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CHCS WebExchange Medicaid Best Buys: Opportunities to

Center for Health Care Strategies, Inc.

Bend the Cost Trend for High-Need, High-Cost Beneficiaries

May 27, 2008

CHCS

TRANSCRIPT

CHCS WebExchange Medicaid Best Buys: Opportunities to Bend the Cost

Trend for High-Need, High-Cost Beneficiaries May 27, 2008 2:00 PM ET

Stephen Somers: Good afternoon. This is Steve Somers from the Center for Health Care Strategies. And before we start, I would like to thank the National Governors Association for cosponsoring today’s call and the Robert Wood Johnson Foundation for providing the background funding for today’s web exchange.

Just a brief overview of Best Buys, the Center for Health Care Strategies introduced Medicaid

Best Buys as a concept in early 2007. Essentially, we’re looking for how to get the best bang for Medicaid’s bucks, the Medicaid dollar, through the use of quality improvement strategies as a tool for bending cost trends.

Initially, we introduced five promising strategies. Two were short-term, and three were longer-

term. The idea is to target areas that could deliver return on investment readily and quickly. We began focusing on high-risk asthma and high-risk birth outcomes, and were able to develop some longer term strategies. Today we’ll focus on care management for high-risk, high-cost members with multiple chronic conditions.

First we’ll hear from Diane Rowland, who is the Executive Vice President of the Kaiser Family

Foundation, which, I don’t think there will be any argument, is the nation’s premier source of information on Medicaid, especially where Medicaid’s highest needs and highest cost populations are concentrated. Diane’s vast experience with the Medicaid population puts her at the forefront of her field.

We will then hear from Melanie Bella, one of my colleagues at the Center for Health Care

Strategies, who will offer a closer, almost on the ground, look at beneficiaries with multiple chronic conditions. She will outline strategies that states are undertaking to design programs for these high need populations.

Then we will hear from two states, Colorado and New York, that are pioneering innovative

approaches to target and intervene with Medicaid’s highest cost subsets. Finally, we will have a word from Raymond Scheppach from the National Governors

Association who will provide the perspective of the Governor’s office. We will have two question and answer periods during this call. The first one will be after Diane

and Melanie have spoken, and the second one will occur after the states have spoken. At this point, without further ado, I would like to turn it over to Diane Rowland. Diane Rowland: Thank you, Steve, and thank you to all the people participating in this important call about a

population that really needs to have further attention so that we can really both meet their health care needs as well as handle the cost of that care.




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As we all know, and as slide one will show, Medicaid is a program that serves a very diverse and complex population. It serves some 50 million beneficiaries, but the cost incurred on behalf of those beneficiaries varies widely by the type of beneficiary enrolled in the program. As you see here, children and non-disabled adults under age 65 account for very low per capita expenditures in contrast to people with disabilities and to the elderly for whom both acute and long term expenditures exceed substantially those of children and other adults.

Just looking at the distribution for people with disabilities, we often think that their major

Medicaid expenditures come from long term care, but you see here that their acute care expenditures are really quite substantial. The elderly, with their Medicare coverage, are a bit in reverse and long-term care takes up a larger share.

But what we’re mostly focused on today is within these populations, those who have

exceedingly high costs. In this analysis, we looked at people with expenditures of over $25,000 in a given year and saw that only 4% of the enrollees in Medicaid, in 2001, had expenditures in this category. Yet, they accounted for nearly half of all Medicaid spending.

One of the ways that we looked the high-cost population is by this level of expenditures. In the

next slide, in figure three, what you see is that among each of the Medicaid beneficiary groups: children, adults, people with disabilities, and the elderly a very small share of the beneficiary group accounts for a very substantial share of the spending.

Figure four shows that for the Medicaid program a very large share of the expenditures are, in

fact, going to beneficiaries who are dual eligibles- those who have coverage first through Medicare, then with Medicaid as a wrap around to provide both cost sharing assistance for covered services and especially long term care.

At the time this analysis was done, Medicaid was also providing the prescription drug coverage

for those Medicare dual eligibles, but now that has been shifted to the Medicare program. But what you see here is that the dual eligibles, about 8 million Medicaid beneficiaries, account

for almost 44% of overall program spending. So one of the focuses that one could have in looking at high cost populations in Medicaid is to focus on that dual eligible population, the relationship between Medicare coverage and Medicaid coverage, and how to handle the services of those chronically ill individuals.

What you see in slide five is that the dual eligible enrollees within the Medicare population are

really Medicare’s poorest and sickest, and also a population that has a substantially higher level of cognitive and mental impairment in contrast to other Medicare beneficiaries. So, again, this is a role where Medicaid comes in to play a very strong role in providing mental health services, rehabilitation services, and assistance that goes beyond the scope of the Medicare benefit package. There services require better coordination with Medicare to ensure that the physical health needs are integrated with the mental health challenges as well as with the long term care needs.

Finally, if you look at figure six, you’ll see for the dual eligible population that in acute care,

drugs made up about half of the spending for that population. Those are the expenditures now shifted to the Medicare program, yet all the remaining services are still part of Medicaid’s obligation to fill in Medicare’s cost for its sickest and most costly beneficiaries. One of the issues that will remain is how to manage the long term care needs, and how to integrate long term and acute care needs within the Medicare program. Then, how do you get better coordination integration there with Medicare coverage itself?




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So that’s one way of looking at high cost populations in the Medicaid program. We took

another slightly different tact in figure seven where we tried to assess if long-term care triggered you to be part of the high-cost population. This slide shows that 7% of all enrollees in the Medicaid program use about half of all of Medicaid’s spending, and those 7% are individuals both in the community as well as in institutions who rely on Medicaid for some form of support for long term care services.

As you can see from this slide, 3% of all enrollees are institutionalized using long term care

services and they account for a third of Medicaid’s spending both acute and long term care spending. Another 4% are living in the community and using long term care services and they account for another 19%. So, perhaps another lens in which one can look at how to address high cost populations is to look at those who are using either home and community based services or institutional services to see if there isn’t a better way to manage and integrate their care.

Figure eight just gives you a little more data breaking down by elderly people with disability and

then other adults and children who have long term care needs. You can see there that obviously it is a much higher expenditure per capita when they are in an institution than in the community, yet still substantial share of their spending is for acute care and so we can’t forget when we deal with long term care that one of the ways to try and better manage that population is to integrate their long term care services better with their acute care. So I think there are a lot of challenges ahead to try to work through how to better provide really high quality, integrated, and cost effective care to Medicaid’s very high cost populations. And at the end of the day, I think they will get better care and we will have better managed their costs, so I think this conference call really sets up a discussion of how to do that.

Thank you. Stephen Somers: Diane, thank you very, very much for that national overview, and I look forward to having the

opportunity with those on the call to ask any questions that may arise or answer — for you to answer and questions that may arise.

We’re going to compliment what Diane just presented by asking Melanie Bella to describe

some of the work that she’s been involved with here at the Center for Health Care Strategies and elsewhere, and she will go ahead and make that presentation and then, as I said earlier, there will be an opportunity for question and answers afterwards.

Melanie Bella: Good afternoon. Thank you very much, Diane, and thanks to all of you who are joining us on

today’s call. We have 35 to 40 states represented as well as other stakeholders, so this is a very exciting opportunity for us to talk about the opportunities that we see in Medicaid for really being part of the solution when we look at what’s going on with health care today.

So, just starting out, I’m going to pick up right where Diane left off in talking really about the

high-need, high-cost subsets in Medicaid. This is a cost curve that you’re all familiar with. You are also all familiar with the 80/20 rule where 20% of people are driving 80% of the cost. But as Diane indicated, in Medicaid it’s more the 5/50 rule where actually 4 or 5% of beneficiaries are driving 50% of the costs.




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And so it’s really important to understand who those folks are and what we might be able to do to bend the cost trend, if you will, and possibly set ourselves up for some longer term cost reductions.

So, if you look at who’s driving the high cost folks in Medicaid, as Diane as already noted, 4%

are accounting for 50% of the spending. These folks have high needs. As you all know, this is a very comorbid population. 61% of adults have at least one condition; half of them have more than one. We’ll talk today about really what the prevalence in clustering of those chronic conditions are.

A very important point that we need to keep in mind throughout today’s presentation, as was

first introduced by Diane, related to the dual eligibles and the fact that 7 million, sounds like 8 million now with updated numbers, out of a total pool of approximately 65 million Medicaid beneficiaries are driving close to 45% of program costs. Again, with updated numbers continuing to show us that those costs are increasing. e must begin to address both care barriers and financial barriers to better integrating their care. And we’ll talk a little bit about that at the end.

So, the other point to make is if we drill right down on the truly high-need, high-cost

populations in Medicaid, which, according to this slide, is the top 1% -5% of Medicaid beneficiaries, out of the top 1% of Medicaid beneficiaries, 83% have three or more chronic conditions, 60% have five or more chronic conditions, and most of these patients are being served in unmanaged fee-for-services today. So that’s why it’s very exciting to be able to share with you some of the work being done by the states to attempt to build models of care for these beneficiaries to coordinate this fragmented system.

At the Center for Health Care Strategies, we recently worked with Rick Kronick and partners

at the University of California-San Diego to produce something called the Faces of Medicaid II. In shorthand, it’s referred to as the cluster data analysis. The purpose of this work was to look for clusters of comorbidities among Medicaid recipients and understand the utilization and expenditure patterns of those clusters.

We had always talked about Medicaid beneficiaries as a very comorbid population, but it was

difficult to find any information that said very concretely: what are those comorbidities and how might they work together to impact utilization and costs of this patient population?

The goal was to understand what the prevalence and the clustering of the conditions as well as

to come up with a description that purchasers, health plans, providers, and care managers could use to help put together programs to improve care and hopefully improve the cost as well.

The project was an analysis of 2001 and 2002 national person level Medicaid files referred to as

the MAX files. And we thank CMS for being good partners and sharing the data with us for review. And as I said, it was conducted by Rick Kronick.

Some of the findings are presented on the following slide. As an aside, the entire Faces of

Medicaid document is available on our website, which I would encourage you to access as well. Essentially, what this slide is showing is the increasing cost as the number of comorbidities for a given patient increases. It’s not a curve that would be a surprise to many of you, but I think when we get into some of the other findings, you might be surprised to see how the addition of each chronic condition impacts expenditures.




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What this pie chart shows you is, again, focusing on the high cost subset of the population. This is the top 5% of Medicaid-only persons in the disability eligibility category, by number of CDPS categories. If you start with the green box all the way around, going around clockwise, that represents three or more chronic conditions. So, at least 75% of the population has three or more chronic conditions within the top 5%. And what’s really interesting is if you go to the original document, you can compare this to the overall population as well as to the top 1%, where you continue to see that as is no surprise, as you go up in cost, then number of folks with multiple conditions increases, but it increases exponentially.

On the next slide, as the bullet indicates, we refer to something called superadditivity, which is

essentially saying the addition of each chronic condition is associated, on average, with an increase in cost of approximately $700 per month. This translates into over $8,000 per year. This is s not inconsequential when you start to think about the impact ,what types of interventions we might put in place, and how might we prioritize tackling conditions when you start getting up into the number of three, four, five, six, seven, eight chronic conditions and understand what’s driving those costs.

What was very exciting for us, starting out, was that we wanted to look for ways to break down

the complexity of comorbid populations. As you know, it seems to be a commonly shared opinion that the disease specific approaches are not sufficient, particularly for a very complex comorbid population. Yet it’s also very overwhelming to think about how you take a person that has seven, eight, or nine chronic conditions and understand where to start.

And so what we were looking for are things in between single disease approaches and ones that

would anticipate every single need of a given patient, because that’s very difficult, and begin to come with alternatives in the middle. One way of doing that is to look for pairs of conditions. For example, on the second bullet, it indicates that some pairs of diagnoses demonstrates correlations. As those of you building programs are well familiar, there is high prevalence of folks with diabetes also have cardiovascular disease. This analysis found 68% actually have diabetes also have cardiovascular disease.

So how do we begin to identify things that can work together in the management of those two

conditions? that touches on the last bullet, which is the analysis of diagnostic pairs or sets, otherwise known as dyads and triads that hold promise for prioritizing care and developing care pathways.

For example, the next slide we’ve chosen to show, the top five diagnostic dyads among the

most expensive 5% of patients. Taking the first one for example, cardiovascular and pulmonary, 30% of beneficiaries have this dyad and you can see the list goes on. In the analysis itself, the list is much longer and there are also tables that show the top five triads and break these down by the top 1% of patients.

The reason why this information is helpful is it begins to let you see how you develop

interventions that can get you some economies of scale, if you will, in the management of conditions, but also helps you understand and identify conditions that may have discordant treatment patterns. There are some conditions such as diabetes and heart disease that are going to respond in similar ways to monitoring blood pressure and cholesterol. There are some conditions like diabetes and cancer, for example, whose treatment may actually work against each other, and if the care manager and the provider aren’t knowledgeable about that, and aren’t building decision support tools into their systems to be aware of any possible negative interactions, that could be problematic and contribute to the excess utilization and cost of these populations.




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We encourage you to take a look at these tables if are you are looking at your patient

population and want to understand how to slice and dice opportunities for improving care among subsets of high cost beneficiaries.

The next slide talks about this year’s Best Buy series. Again, as Steve mentioned, the focus has

been on high-need, high-cost beneficiaries and that is in large part looking for beneficiaries who you have a chance to impact their utilization primarily in inpatient admissions, inpatient readmits, ER utilization, pharmacy medication, because we understand, from a state perspective, there’s a lot of pressure and the pressure only increasing to begin to make some impact in the cost trends for these populations.

The utilization pattern demonstrated by the high-cost, high-need population lend themselves

to interventions that can have an impact in those service categories that I just mentioned. What this brief does is take you through five steps that suggest a pathway for developing programs to improve care and control cost starting with identifying high opportunity beneficiaries. So talking about ways that state their using predictive modeling or other sophisticated tools to segment out those in the population that might be positively impacted by certain interventions with recognition that a one size fits all sort of blanket, telephonic care management approach is not sufficient. We need to identify subsets of populations that might be positively impacted.

The next piece comes to stratifying the population. It’s critical to look at the different risk

levels of the population and to understand how you might vary the intensity of the touch, if you will, when you’re developing a care management intervention. The brief suggests some ways that states are doing this.

The next step is once you’ve identified subsets, there’s a really exciting opportunity to begin to

create interventions that vary based on people’s needs. There may be some folks in your population that are driven by physical comorbidities, some needs that are driven by mental illness. Within that mental illness, those whose needs are driven by depression and anxiety are quite different than those whose needs are driven by bipolar and schizophrenia. Understanding how to develop tailored subsets is really what’s meant in step three.

In step four, there’s a lot of activity, and recognition that for special needs populations today’s

measurement sets aren’t as complete or perhaps as meaningful as we might like. So states are experimenting with new ways of assessing and measuring care coordination, care transitions, comorbidity, physical behavior, and health integration. It’s not to say that all the answers have been found. Certainly, there’s a lot of work that needs to be done, but there’s progress being made in this area.

Lastly, and very critically, has to do with making sure the financing is aligned to support care

management interventions. States are trying new risk arrangements and shared savings pools, but here, I think it’s an opportunity, again, to highlight the desperate need for payment reform when it comes to dual eligibles.

Many of the programs we’re talking about focus on high-need, high-cost beneficiaries within

Medicaid unfortunately exclude dual eligibles today and that is in large part because these interventions are making a positive impact, at least in the short term, on hospitalization utilization and there’s a misalignment when those benefits accrue to Medicare, yet Medicaid is splitting the bill of the care management intervention.




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We have to take any and all opportunities to beat the drum for dual eligible payment reform.

And I’m sure the states on the call, or NGA, will pick up that beam as well. In closing, it’s important to talk just a minute about next steps and promising opportunities. I mentioned the Faces

of Medicaid II. We’ll have a Faces of Medicaid 2.5 or 3 that adds pharmacy data. It will also add 2004 and 2005 MAX data files, and we’re working with a team at Hopkins to identify what I referred to earlier as concordant and discordant pairs and sets of conditions. Look for that in the coming months.

We will be promoting what we’re calling Bend the Trend demonstrations, both within the

high-cost populations of Medicaid that we talked about today, but also dual eligibles and hope to see some gainsharing opportunities down the road.

And then there’s a tremendous opportunity for a national research agenda within Medicaid.

When you hear from these states today, you will hear how they are essentially learning laboratories and the testing that is happening on a daily basis in Medicaid states across the country. It’s a tremendous opportunity for us to take what we’re learning there and spread that to other populations and other pairs outside of Medicaid.

So I would just close with a couple words of a new initiative that the Center for Health Care

Strategies is running called the Rethinking Care Program. It has two levels. One is a national level that really in intended to be a platform for peer exchange and for elevating high-level policy issues for debate and discussion. Some of the tools that will come out of the nation effort include predictive modeling tools, return on investment strategies, payment reform, the work that I mentioned by the Hopkins team. All of that will be available for states who are interested in undertaking programs for these populations.

And most excitedly, we have what we are calling Regional Integrated Care Collaboratives

where the rubber meets the road. These are state-led, multi-stakeholder collaboratives where the states are working with partners whether it be health plans or integrated delivery systems or individual providers to actually put together programs to provide tailored care management interventions for the populations that we’re talking about today. And that is why we’re very excited to have Joan Henneberry and Deborah Bachrach on the call today from New York and Colorado represent our first few Regional Integrated Care Collaboratives and are going to talk to you about the innovative ideas that they developed for their states and were kind enough to work with us on as part of these regional pilots.

So, with that, I’m going to close and I think we’ll probably open it up for a few questions. Stephen Somers: Yes. Thank you very much, Melanie. That was great. We are going to open it up to questions.

I’m to remind participants that if they wish to ask a question, they can do so by using the Q&A box on the right side of their screen. We do have some questions in the hopper already. I have a couple of questions myself. There’s one I wanted to ask Diane at the get-go.

Diane, your presentation discusses what you’re finding from the data. I’ve heard Vern Smith

who does some work for you and the Urban Institute folks identify the likely subpopulations in Medicaid that are likely to grow the most, are growing the most now, or are likely to grow the most in the future. The sense that I’ve had from some of that is people with disabilities is one area where the population is increasing, and one could also project that would happen with the elderly going forward.




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Could you comment on that, please? Diane Rowland: Certainly the disability population is increasing. It’s not increasing as rapidly obviously as

coverage for children, but when you looked at that first slide, you see that when you add one person with disabilities to the Medicaid row, it’s equivalent to adding ten children, so that even modest growth in the number of people with disabilities, because of the high cost of care associated them, could be particularly burdensome on the Medicaid budget.

Stephen Somers: Okay, great. And then there another question I wanted to ask you. I would assume that you

would resonate with the comments that Melanie made about payment reform. You didn’t address that around the dual eligibles. You definitely talked about the dual eligibles. Is there anything you’d like to say about payment reform and the prospects therefore?

Diane Rowland: Certainly I think that a public program is highly dependent on private providers to provide

much of the services and so looking at better integrating the way in which we pay for services, adding some quality measures in, and trying to really reward care management and care integration instead of just paying on a fee-for-service basis with uncoordinated care has to be the way to go to really manage and provide quality care to this population.

Stephen Somers: Great. We’re getting some questions in here that are focused on some of what Melanie

presented from Faces analysis, so I’d like her to address some of those questions right now. Melanie Bella: Sure. We have several questions that have to do with how mental health conditions were

treated in the Faces analysis and did they group into clusters. I would say, if you take a look at the entire document, certainly there are grouping. First of all, any mental health utilization that was included in the MAX files was included in the analysis. And so to the extent that the claims included mental health services, those were factored into the analysis.

I will say that we were concerned, maybe is a strong word, but we were interested to ensure that

mental health diagnosis was not under diagnosed and therefore underrepresented in the claims. And that’s one of the main reasons why we’re adding pharmacy claims into the analysis to ensure that we pick up any pharmacy utilization related to mental health conditions that may come through pharmacy claims to augment the information that is in the regular MAX file utilization claim.

I should also mention that any questions that we don’t get to during this period of time, we’ll

be sure and answer either individually or offline. There were several questions as well about special needs plans and the role for special needs

plans in providing integrated solutions and managing care for dual eligibles. I would say that there are several states that are in various forms of arrangements with special needs plans in an attempt to have one entity responsible for managing the care. And under the belief that by being able to provide a Medicaid stream of funding coupled with a Medicare stream of funding, that entity will have more flexibility to provide for the types of services that these populations need, because those services may not always fit neatly into the definition of the Medicare/Medicaid covered service. But it’s going to be those things that keep folks out of more expensive institutional settings.

There are lots of resources out there about what states are doing, some case studies that ACAP

has produced on what plans are doing in terms of specific models of care. I think the best thing for us to do for purpose of time, because I also want to ask Diane for any thoughts she has on




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special needs plans, would be to say that CHCS will post the resources that are available about integrated care plan, about special needs plans and some of the issues, both challenges and opportunities surrounding them. We’ll post those on our website. And I will ask, Diane, if you had any words to say about special needs plans.

Diane Rowland: Well, one of the things I wanted to add to the issue of mental health was that we have been

doing some studies looking at comorbidities when mental health is one of the comorbidities in the Medicaid population. If you look at people with diabetes who also have a mental illness, they are far more expensive on a per capita basis than individuals without the mental illness.

And so I think we really need to look at how to handle comorbidities in a better way, and pay

special attention to the fact that individuals with mental health diagnoses, may not be able to be as compliant with their medications. They may have other problems that contribute to their being a higher cost patient than just a straight diabetic.

And I think that is one of the challenges for special needs plans: can they really provide the

integrated management and the real-care follow through and can they develop the networks that are needed to provide the full range of services for these individuals? So, I think there are really many challenges ahead for those plans.

Stephen Somers: Okay. I have a question that came in earlier, Diane, around children and children as being

among the high-cost population. Could you comment more on children or what is the percentage of children among the high-cost beneficiary categories that you were presenting?

Diane Rowland: Well, children are a very small share of the high-cost beneficiaries. They represented 0.2% of

the overall Medicaid population, children who are high-cost represented a very small share of the overall Medicaid population. However, there are children on Medicaid with severe disabilities. There are children who are in institutions for the developmentally disabled. And so about 0.3% of children on Medicaid account for 17% of the Medicaid spending for children because of their high needs. But these are very disabled children, children who come in sometimes through the SSI, Supplemental Security Income route as well.

Melanie Bella: Thank you, Diane. Just a note again to reiterate, because are going to have to move on to hear

the state presentations, there are additional questions that we did not get to. If we don’t get to those at the end of today’s call, we will post them. There are questions ranging from the methodology used in the analysis, more questions about special needs plans, questions about access to SSI data. I promise you, we will get to all of them. Thank you very much to all of you for you interest in submitting questions.

But it’s more exciting for you hear from the states and so I’m going to turn it back over to

Steve. Stephen Somers: I would just add, Diane, you’re going to get a few of those sent in your direction for you and

your colleagues to help us respond to, because there’s some great questions on the data side as well. I hope you’ll welcome those questions.

This is the opportunity to turn the floor over to the states. The first state that’s going to

present is Colorado represented by Joan Henneberry She has had a long history in the health care field and worked in Washington prior to going out to Colorado. She has been working with the governor there to develop some terrific innovations and new thinking. She’ will focus her remarks on its efforts to address high-need, high-cost populations.




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Joan Henneberry: Thank you, Steve, and thanks everyone. I’m just going to talk really quickly a little bit about

Colorado, which you’ll see on the next slide, but with more focus on why we chose to go down this path given where we were as a state and how it fits in with our overall health reform agenda and what the governor’s priorities are.

So the first slide just gives you a little bit of data. It’s very consistent with what you’ve heard

and when compared to New York and some of the other states, we are a very small Medicaid program. It is, however, a growing program. And to some of the points that Diane made, the caseload of the highest cost, highest need populations is going up. We have a major initiative that we took on when the governor came into office about enrolling those who are eligible but unenrolled, so our caseload is increasing. We do have overexpenditure authority in both SCHIP and Medicaid so we’re going to keep growing until they tell us to stop. But it doesn’t mean we don’t want to grow wisely, which we do and I’ll get into that in a minute.

Our expenditures on claims and premiums is about $2.5 billion per year. As you can see, this is

very consistent with the national data. 22% of our population accounts for about two-thirds of our costs and 20% account for 77% of the costs. Almost half, 41% of our clients, based on our data analysis, have multiple chronic conditions. Again, even though we’re a fairly healthy state compared to others, our client demographics look very much like the national data.

So why did we start here? One would think why would you take on the highest cost, sickest,

most difficult clients to serve? And you can see from our health reform agenda, it actually fit for us. We made a very deliberate decision as an administration when we came in 2007 that if we were going to build a case for expanding health coverage in Colorado and ask the voters or the legislature for more money to do that, we had to demonstrate that we were doing a better job with our existing client base. And truthfully, we could not say that.

I would say that Colorado was actually the poster child for how not to manage high cost clients,

because we were almost entirely a fee-for-service Medicaid program. So when you matched up what our overall reform agenda was, the fact that we were really

starting at the floor in terms of cost management and quality and improving outcomes and the fact that, frankly, the folks at CHCS stepped forward and offered their help, we trusted them very much and just decided to use their expertise to build a program here in Colorado.

So, our health reform agenda goals were, as I said earlier, and still are, to enroll all eligible kids

for both CHIP and Medicaid, to expand eligibility for children first while we were looking at the people at the opposite end of our client spectrum: the highest cost and most ill clients. So we’ve gone from 200% poverty in CHIP to 225% in early 2009.

We very much wanted to streamline administration and eligibility primarily for the clients, but

frankly, also for our providers. Especially if we’re going to try and convince providers to do something differently with the neediest populations, to think differently about how we’re paying them, and to look at rate methodologies, and payment reforms. We also realized that we had to reduce some of the paperwork and systems problems that both our clients and our providers were having. So we’re doing a number of things in that area including centralizing eligibility in the CHIP and Medicaid programs.

We’re a county-based system here in Colorado, so we have 64 different counties and several

hundred eligibility workers determining eligibility. This is especially difficult for the long-term




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care population. So we’ve taken this on. You can imagine some of the controversy around taking work away from counties, but we’ve convinced everyone that it’s the best way to modernize our health care programs, and to make it easier for our clients and our providers to get people into programs and to keep them in programs. It’s not the sexy part of what we’re doing, but we think it’s the important component to making the healthcare system work better.

We had to rebuild managed care. As I said, we walked in the door, we had one capitated

managed care plan in Colorado, and they were serving about 35,000 individuals. We had an ASO plan. But most of the plans had walked away from the market after lots of controversy and problems with the state. Frankly, the previous administration didn’t embrace the concepts of managed care so we had to start from scratch rebuild relationships with the plans. We’re very fortunate in Colorado to have some excellent state-based, non-profit plans so we decided to start with those plans and work on rebuilding a system and we’re using those plans with our integrated care model.

Just a couple of other things. We had to bring some parity into the benefits packages. We’re

contribution to our regional health information organization and plan to use health IT in a big way to understand what’s happening with our clients. We’ve also begun to focus on outcomes and quality measurements a lot more than we had in the past. We created the Center for Value in Healthcare, and recently got support from Commonwealth to look at that.

The next slide tells you what our goal of the Colorado Regional Integrated Care Collaborative

is. We began to work with the Center for Health Care Strategies who provided enormous amounts of technical assistance and knowledge to us, and set a goal to improve the quality of care that is received by our highest need, highest cost clients in the Medicaid program by doing a better coordinating their physical health, mental health, and substance abuse services.

The objectives of the CRICC program, which is the next slide. And these really are in our

order of priority. First and foremost, we want people to have better health outcomes. As I say, we want them to be healthier when they walk out the Medicaid door than when they walked in the Medicaid door. You all know this is hard to do when you have high turnover in your clients, especially in the younger populations and in the kids, but the good news/bad news with this particular population is because they are sicker and their needs are so complicated, we actually are likely to keep them in our programs longer than the typical younger Medicaid population. So we have an opportunity to not only see if we can make a difference, but to have them in a program long enough to measure those outcomes.

We also want to improve client satisfaction with the overall healthcare system. To have over

300,000, almost 400,000 people, in Medicaid in what I call free-for-all fee-for-service just doesn’t make any sense, especially for people whose needs are so complicated. So it’s no wonder that they’re not very happy with the so-called system either. We hope to identify ways to save money and to, as Center for Health Care Strategies says, bend that trend. We really hope that will happen, we’re very confident that it will happen, but we’re not promising anything since this is new. We did not even put estimated cost savings in our budget documents because, frankly, we just don’t know. And everybody who works in state government knows that if you put those figures in your budget document as potential savings, they’re going to go away really fast. So, we are confident we’ll save money, but we just don’t know yet.




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So, the model is very much like what Melanie had described. It’s a multidisciplinary team approach. We’re using one of our health plans, Colorado Access, as our first partner This plan includes a lot of our safety net providers and our federally qualified health centers, some of which have really strong experience in serving this population. Each client will have a health needs assessment. They’ll have a go-to person that will help them navigate the healthcare system. Everyone will get individualized care plans. They’ll get assistance with scheduling appointments, linkage to community resources helping to connect them to public health and population-base health activities. Although I will say that’s something we have not done a great job on yet, in terms of connecting the acute care services to the public health services.

We’ve also changed our copay policies for certain visits and enhanced the benefits package

that people will get in order to entice them to participate in the program. The next slide talks about key elements of the program. Again, the partnership with the center

and with Colorado Access focusing on the highest need clients. We will start enrolling in June. I believe May the letters and outreach materials with out to the clients. We hope to enroll 2500 folks by July. It’s an opt-out program, so we are — people have to deliberately opt-out of participating. We anticipate another pilot and partner site by the end of this year, and clients will get the services for two years.

The next slide is just a schematic from Colorado Access and shows the care management

continuum, so you can see there’s site based care management and facility based care management. Colorado Access will hire the case management staff, but they will be placed in high volume practices where the clients are seen. They’re also looking at placing staff, co-locating in hospital settings.

The final slide tells you about the evaluation, and what we have in mind. Of course, this is

also in partnership with the Center for Health Care Strategies. I think having an independent evaluator, MDRC, has really given the project a lot of credibility. We had such a bad history here with the client population, especially this client population, in previous attempts at rolling out managed care plans, that we’ve had to do a lot of trust rebuilding and assuring clients that they’re not going to be denied services. We try to convince them that we actually think a good case management, integrated program will make them happier and healthier. But that is not an easy thing to sell when there’s been such a bad history. So, having an independent evaluator is helping us to sell that.

We’ve also gotten a local foundation to pay for a consumer ombudsman, someone who himself

is an individual who lives with disabilities, who’s helping us rebuild that trust with our clients. The evaluation itself, however, will be based on outcomes I mentioned earlier We want to compare the quality of care that people receive, their outcomes, and measuring the utilization and expenditures between the enrolled group and a comparable group of beneficiaries in fee-for-service.

We will also be looking at whether or not some of the administrative requirements that we’re

streamlining make a difference for people with no prior authorization required for certain referrals: did communication between practices improve? So there will be some process of objectives as well.

I think I will stop there and take questions. I will say one more thing about why we’re so

excited about the CRICC project and what it might do for Colorado. We had already done a pretty good job on our long term care programs in terms of moving more people into home and




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community based services versus skilled nursing facilities, but to Diane’s point, the costs associated with those clients, related to their acute care, really had not been attended to very well. Sure you had great things going on in the community in terms of their long term care services, but there was not proper management of their acute care. I think we’re putting this last piece in place and I’m very confident we’re going to see some great outcomes.

Thank you. Stephen Somers: Thank you very much. That was terrific, as I said, and we are going to have questions at the

end of the next presentation and so we will hold them. We are getting some in here, and we’re stacking them up for you.

The next presenter is Deborah Bachrach from New York Medicaid. She started at New York

Medicaid in January of 2007 and has a long history of working on publicly financed programs in New York. It’s a pleasure for us to listen to Deborah’s presentation on high-need, high-cost populations and what New York is doing to address some of the problems they perceive.

Deborah Bachrach: Thank you, Steve. Let me start by giving folks a brief background on New York’s Medicaid

program. It is a large program. We cover over 4 million children and adults at a cost of $47 billion. Of the 4 million enrollees, about 2.5 are in managed care. While most of our beneficiaries are in managed care, most of our expenses are in fee-for-service.

That brings me to the second point, which is, as the prior speaker said, we line up like other

states and national data. 21% of our beneficiaries incur 76% of our costs. The high-need, high-cost beneficiaries fall into the six categories that you see here: the chronically ill, HIV/AIDS, long term care, alcohol and drug use, chronically mentally ill, and the MRDD population.

Again, this is consistent with what Joan said, as you’ll see on the next slide. We couldn’t look

at our high-need, high-cost patients in a vacuum. We really had to look at our whole system and what kind of care were we delivering to all of our Medicaid beneficiaries, because that really was the starting point for how we would intervene with our highest needs beneficiaries. What struck us when we came into office in 2007, was that New York, both in terms of Medicaid payments per beneficiary and healthcare costs per capita, ranked 1, 2, or 3 in the nation. But when we looked at how our system ranked on a quality and particularly on avoidable hospitalizations, we ranked in the bottom quartile. Medicaid is the single largest payer in the state, so surely Medicaid had contributed to this mismatch, and was also in a position to lead a change or reform in our delivery system.

At the same time we focused on our high-cost, high-need population, we went back and said

we know care follows the dollars: what are we doing wrong? In this session of the legislature we got authority to move $150 million from impatient rates to outpatient rates. That’s part of a four-year plan in which we anticipate moving as much as $600 million. We also introduced a new payment methodology on the ambulatory side, moving from a fixed per visit amount to a payment amount that varies based on the intensity or the comprehensiveness of the service provided.

For the first time, we introduced payment for health education and counseling. And to

increase access to care, we did quite a number of things. We started a new program called Doctors Across New York, which will repay the loans of new physicians who, upon graduation, go to parts of the state that are medically underserved and in areas of specialty and primary care do not have enough physicians. We are also going to start paying more for




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evening and weekend hours We’re going to follow Medicare’s lead in terms of enhanced payments for physicians practicing in HPSAs.

We also found that our licensure process actually discouraged the integration of behavior

health and physical health and we took immediate steps to change that. Finally, we’re introducing several changes and enhancements to our utilization management

programs, both our concurrent programs and our retrospective review. We have a very interesting RFP on our website right now to do with additional retrospective review on fee-for-service claims.

That brings me to the chronic illness demonstration program. The CIDP was authorized by

our state legislature in 2007, and extended in this year’s budget. We have $60 million available over three years. Before I talk about the details, I want to give you a sense of why we looked at this demonstration. Again, as with Joan, I want to thank the Center for Health Care Strategies and also our New York Health Care Foundation, both of which have been indispensable partners in making this work. Our goal in CIDP was to see if we could get some immediate impact. Obviously as we improve our primary care assets and quality of primary care, we expect to see changes in outcome, quality, and potentially even in cost savings. Those are critical but long term initiatives.

The approach we took in the CIDP, is that we believe see some changes by the third year of the

demonstration program. So, using Melanie’s terms, we’re really targeting our high opportunity beneficiaries through a predictive modeling or case finding algorithm developed by John Billings at NYU. Using five years of Medicaid data, this algorithm allows us to target patients that are high risk, meaning the estimated 70% of hospital admission in the next 12 months.

We knew that we were really targeting the folks where we could make the biggest difference in

the shortest amount of time. More importantly, the subgoal here was to change the delivery system. We have the clinics, the hospitals, the substance abuse providers, and the social services providers, but they generally operated in a fragmented manner and for this population in particular, we weren’t seeing any coordination of care.

So we’re hoping through this to both change the delivery system and, at the same time we

change the care, the beneficiaries who enroll. As you see on page four, what we’re talking about are beneficiaries who have very significant

medical needs. 76% have a chronic disease. 52% have multiple chronic diseases. 69% have a history of mental illness. 73% have a history of substance use, and 54% a history of mental illness and substance abuse. But their medical needs, not withstanding, they are not well-connected to the delivery system. Almost a quarter show no primary or specialty care visit in the last 12 months and 65%, almost two-thirds, have been to the emergency department.

Again, these are individuals who are in fee-for-service and are not receiving managed care,

despite the fact that they probably need managed care more than our enrollees, or at least as much as the enrollees in our managed care program.

Their costs, which are on slide five, is how we match their medical needs. Now, in the prior 12

months, we expanded on average $37,500 on these beneficiaries. To put that in perspective, our non-special need enrollee averages $2400 a year. Our average special-needs population enrollee averages $28,000 a year. So, these are folks who are coming in at over $37,000 a year making them quite expensive.




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You can see on the slide what their expenses were. I won’t go through each of the cost

categories, but you can also see that by our projections, if we don’t intervene in the going out 12 months, we expect their costs to be $46,000 with a big jump in the hospital costs.

So that’s the patients that we targeted. What we targeted was our CID program, CIDP,

Chronic Illness Demonstration Project. I would encourage folks that are interested, to go on the New York State Health Department’s website. The RFP is on the website, and it provides a ream of information that informed our bidders and I think that you all would find interesting as you think about who we targeted.

The RFP went out in February and proposals came in April. We expect awards to be made on

July 1 or shortly thereafter, and we anticipate on making five awards around the state. The monies that have been allocated by our legislature, which we anticipate being matched by Federal government because they will be Medicaid payments, will be paid out in the form of a monthly care coordination fee. Since these are fee-for-service patients, all of their care will be billed to Medicaid on a fee-for-service basis.

Each project has the two centerpieces of the CIDP program. One is we want an integrated

network of providers, and two is we want to see comprehensive care coordination. This is the lynchpin of this program.

In order to facilitate the role of the lead provider — but again, it will be a network provider

with a lead provider ,patient consent, and every project will have to have a patient consent form that we will approve. We will then be able to share the claims history for the patient as well as their current utilization.

Given the nature of this population, we will look for bidders that have strategies to engage the

population in the care model in an ongoing basis, because, again, these patients are not cycling on and off of Medicaid. Unfortunately, what they are cycling on and off of care.

One of the features that I’m particularly excited about is that we will have a control group and

will conduct a rigorous analysis of the demonstration program’s effectiveness. I think one of my frustrations since coming on to Medicaid here is that every year three or four demonstration programs are authorized by the legislature. We go ahead and do them. Some seem good; some seem bad, but we have no way of actually assessing their effectiveness in improving care, patient satisfaction, or decreasing costs or anything else for that matter. I think with this project, we will be in a position to actually evaluate effectiveness.

Turning to slide seven, one of the things that we will do to encourage the providers to deliver

the type of comprehensive intervention we’re looking for, is set up a program of risk sharing and shared savings. On the risk side, we’re going to pay out every month the full monthly care coordination fee, but 30% of the fee will be at risk. One-third is at risk for the quality and reporting requirements, and two-thirds of the 30% is at risk on the financial side.

On the quality and reporting requirements, that has three components that we’re looking for:

an initial health assessment, an individualized service plan, and a monthly interaction with the patient. That could be a monthly face-to-face interaction or two other types, probably meaning the telephone as an alternative. To meet that standard, we would expect all three standards to be met for 95% of the enrollees.




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Each demonstration will have approximately 500 enrollees. On the 20% that’s at risk for cost, we will look at the total cost of each enrollee. Now, the cost is the fee-for-service cost plus the care management fee. And if that amount exceeds the control group for all the enrollees, then we would take back that money. We’re in a position to take it back because we’re Medicaid and we would withhold it from future payments. So, we prefer to give the money out in the first instance and put it at risk in the back end. That way, our providers would have the money available in order to perform the type of comprehensive care that we’re looking for

In addition to the risk, or the downside arrangement, the upside is we will share savings. The

shared savings will be calculated as whether or not the total costs are coming in at 85% or less of the control group. We will share savings up to 50%, and the pool will be a minimum of $3 million. Again, if it’s matched, it could be as much as $6 million.

So, to sum up, on slide eight we’re doing this demonstration as a learning collaborative. There

will be a substantial amount of interaction between successful bidders, the Department of Health, NYU, and the Center for Health Care Strategies We will have a control group, and we will meet regularly as we perform the evaluation.

On the bottom of this slide, you see the five things that we will be looking at in terms of an

evaluation. I think I will stop there. Again, I would want to stress two things. One, we focus on our

highest need populations and we look for an intervention where we can demonstrate success, potentially relatively quickly, and we do that against the backdrop of trying to improve the delivery system for all Medicaid beneficiaries.

Stephen Somers: Deborah, thank you very much. We’re going to turn to questions and we have a slew of them

for you in a New York minute. But first, we’re going to ask Andrea Maresca from the National Governors Association, who’s

the legislative director of NGA’s Health and Human Services committee, to step in and make a few brief comments about how this all fits within the scope of what the National Governors Association in thinking about.

Andrea Maresca: Thanks, Steve. We want to take a step back and give a global or national perspective on the

environment that states are looking at in terms of health care reform and new innovation. It’s important for everyone to understand the state of economy. And I think if we had to sum it up in one phrase, we’d say abrupt turn around in the past six months or so.

The National Governors Association, along with the National Association of State Budget

Officers, puts out twice a year a report on the state fiscal situation. In the report we put out last fall, there were about seven or eight states that were looking at shortfalls in the range of 12 billion or so. Then in January, the mortgage crisis and other events started to turn the tide on the state fiscal situation. We had that number bumping to about 12 states in January that were reporting they would experience a shortfall. Over the next couple months, we saw that number rise again. And right now we’re hearing that about 25 states or so are attempting to close a shortfall probably of about a total of $40 billion or so for their fiscal 2009 budgets.

That’s really hard. That’s a number that’s constantly fluctuating because, as most of you all

know, almost every state is required to balance their budget unlike the Federal government, which could run deficits. So states are undertaking a number of policy initiatives to close that




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gap, and those could be a combination of spending cuts, tapping into their reserves, or raising revenue through taxes or other fees that they may newly impose.

So, it’s not a pretty picture in terms of the state fiscal situation. You combine that with the

percent and the proportion of spending in state budgets that goes towards Medicaid and healthcare. Medicaid represents about 22% on average of state budgets and healthcare in general is about a third of all state budgets.

These forces of a dismal fiscal situation, combined with the increasing expenditures on healthcare is presenting a really challenging situation for states. Despite that, I think states, as we’ve heard today in all three presentations, are looking to

healthcare not as a burden, but as an opportunity. The situation is emphasizing what’s needed to undertake some of the most challenging issues associated with healthcare.

Today, we have just a sampling of the innovation and critical thinking that’s taking place

around healthcare issues and, in particular, on high cost populations. We see states are looking at these high cost populations the solution, rather than the problem, to improve quality and reduce costs.

At the same time, maintaining and expanding access and coverage is a real high profile issue

that has received a lot of attention. But from the state’s perspective, improving the transparency of quality and cost is also an important factor. You really can’t talk about expanding coverage and maintaining access without, at the same time, pursuing transparency, quality, and other efficiency measures. Part of that step is targeting diseases in populations where we think that we can achieve the most, and really leverage our efforts.

Despite the poor economic outlook, a number of states are taking this opportunity, in their

addresses earlier this year and in their ongoing speeches to make healthcare a part of the most pressing issues that they will going pursue in their agendas for the remainder of this year.

The other issue that we’ve been talking lot about today, as the other presenters discussed, is

recognizing that dualness is an important issue that needs to be resolved to improve care and reduce duplicative costs.

In theory, we know that the system of Medicare and Medicaid providing coverage for dually

eligible populations, in theory, is supposed to provide comprehensive coverage. In reality, we see a fragmented, uncoordinated and efficient system of care.

We certainly see that the special need plans have helped to improve the situation. There are

other innovations and programs states have been pursuing, but many challenges still remain. We have misaligned benefit structures, missed opportunities for cost shifting and tensions

between the state and Federal governments still remain. It’s one of the higher priorities in healthcare for states to address the dual system, and try to streamline the care that we’re providing. The states have seen that the models New York and Colorado are pursuing are an effective approach, and something that requires further evaluation to assess if these models are successful approaches and if we need to perhaps address policy changes at the federal level as well.




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Stephen Somers: Andrea, thank you very much for those comments, and I appreciate you stepping in on behalf of Raymond Scheppach who at the last minute couldn’t join. We are going to go back now to questions and answers. We’d like to address the questions pertaining to the presentation materials Joan and Deborah put on the table. And I’m going to ask Melanie to guide us through some of those questions.

Melanie Bella: Great, we have quite a few for each of you, and there are three questions we would like Joan

and Deborah both to answer. One has to do with the duals. There’s been a lot of discussion of the duals, are the duals in or out of your program and why?

The second question has to do with any thoughts you have on targeted case management and

any concerns or implications with the targeted case management for your programs. The third, there are lot of questions about is the authorities that you are using to garner CMS

approval to do what it is you’re doing. And then we have a couple of state specific ones, but I’ll start with those and I think, Joan, I’ll

ask you to start, and we’ll go back and forth. So Joan if you could start with the duals and then, Deborah, I’ll ask you to comment and we’ll go from there.

Joan Henneberry: Thanks, Melanie. We are not including the duals right now, although there’s been a great deal

of interest in that. We may go down that road later. But for now, we’ve decided to leave them out in part for all the reasons that we’ve talked about in terms of measurements, where the incentives are in the system, and feeling like we need to get some experience with this first before we go down that road. There are, though, some waiver clients included in the pilot.

We’re not really worried about the targeted case management at this point. I could be being

very naive about this, but I think it’s because we’re doing this in a risk based arrangement with an existing health plan we already have contracts with. So what they’re doing is case management and within their managed care program already.

Melanie Bella: The third question is asking under what authority you’re doing this. Joan Henneberry: We’re doing it under the authority of being able to enroll clients into managed care products.

We are a any willing provider state, although within the next couple of years, we are very much moving in the direction of putting our bidding process out to the entire population, and enrolling beneficiaries into different managed care products in a more competitive manner.

I will say that we’re a state where it is not likely that we would put everybody into the same

kind of plan or everybody certainly not into one plan. We have very robust existing managed care market here with non-profit plans. We just, we the department, just hasn’t had a great relationship with them, so we’re starting with that.

Melanie Bella: Okay, great, Joan. And just to clarify a couple of other questions. One person asked why

you’re doing an opt-out program as opposed to a mandatory program. So for clarification, I think we should just let everyone on the call know that it is a mandatory program with an opt-out provision, correct?

Joan Henneberry: That is correct.




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Melanie Bella: And then the other question just had to do with some what you’ve been seeing in utilization

changes already, but perhaps we should just reinforce the program actually hasn’t started touching patients yet. So there’s not any utilization experience to report yet on today’s call.

Joan Henneberry: That is true. Melanie Bella: All right. Switching to New York. Deborah, you have the big three questions if you don’t

mind, and then I have a couple of New York specific ones for you. So if you might talk a little about duals first?

Deborah Bachrach: Okay. Duals are out for all the reasons everybody has talked about and it’s unfortunate and

ultimately we really do have to think through how we can combine the Medicaid and Medicare revenue streams for long-term effectiveness for our duals. But we weren’t in a position under the current rules to do that, so we took duals out.

We also do not think we have a targeted case management problem. This is outside of TCM,

and in fact, our discussions with CMS have confirmed that because the kind of care management we’re looking at here really isn’t what’s contemplated in TCM, even under the new rules. This is care management to get people into care, to perform the assessments, and it goes well beyond the TCM program at this point.

New York is an entirely voluntary program. We’re targeting our fee-for-service program. This

is primarily individuals who are exempt or excluded from managed care or mandatory managed care, so it is voluntary. We are optimistic, and I would say we’ve been working Melanie on this, that we will be able to get FFP probably through waive, but again, we’re still under discussions with CMS on that.

Melanie Bella: Great. Thank you. Specifically, Deborah, there’s a question about what New York did

specifically to encourage behavioral and mental health and physical health providers to coordinate care?

Deborah Bachrach: We made it a requirement of the RFP. Being glib, it’s actually a requirement, but we also

provided a substantial amount of data on the targeted population and, honestly, I don’t think anybody could bid on this without looking at the extensive overlap of medical and behavioral health needs of the target population.

Melanie Bella: Okay. Two last questions for both of you. One has to do with are you doing anything special

to share the continuity of eligibility for the case managed population? And do the care managers have access to eligibility information? So I know you both mentioned that this is a pretty stable population where you’re not seeing a lot of churn, but anything that you have to say specifically about any assurance of continued eligibility? And the second one, which is a completely different note, but it’s been mentioned by several people that are submitting questions, is that you both mentioned the importance of the evaluation. Are there rules of thumb or thoughts for those who are considering going down this path in terms of the challenges that you face with random assignment and the reason you chose to continue down that path?

Joan, would you like to start?




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Joan Henneberry: Sure. We have not done a guaranteed eligibility; we only do redeterminations every 12 months in the Medicaid program. So, again, we’re banking on the fact that the population we’re targeting, once they’re in, will not likely be a population that all of a sudden is going to go out there and get great health insurance. We’re just not worried about that.

Remember, Colorado has a very lean eligibility for Medicaid to begin with. We’re not a

generous state in terms of our income eligibility like New York is. So we just don’t think that’s going to be a problem and some of the administrative things that

we’re doing in the program to avoid people getting accidentally kicked which frustrates providers. We think that will help.

Melanie Bella: Great. I’m going to actually ask to stop you there and ask Deborah to comment on that one

before we move to evaluation. Deborah Bachrach: Again, as you said, we don’t see too much turnover on eligibility, but obviously we don’t want

to see any. Our providers will receive monthly eligibility files. And in New York, most of our hospitals, many of our community health centers, along with CBOs are facilitated enrollers, so I think with the regular interaction that’s contemplated through the care management, we’re pretty confident that we should be able to maintain eligibility throughout the period.

Melanie Bella: And your eligibility period is how long, Deborah, one year? Deborah Bachrach: Well, it’s 12 months. Yeah, we have a 12-month eligibility period. Melanie Bella: Okay. Any responses to the questions regarding the evaluations? Deborah Bachrach: While I’m on a roll. We’re looking at two things. One is utilization, the other is expenditure.

And we’re well aware that for some of this population, we’re going to see the costs go up because they have so underutilized services that we may, initially, see costs go up. For example, they’re not on the appropriate meds. So we want to be sure that we’re looking at both utilization and expenditure and not skewing it in an artificial way because of past undertreatment.

At the same time, we want to understand to what extent what we’re doing is replicable,

because if you remember my point that we wanted to both see delivery system change and changes in quality in patient outcome, we want to then be able to replicate that on a going forward basis. The data will help us there, but also by interfacing regularly with the provider through the learning collaborative, the providers will be able to tell us on the ground what’s working and what’s not working.

Melanie Bella: Great. Thank you. Joan? Joan Henneberry: I would just second exactly what Deborah said. It’s so important to be able to replicate this,

especially in a state where we haven’t modernized our managed care system. We all know the recent experiences, as you and Steve eluded to early on, about the disappointing results that both states and commercial payers are getting with traditional DM programs and frankly even with some managed care products. So, we are looking at this as an opportunity for us to learn. As a huge purchaser, what it is we want to buy is what will make a difference for this population. Rather than putting out an RFP looking at what companies say they think will improve the outcomes and save you money. We want to use this as an opportunity to say

CHCS WebExchange Medicaid Best Buys: Opportunities to Bend the Cost Trend for High-Need,

High-Cost Beneficiaries May 27, 2008

CHCS Center for Health Care Strategies, Inc.

through this pilot, this is what we now know will make a difference for our clients and perhaps save money. And that’s what we want to buy going forward with the majority of our population.

Stephen Somers: Great. Thank you very much, Joan, and thank you Deborah for answering those questions. I’m

now going to close-out this call. On a logistics side, slides, audio, transcript, and answers to the questions that we couldn’t address during the course of the question and answer period will be posted at chcs.org in early June.

Participants will be notified by email when the resources are available. There will also be a call

evaluation emailed to you and we would be very pleased if you would fill it out to let us know how this call went and to provide ideas for future calls.

And I would very much like to thank, again, the National Governors Association who

cosponsored this webinar with us and the Robert Wood Johnson Foundation who has supported much of our work, and finally thank the speakers, Diane Rowland, Joan Henneberry, Deborah Bachrach, Melanie Bella, and Andrea Maresca for their contributions.

Thank you very much.

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