Medicaid Revitalization Committee Meeting 3

1
Medicaid Revitalization Committee Meeting 3
August 9, 2006
Department of Medical Assistance Services
2
Presentation Outline
Electronic Access to Medicaid Follow-Up Disease
Management/Healthy Incentive Follow-Up Medicaid
Managed Care Programs
3
Follow-Up to Electronic Access Discussion from
August 2nd Meeting

• The Committee discussed potential enhancements in
  electronic access to the Medicaid program in
  terms of electronic funds transfer and web-based
  claims submission
• In order to facilitate discussion toward
  consensus for the Committee, DMAS staff have
  attempted to articulate some discussion points
  regarding electronic access to Medicaid that the
  Committee may wish to consider for inclusion in
  the Committees report to the Governor and
  General Assembly
• These discussion points (here and later in other
  parts of the presentation) are designed to
  solicit direct input from the Committee regarding
  specific aspects of HB758. The list of
  discussion points is not intended to limit or
  direct the consensus conclusions of the Committee

4
Follow-Up to Electronic Access Discussion from
August 2nd Meeting (continued)

• Discussion Points for Committee Consideration
• Funding should/should not be provided to the
  Department of Medical Assistance Services (DMAS),
  and DMAS should/should not seek federal approval
  and funding, to provide incentives, financial
  and/or otherwise, to providers who utilize
  electronic funds transfer for receipt of payment
  for Medicaid services. DMAS shall determine the
  scope of the program based on funding made
  available for this purpose.

5
Follow-Up to Electronic Access Discussion from
August 2nd Meeting (continued)

• Discussion Points for Committee Consideration
  (continued)
• DMAS should/should not continue its efforts
  toward establishing the capability for a
  web-based claims submission system offered free
  to participating Medicaid providers for use in
  the electronic submission of Virginia Medicaid
  claims

6
Follow-Up to Electronic Access Discussion from
August 2nd Meeting (continued)

• Discussion Points for Committee Consideration
  (continued)
• DMAS should/should not require contracted Managed
  Care Organizations (MCOs) to expand electronic
  access through
• mandatory web-based claims submission capability
• and/or
• mandatory electronic funds transfer capability
• These capabilities should/should not be
  mandatory / utilized to the extent feasible by
  providers contracting with the MCOs

7
Presentation Outline
Electronic Access to Medicaid Follow-Up Disease
Management/Healthy Incentive Follow-Up Medicaid
Managed Care Programs
8
Follow-Up to Disease Management / Healthy
Incentive Discussion from August 2nd Meeting

• The Committee had several questions related to
  the nuts and bolts of Virginia Medicaid's
  disease management programs. As such, we have
  asked representatives from Health Management
  Corporation (the contractor for the
  fee-for-service Healthy Returns program), and
  Optima Healthcare (one of the Medicaid contracted
  Managed Care Organizations) to present brief
  overviews of their programs and to answer
  specific questions from the Committee
• Megan Padden, Vice President of Government
  Programs, Sentara Health Plans
• Shannon Stepp, National Account Executive, Health
  Management Corporation

9
Follow-Up to Disease Management / Healthy
Incentive Discussion from August 2nd Meeting
(continued)

• DM PANEL DISCUSSION

10
Follow-Up to Disease Management / Healthy
Incentive Discussion from August 2nd Meeting
(continued)

• The Committee also had an interest in further
  discussing the vision of Medicaid disease
  management, including the addition of incentive
  structures to promote healthy behaviors among
  Medicaid recipients and to reward practitioners
  for their efforts in promotion and support of
  these behaviors
• As such, DMAS staff have attempted to articulate
  some discussion points regarding disease
  management that the Committee may wish to
  consider for inclusion in the Committees report
  to the Governor and General Assembly
• Again, these discussion points are designed to
  solicit direct input from the Committee regarding
  specific aspects of HB758. The list of
  discussion points is not intended to limit or
  direct the consensus conclusions of the Committee
• It is important to note that modifications to the
  existing disease management programs that expand
  the scope of the service may require additional
  procurement and contract negotiation, including
  modification of payment rates

11
Follow-Up to Disease Management / Healthy
Incentive Discussion from August 2nd Meeting
(continued)

• Discussion Points for Committee Consideration
• Funding should/should not be provided to the
  Department of Medical Assistance Services (DMAS),
  and DMAS should/should not seek federal approval
  and funding, to expand disease management
  programs for (Medicaid and/or FAMIS) recipients
  to include
• General Wellness?
• Obesity?
• COPD?
• Others?
• These services should/should not be available
  for relevant recipients in both the
  fee-for-service (FFS) and managed care programs
  administered by DMAS. DMAS shall determine the
  scope of the program based on funding made
  available for this purpose.

12
Follow-Up to Disease Management / Healthy
Incentive Discussion from August 2nd Meeting
(continued)

• Discussion Points for Committee Consideration
  (continued)
• Funding should/should not be provided to the
  Department of Medical Assistance Services (DMAS),
  and DMAS should/should not seek federal approval
  and funding, to expand care coordination services
  for high cost / high utilization recipients in
  the fee-for-service (FFS) program not otherwise
  served through a disease management program.
  DMAS shall determine the scope of the program
  based on funding made available for this purpose.

13
Follow-Up to Disease Management / Healthy
Incentive Discussion from August 2nd Meeting
(continued)

• Discussion Points for Committee Consideration
  (continued)
• Funding should/should not be provided to the
  Department of Medical Assistance Services (DMAS),
  and DMAS should/should not seek federal approval
  and funding, to expand current and future disease
  management programs to include aspects of
  provider-centric models in which practitioners
  assume an active and direct role in the care
  management. These programs should/should not
  include pay for performance financial structures
  to reward effective care management by primary
  care-givers. DMAS shall determine the amount and
  scope of the program based on funding made
  available for this purpose.

14
Follow-Up to Disease Management / Healthy
Incentive Discussion from August 2nd Meeting
(continued)

• Discussion Points for Committee Consideration
  (continued)
• Funding should/should not be provided to the
  Department of Medical Assistance Services (DMAS),
  and DMAS should/should not seek federal approval
  and funding, to provide recipient access to
  enhanced benefits accounts in which credits are
  deposited to reward healthy behavior, including
  adherence to care plans as directed by healthcare
  providers. These credits should/should not be
  used, through electronic (debit card) access, to
  cover
• patient cost-sharing responsibilities for
  healthcare services,
• and/or
• to purchase healthcare-related, non-covered goods
  and services.
• DMAS shall determine the amount and scope of the
  program based on funding made available for this
  purpose.

15
Presentation Outline
Electronic Access to Medicaid Follow-Up Disease
Management/Healthy Incentive Follow-Up Medicaid
Managed Care Programs
16
Managed Care Provisions of House Bill 758

• House Bill 758 (HB758) directs the Medicaid
  Revitalization Committee to consider various
  reforms related to Medicaid Managed Care
• Risk-adjusted premiums for Medicaid recipients
  enrolled in Medicaid managed care organizations
  (MCOs), calculated to be actuarially comparable
  to currently covered services under the Virginia
  State Plan for Medical Assistance. The
  actuarially developed risk-adjusted premiums
  shall be designed to reduce adverse selection and
  provide incentives for cost containment through
  identification of chronic illness before the
  recipient becomes seriously ill because of lack
  of treatment
• A transitioning of all recipients remaining in
  the fee-for-service program to a disease
  management program, care coordination program, or
  enrollment in MCOs
• A requirement that all Medicaid MCOs take steps
  to phase in implementation of electronic funds
  transfer technology to add efficiencies to
  administrative procedures, reduce costs, and
  avoid mistakes and abuse Discussed at the August
  2, 2006 MRC meeting

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Overview of Managed Care

• Managed Care delivery system became popular in
  the late 80s for the commercial population
• The system promised to contain costs and focus on
  preventive care, prior authorization and limited
  networks
• The HMO model, as designed and implemented, was
  initially unsuccessful in the commercial market
  due to
• Market changes
• Provider and consumer pushback
• Inability to sustain cost containment or trends
• Consumer requests for flexibility and choice
• Health plan failure

18
Overview of Managed Care(continued)

• The traditional managed care model succeeded in
  the Medicaid market
• Model grew stronger in the 90s with the concept
  of preventive care, networks, prior authorization
• Model proved it worked better than the
  fee-for-service model in urban areas
• States which implemented managed care experienced
  better health outcomes, stronger provider
  networks and reduced utilization trends
• Currently 36 states operate programs using
  managed care organizations (MCOs)

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Overview of Managed Care(continued)

• Each of the 36 states has variations of the MCO
  model variations include
• Full Risk versus Non Risk payment model more
  risk models allows for more autonomy
• Various packages From flexible benefits, cost
  sharing, enhanced services, behavioral health and
  pharmacy carve outs
• Enrollment - Mandatory vs. voluntary enrollment
• Populations - Families and children vs. aged,
  blind, and disabled, foster care, LTC
• Philosophy - heavily regulated to laissez faire
• A handout with more detail on other states
  programs is provided in your packets

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Virginias Medicaid/FAMIS Managed Care Program
Overview

• The managed care organization program began as a
  pilot project in 1996 which included four MCOs
  servicing seven localities in Tidewater.
• Virginia is one of a few states that integrated
  the aged, blind and disabled population from its
  inception.
• Through several regional conversions, MCOs are
  now operating in 110 Virginia localities.
• DMAS decision to convert more areas to managed
  care organizations is based on a proven record of
  achievement displayed by positive health
  outcomes, enrollee satisfaction ratings and
  national recognition.

Lives Added
Locality
Year
Lives Added
Locality
Year
80,000
Tidewater
1997
70,000
Central Virginia
1999
10,000
Areas Adjacent to Central
2000
Virginia
103,000
Northern Virginia, Danville
2001
and Roanoke
(Includes implementation of FAMIS
into new areas and areas currently
served by MCOs)
40,600
Northern Virginia and
2005
Winchester
4,000
2006
Culpeper, Danville
In addition, the ABD 80 group was added July 1,
2006 (1,400 lives)
21
Virginias Medicaid/FAMIS Managed Care Program
Overview(continued)
22
Virginias Medicaid/FAMIS Managed Care Program
Overview(continued)
Map Key
Map Key
Two or more Managed Care Organizations
Two or More (Scheduled for September 2006)
One Managed Care Organization/Fee For Service
Winchester
MEDALLION PCCM (Fee for Service) Only
Frederick
Frederick
Clarke
Manassas Park
Clarke
Manassas Park
Falls Church
Falls Church
Loudoun
Loudoun
Warren
Warren
Arlington
Arlington
Fauquier
Fauquier
Shenandoah
Shenandoah
Alexandria
Alexandria
Fairfax City
Fairfax City
Fairfax
Fairfax
Rappahannock
Rappahannock
Prince
Prince
Manassas
Manassas
Page
Rockingham
Page
Rockingham
William
William
Harrisonburg
Harrisonburg
Culpeper
Culpeper
Stafford
Stafford
Madison
Madison
Highland
Highland
King
King
Augusta
Augusta
Fredericksburg
Greene
Fredericksburg
Greene
George
George
Orange
Orange
Staunton
Staunton
Westmoreland
Spotsylvania
Westmoreland
Spotsylvania
Albemarle
Albemarle
Bath
Essex
Essex
Waynesboro
Waynesboro
Caroline
Louisa
Caroline
Louisa
Charlottesville
Northumberland
Charlottesville
Northumberland
Lexington
Lexington
Richmond
Richmond
Clifton Forge
Fluvanna
Fluvanna
King
King
Buena
Buena
Accomack
Accomack
Covington
Queen
Covington
Queen
Hanover
Goochland
Nelson
Vista
Hanover
Goochland
Nelson
Lancaster
Lancaster
Vista
Rockbridge
Rockbridge
Alleghany
Alleghany
King
King
Middlesex
Middlesex
Henrico
Henrico
Amherst
Amherst
William
William
Buckingham
Buckingham
Powhatan
Powhatan
New
Botetourt
New
Botetourt
Richmond
Richmond
Matthews
Cumberland
Matthews
Cumberland
Kent
Kent
Lynchburg
Craig
Gloucester
Lynchburg
Craig
Gloucester
Northampton
James
Northampton
James
Chesterfield
Chesterfield
Appomattox
Appomattox
Charles
Charles
City
City
Roanoke
Roanoke
Amelia
Amelia
Bedford
Bedford
City
City
Col.Heights
Giles
Col.Heights
Giles
Salem
Salem
Prince
Prince
Roanoke City
Roanoke City
York
York
Buchanan
Prince
Poquoson
Buchanan
Prince
Poquoson
Petersburg
Campbell
Petersburg
Campbell
Edward
Edward
Bedford
Surry
Bedford
Surry
Williamsburg
Montgomery
Williamsburg
Montgomery
George
George
Nottoway
Nottoway
Hopewell
Hampton
Hopewell
Hampton
Dickenson
Bland
Dickenson
Bland
Dinwiddie
Dinwiddie
Isle of
Newport News
Tazewell
Isle of
Newport News
Tazewell
Charlotte
Charlotte
Radford
Wise
Radford
Wise
Wight
Wight
Norfolk
Norfolk
Franklin
Lunenburg
Franklin
Lunenburg
Pulaski
Pulaski
Sussex
Sussex
Norton
Portsmouth
Norton
Portsmouth
Russell
Russell
Floyd
Floyd
Wythe
Wythe
Virginia
Smyth
Brunswick
Virginia
Smyth
Brunswick
Pittsylvania
Pittsylvania
Franklin
Franklin
Beach
Beach
Henry
Suffolk
Henry
Suffolk
Lee
Lee
Carroll
Carroll
Emporia
Washington
Emporia
Washington
Chesapeake
Chesapeake
Southampton
Danville
Scott
Southampton
Danville
Scott
Galax
Mecklenburg
Galax
Mecklenburg
Martinsville
Grayson
Patrick
Halifax
Martinsville
Grayson
Patrick
Halifax
Greensville
Greensville
Bristol
Bristol
23
Virginias Medicaid/FAMIS Managed Care Program
Statistics

LTC/Waiver Programs Foster Care TPL Some
FAMIS Pre-assignment Transition

Managed CareOrganizations
FAMIS Families and Children Disabled Medically
Indigent
421,068
Medallion II
FAMIS
36,374
384,694
110 localities
110 localities
24
Virginias Medicaid/FAMIS Managed Care Program
Statistics(continued)
MCO 421,068
56
44
FFS 332,776
25
Virginias Medicaid/FAMIS Managed Care Program
Statistics(continued)
26
Virginias Medicaid/FAMIS Managed Care Program
Statistics(continued)
Hospital
Services
39
Practitioner
Other
Services
Pharmacy
43
19
Estimated Percent of Capitation Rate, by Major
Service
27
Virginias Medicaid/FAMIS Managed Care Program
Statistics(continued)
Age Breakout
1.4
2.2
23.0
17.3
46.5
6.8
79.1
23.6
FFS
MCO
28
Virginias Medicaid/FAMIS Managed Care Program
Statistics(continued)
Low Income Familieswith Children
87
13
Aged, Blind and Disabled
29
Virginias Medicaid/FAMIS Managed Care Program
Functionality

• How the Virginia Program Works
• Federal Authority
• 1915 (b) Wavier renews every two years with CMS
• CMS provides policies and regulations such as the
  BBA
• State Authority
• Regulations
• State Licensing
• Must be licensed by BOI for solvency, market
  conduct
• National Accreditation
• We prefer that the health plans obtain
  accreditation from National Committee of Quality
  Assurance (NCQA)

30
Virginias Medicaid/FAMIS Managed Care Program
Functionality (continued)

• Education
• Must provide enrollee and provider education
  plans
• Enrollment and Information dissemination is
  handled by the enrollment broker
• All enrollees receive member handbooks, provider
  directories, newsletters, and health information
• DMAS Contract
• Required to meet the Departments Access,
  Financial and Quality standards. Contract
  includes standards for
• Services and networks
• Monitoring/reporting
• Capitation

31
Virginias Medicaid/FAMIS Managed Care Program
Functionality (continued)

• MCOs provide most Medicaid medically necessary
  services, as outlined in contract, within their
  provider network, for a set capitation rate
• Some services are carved out such as dental and
  mental health related state plan option services
• Prior authorization limits, pharmacy, etc. are
  designated by plan
• Plans must handle membership, claims, outreach
  education, services, complaints, and appeals

32
Virginias Medicaid/FAMIS Managed Care Program
Functionality (continued)

• MCOs provide many value added benefits to
  Medicaid recipients
• Services
• Patient Education Information - All enrollees
  receive member handbooks, provider directories,
  newsletters, and health information (available in
  English and Spanish)
• Enhanced Services - Most provide services above
  Medicaid covered services. Enhanced services
  include vision services for adults
• Case Management for special needs and identified
  populations
• 24 Hour Advice and Triage Nurse Helpline - A
  toll-free number for individuals to call a health
  care professional to discuss information on a
  disease or illness (e.g. asthma, pregnancy), or
  receive advice on the treatment of a minor fever,
  accident, or illness
• Disease/Health Management Programs - Provide
  disease management programs and patient/outreach
  information on how to manage asthma, diabetes,
  maternity, etc.

33
Virginias Medicaid/FAMIS Managed Care Program
Functionality (continued)

• Networks
• Provider Recruitment Actively recruit Medicaid
  providers into their networks. MCO recruitment
  activities have resulted in a net increase in the
  number of Medicaid providers
• Provider Credentialing All providers go through
  a rigorous process that includes, but is not
  limited to, the verification of licensure,
  malpractice verification, site visits and
  education. Re-credentialing is required every
  two years
• Provider networks have increased due to MCOs
  ability to
• Leverage their commercial networks and
  affiliations
• Utilize methods and rates of payments that are
  different than Medicaids
• Utilize out of network providers
• Utilize incentive programs for providers

34
Virginias Medicaid/FAMIS Managed Care Program
Functionality (continued)

• DMAS monitors the MCOs through reporting,
  contract compliance, monthly meetings, network
  reviews, on-site visits, appeals, complaint
  monitoring, independent assessments, and focus
  pattern of care studies

• MCO Licensure and Administration
• Outreach and Marketing
• Enrollment and Patient Education
• Network Analysis and Provider Relations
• Medical Care and Services

• Medical and Utilization Management
• Financial Management
• Quality Assurance and Improvement
• Member Services and Complaint Tracking
• Management Information Systems and Claims
  Processing

35
Virginias Medicaid/FAMIS Managed Care Program
Functionality (continued)

• DMAS Monitors

• Changes in provider networks
• Utilization
• Fraud and abuse
• Help line wait times and abandonment rates
• Complaints, grievances and appeals

• Prescription drug formularies
• Enrollee communications
• Sentinel Events
• MCO policies, including marketing
• One-on-One case management utilization review for
  high risk pregnant members

36
Virginias Medicaid/FAMIS Managed Care Program
Functionality (continued)

• DMAS Collects

• HEDIS Data
• Good /Bad Stories
• Administrative Data
• Medical Service Data
• Provider Network Data

• Encounter Data
• Utilization Data
• Complaint Data
• Financial Data
• EQRO Information

37
Virginias Medicaid/FAMIS Managed Care Program
Functionality (continued)

• Monitoring Results
• The contracted external quality review
  organization conducts an Operational Systems
  Review of each MCOs policies, procedures and
  services in four main areas Enrollee Rights and
  Protections, Quality Assessment and Performance
  Improvement and Grievance Systems
• This annual evaluation was conducted during
  January 1, 2004 through December 31, 2004 to
  monitor and validate the overall quality
  performance of the MCOs. The compliance scale
  ranges from 0-100

Aggregate Operational Systems Review-Overall
Compliance Scores
38
Virginias Medicaid/FAMIS Managed Care Program
Payment

• Capitation payments under the Medallion II
  program are essentially risk-adjusted premiums
  predetermined by certain age/sex/region and
  eligibility category groupings for each
  contracted MCO
• FAMIS rates are also differentiated based on
  income, but are not differentiated by region or
  health plan
• Like other states, base rates are set based on
  MCO encounter data and actuarial judgment
• MCO base rates are risk-adjusted using the
  Chronic Illness and Disability Payment System
  (CDPS) NOTE This is the risk-adjustment
  methodology that Florida intends to utilize in
  their reform effort
• This allows one health plan to receive more or
  less than a health plan in their same area
  because one health plan's mix of recipients may
  exhibit, on average, more serious health concerns
  and therefore, higher expected cost. CDPS
  accounts for this higher or lower risk by
  adjusting base rates appropriately to reflect the
  recipient mix
• Relevant fee-for-service experience is considered
  in the CDPS calculations

39
Virginias Medicaid/FAMIS Managed Care Program
Achievements

• U.S. News World Report ranked Anthem 10th and
  Optima 23rd among the top 25 Medicaid health
  plans in the country
• A complex methodology was utilized to develop the
  national rankings and is based on the health
  plans' National Committee for Quality Assurance
  Accreditation Standards score and the following
  four measures access to care, overall member
  satisfaction, prevention, and treatment
• Anthem, Optima, and Southern Health plans have
  received Excellent rating from NCQA
• Virginia Premier and Amerigroup currently have
  Utilization Review Accreditation Commission
  (URAC) accreditation and are pursuing NCQA

40
Virginias Medicaid/FAMIS Managed Care Program
Expansion Goals

• Wide Deep

• Wide
• The Department values the two or more contracted
  MCO program model in a locality as the best
  option for our programs
• The Department wants to consider expanding the
  MCO programs in areas that are currently not
  being served by two contracted MCOs
• The Department wants to consider expansion of the
  MCO programs in current MCO localities, from a
  program strengthening/stabilization perspective,
  as well as in those areas where no Medicaid/FAMIS
  contracted MCOs currently operate

• Deep
• Long Term Care - The Department needs to consider
  options where managed care can have a positive
  affect to be addressed with the LTC blueprint
• Eligibility Groups Other groups are being
  considered (foster care children, aged groups,
  etc.) that fit in the model. The ABD 80 group
  was added July 2006
• Medicaid Reform The Department and the
  Revitalization Committee is looking at Florida,
  South Carolina and other states regarding
  Medicaid Reform proposals

41
Virginias Medicaid/FAMIS Managed Care Program
Expansion Challenges

• The future expansion of Virginias managed care
  program may be very difficult for a variety or
  reasons. For example
• Most of the remaining areas currently without
  Medicaid managed care coverage are extremely
  rural
• It remains to be seen if the same model
  implemented in urban areas will work for rural
  areas, especially when there is a general lack of
  providers (not just Medicaid) and a lack of
  managed care (both commercial and Medicaid) in
  the region
• There is an increased cost to providing outreach
  and managed care programs in rural areas

42
Virginias Medicaid/FAMIS Managed Care Program
Expansion Challenges (continued)

• Reluctance to contract
• The lack of managed care penetration (commercial
  and otherwise) in remaining fee-for-service areas
  illustrates the likelihood that some providers in
  these areas are resistant to contracting with
  managed care plans (generally)
• Despite recent rate increases, reimbursement
  issues remain a major point of significant
  provider pushback, primarily among pediatricians
  and other specialties, regarding the financial
  viability of practices with significant Medicaid
  volume
• DMAS is concerned this not only impacts future
  expansions, but is impacting the viability of
  managed care in some existing regions as well

43
Future Direction of Virginias Medicaid/FAMIS
Managed Care Program

• Discussion Points for Committee Consideration
• The Department of Medical Assistance Services
  (DMAS) should/should not continue working toward
  the goal of expanding managed care into new
  regions and across additional eligibility
  categories where feasible under the current
  defined benefit approach. This approach
  should/should not continue to be based on a
  risk-adjustment methodology in the determination
  of capitation/premium payments to contracted
  Managed Care Organizations

44
Future Direction of Virginias Medicaid/FAMIS
Managed Care Program

• Discussion Points for Committee Consideration
  (continued)
• The Department of Medical Assistance Services
  should/should not seek federal approval and
  funding to modify and expand managed care
  (statewide/certain regions) under a
  market-driven, defined contribution approach.
  Medicaid premiums should/should not continue to
  be determined through a risk-adjusted
  methodology. Mandatory (and certain optional/with
  or without limits) Medicaid services
  should/should not be required in participating
  managed care plans, however plans should/should
  not have the flexibility to offer additional
  benefits. This program should be
  (mandatory/optional/combination) for(defined
  eligibility categories/all recipients).

45
Future Direction of Virginias Medicaid/FAMIS
Managed Care Program

• Discussion Points for Committee Consideration
  (continued)
• The Department of Medical Assistance Services
  should/should not seek federal approval to modify
  fee-for-service and/or managed care
  (statewide/certain regions) for (all/certain
  recipients) to include a provision for a
  monetarily-defined benefit cap(s) that, once
  reached, would serve to terminate Medicaid
  expenditures for healthcare services on behalf of
  the otherwise eligible recipient. The
  appropriate benefit cap(s) shall be determined by
  (who?) and should/should not be indexed for
  medical inflation using (what?)