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February 2012 St@teside

State Delivery and Payment Reform Efforts

AcademyHealth’s State Health Research and Policy Interest Group convened a breakfast session the National Health Policy Conference to discuss how states can support delivery system and payment reforms. The session explored this complex topic with presentations by John Colmers, vice president for health care transformation and strategic planning at Johns Hopkins Medicine; Marie Zimmerman, health care policy director at Minnesota’s Department of Human Services; Jeanene Smith, administrator at the Office for Oregon Health Policy and Research; and Rhode Island Lieutenant Governor Elizabeth Roberts.

John Colmers opened the session by outlining the different policy levers available to states to encourage delivery and payment reforms, including:

  • Convening authority;
  • Use of Medicaid and other state payers;
  • Licensing and other regulatory tools;
  • Statutory changes; and
  • Demonstration authority.

Marie Zimmerman’s presentation focused on the Department’s Medicaid Accountable Care Organization Demonstration that provides services to a specified population for an agreed upon total cost of care or risk/gain sharing payment arrangement.  The state received nine requests for proposal responses, and expects that all nine demos will start operation during 2012.

Jeanene Smith highlighted Oregon’s efforts to reorganize how care is delivered and paid for statewide via the implementation of Coordinated Care Organizations (CCOs). CCOs are local health entities that deliver care to Medicaid beneficiaries, including dual eligibles, are accountable for population health, and receive a single budget that grows at a fixed rate. The state will need federal approval to implement the new model and is working closely with the Centers for Medicare & Medicaid Services (CMS) to obtain a federal waiver. The state also has an intensive public process consisting of community meetings, work groups, public comment, and public testimony. If approved by the state’s legislature and CMS, the first CCO could begin accepting members in July 2012.

Lieutenant Governor Roberts wrapped up the session as the panel’s state respondent by discussing the following challenges and opportunities for states:


  • Imposing change versus catalyzing change. States that are having success are doing so at the local level by implementing a public process to drive change with community support.
  • Leveraging the power of health care as an employer and economic driver in states.
  • Engaging entities on the payment and provider side that have the market power to drive reimbursements.
  • Finding expertise in state government to deal with financial risk.
  • Educating state legislatures on the vision for meaningful reform.

  • Demonstrating change with federal funding, but keeping in mind how to maintain innovations going forward.
  • Creating an open and transparent system.
  • Leveraging primary care as an opportunity to gain support from the industry, and help the community understand how to manage their care.
  • Developing clinical and political leadership.
  • Finding a way to articulate a vision of where the state is going, and what this vision means for population health and curbing the cost of care.