Medicaid Medical Management

Key messages

• Unsustainable spending patterns in Medicaid jeopardize state budgets.
• Growing enrollment means more people on Medicaid.
• Increased concerns about quality of care create liability issues.

Background

State governors and legislators face tremendous challenges in managing their Medicaid programs: enrollments climb, costs soar, enrollee health problems increase in complexity and the pool of providers who agree to treat enrollees grows rapidly smaller.

Medicaid is the single largest expense category in state fiscal budgets. In many states, Medicaid spending jeopardizes important budgets items—increased pay for teachers, improvements in general services, required compliance with federal mandates and infrastructure investments to streamline government, among others.

The number of Medicaid beneficiaries is likely to continue to grow rapidly. The elderly and disabled populations currently contribute 76 percent of the growth in Medicaid spending, and their numbers will increase substantially with the aging of the country’s Baby Boomers.

The design and delivery of health services to Medicaid enrollees presents particular challenges—enrollees don't regularly use the system; risk factors and social issues that render treatment plans ineffective complicate their diagnoses; and, in many states, doctors and hospitals will simply not treat enrollees because of liability concerns.

A new approach is needed. At its most basic, the concept of Medicaid medical management consists of the array of programs and services that assure delivery of the right care to the right enrollee the first time, every time.

Reform strategies

Interviews with leading health plans and state leaders suggest that “best practices” for Medicaid medical management encompass two major categories:

Clinical population care management

How health problems in the Medicaid population are diagnosed, interventions are planned and care is coordinated.

The ability to identify, evaluate and appropriately engage an enrollee is challenging, at best, for commercial plans; it can be even more complex for Medicaid enrollees. It is, nonetheless, an essential element of the medical management process.

A comprehensive program targeting preventive health care and healthy living builds the necessary foundation for Medicaid medical management. On top of that, disease management (DM) focuses on population management of chronically ill patients, with the goal of slowing disease progression and avoiding costly hospitalizations and complications to reduce medical costs.

Finally, Medicaid needs to adopt a case management focus on the sickest 1 to 5 percent of Medicaid enrollees who drive a large portion of controllable costs. A key program element is a one-on-one, nurse-to-enrollee care management model that follows an individualized care plan.

Administrative Medical Management 

How states and health plans operate the program to optimize enrollee patient care and satisfaction while reducing costs (such as policies, procedures, infrastructure and management).

Medicaid enrollees’ complex medical and psychosocial issues require care teams that include physicians, behavioral health professionals, pharmacists and family/other patient caregivers. These teams can motivate and coach participants, collaborate to share ideas and advocate for participants to identify additional resources to help address their myriad needs.

To help coordinate health care, Medicaid administrators and plans now focus on developing single point of entry systems (SPOEs) to provide a centralized, trusted, one-stop portal to access all administrative program functions. Combined with the Internet, these SPOEs could enhance enrollee engagement and self-care.

Patients eligible for Medicare and Medicaid constitute the most resource-intensive enrollees in the Medicaid system, a problem complicated by the lack of seamless coordination and responsibility-sharing between Medicare and Medicaid.

Accurate coverage and denial decisions present a critical challenge for states and Medicaid plans. Medicaid programs face liability challenges if the standard of care provided to their enrollees falls short of community standards afforded to commercial enrollees. Basing coverage decisions on solid medical evidence will become increasingly important to medical management programs.

Doctors, hospitals, allied health professionals and specialized facilities are a critical part of the Medicaid medical management mix. But establishing and maintaining provider relationships can present major hurdles.

Example

Blue Cross & Blue Shield of Tennessee (BCBS TN)

BCBS TN uses predictive modeling to help further stratify the Medicaid population by looking at an “impactability index” to identify which members have gaps in care for prioritizing outreach based on this information. Member adherence to care plans and provider adherence to clinical guidelines is a new contractual requirement for BCBS TN. The predictive modeling process gives BCBS TN the ability to identify gaps in care to share with physicians in the plan. Communicating with physicians in the plan is essential.

Predictive modeling at Blue Cross and Blue Shield

The predictive modeling works by looking at five key indicators to total a score:

1. Estimated cost for next year
2. Preventative gaps in care (such as pap smears and mammograms for women)
3. Chronic gaps in care (the model can pick up one or more conditions)
4. Is a client “impactable?” (Can something be done to help prevent rapid deterioration?)
5. Is a client “movable?” (If nothing is done now, will risk increase?)

BCBS TN can use these scores for more than live referrals. They also ensure results that both disease management and case management programs can use to intervene in health care.

Next steps

Successful state Medicaid medical management programs use information systems to identify and stratify patient health risk for population segmentation; engage and enroll patients and providers in appropriate care programs; promote accountability and reward it with incentives; and measure results.

These programs maintain a clinical focus while investing in the administrative structures necessary to optimize cost-effectiveness and quality. Providing health care drives Medicaid costs, and a medical management program can potentially lower these costs while increasing quality of care. As Medicaid enrollments increase, state budgets tighten and the public clamors for improved quality, medical management programs will find the spotlight.

Policy makers must carefully consider their course of action when crafting the best approach to creating successful ways to manage Medicaid's costs by looking at two areas:

Clinical population care management

• Risk stratification and predictive modeling
• Preventive health, screenings and education
• Chronic care management for type II diabetes, heart disease, depression, COPD, asthma and other conditions
• Case management for the frail elderly, recently discharged and severely disabled

Administrative considerations

• Integrated care team design and oversight
• Medication management and formulary design
• Single point of entry systems (SPOE)
• Medical management information system for program management and quality control
• Nurse-staffed call centers
• Integrated care program for dual eligibles
• Evidence-based guidelines and process for coverage and denial management
• Provider services: credentialing, payment and performance reporting