1. DHS Health Care Services Study: Potential Coverage Strategies for the Non-Disabled Population Michael Bailit Bailit Health Purchasing, LLC March 18, 2004

2. 2 Goals of Study 1.Identify where cost savings can be realized in MA, GAMC, MNCare. We are considering: –What to cover (e.g., perhaps eliminate services that add little value to members’ health). –When to cover (e.g., perhaps require trial of less expensive alternatives before approving a more expensive service). –How to cover (e.g., perhaps use aggressive care management models to maximize effectiveness of services).

3. 3 Goals of Study 2.Utilize an open process to obtain a wide range of opinions and ideas. Create work groups of key interested parties, including DHS staff, stakeholders, & experts. Solicit suggestions, as well as reactions to possible programs, from the work groups. 3.Develop cost savings estimates. 4.Prepare a report for the legislature by 1/15/05. 5.Seek to “do no harm.”

4. 4 Study Structure Three bodies identifying and reviewing strategies: –Stakeholder Work Group –Health Services Experts Advisory Panel –DHS Work Groups

5. 5 Ordering of Meetings for Each Population Group 1.Stakeholder Work Group (1/29) 2.Internal DHS Staff Work Group (2/10) 3.Health Services Experts Advisory Panel (2/24) 4.Stakeholder Work Group (3/18)

6. 6 Timeline By 1/20/04: create study committees (DHS, Stakeholders and Advisory Panel) By 4/30/04: complete study of non-disabled population By 8/16/04: complete study of disabled population By 11/30/04: complete study of elderly population By 1/15/05: submit report to legislature –12/10/04: draft report to DHS –01/03/05: final draft report to DHS

7. 7 Option #1 Eliminate coverage of services that research evidence indicates are inappropriate, and sometimes, potentially harmful.

8. 8 Option #1: Eliminate Coverage of Unnecessary Care 1.Develop a medical policy function and medical management plan within DHS to review current coverage policy. 2.Create a DHS-HMO Medical Policy Committee to review coverage policy and ensure consistent application across DHS and its contractors. 3.Initiate a multi-state sponsored initiative to review medical evidence and make coverage recommendations modeled on the Oregon State EPC for state Medicaid pharmacy.

9. 9 Option #1: Eliminate Coverage of Unnecessary Care 4.Expand current prior authorization activities to address those services that are frequently delivered inappropriately. 5.Reduce reimbursement rates for services that are documented to be used inappropriately in high frequency. 6.Profile providers to identify those providers who appear to be providing services inappropriately and provide feedback.

10. 10 Option #2 Support statewide infrastructure development that will improve efficiency and quality.

11. 11 Option #2: Support Statewide Infrastructure Development 1.Participate in statewide discussions to develop a web-based EMR exchange. 2.Support adoption of EMR by rural practices and community clinics. 3.Support use of a Smart Card for MA, GMAC, and MNCare enrollees.

12. 12 Option #3 Apply a cost/benefit test to coverage policy for medical scanning and medical products.

13. 13 Option #3: Cost/Benefit Test for Medical Scanning and Medical Products Under prescribed situations cover only those medical scanning services and those medical products that evidence finds to be most cost-effective.

14. 14 Option #4 Cautiously pursue disease management (DM) strategies.

15. 15 Option #4: Disease Management 1.Implement well-designed pilot programs for the fee-for-service population. 2.Evaluate the effectiveness of HMO DM strategies for DHS-enrolled populations. 3.Develop prescribed requirements for HMO DM programs. 4.Consider option of one DHS-wide DM vendor. 5.Partner with other purchaser organizations and the Department of Health to develop provider capacity to deliver DM services (implement the Chronic Care Model).

16. 16 Option #5 Explore the use of predictive modeling to prevent near-term hospitalization.

17. 17 Option #5: Predictive Modeling Explore the use of commercial predictive modeling software and care programs to identify MHCP recipients who are likely to need extensive care or are likely to be costly in the future, and to intercede to assist them and avoid the need for future service use.

18. 18 Next Steps DHS staff will further explore the feasibility of the strategies identified to date. Stakeholders with comments on the strategies presented today should submit them to Michael Bailit. A shorter list of strategies will be developed for the report with estimated savings for each one. First stakeholder meeting re: under 65 disabled population scheduled for 5/13.

19. 19 Key Contacts Michael Bailit mbailit@bailit-health.com 781-237-5111 Tom Fields tom.fields@state.mn.us 651-297-7303