1. The State of Medicaid Managed Care in an Era of Federal Reform: Current Trends and Issues
Steve Aragón Chief Counsel | Texas Health & Human Services Commission
Payors, Plans, and Managed Care Practice Group Annual Luncheon

2. Prologue: January 2011
$15B Budget Deficit

3. Texas Medicaid Today
Over $30 billion (federal and state funds) during SFY 2011
Medicaid pays for more than 1/2 of all Texas births
15% of all personal healthcare spending in Texas
Provides assistance for 2/3 of Texans in nursing homes
Insurance for 3.8 million low income, aged, and disabled Texans each month
1 out of 4 Texas children covered
Billions in non patient-specific, supplemental federal funds to help care for indigent, uninsured Texans

4. FY 2011: Approx. $23B, all funds

8. The Next Wave

9. Legislative Response $15.2 billion budget cuts Rainy Day Fund intact
No new taxes

10. HB 1 Mandates Expand and improve Medicaid managed care
Implement quality based payment systems
Streamline and maximize federal funding
Encourage personal responsibility
Prevent fraud and abuse
Establish healthcare collaboratives

11. Texas Medicaid 1115 Transformation Waiver
Expands Medicaid managed care statewide
Authorizes Regional Healthcare Partnerships
Establishes Quality-based Payment Systems
Uses savings to increase reimbursement for uncompensated care
Incentives for delivery system improvements
Protects hospital supplemental payments (i.e., UPL)

12. Hospital Finance Components
Establishes 2 funding pools
Uncompensated Care (UC) Pool
Delivery System Reform Incentive Payment (DSRIP) Pool
Expands categories of Uncompensated Care
E.g., physician costs
Enables local governments to cover more uncompensated care costs
Removes Charge Caps

13. Waiver Timeline
Regional Boundaries Public Hearing
Adopted RHP Rules Effective Date
8/24/12
5/17/12
DSRIP menus sent ot CMS
Final DSRIP Menus, Regions, Protocols submitted to CMS
6/1/12
8/31/12
Proposed RHP Rules published in Texas Register
Final RHP Plans submitted to CMS
RHP Plans submitted to HHSC
6/22/12
9/1/12
10/31/12
' 12
2012
Jun
Jul
Aug
Sep
Oct
' 12
Final RHPs/Anchors Announced
5/28/12
5/31/12
RHP Rules Public Comment Period
6/22/12
7/23/12
RHP Plan Review/Revision Period
9/1/12
10/31/12
Detailed information available at

14. Medicaid Managed Care Timeline
HB 7: Medicaid Managed Care Pilot Authorized
9/1/91
HB 2913, SB : Managed Care Client & Provider Protections
Travis County Pilot
implemented
8/1/93
9/1/97
Tri-County Pilot
PCCM Expanded to 197 Counties
SB 2896: Moratorium on Managed Care Expansion
12/1/93
9/1/05
9/1/99
Medicaid Managed Care Plan for Foster Children
NorthSTAR BH Pilot Launches
4/1/08
SB 10: Statewide Restructuring of Medicaid
11/1/99
Managed Care Expansion begins
Moratorium Lifted
9/1/11
9/1/95
9/1/01
Managed Care Expands to South Texas
3/1/12
1991
1991
1994
1996
1999
2002
2004
2007
2009
2012
Made with Office Timeline 2010

15. Managed Care Service Delivery Models
STAR (State of Texas Access Reform)
Capitated, Health Maintenance Organization (HMO) model for non-disabled pregnant women and children.
STAR+PLUS
Provides acute care services.
Capitated HMO model for disabled Medicaid clients and dual eligibles (Medicaid and Medicare).
Provides acute and long-term services and supports (LTSS).
Medicaid provides medical coverage to eligible persons
The federal government pays just under 60 cents of every dollar spent on Medicaid services
Funding is open-ended since coverage is an entitlement for those who are eligible
Eligible populations and eligibility criteria is listed for your information
Caseload info, if asked:
2,623,215 individuals were enrolled in Medicaid in December 2008
1,741,075 of these receive Children’s Medicaid

16. Managed Care Service Delivery Models
STAR Health
Capitated HMO model for foster care children.
Provides acute care services with emphasis on behavioral health and medication management.
Primary Care Case Management (PCCM)
Non-capitated service delivery model.
Includes non-disabled pregnant women, children, and disabled adults.
Acute care services only.
Medicaid provides medical coverage to eligible persons
The federal government pays just under 60 cents of every dollar spent on Medicaid services
Funding is open-ended since coverage is an entitlement for those who are eligible
Eligible populations and eligibility criteria is listed for your information
Caseload info, if asked:
2,623,215 individuals were enrolled in Medicaid in December 2008
1,741,075 of these receive Children’s Medicaid

17. Medicaid STAR Program: Geographic Distribution (prior to 03/01/2011)
Medicaid provides medical coverage to eligible persons
The federal government pays just under 60 cents of every dollar spent on Medicaid services
Funding is open-ended since coverage is an entitlement for those who are eligible
Eligible populations and eligibility criteria is listed for your information
Caseload info, if asked:
2,623,215 individuals were enrolled in Medicaid in December 2008
1,741,075 of these receive Children’s Medicaid

18. Medicaid STAR Program
The STAR Program provides acute care services for pregnant women, Temporary Assistance to Needy Families (TANF) recipients and low-income children and families.
STAR operates under the authority of a federal 1915(b) waiver.
Risk-based, capitated managed care.
Each STAR member is enrolled in a health maintenance organization (HMO) and has a primary care provider (PCP). PCP is chosen by member or assigned by state or HMO.

19. Medicaid STAR+PLUS Program
STAR+PLUS structured as an integrated delivery system (both
acute and LTSS) for disabled and chronically ill Medicaid
recipients:
Risk-based, capitated managed care.
Most aged and disabled adults who are not in institutions are required to participate.
Includes dual eligible (Medicaid and Medicare) recipients (slightly more than half of STAR+PLUS members).

20. Medicaid STAR+PLUS Program
STAR+PLUS is based on a combined 1915(b) and 1915(c) waiver:
Implemented as a pilot in Harris County Service Area in 1998.
Expanded to the full Harris County Service Area, and to Bexar, Nueces, and Travis Services Area in February 2007.
2011 – Expanded to Dallas and Tarrant Service Area.
Goal: achieve a seamless continuum of care by integrating acute and long-term services and supports in a managed care environment.
Promotes delivery of home and community-based services: Health maintenance organizations (HMOs) are responsible for coordinating acute and LTSS through the use of a service coordinator.

21. Medicaid STAR+PLUS Program
Service coordinator is responsible for:
Formulating an individualized plan covering acute and LTSS.
Overseeing smooth transition from acute care to LTSS.
Making home visits and assessing members’ needs:
Authorize community LTSS.
Arrange acute care services.
STAR+PLUS Medicaid Only members are assigned or choose a primary care provider.
Service Coordinators are required to assist with Medicare physician and service coordination.

22. Medicaid STAR+PLUS Program: Current Geographic Distribution

23. Medicaid Managed Care Initiatives
Expand Existing STAR and STAR+PLUS Service Delivery Areas to Contiguous Counties.
Expand STAR and STAR+PLUS to South Texas.
Convert PCCM Areas to the STAR Program model.
Create a Dental Managed Care Model for Medicaid.
Include In-patient Hospital Services in STAR+PLUS.
Medicaid provides medical coverage to eligible persons
The federal government pays just under 60 cents of every dollar spent on Medicaid services
Funding is open-ended since coverage is an entitlement for those who are eligible
Eligible populations and eligibility criteria is listed for your information
Caseload info, if asked:
2,623,215 individuals were enrolled in Medicaid in December 2008
1,741,075 of these receive Children’s Medicaid

24. 2011 Managed Care Expansion: Geographic Distribution
STAR & STAR+PLUS
Managed Care Expansion Service Areas

25. Proposed Medicaid Managed Care Initiatives
Expand STAR and STAR+PLUS to South Texas
(Proposed Hidalgo Service Area)
Effective date
March 2012
Process
Competitive Procurement
General revenue impact
$319.4 million in cost savings
Proposed
Hidalgo Service Area Counties
Duval
Hidalgo
Jim Hogg
Maverick
Cameron
McMullen
Starr
Webb
Willacy
Zapata
Medicaid provides medical coverage to eligible persons
The federal government pays just under 60 cents of every dollar spent on Medicaid services
Funding is open-ended since coverage is an entitlement for those who are eligible
Eligible populations and eligibility criteria is listed for your information
Caseload info, if asked:
2,623,215 individuals were enrolled in Medicaid in December 2008
1,741,075 of these receive Children’s Medicaid

26. Proposed Medicaid Managed Care Initiatives
Convert PCCM Areas to STAR Program
(164 counties)
Effective date
March 2012
Process
Competitive Procurement
General revenue impact
$61.2 million in cost savings
Create a statewide Dental
Managed Care Model for Medicaid
Effective date
March 2012
Process
Competitive Procurement
General revenue impact
$101.6 million in cost savings
Medicaid provides medical coverage to eligible persons
The federal government pays just under 60 cents of every dollar spent on Medicaid services
Funding is open-ended since coverage is an entitlement for those who are eligible
Eligible populations and eligibility criteria is listed for your information
Caseload info, if asked:
2,623,215 individuals were enrolled in Medicaid in December 2008
1,741,075 of these receive Children’s Medicaid

27. Proposed Medicaid Managed Care Initiatives
Include Inpatient Hospital Services in STAR+PLUS
Effective date
March 2012
Process
Rule/Policy change
General revenue impact
$28.9 million in cost savings
Carve Prescription Drugs into Managed Care
Effective date
March 2012
Process
Competitive procurement
General revenue impact
Option 1 State-specified formulary $56.8 million in cost savings
Option 2 MCO-specified formulary $72.7 million in cost savings
Medicaid provides medical coverage to eligible persons
The federal government pays just under 60 cents of every dollar spent on Medicaid services
Funding is open-ended since coverage is an entitlement for those who are eligible
Eligible populations and eligibility criteria is listed for your information
Caseload info, if asked:
2,623,215 individuals were enrolled in Medicaid in December 2008
1,741,075 of these receive Children’s Medicaid

28. Fee-for-Service (FFS)
Managed Care vs. FFS
Managed Care
Fee-for-Service (FFS)
Provider Directory
Includes Primary Care Providers (PCPs)/ Specialists/LTSS.
Member Handbook
Includes phone numbers for assistance, descriptions of benefits, complaints, and appeal information.
Unlimited Prescriptions for adults (non-duals)
Value-Added Services (varies by HMO)
Such as 24-hour nurse lines, additional transportation help, cell phones for high-risk clients, weight loss programs, Medical Home with a PCP.
No Inpatient Limit
Member chooses PCP or is assigned a PCP
HMO must ensure access to physicians per contract requirements (emergency, urgent, routine care).
Client has to locate willing provider
Client receives a Medicaid Handbook
Limited to 3 prescriptions per month for adults
30-day Inpatient Stay per Spell of Illness (except for transplants)
No Primary Care Provider

29. Steve Aragón Chief Counsel | Health & Human Services Commission
Tel |