The Transition to Medicaid Managed Care in Illinois December 12, 2013 Presented by: Sharon R. Miller

Transition to Medicaid Managed Care Welcome Who Am I ? –30 yrs. Experience in Managed Care –Adjunct Professor at Benedictine University teaching Managed Care and Business of Health Care Classes (MPH program)

What We Will Cover

The Basics of Managed Care Medicaid Now Taking You “Inside” the Payer World Different Departments and “Rules” Managed Care Reimbursements Capitation Reimbursement vs. Risk Medicaid Managed Care: Shifting Roles

Why are We Covering This ???? Managed Care programs are not just unique to Illinois…this is a nationwide movement. “I Heard that Managed Care Does Not Work”….not true What does this have to do with me and my job ? A “Shift” in levels of patient responsibility.

The Basics of Managed Care (HMO model) Managed Care is NOT “new”….been around since the 1920’s; then became popular in the late ‘70s. Health Insurance Companies establish “networks” of providers Patient selects a “Health Plan” Patient selects a “Primary Care Provider (PCP)” All medical services approved through this PCP Other rules: referrals, pre-cert needed for ER visits and certain medical procedures Tight controls over services

The Basics of Managed Care Our Focus HMO style

Medicaid Now State contracts with provider Contract pays based on a “fee for service” Eligibility and “need” determined thru Case Mgmt. Pt. “sees” provider Provider bills IDoA IDoA reimburses provider IDoA sends claim to State

Taking You “Inside” the Payer World State Contracts with Insurance Companies to Manage all aspects of the Patient’s Experience

Working with Payers – the “new” Medicaid configuration State contracts with insurance company State still handles “eligibility” Insurance company accepts a fixed “rate” to manage patient This is called a “Risk Contract” Patient is “managed” through insurance company State oversees compliance

Review of Medicaid Changes to Managed Care Changing Patient Relationship –New: patient relationship is with the insurance company, not the State Changing: Claims Processing done by Insurance Companies –New: State pays “lump sum” to insurance company (more on this later) State keeps eligibility function and takes on oversight function –Day-to-day handled by insurance company

Taking You “Inside” the Payer World DEPARTMENTS AdministrationMarketing/SalesFinanceCustomer ServiceMIS Dept. *** Operations/Claims*** Medical Affairs*** Provider Relations*** UM/QA Insurance Company

Managed Care Reimbursement: Capitation Reimbursement Models How Do Providers Get Reimbursed with Managed Care?

Managed Care Reimbursement: Capitation Reimbursement Models Many Different Ways: FFSFee Schedules P4P (Pay for Performance) DRG Hospital Case RatesHospital Bed Type Volume RatesPrimary Care Capitation Full Capitation

Managed Care Reimbursement: Capitation Capitation This is a payment methodology where a fixed amount of money is paid in advance to the insurance company for the delivery of health care services. New term: PMPM – Per Member Per Month

Managed Care Reimbursement: Capitation Capitation Example 1,000 patients (members) Capitation rate = $ per month Total pre-paid per month to insurance company = $1,063,760 Sounds good, right ????

Managed Care Reimbursement: Capitation What Does the Insurance Company Need to Do for this Advance Payment ? Everything in their contract !!!! –Doctor Services –Hospital Services –Long Term Care Services –Ancillary Care Services –Anything/Everything Else

Managed Care Reimbursement: Capitation And…..the Insurance Company does NOT get 100% of the capitation because of something called a “Risk Pool” Insurers will get paid 80% capitation with 20% withheld. In order to collect on the “withhold”, the insurance company needs to meet certain quality measures set by the State. If they meet the measures, they get the 20% back at the end of the year.

Capitation vs. Risk RISK CONTRACTS This is what capitation is all about: RISK If the insurance company controls the risk, they profit. If the insurance company does not control the risk, they lose money.

Medicaid Managed Care: Your Shifting Roles Eligibility Confirmation !!! Know What’s Covered and What’s Not !!! Understand “Who” is Responsible for “What” !!!

Medicaid Managed Care: Your Shifting Roles OVERSIGHTOVERSIGHTOVERSIGHT

Questions

Contact Information: Sharon Miller