Huntsville Hospital, Sentara Form First Medicaid 'RCO' in AL

The capitated Regional Care Organization model is designed to be responsible for all aspects of care for Medicaid recipients in 10 counties in northern Alabama. CMS approval is pending.

Huntsville Hospital Health System and Sentara Health Plans have formed a joint venture to manage a Regional Care Organization that will serve more than 120,000 Medicaid recipients in northern Alabama when it opens next year.

The capitated RCO model was approved last year by the Alabama Legislature, which created five RCO regions across the state to become operational in October, 2016. The plan has yet to gain a waiver from the federal Centers for Medicare & Medicaid Services, however.

That potential iceberg has not stopped HHHS and Norfolk, VA-based Sentara from sailing ahead to create Alabama's first not-for-profit RCO, which should be operational by October, 2015, one year ahead of the state mandate.

David Spillers, CEO of HHHS, says he's not particularly stressed about riding the leading edge of a profound change in the way care is delivered, even as the details have yet to be finalized.
 
"Hospital systems like ours have to go out and get into the population health management arena. Either we jump out there and do it, or the state is just going to bring in some commercial managed care company to do it to us," Spillers said in a telephone interview.

"I'm not so sure that is worse than taking the risks we are. In fact I'm convinced it's better to take the risk we are than to just let somebody else come in and continue to take patients out of our hospitals and not have any opportunities on the other side to make that up."

The HHHS/Sentara RCO will be responsible for all aspects of care for Medicaid recipients in 10 counties in northern Alabama. The new company will be headquartered in the Huntsville area and is expected to create about 400 new jobs in Alabama and Virginia.

Sentara Health Plans President Michael M. Dudley says his company and HHHS anticipate a 50-50 risk sharing arrangement under the RCO.

"This is not new business to us. We've been in this business for 30 years and more specifically, Medicaid managed care for about 20 years here in Virginia," Dudley said in a telephone interview. "We serve about 170,000 members all over Virginia. We are a statewide provider of Medicaid services in Virginia and have a pretty good track record of serving this population."

"We see it as a great opportunity to scale up a business line that we have done very well with in Virginia and we think we have a lot to offer the good folks of Alabama as they are moving into more of an accountable care scenario with how they deliver services to Medicaid populations."

Dudley acknowledged that the waiver for the program has yet to be approved, "but if we waited until the waiver was granted it would be way too late to implement on schedule that we now have for October 2015. So, we are beginning to make plans for implementation. We are working well with our partners in Alabama and we expect the waiver will be granted in the next few months and everything will fall into place."
 
Spillers says HHHS wanted a partner with the expertise in managing Medicaid populations and who was willing to share the risk under the capitated model for the population they're serving.

"We felt like if they had skin in the game they're more likely to make sure we are successful," he says. "If you are just providing services and you are going to make your money regardless of what happens to us that is not a partnership as far as I am concerned."

Spillers says HHHS wanted a partner with the expertise in managing Medicaid populations and who was willing to share the risk under the capitated model for the population they're serving.

"We felt like if they had skin in the game they're more likely to make sure we are successful," he says. "If you are just providing services and you are going to make your money regardless of what happens to us that is not a partnership as far as I am concerned."

Spillers says being on the leading edge of the RCO movement carries risks and rewards.

"If we didn't have an experienced partner like Sentara I'd be running from this instead of to it," Spillers says. "The state was excited about us coming up first because they want to see it work before they expand it. It's better for them. It also gives us the opportunity to go into other regions if other regions want to partner with us and not have to bring up multiple regions at one time."

Dudley agrees.

"Any time you are the first to the market you are taking some risks that others maybe want to lay back and see about," he says. "On the other hand, given that we have 20 years of experience here in Virginia, we really know this business. We know what we are getting into. We will be able to see very rapidly if the business is going to be sustainable down there."

"We expect that the state of Alabama will be reimbursing at levels that will be sustainable. But if we get six months into this, eight months into this, and the state is not able to offer reimbursement at a rate that is sustainable, then we will have to rethink this whole thing, but we don't expect that at this point."

OH State's Wexner Medical Ctr. Enters Affiliation
The Ohio State University Wexner Medical Center and Ohio Valley Health Services and Education Corp. are creating an affiliation that will serve the Ohio Valley region, the two health systems have announced jointly.
Ohio Valley Health Services & Education Corp. is the parent company of Ohio Valley Medical Center in Wheeling, WV, and East Ohio Regional Hospital in Martins Ferry, OH.

"We're excited that this affiliation will expand access to specialized medical care for many more people in our region," Steven G. Gabbe, MD, senior vice president of Health Sciences and CEO of Ohio State's Wexner Medical Center, said in prepared remarks. "We also see many opportunities to increase medical education and clinical research in the area, and to help OVMC/EORH create innovative health solutions for the community."

Under the affiliation, the two health systems will remain independent, but work together to develop close-to-home care options for residents who would normally travel to Ohio State for highly-specialized treatments. Collaborations in areas such as cancer, heart and vascular care, neurosurgery, telemedicine, urology, diabetes management and community wellness/prevention programs are being discussed.

The two systems will also explore other opportunities, such as adding OVMC and EORH as clinical rotation sites for some of Ohio State's College of Medicine students, and expanding patient access to clinical trials, the systems said in a joint media release.

"We're proud to bring advanced, specialized care from a nationally ranked academic medical center to our patients and to serve a critical need in the Ohio Valley," Michael J. Caruso, president/CEO of OVHS&E, said in a media release. "Additionally, by working with Ohio State, we'll achieve greater efficiencies, lower costs and build a stronger community hospital system through shared electronic health records, group purchasing programs and other shared services."

Ohio State's Wexner Medical Center and OVMC/EORH will form an affiliation advisory council that will set the overall strategic goals, facilitate the plans and identify opportunities for both hospital systems.

Spillers says HHHS wanted a partner with the expertise in managing Medicaid populations and who was willing to share the risk under the capitated model for the population they're serving.

"We felt like if they had skin in the game they're more likely to make sure we are successful," he says. "If you are just providing services and you are going to make your money regardless of what happens to us that is not a partnership as far as I am concerned."