1. Proposed Delivery System Options for the Colorado Medicaid Dental Program

2. Holder of Contract 3 Options: Full Risk Administrative Service Organization (ASO)/Third Party Administrator (TPA) (Self-Funded) Incentive – Based Description Full claims/utilization risk is passed on to vendor. Claims expense, administrative expense and any profit/loss are vendor’s responsibility. Vendor is typically paid on per member per month basis (PMPM). Financial risk for utilization is maintained by State. Vendor is paid a monthly administrative fee only for services performed – typically on a per member per month basis (PMPM). Financial risk for utilization is typically maintained by State under this model. Vendor paid an administrative fee for services performed (PMPM). Financial incentives – contracts are established annually that pay vendor a bonus for hitting established targets, (e.g., clinical, network, cost, etc.). Advantages  No financial risk to State – more predictable.  Administratively easier for state than alternative.  Vendors have more incentive to manage program costs yet this can be mitigated via incentives under an ASO arrangement  Meaningfully less expensive to State if proper oversight is in place. Savings can be returned to the program via enhanced benefits, reimbursement, outreach initiatives, etc.  State maintains more control over program elements, and can more easily direct/align program to reach desired state objectives.  Generally this model is viewed more favorably by constituencies when proper vendor oversight exists.  Same as ASO above yet with added incentives provided to focus vendor on achieving key benchmarks.  Shared data analysis means unanticipated higher utilization can be mitigated to some degree via stringent oversight by state.  With proper vendor oversight and potentially aligned financial incentives, higher program costs can be mitigated. Proposed Delivery System Options for the Colorado Medicaid Dental Program

3. Holder of Contract 3 Options: Full Risk Administrative Service Organization (ASO)/Third Party Administrator (TPA) (Self-Funded) Incentive – Based Disadvantages  Expensive – premium is paid to vendor for vendor assuming risk.  Vendors have more incentive to manage program costs. They can be overly aggressive in managing care which impacts enrollee access to care and will frustrate network, potentially limiting provider participation.  Less client choice if network is not big enough.  State holds financial risk for unanticipated high utilization.  Somewhat greater administrative burden on the State.  Vendors have less incentive to closely manage program costs.  More costly than a pure ASO model (however, only if key identified benchmarks are met). Network Options  State rents the network  State owns the network OR  State rents the network (see table on Page 1)  State owns the network OR  State rents the network (see table on Page 1) Proposed Delivery System Options for the Colorado Medicaid Dental Program