Connecticut
Medicaid Managed Care Council
Legislative Office Building Room 3000, Hartford CT 06106
(860) 240-0321 Info Line (860) 240-8329 FAX (860) 240-8307
www.cga.state.ct.us/ph/medicaid

Medicaid Council Quarterly Report: 1^st Quarter 2004

Date Accepted:  April 16, 2004

This report of the Medicaid Managed Care Council is submitted to the General Assembly as required under CGS 17b-28.  This report is for the time period of January through March 2004.  The Medicaid Managed Care Council is a collaborative body established by the General Assembly in 1994 to advise the Department of Social Services (DSS) on the development and implementation of Connecticut’s Medicaid Managed care Program.  Specifically, the law charges the Council with “advising the Commissioner of Social Services on the planning and implementation of a system of Medicaid Managed Care and shall monitor such planning and implementation and shall advise … on matters including, but not limited to, eligibility standards, benefits, access and quality assurance”.  The Council consists of legislators, consumers, advocates, health care providers, representatives of managed care plans and state agencies.  The Council has several working subcommittees: Consumer Access, Public Health, Behavioral Health and Quality Assurance.

The Medicaid Managed Care Council met monthly during the 2004 first quarter.  The meeting agenda items included program administration issues and data reports, implementation status of 2003 legislation, HUSKY enrollment and related reports by the Department of Public Health and the United Way HUSKY Infoline.

Summary of Key Issues in the First Quarter Meetings

Ø      Implementation of 2003 legislative changes continues.  The changes impact enrollment and access to care in Medicaid and HUSKY programs.

Ø      Delays in eligibility determinations related to DSS human resource reductions are being addressed in the Subcommittees and Council.

Ø      Changes in the service delivery model for dental, behavioral health and pharmacy services remain in discussion.

Ø      Configuration of the managed care rates has been reviewed, with specific attention to county-based rates versus risk adjusted rates.

Ø      HUSKY health provider rate increases have been negotiated with MCOs across all provider types, with the most significant changes in BH and pharmacy.

Ø      While EPSDT utilization trends show improvement under the managed care system, preventive care for youth remains low.   Dental service access has consistently remained below the FSS rates and pharmacy access to temporary supplies remains a problem.

Summary of Medicaid Council Recommendations 1^st Quarter 2004

Summary of Meetings in 1^st Quarter 2004

 HUSKY Program Administration

Service carve- out status & External Quality Review (EQRO) contract (January meeting)

·        The dental carve-out Administrative Service Organization (ASO) bids were reviewed and scored in February by the DSS review committee, which included internal staff and external dental professionals.  The bidder selection recommendation will be forwarded to the Commissioner of the Department of Social Services (DSS) for consideration and public announcement.

·        The DSS plans to implement the behavioral health carve-out in October 2004.  The legislature, State agencies and the Office of Policy & Management have been meeting to discuss the Behavioral Health Partnership, which includes BH services for adults & children.

·        The State is considering a recommendation in the legislative Program Review & Investigation pharmacy study for pooled purchasing of pharmaceuticals in the Medicaid programs (HUSKY A, B, FFS, ConnPace and CADA). This would allow the State to take advantage of the supplemental rebates realized under the Medicaid Fee-For-Service (FFS) program. 

·        The Centers for Medicare & Medicaid Services (CMS) allowed CT to temporarily hold on contracting with an EQRO for oversight of the HUSKY program for one year.  The State must have a quality review contract by the end of March 2004. 

HUSKY MCO Rates (January & March meetings)

The Council had requested information on the new MCO rates by rate cell that apply to the current contract extensions through September 30, 2004 (Anthem BCFP has signed an extension through June 30, 2004). 

The Medicaid Managed Care federal regulations, effective 8/13/03, require State rates to be ‘actuarial sound’ rather than the reliance on the Upper Payment Limits based on a state’s FFS rates. William Mercer, Inc, the state actuarial contactor, analyzed the rates taking into consideration:

ü      Encounter database expenditures for the base period 1/1/01-6/30/02.

ü      MCO financial reports.

ü      Calculation of a yearly base deduction for program changes (i.e. elimination of adult optional services, pharmacy and outpatient co-payments).

ü      Annualized trending.

Mercer developed a rate range (lower=$167.92; upper=$187.85).  The DSS presented the MCOs with a dollar amount within this range.  A final DSS/MCO negotiated rate of $177.82 (4% increase) was agreed upon.

Council discussion included the pros and cons of maintaining the rate differentials based on county (Fairfield County has historically had the lowest rate) versus risk-adjusted rates. While the latter is becoming more common in other states, health plan PMPM payments could be adversely affected, depending on their percentage of risk-adjusted enrolled populations.  The Council may discuss the rate differentials at a future meeting.

While MCO rates have increased yearly since 1996, there did not seem to be provisions for the increases to be reflected in health practitioner rates.  At the March Council meeting, CHNCT presented an overview of factors MCOs considered in determining reasonable premium levels for HUSKY health services.  These include identifying the more stable administration costs and trends in medical spending, which are impacted by the scope of mandated services, medical management, including new drugs or technology, and volume of health services.  There have been rate increases across all provider types, with the most significant in BH and pharmacy.  Providers can re-negotiate their rates with the MCO through contact with the MCO provider relations staff.  Council member comments and recommendations included:

·        The importance of balancing MCO rate issues as well as health provider rates in a less arbitrary manner, as rates are related to access to care issues.

·        Identify and adopt ‘best practice’ modules that lead to more effective and efficient delivery system that reduces financial waste and improves health outcomes.  Rep. Nardello suggested a future meeting of health providers, MCOs and the state agency(s) to determine targeted areas of quality improvement in HUSKY through the adoption of best practices and assessment of the impact of these practice changes.

Dental/BH Revenue  & Expense CY 2002 (March 2004 meeting)

Legislation requires the MCOs report to DSS quarterly on dental & BH revenue & expenses by these subcontractors.  This information is to be reported on a regular basis to the Medicaid Council.  One report was given to the Council in December 2002.  The DSS stated they could not release administrative/medical financial reports by health plan because the ASO selection process has not been completed.  The Council was skeptical of the impact of the HUSKY A reports on the ASO process as the populations in the carve-outs include Medicaid FFS as well as HUSKY.  The Council Chair requested DSS to provide MCO-based reports in the near future. The following summarizes observations from the aggregate financial data presented:

·        BH reinsurance dollars represent on average, 44% of net BH expenditures in CY 2002 and 1^st half 2003 (i.e. in 2002, net BH expenditures was $49.5M and reinsurance payments for inpatient stays beyond medical necessity totaled $23.1M).

o       FirstChoice/Preferred One reported a 24% reduction in that plan’s state reinsurance dollars when the BH subcontractor worked with providers to develop expanded community-based services.

o       Senator Harp asserted that lack of available community resources has contributed to the State’s escalating reinsurance costs.  Further, the Senator stated that leadership outside the state agencies is needed to put resources into the community system; the development process of step-down levels of care in the BHP and in KidCare remains unclear.

o       Dr. Mark Schaefer (DSS) stated there is every expectation of future improvement in the BH care delivery system through a redesign that removes incentives for long term institutionalization, allows DCF better management of long term residential stays and conversion from an outpatient grant system to FFS system, which will allow necessary financial flexibility for growth of the community system.  Under the current system, there are few incentives to expand community care and create system delivery flexibility. Reinsurance costs will continue to rise under the current delivery system.

·        The aggregate data, compared with previous revenue reports (July 2003) suggest that:

o        Dental PMPM dollars represented 4.7% of the total PMPM expenditures ($168.25) while BH PMPM expenditures for 6 months in 2003 ($16.10 PMPM) represent 9.6% of total PMPM expenditures.

o        Dental PMPM expenditures increased by 4.7% from 2002 to the 1^st half 2003.  The BH PMPM expenditures increased by 11% from 2002 to 2003, from $14.37 to $16.10 PMPM.

Data Reports

EPSDT  & Dental rates for 2002 and first 6 months of 2003 :  Screens are lower (68%) in 2003 compared to the 6 month time periods in 2002 (72%-78%).  Preventive dental services remain at 23% and “any dental” access has increased to 32% from 30% in the last half of 2002.(January 2004).

Trends in dental and EPSDT utilization by age  1995-2002 were reported at the suggestion of Dr. Banco, Council member, at the March 2004 meeting.  The HCFA 416 reports were the data source.

Early Periodic Screening Diagnostic Treatment (EPSDT) rates have improved from the 1995-96 FFS rates.  Overall screening rates – the percent of recommended well child screens- increased from FSS rates of 50% to 70-73%.   Participation rates – the percentage of children receiving an EPSDT visit- showed improvement, increasing from 42% in 1995 to, 60% in 2001-02. By age:

• <1 year, screening rates increased from 58% in 1995 to an average of 82% in 2000-02.  Participation ration peaked at 90% in 2000, dropping to 80% in 2002 

o       1-5 years, screening rates increased from 58% to 90% since 1999.  Participation rates have remained at 70% since 2000.

o       Screens and participation rates for 6-14 YO increased by 10 percentage points, from 45% to 55% and from 40% to about 50% respectively in 2000-01.

o       Screens for the 15-20 year olds, at 25% in 1995, have increased to 35% in 1999-2001 and to 50% in 2002.  Participation rates peaked to 45% in 1998 then dropped to 32% since 2000.

Causes for these observed variations, especially reductions in utilization rates in a particular year, were not identified.

Dental service access showed little or no improvement in managed care compare to FFS.  As noted above, dental PMPM expenditures increased 4.7% from CY 2002 to 1^st half 2003.

• Preventive dental services (excluding oral exams) remain under the FFS rate of 38% flattening out to under 35% since 1998.  The FFS percentages are higher for all age groups than those under managed care. 

o       The percentage of HUSKY children receiving any dental service increased slightly (about 5-7% points) for all ages, but all under 50%.  Those aged 6-9 and 10-14 years were close to 50%, perhaps reflecting improved access through SBHC in middle schools and high schools.

After discussion, the following requests/recommendations were made:

·        The MCOs will discuss their internal quality plans that target adolescent well care at the April Council meeting.

·        Since oral exams are excluded from preventive dental care data, the rates reported may under-count preventive services. The DSS was asked to test an oral exam and cleaning data run that would verify this observation.

·        The DSS was asked to use the data to identify the service site for a specific time period, which would better inform budget allocation decisions.

Antidepressant Medication management:  of the 318 children with newly diagnosed depression and medication, 42% had 3 or more follow-up visits within 12 weeks of diagnosis, 29% received 180 days of psychotropic intervention.  The DSS was asked to provide the BH subcommittee with follow-up data that identifies the professional level and/or type of prescribing provider.

Pharmacy report:  Of the number of prescriptions per plan, the average percentage requiring prior authorization (PA) ranged from 3.41-1.51%.  The overall percentage of denials was 0.61%. 

·        The provision of a temporary drug supply for PA medications differs by MCO. The DSS stated the MCOs are working with their Pharmacy Benefit Managers (PBMs) to ensure members receive the temporary supply appropriately, according to the DSS/MCO contract provision.

·        Initially denied PA medications may eventually be approved by the PBM. The BH subcommittee is looking at this issue related to psychotropics; however the MCOs may want to assess the frequency for non-psychotropics, to reduce unnecessary administrative costs for both plans and practitioners.

·        The summary of the $1.00 pharmacy co-pay report for May through September 2003 showed that 48% of clients receiving drugs are required to pay the co-pay compared to 52% of clients that are exempt under federal law (this does not identify the percentage of paid /non-paid co-pays of the non-exempt group).

Medicaid Program Change Status Associated with 2003 Legislation

State Assistance (SAGA) Program (January 2004 meeting) PA 03-3, sec 43 capped the funding for this state-funded program that remains an entitlement program.  To date the hospital inpatient/outpatient program funding has been established at $46.5M/years, compared to initial FY04 projected costs of $59.6M.  Work on the community component, to be provided by federally qualified health centers, continues.  Legislation further requires the Commissioner of DSS to apply for (or include) the SAGA program in the section 1115 HIFA waiver.  CMS has approved the State Plan amendments related to SAGA disproportionate share hospital (DSH) outpatient, GABHP and new medical DSH.

HUSKY B Premiums (March 2004 meeting):  PA 03-3, Sec 55, 56 imposed new premiums for HUSKY B band 1 (186-235% FPL) and increased premiums for band 2 (235-300%FPL). This was implemented February 1, 2004.  In that first month 2400 children (17% of the enrolled population) would have been dis-enrolled from HUSKY B because of failure to pay the monthly premium.  The DSS decided NOT to dis-enroll families over the next several months; however families will remain responsible for the premiums and back premiums.  The MCOs will receive the PMPM capitated rate minus the unpaid premiums.

HUSKY Adult Coverage under Court Injunction:  As of the March 12 meeting, the court had not issued a decision and the 15,000 adults with earned income remain enrolled in HUSKY under Transitional Medical Assistance (TMA).

State Plan Amendment Status (SPA) & estimated savings were provided, at Sen. Harp’s request (March 2004).

The HUSKY B SPA was submitted to CMS at the end of February. Any service carve-outs require an amendment to the 1915(b) waiver as well as legislative committee review/approval.

HUSKY Enrollment March 2004

Husky A enrollment has increased by 11,517 members over 7 months, September 2003 through March 2004; an average increase of 1645 members/ month.  HUSKY B enrollment has decreased by 966 members since October 2003 through March 2004, averaging a 161-member loss/month.  The number of dis-enrolled children going forward would be significant if the DSS had not allowed for an ‘adjustment period’ through at least May.

HUSKY A & B Enrollment

HUSKY B Enrollment

CT United Way HUSKY Infoline Summary: Last half of 2003, Jan-Feb 2004 (March 2004)

The data, when compared to the 2002-03 report, suggest some call trends:

·        There seems to be a temporal relationship between the call volume and program changes that affect a significant number of the HUSKY population (i.e. elimination of optional Medicaid services, additions/increases in co-pays).

·        There have been an increasing number of ‘other needs’ calls (i.e. housing, childcare) in the latter part of 2003 and January & February 2004.  Childcare openings (Care-4-Kids) were frozen in 2003.

·        Maintenance of coverage calls that include information from their MCO account for 52% of the calls in the last half 2003 and 2004, compared to lower rates in 2002-03.

·        The percentage of calls involving specific health care access problems remain unchanged; however the percentage of calls related to billing & premium issues increased in Jan-Feb 2004.  HUSKY B premium changes were implemented 2/1/04.

Department of Public Health: School-based Health Clinic Uninsured Rates (March 2004)

·        The number of students enrolled in SBHC has increased over the past 3 years, as has the number of visits per youth, increasing from 2/student/year to 3 visits per year.

·        The primary reasons for visits include acute illness (26%), MH/Substance use/abuse (23%) and collateral contacts (23%) that include care coordination within the education system and community services.

·        The insurance status of students over the past three years has changed, in that private insurance has decreased almost 10%, Medicaid coverage has increased by about 10%.  The uninsured rate remains at a fairly constant level of 28-26%. 

The Council was concerned about the persistent level of uninsured children and youth enrolled in SBHCs. The DPH was asked to ascertain the factors that may contribute to more than a quarter of children enrolled in SBHC having no insurance.  Such factors may include undocumented immigrant status and/or State policy such as presumptive eligibility for children.  This was eliminated in legislation passed in August 2003; the effect would be seen in 2004 data.

Subcommittee Activities

Behavioral Health SC Jeffrey Walter, Chair: Created a BH Pharmacy work group to simplify administrative procedures in patient access to psychotropic drugs.  Will establish a work group to assess common denial reasons for services, develop problems resolution of key areas with providers, MCOs, DSS, DCF.  Dr. Alan Kazdin will review the BH Outcomes Study in May.

Consumer Access SC  Irene Jay Liu, Christine Bianchi, Co-Chairs:  Reconvened since Feb. to work with DSS, MCOs, providers & advocates on processes to ensure new or continued health care access in HUSKY through system documentation of address changes, clarification of HUSKY A & B eligibility process, and improved implementation of current DSS policy on expedited eligibility for pregnant women while legislative consideration of true presumptive eligibility in HUSKY.

Quality Assurance SC Paula Armbruster, Chair:  HUSKY Obesity work group has, with the MCOs and providers, developed a provider information matrix on obtaining obesity –related services in HUSKY A, B and for adults in HUSKY A.  The subcommittee will review recommendations related to pediatric obesity in April.  The QA subcommittee has asked that an evening meeting be arranged for adolescent providers, MCOs and DSS to discuss the MCO adolescent health QI projects and review the adolescent anticipatory guidance revisions to the State EPSDT periodicity form.  Other SC focus areas in addition to teen health, obesity are 1) regular reports on common reasons for inpatient and ED utilization by age, assess public health approach to reasons for these costly services, 2) annual MCO report on the HEDIS measure for (HUSKY) child /adult appropriate use of asthma medications.