Policymakers Breakfast Getting Ready for Medicaid Expansion Wednesday, November 17, 2010 8:00 am 10:30 am Roger Williams Park Casino Providence, RI 1
Introduction Tim Murphy, President and CEO, Beacon Health Strategies (2007 Present) - Leading managed behavioral healthcare company based in Boston - Providing clinical and pharmacy management services to over 4.0 million members Served as Governor Mitt Romney s Policy Director and then MA Secretary of EOHHS during passage and implementation of healthcare reform (2003-07) - Key architect of the Massachusetts Healthcare Reform Law Health Insurance Connector Commonwealth Care Subsidy Program Individual Mandate and Market Reform Insurance Market Reforms - In charge of Medicaid, DMH, DSS, DYS, DMR, DPH, among other agencies Beacon administers BH benefits for 2/3 of individuals receiving subsidized insurance through the Massachusetts Connector Authority ( Exchange ) - Neighborhood Health Plan of Massachusetts - Boston Medical Center HealthNet Plan - Fallon Community Health Plan Beacon is the BH Partner to Neighborhood since 2001 and BCBSRI since 2003 2
Agenda Massachusetts Healthcare Reform Medicaid Managed Care Plans and Exchanges 3
Efforts to date have reached nearly 75% of the total uninsured in Massachusetts Massachusetts Residents 500K 500K 400K 300K 200K Uninsured 394K Employer Individual Medicaid 100K Commonwealth Care ~4 of Newly insured 0K Estimated Uninsured April '06 Newly Insured: June 2006-Dec 2009 4
Massachusetts Connector: Two Functions and design rationale Goal: Efficient and transparent Administration Subsidy Program Clearinghouse Commonwealth Care - Quick launch by using existing Medicaid backbone - Medicaid had bad track record on expansion populations - Easier to track spending Private Health Insurance - Address failure in the small group/non-group market - Better opportunity for value purchasing 5
Commonwealth Care Provides a Framework for Rhode Island to Consider Redirects existing spending on the uninsured away from opaque bulk payments to providers to direct assistance to the individual Premium assistance up to 30 of the Federal Poverty Level (FPL) - Zero premium for individuals under 10 FPL - Premiums increase with ability to pay up to 30 FPL - No cliff; glide-path to self-sufficiency - No deductibles permitted for low-income individuals Private insurance plans offered exclusively through Medicaid Managed Care Organizations (MMCOs) for first three years The Connector serves as the exclusive administrator of Commonwealth Care premium assistance program - Works closely with Medicaid program to determine eligibility SCHIP and Insurance Partnership programs expanded to achieve the same objective 6
The uninsured were thought to be a good insurance risk... Average Age Gender Mix 50 47 10 42 40 34 38 75% Female Female Female 30 Female 5 20 10 25% Male Male Male Male 0 TANF Adults Com Care Medicad ABD Small Group TANF Adults Com Care Medicaid ABD Small Group 7
... which has turned out to be true from a cost perspective PMPM Claims Experience First 18 months $1,500 $1,222 $1,000 $500 $346 $329 $317 $0 Medicaid TANF Medicaid ABD ComCare Small Group 8
Service costs were similar across populations expect for mental health/substance abuse IPMH Penetration IPSA Penetration 6% 5.9% 6% 4% 4% 3.4% 2.7% 2% 1.6% 2% 0.9% 1. 0.5% 0.2% TANF Adult Com Care Medicaid ABD Small Group TANF Adult Com Care Medcaid ABD Small Group 9
Hospital readmission rates are high for BH Rate of Hospitalization Recidivism - INMH Rate of Hospitalization Recidivism - IPSA 3 3 27.5% 2 17.5% 16.9% 23. 2 21.6% 20.6% 13. 1 9. 1 TANF Adult Com Care Medicaid ABD Small Group TANF Adult Com Care Medicaid ABD Small Group 10
High OP penetration drives high PMPMs Outpatient Penetration Rate PMPM Spending 8 $150 $143.66 67.4% OPSA 6 $100 OPMH 4 Div IPSA 2 20.9% 22.2% $50 $26.09 $36.13 IPMH TANF Adult Com Care Medicaid ABD $0 TANF Adult Com Care Medicaid ABD 11
Utilization takeaways Healthcare will cover many childless adults with a disproportionate prevalence of mental health and substance use disorders The newly covered, particularly at lower income levels have more in common with a Medicaid recipient; outpatient utilization behaves more like Medicaid TANF Adults than the Medicaid Adult Disabled population, while inpatient utilization falls in the middle of these groups. Most insurers, particularly commercial insurers, will be not prepared to meet the needs of this population -Low income, racially and ethnically diverse -Intense MH/SA needs -Infrastructure of community based BH services An effective community based system of care will be essential to achieving quality and fiscal sustainability for the reform population 12
Agenda Massachusetts Healthcare Reform Medicaid Managed Care Plans and Exchanges 13
States will be the center of action Who plays in the Exchange Different Exchanges for Subsidy and Non- Subsidy Structure/ Governance Decisions Use Medicaid Infrastructure Mandate Threshold Defined Benefit v. Contribution 14
Approximately 6% of members monthly churn into a Medicaid product or drop out 6% Com Care Churn up to 20 FPL 6% Com Care Churn up to 15 FPL 8% Com Care Churn between 151% and 20 FPL 5. 4% 3.7% 4% 4.1% 6% 6.1% 5. 3. Churn/Dropouts 4% 2% Churn/Dropouts 2% Churn/Dropouts Churn/Dropouts 2% Churn/Dropouts Churn/Dropouts -2% Churn/Dropout Returns -1.3% 2008 Churn/Dropout Returns -0.8% 2009-2% Churn/Dropout Returns -0.9% 2008 Churn/Dropout Returns -0.6% 2009-2% Churn/Dropout Returns -1.7% Churn/Dropout Returns -1.1% 2008 2009 Membership 45,382 55,309 31,891 41,698 17,168 17,095 15
Medicaid managed care plans are best option to insure the subsidy populations Subsidy populations are likely to have been on Medicaid in the past Higher incidence of mental health and substance abuse conditions Significant churning between Medicaid and subsidy programs argues for continuity in health plan relationship -Suggest Lock-In periods for a 12 month period More likely to have used community base providers such FQHCs, CMHCs, community-based services Field based case management services will be necessary to best manage cost and improve health outcomes Medicaid MCOs such as Neighborhood are the logical vehicle to manage the population -Force existing commercial insurers to play in Medicaid if they want access to Exchange members 16