Location:
HOSPITALS; WELFARE - MEDICAL ASSISTANCE (MEDICAID)
Scope:
Program Description

OLR Research Report


March 24, 2010

 

2010-R-0138

PRIMARY CARE CASE MANAGEMENT: NUMBERS OF ENROLLMENT, EFFECT ON BUDGET, AND IMPACT ON HOSPITAL VISITS

By: Jeanne Hayes, Legislative Fellow

You asked how many enrollees are in other states' Primary Care Case Management (PCCM) programs, and what impact PCCM has on state budgets and hospital visits.

SUMMARY

PCCM is a medical care model that assigns Medicaid patients to a primary care provider (PCP) (usually a physician, nurse practitioner, or physician's assistant) who is responsible for managing the quality, appropriateness, and efficiency of the care they receive. The PCP also coordinates testing and specialty appointments, and collects the results. In addition to the traditional PCCM model described above, there is also an enhanced PCCM model that offers patient education, network management, and performance incentives to increase cost-effectiveness, improve patient outcomes, and encourage greater agency participation.

As of 2008, there were 29 states using a traditional or enhanced PCCM model in their Medicaid programs, either as the sole delivery system or in conjunction with managed care organizations (MCOs) (Kaiser Commission on Medicaid and the Uninsured, Medicaid and Managed Care: Key Data, Trends, and Issues, February 2010). Connecticut began a PCCM pilot program in 2009, bringing the total to at least 30 states.

The Center for Health Care Strategies (CHCS) issued a September 2009 report on enhanced PCCM programs in five states (Arkansas, Indiana, North Carolina, Oklahoma, and Pennsylvania) that contains recent information on the number of PCCM enrollees, effect on state budgets, and impact on hospital and emergency room (ER) use visits (James Verdier et al., CHCS, Enhanced Primary Care Case Management Programs in Medicaid: Issues and Options for States, September 2009). OLR was also able to obtain recent information on Iowa's traditional PCCM program. PCCM enrollment in these six states ranges between 63,781 (Arkansas) to almost one million (North Carolina). With one exception (Arkansas), PCCM enrollment in these six states continues to increase. PCCM programs can result in a cost-savings to states over a long-term period, provided that they adequately coordinate care.

There is mixed evidence regarding whether PCCM programs reduce avoidable hospital and ER visits. Because PCCM programs usually lack influence over hospitals, they are limited in their ability to reduce avoidable hospital use. Studies suggest that a more effective way to reduce unnecessary hospitalizations and ER visits is to target primary care physicians and individuals at a high-risk of hospitalization (such as asthma patients) to persuade them to offer and seek primary care when emergency care is avoidable. Pennsylvania has done this with success.

For further information on PCCM programs and their impact, see OLR Reports 2009-R-0216 , 2008-R-0622, and 2006-R-0550.

PCCM ENROLLMENT

Arkansas

In 1994, Arkansas began an enhanced PCCM program that gives providers tools and incentives to facilitate and encourage managed care. Enrollment in Arkansas's PCCM program decreased slightly between 2005 (499,029) and 2008 (452,775). Enrollment numbers for 2009 are unavailable.

Indiana

From 2003 to 2008, Indiana operated a chronic disease management program for beneficiaries with diabetes or congestive hear failure. This program led to the start of an official enhanced PCCM program (Care Select) in 2008. That year, the Kaiser Family Institute, a non-profit health policy research organization, reported that Indiana had 46,842 members enrolled. By 2009, the number of enrollees had increased to 63,781 (Verdier, supra).

Iowa

Iowa started a PCCM pilot in seven counties in 1990. In 1993, Iowa extended PCCM almost statewide. Currently, PCCM operates in 93 of Iowa's 99 counties. The state exempted six rural counties from mandatory participation in PCCM because of its potential to burden the few medical groups in the area.

During the pilot's three years (1990-1993), about 40,000 members enrolled. According to Denise Janssen, bureau chief of the Iowa Managed Care and Clinical Services, Iowa presently has approximately 187,000 members enrolled. Currently 43% of all Medicaid enrollment is in the PCCM program. Most enrollees are children and women of child bearing age. Janssen reports that there are now 1,800 PCPs and that they enrolled with “surprising enthusiasm.”

North Carolina

In 1991, North Carolina started a traditional PCCM program that was enhanced in 1998. As of June 30, 2008, North Carolina had 890,473 members enrolled in its enhanced PCCM program (Community Care) (Kaiser Family Foundation, Medicaid Enrollment in Managed Care by Plan Type, as of June 30, 2008) (showing PCCM enrollment numbers for the 50 states). Today, the number of enrollees is almost one million.

Oklahoma

Oklahoma started a PCCM program in 1996. In 2004, Oklahoma enhanced the program by hiring 32 nurse care managers and two social service coordinators. The new staff was intended to provide care coordination similar to the former MCOs, but at a lower cost.

By July 2009, Oklahoma's enhanced PCCM program (SoonerCare Choice) had 415,982 members enrolled. Just six months later, in February 2010, enrollment had increased to 445,296 (Oklahoma Health Care Auth., SoonerCare Fast Facts, February 2010).

Pennsylvania

Pennsylvania's ACCESS Plus enhanced PCCM program began in 2005 to extend a form of Medicaid managed care to rural areas not served by its MCO program. In that year, there were 272,627 members enrolled. By December 2008, there were 298,792 members enrolled (Verdier, supra).

BUDGET IMPACT

The budget impact of PCCMs is difficult to determine and often not studied. A February 2010 Kaiser Family Foundation report found that enhanced PCCM programs may perform as well as, or better than MCOs in terms of cost if sufficient resources are devoted to their design, implementation, management and funding. A major roadblock to cost savings is PCCM's lack of control over hospital use (PCPs are not at financial risk for hospitalization and the programs often have no contracts with hospitals to give them leverage over utilization) (Kaiser Commission, supra).

Arkansas, Indiana and Iowa

We were unable to find recent studies evaluating the impact of PCCM on the state budgets of Arkansas, Indiana, and Iowa. A University of Iowa study estimated that PCCM saved Iowa $66 million between 1989 and 1997 (Health Services Research, August 2006). But OLR could not find more recent information regarding PCCM's impact on the Iowa state budget.

North Carolina

North Carolina contracts with an outside actuarial firm, Mercer Government Human Services Consulting (Mercer), to prepare annual estimates of the savings of its enhanced PCCM program. Mercer estimated in February 2009 that the enhanced PCCM program saved the state approximately $147 million in 2007, compared to what costs would have been without the program. This represented a cost-savings of approximately 11% (Verdier, supra). This cost savings is likely due to initiatives to help enrollees better manage chronic conditions, such as asthma and diabetes, so that they do not need to visit the ER (Community Care of North Carolina, Program Impact).

Oklahoma

Among children and non-disabled adults, who account for approximately three-quarters of the enrollment in Oklahoma's PCCM, annual per-member costs have been significantly below the national average every year between 1996 and 2005 (SoonerCare Managed Care History and Performance: 115 Waiver Evaluation, January 2009).

Pennsylvania

Pennsylvania also uses Mercer to calculate the cost of its enhanced PCCM program. Mercer compared the administrative PCCM costs to the voluntary MCO program that operated in the same counties. Mercer estimated that cost of the PCCM program ($12.8 million) was almost half that of the MCO program (Verdier, supra).

EMERGENCY ROOM AND HOSPITAL USE IMPACT

There is mixed data on whether PCCM programs reduce avoidable hospital and ER visits (Managed Care, supra). Some studies show reduced hospitalizations, other studies show increased hospitalizations, and others show no effect on hospital use. PCCM programs often face difficulty reducing avoidable hospital and ER visits because PCCMs usually do not contract with hospitals and thus have no legal or formal relationship that would give them a way to influence hospital behavior (Verdier, supra). Influencing the behavior of beneficiaries and primary care providers, as opposed to hospitals, may help reduce unnecessary hospital visits.

Given the limited savings from reduced hospital and emergency room visits, studies suggest that states target high-cost, high-need patients to help them avoid unnecessary hospital use. Some states have targeted people with asthma. For example, one state asthma management initiative for PCCM patients led to a decrease in the number of emergency visits by asthmatics and created a cost savings of three to four dollars to Medicaid for every dollar spent providing disease management support (Rossiter LF, et al., The Impact of Disease Management on Outcomes and Cost of Care: A Study of Low-Income Asthma Patients, Inquiry, Summer 2000; 37 (2): 188-202).

Arkansas

According to Sheena Olson of the Arkansas Division of Medical Services, Arkansas does not have any recent studies evaluating the impact of PCCM on emergency care and hospital use.

Indiana

Indiana has not completed a study on the impact of PCCM on hospital and ER visits. To reduce avoidable hospitalizations, Indiana encourages strong relationships between PCPs and members so that PCPs are aware of non-life-threatening conditions that can be treated without recourse to hospitalization.

Iowa

A requirement of Iowa's PCCM program was that its impact on emergency care be reviewed. The University of Iowa Public Policy Center performed the review and found that office visits increased while ER visits decreased. In Iowa, the ER triages a PCCM patient and then a primary care physician must approve payment for the emergency treatment plan. A primary care physician can use his or her discretion to refuse payment when the patient's medical needs do not require emergency care. Dennis Janssen believes that this physician discretion gives PCPs some leverage over hospitals and is responsible for reduced emergency care expenses.

North Carolina

According to Denise Levis Hewson, a director at Community Care of North Carolina, there were decreases in ER visits when PCCM was first enacted, but the trend has not continued. She cautions that the 2009-2010 H1N1 flu outbreak increased emergency room visits and could taint recent data measuring PCCM's impact on ER visits.

North Carolina has developed certain initiatives to target groups at high risk of hospitalization, including those with asthma, diabetes, and congestive heart failure. One study found that such initiatives lead to a 37% decrease in the average monthly rates of non-urgent ER visits (see 2008-R-0622).

Oklahoma

Evidence suggests that PCCM controlled the number of avoidable hospitalizations in Oklahoma between 2003 and 2006. One study attributes the success in controlling avoidable hospital to the work of nurse care managers and PCPs (Verdier, supra). In 2003, SoonerCare Choice enrollees had 1.2 ER visits for every physician office visit. By 2007, the ratio was .74 ER visits for every physician office visit, a decline of 38% (SoonerCare Managed Care History and Performance: 115 Waiver Evaluation, January 2009).

Pennsylvania

Pennsylvania recently completed a study that found that ER visits among the total PCCM population decreased 34.8% from 2006 to 2009. The potential cost-savings from this reduction is great, since the average cost for outpatient non-urgent care in Pennsylvania is $70, compared to $170 for non-urgent ER visits.

The decrease in ER use is likely attributable to Pennsylvania's Emergency Department Reduction Program (Reduction Program), started in 2007, which created a call center to identify enrollees who used the ER frequently to encourage them to visit a PCP. The Reduction Program also sent mailings explaining appropriate ER use to enrollees with four or more visits to the ER in the last six months. In addition, the Reduction Program started a coordination initiative to (1) make providers aware of patients who regularly seek ER treatment; (2) increase the percent of enrollees with high ER use who seek follow up treatment with their PCP; and (3) increase outreach and education programs (Automated Health Systems, ED Reduction Program, 2010).

JH:ts