In 2010, the state legislature mandated the Minnesota Department of Human Services (DHS) to develop and implement Integrated Health Partnerships (IHP) demonstration projects to test alternative and innovative healthcare delivery systems, to include Accountable Care Organizations (ACO).
Minnesota is one of a growing number of states to implement an ACO model in their Medicaid program to improve care for enrollees. The program is set up so that in the first year of the demonstration, delivery systems can share in savings and after the first year, they share the risk for losses. The delivery system’s total costs for caring for enrollees in Medicaid are measured against targets for cost and quality.
So far, DHS has contracted with three organizations to participate in IHP demonstration projects. The new contracts with Hennepin Healthcare System, Mayo Clinic Rochester, and Southern Prairie Community Care will explore total cost-of-care or shared risk/gain arrangements in state public programs.
The Minnesota Hospital Association (MHA) has been a strong champion of the IHP approach. Lawrence Massa, MHA President and CEO said, “The IHP demonstrations are home-grown healthcare reform initiatives recognizing the hazards of a one size fits all approach and instead offers DHS and healthcare providers flexibility to tailor the incentives and financing to the unique capacities and needs of individual communities.”
The DHS plans to implement the demonstration projects in different geographic regions of the state and to integrate healthcare with chemical and mental health services, safety net providers, and social service agencies. The projects will include clear incentives for quality of care and targeted savings, which many hope will result in increased competition in the marketplace through direct contracting with providers.