Lessons From a MassHealth ACO That Saved $12.2M

C3 CEO Christina Severin said she remains optimistic about the continuing transition away from the traditional fee-for-service environment to a more value-based system.

A few years ago, Massachusetts renewed its Medicaid Section 1115 waiver and transformed MassHealth, the state's Medicaid program, from an MCO to an ACO.

Community Care Cooperative (C3), a federally qualified health center (FQHC)-owned ACO based in Boston, analyzed the opportunity to start an ACO and avoid being members of larger organizations where they would likely not have a primary care-led FQHC presence.

C3 submitted a request for proposal and were awarded the five-year contract by the state, which began in 2018. According to Christina Severin, president and CEO of C3, in its first full year of operations, the organization beat its $533.6M total cost of care budget projections, saving Massachusetts a little over $12.2 million.

Additionally, C3 earned a $8.1 million shared savings payment as well as $1.3 million due to a 100% quality score from MassHealth.

In an interview with HealthLeaders, Severin detailed how provider organizations can embrace the tenets of value-based care and still adequately support the bottom line.

"I think one thing to be learned is that when you take entities that have an historic experience of providing high-quality care at effective costs, it's not a huge surprise that those are the type of entities that can emerge as highly successful in a two-sided risk ACO environment," Severin said. "When you take the effectiveness of FQHCs, and then you wrap that into an ACO environment that's a pure play business focus on primary care effectiveness, it's sort of doubling down on the elements that I think are key characteristics of what makes a provider organization successful in two-sided risk."

The risk environment for C3 is a budget-and-reconciliation process, according to Severin, where the organization is given a benchmark budget like many CMS programs.

Severin said the organization runs through the year with fee-for-service adjudications on all services rendered under the Medicaid benefit and then at the end of the year, undergoes a reconciliation between the benchmark budget and where the sum of the fee-for-service costs came in, which determines whether the organization exceeded its budget.

Health systems face challenges replicating the success of FQHCs like C3 due to the variations in their strategic plans, according to Severin, which can include capital expenditures and goals for inpatient and outpatient stays, in addition to focusing on the ACO.

She added that those factors can be harder to align in an ACO environment that is "strictly about beating total cost of care in your budget" and managing quality measures.

As it relates to the coronavirus disease 2019 (COVID-19) pandemic, Severin said that she sees two themes emerging: a renewed focus on the importance of primary care and the popularization of telehealth services.

"One thing that is happening in the pandemic is a recognition of the importance of primary care, and I hope that as we go forward, policymakers and carriers will keep this lesson with them, hold it tight, and continue to make investments and to prioritize their thinking about what makes health system effectiveness and put primary care at the front of that thinking when they're making decisions on where to invest."

Severin continued: "What we're focused on at C3 and with our health centers is ensuring that these investments in telehealth are sustainable and durable. [This is] so that when there's a vaccine or when we're able to contain this pandemic, we have concretized the use of telehealth as one of the modalities in our care delivery portfolio."

Severin said she remains optimistic about the continuing transition away from the traditional fee-for-service environment to a more value-based system.

Forward looking, Severin said C3 is aiming to partner with carriers and move towards prospective payments in the form of an enhanced primary care capitation.

Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.