MANAGED CARE MANAGED CARE STRATEGIES FOR STRATEGIES FOR

FINANCING & DELIVERING FINANCING & DELIVERING

HIV SERVICESHIV SERVICES

JULIA HIDALGOJULIA HIDALGOPOSITIVE OUTCOMES, INC. &POSITIVE OUTCOMES, INC. &

GEORGE WASHINGTON UNIVERSITYGEORGE WASHINGTON UNIVERSITY

MANAGED CARE ELEMENTSMANAGED CARE ELEMENTS•• CombinesCombines financing and delivery systems financing and delivery systems•• Patients are Patients are enrolled enrolled in a managed care plan with a in a managed care plan with a

defined defined benefits benefits packagepackage•• Patients usually select or are assigned aPatients usually select or are assigned a primary care primary care

provider provider (PCP)(PCP)•• PCPs act as PCPs act as gatekeepers gatekeepers who determine access to who determine access to

specialists, hospital care, and other servicesspecialists, hospital care, and other services•• Emphasis on Emphasis on preventingpreventing illness and illness and managingmanaging disease disease•• Payment is typically paid on a Payment is typically paid on a prospective, capitatedprospective, capitated

basis, but fee-for-service payments may be made for basis, but fee-for-service payments may be made for some servicessome services

Some MCO goals...Some MCO goals...•• Clearly define patient Clearly define patient

populations, modify their populations, modify their care seeking behavior, & care seeking behavior, & predict their care use & predict their care use & costscosts

•• Identify high risk & high Identify high risk & high cost patientscost patients

•• Identify & minimize Identify & minimize financial riskfinancial risk

•• Maximize profitabilityMaximize profitability•• Organize systems of care Organize systems of care

that achieve these goalsthat achieve these goals

ADVERSE SELECTIONADVERSE SELECTION

Attracting members who are sicker than the general Attracting members who are sicker than the general populationpopulation

•• This results in higher than budgeted expenses for This results in higher than budgeted expenses for the planthe plan

•• Managed care plans may avoid enrolling Managed care plans may avoid enrolling individuals who are sicker than the “average” individuals who are sicker than the “average” patientpatient

•• Some managed care plans may avoid enrolling Some managed care plans may avoid enrolling HIV-infected individuals because of their HIV-infected individuals because of their relatively high treatment costrelatively high treatment cost

MCO FUNCTIONSMCO FUNCTIONS•• MARKETINGMARKETING•• MEMBERSHIP ACCOUNTINGMEMBERSHIP ACCOUNTING

•• Group billing, contracts, enrollment, and PCP assignmentGroup billing, contracts, enrollment, and PCP assignment

•• NETWORK OPERATIONSNETWORK OPERATIONS•• Provider credentialing and contractsProvider credentialing and contracts

•• MEMBERSHIP SERVICESMEMBERSHIP SERVICES•• Education and grievancesEducation and grievances

•• CLAIMS ADMINISTRATIONCLAIMS ADMINISTRATION•• MISMIS•• FINANCEFINANCE

•• Budget projections and capitation ratesBudget projections and capitation rates

•• UTILIZATION MANAGEMENT & QUALITY ASSURANCEUTILIZATION MANAGEMENT & QUALITY ASSURANCE

MEMBER RIGHTS & MEMBER RIGHTS & RESPONSIBILITIESRESPONSIBILITIES

•• Enrollment (marketing & assignment)Enrollment (marketing & assignment)•• Member Handbook & Membership DepartmentMember Handbook & Membership Department•• Primary care provider (PCP) assignmentPrimary care provider (PCP) assignment•• Benefits packageBenefits package•• Availability, accessibility, & continuityAvailability, accessibility, & continuity•• Grievance proceduresGrievance procedures•• Confidentiality & disclosureConfidentiality & disclosure•• Member satisfactionMember satisfaction•• DisenrollmentDisenrollment

PLAN SELECTION CRITERIAPLAN SELECTION CRITERIA

•• Established provider networkEstablished provider network•• Geographic coverageGeographic coverage•• Sufficient capacity & accessible servicesSufficient capacity & accessible services•• Acceptable marketing, enrollment, grievance, Acceptable marketing, enrollment, grievance,

& disenrollment procedures& disenrollment procedures•• Established quality assurance programEstablished quality assurance program•• Fiscal solvencyFiscal solvency•• Established administrative & governance Established administrative & governance

structurestructure•• Meets State managed care licensure criteriaMeets State managed care licensure criteria

MANAGED CARE MANAGED CARE CONTRACTING MODELSCONTRACTING MODELS

•• Staff: Staff: Physicians are HMO employeesPhysicians are HMO employees•• Group: Group: Physicians are members of a single or Physicians are members of a single or

multi-specialty group practice that contracts multi-specialty group practice that contracts with the managed care plan with the managed care plan

•• IPA: IPA: Either the physician contracts directly Either the physician contracts directly with the plan or through a physician with the plan or through a physician corporationcorporation

•• Network: Network: The plan contracts with group The plan contracts with group practices, IPA-physician corporations, and/or practices, IPA-physician corporations, and/or with individual physicianswith individual physicians

OTHER MANAGED CARE OTHER MANAGED CARE CONTRACTING MODELSCONTRACTING MODELS

•• Point of Service (POS): Point of Service (POS): Managed care plan offers members Managed care plan offers members the option to receive services from non-plan providers at a the option to receive services from non-plan providers at a reduced rate of coveragereduced rate of coverage

•• Preferred Provider Organization (PPO): Preferred Provider Organization (PPO): A system that A system that contracts with providers at discounted fees; members may contracts with providers at discounted fees; members may seek care from non-participating providers, but at higher seek care from non-participating providers, but at higher co-pays or deductiblesco-pays or deductibles

•• Integrated Service Network (ISN): Integrated Service Network (ISN): A collaboration of either A collaboration of either PCP (horizontal) or primary, specialty, and inpatient PCP (horizontal) or primary, specialty, and inpatient providers (vertical) for managed care purposesproviders (vertical) for managed care purposes

•• Physician Hospital Organization (PHO):Physician Hospital Organization (PHO): legal entity legal entity between hospital and physicians to contract with plansbetween hospital and physicians to contract with plans

FINANCING & DELIVERY OF SERVICES IN AFINANCING & DELIVERY OF SERVICES IN A MEDICAID MANAGED CARE ENVIRONMENTMEDICAID MANAGED CARE ENVIRONMENT

MCMCOO AGENCIES AGENCIES

& & PROVIDERPROVIDER

S SUB-S SUB-CONTRACT CONTRACT

WITH WITH MCOs TO MCOs TO PROVIDE PROVIDE

SERVICES, SERVICES, MAY BEAR MAY BEAR

SOME SOME RISKRISK

GRANT-GRANT-FUNDED FUNDED

AGENCIES AGENCIES BEARING BEARING NO RISK NO RISK PROVIDE PROVIDE

WRAP-WRAP-AROUND AROUND SERVICES SERVICES THROUGH THROUGH LINKAGE LINKAGE

AGREEMENTAGREEMENTSS

COVERED SERVICES COVERED SERVICES CAPITATED, MCO CAPITATED, MCO

BEARS RISKBEARS RISK

MEDICAIMEDICAIDD

FFS PROVIDERS OF CARVED-

OUT SERVICES

Provider NetworkProvider Network

FFSFFS

FFSFFSCAPCAP

CAPCAP

LALA LALA

WHAT IS CAPITATION?WHAT IS CAPITATION?

•• A reimbursement method for health and associated A reimbursement method for health and associated services in which a provider is paid a fixed amountservices in which a provider is paid a fixed amount•• Payment is usually monthly for each member servedPayment is usually monthly for each member served•• Payment occurs without regard to the actual number or Payment occurs without regard to the actual number or

services provided to the memberservices provided to the member

•• Capitation is a:Capitation is a:•• Means for payment for expected servicesMeans for payment for expected services•• Budgeting toolBudgeting tool•• Management toolManagement tool•• Cost control tool Cost control tool

CAPITATION VERSUS FFSCAPITATION VERSUS FFS

EELLEEMMEENNTT CCAAPPIITTAATTIIOONN FFEEEE FFOORR SSEERRVVIICCEE

CCOONNCCEEPPTT Payment of a fixed amountper patient usually monthly;services are expenses againstrevenue

Fee (revenue) for each serviceprovided

FFUUNNDDIINNGG Based on the number ofenrollees, not the number ofservices

Based on the number of serviceunits provided, not related to thenumber of patients

IINNCCEENNTTIIVVEE Control utilization andprovide fewer and/or lesscostly services; provide earlydetection and treatment tolower total cost of care

Provide more services or chargemore per service; sick patientsrequire more services and generatemore revenue

MONTHLY CAPITATIONMONTHLY CAPITATION

Utilization x Cost

12 months x number of members= PMPMPMPM

Utilization = number of units of service for each benefit for number of enrolled members

Cost = average cost per unit of service

PMPM = per member per month capitation payment

ASSUMPTIONS UNDERLYINGASSUMPTIONS UNDERLYING CAPITATION RATE SETTINGCAPITATION RATE SETTING

•• Covered and excluded services are clearly definedCovered and excluded services are clearly defined•• The average utilization rate per service is known or can be The average utilization rate per service is known or can be

accurately projectedaccurately projected•• If the average utilization rate varies by population group, their If the average utilization rate varies by population group, their

rates are known or can be projectedrates are known or can be projected•• The cost per service is known and is unlikely to vary during the The cost per service is known and is unlikely to vary during the

contract periodcontract period•• Administrative costs are accurately defined (Administrative costs are accurately defined (i.e.,i.e., there are no there are no

hidden costs) and adjustment can made in the PMPM for those hidden costs) and adjustment can made in the PMPM for those costscosts

•• Additional revenue (Additional revenue (i.e., i.e., investments, grant income) may be investments, grant income) may be used to supplement the PMPMused to supplement the PMPM

•• Discounts may be taken for “efficiency”Discounts may be taken for “efficiency”

CAPITATION RISK ADJUSTERSCAPITATION RISK ADJUSTERS

•• Geographic unit (e.g., county)Geographic unit (e.g., county)

•• Medicaid assistance categoryMedicaid assistance category

•• Age Age

•• GenderGender

•• Spectrum of HIV disease (i.e., HIV Spectrum of HIV disease (i.e., HIV asymptomatic, symptomatic, AIDS)asymptomatic, symptomatic, AIDS)

•• Other factors (e.g., homelessness)?Other factors (e.g., homelessness)?

OTHER RISK PROTECTION STRATEGIESOTHER RISK PROTECTION STRATEGIES

•• Reinsurance Reinsurance •• Stop LossStop Loss

•• Establishes an upper limit on annual health care costs for an Establishes an upper limit on annual health care costs for an individual memberindividual member

• • Aggregate stop loss sets an upper limit for membersAggregate stop loss sets an upper limit for members•• Managed care plans usually purchase reinsuranceManaged care plans usually purchase reinsurance•• Providers can negotiate stop loss with the planProviders can negotiate stop loss with the plan

•• Risk CorridorsRisk Corridors•• Establishes a “ceiling” and “floor” of riskEstablishes a “ceiling” and “floor” of risk•• Loss greater than the predetermined amount is reimbursed (e.g., Loss greater than the predetermined amount is reimbursed (e.g.,

10% over costs)10% over costs)•• Profit greater than the predetermined ceiling is returned to the planProfit greater than the predetermined ceiling is returned to the plan

UTILIZATION MANAGEMENTUTILIZATION MANAGEMENT

•• Prior or pre-authorization (e.g., expensive or commonly over-used Prior or pre-authorization (e.g., expensive or commonly over-used services)services)

•• Medical necessity, contracted facility, cost-effectivenessMedical necessity, contracted facility, cost-effectiveness

•• ReferralsReferrals•• Part of gate-keeper function of PCPPart of gate-keeper function of PCP

•• Concurrent reviewsConcurrent reviews•• Is the ongoing service too long and can other services be substituted?Is the ongoing service too long and can other services be substituted?

•• FormulariesFormularies•• Open versus closed formularies, generics, cheapest delivery systemOpen versus closed formularies, generics, cheapest delivery system

•• Claims reviewClaims review•• Appropriateness reviewAppropriateness review

•• Provider selection and profilingProvider selection and profiling

APPROACHES TO MANAGING HIV-APPROACHES TO MANAGING HIV-INFECTED RECIPIENTS IN US INFECTED RECIPIENTS IN US

MEDICAID MANAGED CARE SYSTEMSMEDICAID MANAGED CARE SYSTEMS

•• ““Mainstream” recipientsMainstream” recipients

•• Carve-out recipients into fee-for-serviceCarve-out recipients into fee-for-service

•• Carve-out HIV-related servicesCarve-out HIV-related services

•• Enhance capitation ratesEnhance capitation rates

• • ““Mixed” approach based on assistance category or Mixed” approach based on assistance category or county of residencecounty of residence

NY HIV SPECIAL NEEDS PLANS (SNPs)NY HIV SPECIAL NEEDS PLANS (SNPs)

• • AIDS Day Services Planning, Inc.AIDS Day Services Planning, Inc.

•• CommunityCare PartnersCommunityCare Partners

•• Fidelis Care New YorkFidelis Care New York

•• HealthFirst PHSP, Inc.HealthFirst PHSP, Inc.

•• Health Pact, LLCHealth Pact, LLC

•• Healthy FuturesHealthy Futures

•• MetroPlus Health PlanMetroPlus Health Plan

•• New York Presbyterian Healthcare SystemNew York Presbyterian Healthcare System

NY MAINSTREAM PLANS NY MAINSTREAM PLANS VERSUS HIV SNPsVERSUS HIV SNPs

ELEMENT MAINSTREAM HIV SNPsCONCEPT General disease

management approach,with a prevention emphasis

HIV system of care, with an emphasis onestablishing a clinically appropriate,comprehensive, integrated, and “seamless” array ofservices

ORGANIZATION Mix of for-profit and not-for-profit corporations

Mix of for-profit, not-for-profit, and historical HIVproviders

GOVERNANCE Limited role of consumerson governing board

At least 20% of governing board must beenrollees

ENROLLMENT Goal is mandatoryenrollment

Voluntary enrollment for now

PCP’s ROLE PCP is gate-keeper HIV care team leader, PCP meetdefined criteria as an HIV specialist

COVEREDSERVICES

Benefit package similar tofee-for-service

Extensive benefit package designed to meet theneeds of HIV-infected members and their children;with emphasis on integrating capitated, carved outfee-for-service, and grant funded services; flexiblepackage that includes new advances in HIVmanagement

NY MAINSTREAM PLANS NY MAINSTREAM PLANS VERSUS HIV SNPsVERSUS HIV SNPs

ELEMENT MAINSTREAM HIV SNPsNETWORK State requires network that

meets general health careneeds

State requires HIV-experienced network includingPCPs, specialists, acute care, mental health,substance abuse, case management, other supportservices, treatment education, andCTS and prevention programs. Provisions are madefor access to out-of-plan specialists when needed tomeet enrollees’ needs

NETWORKSTANDARDS

General network access andother standards

General, as well as HIV-specific access, availability,and other standards, including provisions for“special populations”

ROLE OF HIVEXPERIENCEDCLINICALPROGRAMS &SUPPORTSERVICEAGENCIES

Limited role Clearly articulated role; SNPs must include theseagencies in their networks through contracts orlinkage agreements established prior tocertification; SNPs must demonstrate how they willassure the participation of and coordination withthese agencies

NY MAINSTREAM PLANS NY MAINSTREAM PLANS VERSUS HIV SNPsVERSUS HIV SNPs

ELEMENT MAINSTREAM HIV SNPsQUALITYASSURANCE

General processmeasures adopted byMedicaid and otherinsurers

HIV-specific standards of care, HIVcredentialing of SNP staff and network, HIVeducation for SNP staff and network,emphasis on confidentiality and security ofmedical records

FINANCING Health plans pay cost ofdevelopment

State supports portion of development costs

CAPITATIONSTRATEGY

No disease specific riskadjusters (assistancecategory, county, age,gender)

Enhanced rate payment system withHIV/AIDS risk adjusters, as well asassistance category, county, age, gender

SUMMARY FULL CAPITATION RATES SUMMARY FULL CAPITATION RATES FOR HIV SNP PREMIUM GROUPSFOR HIV SNP PREMIUM GROUPS

HIV NON-AIDS AIDS

REGIONADC/HR

Adult

ADC/HR

Child

SSIAdult

SSIChild

ADC/HR

Adult

ADC/HR

Child

SSIAdult

SSIChild

NYC $459 $737 $2,187 $2,867

Down-stateMetro

$610 $625 $1,613 $2,356

Rest OfState

$413 $534 $1,016 $1,191

State-wide

$246 $609 $1,302 $1779

Source: Feldman, et.al. Developing a managed care delivery system in New York State for Medicaid recipients with Source: Feldman, et.al. Developing a managed care delivery system in New York State for Medicaid recipients with HIV. HIV. American Journal of Managed CareAmerican Journal of Managed Care. 5(11), 1457-1465, 1999.. 5(11), 1457-1465, 1999.

For more HIV-related resources, please visit www.hivguidelines.org