December 2005 Presentation to the Vermont Commission on Health Care Reform Kenneth E. Thorpe, Ph.D. Robert W. Woodruff Professor and Chair Department of Health Policy and Management Rollins School of Public Health Emory University

December 2005 Agenda 1.Challenges facing a fast-track implementation of the states chronic care initiative 2.How do other states / state Medicaid programs design disease management programs? 3.Lessons and implications for the Commission discussion

December 2005 Chronic Care Blueprint 1.Population identification processes 2.Evidence-based practice guidelines 3.Collaborative practice models to include physician and support-service providers 4.Patient self-management education (may include primary prevention, behavior modification programs, and compliance/surveillance) 5.Process and outcomes measurement, evaluation and management 6.Routine reporting / feedback loop

December 2005 Key Challenges Facing the Rapid Implementation of the Chronic Care Blueprint 1.Time remaining to complete the patient registry – key infrastructure to identify chronically ill patients 2.Integrating providers and patients into the model – buy-in 3.Changing provider payments – payment reforms needed 4.Finalizing measurable set of standard clinical performance measures, outcomes measures, patient satisfaction measures 5.Role of OVHA / State employees: Build vs. contract with external vendor (latter much faster)

December 2005 Challenges Facing the Chronic Care Blueprint 1.Identification of patients eligible for disease management service (i.e. know who your patients are!) Need Patient registry to identify all eligible members and stratify for risk/level of intervention. Also allows for comprehensive tool for managing clinical needs Cannot move ahead without automated registry, or external vendor identifying potential candidates Challenges: Requires data from several providers, labs, pharmacy clearinghouses, hospitals, physician practices, health plans. –Full completion could be two years away –Key first step is the accelerate the completion of the registry

December 2005 Challenges 2.Finalize clinical protocols that will be adopted across all patients. Successful program will need Outcome, utilization, and process measurements

December Process and Outcomes Measures (still under construction) Member and Provider Satisfaction Surveys Health status outcome - examples –Improved overall health status of members at least 10% –Decrease in hospital admissions at least 10% –Decrease in total inpatient days at least 10% –Decrease in Emergency Department visits by at least 10% –Increased education (knowledge) of providers and members by 10%

December 2005 Illustrative Clinical Outcome Metrics for Diabetes – Variables to be Measured Percent of members with diabetes who completed one foot examination, palpation of pulses and visual examination in the measurement year Percent of diabetes members with microalbuminuria or clinical albuminuria (per ADA Guidelines) taking ACE inhibitors or ARB Percent of diabetes members with an A1C level <7.0% in the past year (ADA Guideline) Percent of diabetes members with LDL level <100mg/DL within the past two measurement years (use last measure to report) (ATP III Guideline) Percent of diabetes members with BP <130/80. (Use last measure to report) (ADA Guideline) Percent of members with diabetes who had one dilated retinal exam in the measurement year. Percent of members with diabetes who had at least two A1C test in the measurement year. Percent of members with diabetes who had one microablumin screening test in the measurement year or receiving treatment for existing nephropathy

December 2005 Illustrative Clinical Outcome Metrics for Diabetes – Variables to be Measured Percent of members with diabetes who completed one fasting lipid panel test in the measurement year Percent of members with diabetes >30 years of age taking an aspirin each day Percent of diabetes members who reported smoking at the beginning of the measurement period who at the time of measurement had quit smoking Percent of all diabetes members who receive flu vaccination within the last 12 months Percent of all diabetes members who have ever received a pneumococcal vaccine Percent of all diabetes members who had a depression screening in accordance with United States Prevention Services Task Force (USPSTF)

December Create Comprehensive Care Plans that Include: Management of disease states and co-morbid conditions Severity of care Improvement of risk factors related to disease (i.e. obesity) Management of appropriate usage of all medications Preventative care and wellness promotion Evaluation of home environment for levels of common environmental triggers

December Create Comprehensive Care Plans that Include: (continued) Action plans for diseases that are required per clinical guidelines (i.e. asthma) Prevention of acute episodes including hospitalizations and emergency-room visits Member self-management strategies Communication feedback among all providers Member and provider adherence to clinical guidelines Members compliance with care plan Are compliant and cooperative with the recommended care plan

December Payment Reform Plans paid a PMPM amount for managing health care of enrollees Cannot fully develop all aspects of chronic care model absent changes in how providers are paid. Not currently planned 6.Physician Buy-in Must seamlessly integrate all parts of the CCI 7.Role of OVHA / State Employees in the CCI Could include OVHA and the state employees through an RFP process with an external vendor Not currently anticipated

December 2005 How Do Other States Provide Disease Management for Medicaid / State Employees? Generally through an RFP process RFP requires vendor to describe (examples) –Approach for identifying eligible members –Approach for conducting baseline assessments of health risk, and non-adherence risk. –Identify educational / wellness / clinical management protocols by risk state (i.e. mild asthmatics v. severe asthmatics) –Approach for enrolling patients opt-in / opt-out

December 2005 How Do Other States Provide Disease Management for Medicaid / State Employees? Identify how vendor would integrate with: –Medicaid provider community –FQHCs –Rural and public health clinics Process for coordinating interventions and care Measure /evaluate outcomes

December 2005 RFPs Require Evidence based guidelines Case managers (face to face, telephone) Care Plans that include: Management of disease states and co-morbid conditions Severity level of care Improvement of risk factors related to disease Management of appropriate usage of all medications Preventative care and wellness promotion

December 2005 RFPs Require (continued) Evaluation of home environment for levels of common environmental triggers Action plans for diseases that are required per clinical guidelines (i.e. asthma) Prevention of acute episodes including hospitalizations and emergency-room visits Member self-management strategies Communication feedback among all providers Member and provider adherence to clinical guidelines Members compliance with care plan Are compliant and cooperative with the recommended care plan

December 2005 Key Part Many RFPs: Guaranteed Net Savings –Expect generally 4% savings for aged/blind/disabled populations –Higher savings (10%) for other populations –Pay a PMPM fee to vendor that is at risk (see example)

December 2005 SAMPLE CALCULATION OF SAVINGS FOR BEND THE TREND PROGRAM (Georgia Medicaid RFP) All numbers provided are for demonstration purposes only. Base yearFirst Contract Year Comments Financial Baseline and Contracted Fees and Guarantee Claims cost/eligible patient/month for that year. $1000Total claims cost/total member-months (based on fiscal year 2004 claims experience) Vendor Guarantee, gross/net 10% gross/5% net Negotiated 5% savings AFTER fees. 10% gross is needed to reach 5% net because the fee itself equates to 5% of claims cost Vendor fees$50 PMPMNegotiated fee (equals 5% of claims) Vendor NET guarantee $50 PMPM5% of financial baseline Vendor targets, before financial baseline adjustments $900 gross, $950 net 10% and 5% reduction off the $1000, respectively Vendor ROI guarantee 2:1$100 in claims savings/$50 in fees.

December 2005 SAMPLE CALCULATION OF SAVINGS FOR BEND THE TREND PROGRAM (Georgia Medicaid RFP) All numbers provided are for demonstration purposes only. Baseline Adjustment Base yearFirst Contract Year Comments PMPM spending increase trend in absence of DM 10%This is a contractually agreed upon number Financial baseline adjusted for trend BEFORE net savings guarantee $1100Previously calculated financial baseline, adjusted for the 10% inflation means that the target goes up by 10% Target (A)AFTER 5% net savings guarantee $1050With 10% inflation factored in, this is the target that the vendor much reach after fees to save a net of 5% Target (B) –gross claims cost target needed to hit 5% net target $1000If fees are $50, a net total cost of $1050 requires reducing gross claims to $1000

December 2005 Did the Vendor hit the Target? Example of missing Actual PMPM claims cost for period $1025Calculated during reconciliation Actual savings$75Claims saved from $1100 projection Savings needed to make their numbers $100The target of $1000 was $100 less than the projected number in absence of DM % of number hit75%$75/$100 Vendor claims performance vs. GROSS claims target $1025 vs. $1000 target Gross claims reduction was 75% of reduction needed to hit the NET target number even though… Amount of miss in claims target $25 (25%)They needed to save $100 in gross claims. They saved $75, so they missed by $25 % of fees which must be returned 25%This ALWAYS EQUALS the % of the miss, in order to maintain the guaranteed ROI Payout by Vendor for missing target, proportionate guarantee $12.50 (25% of $50)Vendor achieved 75 % of the reduction in claims needed to hit the net savings number and missed by 25%. The vendor must return 25% of the fee to the state in order to meet its contractual obligation to keep the state whole and maintain the ROI of 2:1 Remaining gross savings/gross fees $75/$37.50 = 2:1 ROI ROI is maintained due to fee giveback

December 2005 Key Issue: Role of OVHA in Chronic Care Blueprint Build vs. RFP (lease) Issue Could develop RFP contract with external vendor and jump start the process Could require performance guarantees on savings