Transcript Medicaid Managed Care Felicien Fish Brown, Kaiser Permanente Medicaid Congress, Washington DC

Medicaid Managed Care
Felicien Fish Brown, Kaiser Permanente
Medicaid Congress, Washington DC
June 14, 2007
Kaiser Permanente
• Comprehensive integration of services
– Health education and preventive care
– Primary care physicians working closely with
specialists and hospitalists
– Hospital outpatient offices
– Pharmacy, radiology, laboratory
• Medicaid, SCHIP participation
– California, Hawaii, Colorado, Oregon
10 Years of Medicaid and Managed Care
Enrollment Growth
50
45
40
35
30
Millions 25
20
15
10
5
0
65.3%
47.8%
1997
1998
1999
2000
2001 20002 2003
Total Medicaid
Source: CMS, June 30, 2006.
2004
2005
Managed care
2006
Wide state variation in average annual
Medicaid payment per member
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California
Oregon
Virginia
Indiana
Illinois
Maryland
North Dakota
Connecticut
New York
$2,325
$3,177
$3,877
$4,067
$4,531
$5,542
$5,766
$6,670
$7,817
Why Medicaid Managed Care?
• Lower preventable hospitalization rates in
California
– 38% lower than FFS for TANF and TANF-related
enrollees
– 25% lower than FFS for SSI population
• Modest savings for Aged/Blind/Disabled in
Oklahoma
– Costs were 4% less than FFS in 1998-2000
Study by Primary Care Research Center at University of California,
Funded by California Healthcare Foundation.
Why Medicaid Managed Care?
• Evidence of better access to physicians in California
(2004 data) and preventive services in New York (2005
data)
• Can target populations based on conditions such as
asthma and sickle cell
• Evidence of better cost effectiveness (Lewin study)
According to Arizona ACCHS
The Value of Managed Care
• Improves health status and reduces cost of high
risk populations
• Better medical care cost control
• Market competition for members drives quality
and innovation.
• Provides a organized health plan for business
community buy-in.
• Stabilizes providers
• Improves State’s economic vitality
• Complements other State public health and
human service goals
What is Medicaid managed care?
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Full-risk, comprehensive benefit Medicaid
health plans account for 42% of total Medicaid
managed care enrollees (about 19 million)
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Less than 20% of Medicaid dollars are in
managed care
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In California, managed care accounts for 48%
of beneficiaries but less than 25% of Medicaid
costs
Barriers to Medicaid Managed Care
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Dual eligible coordination
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Limited benefit packages – trend?
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HIFA waivers, DRA
Monthly eligibility – churning
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Discourages longer-term relationship with
plan/provider
Increases administrative costs
Barriers to Medicaid Managed Care
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Payment rates
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Law and regs say rates must be on “actuarially
sound basis”
Need for better federal oversight
Risk adjustment would help (in CA, payment rates
2-3 times higher but costs are 4-5 times higher)
Federal UPL Rule
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Health plan payments to hospitals not counted in
UPL calculation
Disincentive for state to use managed care (e.g.,
TX)
The state of Medicaid managed care
Interviews with state officials
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Center for Health Care Strategies, Inc. report,
November 2006
Surveyed 14 states
– California, Colorado, Florida, Georgia, Hawaii,
Kentucky, Maryland, Michigan, Ohio, Oregon,
Pennsylvania, Texas, Washington, Wisconsin
– Varied in size and nature of Medicaid program
States generally happy with managed care
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All surveyed states have full-risk managed care
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Many states experimenting with managed care
variations (e.g., PCCM, disease management):
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Some health plans unwilling to develop state-tailored
programs
Rural areas present network challenge (e.g., Pennsylvania’s
ACCESS PLUS)
Broad state disease-management efforts (e.g., Georgia)
States want to extend managed care into
new areas and for new populations
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Medical home concept is appealing, especially in rural
areas
Interest in expanding managed care for aged, blind,
and disabled
– ABD account for 25% of people but 70% of costs
nationally
– Some states have successful ABD managed care
programs (e.g., Wisconsin, Hawaii)
– But political resistance to full risk for ABD (e.g.,
California)
– Few examples of long-term care incorporation
KP Medi-Cal Care Coordination Pilot
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Aimed at KP Medi-Cal members with complex chronic
needs
– Prevalent chronic conditions include asthma,
diabetes, depression, and CHF
Quality
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Early intervention to coordinate and manage care
Assure participation in chronic disease programs
Monitor and improve medication compliance
Improve clinical outcomes
KP Medi-Cal Care Coordination Pilot
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Access
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Use case manager
Support transportation needs
Establish frequent communication
Utilize home tele-monitoring
Assure clinical appointment compliance
Savings
– 1% of enrollees account for 27% of total costs; more
than $100,000 per enrollee
– Reduce inappropriate ED visits
Medicare special needs plans growing
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SNPs established in MMA with goal of MedicareMedicaid coordination in single health plan
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Rapid growth since 2003
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In 2007
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469 dual-eligible SNPs with 622,00 enrollees
Another 221,000 enrollees in institutionalized or chronic
condition SNPs
Dual eligibles have substantially greater health care
needs than typical Medicare beneficiary
But Medicaid SNP connection is slow
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After Medicare Part D implemented, states have less
financial interest in acute care for duals
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In 2003 Medicaid spending for dual eligibles was:
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66% long-term care
14% prescription drugs
15% other non-Medicare acute care
5% Medicare premiums
But states may want to gain access to SNP drug
utilization data
Future of special needs plans
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Federal interest in SNP reauthorization but could add
additional requirements
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Medicare-Medicaid coordination of benefits
Medicaid billing for non-Part D drugs
Performance reporting
Increased state effort to improve data
reporting and quality
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Identify target populations for disease management
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Monitor plan and provider performance
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Use for rate and risk adjustment
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Pay for performance (e.g., Ohio, Michigan,
Pennsylvania)
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Also auto-enrollment rewards (e.g., California)
History of federal Medicaid quality initiatives
• 1991 – HCFA begins Quality Assurance Reform Initiative (technical
assistance to states)
• 1996 – HCFA Quality Improvement System for Managed Care
(QISMC) (to coordinate Medicare and Medicaid)
• 1997 – BBA allows managed care without waivers and established
access and quality standards
• 2002 – CMS issues BBA final rule; managed care organizations can
seek NCQA or JCAHO accreditation and states can use Medicare or
private accreditation for Medicaid.
“Measuring managed care
performance is not optional. What
aspects of performance to focus on,
how to report on it and to whom can
vary with the state context,
resources, and program needs, but
collection and use of performance
data is critical to program
improvement, accountability, and
credibility.”
James Verdier and Robert Hurley, May 2004
What Wall Street is saying about
Medicaid managed care
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Publicly traded Medicaid plans considerably
more profitable than private plans
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Much lower inpatient and physician utilization
Unclear whether due to lower risk enrollees, better
medical management, or worse access
Most profitable states are Virginia, Michigan,
New Jersey, and Florida
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Need for RFP process to bring in competition
Source: 6/7/07 CIBC World Markets paper based on NAIC data. Excludes California.
State health reform efforts
What role for Medicaid managed care?
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Several states considering major health reform
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Need to managed Medicaid costs first
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SCHIP reauthorization and expansion