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Taking the lead in Medicaid change

Carol Tegas swears she did not mean to apply for the job.

Tegas was named executive director of Finger Lakes Performing Provider Systems Inc. in June. She heads a new agency charged with helping independently operating doctors, hospitals, nursing homes and mental health providers across a 13-county region pull themselves together into tightly coordinated networks capable of delivering high-quality, low-cost care to Medicaid patients.

Known as FLPPS, the organization Tegas heads is one of 25 similar new non-profits created by the state. The performing provider systems initiative is a key part of a reform of the state’s $54 billion Medicaid program kicked off by Gov. Andrew Cuomo in 2012.

Shortly before she took the job, Tegas arranged to meet with FLPPS chairman Kathleen Parrinello and Vice Chairman Bridgette Wiefling M.D. Tegas was not thinking of switching jobs. Becoming FLPPS chief was “not remotely on my radar,” she says.

Tegas had heard about the work it planned to do, however, and thought it dovetailed with initiatives she was interested in pursuing. At the time, she headed the Rochester Community Individual Practice Association. She had worked for over a decade in various capacities for the more than 3,000-member physician group that provides the Rochester-area network for Aetna Inc. and some self-funded insurance plans.

“I thought it would be good to find out more about what they were doing, but really only as it might relate to RCIPA,” Tegas says.

Parrinello and Wiefling had a different idea.

“We pretty much knew we wanted to hire Carol,” Wiefling says.

The women at that point had been working since last year to pull FLPPS together.

Parrinello is chief operating officer of the University of Rochester Medical Center’s Strong Memorial and Highland hospitals. Wiefling’s day job is Rochester Regional Health’s chief clinical innovation officer.

When they met with Tegas last spring, both had been working on the FLPPS project for months. When the state started to carve out the 25 PPS regions last year, five Rochester-area and Finger Lakes region health care organizations had explored leading the effort.

State officials chose URMC and Rochester Regional Health to co-lead the drive for the 13-county FLPPS region.

The Rochester-based health systems were a logical choice. Joint responsibility for the Medicaid push would encourage them to cooperate with each other and could engender broad cooperation throughout the region.

Together URMC and RRH control all of Rochester’s hospitals and directly employ at least half of the region’s physicians. Over the last few years, a succession of financially challenged community hospitals and local health systems have aligned with either URMC or RRH. Other rural providers could follow.

When they met with Tegas last spring, “we’d already hired a lot (FLPPS’) clinical staff,” Parrinello says.

Key qualifications
What the organization needed in a leader was someone with skills few other potential candidates possessed: a strong background in finance and deep familiarity with the labyrinthine U.S. health care system.

That Tegas’ resume includes more than a decade’s work with most of the area’s physicians and many non-physician players in the region added a final bit of luster.

A 20-year veteran of RCIPA, Tegas previously held several positions with Blue Cross Blue Shield of the Rochester Area, the predecessor of New York’s second-largest health insurer, Excellus BlueCross BlueShield.

In addition, she is a trained accountant who started her career as a CPA working for Arthur Andersen & Co. Her first job in health care was as an auditor for the Blues.

By the end of the May meeting with Parrinello and Wiefling, Tegas was excited by the FLPPS project and seriously considering the job.

She asked RCIPA’s longtime attorney Craig Zicari for advice.

“I told her she’d be a perfect fit,” says Zicari of Harter, Secrest & Emery LLP.

For RCIPA, where Tegas had worked since 1995 and served as executive director since 2006, the loss of Tegas would be a blow, Zicari concedes.

“That’s something I expect they’ll start dealing with in January,” he says. “They can replace her, but she did a lot of different things. It might take more than one person.” 

The PPS organizations were created to disburse some $6.5 billion the state wants to spread among hospitals, doctors and other health care providers.

FLPPS, which is to get as much as a $565 million slice of that funding over the next five years, has secured the largest allocation outside of the New York City area. The funds were secured under an $8 billion Medicaid waiver granted to New York by the Center for Medicare and Medicaid Services.

The state is supposed to use the waiver money to re-engineer its Medicaid system. It has earmarked the funds to go to hospitals and other providers under the state’s Delivery System Reform Incentive Program.

The reforms the program aims to bring about for Medicaid are much the same as the goals CMS is promoting through Medicare payment reforms: cut costs, improve care and raise levels of patient satisfaction.

FLPPS plans to work with area private payers eventually, Tegas says. First it has to bring providers into line.

How cooperative private payers will be with the reform effort remains to be seen. Excellus’ parent, Lifetime Healthcare Cos. Inc., also runs the Rochester area’s fifth-largest physician group and several area urgent care centers. The Lifetime practices are among a relative few that have yet to sign on to DSRIP.

“Many doctors don’t want to take Medicaid,” Lifetime Healthcare and Excellus president and CEO Christopher Booth told attendees at a Rochester Business Journal health care event two weeks ago, citing the program’s low reimbursements.

For New York, the stakes in its bid to reform Medicaid are high.

States pay for half of their Medicaid bills, splitting the insurance program for the poor’s cost with the fed-eral government. New York’s Medicaid bill is the country’s second-highest, surpassed by California’s $63 billion in Medicaid expenditures.

Unlike most states, New York splits its share of its Medicaid bill with counties. This makes the program a bane of county-level budget makers.

DSRIP, the state hopes, will cure its Medicaid program’s ills. The idea is that pulling doctors, hospitals, nursing homes and mental health workers into tight, efficiently operating networks will bring down care costs and improve care.

Among the FLPPS’ first tasks are laying the groundwork to create the networks called for in the DSRIP plan and figuring out its own budget.

On the former score, “I think we have the right players at the table,” says Tegas, pausing to deliver a deadpan and only slightly overstated punchline, “which is everyone.”

FLPPS’ 13-county region stretches from Orleans, Wayne and Monroe counties in the north to Allegany, Steuben and Chemung counties in the south.

Players at the table include 28 hospitals, 600 health-care-related community organizations and 3,000 individual providers. In addition to several hundred thousand Medicaid recipients, the region’s poor and at-risk population includes an equal or higher number of uninsured, Tegas says.

The organization is in the opening stages of putting together a five-year plan. Its first steps include identifying naturally occurring care networks. Such networks are groups of geographically close or otherwise connected providers that work with each other or should be working together.

FLPPS has broken its territory down into six regions of such networks. Monroe County is one. Others are the five-county Finger Lakes region, which includes Wayne, Ontario, Yates, Seneca and Cayuga counties; the Southeastern, consisting of part of Steuben County and Chemung County; the Southern, covering Livingston and Allegany counties; and the Western, Orleans, Wyoming and Genesee counties. 

The organization is helping providers in each region to develop plans specific to its area. To carry out plans, the local care networks can apply for some of the $565 million, an amount Tegas stresses is potentially available but not guaranteed.

The state will not release the funds at once but dole out amounts in each year of the DSRIP project’s five-year timeline. The total amount spread in the region will depend on how well the plans work.

The DSRIP has laid out some 40 project designs PPS organizations can choose from to adapt for their member networks. FLPPS has picked 11. Nine are behavioral-health related.

The FLPPS’ budget also comes out of the $565 million allocation. The state says PPS organizations can use up to 15 percent of their allocations to pay for their own staff, office space and other administrative expenses.  

The finances for FLPPS are a work in progress.

“I’m an accountant and I’m trying to make conservative assumptions,” Tegas says.

She projects its budget could come to $50 million a year but is waiting to see how much of the $565 million it could draw over the next five years will be captured before committing to a figure. 

The organization employs 28 and could hire more as needed and its budget allows, Tegas says.

How much of the allocation FLPPS and its member organizations will draw will be answered quarterly and annually as state officials parse the programs developed by provider organization members.

Psychiatrists, psychologists and other mental health providers as well as families of the mentally ill have long complained that by paying only for short-term mental health treatments, private and government third-party payers have given short shrift to behavioral health.

Indeed, emerging research purports to show that chronic-disease patients with behavioral health issues who are inclined to forgo needed treatment add significant extra costs to health expenditures, making such patients outsize drivers of care costs. Closer linking of primary care and mental health providers could fuel double-digit drops in the rate, some researchers theorize.

To ready FLPPS’ application for state money, Finger Lakes Health Systems Agency worked with the still embryonic FLPPS under Parrinello and Wiefling last year to do a county-by-county study of the FLPPS region’s Medicaid and uninsured population’s needs. 

“The data presented clearly illustrate that behavioral health issues are both prevalent and drivers of hospital use,” the FLHSA report states.

Behavioral health issues such as drug addiction among young mothers and pregnant women add significant costs in at least seven of the region’s counties, the study found. Monroe County is most affected. Data were available for 11 of the region’s 13 counties, so the problem might not be fully documented.

Off the job
Tegas, 51, is a dark-haired woman with an open smile. She lives in Greece with her husband and two children, a son, 20, and a daughter, 17.

Tegas’ husband, Vasilios Tegas, owns the Long Pond Family Restaurant where, Carol Tegas says, people often assume she puts in time. She states, rather definitively, she does not work at the restaurant, ever.

“I’m a terrible cook,” Tegas says. “My husband does the cooking in the restaurant and at home. Besides, I do a lot of volunteer work.” 

Tegas, whose volunteer work largely is connected to Greece civic affairs, was last year named the Greece Chamber of Commerce’s Citizen of the Year.

She is a member of the Greece Education Foundation and belongs to the Greece Rotary Club. She also is on the Greece Central School District’s audit committee. Until last year, she served on the district’s finance committee and sat on the Odyssey Academy’s School Improvement Team. She still serves as treasurer of RCIPA’s Community Health and Education Foundation.

The only non-work, non-volunteer activity Tegas can name is faithfully attending her daughter’s soccer games.

A Rochester-area native, Tegas grew up in East Irondequoit’s Seabreeze section. Her father emigrated from Macedonia, which then was part of the dissolved country of Yugoslavia. Arriving in Rochester in the 1950s, he worked for the local dry cleaning chain Speedy’s Cleaners, whose owner was a relative and sponsored him.

The family for a time lived in an apartment above a Speedy’s location on Park Avenue. Tegas’ father, who died in 2006, later worked for Nick Tahou’s, the downtown Rochester restaurant whose garbage plate has become an icon.

Her mother came to the United States from Greece as teenager. The couple met and married when he was 25 and she was 17.

“It was not an arranged marriage,” Tegas says.

Tegas earned a bachelor of science degree in accounting from St. John Fisher College in 1985. After spending three years at Arthur Andersen, she left for Blue Cross Blue Shield of Rochester, last serving as the insurance carrier’s network relations supervisor.

In 1995, Tegas moved to RCIPA as a finance official. At the time, RCIPA represented Rochester-area doctors in dealings with the Rochester Blues’ Blue Choice HMO. RCIPA then doled out some $150 million a year in Blue Choice fees to area doctors.  

In 1997 and 1998, the Blues and RCIPA fell into a fee dispute in which RCIPA accused the insurer of improperly holding back some $10 million in fees. The dispute went into court in 1999 and stayed there for the next 10 years.

The legal battle ended with the Blues paying aggrieved local doctors more than $50 million. Roughly half of that payout was won by RCIPA in a series of court decisions. The balance came after the parties inked an out-of-court settlement agreement.

As a mark of the court battle’s acrimony, the settlement’s terms included a promise by all parties not to disparage each other for the next year.

Mindful of the need for maintaining good relations with all the area’s health care players, Tegas still is reluctant to comment on it.

She moved steadily up in RCIPA, becoming its managing director in 2003 and executive director three years later.

Shortly after the dispute started, the Blues canceled RCIPA’s contract, signing a deal instead with a rival physician organization, the Rochester Independent Practice Association. RCIPA for a short time contracted with RIPA’s former partner, the Preferred Care HMO, but ended that association after a year.

RIPA dissolved after Excellus ended its contract in 2006. In part thanks to business plans Tegas helped develop, RCIPA endured.

Health care reform
The path of U.S. health care reform with the passage of the Patient Protection and Affordable Care Act has been bumpy and not without some inherent contradictions, Tegas concedes.

The value-based, provider-reimbursement plans encourage individual hospitals and health systems to keep care within their own precincts.

How does Tegas see that incentive, which pushes systems to compete, align with the PPS and DSRIP aims of encouraging intersystem cooperation?

“I am an optimist, she says.

The answer may not be entirely clear, Tegas says. But a balance will be struck, she insists. It will happen because it has to.

Carol Tegas
Title: Executive director, Finger Lakes Performing Provider Systems Inc.
Education: B.S. in accounting, St. John Fisher College, 1985
Family: Husband, Vasilios; son, Stylianos, 20; daughter, Margarita, 17
Residence: North Greece
Activities: Attending daughter’s soccer games; volunteering for several town of Greece and Greece Central School District organizations
Quote: “I think we have the right players at the table, which is everyone.”

10/16/15 (c) 2015 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email rbj@rbj.net.

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