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Five Ways to Maximize Value-Based Care in Texas

Dec. 20, 2018

In advance of the 86th Texas Legislature convening in January, Dell Medical School held three sessions on Dec. 11 at the Texas Capitol focused on maximizing value-based care in Texas. Topics included:

  • The collaboration between the Dell Medical School, Episcopal Health Foundation, and Texas Health and Human Services Commission (HHSC) to advance value based payment in Medicaid;
  • Dell Med’s focus on value through UT Health Austin’s clinical care teams; and
  • An overview of the transition plan HHSC must submit by October 2019 on how Texas will continue its health care delivery transformation work when the Delivery System Reform Incentive Payment (DSRIP) program in Texas’ 1115 Medicaid waiver ends in October 2021.

Below are five key takeaways from the discussion.

Providers and health plans need better data to succeed in value based payment.

There is consensus that timely, actionable data, including integration of clinical and claims data, is critical to support value-based payment efforts. Two of the seven recommendations from HHSC’s Value-Based Payment and Quality Improvement Advisory Committee relate to data, and enhanced federal matching funds may be available for Medicaid health information technology (HIT) work. As part of its 1115 Medicaid waiver, HHSC is required to submit to the Centers for Medicare and Medicaid Services (CMS) a Medicaid HIT strategic plan by October 2019 to create a pathway for the exchange of clinical health information related to Medicaid beneficiaries statewide.[1] Texas should leverage this plan as a key step to advance Medicaid value-based payment.

Creating partnerships with patients through shared decision making can lead to better outcomes and cost savings.

UT Health Austin, Dell Med’s clinical practice, started delivering care in the fall of 2017 with several initial care teams “practicing what they teach” and creating a new kind of care model. At the December event, leaders of two of UT Health Austin’s clinical teams shared early learnings from their work implementing new models of person-centered, multidisciplinary care that reward value. The Musculoskeletal Care team uses a whole-patient approach to care to help patients improve their mobility and overall health. The Women’s Health Care team provides personalized treatment for complex and often misdiagnosed gynecologic issues.

UT Health Austin’s value-based care reimbursement model is a bundled payment for an episode of care, in which the care delivered by our clinicians is measured based on outcomes defined by our patients, and includes services that are often not included in more traditional fee-for-service environment. These additional services can include an integrated approach to mental health to help patients facing issues such as depression (common among patients with pain and functional disorders) and substance abuse or addiction. There are also physical therapists, nutritionists and social workers providing care when needed, depending on an individual patient’s unique circumstances and situation.

Kevin Bozic, M.D., and Amy Young, M.D., discussed how they engage patients in their care by discussing with them their conditions, possible treatment paths and the likely success of each path for that patient. This allows the patient to make an informed decision with their care team about which option they want to pursue based on medical evidence and the patient’s preferences and values. For example, a patient with knee pain may opt for physical therapy, nutritional counseling, cognitive behavioral therapy and/or surgery. Based on initial patient reported outcomes, about 70 percent of the patients treated by these two care teams so far report their conditions have improved, which is promising given how long many of these patients have suffered from these complex conditions. Bozic also noted they’ve been able to achieve improved patient outcomes at a lower cost than would have been expected under the fee-for-service model.

The Delivery System Reform Incentive Payment (DSRIP) program in Texas Medicaid’s 1115 waiver has enabled significant investments in the Texas health care system, which Texas should work to build on when DSRIP ends in 2021.

The event was a good kickoff to the discussion that will continue with state leadership, HHSC and stakeholders to plan for when DSRIP ends in October 2021. Since 2012, 300 DSRIP providers throughout Texas (hospitals, mental health centers, physician groups and local health departments) have earned $13.7 billion in funding for initiatives to increase access to care, test innovative ways to deliver care and improve health outcomes. Many of these locally-driven efforts focused on mental health and substance use, primary care, care navigation for the most complex patients, managing chronic conditions such as diabetes and asthma, and health promotion and disease prevention. As flexible incentive payments, DSRIP enabled many services not typically billable through insurance, but that can improve health, such as intensive care navigation for the most complex patients, evidence-based community mental health interventions, community health workers and housing supports. Approximately 40 percent of those benefiting from DSRIP are low income/uninsured Texans, while another 25 percent are Medicaid enrollees.

CMS has made it very clear to Texas that DSRIP is a time-limited funding opportunity that will end October 1, 2021. Though this may seem far into the future, Texas must begin to plan now for what happens after DSRIP. HHSC is required to submit a plan to CMS by October 2019 with milestones for how “Texas’ DSRIP program will transition to a more strategic systemic effort focusing on health system performance measurement and improvement that achieves sustainable and effective delivery system reform.”[2]

Medicaid 1115 waivers must be budget neutral to the Federal government, meaning the waiver can’t cost the Federal government more than it would have spent absent the waiver. Texas expects to have remaining “budget neutrality room” within the 1115 waiver to propose ways to continue to improve access and health outcomes after DSRIP. For Medicaid enrollees, milestones may relate to use of alternative payment models in Medicaid managed care and other payment mechanisms to support delivery system reform efforts. For the low-income/uninsured population that DSRIP has served, it’s less certain what options CMS may be open to considering when DSRIP ends.

Best practices must be shared and replicated/scaled to advance high-value care and value-based payment.

One of the strengths of DSRIP is flexibility to innovate based on local community needs (i.e., 1450+ projects in DSRIP 1.0). The downside of that flexibility is that six years into DSRIP there isn’t a systematic way to evaluate which initiatives work best and why. Similarly, in Medicaid managed care, HHSC is giving each of its 20 contracted medical and dental plans latitude regarding which alternate payment models to implement with their network providers. While this approach allows each plan to compete on different initiatives they think will work best for their providers and members, Texas Medicaid doesn’t have a systematic way of knowing which of these models deliver the best value for Medicaid enrollees. A lot of promising work is underway to improve health and care in Texas (and in other states and nationally), and HHSC should develop a framework to identify and sustain the strongest models.

We need to address non-medical drivers of health to improve health.

When we talk about value-based care, the goal is to achieve outcomes that matter to patients in the most cost effective way. We know that health outcomes strongly relate to upstream drivers of health — non-medical factors such as food, housing, education and other community-based and environmental conditions. Clinical care has about a 20 percent impact on how healthy people are, while social and economic factors, physical environment and health behaviors account for the other 80 percent.[3]

How can health care providers help address these other factors? It’s challenging due to separate programs and funding streams, but the good news is there’s growing recognition of the need to try.

In a recent speech, Health and Human Services Secretary Alex Azar said the current federal administration is deeply interested in this question, and thinking about how to improve health and human services through greater integration. He noted that CMS is allowing its Medicare Advantage health plans to pay for a wider array of health-related benefits beginning in 2019 (transportation, home health visits) and 2020 (home modifications, home delivered meals, and more). CMS recently approved new Medicaid pilots for North Carolina through which Medicaid health plans similarly will be able to pay for enhanced services for high needs enrollees who have risk factors related to food, housing, transportation, and interpersonal violence.

Lisa Kirsch, MPAff, is the senior policy director for Dell Medical School at The University of Texas at Austin.


1. CMS Approval Letter (PDF), December 21, 2017
2. National Alliance to Impact the Social Determinants of Health
3. The Root of the Problem: America’s Social Determinants of Health, Alex M. Azar II, Hatch Foundation for Civility and Solutions, November 14, 2018, Washington, D.C.