Minnesota Hospital Association

Policy & Advocacy

rules, regulations and comments

The Minnesota Hospital Association continually monitors state and federal rules and regulations to keep members informed and advocates on behalf of members regarding the impact of regulations on the state’s hospitals and health systems. MHA submits comment letters to share recommendations and feedback with the appropriate government organizations and health care stakeholders. Examples of rules and regulations that MHA addresses include those implementing federal or state health care reform efforts, changing payment methodologies, establishing community benefit or other standards for tax-exempt organizations, or modifying government oversight of health care activities.

November 01, 2012

Care Integration & Payment Reform Work Group's draft recommendations

Nov. 1, 2012

TO: Commissioner Lucinda Jesson and Members of the Health Care Reform Task Force

RE: Care Integration and Payment Reform Work Group’s Draft Recommendations

On behalf of our members, which include 145 hospitals and 17 health systems throughout Minnesota, the Minnesota Hospital Association (MHA) offers the following feedback and comments regarding the Care Integration and Payment Reform Work Group’s (Work Group) October 29, 2012 draft recommendations. We hope that these comments are useful as you review, discuss and consider the Work Group’s recommendations in preparation for your upcoming report or recommendations to Governor Dayton.

While MHA appreciates the adoption of several suggestions (e.g., clinically appropriate data sharing), we remain particularly concerned with the following recommendations:

  • Heavy-handed cost control measures that could have serious impacts on health delivery and patient care.
  • The possible promulgation of rules outside of the legislative process that could impact private Total Cost of Care contracts.
  • Failure to replace the term “integration” with “collaboration and coordination” in reference to partnerships between health care, long term care, public health, and human services.

MHA’s members are health care providers delivering an extremely diverse and broad scope of health care services for Minnesotans. In addition to the services typically associated with acute care hospitals, such as surgeries, labor and delivery, and cardiac care, MHA’s members provide care that spans the continuum from primary care clinics and ambulance services, in- and out-patient mental health care, and diagnostic imaging and laboratory testing, to long-term care, rehabilitation, chemical dependency and eating disorder treatments. Our members provide the residencies and clinical training for tomorrow’s health care workforce, and undertake some of the most sophisticated research that promises to change how we prevent and treat injuries and illness in the future.

Accordingly, almost every one of the draft recommendations from the Work Group would directly impact MHA’s members and, likewise, our members will play a crucial role in the successful implementation of any recommendation that would be adopted.

Given these high stakes for our members and for the success of the recommendations, MHA has monitored the Work Group’s discussions and progress and made several attempts to provide our input and suggestions. The most substantive feedback from MHA can be found in our letters submitted to the Work Group on August 21, 2012, and October 8, 2012, as well as in the multi-stakeholder letter submitted last week. While the Work Group made some improvements in response to our comment letters, many of our most important concerns remain unaddressed. We hope that the Task Force will take our concerns into account and make substantial changes to the Work Group’s recommendations so that the reform proposals that are put forward to the Governor, Legislature, health care stakeholders and general public are as thoughtful, practical and, ultimately, meaningful as possible.

MHA shares the Work Group’s commitment to advancing the Institute for Healthcare Improvement’s Triple Aim of “improving the patient experience of care (including quality and satisfaction); improving the health of populations; and reducing the per capita cost of health care.” We agree with the Work Group that addressing our society’s challenges with respect to health care “will require fundamental changes in provider payment and methods of delivering care, and consumer and community activation to build healthier lives and healthier communities.” Accordingly, the Work Group’s overarching objectives align with MHA’s long-standing health care reform priorities and the direction our members want Minnesota’s health care system to continue driving toward.

MHA is extremely proud of our health care delivery system’s achievements, especially its repeated national rankings at or near the top in health care quality and at or near the bottom in health care costs. It is important for the Task Force to remember that Minnesota does not face the same challenges as states where health care delivery costs far more than the national average and produces worse outcomes.

This “Minnesota is different” truism also means that the cost and quality improvements we can achieve are different than in states with lower quality and higher costs, and are different than the nation as a whole. Our challenges are different; and so are our opportunities.

Our strategies, therefore, should be uniquely tailored to Minnesota and our needs. Moreover, our strategies should not overturn or jeopardize our nation-leading performance on both cost and quality measures. Finally, our strategies must recognize the other dramatic reforms that are unfolding with unpredictable impacts on health care spending and care delivery models.

MHA continues to believe that improvement is necessary to meet the growing challenges of our communities and to provide the highest quality care at the lowest cost possible. We know that providers, plans, employers, state and local governments and individuals can all take steps to move Minnesota down the Triple Aim’s path. Our Association is engaged in multiple initiatives to take those steps and will continue to champion reforms and policies that can accelerate this work.

We remain concerned, however, that some of the Work Group’s recommendations neglect the uncertainty associated with other health care reforms, rest on generalized assumptions about national health care trends rather than Minnesota’s specific health care environment, and call for a significantly more intrusive, costly and burdensome role for government in private enterprise. More troubling are our concerns about the impact of the Work Group’s recommendations on the quality of care patients receive and the potential decrease in access to care for Minnesotans.

Overall, MHA agrees with the general goal and direction the Work Group aims to address. We question, however, the unintended consequences and harmful disruptions of the timeline. As we discuss later with respect to the strategy that specifies health care cost growth targets, to reduce health care spending to below the rate of inflation in only three fiscal years might seem admirable, innovative or bold when taken in isolation and when reflecting solely on the need to curb health care cost growth. Such a limited view, though, is misleading and potentially disastrous.

Health care represents a powerful portion of the state’s economy. According to the Minnesota Department of Health’s “Minnesota Health Care Spending and Projections” report from July 2012, health care accounted for approximately 14 percent of the state’s economy in 2010. Taking that chunk of economic activity and imposing artificial restraints to decrease its growth below the rate of inflation of the economy as a whole will have a significant impact on the overall economic growth rate, employment rate, state tax revenues and other key economic health indicators.

Moreover, health care represents one of the only sectors of the state’s economy that is growing and producing jobs. Swift measures to suddenly and sharply reduce health care spending will predictably result in slower or negative growth in the state economy and employment statistics at a time when our markets continue their struggle to recover from the 2008-09 recession.

Most importantly for our members and the patients they treat, hasty spending reductions could put patient care at risk. MHA cannot support artificially restraining health care spending for the sake of achieving an attractive timeline or a politically appealing target if doing so will detrimentally impact the quality or safety of patient care or impose barriers to access to care.

MHA shares everyone’s concern about the rate of growth in health care spending and the desire to bend the cost curve. Nevertheless, we suggested that the Work Group revise the goal to clarify that each patient’s and our communities’ interests in health, care quality and safety, and access to care take precedence over the inclusion of language regarding artificial spending targets and timelines. Although the Work Group has not adopted this suggestion, we hope that the Task Force will adopt this prioritization and clearly articulate it in any future recommendations or reports it makes.


  1. Support and advance Total Cost of Care (TCOC) contracting as a strategy to improve population health, improve patient experience and health care, and improve affordability of health care.

    MHA commends the Work Group for recognizing that the health care reimbursement system that our society relied upon, particularly fee-for-service methodologies is a significant factor in increased utilization and a primary target for reform efforts. MHA also agrees that Total Cost of Care (TCOC) contracting is a promising development that could help realign financial incentives for providers and payers to reward high-quality, low-cost care.

    Our concern, however, is that the Work Group’s recommendations in total seem to focus almost exclusively on TCOC contracting as the sole vehicle for addressing needed changes in our reimbursement system and, as a result, place tremendous weight on moving toward measurements, standards and requirements for implementation of TCOC contracts before they are fully understood.

    MHA has championed adoption and experimentation of TCOC contracting because, like the Work Group, we believe it can give providers both the flexibility and the incentive to deliver the best care possible at the lowest overall cost. At the same time, MHA has recognized that TCOC contracting remains very new and experimental and, therefore, it needs to be rolled out methodically and with close observation so we can make necessary adjustments and revisions as we learn how it works in practice and any unintended consequences it might have.

    Likewise, MHA has repeatedly stated that Minnesota’s communities are very diverse and approaching health care reform strategies with a one-size-fits-all-approach is unlikely to succeed. TCOC contracting might be an effective tool with some payers and providers or in some communities, but turn out to be wholly inappropriate for others.

    Accordingly, MHA encourages the Task Force to agree with the overarching strategy of advancing TCOC contracting because it holds great promise and needs to be further tested and examined, but to couch the strategy in language that recognizes the need to simultaneously explore other payment methodologies that might complement TCOC contracting, be more effective in certain communities, or approach health care cost and quality goals in a different manner. In short, while TCOC contracting appears to be an important and powerful tool that we should continue to pursue, the Task Force should encourage health care stakeholders to keep an open mind and be willing to experiment with other tools, as well.

  2. 1a. Advance TCOC contracting by DHS for Minnesota Health Care Programs, and in so doing support integration of health care, long-term care and public health and social services, when appropriate.

    MHA strongly supports increased data sharing, collaboration and coordination, and alignment between and among health care providers, health plans, public health agencies, social service providers and other key players in improving the health of individuals and communities. MHA has raised concerns with the Work Group that using language of “integration” might imply legal integration and create the impression that the Work Group expects various stakeholders to acquire, merge with or otherwise operate under a single governance structure. Thus, MHA respectfully suggested that the Work Group revise this language to state that the Department of Human Services (DHS) would support “collaboration and coordination” or “alignment of financial incentives” among these stakeholders, rather than language of integration. Or, in the alternative, create a definition of "integration" clarifying that it is not used or intended to require legal or formal structural integration. Changing the language in the strategy statement would more closely reflect the language use in the narrative description of the steps DHS would take toward fulfilling this strategy.

    MHA appreciates the changes made in the Work Group’s draft recommendations to recognize that enhancing collaboration and coordination among health care, long-term care, public health and social service providers will take time and that setting artificial timelines would not be useful. Instead, the Work Group includes flexibility for DHS to move forward as appropriate.

    Also, MHA recognizes the emphasis the Work Group placed on building off the efforts that are already underway in Minnesota, including the Health Care Delivery System demonstration project. It is important that we leverage the work and structures that are already in development as we expand TCOC contracting to cover a broader array of services. Also, it is critical that the Work Group recognized that the commercial market is further ahead in TCOC contracting and that new initiatives by the state should align with and avoid impeding the efficiency or incentives in those existing platforms.

    1b. Provide technical assistance to targeted providers to help these providers succeed in the future within a system in which providers are contracting for the Total Cost of Care.

    MHA appreciates the Work Group’s interest in helping providers transform themselves for a TCOC environment. We suggest that instead of assigning the Minnesota Department of Health (MDH) with the task of providing or contracting for this technical assistance, that the Task Force improve upon the Work Group’s recommendation by having MDH award grants to providers who wish to obtain their own experts or facilitators to help in this transformation. As the Work Group’s draft recommendations point out, the provider groups and types that might need technical assistance are varied, as are their needs and challenges. Accordingly, instead of MDH providing technical assistance for which it might not be equipped to do or contracting with facilitators that the department might believe are appropriate, allow the providers wishing to make these transformations select the expertise that they believe is best suited to meet their needs with financial support from the state. Doing so will provide greater flexibility and more applicable guidance for the providers and decrease the administrative burdens for the state.

    As with other strategies contained in the draft recommendations, MHA is pleased that the Work Group highlighted mental and behavioral health care as in need of strategies and reforms to better integrate care delivery of those services with delivery of physical health and social services. MHA supports this approach and intends to continue its efforts to participate in discussions with DHS, MDH and other stakeholders to advance better care and outcomes for individuals with mental and behavioral health needs.

    1c. Explore the need for a limited set of common standards for TCOC-contracting entities and develop such standards, if appropriate.

    Generally, MHA is wary of creating additional regulatory frameworks, standards or requirements when TCOC contracting remains so early in its development. The draft recommendations implicitly acknowledge the risks associated with premature regulatory restrictions: “The standards should not unduly limit provider opportunity to experiment, innovate and compete, and strong consideration should be given to the necessity of standards as weighed against provider and health plan innovation.” That sentence alone, however, neglects to lay out any meaningful parameters for any future standard-setting process.

    Inherently, standards or regulations on how something should be structured or operate limit that entity’s opportunity to experiment, innovate and compete. So, the question becomes what crosses the line into the realm of “unduly,” which many will regard as subjective, ambiguous and open to very different interpretations.

    We are particularly troubled that the draft recommendations go on to suggest that, if standards are recommended by a planning group, “MDH and DHS shall jointly draft and promulgate such standards” without any consideration as to whether the Legislature should be consulted or enabling legislation required. If the Task Force believes that it is worthwhile to convene a group to explore whether TCOC standards are warranted at all or would be cost-effective, MHA hopes that you will call for the departments to bring such recommendations forward to the Legislature for appropriate policy and fiscal consideration before state agencies attempt to unilaterally promulgate new rules and requirements.

    1d. Guide a process for comprehensive performance measurement of TCOC-contracted provider entities and other provider organizations in achieving health and cost goals.

    MHA has supported the Statewide Quality Reporting and Measurement System and believes that this existing mechanism can be utilized to achieve much of the Work Group’s intended strategy. MHA encourages the Task Force to leverage this existing mechanism for developing and agreeing upon uniform measures to be used by providers and plans.

    As stated in our previous letters to the Work Group, MHA continues to be concerned with the amount of measures and new reporting that would result from the Work Group’s recommendations. Today, providers often question whether the amount of resources expended to meet mandatory requirements for collection and reporting of data are out of proportion with the remaining available resources to implement quality of care improvements. MHA appreciates the Work Group’s inclusion of language that cautions against measures that are administratively burdensome. Nevertheless, the number and scope of new measures and reporting described in the draft recommendations seems to presuppose significantly higher costs and burdens for providers.

    MHA supports the Work Group’s recommendation for a robust evaluation of the Health Care Home initiative that explicitly includes review of the state’s process for certification and recertification of Health Care Homes. MHA’s members have expressed concern about the regulatory burdens associated with certification and recertification. These concerns are even more pressing when data show that the amount of care coordination fees paid to providers is significantly lower than expected. In other words, providers are strapped with the costs of cumbersome regulatory processes without the expected revenue that was intended to partially mitigate these costs. Accordingly, in our previous letters to the Work Group, MHA suggested adding language to explicitly direct the study to examine ways to streamline those processes, to mitigate regulatory and reporting burdens on providers, and to reduce state administrative costs.

    Likewise, we support the Work Group’s recommendation to evaluate expanded uses of the All-Payer Claims Database for quality improvement research activities. Although we do not have adequate information about the specific data elements and structure of the All-Payer Claims Database, many MHA members believe that it is underutilized because of its statutory limitations and agency interpretations of those limitations. It is important to note that other states have moved forward with all-payer claims databases with scopes of use that are far more expansive than Minnesota’s, including utilization of the databases for quality of care improvement research and analysis.

    For example, under a contract with the Agency for Healthcare Research and Quality, MHA is combining claims data, much like those contained in MDH’s database, with clinical lab data to test the effectiveness of various cardiac treatments.

    Similarly, MHA, Stratis Health and the Institute for Clinical Systems Improvement (ICSI) are co-leading the Reducing Avoidable Readmissions Effectively (RARE) campaign, which has helped providers avoid or prevent thousands of hospital readmissions for our patients. Unfortunately, without an all-payer claims database, like the one administered by MDH, to track readmissions of patients to hospitals other than the originating hospital, the RARE campaign is unable to analyze, evaluate and learn from almost 25 percent of the state’s readmissions. Thus, the limitations on the use of MDH’s database diminishes the ability of our partnership to improve patient care and reduce health care costs for Minnesotans because our campaign must use limited data despite the existence of a more complete data set.

    1e. Address barriers to clinically appropriate data sharing while rigorously protecting against unauthorized sharing and disclosure.

    Quite simply, none of the efforts to further care integration, TCOC contracting, health care homes or the overarching goals of the Work Group and Task Force can be accomplished unless and until health care providers have more access to the data necessary for care coordination. Accordingly, MHA regards this strategy as the highest priority and of greatest importance with respect to all of the strategies and recommendations put forward by the Work Group. We are pleased to see the most recent revisions incorporating suggestions from the multi-stakeholder letter submitted last week. MHA strongly supports this strategy, and urges the Task Force to adopt it in its final report.

    1f. SEGIP shall convene medium and large self-insured employer purchasers to present and discuss the potential benefits to the employers of Total Cost of Care payment arrangements, the benefits of aligning performance incentives across markets and what employers can do to advance use of such payment arrangements.

    MHA supports efforts to educate employers about TCOC contracting. MHA respectfully suggests that the Task Force consider expanding this recommendation to include educational events for employees of organizations that are considering use of TCOC contracting so that individuals understand how their employers are trying to re-align incentives for better care at lower costs, and how employees’ behaviors and actions impact health care costs for themselves and their employers.

  3. Facilitate improved integration of behavioral health and primary care services.

    As stated earlier and in our previous letters to the Work Group, MHA supports this strategy as well as it subparts 2a-d, and appreciates the Work Group’s attention to mental and behavioral health care as an essential component for health care system improvement. We look forward to continuing to work with DHS, MDH and other stakeholders in these efforts.

  4. Set public and private payer performance targets to support improved population health, patient health care experience and quality of care, and reduced cost growth.

    We expect that the Task Force recognizes that this strategy is the most controversial of the Work Group’s draft recommendations. In MHA’s previous letters to the Work Group, many of our comments and suggestions focused on this element.

    As stated earlier, MHA supports efforts to address the rate of growth of health care spending. We question, however, the merits of setting expectations, such as a rate of growth equal to CPI by State Fiscal Year 2015. Simple, heavy-handed price controls, arbitrary capitation rates or other sweeping measures by the government to unilaterally impose cost savings would be strongly opposed by MHA. Likewise, steps to reduce the rate of health care cost growth in a manner that would result in significant decreases in health insurance coverage, meaningful access to care, or negative disruptions in patient safety or care quality would be opposed by MHA as well.

    Therefore, reducing health care spending growth to the rate of CPI or below CPI may be an admirable goal in isolation or may seem bold and innovative. Whether they are practical, whether their unintended consequences to the state’s economy are counterproductive, and whether they will negatively impact our ability to achieve the Triple Aim are the questions the Task Force should use to evaluate the merits of this recommendation.

    In considering the recommendation, MHA reminds the Task Force that Minnesota’s state government, health plans and providers have very little influence over federal Medicare policy. Accordingly, significant fluctuations in health care spending within the Medicare population might occur solely because of changes in federal policy.

    Likewise, changes in Medicaid policy are largely driven by federal policy. Most recently, provisions requiring increased payments for certain preventive services delivered to Medicaid enrollees was driven by federal law changes, thereby increasing health care expenditures within Minnesota in a manner that MHA and most health care policy experts support.

    And, importantly, MHA notes the irony that the state which has statutorily set its Medicaid reimbursements to providers at far below cost levels completely devoid of any relationship to the commercial market, would then impose penalties and financial consequences on private market actors if spending in other sectors that are forced to make up for the state’s unwillingness or inability to pay its own share of costs. If the state is to enter the arena of imposing health care price controls in the private marketplace, it seems like it should first get its own house in order by paying providers for the costs of services it requires them to provide.

    Quite simply, MHA does not support strategies that involve the state government setting performance targets, artificial or bureaucratically imposed spending limits, or other mandated limitations on the services or prices that private parties negotiate between one another. By paying providers significantly below the actual cost of delivering care, the state has done more than its share of influencing health care costs in the private sector.

  5. Enhance the market availability of health insurance products that foster consumer accountability for health behaviors and create incentives for consumers to use high value providers and high value services.

    MHA supports the direction of this strategy. It is unclear what incentives already exist in the market, or what impact new community rating regulations and the Health Insurance Exchange market will have on such products. As stated above, we believe that the All-Payers Claims Database might be useful in research that would help identify high value services.

  6. Pilot the concept of “Accountable Communities for Health.”

    As stated above and in our previous letters to the Work Group, MHA supports the strategy of demonstration and pilot projects to test new care delivery models and payment methodologies. MHA recognizes that the subparts of this recommendation were not included in previous drafts from the Work Group. Accordingly, we encourage the Task Force to seek additional feedback and input from stakeholders before acting on them so that the final product from the Task Force is as cohesive as possible.

    5a. Beginning in SFY14, MDH shall select up to 10 diverse Accountable Communities for Health two-year pilots.

    While MHA supports experimenting with Accountable Communities for Health, we are concerned about the potential for fragmentation or lack of coordination between MDH’s pilots with ACHs and DHS’s demonstration projects with Health Care Delivery Systems. It would be helpful, therefore, for the Task Force to clarify how these two similar initiatives would relate to one another, if at all, and how providers operating within these pilots and demonstrations will be assured that incentives, reporting requirements, administrative structures, metrics, etc. will be coordinated.

    5b. Integration of health care and other services and population health goals in Accountable Communities for Health.

    In supporting ACHs, MHA would like greater clarification of how these recommended strategies interplay with the other strategies from the Work Group. For example, other recommendations from the Work Group call for setting health care quality and spending targets, yet in this strategy the Work Group recommends that ACHs “shall develop and evaluate annual goals for population health improvement and cost growth.” MHA is concerned that the Work Group’s recommendations will lead to multiple groups engaging in similar but distinct exercises, arriving at different goals or targets, and ultimately, creating even greater confusion and misdirected efforts than exist today.

    5c. Integration of ACHs with ACO/TCOC payment models.

    MHA supports advancing and evaluating ACH, ACO and TCOC contracting projects, as well as sharing best practices. Given that this subpart is a new addition to the Work Group’s recommendations, MHA has not had the opportunity to get clarification of the intent behind recommending that MDH and DHS “develop guidelines for and explore models for shared financial gain and risk.” If the Work Group intends for “develop guidelines” to mean that MDH and DHS will develop regulatory requirements or structures that will govern how private entities agree to share savings, gains or risk, then MHA would object to that recommendation and encourage the Task Force to reject it. As stated earlier, TCOC contracting is too new and experimental to begin imposing cookie-cutter regulations or guidelines on how it is implemented or evolves. This is even more true for ACHs.

    Likewise, because this subpart is new, MHA has not had an opportunity to seek clarification about what the Work Group intends by having ACH pilots “redirect health care savings to primary prevention strategies and models.” As health care providers expend more and more resources and take on greater financial risks to adapt to TCOC contracting and shared savings/risk arrangements, their motivation is to begin to capture a portion of the savings from their quality improvement efforts that historically accrued only to payers. To date, those shared savings have been elusive and far too small to outweigh the amount of resources put into care transformation. MHA would not support ACH pilots, MDH or other governmentally imposed structures that would decrease health care providers’ opportunity to recover their TCOC transformation costs by redirecting the shared savings that the same providers are generating through their quality of care improvement efforts.

    When looked at as a whole, the Work Group’s recommendation of such a “redirect the savings away from providers” strategy would contradict its other strategies of trying to advance TCOC contracting since providers that haven’t already adopted TCOC contracts will be even less inclined to do so if all or a portion of the savings they would have had as an incentive are redeployed elsewhere.

MHA appreciates the opportunity to share these comments and suggestions. We hope that the Task Force finds them useful in evaluating the preliminary recommendations from the Work Group and in assessing which elements to include in the Task Force’s final report. If the Task Force or any of its members have questions or concerns about MHA’s comments, please feel free to contact me anytime.


Matthew L. Anderson, J.D.
MHA Vice President, Regulatory/Strategic Affairs