March 2020, Volume XXXIII, No 12

Value-Based Reimbursement

Integrated Health Partnerships

v2.0: A win-win for patients, systems

Fewer emergency department visits. Fewer hospital stays. More clinic visits. Lower costs—resulting in $401 million in Medicaid savings over six years.

ow are more than two dozen innovative Minnesota health care delivery systems making this happen? They are participating in a state program designed to create incentives to provide high-quality, efficient care to people enrolled in Medical Assistance (Minnesota’s Medicaid program) and MinnesotaCare, whether through managed care organizations or fee for service.

The Integrated Health Partnerships (IHP) program, launched by the Minnesota Department of Human Services (DHS) in 2013 with six providers and 100,000 enrollees, now has 25 health systems and nearly 440,000 enrollees. This means that nearly 40% of Minnesota’s approximately 1.1 million Medicaid and MinnesotaCare beneficiaries receive their primary care through an IHP. By incentivizing providers to be innovative and improve care delivery, the program helps achieve the Institute for Healthcare Improvement’s Triple Aim of improving the experience of care, increasing the health of populations, and lowering per capita costs. At the same time, providers maintain flexibility to meet the needs of their respective communities.

How the program incentives work

Health care delivery systems that show an overall savings across their Medical Assistance and MinnesotaCare population, while maintaining or improving the quality of care, may receive a portion of the dollars saved. Systems in which health care spending increases over time may be required to pay back a portion of that money.

Systems that show an overall savings … receive a portion of the dollars saved.

DHS launched the original 2013 IHP program after the Legislature authorized DHS to develop and implement a demonstration project to test alternative health care delivery systems. In fact, Minnesota was one of the first states to implement an accountable care organization model in its Medicaid program.

In 2018, DHS launched IHP 2.0, with an added focus on social determinants of health because adults and children enrolled in Medical Assistance consistently face several social risk factors. Adults with substance use disorder or serious and persistent mental illness, experience homelessness, or live in deep poverty (defined as incomes 50% below the Federal Poverty Level) have worse health outcomes. Similarly, worse health outcomes are also experienced by children with a parent who experiences these same factors, or with a parent involved with the child protection system.

In addition to the social determinants of health emphasis, IHP 2.0 differs from the original model with the creation of two tracks for delivery systems:

  • Track 1 participants have no shared risk. In other words, there is no potential for shared financial gains or losses. Track 1 is designed for smaller provider groups or independent practices that could not previously participate due to low attribution and lack of capital to take on downside risks.
  • Track 2 IHPs have shared risk, with the standard risk being reciprocal or equal upside vs. downside. We also built into Track 2 an incentive to partner more directly with community-based organizations, in exchange for greater gain-sharing potential. For example, under a reciprocal arrangement, an IHP may choose to earn half of any savings in a given year up to 8%; however, they would also be on the hook for up to 8% in losses if they came in more expensive than their target.

Both tracks offer the benefit of a new payment type, the population-based payment (PBP), which essentially is a combination of pre-paid savings and the type of payments used in primary care medical home models. The payment is modest, but meaningful, averaging approximately $4.50 per member per month, and is paid quarterly. The payment is tied to specific quality metrics, including health equity metrics. Additionally, the PBP payment amount is directly tied to an IHP population’s clinical and social risk. (See sidebar for details.)

How do systems get rolling on one of these tracks?

Through an annual Request for Proposals (RFP) process, potential IHPs submit an application that includes a specific intervention(s) based on local demographics, social risks, and population health factors. As DHS evaluates proposals, we have an opportunity to work together with the potential IHP to discuss and refine its proposed initiative aimed at addressing social determinants of health. IHPs and DHS are often able to create a dynamic conversation that likely wouldn’t otherwise occur. These conversations enhance system-state relationships.

Systems’ proposals must be realistic, data driven (when possible), and integrated into their overall workflow. Systems must also engage in formal, sustainable community partnerships. DHS is a facilitative partner, providing access to robust and timely data, detailed data analytics and reports, and ad hoc support throughout the IHP contract.

Three systems with three different approaches

Examples of participating providers:

One larger, integrated health system located outside of the Twin Cities has established or joined with other organizations on multiple initiatives. One such partnership has led to the implementation of a multi-level and coordinated approach to address the needs of community members who have contact with law enforcement for behavioral health-related issues. Partners include the county, city, law enforcement, health system, mental health crisis providers, and others. They work together to make policy, system, and environmental changes; address barriers for community members and staff; and provide services directly to community members in county jails and elsewhere with the common goal of providing better continuity of care and helping individuals to achieve better health outcomes. Community members who are incarcerated can receive care through the IHP’s correctional care program located within the jail system, and can maintain that care with the same system through any of their clinic locations or through a coordinated care clinic established specifically to meet their unique needs and circumstances.

We want to hear more directly from providers.

The second is a small, independent health care system located in a federally designated food desert in rural Minnesota. This organization has established at least a half-dozen strategies aimed at addressing a lack of access to healthy foods among lower-income families. Their strategies include screening, program enrollment and follow-up in food shares that can be picked up; home-delivered food shares for older adults; food sent home in schoolchildren’s backpacks for weekends; meals provided upon hospital discharge to reduce readmissions; emergency relief boxes available at all of the system’s clinic sites to any food-insecure patient with immediate needs; and hosting a farmers’ market during the growing season. Partners include the local public health department; a community/technical college; University of Minnesota Extension; a hunger relief organization; several local growers; a local food hub that connects farmers, wholesale buyers, and shoppers; and a Twin Cities non-profit that breaks down barriers between locally grown food and those who need it. Since the inception of the program, ED visits have decreased, and A1C measures for diabetic food-share enrollees have improved.

The third is a large integrated pediatric delivery system that established an intervention aimed at helping mitigate the barriers faced by children and families in accessing support for complex socio-economic needs by utilizing a team of multi-lingual staff and community partners to support families. Once identified through a screening or referral process, this system works to connect families to on-site services and/or external resources. Staff follow up with families and community agencies to determine the effectiveness of the referrals and support and ensure that the families’ needs are met or that the family no longer requests support. In addition to the full-time employees used to staff this program, this system’s partners include legal services, hunger relief organizations, transportation providers, housing programs, early childhood development and education organizations, other community organizations, and benefits for which they qualify.

What’s next for IHPs?

DHS is striving to continue to enhance the IHP model. This includes further engagement with providers and patients who benefit from this program. In addition to demonstrated lower cost of care, anecdotal evidence of improved care delivery is strong, but we want to hear more directly from providers and our public health program enrollees who are served by IHPs. Additional considerations are to continue to assess the incentives within the accountability framework, including those that address social determinants of health, and to facilitate a greater exchange of information between the IHP health care delivery systems.

Providers interested in learning more about the Integrated Health Partnership program should visit DHS’s IHP Overview webpage, located at

Mathew Spaan, MPA, manages the Care Delivery and Payment Reform section of the Health Care Administration within the Minnesota Department of Human Services. He holds a master’s degree in Public Administration. He can be reached at

Sara Bonneville, MS, MPP, is a senior policy analyst in the Care Delivery and Payment Reform Section of the Health Care Administration within the Minnesota Department of Human Services. She holds master’s degrees in Health Services Research, Policy & Administration and in Public Policy. She can be reached at 

Details on how population-based payments (PBPs) are determined:

  • The magnitude of an IHP’s average per member per month (PMPM) population-based payment is adjusted to reflect its attributed population’s clinical or social risk factors. To adjust the payment for clinical risk (or medical complexity), DHS uses the Johns Hopkins ACG (Adjusted Clinical Groups) risk adjustment tool to identify relative risk and then assign a PMPM amount.
  • Following the adjustment to the payment for medical complexity, DHS also applies a payment modifier that adjusts the PMPM for social complexity, which is defined as the relative proportion of attributed individuals experiencing certain social risk factors within the IHP’s population.
  • Once the clinical and social risk adjustments are made, DHS calculates the IHP’s average PBP PMPM. The total quarterly PBP payment is then calculated by multiplying the IHP’s average PBP PMPM by its total attributed member months for the respective quarter.
  • For Track 2 IHPs, the PBP is added to the total cost of care PMPM for the respective measurement year when calculating the IHP’s total cost of care performance results.


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Sara Bonneville, MS, MPP, is a senior policy analyst in the Care Delivery and Payment Reform Section of the Health Care Administration within the Minnesota Department of Human Services. She holds master’s degrees in Health Services Research, Policy & Administration and in Public Policy. She can be reached at