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 second quarter of 2001, April to June. 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, Quality Assurance, and Primary Care Practitioner.

The Council met in April and June of 2001 with a focus on the following: HUSKY administrative changes and financial reports, HUSKY enrollment and quality measurement of the program.

Administrative Topics

MCO Changes

• PHS reported a name change, effective May 2001, to Health Net, formerly PHS Health Plan.  This change in name reflects a more united national marketing process.  There has been no change in the plan’s ownership
• Effective July 1, 2001, Health Net has signed a non-risk based contract with Doral Dental Services of CT.  Doral will be paid an administrative fee for dental claims payments and provider network development and maintenance.  Health Net retains the financial risk for services provided.  As a dental subcontractor, Doral has 4.5 million covered lives throughout 26 states and has created a provider network in CT that will ensure access to dental care in HUSKY.

Standardized Claims Criteria

Both the Department of Insurance (DOI), which regulates commercial health insurance and the Department of Social Services, which is responsible for the HUSKY managed care contract compliance, have either statutes or contract provisions regulating timely claims payment to providers.  The Department of Insurance Consumer Affairs Department has received a number of claims complaints that revealed confusion on the part of both managed care organizations and providers as to when the time clock for timely payments began; thus Raymond Claytor and Leslie Wolfgang (DOI) worked with MCO’s and providers to clarify the implementation of CT law (38A-816) that deals with timely provider payments from MCO’s.  They were invited to describe the outcome of this work group to the Medicaid Council, as provider payments delays are an ongoing concern.  The DOI workgroup reached consensus on the fields on the HCFA 1500 and UB 92 forms submitted to commercial HMO’s that must be completed in order for submitted information to be considered a “claim”.  The statutory ‘clock’ for payment within 45 days or the MCO’s request for further information (30 days) begins with the receipt of this standardized information.  Identified criteria for an acceptable initial claim has allowed the DOI Consumer Affairs Department to better assess complaints and calculate the interest owed for claims that meet the established criteria.  The Department of Insurance issued a bulletin on the criteria and communicated this information to health providers through State professional organization and the HMO’s.  Payment complaints have shown a dramatic decline compared to the previous year.

The Council requested the Department of Social Services review the criteria developed by DOI with the HUSKY plans (all of whom participated in the DOI workgroup) and determine how this could be adapted to the HUSKY program. The Department stated that this could be part of the new contract process, observing that there are only a few field differences between commercial and HUSKY form requirements.  Eventually the data reporting changes required by the Health Insurance Portability & Accountability Act (HIPAA) within two years will create common data reporting elements and privacy regulations for all payer sources.

Medicaid Council Safety Net System Survey

Judith Krauss presented a report by the Institute of Medicine on the impact of Medicaid managed care on the core safety net provider system (SNPs), in September 2000.  The safety net system, while gradually adapting to managed care and other health policy changes, continues to be challenged to effectively compete in the health care market, in part due to their disproportionate public funding.  Safety net providers, by definition, deliver care to the uninsured, underinsured, Medicaid and other vulnerable populations, leaving little room for funding the development of adequate administrative infrastructures required by managed care.

The 5^th recommendation of the study was the ‘enhancement and better coordination of technical assistance programs and policies targeted to improving the operations and competitive position of safety net providers’.  Senator Harp and Rep. Nardello requested a Council member with federal policy and managed care background to work with the Council staff to investigate whether Connecticut SNPs require additional administrative infrastructure resources in order to succeed in a managed care environment. The investigation, which used a qualitative methodology, focused only on administrative infrastructure issues with “core outpatient SNPs. The key findings of the study included:

·        SNPs face significant administrative challenges in the managed care environment and will be further challenged with the HIPAA requirements.

·        Administrative capacity varies among SNPs.  Those with limited infrastructure are unable to efficiently bill managed care; this impacts on their ability to maximize their revenues, accurately report service data that is the basis of the HUSKY program’s quality assessments and maintain reasonable administrative costs that do not detract from direct service funds.

·        The SNP system is highly fragmented and decentralized, with each SNP having unique needs that make it difficult to offer uniform solutions for administrative support.

·        The State is already providing some resources to support SNPs’ administrative infrastructure through grants, administrative and clinical software programs and initial staff training in managed care.  (There has been recent attention from the federal government to more systematically address the broad SNP system capacity to participate in the changing health market).

The following recommendations were made:

• Funding of one FTE position within a State agency such as DSS, that would identify those SNPs with administrative support needs, assist the SNP in prioritizing specific needs and identify potential funding resources to meet these needs.  The Department of Social Services stated the agency already has limited resources to monitor the HUSKY program and does not see their primary role as providing technical support to providers.  The Department commented that other State agencies have a mission to ensure their providers have adequate assistance to fulfill their contracts (i.e. DPH, OHCA, DMHAS, DCF).
• The Medicaid Council work with providers and their associations, State agencies and managed care organizations to develop a series of workshops on administrative skills and resources.
• The Office of Health Care Access (OHCA) include SNP resource and need issues in the CT uninsured study.

The Council will follow up on this preliminary study, taking into consideration DSS concerns.

Financial Reports

Managed Care Organizations Revenue/Expense Report CY 2000

Summary of the report totals for the four health plans:

• Medical Loss ratios averaged 88%.
• The administrative Loss ratios averaged approximately 15% in the past.  The average for CY 2000 was 10.3%; however larger MCO’s show slightly lower administrative costs. Administrative costs under Fee-For-Service in 1994 were 5%.

• Total revenue for HUSKY A & B: $438,048,971 (Premiums and ‘other’ revenue)
• Total HUSKY A & B expenses: $424,872,474 (Medical and Administrative expenses)
  • Total HUSKY A & B Medical expenses: $381,003,060 (89.6% of total expenditures)
  • Total HUSKY A & B administrative expenses: $43,869,414 (10.3% of total expenditures).

• CHNCT is not licensed by the Department of Insurance.  The financial information is based on the Generally Accepted Accounting Principles, rather than those of the Insurance Department.
• Financial information from HealthChoice and FirstChoice cover total revenue and expenses for the calendar year, although the former participated in HUSKY for 9 months (1/1-9/30/00) and FirstChoice for 3 months, from 10/1-12/31/00.
• Health Net, formerly PHS, provides coverage for HUSKY A only and commercial lives.

The following table summarizes data presented for CY 1999 and CY 2000 for HUSKY A & B:

Discussion of CY 2000 included the following:

• Subcontractor administrative costs are not broken out separately; Sen. Harp requested DSS provide more detailed information about this in future reports.  The Department agreed to report back to the Council on the feasibility of this.
• The tax credit to commercial/Medicaid plans are accounted for differently by each plan.  For example Health Net placed their amount in “other revenue” whereas Anthem BCFP reportedly passed the tax credit funds to providers, thus the amount was included in medical expenses.  The tax credit is outside the Upper Payment Limit configuration.

MCO and Behavioral Health Subcontractor Transition Payments

• Health Net/PROBH:  Janice Perkins (HN) reported that the run out claims are decreasing from 22,000 processed in March to 5700 in May 2001. Monthly provider payments range from $5-800,000.  Sen. Harp commented that delayed payments have necessitated some providers to take out “bridge loans” with interest rates that are not offset with the late payment interests (1%).  The Department was not aware of this.  The April report showed that the percentage of claims paid in 45 days to outpatient providers (66.46%) was lower than the percentage paid for inpatient claims (91.35%), suggesting a disproportionate late claim burden on outpatient providers.
• FirstChoiceCT/Preferred One and PROBH:  The main health plan has been encountering difficulty obtaining claims data from PROBH beyond 3/1/01.  The new BH vendor, Comprehensive Care, had an initial administrative contract with Preferred One (P-1) in March 2001 and tracked claims back to 2/1/01.  Beginning April 1, 2001, CompCare has a risk-based contract with P-1.   Resolving these back claims (only about 30% of the claims have been submitted by PROBH) through a provider-specific manual process would be burdensome to the provider.  CompCare will work with providers to review claims within the process the health plan has set up that will be less burdensome on the providers. 

The Council Chair and members urged DSS to consider contractual language that will repair the current subcontractor non-compliance with the DSS/MCO contract, described as the weakest link in the program.  The Department agreed that this aspect of vendor oversight has been problematic; language in the new 2001 contract will further strengthen the MCO responsibility for subcontractor compliance with DSS/MCO contract provisions.

Behavioral Health Payments: DSS Mediated Process

The trade association for the child guidance clinics (CCPA) stated at the April BH subcommittee meeting that some providers report they have not received the amounts owed for past claims, based on the DSS audit for claims from 1995-1998.  The Department has worked with MCO’s, providers and CCPA to resolve the disputed claims however some of the money owed is by health plans no longer with the HUSKY program and therefore DSS has no legal contractual relationship with them.  The Department still has the HealthRight financial withhold funds negotiated in the termination agreement.  Providers owed payments from HRI/Value Behavioral Health should contact DSS as soon as possible to resolve this aspect of the audited disputed claims.

Program Quality Measurement

HCFA 416 Preliminary Report

This report showed increases in EPSDT and “any” dental service rates, with a reduction in preventive dental services.

Summary of the HCFA 416 Preliminary Report

Quarterly Data: 3^rd Quarter 2000

Key areas discussed:

• Behavioral Health:  There was a slight decline (0.5%) in mental health and substance abuse penetration rates compared to 00(2) quarter.  Preferred One did not submit data (under their previous subcontractor, PROBH).
• Dental Health: Rates of children receiving “any dental service” declined 1% this quarter compared to the 3^rd quarter 1999.  Health Net (PHS) was the only plan that showed a slight (0.6%) improvement in utilization. Preventive service rates decreased 1.1% while treatment rates were lowered by 0.8%.   Preventive service rates decreased, compared to 2nd quarter 2000, by 2.6% to 10.8% and treatment service rates decreased by 1.1%.  Council members commented that 3^rd quarter dental rate decreases may be related to school vacations over the summer.  While overall dental services (any service) increased by 4.8% in 2000 as compared to 1999, preventive service rates decreased by 1.7%.  The health plans will discuss their individual dental action plans in July 2001.
• First trimester prenatal care decreased this quarter by 8% compared to the same quarter in 1999 while postpartum care increased by 10%.  Both DSS and DPH continue to work on identifying 1^st trimester PNC provided outside HUSKY managed care for women enrolled in HUSKY after this gestational period.  Variations in the utilization rates are also influenced by difficulty differentiating codes within the global fee claims and a growing reluctance of hospitals to add to initial incomplete data to MOC’s because of patient privacy concerns.

Behavioral Health Outcome Study

Senator Harp met with the Commissioners of DSS and DCF, the BH subcommittee chair and the Yale researcher to reassess strategies to move the study forward.  It is the legislative Council members’ position that information derived from the study is critical to future legislative policy and financial decision-making.  By early June, provider participation was increasing and the two agencies agreed to hire a part time study coordinator and the provider payment mechanism, which will be through DSS.

Benova: HUSKY Enrollment

Adult HUSKY A:  5800 additional adults have enrolled in HUSKY A in the past 6 months since the January 2001 start of enrolling caregivers of HUSKY A children at 150% FPL (children at 185% FPL remain eligible for HUSKY A). Almost 50% of the estimated eligible caregivers were enrolled within 6 months.

HUSKY A:  As of June 2001, HUSKY A enrollment for adults and children has increased by 3%, from 234,101 to 241,346.  There has been a steady increase in enrollments since November 2000.  Applications have significantly increased in May 2001 (2269) compared to May 2000 (1294).  Renewal applications more than tripled in May 2001 (420) compared to May 2000 (116).

HUSKY A <age 19 years:  There has bee a 1% increase in this group’s enrollment over the past year, with 178,567 now enrolled in HUSKY A as of June 2001.

HUSKY B enrollment has increased by 33% to 8,573 from 5577 children last June.

HUSKY B PLUS physical health program, located at the two Title V centers in New Haven (55) and Hartford CCMC (115) totals 170 enrollees.  The Yale Behavioral Health program had 9 children enrolled as of March 3/01.

Benova provided information requested by the Council in the last quarter:

• HUSKY B enrollment time from receipt of the application is about 60 days for 95% of the applicants.
• Net HUSKY B enrollment over 3 months shows a 2-3% gain when disenrollments are taken into account.  Dis-enrollment (744 over 2 months) reasons included lack of renewal application submission (37%), referral to HUSKY A (18%), enrollment in employer-based insurance programs (4%) and non-payment of premiums (27%).  In March 00, 91 children in HUSKY B were dis-enrolled due to non-payment of premiums; this is associated, by DSS regulations, with a 3-month lock-out period before the child can be re-enrolled in HUSKY B.  Of the 91 children, 41 remained dis-enrolled, 47 re-enrolled into their MCO with NO coverage gap. The Council recommended that DSS consider allowing the MCO to alert members to the up coming renewal period deadline.
• The Council noted that there was a significant drop in HUSKY A members, 88% of whom were children, last June, related to the end of the child’s continuous eligibility (CE) period.  The Department has sent special mailings to families (representing 3700children) whose children are coming to the end of their 12-month CE in an attempt to avoid this significant loss at the end of this June.

Council Recommendations to the Department of Social Services

The following recommendations were made to DSS related to issues discussed during the 2^nd quarter:

·        The Council requested DSS review the DOI criteria for claims fields that must be completed in order for acceptance of an initial claims submission with the HUSKY data requirements and determine how this criteria could be adapted to the HUSKY program.

·        The Department of Social Services consider recommendations made in the Safety Net Provider report regarding technical and administrative support for core safety net providers within the HUSKY program, taking into consideration DSS’s stated reservations about being the lead State Agency in addressing this problem.

·        HUSKY subcontractor administrative costs are not separately identified in the revenue/expense reports.  The Council requested that DSS provide more detailed information about subcontractor administrative costs in future reports.

·        The Council urged DSS to consider contractual language in the 2001 contract negotiations that would strengthen the MCO responsibility for subcontractor compliance with the DSS/MCO contract.

·        The Council recommended that DSS consider a process by which HUSKY MCO’s can alert their plan members to the approaching renewal period deadline for continued HUSKY enrollment.