1. MAHAP General Session February 19, 2010
Managed Care 101
Kelly Partin
MAHAP General Session February 19, 2010

2. MAHAP General Session February 19, 2010
Agenda
Key Terms
Types of Insurance
Inside an Insurance Company
Carve Outs (Pharmacy, Mental Health, Vision)
MAHAP General Session February 19, 2010

3. MAHAP General Session February 19, 2010
Key Terms - Network
Provider Network – The list of providers who are contracted or enrolled with a Health Insurance Company or Government Agency to provide care for a given set of people.
Participating – (Par Provider / Contracted Provider) The term used to describe providers that are part of a Provider Network.
MAHAP General Session February 19, 2010

4. Key Terms Insurance Types
Show me the money.
Risk – Who ultimately has to pay for the claim. The group who pays the provider is frequently not the one who has to budget for the cost of medical care!
Upside Risk – A method used in contracting to provide incentives the providers to keep health care costs low.
Risk Pool – An account of funds set aside that are designated for one or multiple purposes
MAHAP General Session February 19, 2010

5. MAHAP General Session February 19, 2010
Key Terms - Claims
HCFA 1500 – The Standard Claim form for a Professional Claim
UB 04 – the Standard Claim Form for a Facility
Adjudication – The process of entering the claim information into a claims processing software program, reviewing the claim, and paying or denying a claim
Auto Adjudicate – Adjudicating a claim without a person looking at the individual claim using a rules based software system
MAHAP General Session February 19, 2010

6. Types of Health Insurances (Product Lines)
MAHAP General Session February 19, 2010

7. Types of Insurances Overview
Traditional Insurance (Blue Cross Blue Shield)
Health Maintenance Organizations (HMO)
Preferred Provider Organizations (PPO)
Government Programs (traditional Medicare, Medicaid, Tri-Care)
Odds and Ends: Worker’s Compensation, Motor Vehicle, Gap Plans for Medicare
MAHAP General Session February 19, 2010

8. Types of Insurances Traditional Insurance
Origin: 1929, Physician groups began offering medical care to groups of people at a flat rate (per member per month)
Example: Blue Cross Blue Shield
Insurance Company is at Risk
MAHAP General Session February 19, 2010

9. Types of Insurances Traditional Insurance, cont
Mostly Group Coverage
Deductibles and % co-pays
Very little if any medical management
Large Enrolled Network
MAHAP General Session February 19, 2010

10. MAHAP General Session February 19, 2010
Key Terms
PPO – Preferred Provider Organization – A company that contracts with health care providers to create a network. They then lease the network to employer groups (via TPAs) health plans. Sometimes they can be owned / operated by a TPA (Aetna, Cigna) or operate independently (Great West Life, Multiplan)
Third Party Administrator – An entity that provides Member Services & Claims Processing (examples Meritain Health, CAM Administrators, Pharmacare)
MAHAP General Session February 19, 2010

11. Types of Insurances PPO
Employer / Group based insurance
Employer is generally at risk
Benefits are dependent upon individual group – Vary GREATLY
Look to a Plan Document for benefit coverage
Governed by ERISA - Federal
MAHAP General Session February 19, 2010

12. MAHAP General Session February 19, 2010
Process PPOs
Employer group contracts for a network ( PPO) and a TPA to manage the benefit
PPO prices the claim and forwards onto the TPA (from time to time the TPA will receive the claim and forward to multiple PPOs to price and pick which is best)
TPA pays the claim and bills the employer for the cost of the claim + a fee
TPA prints the ID Card
MAHAP General Session February 19, 2010

13. Types of Insurances PPO cont.
Some to no Medical Management
Network larger than HMO and smaller than Indemnity
Some provider credentialing
MAHAP General Session February 19, 2010

14. MAHAP General Session February 19, 2010
Silent PPOs
Silent PPO does not have the logo on the card.
Rarely drives business to the provider, just allows the payer to take a discount after the fact
Modify Contract language to require logo on card
Example: Beech Street
MAHAP General Session February 19, 2010

15. MAHAP General Session February 19, 2010
Wrap Around Networks
Wrap Around Network – A health care provider Network used as a second option to a primary, more preferred health care provider.
Used for many reasons, which can include:
Filling in holes, such as creating a National Network for traveling members
Provide a more comprehensive network while directing patients to a more cost effective network.
MAHAP General Session February 19, 2010

16. MAHAP General Session February 19, 2010
Wrap Around Networks
Examples:
Botsford’s PPO network – Botsford is the preferred provider with Blue Cross as a wrap
Health Plus uses a large PPO for out of state coverage
Humana’s Commercial Product Line uses Cofinity as a wrap
MAHAP General Session February 19, 2010

17. High Deductible Health Plan
a.k.a. Consumer Driven Health Plan (CDHP) is a benefit design that allows for high deductibles that encourages ownership of medical care
Idea: Consumers will shop around to get the least expensive and medically necessary medical care
MAHAP General Session February 19, 2010

18. High Deductible Health Plan cont
Employers or employees can put money in a Health Savings Account (not MSA) that rolls over year to year to be used toward medical expenses
Year
Min Deductible (Single)
Min Deductible (Family)
Max Out of Pocket Expense (Single)
Max Out of Pocket Expense (Family) 07
$1,100
$2,200
$5,500
$11,000 08
$5,600
$11,200 09
$1,150
$2,300
$5,800
$11,600 10
$1,200
$2,400
$5,950
$11,900
MAHAP General Session February 19, 2010
From IRS Publications

19. Key Terms – Medical Management
Referral – A written document from one provider to another (Family Physician refers a patient to an ENT)
Authorization – An approval from a Insurance Company that the services are considered medically necessary and therefore a covered benefit
HEDIS – Health Employer Data Information Set – Established by NCQA, a set of data elements to score a Health Plan on the quality of care members receive
MAHAP General Session February 19, 2010

20. Types of Insurances HMO
Insurance Company is at Risk
May share risk with providers, but generally limited to upside risk
May share risk with Employer Group
Licensed by Office of Financial and Insurance Regulation – offers the HMO consumer guide (
MAHAP General Session February 19, 2010

21. Types of Insurances HMO, Cont.
Benefits are generally more comprehensive with flat co-pays and low deductibles (regulated)
May now offer CDHPs – not as common
Heavy Medical Management including PCPs
Smaller networks
Provider credentialing (requirement of NCQA)
MAHAP General Session February 19, 2010

22. MAHAP General Session February 19, 2010
Staff Model HMO
Was the original design of an HMO
The physician group is at risk
One stop shop for comprehensive care
Sometimes called Clinic System
Difficult to sustain because of low numbers of membership
MAHAP General Session February 19, 2010

23. MAHAP General Session February 19, 2010
PACE Program
Members / Patients go to a center for medical care, coordinated by an employed physician (PCP) and receive coordinated comprehensive medical care
Covered services include: all medical care (including hospital, home health, specialty), DME, home modifications, many meals, social services, medical transportation, therapy, personal care attendants, hospice care, prescriptions, adult day care, & nursing home care (if needed).
MAHAP General Session February 19, 2010

24. Qualify for PACE Program
Live in the service area
Be 55 years or older
Medically qualify for skilled nursing care
Qualify for Medicare
Capitated benefit funded by Medicare and Medicaid
MAHAP General Session February 19, 2010

25. PACE Programs in Michigan
Henry Ford Health System-Center for Senior Independence
Care Resources (Grand Rapids)
If we have a PACE patient at Botsford – Call the appropriate PACE program for approval – they will be the one paying the bill!
MAHAP General Session February 19, 2010

26. MAHAP General Session February 19, 2010
Indemnity
PPO
HMO
Who is at Risk?
Insurance Company
Employer Group (ERISA)
Who has the insurance?
Group Coverage, Some individual
Almost all group coverage
Benefit Structure
deductibles, % co-pay
Ranges greatly
Generally Flat $ co-pays, comprehensive coverage
Medical Management
No Medical Management
Some medical management
Heavy Medically Mgmt & (PCP)
Network
Purely Enrolled, Large network
Some preferred providers, some provider credentialing
Many preferred providers, provider credentialing
Accreditation
None
Some, usually URAC
Many are NCQA, some are JCAHO
MAHAP General Session February 19, 2010

27. MAHAP General Session February 19, 2010
Medicare
Wiki: 7/1965: President Johnson signing the Medicare amendment. Harry Truman and his wife, Bess, are on the far right.
Traditional Medicare ID Card
MAHAP General Session February 19, 2010

28. Types of Government Coverage Medicare
To qualify you must
Be 65 years or older OR disabled for 24 months OR have end stage renal failure
AND have worked and paid FICA taxes for 40 quarters (prorated for disabled) or have a spouse who has worked and paid FICA taxes
No Financial requirements
No requirement to reside in the U.S.
MAHAP General Session February 19, 2010

29. Types of Government Coverage Medicare, cont.
Funded by the Federal Government
Coverage is not medically managed
Providers simply enroll (no credentialing)
No Accreditation
Large Deductibles and co-insurance
Entitlement Program
MAHAP General Session February 19, 2010

30. Types of Government Coverage Medicare Parts
Part A – Hospital and Facility Coverage – Usually free (UB claims)
Part B - Physician Services and other professional (ambulance, physician, HCFA claims)
Part C – Simply funds the Medicare Advantage Plan
Part D – Prescription Plans – All coordinated through a Carve Out Pharmacy Benefit Manager (PBM)
MAHAP General Session February 19, 2010

31. Types of Government Coverage Medicare Gap Plans - Medigap
Because Medicare covers very little –Medigap is born
Follows Medicare Primary Payor Rules (if Medicare says Ok, I’ll pay..)
Plans are required to follow a certain benefit design determined by OFIS – Plans A through J
MAHAP General Session February 19, 2010

32. Medicare Advantage Plans
Pays like Medicare (except bad debt)
About 20% of Medicare enrollees are in a Medicare Advantage Plan
Many times offer richer benefits (lower co-pays, deductibles) and additional coverage such payment for gyms
Businesses are offered tax incentives to enroll retirees.
MAHAP General Session February 19, 2010

33. MAHAP General Session February 19, 2010
Traditional Medicare
Medicare Private Fee for Service (Deemed)
Medicare PPO
Who is at Risk?
Federal Government
Insurance Company
Benefit Structure
deductibles, % co-pay
Ranges greatly, Better than Medicare
Medical Management
No Medical Management
Some medical management
More Medical Management
Network
Purely Enrolled, Large network
Any provider who is willing to see that patient for Medicare services - NOT CONTRACTED
Some preferred providers, some provider credentialing
Accreditation
None
Many are NCQA, some are JCAHO
MAHAP General Session February 19, 2010

34. Types of Government Coverage Medicaid
Multiple Programs
Some for Disabled or elderly
Others for low income dependents with children
Must have financial need (MedicAID)
Requirements for residency, citizenship, etc.
Mostly administered by State (SSI administered by Social Security Admin.)
MAHAP General Session February 19, 2010

35. Types of Government Coverage Medicaid cont.
Funded by the Federal Government and State Government
Coverage is not medically managed
Providers simply enroll (no credentialing)
No Accreditation
Low co-pays if any
Payor of Last Resort
MAHAP General Session February 19, 2010

36. MAHAP General Session February 19, 2010
Traditional Medicaid
Medicaid Managed Care
Who is at Risk?
State Government (some Federal match)
Insurance Company
Benefit Structure
Comprehensive Coverage and low co-pays
Medical Management
No Medical Management
Heavy Medical Management (PCPs are REQUIRED)
Network
Purely Enrolled, Large network
Contracted Credentialed Providers
Accreditation
None
Many are NCQA, some are JCAHO
MAHAP General Session February 19, 2010

37. Children’s Special Health Care Services (CSHCS)
A program through the State of Michigan (available in all states) that offers Case Management services to children who are disabled.
May also offer additional coverage based upon financial need. (camps, ramps, medical care, etc.)
Does not need to qualify financially, however, may cost a nominal fee if not on Medicaid.
MAHAP General Session February 19, 2010

38. Children’s Special Health Care Services (CSHCS), cont.
To qualify
Michigan Resident
US citizen or documented non-citizen admitted for permanent residence or a non-citizen legally admitted migrant farm worker (i.e. seasonal agricultural worker).
Age:   Children must have a qualifying medical condition and be 20 years old or under.  Person 21 and older with cystic fibrosis or certain hereditary blood coagulation disorders commonly known as hemophilia may also qualify.
Qualifying Medical condition:   A MDCH medical consultant reviews each case to determine eligibility.  Severity and chronicity of the person's condition as well as the need for treatment by a specialist are factors considered.  More than 2,500 diagnoses are potentially eligible.  Click here for a list of these diagnoses
CSHCS Family Phone Line at
MAHAP General Session February 19, 2010

39. Other Government Programs
Tri-Care
Government program for Military
Offers a PPO network and a smaller HMO network (based upon Need)
Enrollment based only
MAHAP General Session February 19, 2010

40. Odds and Ends Worker’s Compensation A requirement for most businesses
Some companies use a PPO network (First Health)
State Fee Schedule
MAHAP General Session February 19, 2010

41. Odds and Ends Motor Vehicle Coverage
Most policies in Michigan have a caveat that the other Health Insurance Coverage is PRIMARY (keeps cost of auto insurance lower)
Many use Cofinity (a.k.a. PPOM) as a network when necessary
MAHAP General Session February 19, 2010

42. MAHAP General Session February 19, 2010
Internal Structures
MAHAP General Session February 19, 2010

43. Internal Structures for Traditional Insurances and HMOs
Provider Contracting & Provider Relations
Claims Department
Member Services
Medical Management
Information Technology (no slide)
Underwriting (in Commercial) (no slide)
MAHAP General Session February 19, 2010

44. Provider Contracting & Provider Relations
HMOs and PPOs contract with Providers to create a network.
Provider Relations create a Provider Manual that explains policies and procedures
Responsible for provider communications, often a requirement of Accreditation
MAHAP General Session February 19, 2010

45. MAHAP General Session February 19, 2010
Claims Department
Enters a claim (electronically, OCR, data entry) into a software program
Requests additional information from Provider, denies, or pays the claim
In many organization, large number of claims (80% and more) are auto adjudicated – Never to be seen by a human.
MAHAP General Session February 19, 2010

46. MAHAP General Session February 19, 2010
Member Services
Member is anyone covered under the insurance
Many times resolves complaints and grievances
Member Services is responsible for all member communications
Newsletters (requirement for Accreditation)
Member Handbook
Call Center – outgoing
MAHAP General Session February 19, 2010

47. MAHAP General Session February 19, 2010
Medical Management
GOAL: Improve member health thus reducing medical care
Will track HEDIS Measures and Bed Days / # of admissions
Medical Director (MD / DO)
Nurses will review high dollar services (inpatient admissions, some surgeries, etc.) and provide a prior authorization for care
Develop policies regarding what is considered “medically necessary”
May use an Imaging Service (AIM) to review radiology services for prior authorizations
MAHAP General Session February 19, 2010

48. Medical Management Quality
80 20 Rule: 80% of your costs come from 20% of the members
Improve the care members receive by reducing barriers
Increase the number of members who receive HEDIS measures tracked
Patients may be eligible for added benefit
MAHAP General Session February 19, 2010

49. Medical Management Case Management
80 20 Rule: 80% of your costs come from 20% of the members
Telephonic Case Management
Typically manage Cardiac, some Asthma, Cancer, Transplant, and other chronic patients
Patients may be eligible for added benefit
MAHAP General Session February 19, 2010

50. MAHAP General Session February 19, 2010
WHY ?
Reduce costs!
Improve Medical Care
US News Top 10 Commercial in MI 09-10
Grand Valley Health Plan – 89.4
Priority Health 86.9
HealthPlus of MI 86.1
Physicians Health Plan of Mid Michigan 85.7
HAP 85.4
BCN 84.5
Newsweek, Sunday, November 9th
MAHAP General Session February 19, 2010

51. MAHAP General Session February 19, 2010
Carve Outs
HMOs and employer groups will contract for specialty health care with a Carve Out organization in addition to the traditional Medical Care
Mental Health (Value Options)
Pharmacy Benefit Management (PBM)
Transportation for Medicaid
MAHAP General Session February 19, 2010

52. MAHAP General Session February 19, 2010
Carve Outs PBMs
Used because
Unique Network
Codes and costs of drugs change weekly
99.9% of claims auto adjudicated
Benefit Structures are challenging
MAHAP General Session February 19, 2010

53. Carve Outs Formularies
Step Formularies
Take this medication before you take the more costly medication
Open Formularies
Patient can take whatever is prescribed, but the cost is different:
$15 generic, $30 brand, $45 non-preferred brand
MAHAP General Session February 19, 2010

54. MAHAP General Session February 19, 2010
Contact
Kelly Partin
Financial Managed Care Analyst
(248)
MAHAP General Session February 19, 2010