1. Use of AHRQ’s Prevention and Pediatric Quality Indicators in MCO Rate Setting Pennsylvania Office of Medical Assistance Programs (OMAP) David K. Kelley MD,MPA Chief Medical Officer, OMAP c-dakelley@state.pa.us

2. Pennsylvania Medical Assistance Provides health care coverage to over 2.0 million consumers (14% of the Commonwealth’s population) Operates a capitated managed care program - HealthChoices ® - in 25 urban and suburban counties covering 1.1 million consumers Operates a managed FFS program in 42 rural counties for 290,000 consumers- Access Plus

3. ERIE CRAWFORD WARREN FOREST McKEAN POTTER CAMERON ELK VENANGO MERCER BEDFORD BLAIR SOMERSET CAMBRAN INDIANA JEFFERSON CLINTON LYCOMING SULLIVAN TIOGA BRADFORD WAYNE WYOMING PIKE LUZERNE MONROE SCHUYLKILL CARBON LEHIGH COLUMBIA BUCKS BERKS CHESTER LANCASTER MONTGOMERY YORK LEBANON PERRY CUMBERLAND DAUPHIN JUNIATA MIFFLIN UNION SNYDER CENTRE ADAMS FRANKLIN FULTON HUNTINGDON CLEARFIELD UPMC CLARION LACKAWANNA MONTOUR + PHILADELPHIA DELAWARE SUSQUEHANNA LAWRENCE BUTLER ARMSTRONG FAYETTE WESTMORELAND ALLEGHENY BEAVER WASHINGTON Mandatory Managed Care - HealthChoices Service Areas GREENE NORTHAMPTON ACCESS Plus and Voluntary Managed Care (where available)

4. Medicaid Value Based Purchasing Efficiency adjustments to Managed Care Organization (MCO) rate setting –Inpatient –Emergency Department –Pharmacy –TPL/COB MCO pay for performance Nonpayment for related readmissions within 14 days Reduced or no payment for preventable serious adverse events

5. Why Inpatient Care Hospital costs account for 32% of MCO expenditures Cost-effective and appropriate use of hospital services is a cornerstone of a well run efficient MCO Quality driven outpatient care management leads to fewer admissions Goal is to identify potentially preventable hospitalizations using PQIs and PDIs

6. Inpatient Efficiency Adjustments Prevention Quality Indicators (14) Pediatric Quality Indicators (5) Other Ambulatory Care Sensitive Conditions –Cellulitis –Pelvic inflammatory disease –Ear, nose, throat conditions C-section mix adjustment

7. Prevention Quality Indicators (PQIs) Diabetes- –uncontrolled diabetes –short-term complications –long-term complications –lower extremity amputation Perforated Appendix Chronic Obstructive Pulmonary Disease Hypertension Congestive Heart Failure Low Birth Weight Dehydration Bacterial Pneumonia Urinary Tract Infection Angina Adult Asthma

8. Pediatric Quality Indicators (PDIs) Asthma Diabetes Short-term Complications Gastroenteritis Perforated Appendix Urinary Tract Infection

9. Adjustments Applied PQI and PDI exclusions Minimum duration of member enrollment Removed the sickest 25% using risk adjusted CDPS © scores Made an additional 50% credibility reduction in preventable costs in part to account for psych-social issues

10. Congestive Heart Failure Preventable admissions- 2,581 Total dollars spent- $20.7 million Removal of members not enrolled minimum of 4 months with MCO Removal of “sickest quartile” Admissions after enrollment adjustment and risk assessment- 1,470 Dollars spent after enrollment and risk adjustment- $10.6 million Dollars spent after 50% credibility factor- $5.3 million

11. Inpatient Efficiency Adjustments Similar analysis done for 17 PQIs and 5 PDIs Excluded Low Birth Weight PQI Total PQI/PDI dollars- $30.3 million –Asthma (PQI 15, PDI 14)- $8.0 million –CHF (PQI 08)- $5.3 million –Diabetes (PQI 01,03,14,16, PDI 15)- $4.9 million –Pneumonia (PQI 11)- $4.3 million –COPD (PQI)- $2.6 million

12. Inpatient Efficiency Adjustments Over 20,000 PQI/PDI admissions Over $153.9 million spent on preventable admissions Preventable admissions consume 13.7% of inpatient costs DPW adjusted 2.7% of inpatient spend ($30.3 million) from the MCO rates

13. Admissions Rates Asthma –2007 Admits per 1000 member months= 4.49 –2008 Admits per 1000 member months= 4.51 CHF –2007 Admits per 1000 member months= 18.17 –2008 Admits per 1000 member months= 17.74 Diabetes –2007 Admits per 1000 member months= 5.33 –2008 Admits per 1000 member months= 5.58 COPD –2007 Admits per 1000 member months= 5.91 –2008 Admits per 1000 member months= 7.61

14. Conclusions-PQI Efficiency Adjustments Transparency- PQIs/PDIs in the public domain Can be used to evaluate the health system’s coordination of outpatient care to prevent hospitalizations PQI/PDI efficiency adjustments can focus MCOs on targeted care management strategies Purchaser value in not paying for preventable inpatient stays