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Managed Care Organizations and Provider Networks Challenges and Opportunities November 7, 2003 Presented by: Neal Cash, CEO.

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Presentation on theme: "Managed Care Organizations and Provider Networks Challenges and Opportunities November 7, 2003 Presented by: Neal Cash, CEO."— Presentation transcript:

1 Managed Care Organizations and Provider Networks Challenges and Opportunities November 7, 2003 Presented by: Neal Cash, CEO

2 Features of the Arizona System  Statewide behavioral health carve out  Integrated substance abuse and mental health services (Adults & Children)  Combined Medicaid and non-Medicaid funding streams  Private Regional Behavioral Health Authorities  Open competitive bidding for authorities  First public sector full-risk behavioral health care system in United States

3 BEHAVIORAL HEALTH PROGRAMS FUNDING ADHS/DBHS Receives Funds for Behavioral Health Services

4 The state is divided into six geographic regions. Each region is assigned to a RBHA. NARBHA EXCEL VALUE OPTIONS PGBHA (GSA 5) Pima ( GSA3) Graham Greenlee Cochise Santa Cruz CPSA

5 FEATURES OF CPSA MODEL  Community governance and oversight  Shared Risk with Providers  Comprehensive Service Networks that are able to provide integrated services  Consumer involvement  Community reinvestment  Coordination with collateral systems

6 Evolving Systems of Care for Persons with Behavioral Health Disorders 1.State Systems  Budget Deficits  Reorganization of State Agencies, Departments and Divisions  Greater Cross Agency Collaboration Managing Entities  Regional Models  County Models  Private Managed Care Organizations  Administrative Service Organizations Community Based Providers  Affiliation of Providers  Networks  Integrated Systems of Care  Greater Community Collaboration

7 2. Evidenced Based Practice  Science to Service  Co-occurring Treatment  Assertive Community Treatment Teams  Wraparound Models  Pharmacotherapy Evolving Systems of Care for Persons with Behavioral Health Disorders (con’t)

8 3. Information Technology a.IT Networking  Design, Configure and Maintain Servers, Computers, Printers, etc.  Data Transmission and Security  Data Storage Evolving Systems of Care for Persons with Behavioral Health Disorders (con’t)

9 b.Telecommunications  Telephones, Voice mail  Video Teleconferencing  Pager and Cell Phone Systems Evolving Systems of Care for Persons with Behavioral Health Disorders (con’t)

10 c.Systems Operations  Coordination and Configurations with Member Services  Enrollment, Intake, Assessments  Data/Demographic  Claims Evolving Systems of Care for Persons with Behavioral Health Disorders (con’t)

11 d.IS Development  Automate Work Processes  Improve Availability and Integration of Data  Web Sites Evolving Systems of Care for Persons with Behavioral Health Disorders (con’t)

12 4. Consumerism and Recovery (Voice & Choice)  System Partners  Advisory Councils  Boards  Employees Evolving Systems of Care for Persons with Behavioral Health Disorders (con’t)

13 Managed Care Organization Authority Core Functions  Provider Network Management  Strategic Planning  Customer Services  Quality Management  Utilization Management  Financial Management  Information Management


15 INTERNAL DEVELOPMENT  Upgrade management information system  Integrate I.T. and financial management system  Establish an agency-wide Performance Improvement Activity (Accreditation Privileging and Credentialing)  Competency Based Employment  Compensation Analysis  Develop targeted staff development program  Retrain your board; repopulate  Consumers/Other Stakeholders  Environment of Care Issues  Establish Development Capability (Grants, Contracts, Fundraising)  Explore Collaborative Partnerships

16 KEY AREAS FOR CONSENSUS 1. Competition  Restricted  Limited  Open 2. Centralized vs. Decentralized  Devolution to local entitles  Types of collaboration and community partnerships 3. Level of Integration  Mental health; substance abuse and DD systems  Co-occurring/co-morbidity  Health care systems 4. Regionalism/Geomapping  Numbers of regions  Size 5. Service Delivery Models  Staff  Community  Mixed

17 OPERATING ASSUMPTIONS  We are strong enough to assume substantial risk.  We have the management infrastructure and skill at all levels to succeed in a risk-based environment.  We have the overall clinical skill and credentials to produce quality outcomes within a competitive price structure.  Our service capacity is greater than current level of business. What we don’t have we can build, buy, create alliances.

18 SOME BASIC QUESTIONS 1.Do the various stakeholders support this action?  Consumers  Board  Legislators  Community at large 2.Can you operate at-risk?  Are your capital reserves adequate?  Can you manage the State’s rate(s)?  How good is the available date? 3.Do you have an adequate infrastructure?  MIS  Utilization management  On-line eligibility evaluation  Financial management 4.Would you consider a private sector partner? 5.What are the anti-trust implications?

19 TRANSITION TO PROVIDER NETWORKS Culture Change  Changing attitudes  Level of sophistication  Professionalism  Competition  Values challenged Tradition & Passion Vs. Business Climate & Practices

20 TRANSITION TO PROVIDER NETWORKS (continued) Information System  Integration of clinical, fiscal and management data  Customer based  Outcome driven  System wide  Value added product Up front and ongoing cost associated with training and capital expenses

21 TRANSITION TO PROVIDER NETWORKS (continued) Strategic Positioning  Education of executive director, board and staff  Short and long term plan  Inclusion of board and staff at all levels  Marketing and public relations  Capacity building Affiliation Merger

22 AFFILIATION STRATEGY MODEL Deficits Alternatives The Deal Strategic Direction Establish Organizational Goals Diagnose Your Shortcomings Determine the Options Negotiate and Execute Attain strong negotiating position in managed care Incomplete service offerings MergeTarget entity for acquisition / affiliation Spread costs over larger client base Small size prevents economics of scale Joint ventureEnter joint planning exercises with target Rationalize excess capacity Ineffective management AcquireDo due diligence and execute

23 Reduce Costs of Service Delivery Enhance Access to Managed Care Contracts PRIMARY OBJECTIVES OF INTEGRATION/AFFILIATION Increase Access to Care Improve Quality of Care Retain Mission

24 ANTITRUST CONSIDERATIONS 1.Are the network providers otherwise free to compete on their own or through other arrangements? 2.What are the restrictions or limitations on joining or remaining with the network? 3.How will the network price its services to third party payers or other customers? For example, will it utilize a non-competitor (i.e., non-provider) to negotiate between the buyer and each participating provider? 4.Will the network attempt to attract contracts that are on a capitated basis or which make use of risk withholds? 5.Will each member of the network be free to participate or not participate as to each contract? 6.Will the network be prepared from the beginning to offer such pro-competitive and integrated services as quality assurances, utilization review, administrative services, etc? 7.How will cost and price data be kept as confidential or generic as possible?

25 DEAL KILLERS  Lack of support from stakeholders/politics  Absence of mutual trust  Lack of common vision/business purpose  Governance/control issues  Financial barriers/liabilities/arrangements

26 SOUTHERN ARIZONA CHILDREN’S CONSORTIUM (L.L.C.) CPSA $ CODAC Behavioral Health Services (Fiscal Agent) Arizona Children’s Association SACC 2 Member Board 6 Directors And 2 CEO’s Subcapitated Las Families Subcapitated CODAC BHS Subcapitated Az. Children’s Assn. Subcapitated CDC Capitalization Discounted fee for service and block purchase (Hospitals, RTC and Group Homes) Discounted fee for service – small group and individual practices, specialty providers - Intensive case management systems - Medical/Psych. Services - Management of “high end” children Capitalization

27 LESSONS LEARNED 1.That aggressive management is not only the high end but also the middle end is extraordinarily important. 2.That a loose affiliation or a loose partnership will not work in a full at-risk situation. 3.That good MIS systems and very good management infrastructure is vital to the operation and needs to be funded right off the top. 4.That aggressive contracting either on a sub-capitated basis or with discounted fees for service or block purchases is necessary to manage scarce resources. 5.That entrepreneurial efforts and creativity are as important as anything is in making managed care work.

28 LESSONS LEARNED (CONTINUED) 6.That there needs to be incentives to change an agency’s culture, as you are as good as the philosophy and approaches of the line staff delivering the services. 7.That agency cultures have myths and unconscious themes that can be detrimental to managed care and may not be easily recognized 8.Continuous quality improvement is extraordinarily important to further cost savings and appropriate utilization of resources. 9.Treatment protocols need to be continually improved upon 10.You need to take the long view in creating managed care programs, companies, processes and systems. While you must think of transition, start up, and the first year, your vision ought to be 3-5 years out.

29 HIGH PERFORMANCE BEHAVIORAL HEALTH SYSTEMS Indicators of Obsolete Delivery SystemsIndicators of Improving Delivery SystemsIndicators of High Performance Delivery Systems Access No intake and triage system, no treatment plans Sophisticated intake and triage system with individualized treatment planning Anticipation and management of illness averts the need for crisis intervention, intake, and triage Care Practice pattern variationValidated practice standards, guidelines, and protocols Team ownership and continuous improvement of clinical processes Services Fragmented, uncoordinated illness treatment services Coordinated, vertically and horizontally integrated illness treatment systems Organized behavioral health promotion and management systems that are backwards integrated into the workplace and the community Systems No continuum of careExpenditure-effective continuum of careCost-effective continuum of health Operations Lack of process measurement, monitoring, and outcome assessment Process measurement, monitoring, and outcome assessment in place Continuous, data driven process improvement Technology Technology profit centersAppropriate technologyCritical technology Cost Cannot measure behavioral costs for expenditures Can measure and manage behavioral expenditures but not costs Can measure and manage both behavioral health expenditures and costs Knowledge Minimal learning and knowledge deployment Rapid learning and knowledge deploymentKnowledge creation

30 PAYOR DRIVEN PAYORPROVIDER ORGANIZATIONINDIVIDUAL CLINICIAN More sophisticated purchaser of care Demand value Require defined and quantified products/services Pressed to define and quantify products/services Cost conscious; effective; efficient practices; accreditation Defined benefit package; services within timelines; measured outcomes Performance based employment relationship Credential specific and different levels of employment Clinical care defined by other than clinician CUSTOMER-SENSITIVE CUSTOMERPROVIDER ORGANIZATIONINDIVIDUAL CLINICIAN Empowered by advocates; choice in marketplace Competitive environment Regulatory environment Negotiate benefits with consumer/contract of service Professional liability intensified Service is a partnership; Client satisfaction; Outcome; Clinical paperwork increased

31 OUTCOME-ORIENTED PAYORPROVIDER ORGANIZATIONINDIVIDUAL CLINICIAN Feedback loop expected; Progress; implications for primary care, job, etc. Highly dependent on payor type History of outcome measurement; Differential reporting C.Q.I. environment essential Practice within competence Highlights CO needs Heightens collaboration/ consultation

32 Manage Care Manage Benefit Manage Health Goals of Future Behavioral Health Systems  To improve the behavioral health status and quality of life of defined populations  To enable beneficiaries to stay healthy, improve wellness, and help reduce the medical utilization and costs of defined populations and communities  To improve functioning and productivity of the American people and work force  To continuously improve the accessibility, affordability, and effectiveness of behavioral health services

33 Provider Network Management Planning and Identification of Network Components 1.Parameters of the continuum of care 2.Comprehensive community planning process 3.Type, number and qualifications of providers Procurement and Selection of Provider Networks 1.Open and competitive process 2.Selection criteria 3.Evaluation 4.Approval process

34 Provider Network Management (continued) Credentialing Documentation of licensure Accreditation Professional credentialing Management of Provider Network Communication processes (administrative and clinical) Community input Assessment of continuum of care Training and technical assistance

35 Strategic Planning  Annual review of services  Gap analysis  Review of utilization data  Geo access information  Needs assessment information  Outcome studies  Member satisfaction

36 Customer Services Customer Relations 1.Members 2.Providers 3.Funders 4.Advocacy groups 5.State and local agencies Member Handbook 1.Benefits and services 2.Member advocacy 3.Rights and responsibilities 4.Grievance and appeal process

37 Customer Services (continued) Coordination with other Systems of Care 1.Health care 2.Education 3.Juvenile justice 4.Child welfare 5.Corrections Member Satisfaction Community Focus Groups

38 Quality Management Includes quality assurance, continuous quality improvement, and performance improvement. Leadership and Staff Commitment 1.Accreditation 2.Board and Executive Management Organization Quality Management Goals Examples: 1.Enhance the accessibility, adequacy and quality of administered mental health services 2.Improve coordination between medical and mental health care within the geographic service areas 3.Promote the effective and economical use of resources within the system ADHS/DBHS Requirement Examples: 1.Case file reviews 2.Provider profiling 3.Member surveys 4.Medical records review

39 Quality Management (continued) Includes quality assurance, continuous quality improvement, and performance improvement. Performance Measures 1.High risk areas (vulnerable populations, fragile 2.populations, unstable populations) 3.High volume areas (based on demographics and 4.diagnosis or high volume treatment modalities) 5.Problem prone areas (breakdown in processes, problematic 6.trends or patterns) Performance Improvement Measures 1.FOCUS - PDCA performance improvement model

40 Utilization Management Prior Authorization 1.Covered services requiring prior authorization 2.Medical necessity 3.Least restrictive level of care Concurrent Review 1.Continued medical necessity 2.Appropriateness of level of care 3.Continued stay reviews Second Level of Review 1.Adequacy and clinical soundness of a member, assessment and 2.treatment plan 3.Used primarily in the determination of SMI or SED status Retrospective Reviews 1.Emergency admissions 2.Consistency with level of care criteria and length of stay criteria Non emergency inpatient Non emergency transportation Non formulary and brand name medications with generic equivalency Partial care Level I RTC

41 Financial Management Regulatory Compliance 1.Legal requirements 2.Contract compliance 3.Grants management Accounting applications and controls 1.Mitigate loss 2.Safeguard corporate assets 3.Monthly, quarterly and annual financial statements 4.Annual budget and forecasts Integration of Financial and Clinical Data 1.Rate setting 2.Cost analysis 3.Clinical analysis

42 Information Management Member Management 1.Enrollment 2.Eligibility status 3.Demographics 4.Benefit plans Utilization Management 1.Prior authorization 2.Utilization analysis Claims/Encounter Management 1.Pharmacy claims 2.Encounter claims processing and reconciliation Provider Network Management 1.Contracted services 2.Demographic data 3.Eligibility

43 Synopsis of Covered Services

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