EWP identifies managed care problems quickly

Recognizing that problems can occur as managed care programs are designed and then operated, some states have experimented with an early warning program that uses limited, readily available data sets to identify potential problem areas and allows a rapid response. A prompt resolution of managed care problems can have both health care quality and economic implications for states.

Howard Dichter, MD, a Philadelphia-based consultant who created a Medicaid managed care Early Warning Program (EWP) while employed at the former Health Care Financing Administration [now the Centers for Medicare & Medicaid (CMS)], tells State Health Watch he first became interested in the crises that can occur in large health systems and wanted to find a way to help identify when problems are occurring.

His work on a District of Columbia physical health program and behavioral health programs in Pennsylvania and Vermont is described in a working paper issued by the Center for Health Care Strategies in Lawrenceville, NJ, under a Robert Wood Johnson Foundation Medicaid managed care grant.

Mr. Dichter says that while there are a number of programs that can evaluate state Medicaid efforts, they don’t provide quick information that can be used to identify emerging problems and facilitate corrective action. For instance, HEDIS (Health Plan Employer Data and Information Set) data only are available annually. In contrast, the EWP was able to identify problems very quickly in the District of Columbia, Pennsylvania, and Vermont, and thus efforts could begin to resolve the problems in a more timely way. While EWP structures vary depending on each state’s needs, reports generally can come out quarterly, giving enough data to be able to identify trends but not taking so long as to miss the point of early identification of problems, he says.

States need to be able to monitor their managed care programs, he says, because the Medicaid population has limited financial resources, complex social service needs, and a high incidence of chronic illness, meaning they are particularly vulnerable to delays in treatment arising from failure to access quality health services. And ethnic minorities may face even greater barriers to securing health services as a result of language or cultural differences. "This population can ill afford having to overcome obstacles to secure needed services," Mr. Dichter declares.

The EWP provides early warning detection and fosters resolution of problems arising out of key aspects of managed care performance. It uses a limited set of measures and administrative processes to oversee the health system and provide real-time, performance-based reporting to state, federal, and local governments; consumers; families; providers; advocates; and other stakeholders.

Data on the measures chosen to fit local circumstances and interests are collected quarterly or more frequently by a state. (For typical data sets, see chart, below.) The information is quickly analyzed and problems identified usually are addressed within weeks or months. Mr. Dichter stresses that the EWP relies heavily on the involvement of stakeholders who routinely receive monitoring data and help the state identify problems or trends warranting additional attention. "The stakeholder role cannot be overemphasized because they assist the state in developing strategies to remedy identified problems and remain involved to ensure that corrective action is taken," he says.

While states initially were concerned that rapid problem identification could lead to lawsuits filed by advocates, that has not been the case to date. Rather, according to Mr. Dichter, enhanced information flow has increased advocates’ confidence that a particular health system was functioning properly and that problems were promptly identified and then addressed. "Overall, collaboration with advocates has improved," he says.

The three pilot EWPs preferred to select data that came from regular managed care organization operations, rather than burden the plans with the need to prepare special reports. The information collected usually was found to be reliable, especially when it also was used by the managed care organization in regular business operations.

Because it was difficult to get timely encounter data, particularly during the first two years of a new program, service authorization data were used to measure access to clinical services. Authorization data were available almost immediately, could be retrieved easily, and could be reviewed in a short time. Evaluating and trending data from the EWP measures was challenging, Mr. Dichter reports. At the onset of the monitoring programs, national standards were not available for most measures of access to services and the quality of services. Whenever possible, results were compared to contractual performance standards, managed care organization internal standards, or federal and state regulations. For most measures, however, pre-existing agreements, standards, or regulations did not exist.

States found that comparing findings and significant variations among similar populations was the most effective strategy to identify problems. Useful strategies include comparing subgroups within a covered population and comparing regions with similar populations or the same population over time. Once a trend was identified and deemed significant, Mr. Dichter says it was important to verify the accuracy of the data and then determine the reason there were outlier groups. Trends usually were associated with problems, but not always. For example, a low number of complaints for one managed care organization was associated with misunderstanding the definition of complaints, which led to underreporting.

EWP data also identified positive performance, indicating system strengths and giving confidence to the efficacy of the health care program. State interest in early warnings program has reached enough intensity that CMS held a summit earlier this year in Washington, DC. The National Academy for State Health Policy in Portland, ME, is preparing the proceedings from that meeting, which should be available by the end of the summer.

Neva Kaye, program director, tells State Health Watch that the summit enabled state officials to share with each other the steps they had taken and what had worked for them. "All states are interested in evaluating access, and then there are other things that are specific to individual states. States are interested in being able to rapidly identify issues. There’s a lot of raw material available, and they need help in putting it together."

[Contact Mr. Dichter at (215) 849-8133 and Ms. Kaye at (207) 874-6524.]