Health insurance exchange not the solutions of New Mexico

While several who’ve never been capable to afford insurance are now capable to do so because of the Affordable Care Act, it is very clear to most persons that the private insurance exchanges – a huge component of ACA to solve the issue of the uninsured – is in critical trouble. A bailout by the state or federal government isn’t a reasonable option.

The great news is there is a Plan B.

Our complicated private insurance system is expensive. Contributors have to deal with various policies with several coverage, deductibles and co-pays. Dividing up the small population of state among several insurance companies leads to minor risk pools and high prices. So, it makes sense for the state to self-insure and set up our own health policy that operates just like a co-op, gives freedom of choice of contributor, involving across state-lines, and which gives a comprehensive set of services. 2 independent solutions of New Mexico researches have indicated that such a plan will mitigate rising health care prices by hundreds of millions of dollars, if not billions, within 5 years.

The Health Security Act is a viable, well-crafted, and financially sound alternative. The ACA permits for this type of alternative via its waiver for state innovation provision.

In the state of New Mexico, the insurance exchange enrollment continues to remain far below sustainable levels. Private insurers providing policies on the exchange claim they can’t make a profit without increasing premiums and other out-of-pocket prices, and, in addition, continuing to decrease the number of physicians in their networks. The low enrollment numbers, they claim, have resulted in those with larger health threats signing up under the exchange. In addition to appeals for double-digit increases in premiums, insurers are no longer providing PPO policies on the exchange, which enable even those willing to pay extra to choose out-of-network contributors.

A latest issue of the Albuquerque Journal ran a story on Presbyterian’s decision to drop out of the New Mexico health insurance exchange due to the unacceptable profit levels. Likewise, in the last year Blue Cross Blue Shield withdrew from the state exchange when regulators refused their appeal for a 52% hike. Blue Cross Blue Shield (BCBS) has since came back to the exchange, but is now claiming a 93% premium increase.

Medicaid now covers 40% of New Mexico residents, with added prices to the state, resulting in cuts in amounts to physicians and hospitals. The affect of this recent Department of Human Services decision will be to decrease the number of contributors willing to accept Medicaid. It might also result in cost shifting – raising the cost of care for those patients not on Medicaid to compensate for the lower amounts.

And, of course, pharmaceutical costs continue to increase in double-digit percentages.

Gas and oil revenue has been meager and tax cuts approved in last legislative session have negatively impacted state revenues. The strapped budget of state has resulted in the series of declared austerity measures at the institutions of larger learning and public school districts.

Rising health care prices will sustain to compete with other significant state requirements. Something requires to be done to deal this situation. The Legislature convenes on the day of Jan. 17, and the Health Security Act, which will be launched at that time, gives a well-thought-out alternative to the ongoing issues of health expenditures and access.

The support for the Health Security Act is there. 34 counties and municipalities from Santa Fe to Roswell have endorsed it. Over 145 diverse New Mexico agencies need to see it approved. A solutions of New Mexico in support of the plan was approved at the state League of United Latin American Citizens convention previous month.

Now it is time for the legislators to get completely on board to make this solutions of New Mexico happen. Now is the period to make the voices heard on this problem.

Why McKesson might sell its health Information Technology business

As reports surfaced previous week about McKesson considering the possible sale of its technology solutions unit, industry observers recommend that few factors may be aligning for the healthcare giant to reassess its stake in the healthcare information technology business.

To a degree, such assessments are a proposed part of the general course of business for industries in today’s economical world, claims John Osberg, managing partner at Informed Partners, a consulting firm that gives strategic business development services for healthcare industries. It is usual for huge companies to consider their portfolios and make strategic decisions, he emphasizes.

Few reports have recommended that McKesson may think about a sale now due to the present investment requirements needed to remain competitive in healthcare IT. Osberg, a mergers and acquisitions consultant, stated that he considers that McKesson for various years has not adequately funded research and development by the unit and may be recognizing that it would have to increase R&D considerably to sustain competitive.

“It has been a ignored asset to certain degree for a while now, and that compounds things,” he asserts. He likens the situation to Siemens Healthcare selling its products in the time of early 2015 to Cerner because upgrading would charge too much.

McKesson isn’t commenting on its policies or reacting to comments from industry insiders; a spokesman late Friday stated that the company doesn’t comment on rumors and speculation.

Initially this year, McKesson agreed to sell its small physician practice EHR and practice management systems to e-MDs, appreciating the purchaser could better service the clients. The acquired software involved the Practice Choice, Medisoft, Medisoft Clinical, Lytec and Practice Partner product lines.

In the time of accountable care and value-based compensation, vendors are under the gun to empower investments and come out with latest product features. In specific, McKesson’s competitors, like Epic and Cerner, have been investing hundreds of millions of dollars into their products, claims the Ken Kleinberg, managing director of the research and insights at the institute of Advisory Board Company, a consultancy.

 

Revenue Cycle Management Should Modify for Community Hospitals

A recent research discloses that community hospitals require transforming their revenue cycle management structures to sustain in business in the Massachusetts.

Community hospitals in Massachusetts will sustain to close if they don’t make suitable modifications to their revenue cycle management strategies, a study unveils.

The study, issued by the Health Policy Commission (HCP) in Massachusetts, indicates that community hospital revenues are suffering due to the prominence of academic medical centers (ACMs), a disproportionate volume of publicly insured sufferers, and latest hospital utilization trends, involving a decline in inpatient facilities and increase in non-hospital services. 2 recent closures of community hospitals in low income places prompted HCP to inquire the trend.

Of the 115 hospitals in Massachusetts, 9 have closed and twenty-two have been changed to non-hospital facilities since the year 1980.

The healthcare market moved away from community hospitals due to the prevalence of AMCs in Massachusetts. Despite easy and local approach, more sufferers are deciding or being suggested to AMCs.

Researchers claim that, with the trend of consolidating providers over the last 3 decades, healthcare is being delivered by a minor number of contributor systems.

In the year 2012, 75% of visits to a primary care physician were to physicians linked with one of the 8 greatest healthcare contributor systems in the state.

Fewer sufferers are being recommended to local hospitals, even for low-intensity care, due to physician affiliations with greater contributor systems.

“For community hospitals, the pressures of the transforming health care system are exacerbated by persistent market dysfunction,” the study claims. “The Massachusetts health care market is now influenced and dominated by some major health care provider systems; almost all anchored by major academic medical centers (AMCs) or teaching hospitals which pursue sufferers from across the state and beyond.”

Furthermore, the report claims that community hospitals perform comparably to ACMs, but sufferers pick up ACMs due to brand, reputation, and positive patient experiences.

“Increasing migration of sufferers away from community hospitals for regular care, along with the general decrease in the utilization of inpatient care statewide, decreases the volume of sufferers seeking care at community hospitals,” the study elaborates. “As community hospitals see fewer sufferers, these hospitals are likely to get lower commercial amounts as they have less bargaining leverage with commercial insurers.

Community hospitals also offer care for more sufferers with public insurance and that needing low intensity care.

“Various community hospitals facilitate high shares of publicly insured sufferers, and most have relatively low average case mix, showing that the bulk of the inpatient services they offer are relatively routine, low-intensity care,” the report claims.

Government payers pay out lower rates in comparison to commercial payers, which decrease the hospital revenue.

Community hospitals also end up offering lower-margin services, such as emergency care and behavioral health care, over higher margin care, such as surgical and obstetric services. In contrast to other healthcare contributors, community hospitals are paid less from commercial payers for the similar services.

From the time period of 2010 to 2013, the greatest-priced hospital in each of the 3 major commercial payers’ network had been paid rates that were 2.5 to 3.4 times larger in contrast to those paid to the lowest-priced hospital for the similar service.

Without dealing essential changes to the revenue cycle, community hospitals can’t channel money back into investments, fundraising, marketing, staff, and infrastructure, the report asserts.

“For instance, various community hospitals may require to make investments to victoriously transform operations, like in hiring or retraining staff, buying innovative equipment such as telehealth platforms, upgrading electronic health records (EHRs), reconfiguring hospital space to better meet sufferer requirements or establishing data analysis and performance checking capabilities. In several cases, community hospitals might lack the financial resources to undertake such contribution,” the authors write.

Latest trends of inpatient care may sustain to drive down community hospital revenues.

In accordance to the study, the number of sufferers requiring inpatient care will decline over 15% in the next ten years due to improvement to patient care, involving less readmissions and unessential hospitalizations.

There is also an increase in the figure of non-hospital contributors, like independent emergency department, urgent care centers, and retail clinics, in Massachusetts. These services create competition for community hospitals.

The Massachusetts research reiterates various concerns that smaller hospitals encounter when compared to greater healthcare contributor networks, such as accountable care organizations (ACOs). Smaller hospitals aren’t living up to the hype that greater healthcare networks have made with value-based care, EHR adoption, and health IT technologies.

As the research recommends, by reforming their revenue cycle management, community hospitals will be capable to contribute in the quality and affordable care they offer.

Will the higher prices of public health insurance exchange enrollees ease over time?

The public health insurance exchange population likely will sustain to be featured by members who are sicker and costlier in contrast to persons covered by group health policies, but sources claim most health insurers are in it for the major haul.

A latest Blue Cross Blue Shield Association study billed as the 1^st of its type discovered that individuals who enrolled in BCBS policies in the years 2014 and 2015 had more sicknesses, used primarily more medical facilities and charge more than those enrolled in BCBS policies before the public exchanges authorized under the Affordable Care Act started functioning as well as those covered by employer-sponsored health policies.

For example, persons who got health insurance recently have greater amounts of diabetes, depression and coronary artery ailment in companion to persons who had individual health insurance prior to the year 2014 and group health policies. They also were taken to the hospital more often and utilized outpatient services.

Medical prices for the newer public exchange enrollees were 18.7 percent greater in contrast to employer-based group policy members in the year 2014 and 22.3 percent higher in the year 2015, in accordance to the Blues study, which did not answer the query of whether the high disease amounts and prices will subside and alleviate uncertainties that few major health insurers might drop out of the exchange business.

“The query comes down to does this market ever stabilize in the long term to get to a point where it is either similar to employer-based coverage or at least not shockingly larger than some of the prices that you see in conventional group-based coverage?” stated Chris Sloan, Washington-based senior manager with consultant Avalere Health.

Pittsburgh-based Highmark Health, a Blues affiliate; Humana Inc. UnitedHealth Group Inc.; and Aetna Inc. all have informed losses regarded to their public exchange health insurance business.

Insurers Need Change

“The carriers have been very crucial and vocal over the changes they would like to observe in this market to make it viable,” Mr. Sloan stated. Health insurers need to change needs for particular enrollment periods, which they claim are too relaxed and permit persons to enroll in coverage when they require treatment, then drop it once they complete the treatment.

Insurers are also claiming for larger compensation from the health reform law's risk adjustment program, which transmits payments from policies with lower-risk enrollees to policies with higher-risk, more expensive enrollees.

Insurers also are growing deductibles, raising premiums and narrowing their networks to increase the exchange policies' profitability, stated Stephen Zaharuk, New York-based senior vice president at the Moody's Investors Services Inc.

Health insurers identify “that this is a long-term problem. It is going to take much longer to stabilize in contrast to we thought,” he claimed. “The insurance organizations would somehow like to pursue (the healthier) population and I consider that is what has to happen.”

Yet, sources stated that they doubt the insurers will pull out of the exchange market altogether.

“Bottom line, the insurance agencies need this to be successful,” Mr. Zaharuk claimed. The exchange business is “a great deal for the insurance agencies. It merely has to be fixed.”

“Carriers observe little future progress in this segment and I do not consider they are eager to pull out,” stated Katherine Hempstead, Princeton, New Jersey-based senior adviser to the vice president at the Robert Wood Johnson Foundation. “I consider there are ways to make better the stability of the market, and I consider that the private sector and the regulators require to work together to seek out what those methods are.”

CMS offers healthcare six years to repay Medicare overpayments in final rule

The CMS (Centers for Medicare and Medicaid Services) on the day of Thursday published a final rule that needs healthcare contributors to repay overpayments discovered within 6 years of the previous Medicare reimbursement, a much shorter lookback time than 1^st proposed.

CMS had previous February postponed the final rule because of uncertainties over the proposed rule mandating contributors be on the hook for overpayments going back ten years. The American Hospital Association and the Federation of American Hospitals had blasted that proposal.

Under the latest final rule, contributors must also give back the overpayments either within sixty days of when the overpayment was discovered, or the due date of any cost report regarded to the payment. The rule applies to contributors receiving payment from Medicare Parts A and B.

CMS stated that the rule clarifies requirements for repayment and secures the Medicare Trust Fund from deception and inaccurate payments.

CMS also clarified what it means officially to recognize an overpayment.

"This final rule claims that an individual has recognized an overpayment when the individual has or should have, through the exercise of reasonable diligence, found that the person has gained an overpayment and quantified the amount of the overpayment," in accordance to the rule.

Under the Affordable Care Act, contributors could be charged under the False Claim Act, hit with civil fines, or be kicked out from engaging in federal reimbursement plans for failing to recognize and repay overpayments.

The final rule is also applicable to medical suppliers that acquire payments from Medicare.

The Open enrollment figures for Obamacare fall behind in week 9

From the month of Dec. 27 to Jan. 2, 83,297 customers made policy selections, in accordance to CMS.

In week 9 of open enrollment, the figures for those signing up or renewing health insurance coverage grew by less than 100,000, a less figure compared to initial weeks.

About 8.6 million customers have signed-up for health policies through the Healthcare.gov stage since November 1, in accordance to the CMS (Centers for Medicare and Medicaid Services). The week prior, CMS claimed more than 8.5 million persons had enrolled or renewed coverage.

The organization did not give a breakdown this week on the number of new customers gaining coverage versus those who are renewing coverage.

Since the month of November 1, a total of 8.6 million customers have enrolled or renewed their policies. Figures issued by CMS last week demonstrated an estimated 6 million people had renewed policies and 2.5 million were newly-insured.

The target time to enroll for February 1 coverage is the Friday, Jan. 15.

"As the season of holiday ends and individuals across the country set objectives for a healthier 2016, we are making sure they comprehend that there is still time to sign-up for quality and affordable health coverage through the Health Insurance Marketplaces," stated Department of Health and Human Services Secretary Sylvia Burwell.

CMS has been publishing weekly open enrollment snapshots of the Healthcare.gov platform, which is utilized by the federally-facilitated marketplaces and state partnership marketplaces, as well as few state-deployed marketplaces.

REMINDER - Dial-up Customers Using the 717 Area Code Modem Telephone Number

EDI trading partners still connecting to Novitas via the former 717 area code modem telephone number will no longer be able to connect for claim submission and report retrieval as of 12:01 AM Eastern Time (ET) on Friday, August 29, 2014.

The majority of our trading partners have already made these changes, and we appreciate your assistance with this effort.  Currently, customers still connecting through the 717 area code mode telephone number may already be experiencing:

• Inability to connect for claim submission, remittance and/or report retrieval.


• Decreased connection quality.


• Frequent connection time-outs.


• If your modem is more than four years old, you may need to purchase a new dial-up modem in order to connect.

Effective August 29, 2014 at 12:01 AM ET, dial-up trading partners must transition to the new number, 904-371-9510.  We have found that customers who have made the switch to the new dial-up number may need to down speed their modem if they are having difficulties connecting.

Customers who have not changed to the new connections should speak to their software vendor immediately to resolve any connection issues you are experiencing.   Additionally, trading partners who are located in the 717 area code will need long distance phone service in order to connect.

If you have questions regarding this change, please contact an EDI Analyst at the numbers listed below.

EDI Services
1-877-235-8073 (JL)
1-855-252-8782 (JH)
www.novitas-solutions.com

Dial-up Customers Using the 717 Area Code Modem Telephone Number

Dial-up Customers Using the 717 Area Code Modem Telephone Number

EDI trading partners still connecting to Novitas via the former 717 area code modem telephone number will no longer be able to connect for claim submission and report retrieval as of 12:01 AM Eastern Time (ET) on Friday, August 29, 2014.

The majority of our trading partners have already made these changes, and we appreciate your assistance with this effort.  Currently, customers still connecting through the 717 area code mode telephone number may already be experiencing:

• Inability to connect for claim submission, remittance and/or report retrieval.


• Decreased connection quality.


• Frequent connection time-outs.


• If your modem is more than four years old, you may need to purchase a new dial-up modem in order to connect.

Effective August 29, 2014 at 12:01 AM ET, dial-up trading partners must transition to the new number, 904-371-9510.  We have found that customers who have made the switch to the new dial-up number may need to down speed their modem if they are having difficulties connecting.

Customers who have not changed to the new connections should speak to their software vendor immediately to resolve any connection issues you are experiencing.   Additionally, trading partners who are located in the 717 area code will need long distance phone service in order to connect.

If you have questions regarding this change, please contact an EDI Analyst at the numbers listed below.

EDI Services
1-877-235-8073 (JL)
1-855-252-8782 (JH)
www.novitas-solutions.com

UPDATE - Attention Part B EDI Customers – Incorrect 277CA Rejections

UPDATE - Attention Part B EDI Customers – Incorrect 277CA Rejections

UPDATE: All affected files from July 6, 2014 that were denied/rejected on the 277CA in error for invalid diagnosis code have been reprocessed and the corrected 277CA files have been sent.  We apologize for any inconvenience this may have caused.

ISSUED: Customers who submitted claims on Sunday, July 6, 2014 between 6:00 AM Eastern Time (ET) and 7:00PM ET may have had their files denied/rejected on the 277CA for invalid diagnosis code in error.  You are not required to resubmit these files.  Please disregard the 277CA dated July 6, 2014.  You will receive a corrected 277CA shortly.  We will update this message when the affected files have been reprocessed and the corrected 277CA files have been sent.  We apologize for any inconvenience this may cause.

EDI Services
1-877-235-8073 (JL)
1-855-252-8782 (JH)
www.novitas-solutions.com

Attention Part B EDI Customers – Incorrect 277CA Rejections

Attention Part B EDI Customers – Incorrect 277CA Rejections

Customers who submitted claims on Sunday, July 6, 2014 between 6:00 AM Eastern Time (ET) and 7:00PM ET may have had their files denied/rejected on the 277CA for invalid diagnosis code in error.  You are not required to resubmit these files.  Please disregard the 277CA dated July 6, 2014.  You will receive a corrected 277CA shortly.  We will update this message when the affected files have been reprocessed and the corrected 277CA files have been sent.  We apologize for any inconvenience this may cause.

EDI Services
1-877-235-8073 (JL)
1-855-252-8782 (JH)
www.novitas-solutions.com

Version 5010 SmartXfr™ Telecommunications Server Updates Scheduled for July 06, 2014

Version 5010 SmartXfr™ Telecommunications Server Updates Scheduled for July 06, 2014

On Sunday, July 06, 2014, from 6:00 PM Eastern Time (ET) until 12:00 Midnight ET, the Version 5010 SmartXfr™ telecommunications server may be unavailable due to system maintenance.  If you submit your claims during this time and are not able to connect, please try to resend at a later time.  We apologize for the inconvenience.

EDI Services
1-877-235-8073 (JL)
1-855-252-8782 (JH)
www.novitas-solutions.com

REMINDER - Important edit changes for Professional claims effective July 6, 2014

REMINDER - Important edit changes for Professional claims effective July 6, 2014

CMS issued Change Request (CR) 8571 edit spreadsheet changes for Professional electronic claims. The Professional edit changes below will be implemented the evening of July 6, 2014.

REVISED EDITS
X222.157.2300.CLM.010  -  Added new message IK304=7 “Segment not in proper sequence”

EDI Services
1-877-235-8073 (JL)
1-855-252-8782 (JH)
www.novitas-solutions.com

CMS will Pay $20 per Patient Monthly Medical-Home Fee

September 29, 2011 — The Centers for Medicare and Medicaid Services (CMS) put a price tag on the much-discussed medical-home concept when it unveiled a plan yesterday to strengthen primary care through new test models for delivering and paying for services.

Physicians participating in the Comprehensive Primary Care Initiative (CPCI) will receive a monthly care-management fee on top of their usual Medicare fee-for-service reimbursements during a 4-year trial run. CMS will initially pay clinicians an average of $20 per Medicare beneficiary per month in the first 2 years. Actual payments will range from $8 to $40 per month because of risk-adjustments based on patients' claims histories and medical status. The agency also will adjust care-management fees up or down to reflect geographic differences in costs.

Richard Baron, MD, director of the Seamless Care Models Group at the CMS Innovation Center, said at a briefing today that the care-management fees are 40% to 50% more than Medicare invests now in primary care.

The care-management fee drops to $15 in the third and fourth years of the CPCI based on the CMS assumption that physicians will become more efficient in this work. In addition, the agency wants to "shift reliance to accountable forms of payment" such as shared savings, which kick in during year 2. Under a shared-savings arrangement, physicians attempt to come under budget in caring for a group of Medicare patients while meeting quality standards. If they succeed, they receive a slice of the savings.

Private Insurers Needed to Make Plan Work

CMS states that the CPCI, an outgrowth of healthcare reform, builds on and extends the patient-centered medical-home concept that many primary care physicians view as the salvation of their specialty. In this delivery model, primary care physicians are financially rewarded for care-management chores — such as talking to a patient's family members or managing specialty referrals — that typically go unreimbursed in traditional fee-for-service Medicare. Medical homes emphasize prevention, patient and caregiver engagement, continuity of care, easy access, and the use of electronic health record (EHR) software to help make it all happen.

CMS is inviting private insurers to participate in the CPCI as well and either pay care-management fees to physicians or support them with embedded care managers, health educators, or pharmacists. Getting these insurers to sign up is critical for the initiative's success, according to the agency. Medicare alone cannot motivate physicians to switch to a new care model.

"Having a majority of a practice's payers supporting enhanced primary care will ensure that a practice can implement a more consistent and comprehensive approach to treating patients," the agency stated in a solicitation for insurers to apply. "Without that majority, practices risk not having enough sustained support to provide the services we are seeking."

Private insurers have until January 17, 2012, to submit an application to participate. CMS will then choose insurers in 5 to 7 markets and recruit 75 primary care practices in each one to come aboard. The agency expects to begin selecting the practices by the spring of 2012 and start paying them under CPCI by the summer.

"We believe that participating practices, depending on the degree of (private) insurance participation, may see a 30% to 50% increase in their gross revenue," said Dr. Baron. The boost in pay, he said, will enable them to invest in the staffing and information technology needed for this "new business model of primary care."

CMS Innovation Center Director Richard Gilfillan, MD, added today that by giving primary care physicians more time and resources to care for patients, healthcare costs will eventually stabilize, patients will be healthier and happier, "and doctors will be more fulfilled."

Humana to acquire Medicare Advantage HMO MD Care

By:

Chris Anderson

Humana Inc. announced today an agreement to acquire Southern California’s MD Care, a Medicare Advantage HMO with approximately 15,000 members.

When completed the deal will add to Humana’s existing book of MA business in California where it has more than 200,000 members. MD Care’s 2010 revenue was $155 million. Terms of the agreement were not disclosed

“As Humana continues growing its Medicare business in the western U.S., MD Care offers an opportunity to expand our Medicare footprint and the suite of products and services we offer in California,” said Thomas J. Liston, senior vice president of senior products for Humana in a press release announcing the deal.

Four-year-old MD Care currently offers Medicare beneficiaries a choice of Medicare Advantage plans that serve as an alternative to traditional fee-for-service Medicare. MD Care’s medical plans include two Medicare Advantage plans including a special needs plan, and Medicare Part D insurance for prescription drug coverage. MD Care’s market area includes all of Los Angeles County and Orange County; and select zip codes San Bernardino County and Riverside County.

According to company information, MD Care’s medical delivery model focuses on preventive care, health maintenance and access to health services, which are safe, evidence-based and quality driven.

The transaction is subject to both federal and state regulatory approvals and is expected to close in late 2011. Humana’s acquisition of MD Care is not expected to materially impact the company’s financial earnings this year.

States choose diverse paths to expand Medicaid managed care

By:

Mary Mosquera, Senior Editor

New York, North Carolina and Texas are examples of how states take different paths to expand and improve Medicaid managed care, including medical home models, new services and health plan competition. Regardless of the tools, managed care is fast approaching as the primary method to deliver health care to low income populations.

New York has the largest Medicaid program in the country based on its annual budget of $53 billion and serves 5 million New Yorkers, about 25 percent of the state’s population, according to Jason Helgerson, Medicaid director in the Office of Health Insurance Programs, New York State Department of Health.

The state has gravitated to managed care on a voluntary basis but left individuals with complex and chronic conditions in its fee-for-service program, “sort of a halfway point to real managed care for the entire population but not going into those higher cost areas. That has changed in the last few months,” he said at a recent briefing sponsored by the Kaiser Family Foundation.

A Medicaid redesign team in New York “put the state on a three-year glide path to get out of fee-for-service in our state,” Helgerson said

New York wants to expand the mandatory managed care umbrella to the dual eligible population, who drive 36 percent of the total Medicaid budget, to bring them into integrated and coordinated care. “We have a number of small programs, but they haven’t grown to sufficient size yet,” he said. The state has also mandated that managed long-term care will take effect in April 2012.

New York has 820,000 Medicaid patients in medical homes and pays a bonus to physicians who meet National Committee for Quality Assurance (NCQA) accreditation standards. Most of those patients are in low-income health plans. “We’re gearing up for the move which includes identifying very specific performance measures that we’re going to hold plans accountable for,” Helgerson said. "We’re now looking at outcomes of those members to see if that extra payment of millions of dollars is seeing a return on investment."

To use managed care effectively, states have “to structure the contractual relationship, provide the right financial incentives and have the right checks in the system to ensure getting the outcomes you want,” Helgerson said.

Elsewhere, North Carolina has expanded its pioneering Community Care of North Carolina (CCNC) Medicaid medical home model across all the state’s 100 counties and serves 1 million Medicaid recipients. CCNC, established as a not-for-profit organization, has 14 provider networks that develop care management and coordination practices, and an informatics center to collect and analyze claims data for quality purposes.

North Carolina plans to add incentive-based upon metrics to further drive quality, said Dr. Craigan Gray, director, medical assistance division, North Carolina Department of Health and Human Services. For example, pharmacy services will fill more generic prescriptions based on tiered reimbursement. CCNC has also added a pregnancy medical home model, with measures to improve clinical outcomes.

“We’ll pay the obstetrician a little more. It’s data and claims driven, and there is surveillance through in-office chart review to make sure they meet the quality outcome metrics,” he said.

“But that does not measure the collateral benefit that we receive from this program from getting healthier kids and avoiding the later costs that Medicaid would undoubtedly bear from being very low birth weight,” Gray said.

The medical home model in North Carolina has demonstrated enough cost savings and quality improvements to attract the attention outside of Medicaid of several large employers within the state. These organizations, including the manager of North Carolina’s health plan for state workers, Blue Cross and Blue Shield, have engaged CCNC as an option to their health coverage. The overwhelming majority of primary care providers in North Carolina participate in CCNC.

“This is truly engaging the power of the Medicaid program to improve the standard of care across the state,” Gray said.

Texas plans to grow its STAR Medicaid managed care program throughout the state by March 2012 from just large metropolitan areas, in part to be prepared for the anticipated spike in individuals eligible for Medicaid under health reform.

Medicaid growth in general is outpacing infrastructure, and states are going to have to respond, said Joe Vesowate, deputy director of managed care operations, Medicaid and CHIP divisions, Texas Health and Human Services Commission.

Care coordination is a cornerstone, along with adding services to support that, such as a pharmacy benefit.

In March 2012, Texas Medicaid will add a managed care dental program for its children’s insurance program and expand to most parts of the state its STAR Plus managed care program for acute and long-term services for the disabled and chronically ill.

A critical characteristic underlying the expansion of managed care and controlling costs is Texas’ competitive procurement for healthcare services. ”The key is having these competitive relationships, good business environment and the right number of managed care organizations for the capacity,” Vesowate said.