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Prepared Witness Testimony The House Committee on Energy and Commerce
Evaluating Coordination of Care in Medicaid: Improving Quality and Clinical Outcomes.
Subcommittee on Health
Mr. Dan Hilferty
Mr. Chairman and members of the subcommittee, my name is Daniel J. Hilferty. I am President and CEO of the AmeriHealth Mercy/Keystone Mercy Health Plan. AmeriHealth Mercy and its family of health plans serve over 1.3 million Medicaid beneficiaries in six states, Pennsylvania, New Jersey, Kentucky, South Carolina, Virginia and California. As a mission-driven organization, AmeriHealth Mercy specializes in managing the delivery of health care services and providing health plan management services for organizations serving enrollees in Medicaid managed care programs and State Children's Health Insurance Programs (SCHIP). I appreciate this opportunity to testify about the value that private sector health plans bring to the Medicaid program. AmeriHealth Mercy/Keystone Mercy has played a leading role in improving health care quality for Medicaid beneficiaries. We do this by coordinating care, placing a strong emphasis on preventive health care services, providing disease management services for chronically ill patients, and offering innovative programs to promote the health and well being of our Medicaid enrollees. We are strongly committed to ensuring that Medicaid enrollees have access to high quality, affordable, patient-centered health coverage. I am also testifying today on behalf of the American Association of Health Plans (AAHP), of which AmeriHealth Mercy/Keystone Mercy Health Plan is a member through our parent, Independence Blue Cross of Pennsylvania. AAHP and its member plans have a longstanding commitment to Medicaid and its mission of meeting the health care needs of low-income Americans and persons with disabilities. AAHP's membership includes approximately 100 health plans participating in Medicaid managed care programs. In my testimony, I will refer to such plans as Medicaid managed care plans. Collectively, AAHP members serve more than half of the 15.5 million Americans who are covered under Medicaid managed care plans. Today, I will focus on the strategies Medicaid managed care plans are implementing to improve the health care system for Medicaid enrollees. I will begin by reviewing the importance of coordinated care and why this approach is producing better health outcomes and higher satisfaction among Medicaid beneficiaries than Medicaid fee-for-service programs. Next, I will focus on preventive health care services and disease management programs offered by Medicaid managed care. I will also highlight several specific examples of the dozens of innovative programs that plans have developed to meet the needs of their Medicaid enrollees. My testimony will also emphasize the importance of ensuring that state Medicaid managed care programs are funded at levels that support the participation of Medicaid managed care plans and their providers. At the same time, I will discuss the important role that plans are playing in delivering cost-effective health coverage and ensuring that state Medicaid programs receive maximum value for their limited resources at a time when state budgets are severely strained. Coordination of Care Medicaid managed care plans have developed systems of coordinated care for ensuring that Medicaid beneficiaries receive all medically appropriate health care services, covered under the state Medicaid managed care program, on a timely basis in a challenging environment in which an individual's Medicaid eligibility may change during the year. In general, each Medicaid beneficiary is encouraged to establish a relationship with a primary care physician who helps makes arrangements for specialty visits, hospital care, home health care, or other care he or she may need. The primary care physician ensures that each patient receives the best available care in the most appropriate setting, and oversees all of a patient's treatments and medications. Moreover, coordinated care systems provide for the seamless delivery of health care services across the continuum of care. In other words, physician services, hospital care, prescription drugs, and other health care services are integrated and delivered through an organized system whose overriding purpose is to prevent illness, improve health status, and employ best practices to swiftly treat medical conditions that occur. This approach is far superior to a system of uncoordinated care in which patients are forced to navigate a fragmented health care system on their own. Coordinated care provides the opportunity to reduce emergency room visits for routine care, and to ensure prompt access to primary care physicians and specialists when care is needed. It also promotes communication between treating physicians about various treatments and medications a patient receives. This is very important because the interaction of multiple medications prescribed by multiple physicians can result in high risk to the patient and death in some instances. Coordinated care creates an intense focus on health care quality because health care services are well integrated and a single physician oversees each patient's care. AmeriHealth Mercy serves a high percentage of non-traditional Medicaid recipients, the "sickest of the sick," those accounting for the highest costs (aged, blind and disabled). AmeriHealth Mercy is at risk for the total cost of care for the patient/member. Therefore, we have designed a population-based approach which links traditional medical care management with pharmacy care management to promote comprehensive, cost effective, quality care. The results are striking. Our case management programs for high cost populations have enhanced the quality of life for our members and produced an annual savings of $740,000 for just 190 high cost members. Research findings indicate that systems of coordinated care are highly successful in improving access to health care for Medicaid enrollees. For example, a study published in the March 2001 issue of the American Journal of Public Health found that, in New York City, Medicaid managed care enrollees are more likely than Medicaid fee-for-service enrollees to have a regular source of health care and also more likely to obtain care from a doctor's office or a clinic. The same study found that Medicaid managed care enrollees are less likely than Medicaid fee-for-service enrollees to obtain care from a hospital emergency room or an outpatient hospital clinic, which are not optimal settings for receiving routine care. Preventive Health Care Services Instead of focusing solely on treating beneficiaries when they are sick or injured, Medicaid managed care plans place a strong emphasis on preventive health care services that help to keep beneficiaries healthy, detect diseases at an early stage, and avoid preventable illnesses. According to AAHP's 2001 and 2002 Industry Surveys, Medicaid managed care plans routinely provide coverage for diabetes screening, colorectal cancer screening, prostate cancer screening, mammograms for women age 40 and older, hearing tests for newborns, and osteoporosis screening. In addition, a large percentage of Medicaid managed care plans contact enrollees on a regular basis with reminders about child immunizations, mammograms, cervical cancer screening, or other preventive services. By actively encouraging enrollees to receive these services, plans are empowering them to take proactive steps to enhance their health and well-being. AAHP's surveys also found that almost all Medicaid managed care plans offer various types of counseling programs. Many programs focus on prenatal care, nutrition, or exercise counseling, while others address issues such as smoking cessation or alcohol dependency. These programs help enrollees address behavioral or lifestyle issues in ways that can significantly improve their health and the quality of their lives. Medicaid managed care plans also typically exceed the core objectives of the Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) program by placing a strong emphasis on primary care for children. The EPSDT programs of Medicaid managed care plans typically include aggressive education and outreach components in order to ensure that children receive complete physical examinations, hearing and vision checkups, dental care, immunizations, and other health care services they need to stay healthy. One Medicaid managed care plan in Connecticut has implemented a program that, by using specially trained staff to place "welcome" calls to Medicaid enrollees, was successful in increasing EPSDT participation rates from 52 percent to 75 percent in just one year. The delivery of these crucial primary care services is an important factor in promoting good health among children and adolescents in the Medicaid program. Passport Health Plan, owned by University Health Care in Kentucky and managed by our organization, has improved adolescent immunizations by over 160 percent from 1997 to 2002, and increased well-child visits in the first 15 months of life by 216 percent. Over 90 percent of our pregnant members receive prenatal care meeting the standards of the National Committee for Quality Assurance from whom Passport has earned the highest level of accreditation, Excellent in all categories. Disease Management Services Medicaid managed care plans have also introduced the concept of disease management programs to Medicaid - improving quality of care for beneficiaries with chronic conditions by focusing on the comprehensive care of patients over time, rather than individual episodes of care. Because of their prevalence, asthma and diabetes are the two illnesses that are targeted most frequently for disease management services by Medicaid managed care plans. AAHP's surveys found that the top three benefits of these services are: (1) reduced morbidity and mortality; (2) lower health care costs; and (3) improved patient satisfaction. The success of these programs is demonstrated by research findings which show that asthmatic children covered by Medicaid managed care plans are less likely to experience serious asthmatic attacks that require them to be hospitalized, relative to asthmatic children who have fee-for-service Medicaid coverage. According to a 2002 report by the Wisconsin Department of Health and Family Services, 11.7 percent of asthmatic children in the Medicaid fee-for-service program had asthma-related hospital admissions, compared to only 8.6 percent of asthmatic children in Medicaid HMOs. AmeriHealth Mercy's disease management programs have improved health outcomes and significantly lowered the cost of care for the highest cost patients. These programs have achieved major savings and improved patient care for small, but very ill populations groups. For example, our Hemophilia Case Management program has reduced hospitalizations by 40 percent for 60 members, thus saving $2 million annually in the cost of blood factor and medical care. Our Dialysis Case Management program saves $2 million annually by improving patient care for 300 members. Finally, our Sickle Cell Case management program has reduced hospitalizations by 23 percent and emergency room visits by 24 percent. The savings from high quality Medicaid managed care are indisputable and the value to members is high. Innovations by Medicaid Health Plans Last year, AAHP published a report highlighting more than 60 initiatives Medicaid managed care plans have undertaken to improve the health status of Medicaid beneficiaries. This report provides practical guidance to policymakers and health care professionals on effective strategies for addressing the needs of Medicaid beneficiaries. For example, our plan in Pennsylvania, Keystone Mercy, is promoting preventive health care for its Medicaid enrollees through a Health Ministry Program for Women. This program links church groups with other medical and social services in their communities. Using a team of specially trained nurses, this program provides women with health assessments to identify diseases for which they may be at risk. This assessment is followed by a second session in which women learn about preventive measures they can take to avoid these conditions and, at the same time, learn about nutrition, exercise, and stress management techniques. Another AAHP member plan, Humana, has implemented a program in both Florida and Illinois to improve patient care for pregnant Medicaid enrollees. Under this program, the health plan first takes steps to identify women who are at risk of experiencing complications during their pregnancies. Obstetrical case managers then perform ongoing assessments of these women and coordinate the care they receive from their primary care physicians and other health care professionals. Educational materials, including a pregnancy-related guidebook, are a key component of this program. A survey found that 99 percent of participants were satisfied with this program. Another excellent example is an asthma program that an AAHP member plan, UCare Minnesota, implemented in Minnesota in 2000. This program provides Medicaid beneficiaries who have asthma with an "action plan" - developed by their primary care physicians - with specific directions on steps to take when a patient's asthma reaches certain levels of severity. In addition, this program makes arrangements for respiratory nurses to conduct home health visits during which they educate patients about the proper use of their inhalers and peak flow meters. Patients can also reach respiratory nurses through a telephone hotline that is open 24 hours a day, seven day a week. A survey of patients participating in this program found that 97.1 percent were satisfied with their action plan and 98.8 percent were satisfied with their nurses. The Medicaid populations we serve are unique. Our PerformRx program, an in-sourced pharmacy management program, has applied our 20 years of experience in Medicaid care management to achieve an 8.8 percent average annual pharmacy trend, versus the national trend of 20 percent. Remember, this is for the sickest, most disadvantaged citizens! Adequacy of Medicaid Health Plan Payments While Medicaid managed care plans are focused intensely on improving health care for Medicaid enrollees all across the nation, our efforts are complicated by the steps states have been taking, in response to budget crises, to limit funding for Medicaid benefits in recent years. According to a September 2003 report by the Kaiser Family Foundation, 21 states either reduced or froze Medicaid managed care payments in fiscal year 2003, and 19 states are targeting Medicaid managed care for similar payment cuts or freezes in fiscal year 2004. These cost containment measures are seriously challenging the viability of Medicaid managed care program participation for plans that are demonstrating their strong commitment to providing Medicaid beneficiaries with the high quality health coverage they need and deserve. AAHP and its member plans have strongly encouraged the Centers for Medicare and Medicaid Services (CMS) to take appropriate steps to ensure that state Medicaid agencies provide adequate funding for plans serving Medicaid enrollees and their providers. We are pleased that the agency has issued regulations and related guidance upholding the fundamental principle that Medicaid managed care payment rates must be actuarially sound. We believe it is critically important for CMS to proactively work with the states to ensure that these regulations are implemented in a way that promotes fair payments to support the continued viability of Medicaid managed care programs. We also urge the subcommittee to closely monitor this issue and take any steps that may be needed to ensure that payments to Medicaid managed care plans are actuarially sound. Value of Medicaid Managed Care While payment adequacy is a major concern for Medicaid managed care plans and their enrollees and providers, it is also important for Congress to recognize that plans are working hard to ensure that state Medicaid managed care programs receive the highest possible value for the dollars they spend on health care. In addition to delivering high quality health coverage, health plans also bring value to the Medicaid program by providing coverage that is much more cost-effective than fee-for-service Medicaid coverage. One recent study, conducted by the Lewin Group, found that pharmacy benefits are 10 to 15 percent less costly under Medicaid managed care programs, compared to Medicaid fee-for-service programs. This is a highly significant finding, considering that rapidly rising prescription drug costs are a major factor contributing to medical inflation throughout the health care system. Another study, conducted by Milliman USA, Inc., estimated that Medicaid managed care plans saved the Wisconsin Medicaid and BadgerCare programs a total of $35 million in 2001 and $56 million in 2002. This study indicated that health plans did a better job, relative to the Medicaid fee-for-service system, of reducing the inappropriate use of emergency rooms and unnecessary inpatient hospital stays. Moreover, this study found that Medicaid health plan enrollees in Wisconsin are more highly satisfied than Medicaid fee-for-service enrollees. Yet another study, conducted by Schaller Anderson, found that managed care plans in Oklahoma's Medicaid program achieved savings of four percent in the total medical and administrative costs associated with health care for persons with chronic disabilities. This same study found that 61 percent of Medicaid managed care enrollees with chronic disabilities said their care was better than under the Medicaid fee-for-service program; another 32 percent said their care was about the same. Fully 60 percent of these beneficiaries said it was easier to get prescription drugs through their health plan than through the fee-for-service program. Passport, our plan in Kentucky, has saved the Commonwealth $92.4 million on 100,000 lives in just four years and our HealthChoices program in Pennsylvania has saved the Department of Public Welfare hundreds of millions of dollars since its inception in 1997. At the same time, enrollees in these programs benefit from improved continuity of care and are highly satisfied with their care. Conclusion In conclusion, I want to emphasize that AmeriHealth Mercy and its family of health plans, along with other AAHP member plans, is strongly committed to our mission of providing high quality, affordable, patient-centered health coverage to low-income Americans and persons with disabilities. We are proud of the success we have demonstrated in improving the health care that is available under Medicaid programs to many of our nation's most vulnerable citizens. By coordinating care, by emphasizing prevention, by offering disease management services to the chronically ill, and by developing innovative programs to meet the unique needs and circumstances of our Medicaid enrollees, we have established ourselves as a model for Congress to consider as you address the challenges in Medicaid - including the current funding crisis - and undertake future efforts to expand coverage to the uninsured.
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