A number of states have used the flexibility of the Medicaid program to develop innovative payment and delivery systems designed to coordinate and improve quality of care. This brief, based on site visits from Nov. 2009 through March 2010, highlights care coordination and related efforts in five states: Alabama, Oklahoma, Oregon, Pennsylvania and Washington State. Such efforts by states to realign the provider payment and delivery systems are key to improving Medicaid and to successfully implementing coverage expansions under the health reform law.
The text below is an excerpt from the complete document. Read the entire report in PDF format.
Medicaid is a vital program and component of the U.S. health care system. It currently covers approximately 60 million Americans, including one in three children. Medicaid is expected to become an even broader method of coverage for low-income people as a result of the Patient Protection and Affordable Care Act (ACA). The program is jointly financed by states and the federal government, but is administered by states within broad federal guidelines. States have the flexibility to determine who is eligible, what benefits are covered, how care is delivered, and how and what providers are paid. As a result, Medicaid programs across the country differ significantly. A number of states have used their flexibility to develop innovative payment and delivery system reforms designed to coordinate and improve quality of care.
Most states have increasingly relied on different forms of managed care to organize and deliver services to Medicaid beneficiaries. Currently, about 70 percent of Medicaid enrollees receive some or all of their services through managed care. One key principle of managed care is to improve access to and coordination of care by ensuring that enrollees have a designated primary care provider and by relying heavily on preventive and primary care. Under traditional risk-based managed care, health plans contract with networks of providers and are paid a fixed monthly capitation payment for each enrollee. The plans then assume financial risk for the patient and are required to provide a defined set of services. Capitation can give states more predictability over costs. States can also use an array of quality measures and performance incentives to help hold managed care plans accountable for the quality of care they provide to Medicaid enrollees.
Primary Care Case Management (PCCM) programs are a blend of fee-for-service and conventional managed care. The state contracts with a provider – usually the Medicaid beneficiary’s primary care physician – to provide basic care and to coordinate and authorize any needed specialty care or other services from other physicians or managed care plans. The primary care physician is paid a small case management fee per-member-per-month (pmpm), and other services are usually paid on a fee-for-service basis. As of June 30, 2008, 29 states operated 35 PCCM programs with a total enrollment of 6.7 million Medicaid beneficiaries. In rural areas, where MCOs are less likely to operate due to low population density PCCM is the predominant form of Medicaid managed care.
A growing number of states are building on PCCM models to better coordinate and manage care for beneficiaries. These strategies are often referred to as medical home or patient-centered medical home (PCMH) models. Since 1998, North Carolina has been implementing the Community Care of North Carolina (CCNC), an enhanced medical home model of care that uses local non-profit community networks comprised of physicians, hospitals, social service agencies, and county health departments to provide and manage care. Within each network, each enrollee is linked to a primary care provider, who assumes responsibility of managing the patient’s care, including acute and preventive care, managing chronic illnesses, coordinating specialty care, and providing 24/7 on-call assistance. Case managers are integral members of each network, and they work in concert with physicians to identify and manage care for high-cost, high-risk patients. The networks work with primary care providers and case managers to implement a wide array of disease and care management initiatives that include providing targeted education and care coordination, implementing best practice guidelines, and monitoring results. The program has built-in data monitoring and reporting to facilitate continuous quality improvement on a physician, network, and program-wide basis. An evaluation of enhanced PCCM programs in North Carolina and four other states (AR, IN, OK, PA) indicates that they may perform equal to or better than capitated MCOs on measures of access, cost, and quality, if sufficient resources are devoted to their design, implementation, management, and funding. At the same time, the lack of direct control over hospital use – primary care providers were not at financial risk for hospitalization and the programs had no contracts with hospitals to give them leverage over utilization – was an obstacle to achieving savings.
As of 2009, at least 31 states had implemented initiatives to promote patient-centered medical homes (PCMH) for their Medicaid and Children Health Insurance Program (CHIP) enrollees. Definitions for medical homes vary, but, in broad terms, it has been characterized as a clinic or practice, led by a primary care physician or other medical professional (such as a specialist or an advanced practice nurse), that provides care that is “accessible, continuous, coordinated, and delivered in the context of family and community.” In addition, medical homes can be customized for different Medicaid sub-populations.
State Medicaid agencies have attempted to support PCMH efforts with other strategies. Specifically, some states were rethinking the role of Medicaid managed care organizations (MCOs) and disease management efforts and moving toward more direct work with providers through learning collaboratives and practice coaching. States are also implementing changes in provider payments and making investments in health information technology (HIT), including disease registries and electronic health record’s (EHR) efforts to support PCMH models. Some Medicaid agencies have also participated in multi-payer initiatives with private health plans, and now have an opportunity to partner with Medicare through the Advanced Primary Care Practice Demonstration. Despite the variation in Medicaid programs, many states were using some common strategies. Often, Medicaid PCMH models and initiatives were ahead of Medicare and many commercial payers.
End of excerpt. The entire report is available in PDF format.