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Newly merged Chicago clinic network says it has the fix for impending Medicaid cuts


As federal Medicaid cuts threaten to push hundreds of thousands of Illinoisans off the rolls, the newly merged Diverge Health and Medical Home Network are betting that value-based care can keep safety-net clinics afloat.
It’s a bet that Art Jones has been making for 40 years, using the logic of value-based care — paying healthcare providers for positive outcomes, not just procedures — as a way to keep costs under control and patients out of the emergency room or nonemergency
care.

But Jones sees tough times and consolidation ahead for Federally Qualified Health Centers, even if they succeed in value-based care contracting. Jones is chief clinical officer of Medical Home Network, a managed care organization that’s recently merged with Diverge Health and a consultant at Health Management Associates. But before helping form MHN in 2009, Jones served as the CEO of Lawndale
Christian Health Center for 27 years. There, in the early 1980s, he became one of the nation’s first advocates for value-based payments for Federally Qualified Health Centers like Lawndale Christian.

“Our health center adopted value-based payments in 1987. We were one of the first in the country to do so, and I’ve stayed with it ever since,” Jones said. “It always made sense to us in that if we really kept people healthy and helped themself-manage their conditions and give them good timely access to care when they had acute problems, we could keep them out of the emergency room and out of the hospital, which is where a lot of the low-value costs occur.”


Value-based care’s role amid cutbacks


Now, healthcare in Illinois is facing a new challenge in the form of work requirements and biannual applications for Medicaid recipients.
The impact of the Trump administration’s HR 1, widely known as the Big Beautiful Bill Act, is predicted to be devastating with an estimated 400,000 at risk of being taken off the Medicaid rolls in Illinois alone.

The newly merged Diverge Health and MHN is in a strong position to both help those on Medicaid stay on the rolls and lower their costs through value-based care, said Diverge CEO Binoy Bhansali.

The merger lets the combined company integrate value deeper into operations:Diverge focuses on independent physician groups in underserved communities, whileMHN works with FQHCs, Bhansali said.

The size of the operation, now with a network of more than 400 different providerorganizations and $3 billion in medical spending, gives the new company anexpertise in value and managed care that will be sought out among providers andpayers, he said.

In recent years, the U.S. Centers for Medicare & Medicaid Services has also put moreemphasis on supporting community health centers and independent providers thatuse value-based care.

The post-merger expansion possibilities, Bhansali said, are strongest in diggingdeeper into the states and markets where it already exists and adding more value-based care networking there. He said the company won’t pursue an expansion plan ofdiving into new states without being deliberate.

One tool MHN uses is the longstanding accountable care organization, which hascreated a healthcare network that’s pulling in the same direction to keep peoplehealthy, Yasin Patel, president and CEO of the MHN ACO, said in a recent statement.

“Chicago’s safety-net providers are under real pressure from Medicaid changes, andno single health center should have to carry that risk alone,” Patel said. ”That’s whyour health centers partnered with MHN to form MHN ACO more than a decade ago.MHN and Diverge coming together puts more infrastructure behind our healthcenters, so they can stay focused on caring for their patients and communities.”

In Chicago, and beyond, Diverge Health’s strength is its connections in thecommunity and with providers who will help the Medicaid population navigate thecoming re-enrollment and work requirement roadblocks while building deeper value-based networks, Jones said.

That’s going to be very important to all players, including Medicaid programs, hospitals and FQHCs, said MHN co-founder, Cheryl Lulias, who will continue as president of the new organization.

The company already focuses keeping patients up-to-date with Medicaidparticipation as part of the care coordination process, she said. For example MHNworks with Cook County’s Medicaid managed care program, County Care, and itspartner FQHCs to keep redetermination rates as high as possible.


Big changes ahead for FQHCs


“FQHCs are like the safety net’s safety net. In both urban and rural communities, theyare the vital primary care assets,” Lulias said. “They’re critical because they do takeeverybody regardless of ability to pay, and they provide really high quality,comprehensive care.”
At the same time, Jones predicts cuts in Medicaid participation and correspondingincrease in the uninsured population will inevitably lead to consolidation.

“I think a lot of a lot of health centers are looking at downsizing in terms of sites,”Jones said. “They’re going to have to look at where they’re at if they multiple sites. . ..They’re going to be forced to look at which of their sites are less efficient in terms of unit size and that type of thing, and they’re going to have to do some consolidation ofsites.”

Many FQHCs across the country, he said, aren’t going to make it under HR 1.

“They’re already struggling, and so we’re starting to see health centers talk to eachother about mergers, kind of like what you saw become really common 20 years agohospital closures and mergers,” he said. “I think you’re going to see you’re going tosee more merger activity.”

The ones who may succeed, Jones said, are going to be those who can keepimplementing value-based care by using timely and good data. Provider networks,paid through value-based care, need to capitalize on how AI can identify thosepatients most at risk of complications, ER visits and readmissions and focus theirextra resources on those patients, he said.

In addition, strong outcomes data will be vital, he said, because the more patient andpositive outcomes you can claim, the better position you’ll have in contracting.


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VBC accelerator Diverge merges with Medical Home Network to support PCPs, FQHCs