Colorado goes ahead with health care reform

Colorado is moving forward with the creation a standard health insurance plan for its citizens as part of federal health care reform legislation. Under federal health care reform, each state must create an “essential benefits,” health plan that serves as a guideline for health care providers listed on the health insurance exchange. These plans are meant to help keep costs low, create more uniformity in the market and may eventually serve as a framework for inter-state health coverage.

According to guidelines from the Department of Health and Human Services (HHS), by 2014 health insurance must cover ambulatory patient services, emergency services, hospitalization, mental health and substance abuse, prescription drugs, rehabilitative services, lab services, preventive and wellness care, and chronic disease management. The federal government was originally going to provide guidelines on the single plan, in order to set up the ability to bring insurance coverage across state lines, but has instead let states take more control of their guideline plans in order to customize them to local populations.

Colorado has nine plans, one of which will serve as the guideline plan. State officials have spent the summer weighing these options, and had a public meeting to discuss which best represents the needs of residents. The early leader is the state’s largest HMO plan offered by Kaiser Permanente although nothing has been formally decided yet. Colorado has until October 1 to submit its plan to the federal government to meet compliance requirements for health care reform.

The state has also joined a group of states building Medicaid accountable care organizations (ACOs). Minnesota, New Jersey, Oregon and Utah have all started building ACOs which are coordinated care partnerships between Medicaid providers. ACOs allow states to experiment with how care is provided and payments are made. However, providing managed care to a high-risk population like those enrolled in Medicaid can be difficult for states without an existing and broad based managed care framework. Many of the ACO plans being considered are still in the early stages, Montana recently announced a federal coordinated care pilot and Vermont also passed a coordinated care plan.

Colorado’s ACO work was referenced in a May report from the Kaiser Family Foundation, that discussed the risk factors for states considering Medicaid ACOs relative to risky subpopulations on Medicaid rolls. “These complex care arrangements bear on which subpopulations the state includes in a Medicaid ACO initiative and the benefits for which the ACOs are at risk. In Colorado, for example, beneficiaries residing in state psychiatric institutions or nursing facilities were initially excluded from enrollment in the Accountable Care Collaborative,” authors wrote noting that those populations are often carved out and included in managed care arrangements instead.

Some enrollees are also eligible for multiple benefits which can impact how states structure payment and reimbursement plans relative to care arrangements. These factors can add more complexity to ACOs and may require longer examination and planning periods before implementing an ACO plan. “States with nascent Medicaid ACO initiatives appear to be aware of, and responding to, the operational issues and pitfalls associated with past managed care strategies. These states have emphasized the role of providers, established performance metrics, and/or focused on closer alignment of financial incentives with policy goals. At the same time, state officials have noted that the new accountable care approach brings its own technical challenges, such as methods for attributing patients to ACOs, allocation of shared savings and development of appropriate risk adjustment methodologies. States vary in the resources they have available to address these challenges,” the report says.

Colorado appears to have put significant resources behind their various health care reform plans. Advanced Health Care an electronic medical records company based in Colorado recently announced that it has purchased Matrix EHR from MDI Achieve which provides electronic health records for eldercare. Advanced Health Care will use the acquisition to provide electronic health record services for long-term care providers in Arizona, Colorado, Idaho, Nevada, New Mexico and Utah.

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