PIHP Data Quality Meeting Review & Relative Value Unit Methodology

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1 PIHP Data Quality Meeting Review & Relative Value Unit Methodology Presented by: Paul Houchens, FSA, MAAA Jeremy Cunningham, FSA, MAAA May 28, 2015

2 Phases of Data Quality Review 1. Overall completeness of key data fields 2. Service level comparison of FY 2014 encounter data compared to the FY 2013 MUNC Report 3. Consistency of aggregate data from month to month and prior fiscal year Relative Value Unit Methodology 2

3 Phase 1 of Data Quality Review Overall completeness of key data fields PIHP INITIAL Table 1 State of Michigan Department of Community Health Encounter Data Quality Reporting Completeness of Key Fields in FY 2014 Line Charge Amount Mental Health Line Payer Paid Amount Billing Provider NPI 1 - Northcare Network 100% 0% 68% 2 - Northern Michigan Regional Entity 99% 39% 68% 3 - Lakeshore Regional Entity 95% 20% 90% 4 - Southwest Michigan Behavioral Health 100% 0% 54% 5 - Mid-State Health Network 98% 16% 45% 6 - CMH Partnership of Southeast Michigan 71% 0% 34% 7 - Detroit Wayne Mental Health Authority 100% 100% 36% 8 - Oakland County CMH Authority 99% 99% 87% 9 - Macomb County CMH Services 100% 100% 33% 10 - Region 10 PIHP 100% 25% 35% Composite 97% 52% 51% PIHP FINAL Table 1 State of Michigan Department of Community Health Encounter Data Quality Reporting Completeness of Key Fields in FY 2014 Line Charge Amount Mental Health Line Payer Paid Amount Billing Provider NPI 1 - Northcare Network 100% 100% 67% 2 - Northern Michigan Regional Entity 99% 99% 74% 3 - Lakeshore Regional Entity 89% 52% 84% 4 - Southwest Michigan Behavioral Health 100% 99% 55% 5 - Mid-State Health Network 98% 96% 43% 6 - CMH Partnership of Southeast Michigan 70% 97% 33% 7 - Detroit Wayne Mental Health Authority 100% 100% 37% 8 - Oakland County CMH Authority 99% 99% 87% 9 - Macomb County CMH Services 100% 100% 34% 10 - Region 10 PIHP 100% 100% 37% Composite 97% 95% 52% 3

4 Phase 2 of Data Quality Review Service level comparison PIHP Example PMPM Utilization per 1,000 Unique Recipients Cost Per Unit Service Category FY 2013 FY 2014 FY 2013 FY 2014 FY 2013 FY 2014 FY 2013 FY 2014 PT68 Inpatient PT73 Inpatient , H0043 Professional CLS H2015 Professional CLS , , ,810 3, T1020 Professional CLS , , ,800 1, Professional Non-CLS ,520 1, H0002 Professional Non-CLS ,320 2, H0018 Professional Non-CLS H0036 Professional Non-CLS , H0039 Professional Non-CLS H2014 Professional Non-CLS , , ,630 1, H2023 Professional Non-CLS H2030 Professional Non-CLS , , T1002 Professional Non-CLS ,000 2, T1016 Professional Non-CLS , ,160 5, T1017 Professional Non-CLS , ,500 4, T1023 Professional Non-CLS ,630 1, PMPM Selected $ $ PMPM Excluded due to Immateriality $ 6.11 $ 6.58 PMPM with No Material Differences $ $ Total PMPM $ $

5 Phase 3: Analyzing Aggregate Utilization and Cost Per Unit 241 Services Inpatient Outpatient Professional 26 Different Unit Increments Utilization and cost per unit by service category and in composite is difficult to measure because of unit increment differences. Count of Covered Services by Unit Increment Service Per Service Per Month Minutes First Min. Face to Face Contact Encounter Face-to-Face Each Additional 30 Minutes 45 minutes or more Up to 15 min Per Screen Per one-way trip Month Amount Encounter / Trip Per mile 60 Minutes 45 Minutes 30 Minutes Item Per diem Hour Day NA 15 Minutes Encounter

6 Example of Aggregating Current Utilization A PIHP is transitioning from using a day code (H2016) to using the 15-minute code (H2015) Utilization FY 2012 FY 2013 FY 2014 H2015 (15 minute) 2,202,862 2,769,892 3,545,868 H2016 (day) 374, , ,455 Total 2,576,863 3,117,185 3,861,323 Unadjusted aggregate utilization indicates a 50% increase from FY 2012 to FY

7 Relative Value Unit (RVU) Development - Rationale Goal: Evaluate utilization (and unit cost) at an aggregate level, normalizing for unit increment differences The Relative Value reflects both the duration and intensity of the service being provided, and is calculated as: The statewide MUNC cost per unit for a service divided by the statewide MUNC cost per unit for all services Example: Statewide cost per unit of $10 PT73: $500 cost per unit Relative value = $500 / $10 = H2015: $2.50 cost per unit Relative value = $ 2.50 / $10 =

8 Relative Value Unit (RVU) Development - Steps 1. Develop RVU scale from statewide composite costs per service 2. Apply RVU scale to utilization 3. Relative Value Units = Utilization * Relative Value 4. Cost Per RVU(Conversion Factor) = Total Expenditures Total RVUs 8

9 Example of Aggregating Current Utilization A PIHP is transitioning from using a day code (H2016) to using the 15-minute code (H2015) Utilization FY 2012 FY 2013 FY 2014 H2015 (15 minute) 2,202,862 2,769,892 3,545,868 H2016 (day) 374, , ,455 Total 2,576,863 3,117,185 3,861,323 Relative Value Units Relative Value FY 2012 FY 2013 FY 2014 H2015 (15 minute) , , ,843 H2016 (day) 6.5 2,431,007 2,257,401 2,050,458 Total 3,047,808 3,032,971 3,043,301 Utilization measured on a relative value unit basis is nearly unchanged from FY 2012 to FY

10 Phase 3 of Data Quality Review Consistency of data from month to month PIHP Example Relative Value Units per 1,000 Average FY 13 1/1/2014 2/1/2014 3/1/2014 4/1/2014 5/1/2014 6/1/2014 7/1/2014 8/1/2014 9/1/2014 Average FY 14 TANF Inpatient 1,623 1,784 1,746 2,113 1,119 2,052 1,532 1,741 1,212 1,182 1,612 Outpatient Professional CLS Professional Non-CLS 7,046 10,079 10,286 6,837 7,026 7,620 7,518 5,802 6,034 5,537 7,413 Mental Health Total 9,095 12,416 12,726 9,571 8,598 10,226 9,585 8,175 7,663 6,987 9,552 HMP Inpatient ,288 8,932 10,208 9,101 8,931 6,398 8,832 Outpatient Professional CLS Professional Non-CLS ,586 11,431 11,424 7,987 6,877 7,803 9,498 Mental Health Total ,173 20,838 22,387 17,860 16,275 14,749 18,896 PMPM Average FY 13 1/1/2014 2/1/2014 3/1/2014 4/1/2014 5/1/2014 6/1/2014 7/1/2014 8/1/2014 9/1/2014 Average FY 14 TANF Inpatient $1.98 $2.19 $2.10 $2.60 $1.37 $2.72 $1.96 $2.22 $1.58 $1.57 $2.04 Outpatient Professional CLS Professional Non-CLS MH Composite $ $ $ $ $ 9.39 $ $ $ 9.74 $ 8.94 $ 8.06 $ HMP Inpatient $0 $0 $0 $0 $13.84 $12.34 $14.13 $13.00 $12.88 $8.81 $12.33 Outpatient $0.06 $ 0.17 $ Professional CLS Professional Non-CLS MH Composite $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ $ $ $ $ $ $ Note: FY 2013 figures reflect FY 2013 encounter data re-priced using the PIHP submitted MUNC Reports. 10

11 Overall Encounter Data Quality Reported Costs Relative to MUNC FY 2014 MH PMPM Encounter MUNC DAB and TANF $ $ Healthy Michigan $ $ The raw encounter statewide PMPM was 5% to 10% lower than the statewide MUNC PMPM for both DAB/TANF and Healthy Michigan populations. Over half of the PIHPs were in this range, likely due to year-end allocation costs not being embedded in encounter data. Healthy Michigan reported costs relative to the MUNC varied much more by PIHP than the DAB/TANF populations. 11

12 PIHP Data Quality Meeting Observations Inpatient utilization and cost had material issues for almost all PIHPs Many PIHPs unit cost was lower than FY 2013 because the yearend allocation process occurs much after encounter submission Significant unit cost variation across PIHPs Future Goals Understand which services are Direct Run vs. Contracted Better service delivery consistency between PIHPs for a given procedure code. 12

13 LIMITATIONS The services provided for this project were performed under the signed Consulting Services Agreement between Milliman and the State of Michigan, Department of Health and Human Services (MDHHS) approved July 21, In performing this analysis, we relied on data and other information provided by MDHHS. We have not audited or verified this data and other information. If the underlying data or information is inaccurate or incomplete, the results of our analysis may likewise be inaccurate or incomplete. We performed a limited review of the data used directly in our analysis for reasonableness and consistency and have not found material defects in the data. If there are material defects in the data, it is possible that they would be uncovered by a detailed, systematic review and comparison of the data to search for data values that are questionable or for relationships that are materially inconsistent. Such a review was beyond the scope of our assignment. This report has been prepared solely for the internal business use of and is only to be relied upon by the management of MDHHS. No portion of this report may be provided to any other party without Milliman's prior written consent. Milliman does not intend to benefit or create a legal duty to any third party recipient of its work. QUALIFICATIONS This document was created by Paul Houchens, FSA. Mr. Houchens is a Principal and Consulting Actuary in the Indianapolis office of Milliman and a Fellow of the Society of Actuaries and Member of the American Academy of Actuaries. Paul meets the qualification standards for performing the analyses contained in this document. 13

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