1. Medicaid and Managed Care : Current Directions and Challenges Alliance for Health Reform Washington, DC October 28, 2011 Vernon K. Smith, PhD Health Management Associates © 2011 Vsmith@HealthManagement.com

2. About the KCMU/HMA Medicaid Managed Care 2011 Survey 50-state survey conducted by the Kaiser Commission on Medicaid and the Uninsured (KCMU) and Health Management Associates (HMA) regarding Medicaid managed care programs operating as of October 2010. –Survey fielded in late December 2010; data collected through Spring 2011. Scope of survey: –States’ current managed care programs (MCOs, PCCM programs, non- comprehensive PHPs) –Special initiatives to improve quality and care coordination –Managed long-term care and managed care initiatives for dual eligibles –Expectations related to health reform. Findings are based on information reported by state Medicaid officials. SOURCE: KCMU/HMA Survey of Medicaid Managed Care, September 2011.

3. Managed Care Gives Medicaid What Fee-For-Service Cannot A Point of Accountability, by Contract For guaranteed access For quality care and performance to benchmarks A structure to align incentives to improve quality, outcomes and community health status Budget certainty and potential for cost savings “The costs are about the same, but if you take into account access and quality, then you are getting better value.” -- Medicaid director, 2011 2 SOURCE: Kathy Gifford, Vernon Smith, Dyke Snipes and Julia Paradis, “A Profile of Medicaid Managed Care Programs in 2010: Findings from a 50-State Survey,” The Kaiser Commission on Medicaid and the Uninsured, September 2011. http://www.kff.org/medicaid/8220.cfm

4. Share of Medicaid Enrollees in MCOs and PCCMs, By Plan Type 1991 - 2010 3 MCO Source: HMA analysis of CMS Managed Care Reports, 1991 - 2005; for 2010: Kathy Gifford, Vernon Smith, Dyke Snipes and Julia Paradis, “A Profile of Medicaid Managed Care Programs in 2010: Findings from a 50-State Survey,” The Kaiser Commission on Medicaid and the Uninsured, September 2011. http://www.kff.org/medicaid/8220.cfm

5. Figure 4 Medicaid Enrollment in Managed Care (MCOs and PCCMs) October 2010 SOURCE: Kathy Gifford, Vernon Smith, Dyke Snipes and Julia Paradis, “A Profile of Medicaid Managed Care Programs in 2010: Findings from a 50-State Survey,” The Kaiser Commission on Medicaid and the Uninsured, September 2011. http://www.kff.org/medicaid/8220.cfm Total = 53.9 million Medicaid beneficiaries

6. Figure 5 Comprehensive Medicaid Managed Care Models (MCOs and PCCMs) Operating in the States, 2010 SOURCE: Kathy Gifford, Vernon Smith, Dyke Snipes and Julia Paradis, “A Profile of Medicaid Managed Care Programs in 2010: Findings from a 50-State Survey,” The Kaiser Commission on Medicaid and the Uninsured, September 2011. http://www.kff.org/medicaid/8220.cfm Comprehensive Medicaid Managed Care enrollment = 66% WY WI WV WA VA VT UT TX TN SD SC RI PA OR OK OH ND NC NY NM NJ NH NV NE MT MO MS MN MI MA MD ME LA KY KS IA IN IL ID HI GA FL DC DE CT CO CA AR AZ AK AL PCCM only (12 states) MCO only (16 states and DC) No MMC (3 states) MCO and PCCM (19 states)

7. Figure 6 Distribution of Medicaid MCO Enrollment by Selected MCO Characteristics SOURCE: Kathy Gifford, Vernon Smith, Dyke Snipes and Julia Paradis, “A Profile of Medicaid Managed Care Programs in 2010: Findings from a 50-State Survey,” The Kaiser Commission on Medicaid and the Uninsured, September 2011. http://www.kff.org/medicaid/8220.cfm

8. With Managed Care, Medicaid Is Now a Leader in Innovation, Quality Improvement and Value “We are unashamed to use the power of Medicaid to raise the standard of care for all the citizens of our state.” – Dr. Craigan Gray, NC Medicaid director, 9/13/11 Better information on best practices and performance Consumer guides and MCO performance report cards, based on HEDIS and CAHPS Quality Initiatives Care management programs for high risk / high cost patients Performance improvement projects (e.g., reducing avoidable ER visits) Special initiatives for priority population health (e.g., reducing obesity, disparities) Reimbursement Strategies Bonus payments for high performance on HEDIS® or CAHPS® quality performance measures selected annually Penalties for poor performance Higher payment when meet medical home or chronic care management standards Procurements based on quality 7 SOURCE: Kathy Gifford, Vernon Smith, Dyke Snipes and Julia Paradis, “A Profile of Medicaid Managed Care Programs in 2010: Findings from a 50-State Survey,” The Kaiser Commission on Medicaid and the Uninsured, September 2011. http://www.kff.org/medicaid/8220.cfm

9. Most Medicaid Spending Is Still FFS, for All Eligibility Groups, FFY 2008 8 Note: Managed care includes risk- and non-risk based, including MCOs, PCCMs, and limited benefit plans. Source: HMA, prepared from data in: MACPAC, Report to Congress: The Evolution of Managed Care in Medicaid, June 2011.

10. Medicaid Increasingly Uses Managed Care for Persons with Complex Health Needs Increasingly, states require populations previously excluded to enroll in some form of managed care, e.g., children with disabilities receiving SSI, children with special health care needs seniors and persons with disabilities. 11 states have prepaid Managed Long Term Care programs with total enrollment of over 400,000 25 states now enroll dual eligibles in some form of Medicaid managed care, on a voluntary or mandatory basis (in addition to PACE programs) Number will grow with coordinated, integrated care for duals 9 SOURCE: Kathy Gifford, Vernon Smith, Dyke Snipes and Julia Paradis, “A Profile of Medicaid Managed Care Programs in 2010: Findings from a 50-State Survey,” Kaiser Commission on Medicaid and the Uninsured, September 2011. http://www.kff.org/medicaid/8220.cfm

11. Managed Care Is Now Assisting States on Their Most Pressing Medicaid Issues Dealing with fiscal pressure and long- term sustainability of the program Assuring access, quality and value Preparing for health reform 10