Yakima Valley Farm Workers Clinic, a federally qualified community health center serving 80,000 Washingtonians and Oregonians under full-risk Medicaid managed-care contracts, has no intention to launch its own Medicaid managed-care plan.
Why wouldn't long-time CEO Carlos Olivares want to cut out the middleman and launch his own plan?
He says going through the state licensing process and meeting state financial reserve requirements are too daunting—even though the clinic has a lot of the hardware and software it needs to become an insurer. “It's a math issue for us,” he said. “We manage about $300 million in premiums,” which, with a reserve requirement of 8-to-1, would amount to about $38 million. “It's huge, sitting idle. You can't use it. You can't invest it. It's got to be liquid.”
The National Association of Community Health Centers does not keep track of its members' efforts to launch health plans. But a spokeswoman said a few community health centers are taking the plunge.
Yakima Valley’s clinics are linked by a common electronic health-record system. They are installing a new EHR from Epic Systems Corp. that also will provide the group with better connectivity with the seven hospitals in its service area, four of which also have Epic systems.
Epic, based in Verona, Wis., has a product called Tapestry integrated into its EHR that handles many health plan functions, including member enrollment, patient eligibility, provider utilization management, premium collection and tracking and patient and employer portals, said Sean Cotter, its lead developer. The company offers its health plan software to provider systems that are customers, Epic President Carl Dvorak said. Nearly a dozen healthcare systems are using it.
Because it has taken on so much financial risk under its Medicaid contracts, Yakima Valley had to beef up on data analytics systems, Olivares said. For example, the clinic grabs and analyzes claims data from four different health plans, with a project underway to connect to a fifth. It also connects to social service agencies in its service communities. It uses a data warehouse and analytics services from a company called Arcadia to sift through and make sense of the information from these multiple data streams.
“One of the things I wanted to make sure we didn't do was to simply rely on the notion that if you have a very good, strong, functional (EHR), that that's all you need to take risk,” Olivares said. “That is the absolute road that leads you to a cliff. What you need is a much more robust sort of data sources and analytics capacity to help you understand (that) as the system is generating care, it also begins to generate expenses. If you're not monitoring that on a regular basis and you're not correcting and making the small corrections to ensure that you're attending to patients that have the highest risk, then you end up at the end of the year with a negative reconciliation.”
He said his organization now can incorporate data from insurers into its data warehouse. “The combination between our (EHR) and all of that claims data allows us to produce reports that are used on the day-to-day care of our patients.”
In West Virginia, community health centers have entered the insurance business. Louise Reese, CEO of the West Virginia Primary Care Association, an umbrella organization for the state's community health centers, said her state's centers spent 18 months getting ready to launch a plan. On Sept. 24, 2014, community health centers, in partnership with Highmark West Virginia, started West Virginia Family Health, a for-profit, provider-sponsored network operating a Medicaid managed-care organization. Reese said the centers hold a 51% controlling interest, with Highmark holding 41% and with the rest of the company's stock held in reserve.
Reserve requirements with the state could have been lowered because it's a provider-sponsored network, Reese said. But under the partnership with the state's dominant Blues plan, the company met the state's full reserve requirement. The organizing and legal work took a lot of the community health centers' time and energy, she added.
Highmark West Virginia is doing all the back-end claims processing and adjudication, Reese said. The Oregon Community Health Information Network is helping the group develop a central data repository where claims and clinical data will be stored and analyzed.
West Virginia Family Health will get a big boost July 1 when the state shifts its entire Medicaid program to private managed-care plans.
The plan's Medicaid enrollment is now at 12,000 members, Reese said. “Once they move over to managed care, we're estimating we'll have between 60,000 and 70,000 lives.”
