MEDICAID REFORM PROPOSAL Stakeholder Meeting August 24, 2004

1. MEDICAID REFORM PROPOSALStakeholder MeetingAugust 24, 2004

2. Medicaid Growth is Unsustainable! • In FY2005, Medicaid will require 43% of all new state revenue • By FY2008, Medicaid will require over 50% of all new state revenue. • By FY2011, Medicaid will require 60% of all new state revenue. Georgia Department of Community Health

3. Percent of All New Revenue Required by the Medicaid Program Georgia Department of Community Health

4. Utilization Management is a Necessity • Medicaid utilization drives more than 35% of total growth year over year • From FY05 to FY10 utilization is expected to increase in the following major categories of service: • Inpatient Admissions = 23% • Physician Visits = 42% • Prescriptions = 30% • Outpatient Hospital Visits = 34% Utilization Growth Enrollment & Price Growth Georgia Department of Community Health

5. Quality Indicators HealthCheck Comparative Data National Data Georgia Data Georgia and National data is current except where noted below. National Participation & Screenings are FFY 98 National Lead Screening is FFY 02 Georgia Department of Community Health

6. Quality Indicators ER Utilization Per 1,000 Georgia Better Health Care FY2001 APHSA Medicaid MC Plans HEDIS Benchmark FY2001 State Health Benefit Plan FY2003 Medstat Employer (Commercial) Client Data FY2003 Georgia Department of Community Health

7. Why Medicaid Reform? • To focus on system-wide improvements in performance and quality • To consolidate fragmented systems of care • To control unsustainable trend rate in Medicaid expenditures • To adopt a “management of care” approach to achieve the greatest value for the most efficient use of resources Georgia Department of Community Health

8. Goals of Reform • Improve health care status of member population • Establish contractual accountability for access to and quality of healthcare • Lower cost through more effective utilization management • Budget predictability and administrative simplicity Georgia Department of Community Health

9. Vision To create a statewide, full-risk organized system of care for Medicaid and PeachCare members that incorporates Georgia-specific initiatives as well as “best practices” for the provision and purchasing of healthcare. Georgia Department of Community Health

10. Strategy A successful model for the “management of care” for Georgia Medicaid involves: • An organized system of care • Responsibility for case oversight • A network of contractually accountable providers to ensure both quality and cost containment • Medically based guidelines for appropriate treatment leading to healthy outcomes Georgia Department of Community Health

11. Population-based Strategy • DCH will apply different strategies for reform based upon the unique needs of our populations. • PartI will include Low-income Medicaid adults and children PeachCare for Kids, Right from the Start Medicaid and Refugees • Part II will include the Elderly and Disabled, Medically Fragile Children and Foster Children Georgia Department of Community Health

12. The Plan – Part I • Regionalized approach – 6 geographic regions • Competitive procurement for up to 2 care management organizations (CMOs) in each region • CMOs will: • Be licensed by Georgia Department Of Insurance as risk-bearing entities • Be subject to net worth and solvency standards • Have demonstrated ability to provide all covered healthcare services and an adequate provider network Georgia Department of Community Health

13. Proposed CMO Regions & Eligible Member Counts – Avg. Member/Month – FY 2004 CATOOSA FANNIN TOWNS RABUN DADE North UNION 155,940 MURRAY WHITFIELD GILMER WALKER HABERSHAM WHITE LUMPKIN STEPHENS CHATTOOGA GORDON PICKENS FRANKLIN DAWSON HART 499,334 HALL BANKS BARTOW FORSYTH CHEROKEE FLOYD Atlanta ELBERT JACKSON MADISON POLK BARROW COBB CLARKE OGLETHORPE GWINNETT PAULDING OCONEE HARALSON WILKES WALTON LINCOLN 79,851 DEKALB DOUGLAS FULTON TALIAFERRO GREENE CLAYTON ROCKDALE COLUMBIA CARROLL MORGAN MCDUFFIE NEWTON HENRY FAYETTE WARREN RICHMOND JASPER PUTNAM 148,995 COWETA HEARD BUTTS East HANCOCK GLASCOCK SPALDING MERIWETHER JEFFERSON BURKE BALDWIN PIKE JONES LAMAR MONROE TROUP WASHINGTON UPSON JENKINS WILKINSON BIBB SCREVEN JOHNSON HARRIS CRAWFORD TWIGGS TALBOT EMANUEL Central LAURENS TAYLOR PEACH MUSCOGEE BULLOCH EFFINGHAM BLECKLEY MARION HOUSTON TREUTLEN CANDLER MACON CHATTAHOOCHEE MONTGOMERY SCHLEY PULASKI DODGE EVANS DOOLY BRYAN WHEELER CHATHAM WEBSTER STEWART TOOMBS TATTNALL SUMTER WILCOX Southeast TELFAIR CRISP LIBERTY QUITMAN LEE LONG JEFF DAVIS TERRELL BEN HILL APPLING TURNER RANDOLPH IRWIN WAYNE MCINTOSH BACON COFFEE CLAY CALHOUN DOUGHERTY WORTH TIFT PIERCE Southwest EARLY BAKER ATKINSON GLYNN BERRIEN BRANTLEY WARE MITCHELL COLQUITT MILLER COOK LANIER CAMDEN SEMINOLE CLINCH CHARLTON DECATUR GRADY THOMAS BROOKS LOWNDES ECHOLS 114,624 131,336 Georgia Department of Community Health Rev. 12/20/04

14. The Plan – Part I Additional preferred attributes for consideration of CMOs: • Incorporate technological advances (i.e. electronic prescribing and telemedicine) • Focus on the education and empowerment of the Medicaid member • Introduce elements of consumerism to Medicaid members to drive better healthcare choices (i.e. financial incentives and quality information) • Incorporate disease and case management functions as part of their medical management strategy • Georgia provider-owned/sponsored organizations Georgia Department of Community Health

15. The Plan – Part I Required enrollment for: • Low-income Medicaid adults and children • PeachCare for Kids • Right from the Start Medicaid • Refugees CMO enrollment mandatory, but: • Enrollees will have 30 days to select one of at least two CMOs • Enrollees will have 90 days to change CMO without cause; thereafter, will remain in selected CMO until one-year anniversary Georgia Department of Community Health

16. The Plan – Part I CMOs will be responsible for providing all covered Medicaid services, which include: • Physician visits, laboratory and diagnostic testing, and inpatient and outpatient hospitalization • Mental health and substance abuse treatment • Pregnancy-related services • Prescription drugs • Dental and vision care services (to eligible populations) • Screening and preventive services (to eligible populations) • Durable Medical Equipment Georgia Department of Community Health

17. The Plan – Part I CMOs will not be responsible for: • ICFMR- Intermediate Care Facility/Mentally Retarded • HCBS- Home and Community-based Services under a 1915 (c) waiver • Other long-term services Georgia Department of Community Health

18. Healthcare Delivery and Access Standards DCH will protect the patient/provider relationship by contractually requiring CMOs: • To have sufficient numbers of providers of both primary and specialty care • To include sufficient numbers of safety-net providers and rural and critical access hospitals • To have a culturally appropriate mix of providers Georgia Department of Community Health

19. Rights of Members DCH will contractually require CMOs to provide to members: • Bi-lingual written materials and oral interpretation services • Clear information on grievance and appeal rights • Multiple means to access CMO member services Georgia Department of Community Health

20. Rights of Providers DCH will contractually require CMOs to provide healthcare providers with: • Prompt payment and adherence to State reimbursement policies • Expedited grievance and appeal processes • Multiple means to access CMO provider resources Georgia Department of Community Health

21. Quality Management DCH will require CMOs to have an internal program that monitors and assures DCH-mandated: • Levels of service quality and efficiency • Outcomes and health status targets • Contractual obligations will prevent the CMOs from sub-optimal provision of healthcare Georgia Department of Community Health

22. Quality Management DCH will require CMO reporting on: • Well child visits and childhood immunizations • Rates of breast cancer and cervical cancer screening • Rates of diabetic eye exams and HgbA1c testing • Early initiation of prenatal care and incidence of C-Sections • Appropriateness of emergency room utilization • Incidence of avoidable procedures • Other possible quality indicators Georgia Department of Community Health

23. Reform Strategy – Part II Who is not included in the CMOs: • Elderly and Disabled • Medically Fragile Children • Foster Children And what is our strategy for them?… An overview of Part II Georgia Department of Community Health

24. Care Management for Elderly and Disabled – Part II An initial strategy of statewide disease management programs focusing on: • Congestive Heart Failure • Diabetes • Chronic Obstructive Pulmonary Disease • Programs to reach and manage both Medicaid and SHBP members • Programs could be implemented as early as July 1, 2005 Georgia Department of Community Health

25. Care Management for Elderly and Disabled – Part II • A longer-term, more comprehensive strategy in development for 275,105 Medicaid members in Elderly and Disabled sub-programs • Will be consistent with new policy direction of DHR • Will be coordinated with the Governor’s Office and DHR • Will combine vigorous assessment and case management with traditional fee-for-service reimbursement to providers • Vouchers for self-directed care could be made available for those eligible and able to manage • Health outcomes improved and utilization reduced through oversight and management by a statewide ASO vendor • Vendor incentivized to attain outcomes and cost goals • Program could be moved to full risk over time Georgia Department of Community Health

26. Timeframe • Development of System of Organized Care Model - September 1 – October 30 • Statewide consensus building • Development of SPA & RFP/Contract • Administrative Functions • Submit SPA & RFP/Contract to CMS for review (CMS approval mandatory and can take 90+ days) • Release RFP (target is 1st week of January 2005, pending CMS approval) • Evaluation of RFP responses • Contract decisions made • Contracts negotiated and signed • Readiness evaluation • Implementation – January 1, 2006 • Implement CMOs in two/three regions, with remaining two/three regions phased in during the next 6 – 12 months Georgia Department of Community Health

27. Conclusion • Current trend for the Medicaid program is unsustainable • A more efficient and effective system for appropriate utilization management is necessary • This plan will create a more organized and accountable system of care • Quality outcomes must be a primary goal Georgia Department of Community Health

28. Questions & Comments Georgia Department of Community Health