Managed Care Organizations and Provider Networks Challenges and Opportunities

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Managed Care Organizations and Provider
NetworksChallenges and Opportunities

• November 7, 2003
• Presented by Neal Cash, CEO

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Features of the Arizona System

• Statewide behavioral health carve out
• Integrated substance abuse and mental health
  services (Adults Children)
• Combined Medicaid and non-Medicaid funding
  streams
• Private Regional Behavioral Health Authorities
• Open competitive bidding for authorities
• First public sector full-risk behavioral health
  care system in United States

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BEHAVIORAL HEALTH PROGRAMS FUNDINGADHS/DBHS
Receives Funds for Behavioral Health Services
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The state is divided into six geographic regions.
Each region is assigned to a RBHA.
NARBHA
VALUE OPTIONS
EXCEL
PGBHA
(GSA3) Graham Greenlee Cochise Santa Cruz
(GSA 5) Pima
CPSA
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FEATURES OF CPSA MODEL

• Community governance and oversight
• Shared Risk with Providers
• Comprehensive Service Networks that are able to
  provide integrated services
• Consumer involvement
• Community reinvestment
• Coordination with collateral systems

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Evolving Systems of Care for Persons with
Behavioral Health Disorders

• State Systems
• Budget Deficits
• Reorganization of State Agencies, Departments and
  Divisions
• Greater Cross Agency Collaboration
• Managing Entities
• Regional Models
• County Models
• Private Managed Care Organizations
• Administrative Service Organizations
• Community Based Providers
• Affiliation of Providers
• Networks
• Integrated Systems of Care
• Greater Community Collaboration

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Evolving Systems of Care for Persons with
Behavioral Health Disorders (cont)

• Evidenced Based Practice
• Science to Service
• Co-occurring Treatment
• Assertive Community Treatment Teams
• Wraparound Models
• Pharmacotherapy

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Evolving Systems of Care for Persons with
Behavioral Health Disorders (cont)

• Information Technology
• IT Networking
• Design, Configure and Maintain Servers,
  Computers, Printers, etc.
• Data Transmission and Security
• Data Storage

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Evolving Systems of Care for Persons with
Behavioral Health Disorders (cont)

• Telecommunications
• Telephones, Voice mail
• Video Teleconferencing
• Pager and Cell Phone Systems

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Evolving Systems of Care for Persons with
Behavioral Health Disorders (cont)

• Systems Operations
• Coordination and Configurations with Member
  Services
• Enrollment, Intake, Assessments
• Data/Demographic
• Claims

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Evolving Systems of Care for Persons with
Behavioral Health Disorders (cont)

• IS Development
• Automate Work Processes
• Improve Availability and Integration of Data
• Web Sites

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Evolving Systems of Care for Persons with
Behavioral Health Disorders (cont)

• Consumerism and Recovery (Voice Choice)
• System Partners
• Advisory Councils
• Boards
• Employees

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Managed Care OrganizationAuthority Core Functions

• Provider Network Management
• Strategic Planning
• Customer Services
• Quality Management
• Utilization Management
• Financial Management
• Information Management

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(No Transcript)
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INTERNAL DEVELOPMENT

• Upgrade management information system
• Integrate I.T. and financial management system
• Establish an agency-wide Performance Improvement
  Activity (Accreditation Privileging and
  Credentialing)
• Competency Based Employment
• Compensation Analysis
• Develop targeted staff development program
• Retrain your board repopulate
• Consumers/Other Stakeholders
• Environment of Care Issues
• Establish Development Capability (Grants,
  Contracts, Fundraising)
• Explore Collaborative Partnerships

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KEY AREAS FOR CONSENSUS

• Competition
• Restricted
• Limited
• Open
• Centralized vs. Decentralized
• Devolution to local entitles
• Types of collaboration and community partnerships
• Level of Integration
• Mental health substance abuse and DD systems
• Co-occurring/co-morbidity
• Health care systems
• Regionalism/Geomapping
• Numbers of regions
• Size
• Service Delivery Models
• Staff
• Community
• Mixed

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OPERATING ASSUMPTIONS

• We are strong enough to assume substantial risk.
• We have the management infrastructure and skill
  at all levels to succeed in a risk-based
  environment.
• We have the overall clinical skill and
  credentials to produce quality outcomes within a
  competitive price structure.
• Our service capacity is greater than current
  level of business. What we dont have we can
  build, buy, create alliances.

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SOME BASIC QUESTIONS

• Do the various stakeholders support this action?
• Consumers
• Board
• Legislators
• Community at large
• Can you operate at-risk?
• Are your capital reserves adequate?
• Can you manage the States rate(s)?
• How good is the available date?
• Do you have an adequate infrastructure?
• MIS
• Utilization management
• On-line eligibility evaluation
• Financial management

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TRANSITION TO PROVIDER NETWORKS

• Culture Change
• Changing attitudes
• Level of sophistication
• Professionalism
• Competition
• Values challenged

Tradition Passion Vs. Business Climate
Practices
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TRANSITION TO PROVIDER NETWORKS(continued)

• Information System
• Integration of clinical, fiscal and management
  data
• Customer based
• Outcome driven
• System wide
• Value added product

Up front and ongoing cost associated with
training and capital expenses
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TRANSITION TO PROVIDER NETWORKS(continued)

• Strategic Positioning
• Education of executive director, board and staff
• Short and long term plan
• Inclusion of board and staff at all levels
• Marketing and public relations
• Capacity building

Affiliation Merger
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AFFILIATION STRATEGY MODEL


Deficits

Strategic Direction
The Deal
Alternatives
Establish Organizational Goals Diagnose Your Shortcomings Determine the Options Negotiate and Execute
Attain strong negotiating position in managed care Incomplete service offerings Merge Target entity for acquisition / affiliation
Spread costs over larger client base Small size prevents economics of scale Joint venture Enter joint planning exercises with target
Rationalize excess capacity Ineffective management Acquire Do due diligence and execute



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Improve Quality of Care
Increase Access to Care
Retain Mission
PRIMARY OBJECTIVES OF INTEGRATION/AFFILIATION
Reduce Costs of Service Delivery
Enhance Access to Managed Care Contracts
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ANTITRUST CONSIDERATIONS

• Are the network providers otherwise free to
  compete on their own or through other
  arrangements?
• What are the restrictions or limitations on
  joining or remaining with the network?
• How will the network price its services to third
  party payers or other customers? For example,
  will it utilize a non-competitor (i.e.,
  non-provider) to negotiate between the buyer and
  each participating provider?
• Will the network attempt to attract contracts
  that are on a capitated basis or which make use
  of risk withholds?
• Will each member of the network be free to
  participate or not participate as to each
  contract?
• Will the network be prepared from the beginning
  to offer such pro-competitive and integrated
  services as quality assurances, utilization
  review, administrative services, etc?
• How will cost and price data be kept as
  confidential or generic as possible?

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DEAL KILLERS

• Lack of support from stakeholders/politics
• Absence of mutual trust
• Lack of common vision/business purpose
• Governance/control issues
• Financial barriers/liabilities/arrangements

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SOUTHERN ARIZONA CHILDRENS CONSORTIUM (L.L.C.)
CPSA
CODAC Behavioral Health Services (Fiscal Agent)
Arizona Childrens Association
Capitalization
Capitalization
SACC 2 Member Board 6 Directors And 2 CEOs
- Intensive case management systems -
Medical/Psych. Services - Management of high
end children
Subcapitated Las Families
Subcapitated CODAC BHS
Subcapitated Az. Childrens Assn.
Subcapitated CDC
Discounted fee for service and block purchase
(Hospitals, RTC and Group Homes)
Discounted fee for service small group and
individual practices, specialty providers
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LESSONS LEARNED

1. That aggressive management is not only the high
   end but also the middle end is extraordinarily
   important.
2. That a loose affiliation or a loose partnership
   will not work in a full at-risk situation.
3. That good MIS systems and very good management
   infrastructure is vital to the operation and
   needs to be funded right off the top.
4. That aggressive contracting either on a
   sub-capitated basis or with discounted fees for
   service or block purchases is necessary to manage
   scarce resources.
5. That entrepreneurial efforts and creativity are
   as important as anything is in making managed
   care work.

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LESSONS LEARNED (CONTINUED)

1. That there needs to be incentives to change an
   agencys culture, as you are as good as the
   philosophy and approaches of the line staff
   delivering the services.
2. That agency cultures have myths and unconscious
   themes that can be detrimental to managed care
   and may not be easily recognized
3. Continuous quality improvement is extraordinarily
   important to further cost savings and appropriate
   utilization of resources.
4. Treatment protocols need to be continually
   improved upon
5. You need to take the long view in creating
   managed care programs, companies, processes and
   systems. While you must think of transition,
   start up, and the first year, your vision ought
   to be 3-5 years out.

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HIGH PERFORMANCE BEHAVIORAL HEALTH SYSTEMS
Indicators of Obsolete Delivery Systems Indicators of Improving Delivery Systems Indicators of High Performance Delivery Systems
Access No intake and triage system, no treatment plans Sophisticated intake and triage system with individualized treatment planning Anticipation and management of illness averts the need for crisis intervention, intake, and triage
Care Practice pattern variation Validated practice standards, guidelines, and protocols Team ownership and continuous improvement of clinical processes
Services Fragmented, uncoordinated illness treatment services Coordinated, vertically and horizontally integrated illness treatment systems Organized behavioral health promotion and management systems that are backwards integrated into the workplace and the community
Systems No continuum of care Expenditure-effective continuum of care Cost-effective continuum of health
Operations Lack of process measurement, monitoring, and outcome assessment Process measurement, monitoring, and outcome assessment in place Continuous, data driven process improvement
Technology Technology profit centers Appropriate technology Critical technology
Cost Cannot measure behavioral costs for expenditures Can measure and manage behavioral expenditures but not costs Can measure and manage both behavioral health expenditures and costs
Knowledge Minimal learning and knowledge deployment Rapid learning and knowledge deployment Knowledge creation
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PAYOR DRIVEN
PAYOR PROVIDER ORGANIZATION INDIVIDUAL CLINICIAN
More sophisticated purchaser of care Demand value Require defined and quantified products/services Pressed to define and quantify products/services Cost conscious effective efficient practices accreditation Defined benefit package services within timelines measured outcomes Performance based employment relationship Credential specific and different levels of employment Clinical care defined by other than clinician
CUSTOMER-SENSITIVE
CUSTOMER PROVIDER ORGANIZATION INDIVIDUAL CLINICIAN
Empowered by advocates choice in marketplace Competitive environment Regulatory environment Negotiate benefits with consumer/contract of service Professional liability intensified Service is a partnership Client satisfaction Outcome Clinical paperwork increased
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OUTCOME-ORIENTED
PAYOR PROVIDER ORGANIZATION INDIVIDUAL CLINICIAN
Feedback loop expected Progress implications for primary care, job, etc. Highly dependent on payor type History of outcome measurement Differential reporting C.Q.I. environment essential Practice within competence Highlights CO needs Heightens collaboration/ consultation
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• Goals of Future Behavioral Health Systems
• To improve the behavioral health status and
  quality of life of defined populations
• To enable beneficiaries to stay healthy, improve
  wellness, and help reduce the medical utilization
  and costs of defined populations and communities
• To improve functioning and productivity of the
  American people and work force
• To continuously improve the accessibility,
  affordability, and effectiveness of behavioral
  health services

Manage Benefit
Manage Care
Manage Health
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Provider Network Management

• Planning and Identification of Network
  Components
• Parameters of the continuum of care
• Comprehensive community planning process
• Type, number and qualifications of providers
• Procurement and Selection of Provider Networks
• Open and competitive process
• Selection criteria
• Evaluation
• Approval process

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Provider Network Management(continued)

• Credentialing
• Documentation of licensure
• Accreditation
• Professional credentialing
• Management of Provider Network
• Communication processes (administrative and
  clinical)
• Community input
• Assessment of continuum of care
• Training and technical assistance

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Strategic Planning

• Annual review of services
• Gap analysis
• Review of utilization data
• Geo access information
• Needs assessment information
• Outcome studies
• Member satisfaction

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Customer Services

• Customer Relations
• Members
• Providers
• Funders
• Advocacy groups
• State and local agencies
• Member Handbook
• Benefits and services
• Member advocacy
• Rights and responsibilities
• Grievance and appeal process

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Customer Services(continued)

• Coordination with other Systems of Care
• Health care
• Education
• Juvenile justice
• Child welfare
• Corrections
• Member Satisfaction
• Community Focus Groups

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Quality ManagementIncludes quality assurance,
continuous quality improvement, and performance
improvement.

• Leadership and Staff Commitment
• Accreditation
• Board and Executive Management
• Organization Quality Management Goals
• Examples
• Enhance the accessibility, adequacy and quality
  of administered mental health services
• Improve coordination between medical and mental
  health care within the geographic service areas
• Promote the effective and economical use of
  resources within the system
• ADHS/DBHS Requirement
• Examples
• Case file reviews
• Provider profiling
• Member surveys
• Medical records review

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Quality Management(continued)Includes quality
assurance, continuous quality improvement, and
performance improvement.

• Performance Measures
• High risk areas (vulnerable populations, fragile
• populations, unstable populations)
• High volume areas (based on demographics and
• diagnosis or high volume treatment modalities)
• Problem prone areas (breakdown in processes,
  problematic
• trends or patterns)
• Performance Improvement Measures
• FOCUS - PDCA performance improvement model

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Utilization Management

• Prior Authorization
• Covered services requiring prior authorization
• Medical necessity
• Least restrictive level of care
• Concurrent Review
• Continued medical necessity
• Appropriateness of level of care
• Continued stay reviews
• Second Level of Review
• Adequacy and clinical soundness of a member,
  assessment and
• treatment plan
• Used primarily in the determination of SMI or SED
  status
• Retrospective Reviews
• Emergency admissions
• Consistency with level of care criteria and
  length of stay criteria

• Non emergency inpatient
• Non emergency transportation
• Non formulary and brand name medications with
• generic equivalency
• Partial care
• Level I RTC

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Financial Management

• Regulatory Compliance
• Legal requirements
• Contract compliance
• Grants management
• Accounting applications and controls
• Mitigate loss
• Safeguard corporate assets
• Monthly, quarterly and annual financial
  statements
• Annual budget and forecasts
• Integration of Financial and Clinical Data
• Rate setting
• Cost analysis
• Clinical analysis

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Information Management

• Member Management
• Enrollment
• Eligibility status
• Demographics
• Benefit plans
• Utilization Management
• Prior authorization
• Utilization analysis
• Claims/Encounter Management
• Pharmacy claims
• Encounter claims processing and reconciliation
• Provider Network Management
• Contracted services
• Demographic data
• Eligibility

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Synopsis of Covered Services