First-Year Results of a Pilot Effort at a Nonprofit Medicaid HMO in Texas

HCI3 collaborated with CHC to design, implement, and measure a bundled payment program for maternity care, and the experience—both during the process of executing year one of the pilot, and upon review of the first year’s outcomes—yielded insights valuable to other health care leaders. The observations and recommendations detailed in this case study include:

• The challenge of formulating comprehensive maternity-episode budgets for patients whose claims history is short or absent, and how to proceed in the face of that challenge
• The significance of the C-section rate in driving financial outcomes for deliveries, and the budget methodology that can provide an explicit incentive to reduce unwarranted C-sections
• The enormous effect even a few high-need, high-cost infants can have on a provider’s actual costs, and ways to fairly moderate the effect these costs can have on a provider’s potential gain or loss sharing, especially considering the discretion a provider has in nursery-level classification for each infant