Looking Back on Promising Progress in Round One State Innovation Model, Looking Forward to the Future of State Based Innovation

by Patrick Conway, M.D., CMS Principal Deputy Administrator and Chief Medical Officer
The State Innovation Models (SIM) Initiative began in April 2013, and has supported over 38 states, territories and the District of Columbia in two rounds of awards.  Yesterday, we released the second annual independent evaluation report for the Round 1 State Innovation Model Test Awards, including the first findings available for SIM after the baseline data summary.  This report shows both progress in states being catalysts for health care transformation and the value of CMS’ collaboration with states. Today, we are releasing a Request for Information (RFI) to obtain input on the design and future direction of the SIM Initiative.

Overview of SIM

SIM states are testing strategies to transform health-care across their entire state, specifically to have a preponderance of payments to providers from all payers in the state be in value-based purchasing and/or alternative payment models.

In the SIM Initiative, CMS is testing models for how state governments can use their policy and regulatory levers to accelerate statewide health care system transformation from encounter-based service delivery to care coordination, and from volume-based to value-based payment.  Round 1 states are implementing statewide health care innovation plans that support health care transformation through a variety of methods, including:

  • primary care practice transformation through patient-centered, coordinated care;
  • integration of primary care with other health and social services, including behavioral health services and long-term services and supports;
  • payment reforms that promote delivery system transformation and a variety of enabling strategies to facilitate and sustain an improved health system that puts the patient at the center of care delivery; and
  • community-based population health and prevention.

Central to enhanced care coordination, population health, behavioral and physical health integration, and alternative payment models is the use of health information technology (IT) and a robust data infrastructure.  The Round 1 Test states are strengthening these capacities through:

  • engaging and supporting providers that have not typically been connected to health IT;
  • requiring participating providers to report on data and/or implement health IT;
  • making available patient-level health information to providers and systems to improve care coordination; and
  • improving data analytics to support quality improvement and payment reform, and aligning metrics and data infrastructure across payers and initiatives.

Evaluation findings from Year 2 of SIM Round 1

In SIM Round 1, Model Test awards were made to six states: Arkansas, Massachusetts, Maine, Minnesota, Oregon, and Vermont. The SIM Initiative has made notable progress in accelerating health care transformation among the Round 1 Test states. Over time, many states have been able to increase the populations served by their SIM-supported models.

  • Over 70% of eligible Medicaid primary care providers participate in Arkansas’ patient-centered medical home, which serves about 80% of their eligible Medicaid population.
  • Alternative payment models supported by SIM funds in Minnesota and Vermont are reaching about 50% of each state’s total population, with Oregon and Vermont also reaching over 80% of their total Medicaid population.

The evaluation found that states have been successful in engaging a wide swath of the payer, provider, purchaser, and patient communities and building stakeholder consensus by balancing standardization and flexibility when expanding payment reforms statewide. States have leveraged multi-payer efforts to implement payment and delivery system reforms, engaged the provider community in SIM-related activities, and used a range of policy levers to effect change. Some of the most substantial changes to delivery systems and payment methods are in areas where public and private payers are working together to accelerate transformation. For example:

  • In Arkansas, Arkansas Blue Cross Blue Shield, QualChoice and some large self-insured employer groups, including Walmart, participate in the SIM-supported patient-centered medical home and episode of care models.
  • Vermont’s SIM Initiative focuses on supporting Accountable Care Organizations. Providers participating in both Medicaid and commercial ACOs now represent a significant majority of the state’s available primary care providers. ACOs offer services to nearly all residents statewide, and about half of eligible beneficiaries were participating as of late 2014.
  • In Oregon, participation in the Coordinated Care Model under the SIM Initiative currently includes commercial insurance carriers contracting with the state to cover state employees and Medicaid beneficiaries.

It remains too early to attribute specific quantitative results directly to the SIM Initiative. However, analyses based on Medicare and commercial populations show that states were making progress on health outcomes, such as declines in emergency room visits and inpatient readmissions through models pre-dating SIM and models upon which SIM efforts are expanding. Future evaluation reports will provide more detail on quantitative results and whether and how the SIM Initiative is affecting and accelerating trends in health outcomes and spending.

SIM Supports Health Care Transformation

The Affordable Care Act provides tools through the CMS Innovation Center, like the SIM Initiative, to move our health care system toward one that provides better care to patients, spends dollars more wisely, and results in healthier communities. Today’s announcement is part of the Administration’s broader strategy to improve the health care system by paying providers for what works, unlocking health care data, and finding new ways to coordinate and integrate patient care to improve quality.

In 2015, the Administration announced goals for Medicare to tie payment to quality or value. These goals are for 30 percent of Medicare fee-for-service payments to be made through alternative payment models by the end of 2016 (and 50 percent by 2018), and tying 85 percent of payments to quality or value by 2016 (90 percent by 2018). In early 2016, the Secretary announced that HHS had reached its goal of 30 percent of Medicare payments made through alternative payment models ahead of schedule. HHS is also working with private payers, employers, consumers, providers, states and state Medicaid programs, and other partners to expand alternative payment models. Initiatives like SIM are an important part of states’ role in health care transformation and tying payments to quality or value.

Looking to the future, we are also seeking input through an RFI on the following concepts related to the evolution of the SIM Initiative:

  • Partnering with states to implement delivery and payment models across multiple payers in a state that could qualify as Advanced Alternative Payment Models (APMs) or Advanced Other Payer APMs under the proposed Quality Payment Program, making it easier for eligible clinicians in a state to become qualifying APM participants and earn the APM incentive;
  • Implementing financial accountability for health outcomes for an entire state’s population;
  • Assessing the impact of specific care interventions across multiple states, and;
  • Facilitating alignment of state and federal payment and service delivery reform efforts, and streamline interaction between the Federal government and states.

For more information on the RFI, please visit: https://innovation.cms.gov/Files/x/sim-rfi.pdf.  To be assured consideration, RFI comments must be received by October 28, 2016.  Comments should be submitted electronically to: SIM.RFI@cms.hhs.gov with “RFI” in the subject line.

CMS supports states through SIM and other innovation efforts to move towards this vision of multi-payer delivery system reform across an entire state.  Health system transformation and improvement happens at the state and local level and CMS will continue to support states in their transformation journey to improve care for people across the nation.

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