1. Medicaid Managed Care for Persons with Severe Mental Illness in New York: Challenges and Implications Michael Birnbaum Director of Policy, Medicaid Institute United Hospital Fund June 5, 2008

2. The Medicaid Institute at the United Hospital Fund provides information and analysis explaining New York’s Medicaid program, with the goal of helping all stakeholders redesign, restructure, and rebuild the program.
“The Institute’s mission is to shape sound health policy and practice so that Medicaid can meet its most important challenges: covering more low-income New Yorkers, better managing patient care, reforming payment systems, providing effective long-term care, and improving program administration.”
James R. Tallon, Jr.
President
United Hospital Fund

3. A cornerstone of New York’s health insurance system
Medicaid provides insurance to 4.1 million low-income New Yorkers.
1.6 million children
1.5 million (non-elderly, non-disabled) adults
Over 1 million elderly or disabled beneficiaries
Medicaid funding sustains nearly one-third of New York’s health care economy.
Medicaid accounted for $44.7 billion in payments to health care providers and plans in New York in 2006.
Notes on enrollment data:
Medicaid’s child enrollment figure does not include Child Health Plus B enrollment, which was 390,000 as of June 2007.
Adult enrollment figure includes Family Health Plus, which had 500,000 enrollees as of June 2007.
Note: Medicaid enrollment is from June 2007; categories do not sum to total due to rounding.
Source: United Hospital Fund analysis of NYS DoH enrollment reports; CMS NHE and 64 data.

4. Managed care enrollment: 1997 - 2007
First five yrs: No activity
Second five yrs: more than doubled from 02-03
- more people coming into the program
- 2.8 m in 2000; 4.1 m in 2007 = about 50 % increase
waiver w mandatory MMC being implemented in phases, including in NYC, which accounts for 60% of state’s enrollment
Timeline:
MC introduced in early eighties
1991- goal of 50% in next ten years; state increased rates to plans, ability to create PHSPs- prepaid health service plans
1997- partnership approved
implemented in gradual phase-in
Source: United Hospital Fund analysis of NYS Department of Health enrollment reports:
March 1997 – March 2007.

5. Managed care penetration
Closer look at who’s enrolled in managed care…
NO SSI MANDATE
I want to take a moment to look at Medicaid managed care from two different angles.
Also- of the 23% of A&C not in MC, some are transitioning into MC, so share actually little higher.
If you look at enrollment and ask whether New York’s Medicaid program has moved to managed care, the answer is “yes and no.” We basically have two programs – a managed care program for children and adults and a FFS program for the elderly and disabled.
Source: United Hospital Fund analysis of NYS Department of Health enrollment reports:
April 2007.

6. Managed care: 60% of enrollment and 14% of spending
If you look at spending, we still have a FFS Medicaid program.
Only $1 in every $7 of Medicaid spending falls under “managed care.”
Original rationale- to control spending- but haven’t targeted the $
Don’t get ahead- has MMC saved money on next slide
Note: Medicaid spending is from FFY Enrollment is from December 2006.
Source: UHF analysis of New York State Department of Health enrollment reports and
CMS 64.

7. Disabled and Elderly (SSI) Medicaid beneficiaries in New York City
(Prior to 2006 )
(2006)
(2007)
(2007)
THIS IS NEW YORK CITY
Started in NYC b/c have most ppl (60%) and $. Plans large enough to take on risk.
State began removing exemptions in NYC in been phasing in over two years
Two mandates- captured little over 150,000
Even when mandate fully phased-in, still 350,000 excluded
Those who are duals and LTC- existing managed care program can’t work for them
N = 600,000

8. Medicaid Institute analysis of beneficiaries with SPMI
Analysis of beneficiaries’ spending, service use, and diagnostic patterns using the Medicaid paid claims file.
Data provided by New York State Department of Health
Research and statistical programming by Center for Health and Public Service Research, New York University
SSI adults (18-64) with SPMI in FFS Medicaid as of December 2004 and facing mandatory managed care.
Cohort identified using DOH algorithm, based on utilization thresholds for mental health services.
Slightly different population than those meeting a clinical definition of SPMI.
Explain- 6 years of claims- all diagnoses from every MA encounter.
SPMI algorithm, “ten or more encounters, including visits to a mental health clinic, psychiatrist or psychologist and inpatient hospital days relating to a psychiatric diagnosis; or one or more specialty mental health visits (i.e., psychiatric rehabilitation treatment program; day treatment; continuing day treatment; comprehensive case management; partial hospitalization; rehabilitation services provided to residents of the New York State Office of Mental Health licensed community residences and family-based treatment and mental health clinics for seriously emotionally disturbed children,” during the preceding year.

9. Those with the most severe mental health conditions
SSI adults with SPMI most often have :
Major depression
Bipolar disorder
Schizophrenia
Other psychosis
Some combination of the above
Most recent E&D policy SPMI
By definition- very challenging population.
Not people with low-grade depression and generalized anxiety disorder.
Low voluntary enrollment, plans have little/no experience. How mandate play out?
UHF access to MA claims files.

10. Rates of select chronic conditions: SSI adults with SPMI
Define low, high, ultra.
Highlights of severe chronic conditions.
Found that attempting to coordinate care going to be huge challenge.
Note incremental increases moving across groups.
Bottom 80%
Next 15%
Top 5%
Note: Data are from 1999 through Cardiovascular conditions include coronary heart disease, congestive heart failure, and hypertension.
Source: Birnbaum M. and L. Powell. Medicaid Managed Care for Persons with Severe Mental Illness: Challenges and Implications. Medicaid Institute at United Hospital Fund, 2007.

11. Prevalence of other significant health conditions: SSI adults with SPMI
Note jump up with SA from low to high;
Note decline for cancer.
Note: Data are from 1999 through Substance abuse conditions include alcoholism and drug addictions.
Source: Birnbaum M. and L. Powell. Medicaid Managed Care for Persons with Severe Mental Illness: Challenges and Implications. Medicaid Institute at United Hospital Fund, 2007.

12. Primary care visits in a one-year period: SSI adults with SPMI
Note: Data are for CY Shares may not sum to 100 percent due to rounding.
Source: Birnbaum M. and L. Powell. Medicaid Managed Care for Persons with Severe Mental Illness: Challenges and Implications. Medicaid Institute at United Hospital Fund, 2007.

13. Outpatient mental health visits in a one-year period: SSI adults with SPMI
Note: Data are for CY Shares may not sum to 100 percent due to rounding.
Source: Birnbaum M. and L. Powell. Medicaid Managed Care for Persons with Severe Mental Illness: Challenges and Implications. Medicaid Institute at United Hospital Fund, 2007.

14. Outpatient prescription drugs: SSI adults with SPMI
Note: Data are for CY Shares may not sum to 100 percent due to rounding.
Source: Birnbaum M. and L. Powell. Medicaid Managed Care for Persons with Severe Mental Illness: Challenges and Implications. Medicaid Institute at United Hospital Fund, 2007.

15. Hospital admissions in a one-year period: SSI adults with SPMI
Note: Data are for CY Shares may not sum to 100 percent due to rounding.
Source: Birnbaum M. and L. Powell. Medicaid Managed Care for Persons with Severe Mental Illness: Challenges and Implications. Medicaid Institute at United Hospital Fund, 2007.

16. Hospital admissions in a one-year period – a closer look: SSI adults with SPMI
Note: Data are for CY Shares may not sum to 100 percent due to rounding.
Source: Birnbaum M. and L. Powell. Medicaid Managed Care for Persons with Severe Mental Illness: Challenges and Implications. Medicaid Institute at United Hospital Fund, 2007.

17. Less concentrated Medicaid spending
There are very few low-cost SSI adults with SPMI.
The rule does not apply.
The lowest-cost 80 percent accounts for 46 percent of the cohort’s total spending.

18. Comparison of per capita Medicaid spending: SSI adults
There are no low-cost SPMIs.
The rule does not apply.
The lowest-cost 80 percent accounts for 46 percent of the cohort’s total spending.
(Bottom 80%)
(Next 15%)
(Top 5%)
Note: Costs are for CY 2004 and are not annualized for full-year enrollment.
Source: Birnbaum M. and L. Powell. Medicaid Managed Care for Persons with Severe Mental Illness: Challenges and Implications. Medicaid Institute at United Hospital Fund, 2007.
Birnbaum M. and J. Billings. New York’s SSI Beneficiaries: the Move to Managed Care.
Medicaid Institute at the United Hospital Fund, 2006.

19. Where can the Medicaid savings come from?
For lower-cost SSI adults with SPMI—the bottom 80 percent—two-thirds of Medicaid costs are already driven by services that would be a cornerstone of any intervention aimed at curbing spending.
Outpatient mental health services
Outpatient prescription drugs
Inpatient hospital account for only a small share (13%) of their Medicaid costs—leaving a very small target for spending that is “potentially avoidable.”
Lower cost SPMIs incur approximately $2,000 in inpatient costs. If you spent $2,000 per person on an intervention- you would just break even.

20. Patient profile: lower-cost beneficiary
Ms. F
Ms. F has a schizoaffective disorder with psychosis, hypothyroidism, and congestive heart failure. She received outpatient mental health care about three times a week from the same provider and filled prescriptions regularly. The balance of her service use during the year consisted of one primary care visit and five dental visits.

21. Patient profile: ultra-high cost beneficiary
Mr. A
On the other hand, Mr. A seems like a perfect target for an intervention to reduce costs by avoiding hospitalizations…
Mr. A was diagnosed with manic depression, bipolar disorder with psychosis, panic disorder, and paranoid schizophrenia. He had only three outpatient mental health visits, no primary care visits, and ten emergency department visits. He had 21 mental health inpatient stays at 12 different hospitals, lasting, all told, eight months. Mr. A filled no outpatient prescriptions.

22. Services delivered through FFS for MMC enrollees:
Key services are carved out of New York’s managed care benefit for SSI enrollees, including those with SPMI.
Services delivered through FFS for MMC enrollees:
Outpatient mental health
Inpatient mental health
Includes stays in general hospitals with MH diagnosis
Outpatient substance abuse
Inpatient substance abuse
Outpatient prescription drugs
Note: One substance abuse service, detoxification, is carved-in for SSIs.

23. Average per capita spending by service area: SSI adults with SPMI
SLOW
Total spending: high cost group overall, normally low cost much lower; still large differences.
The rule does not apply: lowest 80 percent account for 46 percent of the cohort’s total spending.
Hospitalizations drove much of spending for high cost
Wrinkle carve outs- DRUGS and BH.
BH=MH + SA
Most states BH, few drugs.
Focus on ultra high- 75% carved out applied to all groups
Current challenges as NY moves more costly/complex into MC
Note: Costs are for CY 2004.
Source: Birnbaum M. and L. Powell. Medicaid Managed Care for Persons with Severe Mental Illness: Challenges and Implications. Medicaid Institute at United Hospital Fund, 2007.

24. Challenges and opportunities
Current policy limits MMC plans’ ability to coordinate care and may undermine incentives to reduce hospitalizations.
Most spending remains outside managed care
State cannot assess MMC plan performance
Achieving cost savings and providing high-quality coordinated care will require a strategy beyond the two existing options:
MMC with significant carve-outs
Fee for service
Mention new Medicaid Institute analysis of behavioral health services.