PEER conducts review of Medicaid cost-control

JACKSON — During its 2009 Second Extraordinary Session, the Mississippi Legislature passed House Bill 71 (now codified as MISS. CODE ANN. Section 43-13-117 [1972]), which contained several provisions designed to control Medicaid costs, including a provision authorizing the Division of Medicaid (DOM) to implement a managed care program on or after January 1, 2010. The bill included a mandate for the PEER Committee to conduct a comprehensive performance evaluation of the program by December 15, 2011.

The executive summary of the PEER report reads in part: “Medicaid has traditionally been provided in a fee-for-service delivery system. Fee-for-service is a method for the administration of the Medicaid program whereby provider participation is open to all providers that meet state requirements. Under a fee-for-service system, providers are reimbursed for each unit of service delivered.

“A growing concern is that the traditional fee-for-service system has the potential for Medicaid providers to provide many services as an economic incentive, which may contribute to rising Medicaid costs. As a result of this concern, many states have shifted from the traditional fee-for-service system to a managed care system for their respective Medicaid programs to reduce and stabilize costs and gain greater budget control.

“The Division of Medicaid selected two providers to implement MSCAN and entered into contracts with Magnolia and UnitedHealthcare to provide these services until Dec. 31, 2013. On Jan. 1, 2011, the division implemented MSCAN, with the goals of improving access to and quality of care and reducing state expenditures for Medicaid. As of September 2011, the program had complied with all state-mandated requirements and most federal requirements. According to the division’s staff, the program is in the process of complying with the remaining federal requirements or will have complied upon completion of the first full program year.

The contracts between the Division of Medicaid and the managed care organizations established reporting requirements, including periodic reporting of financial, quality, and access data. As of September 2011, both managed care organizations (MCOs) had complied with all contractual reporting requirements to date. However, the MCOs cannot fulfill some of the contractual reporting requirements until completion of the first MSCAN program year

“The Division of Medicaid considers its capitation rates (which are designed to ensure a ten percent net savings to the state) and savings guarantee program (a financial incentive to the MCOs to save at least ten percent on inpatient hospital services) to be its cost savings performance measures.

“PEER could not calculate documented cost savings of MSCAN to date because of delays in financial reporting by the managed care organizations. This was compounded by delays in submitting encounter and claims data to the DOM data system because of coding errors. However, Milliman (the actuarial firm that DOM retained to calculate capitation rates to be paid to the MCOs) is scheduled to review actual MSCAN expenditures in comparison to capitation rates and inpatient hospital cost targets upon completion of the first complete program year of MSCAN.

“MSCAN’s actuarially sound capitation rate was calculated taking into account a 10 percent net savings to the state for MSCAN enrollees. However, due to limited program data during its implementation, actual cost savings to date cannot be calculated until completion of the Milliman capitation rate and inpatient cost targets analysis. This analysis will occur once the first MSCAN program year has been completed.

“According to the Division of Medicaid, it will utilize the primary quality tools (such as the Healthcare Effectiveness Data and Information Set [HEDIS] measures) commonly used by other states that have entered into a comprehensive MCO arrangement for Medicaid managed care. However, the DOM did not establish clearly defined objectives with associated timeframes or target levels of performance for the program prior to its implementation. Also, the State Quality Assessment and Improvement Strategy, required by federal regulation, should incorporate goals and objectives for MSCAN and the state standards for quality measurement and improvement.

“The Division of Medicaid has not completed the State Quality Assessment and Improvement Strategy, which should contain outcome measures for quality. Also, although both Magnolia and UnitedHealthcare have general measures that they plan to use to assess quality of care for MSCAN’s enrollees, neither has data regarding whether the program has improved the quality of care for MSCAN enrollees to date compared to the quality of care received by those eligible populations who did not enroll in MSCAN.

“Operational definitions of the MSCAN quality requirements are in place based on the sources of general measures that the Division of Medicaid will utilize in monitoring the quality of program providers’ service structures. However, PEER cannot perform a comprehensive review of how MSCAN has impacted quality due to a lack of clearly defined outcome measures and performance targets.

“The Division of Medicaid has several operational definitions for and performance goals for MSCAN access measures. The division noted that the primary access measure that will be utilized for MSCAN is to ensure that enrollees travel no more than sixty minutes or sixty miles in rural regions and thirty minutes or thirty miles in urban regions for access to primary care. The division also established timeframe requirements for MSCAN enrollees to receive services for urgent care, routine care, and wellness care. Both Magnolia and UnitedHealthcare measure access through the number and types of network providers and the ratio of providers by type to enrollees.

“Both managed care organizations produce GeoAccess maps that may be utilized to measure access in terms of distance and time of travel for their respective MSCAN enrollees, but these maps do not necessarily reflect enrollees’ actual utilization of active providers in the program. Furthermore, no other extensive access measures are readily available on how MSCAN might improve access to care in comparison to those eligible beneficiaries who did not enroll in MSCAN. Therefore, PEER cannot conduct a comprehensive review of how MSCAN has impacted access to date.

“PEER determined that operational definitions, access standards, and service requirements for a managed care program are in place for MSCAN. However, adequate performance data is missing on these and other indicators to allow evaluators to draw conclusions on whether managed care has improved enrollees’ access beyond the access available to those in the fee-for-service Medicaid system.

“Mississippi should take the lessons learned from implementation of MSCAN and focus on the steps needed next to prepare the program for future evaluability.

“As noted in this report, several key reports and a full year of MSCAN program data should be available in early 2012. At that point, the Division of Medicaid should ensure that it takes the actions listed on pages 52-53 of the report to facilitate future evaluability of MSCAN’s cost savings, quality of care, and access to care.”

PEER recommendations include:

• The Legislature should require the PEER Committee to monitor and evaluate the continued implementation of MSCAN by using a tiered evaluation approach.

• At the midpoint of the 2012 MSCAN program year, PEER should evaluate the State Quality Assessment and Improvement Strategy that DOM will provide to CMS in early 2012 to ensure that operational definitions as well as performance goals, objectives, and outcome measures are in place.

This review should include, but not be limited to, a review of specific outcome measures developed by the DOM such as specific HEDIS measure targets, a review of the Milliman follow-up capitation rate and inpatient cost target analysis, and a review of the analysis performed by the External Quality Review Organization upon its completion.
PEER should also compare these measures to those of other states who have similar Medicaid managed care structures and target populations.

• At the midpoint of the 2013 MSCAN program year, PEER should perform a follow-up evaluation of MSCAN. This evaluation should compare how MSCAN performed during its second full program year in comparison to the baseline data established in the initial program implementation year regarding specific quality and access outcome measures, as well as documented cost savings.

• The Division of Medicaid should amend the initial MSCAN contracts with Magnolia and UnitedHealthcare through the addition of a renewal option for one additional year (through Dec. 31, 2014) instead of utilizing another request for proposals process in 2013. This would allow PEER to perform a more comprehensive evaluation for MSCAN (see Recommendation 1) while ensuring that the Legislature has sufficient time to review the findings and allow a decision to continue or repeal the managed care program during the 2014 regular legislative session. Also, this one-year renewal option would allow for a more continuous system of care and would be less likely to disrupt or require transition for a new contracting process.

• The Division of Medicaid should analyze its data collection and reporting systems to identify potential data elements that could be utilized to compare quality and access of services of MSCAN enrollees with those same eligibility categories in the FFS system, as long as program enrollment is voluntary. Potential measures could include, but would not be limited to, the use of enhanced benefits of MSCAN, such as unlimited office visits, the number of preventable inpatient hospitalizations and hospital readmissions, EPSDT (Early and Periodic Screening, Diagnosis and Treatment) screenings, and the number of active specialists participating in MSCAN versus fee-for-service Medicaid.

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