Dr. Joe Parks presented Comparing Performance: Managed Care (MC) and Fee-for –Service (FFS)
Children and low income parents make up the 420k people on MC or 48% of the Missouri Medicaid population. 219k or 25% of the same population type on FFS. 27% or 233k people are Aged, Blind or Disabled and are not in MC and not included in this report.
Last analysis like this was done by Mercer in FY09 and found that MC saved the state 2.7%. That analysis and this one include a 5% geographic adjustment due to higher health care costs in urban areas.
When figuring this comparison, adjustments were also made. The cost of carved out services such as pharmacy, DMH mental health services, some adult dental and transplants were taken into account. Costs also attributed to MC in this review are FQHC and RHC wrap-around payments by the state. Hospital direct payment and waiver services were excluded from this review.
Fredrick asked for a clarification of FQHC wrap around payments, Parks said MC only covers 60% of the cost to FQHC with the state picking up the rest. Fredrick amazed.
Weimann, who has worked for managed care companies and seems to support state wide MC for all populations, asked why carve outs. Parks said it saves $ on pharmacy, quality of care is reason in behavioral health care.
Using these factors they did a retrospective cost comparison of four fiscal years (FY), FY2010-FY2013. MC saved an average 1.7% or $27 million.
Wood questioned the margin of error in numbers. Parks said the real margin of error is in the guess that there should be a 5% geographic adjustment. A slight shift in that assumption would change the savings to cost.
The key findings on the data are important:
– Savings equates to $5 PMPM;
– compared to FFS, MC reduces medical costs/payments to providers by over $23 PMPM (8% decrease);
– MC increases administrative costs by over $18 PMPM (149% increase)
Parks said it would be a policy decision the legislature will make on expansion between spending more on admin and less on providers.
Missouri sees fewer saving with MC then other states because:
– carves outs;
– FFS run with strong management of pharmacy and Health Homes, etc. similar to MC cost controls;
– provider taxes;
– low provider rates.
Parks points out that savings going forward will be reduced because ACA health insurer fee must be paid on MC but not FFS.
In hospital admissions FFS had a slightly higher rate of patients with a hospital admission then MC (6.7% compared to 5.4%). Average length of stay was higher in FFS then MC (5.6 days versus 4.1 for MC). But FFS readmission s were lower in FFS with 5.2% compared to 6.4% readmitted with MC.
Weimann asked about readmission. Obviously supports MC
Wood asks if hospitals are treating patients different on length of stay. Parks said no, that authorization given at beginning of stay is longer in FFS.
Frederick says he sees exactly what data says, doc wants patient cared for and the hospital viable so go along with MC so hospital doesn’t have to eat the cost of a longer unapproved stay.
In ER usage, slightly more MC clients use ER then FFS and slightly more often and have slightly less visits to doctor’s offices then in FSS.
In the area of quality, analysis in only 6 areas has been completed with more being done. FFS does a better job in 5 areas while MC better at 1.
Wood said there have been many proposals have been looked at like HSAs, hybids, etc. much talk of changing the current system but if they go to state wide MC, nothing will change.
Wood asked Parks what he would prefer.
Parks: Would not put ABD in MC, current population is a toss-up. It would depend on how much you would give me in administration to administer a statewide FFS system.
Wood wants HSA hybrid
Parks: look at Indiana HSA
Weimann worked for mc thinks parks data not expected (insinuated incorrect). Wants source data
Parks said info came from encounter claims and DMH data
Fredrick believes MC provides lower service and higher admin. Believes its services are denied, shorting patients in care. When in his practice he finally gets through to MC doc peer to peer, not from the same discipline so don’t have same criteria.
Mims told about people’s lives story, X-ray instead of MRI in lymphoma, sent home that day of surgery.
Allen told story of having pediatric home therapy company. Feedback from family was positive, but as an owner rates were so low they were bleeding, glad to be bought out. When as a therapist she didn’t care about bottom line but as an owner she did. She then said Docs aren’t always right.
Person from Mo Medicaid compliance and audit office testified. Not a comparison but giving experience with MC. They do program integrity on FFS provider audits. Billing system; Feds audit MC but her office is starting to do MC too.
Medicaid MC company execs testified together: Shannon Bagley Centenne (Home State), Barb Whittey Missouri Care, and Brian Dobbins Health Care USA (Aetna)
Shannon did the most talking. They made many claims and gave many “facts” with no citing of statistical facts.
For example, claimed that pre natal is better in MC (Parks measured postpartum and FFS is better)
Dobbins said they have mental health professionals on their teams;
“Practice of medicine and business of health care is different”
“facts” states that have all FFS have cost increases at 10-15% annually.
Barb says “case management is not like a state case management but rather Care management.” Say they collaborate with physicians. Medicaid MC plans are different from private insurance MC. Medicaid MC collaborate with community programs that support their members. “We control costs by improving outcomes”.
Dobbins “we negotiate better rates but its not at expense of anyone” Providers inflate rates and when we negotiate rates the hospital, etc. still makes money.
With Wood question Shannon says they have to manage within the rate the state sets, not mentioning that NO, state has to pay actuarially sound rate.
Shannon says CMS wants 90% of care under MC
Jeff Howell, mo state medical testified.
Says MC disrupts patient physician relationship, He doesn’t think Arkansas and Iowa borders docs aren’t going to want to join MC sign up.
Woods asked if he was saying MC witnesses wrong about paying FFS or higher. Howell says its Inadequate reimbursement.
Fredrick says the time in dealing with MC isn’t taken into account when rates are set.
Ruth asked if number of physicians willing to see patient go down in these areas Howell: very likely.
Daniel Landon, Hospital Association
MC brings more complexity to the system
Denials are a problem
All plans different with different rules
Reforms in MC needs to be done, Parks is doing some of this
Clarified that rates are set by state but actuarially sound rate is fed requirement
Provider taxes pay for large chunk of health care cost but large MC admin cost isn’t part of provider tax system so that’s money going somewhere besides your local providers.
Fredrick: Innovative Medicaid delivery models out there and going to statewide stops any opportunity to try any other model. Telemedicine, etc.
Haefner closing comments, decision has to be made about mc model statewide.
Soon will meet so committee can discuss.
Cora Walker, HC policy fellow testified
Thinks secret shoppers for MC in other states works. Not by
MCOs but should be independent.