The Transition to Medicaid Managed Care in Illinois October 7, 2013 Presented by: Sharon R. Miller

The Transition to Medicaid Managed Care in Illinois

October 7, 2013

Presented by:

Sharon R. Miller

Transition to Medicaid Managed Care

• Welcome

• Who Am I ?– 30 yrs. Experience in Managed Care– Adjunct Professor at Benedictine University teaching

Managed Care and Business of Health Care Classes (MPH program)

What We Will Cover

What We Will Cover

What We Will CoverThe Basics of Managed Care

Medicaid Now

Taking You “Inside” the Payer World

Different Departments and “Rules”

Managed Care Reimbursement: Capitation

Capitation vs. Risk

Medicaid Managed Care: Your Shifting Roles

Why are We Covering This ????

• Managed Care programs are not just unique to Illinois…this is a nationwide movement.

• “I Heard that Managed Care Does Not Work”….not true

• As a Care Coordinator, what does this have to do with me and my job ?

• State will oversee compliance

The Basics of Managed Care

Our Focus

HMO style

The Basics of Managed Care (HMO model)

• Managed Care is NOT “new”….been around since the 1920’s; then became popular in the late ‘70s.

• Health Insurance Companies establish “networks” of providers

• Patient selects a “Health Plan”• Patient selects a “Primary Care Provider (PCP)”• All medical services approved through this PCP• Other rules: referrals, pre-cert needed for ER visits

and certain medical procedures• Tight controls over services

• There are also different “types” of HMOs:– Staff Models (physicians are salaried employees –

Humana)– Network Models (works with a variety of doctors

including individual and group practices)– Group Models (a payer that works with only one

multispecialty physician group)– IPA Models (payer with contractual relationships

with individual and group practices, as well as large Independent Physician Associations (IPAs))

The Basics of Managed Care (HMO model)

Medicaid Now

Taking You “Inside” the Payer World

State Contracts with Insurance Companies to Manage all aspects of

the Patient’s Experience

Working with Payers – the “new” Medicaid configuration

Review of Medicaid Changes to Managed Care

• Changing Patient Relationship– New: patient relationship is with the insurance company, not the

State

• Changing: Claims Processing done by Insurance Companies– New: State pays “lump sum” to insurance company (more on this

later)

• State keeps eligibility function and takes on oversight function– Day-to-day handled by insurance company

Taking You “Inside” the Payer World

Insurance Company

Managed Care Reimbursement: Capitation

Capitation Capitation

•This is a payment methodology where a fixed amount of money is paid in advance to the insurance company for the delivery of health care services.

•New term: PMPM – Per Member Per Month

Managed Care Reimbursement: Capitation

Capitation ExampleCapitation Example

•1,000 patients (members)•Capitation rate = $1063.76 per month•Total pre-paid per month to insurance company = $1,063,760

Sounds good, right ????Sounds good, right ????

Managed Care Reimbursement: Capitation

What Does the Insurance Company Need What Does the Insurance Company Need to Do for this Advance Payment ?to Do for this Advance Payment ?

•Everything in their contract !!!!– Doctor Services– Hospital Services– Long Term Care Services– Ancillary Care Services– Anything/Everything Else

Managed Care Reimbursement: Capitation

And…..the Insurance Company does And…..the Insurance Company does NOT get 100% of the capitation because NOT get 100% of the capitation because

of something called a “Risk Pool”of something called a “Risk Pool”

Insurers will get paid 80% capitation with 20% withheld. In order to collect on the “withhold”, the insurance company needs to meet certain quality measures set by the State. If they meet the measures, they get the 20% back at the end of the year.

Capitation vs. Risk

RISK CONTRACTSRISK CONTRACTS

•This is what capitation is all about: RISK•If the insurance company controls the risk, they profit.•If the insurance company does not control the risk, they lose money.

Medicaid Managed Care: Your Shifting Roles

OVERSIGHTOVERSIGHT

OVERSIGHTOVERSIGHT

OVERSIGHTOVERSIGHT

Questions

Contact Information:Sharon Miller

sharon.millerhci@gmail.com