Medicaid Health Home Impacts And Implications: Chief Financial Officer

The Affordable Care Act of 2010 continues to have a significant impact on the health care industry. One area where that impact is likely to be especially prominent is in the shift toward a Medicaid Health Home or Totally Accountable Care Organization (TACO) [1]  model.  “Totally” refers to the expectation that these organizations will be responsible for delivering whole person care defined as services beyond just medical care, including mental health, substance abuse treatment and other social support services as well as the aspiration that these organizations will assume accountability for all associated costs of care, ultimately, through global payment mechanisms. The expected outcomes are to reduce avoidable emergency room visits, hospital stays, and institutionalizations for people with multiple physical and behavioral health conditions and social problems like homelessness.

As part of GSI Health’s continuing series examining the impacts and implications of the Medicaid Health Home model, today’s post focuses on the shifting roles, responsibilities and requirements faced by Chief Financial Officers (CFOs).

If you missed the previous two posts in this series, it’s not too late to catch up:

Click here to read about how Medicaid Health Homes are changing the role of Chief Medical Officer.

Click here to read about how Medicaid Health Homes are changing the role of Chief Operating Officer and VP of Care Management.

The Changing Role Of The CFO Under Medicaid Health Homes

There is progress being made in re-orienting the health care system to pay “for the value, not the volume, of medical care.”  The aspiration is that Medicaid Health Homes and Totally Accountable Care Organizations will assume accountability for all associated costs of care, medical, behavioral health and social supports.  Chief Financial Officers have a major role to play to understand the total cost drivers and the depth of financial responsibility in managing the highest-need Medicaid beneficiaries.    The biggest challenge CFOs face is trying to manage the old volume based and the new value based models together, reconciling conflicting incentives.

Key Steps:

  1. Understand what drives profitability in a value based health care system
  2. Understand cost drivers of the high-need Medicaid population
  3. Establish metrics that value Medicaid Health Home services
  4. Translate these metrics/values into specific objectives for clinical departments and community programs
  5. Seek out managed care arrangements which reward the values to which you are aspiring

 Care Continuum Realization Technology

While the responsibilities and key steps detailed above provide a high level starting point regarding the foundational financial requirements for a Medicaid Health Home, they are by no means the only elements required for success. In addition to shifting roles such as the Chief Financial Officer, you need a health IT solution capable of collecting, analyzing, measuring and reporting information to enable the transition to value-based payment arrangements.  You need a platform that collects and analyzes information from various sources, including: claims, clinical, administrative and care coordination systems and measures and reports on performance in support of new payment arrangement.

Stay tuned to the GSI Health Blog for the final installment in this series on the impacts and implications of Medicaid Health Homes as we turn our attention to the role of Chief Information Officer (CIO).

[1] Health Affairs Blog – -Broadening the ACA Story: A Totally Accountable Care Organization

Posted By Stephen Somers On January 23, 2014 @ 11:59 am In All Categories,Chronic Care,Disparities,Environmental Health,Health Reform,Medicaid,Mental Health,Nonmedical Determinants,Policy,Public Health,Substance Abuse

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