Medicaid Managed Care's Effects on Costs, Access, and Quality: An Update.

Medicaid is integral to public health because it insures one in five Americans and half of the nation's births. Nearly two-thirds of all Medicaid recipients are currently enrolled in a health maintenance organization (HMO). Proponents of HMOs argue that they can lower costs while maintaining access and quality. We critically reviewed 32 studies on Medicaid managed care (2011-2019). Authors reported state-specific cost savings and instances of increased access or quality with implementation or redesign of Medicaid managed-care programs. Studies on high-risk populations (e.g., disabled) found improvements in quality specific to a state or a high-risk population. A unique model of managed care (i.e., the Oregon Health Plan) was associated with reduced costs and improved access and quality, but results varied by comparison state. New trends in the literature focused on analysis of auto-assignment algorithms, provider networks, and plan quality. More analysis of costs jointly with access/quality is needed, as is research on managing long-term care among elderly and disabled Medicaid recipients.

Preventive visit among older adults with Medicare's introduction of Annual Wellness Visit: Closing gaps in underutilization.

Preventive visit rates are low among older adults in the United States. We evaluated changes in preventive visit utilization with Medicare's introduction of Annual Wellness Visits (AWVs) in 2011. We further assessed how coverage expansion differentially affected older adults who were previously underutilizing the service. The study included Medicare beneficiaries aged 65 to 85 from a mixed-payer multispecialty outpatient healthcare organization in northern California between 2007 and 2016. Data from the electronic health records were used, and the unit of analysis was patient-year (N = 456,281). Multivariable logistic regression models were used to assess determinants of "any preventive visit" use. Prior to the AWV coverage (2007-2010), Medicare beneficiaries who were older, with serious chronic conditions, and with a fee-for-services (FFS) plan underutilized preventive visits such that odds ratio (OR) for age groups (vs. age 65-69) ranges from 0.826 (age 70-74) to 0.522 (age 80-85); for Charlson comorbidity index (CCI) (vs. 0 CCI) ranges from 0.77 (1 CCI) to 0.65 (≥2 CCI); and for FFS (vs. HMO) is 0.236. With the Medicare coverage (2011-2016), the age-based gap reduced substantially, but the difference persisted, e.g., OR for age 80-85 (vs. 65-69) is 0.628, and FFS (vs. HMO) beneficiaries still have far lower odds of using a preventive visit (OR = 0.278). The gap based on comorbidity was not reduced. Medicare's coverage expansion facilitated the use of preventive visit particularly for older adults with more advanced age or with FFS, thereby reducing disparities in preventive visit use.

Do Medicare Advantage Plans Respond to Payment Changes? A Look at the Data from 2009 to 2014.

Issue: Medicare Advantage (MA) enrollment has grown significantly since 2009, despite legislation that reduced what Medicare pays these plans to provide care to enrollees. MA payments, on average, now approach parity with costs in traditional Medicare. Goal: Examine changes in per enrollee costs between 2009 and 2014 to better understand how MA plans have continued to thrive even as payments decreased. Methods: Analysis of Medicare data on MA plan bids, net of rebates. Findings: While spending per beneficiary in traditional Medicare rose 5.0 percent between 2009 and 2014, MA payment benchmarks rose 1.5 percent and payment to plans decreased by 0.7 percent. Plans' expected per enrollee costs grew 2.6 percent. Plans where payment rates decreased generally had slower growth in their expected costs. HMOs, which saw their payments decline the most, had the slowest expected cost growth. Conclusions: In general, MA plans responded to lower payment by containing costs. By preserving most of the margin between Medicare payments and their bids in the form of rebates, they could continue to offer additional benefits to attract enrollees. The magnitude of this response varied by geographic area and plan type. Despite this slower growth in expected per enrollee costs, greater efficiencies by MA plans may still be achievable.

Altarum's MESA Turns High-Deductible Coverage on its Head.

The architects of Medical Episode Spending Allowance (MESA) benefits are radically reframing coverage as allowances for episodes of care and have a plan for engaging members in making better choices. MESA could catch on quickly, particularly with plan sponsors who have seen consumer-directed plan designs work against them.

Balance Billing by Health Care Providers: Assessing Consumer Protections Across States.

ISSUE: Privately insured consumers expect that if they pay premiums and use in-network providers, their insurer will cover the cost of medically necessary care beyond their cost-sharing. However, when obtaining care at emergency departments and in-network hospitals, patients treated by an out-of-network provider may receive an unexpected "balance bill" for an amount beyond what the insurer paid. With no explicit federal protections against balance billing, some states have stepped in to protect consumers from this costly and confusing practice. GOAL: To better understand the scope of state laws to protect consumers from balance billing. METHODS: Analysis of laws in all 50 states and the District of Columbia and interviews with officials in eight states. FINDINGS AND CONCLUSIONS: Most states do not have laws that directly protect consumers from balance billing by an out-of-network provider for care delivered in an emergency department or in-network hospital. Of the 21 states offering protections, only six have a comprehensive approach to safeguarding consumers in both settings, and gaps remain even in these states. Because a federal policy solution might prove difficult, states may be better positioned in the short term to protect consumers.

Promoting Value for Consumers: Comparing Individual Health Insurance Markets Inside and Outside the ACA's Exchanges.

The new health insurance exchanges are the core of the Affordable Care Act's (ACA) insurance reforms, but insurance markets beyond the exchanges also are affected by the reforms. This issue brief compares the markets for individual coverage on and off of the exchanges, using insurers' most recent projections for ACA-compliant policies. In 2016, insurers expect that less than one-fifth of ACA-compliant coverage will be sold outside of the exchanges. Insurers that sell mostly through exchanges devote a greater portion of their premium dollars to medical care than do insurers selling only off of the exchanges, because exchange insurers project lower administrative costs and lower profit margins. Premium increases on exchange plans are less than those for off-exchange plans, in large part because exchange enrollment is projected to shift to closed-network plans. Finally, initial concerns that insurers might seek to segregate higher-risk subscribers on the exchanges have not been realized.

Trends in Managed Care Cost Containment: An Analysis of the Managed Care Backlash.

Consumer dissatisfaction with the quality and limitations of managed health care led to rapid disenrollment from managed care plans and demands for regulation between 1998 and 2003. Managed care organizations, particularly health maintenance organizations (HMOs), now face quality and coverage mandates that restrict them from using their most aggressive strategies for managing costs. This paper examines the effect of this backlash on managed care's ability to contain costs among short-term, non-federal hospitals between 1998 and 2008. The results show that the impact of increased HMO penetration on inpatient costs reversed over the study period, but HMOs were still effective at containing outpatient costs. These findings have important policy implications for understanding the continuing role that HMOs should play in cost containment policy and for understanding how effective the latest wave of cost containment institutions may perform in heavily regulated markets.

[Reembursing health-care service provider networks]. / Vergütungsstrukturen von Versorgungsnetzwerken.

Health-care service provider networks are regarded as an important instrument to overcome the widely criticised fragmentation and sectoral partition of the German health-care system. The first part of this paper incorporates health-care service provider networks in the field of health-care research. The system theoretical model and basic functions of health-care research are used for this purpose. Furthermore already established areas of health-care research with strong relations to health-care service provider networks are listed. The second part of this paper introduces some innovative options for reimbursing health-care service provider networks which can be regarded as some results of network-oriented health-care research. The origins are virtual budgets currently used in part to reimburse integrated care according to §§ 140a ff. SGB V. Describing and evaluating this model leads to real budgets (capitation) - a reimbursement scheme repeatedly demanded by SVR-Gesundheit (German governmental health-care advisory board), for example, however barely implemented. As a final step a direct reimbursement of networks by the German sickness fund is discussed. Advantages and challenges are shown. The development of the different reimbursement schemes is partially based on models from the USA.

Health care spending and quality in year 1 of the alternative quality contract.

BACKGROUND: In 2009, Blue Cross Blue Shield of Massachusetts (BCBS) implemented a global payment system called the Alternative Quality Contract (AQC). Provider groups in the AQC system assume accountability for spending, similar to accountable care organizations that bear financial risk. Moreover, groups are eligible to receive bonuses for quality. METHODS: Seven provider organizations began 5-year contracts as part of the AQC system in 2009. We analyzed 2006-2009 claims for 380,142 enrollees whose primary care physicians (PCPs) were in the AQC system (intervention group) and for 1,351,446 enrollees whose PCPs were not in the system (control group). We used a propensity-weighted difference-in-differences approach, adjusting for age, sex, health status, and secular trends to isolate the treatment effect of the AQC in comparisons of spending and quality between the intervention group and the control group. RESULTS: Average spending increased for enrollees in both the intervention and control groups in 2009, but the increase was smaller for enrollees in the intervention group--$15.51 (1.9%) less per quarter (P=0.007). Savings derived largely from shifts in outpatient care toward facilities with lower fees; from lower expenditures for procedures, imaging, and testing; and from a reduction in spending for enrollees with the highest expected spending. The AQC system was associated with an improvement in performance on measures of the quality of the management of chronic conditions in adults (P<0.001) and of pediatric care (P=0.001), but not of adult preventive care. All AQC groups met 2009 budget targets and earned surpluses. Total BCBS payments to AQC groups, including bonuses for quality, are likely to have exceeded the estimated savings in year 1. CONCLUSIONS: The AQC system was associated with a modest slowing of spending growth and improved quality of care in 2009. Savings were achieved through changes in referral patterns rather than through changes in utilization. The long-term effect of the AQC system on spending growth depends on future budget targets and providers' ability to further improve efficiencies in practice. (Funded by the Commonwealth Fund and others.).

Nonmedical costs and implications for patients seeking vitreoretinalcare.

PURPOSE: To measure nonreimbursable, nonmedical costs incurred by patients attending a vitreoretinal clinic appointment. METHODS: A nurse-administered questionnaire designed to capture the nonmedical costs for a single clinical appointment was administered to patients attending an appointment at a single-center, single-physician, university-based vitreoretinal clinic. First day postoperative visits were excluded. End points were time commitment, time missing work, and median total nonmedical costs incurred. A subgroup analysis of Medicare patients who lived locally was performed. RESULTS: Three hundred and six patients completed the survey. The median nonreimbursable, nonmedical cost incurred was $23.32; the mean cost was $236.53 (range, $0-$7,259). The largest component of cost was transportation costs ($13.43). The patient took at least a day off from work in 27% cases. An accompanying person attended in 58%, and 27% took at least 1 day off from work to do so. The Medicare cohort who lived locally had similar median costs ($21.53); the mean cost was $51.29 (range, $0-$1,255.80). This cohort also had a lower incidence of missing work (6%), and a higher incidence of an accompanying person (68%) who had a lower incidence of missing work (16%). The costs and distributions varied minimally by visit type. CONCLUSION: Physicians and policymakers may not recognize or consider the potential impediment to care that nonreimbursable costs may present when developing treatment strategies and designing policies.

Total expenditures per patient in hospital-owned and physician-owned physician organizations in California.

IMPORTANCE: Hospitals are rapidly acquiring medical groups and physician practices. This consolidation may foster cooperation and thereby reduce expenditures, but also may lead to higher expenditures through greater use of hospital-based ambulatory services and through greater hospital pricing leverage against health insurers. OBJECTIVE: To determine whether total expenditures per patient were higher in physician organizations (integrated medical groups and independent practice associations) owned by local hospitals or multihospital systems compared with groups owned by participating physicians. DESIGN AND SETTING: Data were obtained on total expenditures for the care provided to 4.5 million patients treated by integrated medical groups and independent practice associations in California between 2009 and 2012. The patients were covered by commercial health maintenance organization (HMO) insurance and the data did not include patients covered by commercial preferred provider organization (PPO) insurance, Medicare, or Medicaid. MAIN OUTCOMES AND MEASURES: Total expenditures per patient annually, measured in terms of what insurers paid to the physician organizations for professional services, to hospitals for inpatient and outpatient procedures, to clinical laboratories for diagnostic tests, and to pharmaceutical manufacturers for drugs and biologics. EXPOSURES: Annual expenditures per patient were compared after adjusting for patient illness burden, geographic input costs, and organizational characteristics. RESULTS: Of the 158 organizations, 118 physician organizations (75%) were physician-owned and provided care for 3,065,551 patients, 19 organizations (12%) were owned by local hospitals and provided care for 728,608 patients, and 21 organizations (13%) were owned by multihospital systems and provided care for 693,254 patients. In 2012, physician-owned physician organizations had mean expenditures of $3066 per patient (95% CI, $2892 to $3240), hospital-owned physician organizations had mean expenditures of $4312 per patient (95% CI, $3768 to $4857), and physician organizations owned by multihospital systems had mean expenditures of $4776 (95% CI, $4349 to $5202) per patient. After adjusting for patient severity and other factors over the period, local hospital-owned physician organizations incurred expenditures per patient 10.3% (95% CI, 1.7% to 19.7%) higher than did physician-owned organizations (adjusted difference, $435 [95% CI, $105 to $766], P = .02). Organizations owned by multihospital systems incurred expenditures 19.8% (95% CI, 13.9% to 26.0%) higher (adjusted difference, $704 [95% CI,$512 to $895], P < .001) than physician-owned organizations. The largest physician organizations incurred expenditures per patient 9.2% (95% CI, 3.8% to 15.0%, P = .001) higher than the smallest organizations (adjusted difference, $130 [95% CI, $-32 to $292]). CONCLUSIONS AND RELEVANCE: From the perspective of the insurers and patients, between 2009 and 2012, hospital-owned physician organizations in California incurred higher expenditures for commercial HMO enrollees for professional, hospital, laboratory, pharmaceutical, and ancillary services than physician-owned organizations. Although organizational consolidation may increase some forms of care coordination, it may be associated with higher total expenditures.

Civilian Health and Medical Program of the Uniformed Services (CHAMPUS); TRICARE uniform health maintenance organization (HMO) benefit--Prime enrollment fee exemption for survivors of active duty deceased sponsors and medically retired uniformed services members and their dependents. Final rule.

This final rule creates an exception to the usual rule that TRICARE Prime enrollment fees are uniform for all retirees and their dependents and responds to public comments received to the proposed rule published in the Federal Register on June 7, 2013. Survivors of Active Duty Deceased Sponsors and Medically Retired Uniformed Services Members and their Dependents are part of the retiree group under TRICARE rules. In acknowledgment and appreciation of the sacrifices of these two beneficiary categories, the Secretary of Defense has elected to exercise his authority under the United States Code to exempt Active Duty Deceased Sponsors and Medically Retired Uniformed Services Members and their Dependents enrolled in TRICARE Prime from paying future increases to the TRICARE Prime annual enrollment fees. The Prime beneficiaries in these categories have made significant sacrifices for our country and are entitled to special recognition and benefits for their sacrifices. Therefore, the beneficiaries in these two TRICARE beneficiary categories who enrolled in TRICARE Prime prior to 10/1/2013, and those since that date, will have their annual enrollment fee frozen at the appropriate fiscal year rate: FY2011 rate $230 per single or $460 per family, FY2012 rate $260 or $520, FY2013 rate $269.38 or $538.56, or the FY2014 rate $273.84 or $547.68. The future beneficiaries added to these categories will have their fee frozen at the rate in effect at the time they are classified in either category and enroll in TRICARE Prime or, if not enrolling, at the rate in effect at the time of enrollment. The fee remains frozen as long as at least one family member remains enrolled in TRICARE Prime and there is not a break in enrollment. The fee charged for the dependent(s) of a Medically Retired Uniformed Services Member would not change if the dependent(s) was later re-classified a Survivor.

A longitudinal model of the dynamics between HMOs' consumer-friendliness and preventive health care utilization.

This study aims at replicating and extending Xiao and Savage's (2008) research to understand the multidimensional aspect of HMOs distinguished by HMOs' consumer-friendliness, and their relationship to consumers' preventive care utilization. This study develops a dynamic model to consider both concurrent and time lagging effects of HMOs' consumer-friendliness. Our data analysis discloses similar relationship patterns as revealed by Xiao and Savage. Additionally, our findings reveal the time-series changes of the influence of HMOs' consumer-friendliness that either the effects of early experienced HMOs' consumer-friendliness wear out totally or HMOs' consumer-friendly characteristics on the concurrent term contain most of the explanatory power.

Service use at the end-of-life in Medicare advantage versus traditional Medicare.

BACKGROUND: Relative to traditional fee-for-service Medicare, managed care plans caring for Medicare beneficiaries may be better positioned to promote recommended services and discourage burdensome procedures with little clinical value at the end of life. OBJECTIVE: To compare end-of-life service use for enrollees in Medicare Advantage health maintenance organizations (MA-HMO) relative to similar individuals enrolled in traditional Medicare (TM). RESEARCH DESIGN, SUBJECTS, MEASURES: For a national cohort of Medicare decedents continuously enrolled in MA-HMOs or TM in their year of death, 2003-2009, we obtained hospice enrollment information and individual-level Healthcare Effectiveness Data and Information Set utilization measures for MA-HMO decedents for up to 1 year before death. We developed comparable claims-based measures for TM decedents matched on age, sex, race, and location. RESULTS: Hospice use in the year preceding death was higher among MA than TM decedents in 2003 (38% vs. 29%), but the gap narrowed over the study period (46% vs. 40% in 2009). Relative to TM, MA decedents had significantly lower rates of inpatient admissions (5%-14% lower), inpatient days (18%-29% lower), and emergency department visits (42%-54% lower). MA decedents initially had lower rates of ambulatory surgery and procedures that converged with TM rates by 2009 and had modestly lower rates of physician visits initially that surpassed TM rates by 2007. CONCLUSIONS: Relative to comparable TM decedents in the same local areas, MA-HMO decedents more frequently enrolled in hospice and used fewer inpatient and emergency department services, demonstrating that MA plans provide less end-of-life care in hospital settings.

Oregon bets on coordinated care. Interview by Haydn Bush.

Gov. John Kitzhaber, M.D., describes his state's overhaul of Medicaid. It's an ambitious plan to control costs and improve quality through coordinated care organizations.

From HMOs to ACOs: the quest for the Holy Grail in U.S. health policy.

The United States has been singularly unsuccessful at controlling health care spending. During the past four decades, American policymakers and analysts have embraced an ever changing array of panaceas to control costs, including managed care, consumer-directed health care, and most recently, delivery system reform and value-based purchasing. Past panaceas have gone through a cycle of excessive hope followed by disappointment at their failure to rein in medical care spending. We argue that accountable care organizations, medical homes, and similar ideas in vogue today could repeat this pattern. We explain why the United States persistently pursues health policy fads--despite their poor record--and how the promotion of panaceas obscures critical debate about controlling health care costs. Americans spend too much time on the quest for the "holy grail"--a reform that will decisively curtail spending while simultaneously improving quality of care--and too little time learning from the experiences of others. Reliable cost control does not, contrary to conventional wisdom, require fundamental delivery system reform or an end to fee-for-service payment. It does require the U.S. to emulate the lessons of other nations that have been more successful at limiting spending through budgeting, system wide fee schedules, and concentrated purchasing.

Two-year trends in cancer screening among low socioeconomic status women in an HMO-based high-deductible health plan.

BACKGROUND: Cancer screening is often fully covered under high-deductible health plans (HDHP), but low socioeconomic status (SES) women still might forego testing. OBJECTIVE: To determine the impact of switching to a HDHP on breast and cervical cancer screening among women of low SES. DESIGN: Pre-post with comparison group. PARTICIPANTS: Four thousand one hundred and eighty-eight health plan members enrolled for one year before and up to two years after an employer-mandated switch from a traditional HMO to an HMO-based HDHP, compared with 9418 propensity score matched controls who remained in HMOs by employer choice. Both groups had low outpatient copayments. High-deductible members had full coverage of mammography and Pap smears, but $500 to $2000 individual deductibles for most other services. HMO members had full coverage of cancer screening and low copayments for other services without any deductible. We stratified analyses by SES. INTERVENTION: Transition to a HDHP. MAIN MEASURES: Annual breast and cervical cancer screening rates; rates of annual preventive outpatient visits. KEY RESULTS: In follow-up years 1 and 2, low SES HDHP members experienced no statistically detectable changes in rates of breast cancer screening (ratio of change, 1.14, 95 % CI, [0.93,1.40] and 1.05, [0.80,1.37], respectively) or preventive visits (difference-in-differences, +1.9 %, [-11.9 %,+17.7 %] and +10.1 %, [-9.4 %,+33.7 %], respectively) relative to HMO counterparts. Similarly, among low SES HDHP members eligible for cervical cancer screening, no significant changes occurred in either screening rates (1.01, [0.86,1.20] and 1.08, [0.86,1.35]) or preventive visits (+0.2 %, [-11.4 %,+13.3 %] and -1.4 %, [-18.1,+18.6]). Patterns were statistically similar for high SES members. CONCLUSION: During two follow-up years, transition to an HMO-based HDHP with coverage of primary care visits and cancer screening did not lead to differentially lower rates of breast and cervical cancer screening or preventive visits for low SES women. Generalizability is limited to commercially insured women transitioning to HDHPs with low cost-sharing for cancer screening and primary care visits, a common design.

Pricing and Welfare in Health Plan Choice.

Premiums in health insurance markets frequently do not reflect individual differences in costs, either because consumers have private information or because prices are not risk rated. This creates inefficiencies when consumers self-select into plans. We develop a simple econometric model to study this problem and estimate it using data on small employers. We find a welfare loss of 2-11 percent of coverage costs compared to what is feasible with risk rating. Only about one-quarter of this is due to inefficiently chosen uniform contribution levels. We also investigate the reclassification risk created by risk rating individual incremental premiums, finding only a modest welfare cost.

Competitive bidding for health insurance contracts: lessons from the online HMO auctions.

Healthcare is an important social and economic component of modern society, and the effective use of information technology in this industry is critical to its success. As health insurance premiums continue to rise, competitive bidding may be useful in generating stronger price competition and lower premium costs for employers and possibly, government agencies. In this paper, we assess an endeavor by several Fortune 500 companies to reduce healthcare procurement costs for their employees by having HMOs compete in open electronic auctions. Although the auctions were successful in generating significant cost savings for the companies in the first year, i.e., 1999, they failed to replicate the success and were eventually discontinued after two more years. Over the past decade since the failed auction experiment, effective utilization of information technologies have led to significant advances in the design of complex electronic markets. Using this knowledge, and data from the auctions, we point out several shortcomings of the auction design that, we believe, led to the discontinuation of the market after three years. Based on our analysis, we propose several actionable recommendations that policy makers can use to design a sustainable electronic market for procuring health insurance.

Paying for quality not quantity: a wisconsin health maintenance organization proposes an incentive model for reimbursement of chiropractic services.

OBJECTIVE: The purpose of this study is to describe a reimbursement model that was developed by one Health Maintenance Organization (HMO) to transition from fee-for-service to add a combination of pay for performance and reporting model of reimbursement for chiropractic care. METHODS: The previous incentive program used by the HMO provided best-practice education and additional reimbursement incentives for achieving the National Committee for Quality Assurance Back Pain Recognition Program (NCQA-BPRP) recognition status. However, this model had not leveled costs between doctors of chiropractic (DCs). Therefore, the HMO management aimed to develop a reimbursement model to incentivize providers to embrace existing best-practice models and report existing quality metrics. The development goals included the following: it should (1) be as financially predictable as the previous system, (2) cost no more on a per-member basis, (3) meet the coverage needs of its members, and (4) be able to be operationalized. The model should also reward DCs who embraced best practices with compensation, not simply tied to providing more procedures, the new program needed to (1) cause little or no disruption in current billing, (2) be grounded achievable and defined expectations for improvement in quality, and (3) be voluntary, without being unduly punitive, should the DC choose not to participate in the program. RESULTS: The generated model was named the Comprehensive Chiropractic Quality Reimbursement Methodology (CCQRM; pronounced "Quorum"). In this hybrid model, additional reimbursement, beyond pay-for-procedures will be based on unique payment interpretations reporting selected, existing Physician Quality Reporting System (PQRS) codes, meaningful use of electronic health records, and achieving NCQA-BPRP recognition. This model aims to compensate providers using pay-for-performance, pay-for-quality reporting, pay-for-procedure methods. CONCLUSION: The CCQRM reimbursement model was developed to address the current needs of one HMO that aims to transition from fee-for-service to a pay-for-performance and quality reporting for reimbursement for chiropractic care. This model is theoretically based on the combination of a fee-for-service payment, pay for participation (NCQA Back Pain Recognition Program payment), meaningful use of electronic health record payment, and pay for reporting (PQRS-BPMG payment). Evaluation of this model needs to be implemented to determine if it will achieve its intended goals.