Medicaid managed care: Turnover or touchdown?
Medicaid managed care: Turnover or touchdown?
Despite challenges, it can be a winning strategy
Once strangers, Medicaid and managed care are now joined at the hip. First introduced in the early 1990s, managed care enrollment as of June 30, 1997, topped 47% of the total Medicaid population.1 Its penetration in some states is virtually 100% of Medicaid beneficiaries.
Private duty providers entering this Brave New World face inherent difficulties serving clients in low socioeconomic areas, coupled with stiff managed care reporting and service requirements. Given these challenges, they may think twice about contracting with Medicaid managed care, but sources say it can be a winning strategy.
"It is an arena fraught with danger, but you can't steer away from it. It's the future of home care," says Jay Sexton, CPA, CFP, PFS, a shareholder with Witham, Smith and Brown, an accounting firm that has a health care specialty based in Princeton, NJ. Sources provided the following tips to meet payer expectations and serve clients while not out-pacing your organization's resources.
· Know your cost structure.
Low reimbursement rates, combined with the added resources providers must expend serving Medicaid managed care clients, promote marginal profitability at best. "You can get buried so quickly, it will make your head spin," Sexton warns.
Volume, cost management critical with low margins
To stave off financial reverses, agencies should know the direct cost of care per visit including added expenses often associated with serving inner-city clients, such as language interpretation and escort services. Lost productivity due to "no-show" visits, which typically occur more frequently in the city, should be factored in. Visits may also be longer; patients' multiple comorbid conditions often require increased education and care.
Slow payments compound the marginal profitability. "There are absolute differences between managed care companies' payment. Providers must be able to maintain their cash flow," says JoAnne Ruden, MPA, RN, president and chief executive officer, Visiting Nurses Association of the Delaware Valley in Trenton, NJ. They can more easily absorb these inherent added costs with a broad base of business that encompasses less-resource-intense areas and services, she adds. Companies with large Medicaid managed care caseloads have a much more tenuous existence.
· Invest in information systems.
Cost awareness and good information systems go hand-in-hand, sources report. Before proposing programs or signing agreements, providers should perform financial modeling, varying costs and volume to ensure that payments will cover costs. With marginal per-case profits, agencies need to know their break-even volume. Once awarded a contract, they should constantly assess costs and profitability.
Information systems also come into play after contract signing. "Providers should invest in administrative systems to support the contract. Their billing and admitting systems should talk to each other [so that claims are formatted and submitted according to payer expectations]," says Stacey Beskind, vice president of provider contracting for Health Partners in Philadelphia.
Medicaid managed care organizations' reporting requirements are similar to other managed care companies, sources say. For example, disease state management programs often necessitate monthly and quarterly summaries of opened cases and patients' progress through the program. And like their commercial counterparts, Medicaid managed care companies are now collecting Health Plan Employer Data Information Set 3.0 (HEDIS 3.0) performance measures for National Committee for Quality Assurance (NCQA) accreditation.
The Medicaid payers, however, are still on a learning curve, and their demands "may initially be more intensive and cumbersome," Ruden says. Refining reporting needs presents an "opportunity for the payer and provider to collaborate and come up with what works," she adds.
· Contract well.
Many managed care organizations' base contracts only cover generic home care services, not disease state management programs, warns Ruden. Providers should obtain separate contracts for these "a la carte" programs, or they may be excluded from sometimes significant patient populations that they are especially qualified to serve.
Many Medicaid managed care companies are now issuing fewer contracts than in the past, raising the provider selection bar. "It is easier to work with fewer vendors, especially with [disease state management] programs and risk-sharing," Beskind says. Payers want providers who can produce what they market, treat the managed care organization as a customer, and know the community they will service, she adds. Pennsylvania's Health Choices managed care conversion has brought providers "out of the woodwork, but you can't just do this out of the blue," she says.
Innovation equals contracts
· Offer innovative programs.
Payers want "innovative programs based on the reality of the marketplace that help [managed care organizations] save money and have positive patient outcomes," says Beskind. "Package programs focusing on high frequency, high cost conditions, with physician-group, DME, and home care company participation are very appealing," she adds. "Providers should distinguish themselves with some kind of niche program and pricing structure that works [for both themselves] and the payer.
Because payers are now at risk, they must work with providers in a partnership," says Glen Miller, managing director of Interphase Medical, a Philadelphia-based pediatric respiratory services company.
Many payers already have asthma, congestive heart failure, and diabetes disease state management programs and are open to other such services. "If you have a good proposal, we're willing to listen," Beskind says.
The VNA of the Delaware Valley pitched and received Medicaid managed care contracts for its total joint replacement restorative nursing program. The VNA provides intensive training and certifies nurses in restorative nursing practice. Credentialed nurses then work closely with physical therapists who identify hip and knee replacement patients for the combined nursing and therapy program.
· Understand Medicaid program components.
Private duty providers should fundamentally understand the Medicaid market and regulatory environment. Knowing the difference between Medicaid-mandated and waiver programs is particularly important in advocating for your clients' needs. For example, a patient may require hourly nursing, not a basic covered service. But they may qualify for such care through one of your state's waiver programs. The managed care company case manager may not necessarily know about such waiver services.
· Meet service requirements.
As with any other payer, agencies must adapt to meet Medicaid managed care company service requirements. The VNA created a combined case management/intake unit in which its own case managers act as liaisons between field staff and managed care case managers to provide clinical updates and obtain authorizations. Additionally, it continually educates home care teams about managed care authorization and documentation requirements.
"You must provide the same level of service to any population, regardless of where they're located," says Miller. The long arm of the state adds pressure to do so, he notes. Miller finds that Pennsylvania more tightly monitors medicaid-contracted payers and their vendors than the state insurance commission does for their commercial counterparts. Patient complaints and grievances are thoroughly followed up on, he adds.
· Follow payer rules.
Payers and providers are now struggling with freedom of choice provisions which allow Medicaid HMO members to switch plans monthly. "It is an administrative nightmare," Ruden says. Clients change companies due to some dissatisfaction or another company's marketing efforts, but they "don't know their rights [to resolve disputes] and don't know what they've signed up for" with the new company, she adds.
Clients are often unaware that they need to inform their home care provider of the change, so it is incumbent upon the private duty provider to confirm coverage. VNA field staff now check their Medicaid patients' insurance at each visit, as opposed to the monthly standard for other payers.
When visits occur after a patient changes insurers, VNA case managers immediately talk with case managers from the old and new companies. "The old company is under no obligation to reimburse anything after the plan change, so we attempt to obtain both retrospective and ongoing authorization from the new company," Ruden says.
Sometimes these changes outpace the managed care organization's own information system, and the new company may or may not authorize services. They may also require a new home care provider. And the whole cycle may start over the next month.
· Take the long view.
Medicaid managed care is now in its young adulthood, expanding enrollment and providing members with basic covered services. Sources look forward to its maturity when it pays more, has better systems, and supports innovative modalities such as telemedicine.
Ruden awaits the day when Medicaid managed care companies pay for increased resources used to serve members, including escort and interpretation services. Some payers may believe that if agencies were not reimbursed for such services under "straight Medicaid," they shouldn't be compensated under managed care. However, Ruden says the equation has changed. Managed care rates are generally lower than the cost-based payments made by most state Medicaid programs. With no recognition of these special costs, "agencies are put in a position of making difficult choices," she says.
Ruden also looks forward to better ways of addressing members' frequent plan changes. She doesn't expect much, however, until patients face annual or biannual open enrollment restrictions similar to those in commercial plans.
In spite of a few bumps in the road, sources are enthusiastic about managed care. "It will improve the quality of care and ultimately improve the health of members," Sexton says. Under the old system, except for requesting and granting authorization, states and providers had little dialogue about medically necessary non-waiver services, Ruden says. Now, working together, they can effect lasting changes in members' health.
Reference
1. Health Care Financing Administration. National Summary of Medicaid Managed Care Programs and Enrollment. Baltimore; March 1998.
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