Recipients

Agency Type Name Organization Location Texas Center for Quality and Partnership for Patient Safety Patient Safety, Texas Austin Patients (PfP) Hospital Association Graduate Nurse Memorial Hermann-Texas Workforce Education Houston Medical Center Hospital Demonstration Delivery System Innovation JPS Physician's Group Fort Worth Reform Advisor's Program Wellness Behavioral Incentives and Texas Health and Human Health Statewide Navigation Services Commission Integration Program Bay Area Birth Center Pasadena Casa de Amigos Health Houston Center Combest Center Lubbock Cullen Clinic Houston Gulfgate Health Center Houston Holy Family Birth Center Weslaco Strong Start for LBJ General Hospital Houston Maternal/Infant Mothers and Health Newborns Lovers Lane Birth Center Richardson Initiative North Houston Birth Center Houston People’s Health Center Houston Rite of Passage Pearland Texas Tech University Health Sciences Center Lubbock Family Medicine Clinic Texas Tech University Health Sciences Center SOM Lubbock OB/GYN Clinic Behavioral Health Center for Health Care San Antonio Integration Services Integrated Nurse CHRISTUS St. Michael Training and Health System, Community Mobile Device Long-Term Care Facility Texarkana Harm Reduction Partnership Group, Incarnate Health Care Program Word University Innovation Methodist Hospital Research Awards Delirium Detection Institute, Methodist Hospital Statewide and Prevention System, Baylor College of Medicine Sepsis Early Methodist Hospital Research Recognition and Houston, Bryan, Institute, Texas Gulf Coast Response Initiative McAllen Sepsis Network (SERRI)

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Federal Initiatives Texas Recipients

Agency Type Name Organization Location Comprehensive Care for High-Risk University of Texas Health Houston Children through Science Center Medical Home Patient and Family Trustees of Dartmouth Across 16 states, Activator Program College including Texas National Council of Young Across 8 states, YMCA Diabetes Men's Christian Association including Texas Prevention of the United States of (Arlington, Dallas, Program America Fort Worth) Reduce Emergency Department Usage National Health Care for Across 8 states, in Homeless Homeless Council including Texas Population Program Enhanced Home University of Arkansas for Across 4 states, Caregiver Training Medical Sciences including Texas Brookdale Senior University of North Texas Based in Fort Worth; Living Transitions Health Science Center, Across 35 states, of Care Program Brookdale Senior Living including Texas CDC DSHS, Nutrition, Physical Obesity Prevention Obesity Activity, and Obesity Statewide Initiative Prevention Program National Diabetes DSHS, Diabetes Prevention Statewide, and 14 Diabetes Prevention and Control Program communities Program Community DSHS, Health Promotion Transforming Transformation and Chronic Disease Statewide Texas Grant Prevention SAMHSA Prescription Drug Monitoring Program (PDMP) Texas Health and Human HIT Statewide EHR Integration Services Commission and Interoperability PC-BH PC-BH Integration- Lubbock, MHMR; Lubbock, Integration Prevention Trust Austin/Travis Co. MHMR Austin/Travis co. Grants ONC/ARRA Texas Medicaid Electronic Health Texas Health and Human Statewide Record (EHR) Services Commission Incentive Program HIT Texas Health and Human e-Prescribing Statewide Services Commission Regional Extension Center (REC) Texas Medical Foundation Statewide Support Services

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Federal Initiatives Texas Recipients

Agency Type Name Organization Location Professional University Texas State University, Resources and University of Texas, San Marcus, Austin, Education for University of Texas Health Houston Health Information Science Center Technology (PURE-HIT) Strategic Health Information Technology University of Texas Health Houston Advanced Science Center Research Project (SHARP) Dallas County Community Community College, Houston Dallas, Houston, College Consortia Community College, Midland Program Midland Community College East and Northeast Firstnet Exchange Texas Greater Houston Houston Healthconnect Healthcare Access San San Antonio Antonio (HASA) Health Information Network South Texas of South Texas (HINSTX) iHealth Trust Houston Integrated Care Central Texas Collaboration (ICC) Local HIE Grant The Health Information Program Partnership of Southeast Southeast Texas Texas (HIPSET) HIE North Texas Accountable Healthcare Partnership North Texas (NTAHP) Paso del Norte HIE (PdN El Paso HIE) Rio Grande Valley HIE Rio Grande Valley (RGV HIE) Rio One Health Network Rio Grande Valley Southwest Texas Health Southwest Texas Systems Medicaid Eligibility and Texas Health and Human Statewide Health Information Services Commission System

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Federal Initiatives Texas Recipients

Agency Type Name Organization Location HRSA Patient-Centered Texas Association of PCMH Medical Health Statewide Community Health Centers Home Initiative Health Center Texas Association of HIT Controlled Statewide Community Health Centers Network Grant

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Appendix 2. Table of SIM Stakeholder Regional Meeting Participants Name Title Organization Waco Stakeholder Meeting, May 8, 2013 Rose Dunaway Regional Director New Business Girling Health Care Development Melissa DeLaGarza CQO Hamilton General Hospital James Burns Manager Health and Human Services Commission Robin Richardson Policy Advisor Medicaid CHIP Health and Human Services Division Commission Roland Goertz CEO Heart of Texas Community Health Center, Inc. Barbara Tate Executive Director Heart of Texas Regional MHMR Hansel Deen Director of Reimbursement Providence Health Center Dwight Brandon COO Your Doctor Program Lubbock Stakeholder Meeting, May 14, 2013 Sherri Bohr Chief Service Officer Central Plains Center (MHMR) Susan Lilly Executive Director Managed Care Center for Addictive/Other Disorders, Inc. Rick Love CEO Regence Health Network Derek Martin CFO Regence Health Network Cindy Holtman Grants Planning Star Care Marcella Ford Contracts Management Director Star Care Chera Soper Director of Operations Superior Health Plan Ella Goodman Clinical Nurse Liaison Superior Health Plan Rachel Wilkerson Regional Director Texas Hunger Institute Abilene Stakeholder Meeting, May 15, 2013 Ginger Smith CFO Betty Hardwick Center (MHMR) Kristi Hanley Quality Improvement Director Cogdell Hospital Cindy Rowlett Public Relations Representative FirstCare Kevin Orr Regional Partnership Specialist Health and Human Services Commission Chris Mabry Reimbursement Manager Hendrick Medical Center Mike Campbell CEO La Esperanza Clinic (FQHC) Sandy Marsh Professional Association for Pediatrics Dustin Hawk CEO Resource Care Sherry Paul Marketer Steps & Strides Chera Soper Director of Operations Superior Health Plan San Antonio Stakeholder Meeting, May 17, 2013 Christina Marbach Clinical Manager Cenpatico Bren Manaugh VP Adult Behavioral Health Center for Health Care Services

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Name Title Organization AnaMaria Garcia Cortez VP of Development and Marketing CentroMed Rose Dunaway Regional Director New Business Girling Health Care Development David R. Garcia Supervisor, Eligibility Services Health and Human Services Commission Lupe Torres Regional Partnership Specialist Health and Human Services Commission Ina J. Reyes Provider Relation Representative MCNA Dental Rebecca Brune VP of Strategic Planning Methodist Healthcare Ministries Wendy Bruns Assistant VP Managed Care Methodist Healthcare Ministries Covita Moroney Collaborative Grants & Research Methodist Healthcare Ministries Specialist Irma Paveglio Provider Services Molina Healthcare Yolanda Cantu Principal ODES Consulting Maria Torres Director of Medicaid Programs San Antonio ISD Mike Diel Senior VP Superior Health Plan Ted Day VP Business Development University Health System Daniel V. Pineda Community Educator University of Texas Health Science Center – San Antonio Carlos Moreno CEO Vida y Salud Health System Kim Dunn CEO Your Doctor Program Fort Worth Stakeholder Meeting, May 21, 2013 Hilda Sallack Senior Director Children’s Hospital Dallas Kelly Roberts VP of Reimbursement Creative Solutions Healthcare LTC Karen Johnson COO Creative Solutions Healthcare LTC Victor Henderson Network Development Manager JPS Health Network Mallory Johnson Manager Region 10 Health Partnership JPS Health Network Catherine Carlton Director of Communications MHMR of Tarrant County Susan Garnett CEO MHMR of Tarrant County Lou Brown Health Director Tarrant County Public Health Sharefa Aria Health Informatics Manager Tarrant County Public Health Cheryl O’Rear Director of Business Operations Texas Health Resources Amber Baker Community Outreach Texas Hunger Initiative Jay Stowers CFO Your Doctor Program Kim Dunn CEO Your Doctor Program Michael Stevener Neonatologist Dallas Stakeholder Meeting, May 22, 2013 Lynn Balli Reimbursement Manager Baylor Health Care System Niki Shah Director Baylor Health Care System Bill Roberts Chief Strategy Officer Baylor Health Care System

Pam Barneo Vice President, Reimbursement Baylor Health Care System

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Name Title Organization Hilda Sallack Senior Director Children’s Medical Center of Dallas Mary Brown Manager Dallas Area Agency on Aging Millie DeAnda Director Dallas Area Agency on Aging Angela Prince Provider Relations Representative Department of State Health Services Susie Hamsho Public Health & Prevention Department of State Health Services Susan Turlington Assistant VP Managed Government HCA Programs Judy Graham Account Manager Lilly Herlinda Bonilla CFO Los Barrios Unidos Community Clinic Joleen Bagwell Director of Development and Los Barrios Unidos Community Marketing Clinic Evelyn Erving Regional Outreach Specialist Maximus Sandy Stephens Director of Philanthropy Metrocare John Burruss CEO Metrocare Services Brittany McNaughton Clinical Director North Texas Behavioral Health Authority Keri Disney Director, Charge & Reimbursement Parkland Health & Hospital System Integrity Jay Stowers CFO Your Doctor Program Tyler Stakeholder Meeting, May 29, 2013 Karen Boehm Director 211 East Texas Region Waymon Stewart CEO Andrews Center Chris Taylor Executive Director Cherokee County Public Health Cathy Turner Financial Analyst Good Shepherd Stephanie Raymer Community Relations Health and Human Services Commission Ryan Surratt Regional Director Texas Hunger Institute Teri Speer Division Manager Therapy 2000 Elizabeth Pulliam Vice President Trinity Mother Frances Carl Walters II CEO Wellness Pointe Annette Okpeko Chief Medical Officer Wellness Pointe Sheena Lemon Decision Support Analyst Wellness Pointe Mike Turner COO Wellness Pointe Eddy Herrera CEO Amistad Community Health Center Kimberly Faglie Accounting Supervisor/Utilization Charlie’s Place Recovery Center Review Gina Hightower Plan Manager Christus Health Plan Cherie Brzozowski QM Director Citizens Medical Center America Contreras QA Specialist Coastal Plains Community Center Leo Trejo Director, Integrated Services Coastal Plains Community Center Barbara Giovannon Director of Nursing Coastal Plains Community Center Chris Nicosia CFO Coastal Plains Community Center

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Name Title Organization Jace Jones Administrator DeTar Hospital Greg Ward Vice President Finance Driscoll Children’s Hospital Michelle Ramirez Analyst Driscoll Children’s Hospital Mary Peterson CEO Driscoll Health Plan Rick Villarreal Vice President Finance Driscoll Health Plan Jonny Hipp Administrator Nueces County Hospital District Stephan Zinda Managing Member Pegasus Quest Nestor Praderio Physician Psychiatric Consulting Services Virginia Longoria CBP Manager San Patricio County Department of Public Health Eric Longbotham Assistant Texas Association of Rural Health Clinics Ramsey Longbotham Director Texas Association of Rural Health Clinics Jan Wyer Public Member Houston Stakeholder Meeting, June 4, 2013 Harvey Laas Access Health Penny Pabst Access Health Jeff Allen Community Health Choice Marcie Sanchez Community Health Choice Blanca Garza DentaQuest Carrie Greenberg DentaQuest Ron Cookston Gateway to Care Anne Whitlock Harris County Health Alliance Carol Hampton Harris County Medical Society Nicole Lievsay Harris Health Region 3 Amy Hadea Health and Human Services Commission David Arlen Health and Human Services Commission J. Jones Health and Human Services Commission James Dubose J & R Medical Karina Troncoso MCNA Dental Randy Essenberg Medco Medical Supply Ashlea Quinonez Memorial Hermann Health System Katherine Grigsby Oncology Consultants Elizabeth O'Donnell Pediatrix Bill Caplan Pediatrix Diane Gibson Reach Health Care Services Mark Young Stephen F. Austin Community Health Center Chris Born Texas Childrens Health Plan

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Name Title Organization Israel Barco The Methodist Hospital System Cissy Yoes University of Texas Medical Branch Katrina Lambrecht University of Texas Medical Branch Kim Chambers Director, Patient Services University of Texas School of Dentistry Martha Roco University of Texas School of Dentistry Edinburg/McAllen Stakeholder Meeting, June 5, 2013 Jovie Cantu Vice President Operations APC Home Health Alma Garza Assistant VP Operations APC Home Health Rudy Leal Business Manager Ashley Pediatrics Dee Aduciri Operations Manager Ashley Pediatrics Maggie Beas Billing Manager Ashley Pediatrics Efrain Guerrero ATP/QRP Border Mobility Olivia Garcia Office Manager Border Mobility Afaq Patel Manager Brownsville Pediatrics Lidia Calvo Cardiothoracic surgeons Brian Smith Regional Director Department of State Health Services Sarah Shaw Healthcare Policy Analyst Department of State Health Services Rene Hinojosa Project Manager Doctors Hospital at Renaissance Maritza Salinas Intern – Practice Solutions Doctors Hospital at Renaissance Veronica Villarreal Intern – Practice Solutions Doctors Hospital at Renaissance Ada Gonzalez Administrator Doctors Hospital at Renaissance Paulette R. Saca PHO Director Doctors Hospital at Renaissance Felipe Garza Fuad Zayed, M.D. Brenda Santana Billing Gholam A. Kiani, MD Elia Kiani Office Manager Gholam A. Kiani, MD Esmeralda Rodriguez Health Plan Technician Health and Human Services Commission Dolia Castillo Manager Health and Human Services Commission Lourdes Acevedo Coordinator Hidalgo County Health and Human Services Elva Torres Billing Hidalgo County Health Department Eduardo Olivarez Chief Administrative Officer Hidalgo County Health Department Mike Escamame Budget Manager Hidalgo County Health Department Maveli Martinez Billing Supervisor Hidalgo County Health Department Lauren Garcia Public Health Technician Hidalgo County Health Department Perla Lopez Coordinator Hidalgo County Health Department Brenda Salazar Public Health Technician Hidalgo County Health Department Rutchebeth Contreras President High Point Home Health Jaime Islas Director of Marketing High Point Home Health

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Name Title Organization Renato Pantoja Billing Intuit Health Care Richard Garza Owner ISD Managed Care Maribel Barns Director Knapp Medical Center Janie Valdez Administrator MDPA Tim McVey CFO Mission Regional Medical Center Lydia Lopez Assistant Manager MTB Silverio Lucy Ramirez Executive Director Nuestra Clinica Brian Wickwire Medical Director Nuestra Clinica del Valle Marivel Barrera Administrator Practice Solutions Judy Kutugata Office Manager Rainbow Pediatrics Clinic Judith Villarreal Supervisor Rainbow Pediatrics Clinic Andrew Lombardo Director RGV HIE Lorenzo Olivarez CFO South Texas Health System Adam Saldivar CFO Su Clinica Familiar Christina Perez COO Su Clinica Familiar Orlando Julian Vice President Operations Superior Health Plan Lille Chambers Manager Public Relations Superior Health Plan Fred Sandoval President Texas Medical Service Jim Banks Operations Manager Tropical Texas Behavioral Health Beatriz Trejo CFO Tropical Texas Behavioral Health Frank Ambriz Chair University of Texas – Pan American Pam Magouirk Executive Director Valley Baptist Health System Tanya Minor Clinic Director Valley Childrens Clinic Martha Hernandez Front Desk Valleys Kids and Teens Clinic Laredo Stakeholder Meeting, June 6, 2013 Daniel Castillon Executive Director Border Region Behavioral Health Maria A. Sanchez HR and Support Services Border Region Behavioral Health Administrator Jesus Hinojosa III Quality Management Border Region Behavioral Health Roland Gutierrez CFO Border Region Behavioral Health Laura Palomo Adult MH Director Border Region Behavioral Health Jackie Lopez CAPS MH Director Border Region Behavioral Health Jaime Ismael Health and Human Services Commission Cynthia Garza Outreach Specialist MCNA Dental Loida Gonzalez Provider Relations Specialist Superior Health Plan Sabrina Macon Provider Relations Supervisor Superior Health Plan Sonia Perez Operations Manager (dental program) University of Texas Health Science Center Laredo Midland Stakeholder Meeting, June 11, 2013 Mike Avery Director ALJ Avery & Associates

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Name Title Organization Susan Parker CFO Big Bend Regional Medical Center Pam Rodriguez Provider Relations – Texas Health Department of State Health Services Steps Beatrix Gun Program Specialist Department of State Health Services Kathy Wehmeyer Coordinator – Immunization Program Department of State Health Services Chris Bamholl Controller Permian Basin Community Centers El Paso Stakeholder Meeting, June 12, 2013 Lisa Cox Senior Marketing Representative Amerigroup Maria Flores Amerigroup Dan Dagle Counselor Army ACS Alex White Senior Provider Representative Blue Cross Blue Shield of Texas Cynthia Moreno Provider Relations Coordinator El Paso First Health Pauline Motts CFO Emergence Ashley Sandoval Operations Accountant Emergence Rene Navarro Administrative Director Grants Emergence Reng Hurtado Organization Development Emergence Alma Vera Human Resources Salud y Vida L. Valls Administrator Salud y Vida Corinne Chacon District Director Senator Rodriguez Adam Peger Administrative Resident Sierra Providence East Medical Center Richard Glancey Administrative Director Sierra Providence Health Network Tony Brind Sierra Providence Health Network Manuel Miranda Administrative Director Clinical Care Tenet Healthcare Services Jaime Barul Marketing Outreach United Healthcare Jacqueline Gonzalez United Healthcare Connie Crawford Assistant County Attorney University Medical Center of El Paso Michael Nunez CFO University Medical Center of El Paso Christina Ford Assistant County Attorney University Medical Center of El Paso Austin Stakeholder Meeting, June 18, 2013 Dash Lovan Recruiting Manager Aerotek Health Staci Roberts VP Business Development American Medical Technologies Rosamaria Murillo Assistant Director Austin/Travis County Health and Human Services Department Duke Ruktanonchai Epidemic Intelligence Service Officer CDC/Texas Department of State Health Services Laura Rockefeller Proposal Development Analyst Cenpatico Behavioral Health LLC K. Cheng Legislative Affairs Centene Sovah Ortiz Community Care Tom Parker Medical Director Community Care Consortium

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Name Title Organization Jon Huss Deputy Regional Director Department of State Health Services Rachel Samsel Director, Office of Healthcare Department of State Health Services Delivery Redesign Quiara Sherrard Chief Revenue Officer FQHC CommuniCare Rick Gonzalez CFO FQHC CommuniCare Phil Defalco Revenue Controller FQHC Community Care Rose Dunaway Regional Director New Business Girling Health Care Development Cindy Blackwell Assistant Vice President, Strategic HCS Central & West Texas Pricing & Analytics Michael Carter Program Specialist Health and Human Services Commission Courtney Harris Program Specialist Community Health and Human Services Partners Program Commission Mazen Abdulduen Enterprise Architect Hewlett Packard Kim Roberts Grant Director Lone Star Circle of Care Monica Crowley Senior Director of Strategic Lone Stare Circle of Care Communication and Policy Travis Lucas Special Counsel Madison Policy Group Sandra Martinez Policy & Advocacy Methodist Healthcare Ministries Christina Ruben Manager Government Contracts Molina Pam Coleman Senior Vice President Optum Health David Cripe Director of Pricing Seton Family of Hospitals John Hellerstedt Chief Medical Officer Seton Family of Hospitals Sylvia Garcia Seton Health Plan Clayton Travel Mental Health Fellow Texans Care for Children Ar’sheill Sinclair Project Manager Texas Alliance of YMCAs Simon Kim Government Relations Coordinator Texas Alliance of YMCAs Marissa Machado Research/Policy Specialist Texas Association of Home Care & Hospice Katrina Daniel Life, Accident, and Health Texas Department of Insurance Doug Danzeiser Deputy Commissioner Texas Department of Insurance Tom Valentine Texas Insight Sylvia Murphey Policy Analyst Texas Medicaid and Healthcare Partnership Helen Davis Director, Governmental Affairs Texas Medical Association Justin Henderson Public Health & Regulatory Policy Texas Optometric Association Coordinator Ryan Clay Attorney Texas Star Alliance Tara Richardson Director TMF Health Quality Institute Asadhana Suresh Analyst TMF Health Quality Institute Leslie Carruth Health Analysis Specialist University of Texas System

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Appendix 3. Texas Institute of Health Care Quality and Efficiency Board of Directors (current as of 11/1/2013)

Voting Members Joel Allison, FACHE, MS Chief Executive Officer Baylor Scott & White Health Dallas, Texas

Steven M. Berkowitz, MD President and Founder SMB Health Consulting Austin, Texas

Patrick M. Carter, MD Medical Director Kelsey-Seybold Clinic Houston, Texas

Alexia Green, RN, PhD Professor and Dean Emeritus Texas Tech University Health Science Center Lubbock, Texas

Robyn M. Jacobson Chief Operating Officer Entrust, Inc. Houston, Texas

John C. Joe, MD, MPH, FAAFP Chief Medical Information Officer St. Luke's Episcopal Health System Houston, Texas

Ronald T. Luke, JD, PhD President Research & Planning Consultants, L.P. Austin, Texas

Elena L. Marin, MD Chief Executive Officer

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Su Clinica Familiar Harlingen, Texas

Stephen N. Nguyen, DO President and Optometrist Southwest Dallas Eye Care Irving, Texas

Beverly B. Nuckols, MD, FAAFP Physician New Braunfels, Texas

Thomas J. Quirk Chief Executive Officer United Healthcare Plano, Texas

Ben G. Raimer, MD Senior Vice President University of Texas Medical Branch Galveston, Texas

Shannon Stansbury, MBA, FACHE, CHIE Vice President Managed Care CHRISTUS Health Austin, Texas

Alan B. Stevens, PhD Vernon-Rampy Centennial Chair in Gerontology Scott & White Healthcare Professor, Texas A&M College of Medicine

Susan Strate, MD, FCAP Medical Director and Physician Wichita Falls, Texas

Ex Officio Members John J. Buckley, Jr., FACHE Executive-in-Residence (Lecturer), School of Rural Public Health Texas A&M University Health Science Center College Station, Texas

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C. Mark Chassay, MD, MBA Deputy Executive Commissioner, Health Policy and Clinical Services Health and Human Services Commission Austin, Texas

Katrina Daniel, RN Associate Commissioner Life, Accident, and Health Section Texas Department of Insurance Austin, Texas

Lisa Glenn, MD Physician Department of Aging and Disability Services Austin, Texas

Betsey Jones Director, Health Care Policy and Administration Teacher Retirement System of Texas Austin, Texas

Robert Kukla Director Employees Retirement System of Texas Austin, Texas

David Lakey, MD Commissioner Texas Department of State Health Services Austin, Texas

Brent D. Magers, MS, MA, FACHE Executive Associate Dean, School of Medicine Texas Tech University Health Sciences Center Lubbock, Texas

Ramdas Menon, PhD Director, Health Information Technology Health and Human Services Commission Austin, Texas

Perry Moore, PhD Chief Academic Officer

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Texas State University System San Marcos, Texas

Don N. Peska, DO, Med Interim Chief Medical Officer, UNT Health Professor of Surgery and Dean Texas College of Osteopathic Medicine University of North Texas Fort Worth, Texas

Suzanne Pickens, MBA Senior Program Director Texas Higher Education Coordinating Board Austin, Texas

Mari Robinson, JD Executive Director Texas Medical Board Austin, Texas

Kelly Sadler, JD Manager Texas Workforce Commission Austin, Texas

Kenneth Shine, MD Special Advisor to the Chancellor The University of Texas System Austin, Texas

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Appendix 4. Letter of Support from the Texas Institute of Health Care Quality and Efficiency

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Appendix 5. Selected Components of SB 7 (83rd Legislature, 2013)

Outcome‐Based Performance Measures & Incentives within Contracts SB 7 requires HHSC outcome-based performance measures and incentives to be included in each contract between a health maintenance organization and HHSC for the provision of health care services to recipients that is procured and managed under a value-based purchasing model to align to the extent possible with other state and regional quality care improvement initiatives. Bill authorizes HHSC to consult with participating providers rather than with physicians and hospitals in assessing feasibility and cost-effectiveness.

Consultation by Stakeholders for Development of Quality‐Based Payment System SB 7 requires HHSC to consult with appropriate stakeholders to develop a quality-based payment system for healthcare providers participating in child health plan or Medicaid. Managed care organizations are required to also develop similar quality-based payment systems. HHSC is required to convert outpatient hospital reimbursement systems under the child health plan and Medicaid programs to an appropriate prospective payment system that will allow HHSC to more accurately classify the full range of outpatient service episodes, account for the intensity of services provided, and motivate outpatient service providers to increase efficiency and effectiveness.

Payment Initiatives towards Quality‐Based Payment Systems SB 7 requires HHSC to, after consulting with the Medicaid and CHIP Quality-Based Payment Advisory Committee, to establish payment initiatives to test the effectiveness of quality-based payment systems, alternate payment methodologies, and high-quality, cost-effective health care delivery models that provide incentives to health care providers to develop health care interventions for child health plan or Medicaid recipients to improve integration of acute care services and long-term services and supports.

Clinical Improvement Program SB 7 requires HHSC to establish a clinical improvement program to identify goals designed to improve quality of care and care management and to reduce potentially preventable events and to require managed care organizations to develop and implement collaborative program improvement strategies to address the goals. Goals are to be set by geographical region and program type.

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Glossary of Common Abbreviations

Abbreviation Full Name ACO Accountable Care Organization ADT Admission, Discharge, and Transfer AHIP America's Health Insurance Plans AHRQ Agency for Healthcare Research and Quality APRN Advanced Practice Registered Nurse BCBSTX Blue Cross Blue Shield of Texas BMI Body Mass Index BPHC Bureau of Primary Health Care BRFSS Behavioral Risk Factor Surveillance System BTE Bridges to Excellence CDC Centers for Disease Control and Prevention CHIP Children's Health Insurance Program CHW Community Health Worker CMMI Center for Medicare & Medicaid Innovation CMS Centers for Medicare & Medicaid Services DADS Department of Aging and Disability Services DAP Diabetes Action Plan DARS Department of Assistive and Rehabilitative Services DD Developmental Disability DFPS Department of Family and Protective Services DPP Diabetes Prevention Program DSHS Department of State Health Services DSME Diabetes Self-Management Education DSRIP Delivery System Reform Incentive Payment EHR Electronic Health Records EQRO External Quality Review Organization ERS Employee Retirement System of Texas FFS Fee-For-Service FPL Federal Poverty Level FQHC Federally Qualified Health Centers HB House Bill HCSSA Home and Community Support Services Agencies HEDIS Healthcare Effectiveness Data and Information Set HHS Health and Human Services Enterprise (Texas) HHSC Health and Human Services Commission HIE Health Information Exchange HISP Health Information Service Providers

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Abbreviation Full Name HIT Health Information Technology HITECH Health Information Technology for Economic and Clinical Health HPSA Health Professional Shortage Area HRSA Health Resources and Services Administration HSR Health Services Regions ICC Integrated Care Collaborative ICF/IID Intermediate Care For Individuals with an Intellectual Disability ICHP Institute for Child Health Policy (Medicaid EQRO) Institute Texas Institute of Healthcare Quality and Efficiency IOM Institute of Medicine IT Information Technology LBW Low Birth Weight LMHA Local Mental Health Authority LTSS Long-term Services and Support LVN Licensed Vocational Nurses MA/SNP Medicare Advantage/Special Needs Population MCO Managed Care Organization MHSA Mental Health and Substance Abuse NCQA National Committee for Quality Assurance NQF National Quality Forum OeHC Office of e-Health Coordination ONC Office of the National Coordinator for Health Information Technology P4P Pay-for-Performance PCMH Patient-Centered Medical Home PCP Primary Care Provider PPA Potentially Preventable Admission PPC Potentially Preventable Complication PPE Potentially Preventable Event PPH Potentially Preventable Hospitalization PPR Potentially Preventable Readmission PPV Preventable Emergency Department Visit PQRS Physician Quality Reporting System QIO Quality Improvement Organization REC Regional Extension Center RHC Rural Health Clinic RHP Regional Healthcare Partnership RRU Relative Resource Use SAMHSA Substance Abuse and Mental Health Services Administration

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Abbreviation Full Name SB Senate Bill SFY State Fiscal Year SHCC Statewide Health Coordinating Council SHIP State Healthcare Innovation Plan SIM State Innovation Models SMI Serious Mental Illness STAR State of Texas Access Reform (Medicaid managed care) STAR+PLUS State of Texas Access Reform (Medicaid managed care program that serves qualified low- income, aged, blind and disabled individuals) TCNWS Texas Center for Nursing Workforce Studies TDC Texas Diabetes Council TDI Texas Department of Insurance THCIC Texas Health Care Information Collection THSA Texas Health Services Authority TMA Texas Medical Association TMF TMF Health Quality Institute (Medicare QIO) TRS Teacher Retirement System of Texas

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