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Arkansas Bets Farm on Value-Based Care

By Christopher Cheney  
   September 01, 2016

Medicaid expansion, PCMH proliferation, and a multipayer approach to bundled payments have had a significant financial impact on Arkansas providers, payers, and patients. The Arkansas Center for Health Improvement has helped spearhead payment reform efforts at the state level. In January, ACHI released the publicly and privately funded organization's Arkansas Health Care Payment Improvement Initiative: 2nd Annual Statewide Tracking Report, which shows the broad reach and deep financial effects of value-based reforms:

  • As of October 2015, 331,000 (82%) Arkansas Medicaid beneficiaries were receiving care through PCMHs.
  • In 2014, Medicaid spending on primary care totaled $522.3 million, with the program saving $34.3 million through PCMH cost reductions. Of the $34.3 million in savings, $12.1 million was allocated to per member per month (PMPM) payments to providers. The remaining $22.2 million was shared between the state and providers who met both quality and cost savings requirements. Shared savings checks were issued in October 2015, with several clinics receiving more than $100,000.
  • In 2014, practices enrolled in Medicaid's PCMH program posted a cost decrease of 1.2%, beating both the 2.6% benchmark increase and the 0.6% cost growth of practices outside the PCMH program.
  • As of October 2015, 780 primary care providers were participating in the Medicaid PCMH program (69% of eligible Medicaid providers).
  • About 250,000 Arkansas residents have gained health coverage through the state's "private option" Medicaid expansion. The 2010 U.S. Census pegs the state's population at 2.9 million residents.
  • For the annual period ending July 2015, Medicaid reported significant provider cost cutting for several episodes of care (EOC) in the state's multipayer bundled payment program: perinatal EOC, C-section rate reduced from 39% to 34%, with an estimated 2%–4% percent direct savings; upper respiratory infections EOC, 17% reduction in antibiotic prescriptions, with episode costs remaining flat despite a 10% increase in drug prices; ADHD EOC, average episode cost fell by 22%; and for total hip and knee replacement, the 30-day all-cause readmission rate fell from 3.9% to 0%, generating an estimated 5% to 10% direct savings.

Christopher Cheney is the senior clinical care​ editor at HealthLeaders.

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