MaineCare Long Term Strategy

MaineCare Long Term Strategy
MaineCare Redesign Taskforce October 23, 2012 Seema Verma, SVC Robert Damler, Milliman DRAFT

Expense by Cost Distribution FY2011
DRAFT Expense by Cost Distribution FY2011 Source: MaineCare Redesign Taskforce, Maine by the Numbers, 2012.

Source: MaineCare Redesign Taskforce, Maine by the Numbers, 2012.
Annual Cost Per Member DRAFT Cost PMPM Top 5% 90 to 95% 80 to 90% Low 80% $5,713 $1,750 $766 $78 Source: MaineCare Redesign Taskforce, Maine by the Numbers, 2012.

Who is the typical consumer?
DRAFT Who is the typical consumer? Top 5% 2nd 5% 80-89% <80% Age group 18-44 Under age 18 RAC SSI disabled Not receiving AFDC, but eligible (parents/ caregivers) Under 19, income <125% FPL Clinical condition Developmental disability Mental health: neuroses Pregnancy with complications Preventive/ Admin encounters Provider type Waiver services PNMI/Waiver services Physician/ Hospital Source: MaineCare Redesign Taskforce, Maine by the Numbers, 2012.

Previous Options Option 1: State based (FFS)
DRAFT Previous Options Option 1: State based (FFS) Further development of State utilization management program Active risk assessment & case management by State Development of disease-specific management programs Could develop different benefit packages according to risk Option 2: Value based purchasing design Medical homes, ACOs, incentive payments Option 3: Capitation Population & region, services Providers, MCO, ACOs, PACE Models: shared savings, risk adjustment, reinsurance, etc. Cons: Requires significant state development, piece meal approach, addressing key problems, but not a systemic approach. No gurantee of cost savings, maybe if vendors are used. Could require up front investment. Outsource- savings Pros: maintains current system as much as possible (if that is wanted)

Proposed: Multi-Tiered Strategy Based on Population
DRAFT Proposed: Multi-Tiered Strategy Based on Population Investment in primary care (80% of MaineCare) Pregnant women Children Parents Coordinated, quality services for Maine’s most vulnerable citizens (top 20% of MaineCare) Waiver populations Institutionalized Disabled with chronic diseases Other high risk Effective & efficient use of services (100% of Maine Care) All populations

Investment In Primary Care: Value Based Purchasing
DRAFT Investment In Primary Care: Value Based Purchasing 80% of MaineCare Target groups: Non-disabled Non-elderly populations Non-institutionalized populations Health homes/Primary care case management Primary care incentive program Accountable care organizations Targeted initiatives: ED Maternal & child health Care coordination aimed to assist transitions Increased promotion/incentive of PMP program to address narcotic abuse, incentives for using HIE, PA all MRIs and CTs

Goals of Value Based Program
DRAFT Goals of Value Based Program Pay for outcomes Pay for quality Incent consumers to become active participants in their healthcare consumption Design benefits that provide appropriate intensity and levels of care Providers coordinate total care resulting in better outcomes at lower costs

Accountable Communities
DRAFT MaineCare is planning an Accountable Communities Program Goal is for groups of provider organizations called accountable care organizations (ACOs) to provide better care to members for lower costs ACOs usually formed by different providers working together Primary care doctors Specialists Hospitals Others How does this work? Type of ACO is unknown “We want to work with health care providers to plan the kind of ACOs we will have so that they join us in this project.” ACOs have to meet quality goals ACOs will have goals to save money Source: Value Based Purchasing, Member Services Committee, October 7, 2011

Patient Centered Medical Homes
DRAFT Patient Centered Medical Homes PCMHs are primary care practices that: Care for members using a team approach with communication among physicians & supports Encourage the member & provider to have a good relationship Use information technology to track member data Make it easier for members to schedule necessary appointments Focus on providing better care for members with serious physical & mental health issues Currently 26++ PCMHs 8 Community Care Teams Source: Value Based Purchasing, Member Services Committee, October 7, 2011

Primary Care Provider Incentive Program
DRAFT Primary Care Provider Incentive Program The Primary Care Provider Incentive Payment (PCPIP) program pays bonuses to doctors that achieve certain goals: Seeing MaineCare members at their doctor’s office Primary care over emergency room care Quality “MaineCare has not changed how it does the PCPIP since Doctors receiving the PCPIP do a much better job seeing MaineCare members at their office now than they used to. But in other areas, the doctors have not improved very much or at all.” “MaineCare is going to see how it can change the program to make sure that doctors are improving in all areas.” Source: Value Based Purchasing, Member Services Committee, October 7, 2011

Contracting Strategy Continue FFS
DRAFT Contracting Strategy Continue FFS Continue PMPM management fee to primary care medical homes Quality Incentive Program Community coordinators PMPM fee Care Management Organization (CMO) Manages, utilization, PA etc. Oversees PCCM LA model Shared savings & risk Future capitation to ACOs

Louisiana Model Operates under 1932(a)(1) SPA authority
DRAFT Operates under 1932(a)(1) SPA authority Mandatory enrollment for disabled & non-disabled Excluded populations Duals Voluntary Enrollment (must opt-out) SSI Children Foster Children Children Receiving Special Health Services Native Americans Enrollees have choice between Enhanced PCCM Model & MCO Model Sources: Louisiana Department of Health and Hospitals, Healthcare Delivery Changes/Birth Outcomes Initiative, 2011; Louisiana State Plan Amendment, 2011; Louisiana Department of Health and Hospitals, 2012.

Louisiana Model Enhanced PCCM model Two entities operate PCCM model
DRAFT Enhanced PCCM model Two entities operate PCCM model Saving targets Savings shared with providers If no savings return up to 50% monthly care management payment made for each member Example: Total payments made for care management = $60M Net loss of $3M $3M owed to State Network of primary care providers only Sources: Louisiana Department of Health and Hospitals, Healthcare Delivery Changes/Birth Outcomes Initiative, 2011; Louisiana State Plan Amendment, 2011; Louisiana Department of Health and Hospitals, 2012.

Timeline & Implementation
DRAFT Timeline & Implementation 1/12 Care Coordination Teams Start 1/13 Health Homes Begin 7/13 Primary Care Incentive Program Spring 2013 Accountable Communities 1/12 Source: Value Based Purchasing, Member Services Committee, October 7, 2011

Cost Distribution for Low 80%*
DRAFT Cost Distribution for Low 80%* Adult/Child Disabled Other Hospital $ 88.9 $ 7.7 $ 2.6 Mental health $30.6 $ 10.9 $ 1.5 LTSS/Other $ 29.8 $7.7 $ 9.1 Physician $ 51.9 $ 8.5 $ 9.3 Pharmacy $ 38.8 $9.2 $ 1.8 All other $ 22.3 $ 3.9 $ 1.1 TOTAL $ 262.4 $ 47.9 $ 25.3 Lives 191,916 28,857 37,390 * Reflects State & Federal Expenditures Source: DHSS, SFY 2010 Experience Summary, Cost by Specialty and Grouping 2010.xlsx.

Range from 0.0-4.0% , Depending on type of service
Value Based Purchasing - Projected Cost Savings for Low 80% of Maine Care* DRAFT Range from % , Depending on type of service Adult/Child Disabled Other Low 80% Total cost $ 262.4 $ 47.9 $ 25.3 Savings $ 6.0 $ 1.0 Unknown * Reflects State & Federal Expenditures With cost-savings measures, MaineCare could save more than $7.0 in its “Low 80%” population. Calculation based on adding the ASO at risk strategy to the 80% VBP option Source: DHSS, SFY 2010 Experience Summary, Cost by Specialty and Grouping 2010.xlsx.

Redistributed* Admits Redistributed* Spending
DRAFT Potential Savings (State and Federal expenditures) for Reducing Number of Neonates Base Admits Base Spending Redistributed* Admits Redistributed* Spending Normal newborns 3,316 $ 3,750,451 3,887 $ 4,396,035 Neonate 2,854 $ 21,620,671 2,283 $ 17,296,537 TOTAL 6,170 $ 25,371,121 $ 21,692,571 Neonate % 46%** 37% Savings from redistribution $3,678,550 Savings = 14.5% Neonate conditions = Full-term with major problems, neonate with other significant problems, neonate died or transferred to another ACF, prematurity with major problems, prematurity without major problems, extreme immature or respiratory distress syndrome * Redistributed = If able to prevent 20% of each type of neonate ** For comparison, Indiana rates are 17% and Michigan rates are 27% Source: Maine, SFY 2010, DHHS, admits.xlsx, 2012.

Current Initiative: Emergency Department Project
DRAFT Current Initiative: Emergency Department Project MaineCare is working with hospital emergency departments across the State to: Identify high utilizers Identify drivers of high utilization Collaborate with identified member’s healthcare providers to encourage utilization in more appropriate treatment settings

Emergency Room Utilization Maine – SFY2012
DRAFT Emergency Room Utilization Maine – SFY2012 Number of Visits Individuals Visits Average Visits 202,117 - 1 71,539 1.0 2 29,562 59,124 2.0 3 14,089 42,267 3.0 4 7,237 28,948 4.0 5-9 10,012 61,671 6.2 10-19 1,993 25,139 12.6 20+ 426 11,025 25.9 TOTAL 336,975 229,713 Less than 6% of the total population on MaineCare is using over 55% of the ER visits Source: DHHS, 2012.

Coordinated Quality Services for Vulnerable Populations
DRAFT Coordinated Quality Services for Vulnerable Populations Service cost for top 5% represents 54% of spending Focus on preventing next 15% from becoming the top 5% Populations include: Disabled non dual including low 80% Waiver populations (DD & physically disabled) Non dual residential facilities State funded populations-? Exempt disabled children? What do we need to do with eligibility to expand to state funded programs? Review asset tests. Risk assessment…..eligibility based on need/level of care

Intellectual Disability & Developmental Disability HCBS Waiver
DRAFT Intellectual Disability & Developmental Disability HCBS Waiver Rank Average Expenditures per Waiver Recipient in FY 2009 (State and Federal Expenditures) 25th percentile $ 31,161 50th percentile $ 42,155 US average $42,896 75th percentile $ 51,199 90th percentile $ 68,478 Maine average $77,736 Potential savings for Maine $ 36M, if 90% percentile In FY 2009 Lives: 3,904 Spent: $303M Total lives = 3,904 Total spent = $303 million Sources: Medicaid_1915(c)_Home _and_Community-Based_Service_Waiver_Participtants,_by_Type_of_Waiver.xls; statehealthfacts.org

Opportunities Provide members with ONE number to call
DRAFT Opportunities Provide members with ONE number to call Provide aggressive case & disease management Prevent disease progression, avoid hospitalization and institutionalization Integrate behavioral health care Promote home & community based care over institutionalized care Continually and periodically re-evaluate clients to assure service level is appropriate Identify quality metrics, both process & outcome Reduce waitlist

MLTSS for Individuals with Developmental Disabilities & Serious Mental Illness
DRAFT 8 States currently enroll adults with intellectual/developmental disabilities in a managed long term services & supports (MLTSS) capitated program 4 of these States also enroll children with developmental disabilities 7 of these States enroll individuals in any setting type (i.e., ICF/MR & HCBS waiver) 2 of these States deliver ICF/MR & waiver services outside the MLTSS program & DD enrollees receive all other services through MLTSS Persons with serious mental illness (SMI) are included in some programs but generally need to fall into one of the other population groups to be enrolled in MLTSS (i.e., person must have physical, intellectual/developmental or age-related disability in order to enroll) Source: Truven Health Analytics, The Growth of Managed Long-Term Services & Supports (MLTSS) Programs: A 2012 Update. July 2012.

LTSS Carve-Outs State Services Carved-Out CA Private duty nursing HI
DRAFT LTSS Carve-Outs State Services Carved-Out CA Private duty nursing HI ICF/MR & MR waiver MI Acute & medical NY Primary & acute care PA TX Pharmacy & nursing home to 120 days TN Pharmacy & dental WI Primary & acute care, Pharmacy Source: Truven Health Analytics, The Growth of Managed Long-Term Services & Supports (MLTSS) Programs: A 2012 Update. July 2012.

Requirements for Vendor
DRAFT Fiscal prudence Predictable costs Contain growth rate Provide high quality, coordinated & efficient care for recipients Person-centered Community integration More choices Assure quality Work with stakeholders to identify quality metrics and hold vendors accountable for achievement Align incentives for providers across services Essential providers Minimum payment to providers

Capitation Features Full risk (all services ?)
DRAFT Capitation Features Full risk (all services ?) Risk adjusted to account for institutional vs. HCBS vs. diagnosis Performance bonus for meeting quality incentives Withhold to assure that certain process measures are achieved

DRAFT Cost Distribution – High 5% (Non-Dual) State and Federal Expenditures – SFY 2010 Adult/Child Disabled Other Hospital $ 120.5 $ 142.8 $ 11.5 Mental health $105.9 $ 68.2 $ 3.0 LTSS/Other $ 29.1 $209.2 $ 22.6 Physician $ 12.2 $ 14.9 $ 1.1 Pharmacy $ 18.7 $36.3 $ 1.8 All other $ 3.7 $ 9.2 $ 0.3 TOTAL $ 290.2 $ 480.6 $ 40.4 Lives 5,752 7,301 1,185 Source: DHSS, SFY 2010 Experience Summary, Cost by Specialty and Grouping 2010.xlsx.

DRAFT Cost Distribution – Next 15% (Non-Dual) State and Federal Expenditures – SFY 2010 Adult/Child Disabled Other Hospital $ 144.3 $ 31.2 $ 4.6 Mental health $55.6 $ 23.0 $ 1.7 LTSS/Other $ 26.4 $19.9 $ 3.8 Physician $ 32.2 $ 8.7 $ 1.2 Pharmacy $ 40.0 $26.8 $ 1.6 All other $ 11.2 $ 0.3 TOTAL $ 309.8 $ 113.4 $ 13.2 Lives 29,185 9,845 1,845 Source: DHSS, SFY 2010 Experience Summary, Cost by Specialty and Grouping 2010.xlsx.

Capitation for MaineCare’s Top 20%
DRAFT Capitation for MaineCare’s Top 20% Cost savings estimates for High 5% range from % Cost savings estimates for Next 15% range from % * Estimates are State & Federal Adult/Child Disabled Other Top 5% Total Cost $ 290.2 $ 480.6 $ 40.4 Savings $ 14.1 $ 18.7 Unknown Next 15% $ 309.8 $ 113.4 $ 13.2 $ 9.6 $ 3.5 TOTAL Top 20% $ 519.0 $522.0 $53.6 $ 23.7* $22.2* Great slide, Lora With cost-savings measures, MaineCare could save more than $45.9 in its “Top 20%” population. Source: DHSS, SFY 2010 Experience Summary, Cost by Specialty and Grouping 2010.xlsx.

Implementation Timeline & Issues
DRAFT Implementation Timeline & Issues Planning & development of waiver Waiver approval process Development of RFP & contracting process Claims system DHHS must be able to obtain claims data from MCOs/ACOs/PACE or other vendor 18-24 months

Effective Use of Services
DRAFT Effective Use of Services Assure that services are used appropriately Reduce waste and inefficiency Promote quality Create financial incentives for providers to achieve quality benchmarks

Effective Use of Services: Strategy
DRAFT Effective Use of Services: Strategy Reimbursement Strategy Bed hold days Readmissions within 7 days: ME does not reimburse for readmits within 72 hours Hospital acquired conditions New policy aligns with Medicare Elective C-Section before 39 weeks Radiology Benefits Manager Transportation broker (in process) Behavioral health ???? WHAT IS THE MEDICARE HAC POLICY? Medicare does not reimburse for the extra costs associated with a specific list of HACs & never-events. The Medicare policy was required to be adopted by Medicaid agencies under the ACA.

Medicare HAC Policy Medicare does not pay for:
DRAFT Medicare does not pay for: The additional costs associated with hospital acquired conditions (HAC) “Never Events” Under the Affordable Care Act, the Medicare policies were applied to Medicaid with some minor deviations Medicaid agencies can identify additional HAC which will not be reimbursed by the State MaineCare currently applies the Medicare policies Never events: surgery on wrong body part, etc HAC: embolisms, UTI from catheter, etc.

Maryland’s Hospital Acquired Condition Program
DRAFT Maryland’s Hospital Acquired Condition Program Implemented in 2009 Provides system of payment incentives based on a hospital’s actual number of complications vs. statewide target rate Hospital performance rates monitored & payment adjustments made annually based on performance Applies across all payers Overview of Program Includes 49 HACs Developed from list of 64 potentially preventable complications developed by 3M Health Information Systems List of HACs Hospitals with higher-than-average complication rates receive an overall decrease in payment rates & vice versa (risk-adjustments first made to account for any patient attributes) Methodology is revenue neutral; net increase in rates for better performing hospitals funded through reduction in rates for poor performing hospitals Annually adjust maximum penalty; was 1% of hospital revenue in FY 2012 & 0.5% in FY 2011 Methodology FY 2008: Incidence of HACs present in 53K of 800K inpatient cases totaling $500M in potentially preventable hospital payments FY : 12% decrease in measured complication rates with associated costs of $62M Portion may be attributable to hospital coding changes in addition to the new reimbursement system Outcomes HOW DOES THIS COMPARE WITH THE MEDICARE POLICY: Expands upon the list of HACs not covered. Maine currently only covers Medicare HACs, if they expand list, potential for savings. Source: The Maryland Health Services Cost Review Commission -

Potentially Preventable Readmissions
DRAFT Potentially Preventable Readmissions Potentially preventable readmissions are hospital readmissions occurring within a short time period that could have reasonably been expected to be prevented through: Effective use of discharge planning Coordinated follow-up care Nationally 20% of patients are readmitted within 30 days of discharge Estimated to cost $25B annually Source: Community Catalyst, Overview: Model Legislation to Reduce Potentially Preventable Readmissions & Complications; October 2011.

Potentially Preventable Readmissions: State Examples
DRAFT Potentially Preventable Readmissions: State Examples New York Massachusetts Effective 7/1/10 Projected $47M in savings 7/10-3/11 Reduce hospital’s payment based upon the excess number of potentially preventable readmissions (PPRs) Applies to PPRs within 14 days Excess readmission rate is difference between observed rate & expected rate For excess readmissions, the hospital’s payment for all non-behavioral health related Medicaid discharges is reduced by applying the computed adjustment factor to the applicable case payment or per-diem rate Effective 10/1/11 Hospitals above the threshold for readmissions received 2.2% reduction in their standard payment amount per discharge Penalty amount determined using 3M Potentially Preventable Readmission System 24 of 65 contracted hospitals were identified to have higher-than-average readmissions Statewide average is adjusted for severity of illness & hospital case mix NY: effective 7/1/10 projected $47M in total savings in first year through rate changes potentially preventable readmission: readmission to a hospital that follows a prior discharge within 14 days that is clinically related to prior admission Could have reasonably been prevented through appropriate care during discharge or post-discharge follow-up is for same or closely related condition, infection of complication, indicative of failed surgical intervention, acute decompensation of a coexisting chronic disease Exclusions: discharge AMA Original discharge for getting treatment of major or metastatic malignancy, multiple trauma, burns, neonatal and obstetrical admissions. readmission was planned or occurred after 15 days hospitals that have excessive # of readmissions risk-adjust comparison of actual & expected number of readmissions (accounts for severity of illness, APR-DRG & age of patients at time of discharge preceding readmission) Methodology rate adjustments for each hospital based on 2007 paid claims data Reduction in expected rate of readmission prior to 9/30/10: 24% 10/1/10-12/31/10: 38.5% After 1/1/ % Excess readmission rate is the difference between the observed rate & expected rate of PPR for each hospital for excess readmission, hospitals projected payment rate for the 2010 period will be used to compute the relative aggregate payments (excluding bh) associated with the risk adjusted excess readmissions in each hospital A hospital specific readmission adjustment factor computed as 1 minus the ratio of the hospitals relative aggregate payments associated with the excess readmissions payments reduced by applying the adjustment factor computed from step above to the applicable case payment or per-diem payment for all non-bh related Medicaid discharges to the hospital Sources: &

Potentially Preventable Readmissions: Medicare Policy
DRAFT Potentially Preventable Readmissions: Medicare Policy The ACA created the Medicare Hospital Readmissions Reduction Program Targets readmissions: Acute Myocardial Infarction (AMI), Heart Failure (HF), and Pneumonia (PN) Readmission within 30 days of discharge Calculate excess readmission ratio for AMI, HF, and PN Includes adjustment factors that are clinically relevant (i.e. patient demographics, comorbidities, patient frailty, etc.) Measure of a hospital’s readmission performance compared to the national average Utilizes risk adjustment methodology endorsed by National Quality Forum (NQF) Effective 10/1/12: Maximum penalty is 1% of base Medicare reimbursements October 2013: Increases to 2% October 2014: Increases to 3% 71% of hospitals reviewed to be penalized 2,217 hospitals nationwide to receive penalties 1,910 hospitals to receive penalties <1% $280M in total penalties Comprise approximately 0.3% of total amount hospitals are reimbursed by Medicare Note: While not explicitly stated, all research indicates that penalty applied to hospital’s total Medicare reimbursement Note: According to Kaiser study, it looks like Maine has one of the lowest penalties in the country; Source: Sources: CMS, Readmissions Reduction Program, 2012.

Maine Hospital Admissions & Readmissions
DRAFT Maine Hospital Admissions & Readmissions # Initial Admits # Readmits Total # Admits Initial Admits Paid Readmits Paid Total Admits Paid Readmit Rate (Maine, 2010) Readmit Rate (US, 2007) Behavioral health 3,618 1,645 5,263 $59.7 $31.9 $91.6 45% SA = 20.7% MD = 57.2% SA = 12.3% MD = 11.9% Maternity 5,947 462 6,409 $30.1 $2.2 $32.3 7.8% 3.8% Newborn 5,943 227 6,170 $24.6 $0.8 $25.4 4% 2.6%* Medical/ Surgical 10,480 2,259 12,739 $136.5 $166.6 21.6% 10.7% TOTAL 25,998 4,593 30,581 $250.9 $65.0 $315.9 SA = Substance Abuse, MD = Mental Disorder * This rate is for children under 1 year of age If Maine could cut medical/surgical readmission rates in half, the program would save $15.0 million (State and Federal expenditures). Sources: Maine DHHS, October 2010 – September 2011 Hospital Claim Experience, 2012; AHRQ, All-Cause Hospital Readmissions among Non-Elderly Medicaid Patients, 2007, 2010.

Elective Inductions Prior to 39 Weeks
DRAFT Put a “hard stop” to elective inductions prior to 39 weeks gestation Savings gained from: Shorter labors Reduced c-section rate Better birth outcomes Potential savings: $850K State & Federal1 Challenges How to implement? OH & UT required hospital to enter week’s gestation in order to schedule induction PA as potential alternative State Example: Ohio Estimated Savings Induction Rate Prior to Pilot Induction Rate Post Implementation $10M 25-30% 0-2.5% 1 MaineCare has ~5,400 births/yr. Estimated 25% elective induction rate. Reduction to 2.5% assumed. Source: DHHS, 2012.

Radiology Cost Control
DRAFT Radiology Cost Control State strategies for containing radiology costs & ensuring the appropriate delivery of services have included: Radiology Benefit Managers Clinical decision support models Real-time online interactive PA

DRAFT Radiology Benefits Management (RBM) Role: To ensure imaging needed for potential diagnosis Pros: Potential utilization & cost reductions of 8-20% Successful RBM programs could save $ billion by 2020 Cons: Costs shifted to providers Getting prior authorization for all imaging services places administrative burden on providers Sources: CaretoCare, Achieving Cost Savings and Patient Safety through Radiology Benefit Management, 2010; Magellan Health Services, Independent study estimates significant savings to Medicare through RBM programs, 2011; Lee, Rawson, & Wade, Radiology benefit managers: cost saving or cost shifting?, 2011.

Radiology Benefits Manager: North Carolina
DRAFT NC operates a statewide PCCM Program Implemented a RBM in 2009 All PAs handled through RBM & appeals handled by State Overview All outpatient, non-emergent, diagnostic imaging services including: CT MR PET Ultrasound Services requiring PA Inpatient Emergency Room 23 Hour Observation Services not requiring PA Duals Enrollees with TPL PACE Family Planning Waiver SCHIP Populations excluded Source: North Carolina Department of Health & Human Services -

DRAFT Clinical Decision Support Clinical decision support (CDS) is an alternative to utilization reviewers & Radiology Benefit Managers “Clinical decision support (CDS) is the use of health IT to provide clinicians and/or patients with clinical knowledge and patient-related information, intelligently filtered or presented at appropriate times, to enhance patient care. (HRSA)” Providers guided to order the appropriate test through an interactive electronic question set vs. receiving a PA denial Can be integrated into EHRs or accessed via the Web

Clinical Decision Support for Radiology: Minnesota
DRAFT Minnesota implemented CDS pilot in 2007 & expanded as statewide option in 2010 Implemented by Institute for Clinical Systems Improvement (ICSI) Non-profit organization representing 64 medical groups & sponsored by 5 health plans Implemented clinical criteria based on American College of Radiology standards Review is given in real-time & “decision support number” is given & required to process the claim Over ½ of all scans in MN are ordered through this process Increase in scans ordered : 8% : 1% Time expended by medical group staff Pre-pilot: 308 hrs Post: 5 hrs None of the 4,500 pilot practices requested return to traditional PA when pilot concluded Institute for Clinical System Improvement (a nonprofit health care improvement org) instituted a statewide initiative in 2010 which followed a yearlong pilot that included 4k physicians from state’s 5 largest medical groups, 5 largest payers & Minnesota Dept of Human Services

Radiology Clinical Decision Support: State Example
DRAFT April 2011: New York Medicaid implemented a collaborative, non-denial Radiology Benefits Manager Applies to outpatient non- emergency advanced imaging for FFS Duals & MCO enrollees excluded Utilize RadConsultTM Provides peer consultation & evidence-based medical criteria 5% reduction in advanced diagnostic imaging Consults per 1,000 members: June 2011: 89.58% Feb 2012: 85.53% RadConsult is a consultative, educational program that improves quality and reduces the cost of care by providing expert peer consultation and the latest evidence-based medical criteria. It gives you access to consultations with subspecialists affiliated with leading academic institutions. RadConsult does NOT issue denials for services requested but if the requested service does not meet guidelines, a HealthHelp Radiologist will have a peer-to-peer with the requesting practitioner to consider alternatives.

Real-Time Online Interactive Radiology PA: State Example
DRAFT Iowa Medicaid implemented Clear Coverage (a McKesson product) Online interactive PA system using InterQual criteria for certain elective outpatient radiology tests PA not required for inpatient or ER procedures Requests that meet criteria are automatically approved in real-time Provider answers questions on patient’s health status on web-based program Program utilizes InterQual criteria to identify what imaging studies are medically appropriate Program identifies which imaging studies require PA Program identifies what level of benefits are available Sources: & McKesson, Iowa Medicaid Enterprise & IFMC: Automatic Prospective Utilization Management of Diagnostic Imaging at the Point of Care, 2011.

Iowa’s Radiology Management: Outcomes
DRAFT The program achieved cost savings within 10 months Annual estimated savings of $2.4M attributed to: $1.3M due to physicians canceling requests found non- medically appropriate $0.6M due to denials $0.5M vs. adding 7 full-time employees for manual PA reviews The volume of manual reviews has been reduced Of 50,ooo PA requests: 40%: Instant automated approval 8%: Cancelled by provider when notified clinical evidence not aligned with request 4%: Denied as medically inappropriate Sources: & McKesson, Iowa Medicaid Enterprise & IFMC: Automatic Prospective Utilization Management of Diagnostic Imaging at the Point of Care, 2011.

Federal Waivers Waiver authority Dependent on strategy
DRAFT Waiver authority Dependent on strategy What populations What method is being used Managed care Other? What flexibilities are needed? Statewideness Mandatory/Voluntary enrollment Defined network, limited choice of contractors Benefits Timing (length of approval process) Budget tests Budget neutrality Cost effectiveness Depends on expansion population: cost effectiveness vs. budget neutrality?

Stakeholder Submissions
DRAFT Stakeholder Submissions 1) Integrated chronic care management for high cost cases, 1915 waiver populations 2) Independent administration of HCBS, children ID/DD,& Adults in LTC 3) Population Based Integrated Services Model for Medicaid Eligible Individuals with a Serious Mental Illness and Chronic Co-Morbid Medical Conditions

Long-Term Strategies Summary
Item Current Initiative State & Federal Savings State Savings Investment in primary care Value-based purchasing $5.2M $1.98M Value-based purchasing with risk $7.0M $2.66M Reduce neonates & Increase normal births $3.7M $1.41M ER utilization X Coordinated, quality services for Maine’s most vulnerable citizens Capitation $45.9M $17.44M Effective & efficient use of services Readmissions $15.0M $5.7M HAC Elective Inductions $850K $323K Radiology Maine state share = 38% Savings calculations occasionally overlap, so savings are not additive

Authorities for Managed Care
DRAFT Authorities for Managed Care Authority Description Limitations Section 1115 Gives Secretary of HHS broad authority to approve demonstration programs that test innovative Medicaid policy. Proposal must be truly innovative, not simply replicating an idea already demonstrated elsewhere. Section 1915(a) Statutory authority to enter into contracts with organizations to provide services already offered under the state plan. Voluntary enrollment only; Existing services only; Number of qualified contractors may not be limited. Section 1915(b) Waiver authority for mandatory enrollment in managed care. With exceptions for rural areas, must offer at least 2 options. Section 1932(a) Statutory authority for mandatory enrollment in managed care. Certain groups are exempted from mandatory enrollment; with exceptions for rural areas, must have at least 2 options. Exempted groups include: Special Needs Children American Indians/Alaskan Natives Dual Eligible Special needs children = SSI, 1902(e)(3)- Katie Beckett, Foster Care and Adoption Assistance, and Title V Children Source: L&M Policy Research, MLTSS Federal Authorities.

Authorities for Long Term Services & Supports
DRAFT Authorities for Long Term Services & Supports Authority Description Limitations Section 1915(c) Waiver authority to offer HCBS to beneficiaries who would otherwise meet institutional level of care. Beneficiary must meet institutional level of care. Section 1915(i) Statutory authority to offer HCBS as a state plan service, whether or not a beneficiary meets institutional level of care. State may not limit the number of eligible participants or have a waiting list. Service must be offered statewide. Section 1915(j) Statutory authority to offer self-directed personal assistance services option in a 1915(c) waiver program, or under state plan personal assistance services. Not a service authorization per se, but rather a delivery option for services otherwise provided under the state plan. Section 1915(k) Statutory authority to offer attendant services and supports controlled by the beneficiary (Community First Choice Option). Other State Plan Services States must offer certain services (such as nursing home and home health) and may offer optional services (such as personal care and targeted case management). State plan services must be offered to all eligible beneficiaries without waiting lists. Services must be offered statewide. Source: L&M Policy Research, MLTSS Federal Authorities.

Authorities for Medicare
DRAFT Authority Description Limitations Section 1859 Statutory authority for Medicare Advantage plans to create specialty plans targeted to special needs individuals, including those who are dually enrolled in Medicare and Medicaid. Voluntary enrollment only; authority applies to Medicare Advantage plans (not to the State Medicaid agency); all Medicare Advantage rules must be met. Sections 1894 and 1934 Statutory authority to offer PACE, which combines Medicare and Medicaid services. Voluntary enrollment only; PACE model only. Section 1115A Gives Center for Medicare and Medicaid Innovation broad authority to test innovative models that decrease costs and maintain or improve quality. Proposed model must be innovative and fit within the statutory priorities of CMMI (Center for Medicare & Medicaid Innovation) at CMS. Source: L&M Policy Research, MLTSS Federal Authorities.

Developmentally Disabled & SMI LTSS: State Examples
DRAFT State Populations Medicaid Authority Geographic Reach Mandatory or Voluntary Services included in Capitation Outcomes AZ Children Adults < 65 with PD with ID/DD Adults 65+ 1115 Statewide Mandatory Primary Acute Behavioral Rx Drugs NF ICF/MR HCBS waiver- like services Peer reviewed study found substantial cost savings & nursing home avoidance. MI Children & adults with intellectual/ developmental disabilities Children with serious emotional disturbance Adults with SMI 1915(b) & 1915(c) Personal care Targeted case management HCBS waiver for persons with DD Carve-outs: primary & acute medical services & prescription drugs. No formal evaluation conducted DE All SSI children & adults except ICF/MR & in DDMR 1915(c) Carve-out: Rx Drugs N/A: recently implemented Source: Truven Health Analytics, The Growth of Managed Long-Term Services & Supports (MLTSS) Programs: A 2012 Update. July 2012.

Mandatory or Voluntary Services included in Capitation
DRAFT Developmentally Disabled & SMI LTSS: State Examples State Populations Medicaid Authority Geographic Reach Mandatory or Voluntary Services included in Capitation Outcomes WA Adults 21-64 with SSI Adults 65+ 1932(a) 1 of 39 counties Voluntary Note: people with DD receiving Medicaid personal care receive all services through WMIP except for certain services provided by the DDD (i.e., supported employment) Those receiving LTSS through DDD waivers receive their medical, mental health and chemical dependency services through WMIP, but continue to receive waiver services through the DDD waivers . Primary Acute Behavioral Rx NF (up to 6 mos, then no longer at risk) Community based services 2010 Evaluation: Medicaid cost savings not demonstrated. Mortality rates & inpatient hospital admissions somewhat lower (no statistical significance found). Significantly lower growth in prescriptions for mental illness. Sources:“WMIP: Medical Care, Behavioral, Health, Criminal Justice, and Mortality Outcomes for Disabled Clients Enrolled in Managed Care,” David Mancuso, Melissa Ford Shah, Barbara Felver, Daniel Nordlund, Washington Department of Social and Health Services, Research and Data Analysis Division, December & Truven Health Analytics, The Growth of Managed Long-Term Services & Supports (MLTSS) Programs: A 2012 Update. July 2012.

Mandatory or Voluntary Services included in Capitation
DRAFT Developmentally Disabled & SMI LTSS: State Examples State Populations Medicaid Authority Geographic Reach Mandatory or Voluntary Services included in Capitation Outcomes WI Adults <65 with PD or ID/DD Adults 65+ 1915(b) & 1915(c) 57 of 72 counties Voluntary – Opt In Behavioral health not provided inpatient or by physician NF ICF/MR Personal Care HCBS Carve-outs: Primary & acute medical care & Rx HCBS waiver services only available to members with nursing home LOC 2011 Evaluation: Several MCOs with operating deficits; 3 identified at risk of insolvency. Improved access to long-term care. Cost-effectiveness determined difficult to assess. Sources:. “An Evaluation: Family Care” Joint Legislative Audit Committee, Report 11-5, April Truven Health Analytics, The Growth of Managed Long-Term Services & Supports (MLTSS) Programs: A 2012 Update. July 2012.

DRAFT Developmentally Disabled & SMI LTSS: State Examples State Populations Medicaid Authority Geographic Reach Mandatory or Voluntary Services included in Capitation Outcomes PA Targets autism only 1915(a) 4 of 67 counties Voluntary – Opt In Primary Behavioral health Dental ICF/MR Targeted case management Adult day OT/PT/ST Carve-outs: inpatient, ambulatory surgical center, home health, clinic, transportation, renal dialysis, lab, x-ray, Rx No formal evaluations NC Children & adults with SED, DD, mental illness or substance abuse 1915(b) & 1915(c) Scheduled to be Statewide in 2013 Mandatory Inpatient & outpatient behavioral health PRTF ER visits for BH HCBS for DD Therapeutic foster care Residential child Source: Truven Health Analytics, The Growth of Managed Long-Term Services & Supports (MLTSS) Programs: A 2012 Update. July 2012.

DRAFT Developmentally Disabled & SMI LTSS: State Examples State Date of Inception Medicaid Authority Geographic Reach Mandatory or Voluntary Services included in Capitation Outcomes HI Children Adults <65 with PD with ID/DD Adults 65+ 1115 Statewide Mandatory Primary Acute Behavioral Rx Drugs NF DD/ID Waiver Enrollees must enroll in one of the 2 plans but waiver services carved-out & provided by Dept. of Health Additional BH services for adults with SMI or children with SED excluded from cap rates No formal evaluation conducted yet Source: Truven Health Analytics, The Growth of Managed Long-Term Services & Supports (MLTSS) Programs: A 2012 Update. July 2012.

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