Meeting Summary: July 14, 2006
(Next meeting: Friday September 8, 2006 @ 9:30 AM in LOB RM 1D)

Present: Sen. Edith Prague (Vice-Chair), Rep. Vickie Nardello, Rep. David McCluskey, David Parrella, Rose Ciarcia (DSS), Dorothy Lucas (HMO rep.), Jeffrey Walter, Ellen Andrews, Auralee Kamm (DCF), Dorothy Pacyna (DPH), Mary Alice Lee, Thomas Deasy (Comptroller's Office).
Also Present: Kevin Loveland (DSS), William Diamond (ACS), Dr. Larry Loeb (DSS Dental Comm.), Robert Diaz (WellCare/PONE), Sylvia Kelly (CHNCT), Scott Markovich, Gail DiGioia (Anthem), M. McCourt (legislative staff).

Department of Social Services
HUSKY Managed Care Financial Reports (click on icon below to view 2005 & 2004 financial reports)

The audited managed care plan financial report for the HUSKY line of business for calendar year (CY) 2005 was reviewed and discussed. There were several significant changes from CY 2004:

ü In 2005 three of the four plans (Anthem, CHNCT and Health Net) experienced losses compared to 2004.

o According to DSS Anthem's losses result primarily from costs associated with maintaining a large network.
o CHNCT stated that their loss margin is related to their case mix in that their membership overall has higher health care needs and they have a high number of high-risk pregnancies related to their contracts with federally qualified health clinics.
o Health Net sustained a member month loss of 55,321 in 2005 compared to 2004, but a revenue increase and about $8 million administrative expense increase compared to 2004. The MCO described the financial relationship with their sister pharmaceutical contractor (Health Net Pharmaceutical), in which the contract calls for the contractor to retain the pharmacy rebates in lieu of administrative payments from Health Net, which are included under medical loss ratio. Adjustments reflecting these pharmacy rebates in 2005 would result in increasing the medical loss ratio to 93% and a 1% decrease in administrative ratio. Financials for CY 2006 will reflect the pharmacy rebates adjustments.

ü WellCare/PONE continues to have the lowest medical loss ratio of the 4 plans and the highest PMPM positive margin in 2004 and 2005. The plan has increased member months by 57,697 (14%) from 2004 to 2005. In 2005 the WellCare profit/loss margins increased to 4.1% from 2.7% 2004 and per member per month (PMPM) margin increased to $7.51 from $4.92 in 2004. WellCare/PONE explained that:

o They did not have contracts with the CCMC hospital/faculty practice in 2005; the contract was signed May 2006. In addition the MCO now has a contract with Stamford hospital. This had impacted their case mix and medical loss ratio in 04-05 .
o 2004 medical loss ratio also reflected less desirable access and quality indicators. PONE gave DSS a quality improvement plan for 2005 that included increased reimbursement for dental and adolescent primary care providers and improvement in their data reporting systems. Mr. Diaz stated that their more recent performance indicators are in line with the other MCOs

ü Senator Prague requested DSS meet with Health Net to clarify the administrative issue and with WellCare/PONE regarding medical loss and administrative ratios (see below) and report back to the Council.

ü While member months increased for 3 of the four plans in CY 2005 compared to CY 2004, there was a greater increase in medical expenses for all four plans. DSS noted that Medicaid has traditionally focused more on treatment, less on prevention interventions that can have an impact on medical expenditures. Anthem commented that the plan, while previously directing efforts toward prevention, is currently refocusing more attention on preventive care such as prenatal care, immunizations and well visits.

Summary of all plans total R/E reports: 2000-2005

*Calculated from differences between CY 2000 and CY 2005 reports.

Behavioral Health Carve-out Dollars
DSS negotiated individual managed care PMPM amounts that will be deducted from the MCO PMPM rates, retroactive to January 1, 2006, for the removal of behavioral health services from the managed care delivery system to the Behavioral Health Partnership program. (The MCOs retain responsibility for pharmacy, transportation, emergency room services and coordination of care management with the BHP Administrative Service Organization – ASO- for intensive care management of members).

The MCO carve-out PMPM reductions are:

• Anthem: $19.22
• Health Net: $20.00
• CHNCT: $19.25
• WellCare/PONE: $16.50
• Weighted average: $19.13

Discussion points:

ü Are these PMPM amounts also applied to HUSKY B? DSS stated that fewer dollars were 'carved-out' of HUSKY B compared to HUSKY A as the SCHIP program does not have the same number of rate cells as HUSKY A. DSS will provide HUSKY B PMPM reductions and calculate the HUSKY A & B total amounts removed from the MCO PMPM rates and provide the Council with this information.

ü DSS stated it had hoped to negotiate a BH carve-out rate closer to $21.00 PMPM (the carve-out estimates presented in March 2005 to the BH Committee were $19.76 average carve-out, and $1.48 MCO BH administrative PMPM amount). In response to questions about the impact of the $1.87 PMPM carve-out difference DSS stated that regardless of the total 'carved-out' dollars, the agency will expend the needed dollars to pay claims in the new program. This could result in a deficiency in DSS February report to the CGA.

ü There are PMPM carve-out dollar differences among the MCOs because the negotiations were based on what each plan was spending on BH services. The BH subcontractor risk model (BH vendor full-risk versus an ASO type arrangement) and case mix influence BH spending amounts. WellCare/PONE, which had the lowest carve-out amount, was the only plan that retained a full-risk BH service model, paying a capitated amount to the BH subcontractor and had less DCF children compared to other plans. Rep. Nardello stated it is important to remember that each MCO is responsible for their subcontracted services and payment of these services regardless of the MCO/vendor contract model.

ü Jeffrey Walter stated the BHP Oversight Council has been dealing with 2005 BH claims run out under managed care that include unresolved legitimate claims for BH services. DSS has taken a strong role in the resolution process and the MCOs have reported on claims projects. These dollars will be coming out of the non-carve-out “pot” of PMPM MCO dollars. With the difference in projected versus negotiated carve-out PMPM dollars it is important to ensure providers are paid for BH services provided under the managed care system. Mr. Walter stated it is incumbent on both the Medicaid Council and the BHP Council to receive a final report of the BH claims payment under managed care.

Managed Care Plan rate adjustments SFY 07
The Managed care plans each received a 3.88% rate increase as of July 1, 2006. The state budget had allocated a 2% increase in rates for SFY07. The MCO rate increase would amount to roughly $27M, when the 3.88 rate increase is applied to the $744.8 million revenue minus the carve-out amount. Medical cost of living rates are about 4-4.5%, according to DSS.

Changes in CMS Citizenship Requirements
Kevin Loveland (DSS) reviewed the changes in states' application of the Deficit Reduction Act (DRA) provisions for proof of citizenship & identity made in the Centers for Medicaid & Medicare Services (CMS) interim regulations. States were required to implement the provisions July 1, 2006. The provisions apply to U.S. citizen applicants/beneficiaries for Medicaid health coverage. Self attestation under risk of perjury is no longer acceptable; applicants/beneficiaries must show proof of citizenship/identify one time in order to receive or continue to receive Medicaid health services. (DSS will be scanning these documents for the client's file). While the whole process remains quite complex for states and particularly for Medicaid applicants/beneficiaries, positive key changes in the interim regulations include:

• Exemption of some applicants/beneficiaries in providing the original documents:

o Medicare/Medicaid and SSI clients are exempt from providing redundant documentation; however the state (DSS case workers) will need to verify evidence of citizenship (a requirement for Medicare & SSI) through a database available to the case worker. In Connecticut this will affect about 85,000 aged,blind,disabled (ABD) clients.

o Foster children will be considered recipients (already in Medicaid); documentation will be required at their program renewal.
o Newborns :

§ Medicaid enrolled/eligible mothers are automatically eligible for Medicaid for one year. Although Medicaid pays for the birth, CMS does not recognize the claims data, so citizenship/identity must be documented at the 1^st year renewal.
§ Non-Medicaid eligible mothers/or those that received only Medicaid emergency services are not automatically Medicaid eligible. The newborn must have documented citizenship (birth date, place on hospital letterhead) and proof of identity, most likely from a parent affidavit.

o Children that receive Presumptive eligibility (PE) will be exempt from initial citizenship documentation but this will be required for completion of the application into HUSKY.

• States have more flexibility in using vital statistics data such as birth data. DSS is working with DPH, initially using a manual form for birth data matches and an automated process by September 2006. CMS guidelines forbid states to enroll new applicants otherwise eligible for Medicaid if proof of citizenship has not been documented.
• DSS has verbal assurance from CMS that entities that have formal agreements with DSS, such as FQHC's, Healthy Start programs, PE qualified entities, Human Service Infrastructure agencies, can verify that the applicant/beneficiary presented original birth/identity documents, send the copy and notation to DSS.

DSS has done a lot of work in a short period of time to implement the DRA provision in compliance with the CMS interim regulations released 7/9/06. The agency has said it will make every effort to ensure that CT residents otherwise eligible for Medicaid will have or maintain access to Medicaid services, adhering to interim federal regulations. The DSS Commissioner has instructed regional DSS offices not to deny or discontinue a case because of failure of citizenship verification without first contacting the central DSS office. This will allow the central office to ensure that all possible alternatives of documentation have been exhausted.

The Council recognized DSS and other state agencies' intense efforts toward minimizing the state loss of federal dollars and loss of Medicaid recipient coverage that could result from these provisions. States received no additional administrative or outreach dollars to implement the law; however there will be a 50% federal match for administrative costs.

Addendum: At the Council recommendation, letters (see copies below) were sent to the Governor and State Congressional Delegation with specific action requests related to the DRA provision.

The July 20^th response from the Governor summarized her belief that “the developments from Washington and DSS should help offset the potential impact of the Deficit Reduction Act on eligible Medicaid applicants and beneficiaries.” The Governor knows that DSS and the Council will be monitoring the impact of the DRA during the implementation period.

Births to Mothers with Medicaid Coverage (click on icon below to view report).

Mary Alice Lee, CT Voices, reviewed the 2004 HUSKY A and Medicaid fee-for-service (FFS) birth data. Data trends over the last four years show that births in HUSKY A are increasing, that three-quarters of women are receiving care in the first trimester and adequate care (80% of recommended visits). Teen births remain about 20% of the total HUSKY births and low birth weights, while higher than the general population, have not increased. Preterm deliveries, also higher than the general population, have decreased since 2000. Approximately 65% of the HUSKY A mothers did not have recorded risk factors; 16% of HUSKY A mothers smoked during pregnancy compared to 3% of other mothers. Hartford has the highest number of Medicaid births followed by New Haven and Bridgeport: 33% (4265) of all Medicaid births in 2004 were from these three cities.

Perspective: HUSKY A Maternal and Birth Outcomes 2000-2004

*2000 - 2002 data from CHC/CT Voices previous reports to MMCC

Based on the Medicaid birth data, CTVoices identified Medicaid initiatives that could improve maternal/birth outcomes (See page 4 of document above),including state-funded prenatal coverage for undocumented pregnant women, expand pregnant women's Medicaid income eligibility beyond 185% FPL, extend mother's coverage beyond the 60 day postpartum period, include tobacco dependence treatment in HUSKY and broaden access to reproductive health through the implementation of the DSS Family Planning Waiver. See report at: www.ctkidslink.org

Another source of information about CT births is the DPH statewide survey of women with low birth weight babies about their prenatal experiences (Prats Survey Round 2). This can be found on the Department of Public Health web site: www.dph.state.ct.us, (click on programs, then MCH).

HUSKY Enrollment
Husky enrollment had the largest drop in the program's history between June-July 2006.

ü Total HUSKY A change: (14,879) (5%)
ü Under 19 years change: (8,786) (4.2%)
ü Adults change: (6,093) (6.7%)
ü Husky B change: (242) (1.6%)

Enrollment Change: August 05 - July 06 from monthly reports

DSS graph of enrollment:

Rose Ciarcia and Kevin Loveland discussed the enrollment changes by coverage group. The pattern ( see above handout) shows that the enrollment losses were primarily due to the reduction of transitional medical assistance (TMA) coverage from 24 to 12 months. The TMA coverage ended June 30^th for many TMA clients but letters to families from DSS and members' MCO encouraged TMA families to renew coverage. The July losses were attributed to families that were over income for HUSKY A, they did not renew their coverage or the application renewal may still be in process in the regional office. Mr. Loveland noted that the regional offices observed a lot of mailings returned to the regional offices.

HUSKY B has a significant number of pending applications (1,784) and 434 renewals.

DSS stated that a resurgence of applications may be seen in August/September as families realize they are no longer enrolled when they seek health services. School physicals, generally done in August as students are not allowed into school without the mandated school physical, may be a vehicle toward recovery of Medicaid coverage for some families/children. One enrollment barrier may be the citizenship DRA provisions that now apply to these applicants.