Remodeling Medicaid
By Joey Berlin Texas Medicine July 2018


For Brownsville pediatrician Carmen Rocco, MD, it had been awhile since she had that joyous feeling of remembering why she went into medicine in the first place. Going to her special-needs patients’ homes — instead of them coming to her — brought that feeling back.

As part of the shift to value-based care in Medicaid, Dr. Rocco’s two-physician practice partnered with Driscoll Health Plan to establish a home-visit program in hopes of better understanding these young patients and better targeting their care. 

“We benefit a lot from understanding their health care environment, and in turn, they open up to us with problems that they would [not talk about] within the forced walls of an exam room,” she said.

The program also has rejuvenated her as a physician.

“We all go into medicine because we believe in a connection with helping human beings — especially children, in my [specialty] — become healthier,” Dr. Rocco said. “It’s a very special experience that really brought me back to the roots of why one even does this. Because it’s so real for you at the point that you’ve entered that patient’s home.”

Many physicians have greeted the shift from fee-for-service to value-based payment (VBP) models with apprehension and skepticism, and rightly so given the large demands it can place on small practices to deliver better health results at a lower cost, but with few resources. Common VBP approaches thus far include pay-for-performance models; bundled payments for multiple specific services instead of separate billing for each service; and shared savings, or risk, where physicians collectively keep the money saved from meeting a cost-of-care target, or take a loss for failing to do so.

But some of the VBP initiatives emerging in the Medicaid program have spurred hope and excitement among those involved, with Texas physicians and hospitals collaborating with health plans on innovative ideas that not only could save millions, but also make medicine more patient-centered — and more rewarding.

The concept of value-based contracting is based on patient-centered health care, notes Ira Bell, MD, senior medical director of FirstCare Health Plan. Dr. Bell says because of that, it’s an exciting time to be a primary care physician.

The VBP fast track 

Managed care organizations (MCOs) in Texas Medicaid are ramping up the timetable for introducing VBP initiatives because the Texas Health and Human Services Commission (HHSC) mandated it. Beginning in 2018, HHSC’s contracts require that 25 percent of an MCO’s payments overall must be in value-based contracts, with 10 percent being risk-based. Those targets will increase over a four-year period through 2021, when 50 percent of overall payments must be in VBP arrangements and 25 percent must be risk-based.

San Antonio pediatrician Ryan Van Ramshorst, MD, chair of the Texas Medical Association’s Select Committee on Medicaid, CHIP, and the Uninsured, says some health plans are taking an active role in their partnerships with practices; others aren’t.

“Right now, there are some managed care companies that are actually sending out their medical directors to meet one on one with practices, to essentially put their medical directors on the ground to establish those one-on-one relationships with provider organizations, with provider groups, to say, ‘Hey, here’s my helping hand. Let’s do this together. Let’s make this work,’” he said. “And then you have other MCOs that are just distant. That remains a challenge not just with entering into value-based purchasing, but with improving care coordination and improving provider experience in general. You have almost 20 different managed care plans, so there’s going to be some variability.”

TMA is working to level that playing field. The association’s Council on Socioeconomics convened a workgroup to, among other things, examine the value-based care landscape in Texas and develop policy to help physicians serving low-income populations transition to new payment models. (See “Leveling the Playing Field,” page 20.)

Dallas internist Sue Bornstein, MD, chair of the new workgroup and executive director of the Texas Medical Home Initiative, notes physicians who treat vulnerable patients are at a disadvantage when it comes to value-based care.

“The folks that are in communities that serve low-income populations typically don’t necessarily have a lot of extra resources to learn how to do these things. And really we’re talking about a major change in the way payment is made for medical services and as a consequence of that, the way care is going to be organized,” she said. “It’s a major change, and we just want to make sure that especially the practices who treat more vulnerable or low-income populations are equipped to survive and thrive in this new payment world.”

Innovations that work

Some health plans are stepping up to the plate.

After Driscoll began administering services for STAR Kids (a managed care program for disabled children and adults younger than 21), it allowed Dr. Rocco and her small practice, Brownsville Kiddie Health, as well as other primary care physicians under the STAR Kids contract, “an open door to come up with things that they thought might work” for special-needs kids, she said.

Among its choice of programs, Brownsville Kiddie Health went for something a bit novel: A yoga class to help kids address behavioral issues such as attention deficit disorder. The classes are open to anyone.

 “One of the neat things that Driscoll allowed us to do is that we said, ‘Is it exclusive for Driscoll children?’ They were like, ‘No, open it to whoever you want.’ So we have been able to do that. We haven’t had to ask anybody, ‘Are you Driscoll? Are you Superior [HealthPlan]?’ which has been really, really nice.” The home visits became a way for families to know that “we were their umbrella,” Dr. Rocco says, as well as a way to alleviate the difficulty many of their patients had in coming to the doctor’s office.

“That has been a very special experience, because it allows you to enter and see the actual environment where families are having to live, especially in a place like Brownsville in the Rio Grande Valley, where the resources for families are so scarce, and they’re doing so much with so little. It opens up a connection and a communication with that family that goes beyond the visit.”

Driscoll Health Plan, which serves South Texas, has been researching and executing ways to implement value-based care for a long time. 

“If you want to have a partnership, you need to have physicians actually engage with what they think will be improvements in the program,” said Chief Executive Officer Mary Dale Peterson, MD. The health plan listened to physicians’ thoughts during mini-retreats where Driscoll told doctors, “‘We’ll entertain any project that you think will be worthwhile in the projects list,’” she said. “We allowed some experimentation that way.”

The MCO’s experience with value-based care projects goes back a decade, when Dr. Peterson investigated how to reduce severe early childhood caries. The American Dental Association defines early childhood caries as one or more decayed, missing, or filled tooth surfaces in a preschool-aged child’s primary tooth between birth and 71 months. The disease is prevalent in low-income children and can lead to oral surgery, requiring general anesthetic, for everything from crown insertion to extraction.

Driscoll began a pilot program to train pediatricians to apply protective fluoride varnish to their young patients’ teeth during well-child visits. While dentists have been applying that varnish treatment for a long time, Dr. Peterson explains, “there are not many families that take their 6-month-old or 7-month-old to a dentist. But they’re going to the pediatrician very often in those first three years of life for their well-child visits and immunizations. So it just makes sense to provide this preventive treatment in the physician office.” 

Appropriate preventive care, she reasoned, would prevent surgical reconstruction — and anesthesia — on a child.

Pediatricians reacted with initial confusion and pushback, saying they weren’t dentists and they didn’t have enough time to do the application during a well-child visit, and asking who would pay for it. But Driscoll worked through the barriers, paying for the initial varnish and for the physicians to reconfigure their electronic health records, and paying them extra to perform the procedure.

After five years, Dr. Peterson says Driscoll saw dramatic results: Children who had multiple varnish treatments up to around 3 years old virtually never went to the operating room for severe early childhood caries. As a result, Driscoll saved about $8.5 million on operating and anesthesia costs.

“It’s exciting to me that you can have a treatment that works … that wasn’t dependent on a behavioral health change, because that’s more difficult,” Dr. Peterson said.


Collaborations big and small

Health organizations with resources, such as big-city hospital systems, can introduce high-tech VBP initiatives. 

At Parkland Hospital in Dallas, about 25 percent of patients are covered by Medicaid, and another 50 percent are uninsured, according to the Medicaid and CHIP Payment  and Access Commission. The safety-net hospital has found success with the Parkland Center for Clinical Innovation (PCCI), which uses cloud-based technology to connect physicians and other practitioners with community-based organizations to help address social determinants of health. Agencies connected with PCCI include a food bank, a Metro Dallas Homeless Alliance system for tracking homeless people, and domestic violence programs. Physicians receive alerts through the system when their patients — Medicaid and non-Medicaid — access those community services, and how they used them.

A Politico magazine story in December 2017 detailed the program’s effectiveness: In December 2016, Parkland spent $108,500 caring for a patient who frequented the emergency department (ED) with severe headaches from hypertension and stress. After PCCI connected him with a community clinic and a mental health center, the patient’s cost of care in February 2017 dropped to $8,400. In March, he had a toothache that cost just $52 to treat, and the following month, he didn’t visit the hospital at all.

Donna Persaud, MD, PCCI’s vice president of clinical leadership, told Texas Medicine the system is designed to help physicians prevent holes in the care of their most vulnerable patients. She says PCCI is looking at how to work all available transportation systems — another major social determinant of health — for a patient into its connected system.

The system addresses practitioners’ concerns “that their patients will fall through the cracks, meaning crucial gaps in their care for monitoring,” Dr. Persaud added. “With a connected health and community service system, individuals can benefit from the community supporting them on a personally meaningful level and checking up on them regarding are they getting what they’re needing, and what can the community agencies do to support their plan of care.”

Many of the goals of value-based care align with those of the patient-centered medical home (PCMH), in which practices provide coordinated, personal care that may include patient-friendly amenities like expanded hours and open scheduling. (See “The Medical Home Machine, January 2017 Texas Medicine, pages 49-56, or

But for smaller practices, the resources required to become a recognized PCMH — such as adding personnel — can be a profound challenge. 

Driscoll addressed that by coming up with its own medical-home model system, allowing practices that care for children with special needs to introduce the standards and features of a medical home without earning official recognition from an organization like the nonprofit National Committee for Quality Assurance (NCQA). The Driscoll Health Home Model has three tiers with different requirements; for example, a Level 2 health home practice must pick three aspects in which to show “measurable improvement,” such as offering home visits, decreased emergency department visits, and decreased hospital readmissions.

Driscoll pays its Health Home Model practices higher rates than the Medicaid fee schedule offers for evaluation and management codes, as well as for home visits. Dr. Peterson says Driscoll has been able to afford it.

“We can always pay [primary care physicians] more than Medicaid if they partner with us on decreasing the cost of care in other areas, like inappropriate [ED] use or inpatient utilization or other services, whether it’s prescriptions or labs or whatever,” she said. “We have a finite bucket of money essentially, and so it has to come from somewhere. As long as we can work together to figure out where that is, and if going to the office more and paying a higher rate results in better care and lower costs, that is the triple aim. And I really feel like we are getting there.”

For-profit insurers, too, are finding ways to help physicians make the transition. 

Salil Deshpande, MD, chief medical officer of UnitedHealthcare’s Community Plan of Texas and a member of TMA’s Committee on Physician Distribution and Access, says United has made it a point to introduce smaller practices to more simple and straightforward performance models to ease the VBP transition, and provide clinical transformation consultants. Those models might include incentive payments for quality measures that come on top of the practice’s contractual fee-for-service payment. United also is engaging in shared savings arrangements, Dr. Deshpande says. 

 “We are measuring the total cost of care, and with the expectation that the total cost of care is improving because of all these clinical transformative practices that they’re implementing, there will be savings that we can then share with the practice,” Dr. Deshpande said.

For instance, accountable care organizations (ACOs) participating in United’s Medicaid value-based care programs have 10 percent higher rates of colorectal cancer screening compliance than non-ACOs, according to the insurer’s February 2018 Value-Based Care Report.

Another quality measure United is encouraging practices to offer: a follow-up appointment within one week of a patient’s ED visit or hospitalization. United makes an online registry available to practices with information about recent significant health care events, along with outpatient visits, prescriptions, and lab data.

“All of that is available online to that office practice so that they can see what’s going on with their patients, and they can be alerted to when there is a recent ED visit,” Dr. Deshpande said. “Our hope … is that the physician will then follow up with that patient within seven days, because we know that’s the best practice that can help mitigate avoidable readmissions.”

Dr. Rocco hopes the anachronistic nature of programs like the home visits shifts medicine’s focus back onto the patient. Taking the leap into value-based programs as a small practice takes a real team effort, she says.

“That in itself is an unspoken thing that ties us together into a joint mission statement of, ‘Cool, we’re doing things differently. This is working.’ We see kids that are happier, and when you [plant] a seed like this, it just kind of slowly grows on its own.” 

Leveling the Playing Field

The Texas Medical Association’s Council on Socioeconomics has formed a value-based payment (VBP) workgroup. The workgroup will include representatives of county medical societies and several other TMA councils, and inform and complement the work of the TMA-Texas Hospital Association Task Force on Medicaid Physician Payments.

The VBP workgroup has three primary objectives: 

  • Respond to new TMA policy adopted last year that calls upon TMA to “support the concept and implementation of community-based health care delivery models and to collaborate with the county medical societies to advocate for the adoption of such models”;
  • Survey Texas’ value-based payment landscape, particularly pertaining to models serving low-income, uninsured, or other vulnerable populations; and
  • Develop TMA policy, education, and tool kits not only to spur formation of physician-led, community-based organizations but also to help physicians who serve low-income populations successfully transition their practices to new payment arrangements. 
How Can TMA PracticeEdge Help?
Interested in joining or starting a physician-led accountable care organization? TMA PracticeEdge has expanded to serve more than 600 physicians across Texas, allowing independent practices to pool resources and providing the leverage needed to participate in value-based care contracts with all major payers in the state. For more information, visit or call (888) 900-0334. 



Tex Med. 2018;114(7):16-21
July 2018 Texas Medicine Contents
Texas Medicine Main Page


Last Updated On

July 03, 2018

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Joey Berlin

Associate Editor

(512) 370-1393

Joey Berlin is associate editor of Texas Medicine. His previous work includes stints as a reporter and editor for various newspapers and publishing companies, and he’s covered everything from hard news to sports to workers’ compensation. Joey grew up in the Kansas City area and attended the University of Kansas. He lives in Austin.

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