|
Financial Impact of
Proposed
Integrated Care Management (ICM)
Model
March 15, 2005
Full report in printable Adobe Acrobat PDF
format 
TABLE OF CONTENTS
- Description
- Fiscal Impact
- Coverage Areas Details
- Caseload Forecast
- Cost Forecast
- Projected FFS Client Costs
- Methodology and Assumptions Used
- Actuarial Review
- Timeline
- Impact on UPL
- Impact on Community-Based Long-Term Care Services
- Community-Based Alternatives (CBA) Interest List
- Provider Rates
- SB1 Assumptions
<<back to top>>
OVERVIEW OF THE ICM MODEL
Description
The Integrated Care Management (ICM) model will provide
administrative functions associated with the delivery of health care to
the aged, blind and disabled and coordinate acute and long-term care
through case management/ care coordination services. HHSC will continue
to process claims through the existing Claims/Primary Care Case
Management (PCCM) Administrator. The ICM model is not capitated. The ICM
is paid a case management fee that is based on 10 percent of the
projected expenditures for the population served. Of this amount 20
percent of the case management fee is at risk. Each year the ICM
contractor and the state will mutually establish projected savings
estimates. If projected savings are not realized then the ICM contractor
will forfeit a proportional amount of the case management fee. Primary
Care Providers (PCPs) will receive a $3 per member/per month (PM/PM)
case management fee.
Population Served
- Aged (dual eligibles)-mandatory enrollment
- Blind and Disabled (Supplemental Security Income (SSI
adults))-mandatory enrollment
- SSI children - voluntary
Excluded Populations
- Individuals receiving CLASS Waiver services
- Individuals receiving Home and Community-Based Services (HCS)
Waiver
- Individuals receiving Medically Dependent Children's Waiver
services
- Individuals receiving Deaf-Blind Multiple Disabilities services
- Individuals who exercise the option to participate in a Hospice
program who are not receiving Community Based Assistance services
- Clients currently in a nursing facility
- Clients who are currently in an ICF/MR facility
- TANF and TANF related unless a "high cost" condition
exists.
- State Paid Adoption Subsidy recipients
- Adoption Subsidy recipients
- Children in Foster Care Programs
- Medically Needy Program Recipients- with or without Spend Down
- Individuals with Prior Coverage only
- Individuals who qualify for Ineligible Alien Programs
- Individuals in Presumptive Eligibility Programs
Service Delivery Areas
The ICM will operate in the following areas and serve the populations
identified earlier:
- Harris Contiguous SDA: (Brazoria, Fort Bend, Galveston,
Montgomery, Waller, Austin, Colorado, Matagorda, Washington,
Wharton)
- Bexar Service Area (Bexar, Atascosa, Comal, Guadalupe,
Kendall, Medina, Wilson)
- Dallas Service Area (Dallas, Collin, Ellis, Hunt, Kaufman,
Navarro, Rockwall, Fannin, Grayson)
- El Paso Service Area (El Paso)
- Lubbock Service Area (Lubbock, Crosby, Floyd, Garza, Hale,
Hockley, Lamb, Lynn, Terry)
- Travis Service Area (Travis, Bastrop, Burnet, Caldwell,
Hays, Lee, Williamson)
- Nueces Service Area (Aransas, Bee Calhoun, Jim Wells,
Kleberg, Nueces, Refugio, San Patricio and Victoria)
- Tarrant Service Area (Denton, Wise, Parker, Hood and
Johnson Counties)
Model Assumptions
- Single, statewide ICM administrator
- Competitive procurement
- No risk for acute care and long term care medical costs
- Limited risk for administrative costs
- HHSC administers the ICM vendor
- STAR+PLUS continues in Harris County
- PCCM program continues operations and planned expansion
- ICM will be implemented through a waiver
- Approval of an Advance Planning Document through CMS will be
required
Benefit Assumptions
- Fee-For-Service acute care and long term care medical benefits
- Unlimited prescription drugs
- Removal of limitations on spell of illness
- Adult well checks
Vendor Responsibilities
- Network Development (physicians, hospitals, home health, community
support providers, rural and community clinics)
- Monitor network adequacy
- Analysis of health risk screening data
- Nurse Hotline (24 hours/ 7 days a week)
- Patient education and outreach (member handbooks, call center
functions)
- Utilization Review (review of physician medical prescribing and
referral practices)
- Quality Assurance (development of quality improvement plan,
periodic review of quality of services provided, etc)
- Prior authorization for high cost medical and hospital services
- Acute and long-term case management and care coordination for high
risk patients
- Coordination of referral to medical home
- Clinical committee to develop performance standards and clinical
guidelines
- Does not include grievance, appeals, and fair hearings
administration
Relationship with other External Vendors
- Enrollment Broker: Performs the following functions for ICM
clients
- Enrolls patient in ICM
- Performs health risk screening and transmits data to ICM
- Assists patient with selection of medical home
- Claims Administrator: Performs the following functions for ICM
clients:
- Pays ICM administrative costs
- Pays FFS claims to acute and long term care providers
- Claims data integrity (duplicate claims, cost reasonable given
fee schedule, etc)
- External Quality Review Organization (EQRO)
- Independent quality of care evaluation of ICM services
- Disease Management Administrator: No impact
Internal System/Automation Systems
- TIERS/SAVERR: Set up data transfer systems and interfaces
- Compass 21: Set up data transfer systems, ability to accept prior
authorization from ICM administrator and build associated
interfaces.
Fiscal Impact
Over the 2006-07 biennium the ICM model is estimated to save about $7
million in general revenue. This compares with STAR+PLUS that is
estimated to save $43.3 million in general revenue and bring in net gain
in premium tax of $20.9 million general revenue or a total net benefit
of $64.2 million.
Coverage Areas Details
Bexar Service Area
CSA Counties: Bexar, Atascosa, Comal, Guadalupe,
Kendall, Medina, Wilson
CHIP OSA Counties: Bandera |
| STAR |
ICM |
CHIP |
| Eligibles |
Projected Eligibles |
Eligibles |
|
Total # of Eligibles (February 2005) |
157,668 |
Total# of Eligibles
(Projected FY 2006) |
47,687 |
Total# of Eligibles
(January 2005) |
26,109 |
|
% in PCCM |
% in HMO |
Over
21 |
Under
21 |
|
49% |
51% |
39,126 |
8,561 |
|
HISTORY: |
The STAR program has operated in the Bexar SA since 1996
and serves primarily low-income pregnant women and children. It is
currently served by two HMOs (Superior HealthPlan and Community First
Health Plan) and the PCCM model. The CHIP program has operated in the SA
since 2000 and is currently served by two HMOs (Superior HealthPlan and
Community First Health Plan). |
|
MEDICAID EXPANSION: |
With the Medicaid managed care expansion, the following
changes will occur: 1) Adult SSI-related Medicaid eligibles will be
mandated into the ICM model; 2) ICM enrollment will be voluntary for SSI-related
children (under age 21); and 3) if it is determined that there is adequate
access for members through HMO providers, the PCCM model will be withdrawn
from the SA upon implementation of the ICM program. |
Dallas Service Area
CSA Counties: Dallas, Collin, Ellis, Hunt,
Kaufman, Naarro, Rockwall |
| STAR |
ICM |
CHIP |
| Eligibles |
Projected Eligibles |
Eligibles |
|
Total # of Eligibles (February 2005) |
217,671 |
Total# of
Eligibles (Projected FY 2006) |
53,387 |
Total# of
Eligibles (January 2005) |
41,387 |
|
% in PCCM |
% in HMO |
Over
21 |
Under
21 |
|
23% |
77% |
42,403 |
9,984 |
|
HISTORY: |
The STAR program has operated in the Dallas SA
since 1998 and serves primarily low-income pregnant women and
children. It is currently served by two HMOs (Amerigroup and
Parkland) and the PCCM model. The CHIP program has operated in
the SA since 2000 and is currently served by two HMOs (Amerigroup
and Parkland). |
|
MEDICAID EXPANSION: |
With the Medicaid managed care expansion, the
following changes will occur: 1) Adult SSI-related Medicaid
eligibles will be mandated into the ICM model; 2) ICM enrollment
will be voluntary for SSI-related children (under age 21); and
3) if it is determined that there is adequate access for members
through HMO providers, the PCCM model will be withdrawn from the
SA upon implementation of the ICM program. |
El Paso Service Area
CSA Counties: El Paso
CHIP OSA Counties: Hudspeth |
| STAR |
ICM |
CHIP |
| Eligibles |
Projected Eligibles |
Eligibles |
|
Total # of Eligibles (February 2005) |
100,172 |
Total# of
Eligibles (Projected FY 2006) |
25,950 |
Total# of
Eligibles (January 2005) |
14,497 |
|
% in PCCM |
% in HMO |
Over
21 |
Under
21 |
|
69% |
31% |
23,291 |
2,658 |
|
HISTORY: |
The STAR program has operated in the El Paso SA
since 1998 and serves primarily low-income pregnant women and
children. It is currently served by two HMOs (Superior
HealthPlan and El Paso First) and the PCCM model. The CHIP
program has operated in the SA since 2000 and is currently
served by two HMOs (Superior HealthPlan and El Paso First). |
|
MEDICAID EXPANSION: |
With the Medicaid managed care expansion, the
following changes will occur: 1) Hudspeth and Culberson Counties
which are currently a part of the El Paso SA will be moved to
the statewide PCCM expansion and will no longer be part of the
El Paso SA for Medicaid enrollees; 2) SSI-related Medicaid
eligibles will be mandated into the ICM model; and 3) if it is
determined that there is adequate access for members through HMO
providers, the PCCM model will be withdrawn from the SA upon
implementation of the ICM program. |
Harris Service Area
CSA Counties: Harris Brazoria, Fort Bend,
Galveston, Montgomery, Waller
CHIP OSA Counties: Austin, Chambers, Hardin, Jasper, Jefferson,
Liberty, Matagorda, Newton, Orange, Polk, San Jacinto, Tyler,
Walker, Wharton |
| STAR |
ICM |
CHIP |
| Eligibles |
Projected Eligibles |
Eligibles |
|
Total # of Eligibles (February 2005) |
353,901 |
Total# of
Eligibles (Projected FY 2006) |
96,798 |
Total# of
Eligibles (January 2005) |
94,828 |
|
% in PCCM |
% in HMO |
Over
21 |
Under
21 |
|
34% |
66% |
70,004 |
26,794 |
|
HISTORY: |
The STAR program has operated in the Harris SA
since 1998 and serves primarily low-income pregnant women and
children. It is currently served by three HMOs (Amerigroup,
Community Health Choice, Texas Children's Health Plan) and the
PCCM model. The CHIP program has operated in the SA and
surrounding counties since 2000 and is currently served by three
HMOs (Amerigroup, Texas Children's Health Plan and UTMB). The
ICM Pogram has operated in Harris County since 1998 and serves
SSI Medicaid enrollees. It is currently served by two HMOs (Amerigroup
and EverCare). SSI children (under age 21) in Harris County are
currently mandated into Medicaid managed care but may choose to
enroll in the PCCM model if they prefer that to a ICM HMO. |
|
MEDICAID EXPANSION: |
With the Medicaid managed care expansion, the
following changes will occur: 1) The ICM model will be expanded
to include all counties in the Harris SA; 2) Adult SSI-related
Medicaid eligibles will be mandated into the ICM model; 3) ICM
enrollment will be voluntary for SSI-related children (under age
21); and 4) If it is determined that there is adequate access
for members through HMO providers, the PCCM model will be
withdrawn from the SA upon implementation of the ICM program. |
Lubbock Service Area
CSA Counties: Lubbock, Crosby, Floyd, Garza,
Hale, Hockley, Lamb, Lynn, Terry
CHIP OSA Counties: Carson, Deaf Smith, Hutchinson, Potter,
Randall, Swisher |
| STAR |
ICM |
CHIP |
| Eligibles |
Projected Eligibles |
Eligibles |
|
Total # of Eligibles (February 2005) |
32,552 |
Total# of
Eligibles (Projected FY 2006) |
8,024 |
Total# of
Eligibles (January 2005) |
7,912 |
|
% in PCCM |
% in HMO |
Over
21 |
Under
21 |
|
50% |
50% |
6,705 |
1,319 |
|
HISTORY: |
The STAR program has operated in the Lubbock SA
since 1996 and serves primarily low-income pregnant women and
children. It is currently served by one HMO (FirstCare) and the
PCCM model. The CHIP program has operated in the SA and
surrounding counties since 2000 and is currently served by two
HMOs (Superior HealthPlan and FirstCare). |
|
MEDICAID EXPANSION: |
With the Medicaid managed care expansion, the
following changes will occur: 1) Adult SSI-related Medicaid
eligibles will be mandated into the ICM model; 2) ICM enrollment will be voluntary for SSI-related children
(under age 21); and 3) If it is determined that there is
adequate access for members through HMO providers, the PCCM
model will be withdrawn from the SA upon implementation of the
ICM program. |
Nueces Service Area
CSA Counties: Nueces, Aransas, Bee, Calhoun, Jim
Wells, Kleberg, Refugio, San Patricio, Victoria
CHIP OSA Counties: Brooks, Goliad, Karnes, Kennedy, Live Oak |
| STAR |
STAR+PLUS |
CHIP |
| Background Information |
Background Information |
Background Information |
|
Total # of Eligibles (Projected FY 2006) |
71,500 |
Total# of
Eligibles (Projected FY 2005) |
20,339 |
Total# of
Eligibles (January 2005) |
10,990 |
| Over
21 |
Under
21 |
| 6,705 |
1,319 |
|
HISTORY: |
The CHIP program has operated in the SA since
2000 and is currently served by one HMO (Driscoll). The STAR and
STAR+PLUS programs do not currently exist in this area. |
|
MEDICAID EXPANSION: |
With the Medicaid managed care expansion, the
following changes will occur: 1) The STAR program will be
expanded into this SA and will serve low-income pregnant women
and children on a mandatory basis; 2) Adult SSI-related Medicaid
eligibles will be mandated into the ICM program; and 3) ICM enrollment will be voluntary for SSI-related children
(under age 21). |
Tarrant Service Area
CSA Counties: Tarrant, Denton, Hood, Johnson,
Parker, Wise |
| STAR |
STAR+PLUS |
CHIP |
| Background Information |
Background Information |
Background Information |
|
Total # of Eligibles (Projected FY 2006) |
125,738 |
Total# of
Eligibles (Projected FY 2005) |
28,121 |
Total# of
Eligibles (January 2005) |
27,966 |
| Over
21 |
Under
21 |
| 22,632 |
5,489 |
|
HISTORY: |
The STAR program has operated in the Tarrant SA
since 1996 and serves primarily low-income pregnant women and
children. It is currently served by one HMO (Amerigroup). The
CHIP program has operated in the SA since 2000 and is currently
served by one HMO (Cook Children's Health Plan). |
|
MEDICAID EXPANSION: |
With the Medicaid managed care expansion, the
following changes will occur: 1) Adult SSI-related Medicaid
eligibles will be mandated into the ICM model; and 2) ICM enrollment will be voluntary for SSI-related children
(under age 21). We are also seeking to restore a choice of two
or more health plans for STAR enrollees in the Service Area
through this procurement. |
Travis Service Area
CSA Counties: Travis, Bastrop, Burnet, Caldwell,
Hays, Lee, Williamson
CHIP OSA Counties: Fayette |
| STAR |
STAR+PLUS |
CHIP |
| Eligibles |
Projected Eligibles |
Eligibles |
|
Total # of Eligibles (February 2005) |
76,344 |
Total# of
Eligibles (Projected FY 2006) |
17,711 |
Total# of
Eligibles (January 2005) |
16,428 |
|
% in PCCM |
% in HMO |
Over
21 |
Under
21 |
|
N/A |
100% |
14,544 |
3,157 |
|
HISTORY: |
The STAR program has operated in the Travis SA
since 1996 and serves primarily low-income pregnant women and
children. It is currently served by two HMOs (Superior
HealthPlan and Amerigroup) and the PCCM model. The CHIP program
has operated in the SA and surrounding counties since 2000 and
is currently served by one HMO (Seton Health Plan). |
|
MEDICAID EXPANSION: |
With the Medicaid managed care expansion, the
following changes will occur: 1) Blanco County which is
currently a part of the Travis SA will be moved to the statewide
PCCM expansion and will no longer be part of the Travis SA for
Medicaid enrollees; 2) Adult SSI-related Medicaid eligibles will
be mandated into the ICM model; and 3) ICM enrollment will be voluntary for SSI-related children (under age
21). |
Webb Service Area
CSA Counties: Webb, Duval, Jim Hogg, Zapata |
| STAR |
STAR+PLUS |
CHIP |
|
Not Applicable |
Not Applicable
|
Background Information |
| Total# of Eligibles
(January 2005) |
5,846 |
|
HISTORY: |
The CHIP program has operated in the area since
2000. It is served by one HMO (Mercy Health Plans). Duval County
enrollees currently have a choice of two HMOs (Mercy or
Driscoll). |
|
MEDICAID EXPANSION: |
These counties are part of the Statewide PCCM
expansion. |
CHIP HMO Service Areas:
Bexar: Bexar, Atascosa, Comal, Guadalupe, Kendall, Medina, Wilson
Optional Addition to Bexar CSA (O-SA): Bandera
Dallas: Dallas, Collin, Ellis, Hunt, Kaufman, Navarro, Rockwall
Corpus Christi: Aransas, Bee, Calhoun, Jim Wells, Kleberg, Nueces,
Refugio, San Patricio, Victoria
Optional Addition to Corpus Christi CSA (O-SA): Brooks, Goliad, Karnes,
Kennedy, Live Oak
El Paso: El Paso, Hudspeth
Tarrant: Tarrant, denton, Hood, Johnson, Parker, Wise
Webb (Chip Only SA): Webb, Duval, Jim Hogg, Zapata
Travis: Travis, Bastrop, Burnet, Caldwell, Hays, Lee Williamson
O-SA: Fayette
Lubbock: Lubbock, Crosby, Floyd, Garza, Hale, Hockley, Lamb, Lynn,
Terry
Optional Addition to Lubbock CSA (O-SA): Carson, Deaf Smith, Hutchinson,
Potter, Randal, Swisher
Harris: Harris, Brazoria, Fort Bend, Galveston, Montgomery, Waller
Optional Addition to Harris CSA (O-SA): Austin, Chambers, Hardin, Jasper,
Jefferson, Liberty, Matagorda, Newton, Orange, Polk, San Jacinto, Tyler,
Walker, Wharton
STAR HMO Service Areas
Bexar: Bexar, Atascosa, Comal, Guadalupe, Kendall, Medina,
Wilson
Dallas: Dallas, Collin, Ellis, Hunt, Kaufman, Navarro,
Rockwall
El Paso: El Paso
Travis: Travis, Bastrop, Burnet, Caldwell, Hays, Lee,
Williamson
Harris: Harris, Brazoria, Fort Bend, Galveston,
Montgomery, Waller
Lubbock: Lubbock, Crosby, Floyd, Garza, Hale, Hockley,
Lamb, Lynn, Terry
Tarrant: Tarrant, Denton, Hood, Johnson, Parker, Wise
New STAR Service Area:
Nueces: Aransas, Bee, Calhoun, Jim Wells, Kleberg, Nueces, Refugio, San
Patricio, Victoria
Existing PCCM Only Service Area
Southeast Region: Chambers, Hardin, Jefferson, Liberty, Orange
ICM Service Areas
Bexar: Bexar, Atascosa, Comal, Guadalupe, Kendall, Medina, Wilson
Harris: Harris, Brazoria, Fort Bend, Galveston, Montgomery, Waller
Dallas: Dallas, Collin, Ellis, Hunt, Kaufman, Navarro, Rockwall
Lubbock: Lubbock, Crosby, Floyd, Garza, Hale, Hockley, Lamb, Lynn,
Terry
Travis: Travis, Bastrop, Burnet, Caldwell, Hays, Lee, Williamson
Tarrant: Tarrant, Denton, Hood, Johnson, Parker, Wise
El Paso: El Paso
Nueces: Aransas, Bee, Calhoun, Jim Wells, Kleberg, Nueces, Refugio, San
Patricio, Victoria
<<back to top>>
ASSUMPTIONS USED IN FINANCIAL IMPACT
ANALYSIS
Caseload Forecast
Health and Human Services Commission
Average Caseload Count Assumptions Used in the
Integrated Care Management Analysis |
| |
FY2006 |
FY2007 |
FY2008 |
FY2009 |
FY2010 |
| Medicaid Only Members |
| Bexar Area |
19,310 |
20,016 |
21,517 |
23,131 |
24,866 |
| Dallas Area |
22,361 |
23,242 |
24,986 |
26,859 |
28,874 |
| El Paso Area |
7,770 |
8,093 |
8,700 |
9,352 |
10,054 |
| Harris Contiguous Area |
7,987 |
8,493 |
9,130 |
9,815 |
10,551 |
| Lubbock Area |
3,254 |
3,356 |
3,607 |
3,878 |
4,168 |
| Nueces Area |
7,810 |
8,078 |
8,694 |
9,336 |
10,036 |
| Tarrant Area |
12,660 |
13,393 |
14,397 |
15,477 |
16,638 |
| Travis Area |
7,475 |
7,819 |
8,406 |
9,036 |
9,714 |
| Total |
88,627 |
92,490 |
99,427 |
106,884 |
114,900 |
| Medicare/Medicaid Members |
| Bexar Area |
24,845 |
24,829 |
25,226 |
25,630 |
26,040 |
| Dallas Area |
26,715 |
27,227 |
27,663 |
28,105 |
28,555 |
| El Paso Area |
17,605 |
17,920 |
81.206 |
18,497 |
18,793 |
| Harris Contiguous Area |
9,410 |
9,749 |
9,905 |
10,064 |
10,225 |
| Lubbock Area |
5,069 |
5,032 |
5,113 |
5,194 |
5,277 |
| Nueces Area |
11,673 |
11,669 |
11,856 |
12,045 |
12,238 |
| Tarrant Area |
14,414 |
14,640 |
14,874 |
15,112 |
15,353 |
| Travis Area |
9,398 |
9,400 |
9,550 |
9,703 |
9,858 |
| Total |
119,130 |
120,465 |
122,392 |
124,350 |
126,340 |
| Medicaid Only and Medicare/Medicaid Members |
| Bexar Area |
44,155 |
44,845 |
46,743 |
48,761 |
50,906 |
| Dallas Area |
49,076 |
50,480 |
52,649 |
54,965 |
57,429 |
| El Paso Area |
25,375 |
26,012 |
26,906 |
27,850 |
28,847 |
| Harris Contiguous Area |
17,397 |
18,242 |
19,036 |
19,879 |
20,776 |
| Lubbock Area |
8,323 |
8,387 |
8,720 |
9,072 |
9,446 |
| Nueces Area |
19,484 |
19,747 |
20,540 |
21,381 |
22,274 |
| Tarrant Area |
27.074 |
28,032 |
29,271 |
30,589 |
31,991 |
| Travis Area |
16,874 |
17,219 |
17,956 |
18,739 |
19,527 |
| Total |
207,757 |
212,955 |
221,819 |
231,234 |
241,240 |
Cost Forecast
Health and Human Services Commission
Cost Trend Assumptions Used in the Integrated Care Management Analysis
|
| |
FY2006 |
FY2007 |
FY2008 |
FY2009 |
FY2010 |
| Acute Care Service Trends |
3.80% |
5.00% |
5.10% |
5.10% |
5.10% |
| Long Term Care Service Trends |
3.80% |
5.00% |
5.10% |
5.10% |
5.10% |
| Prescription Drug Trend |
15.00% |
15.00% |
15.00% |
15.00% |
15.00% |
Projected FFS Client Costs
Health and Human Services
Commission
Projected Cost Assumptions Used in the Integrated Care Management Analysis |
|
FY2006 |
FY2007 |
FY2008 |
FY2009 |
FY2010 |
| Projected FFS Client Service Costs in $1,000s. |
| Bexar Service Area |
| Acute Care |
158,852 |
173,071 |
195,540 |
220,926 |
249,608 |
| Long Term Care |
104,951 |
114,846 |
124,231 |
134,458 |
145,616 |
| Prescription Drugs |
26,698 |
33,004 |
40,820 |
50,442 |
62,358 |
| Total |
290,501 |
320,922 |
360,574 |
405,826 |
457,581 |
| Dallas Service Area |
| Acute Care |
180,167 |
196,547 |
222,064 |
250,892 |
283,464 |
| Long Term Care |
77,085 |
83,729 |
90,539 |
97,958 |
106,046 |
| Prescription Drugs |
24,578 |
30,383 |
37,561 |
46,435 |
57,406 |
| Total |
281,830 |
310,660 |
350,164 |
395,284 |
446,916 |
| El Paso Service Area |
| Acute Care |
59,325 |
64,752 |
73,157 |
82,655 |
93,385 |
| Long Term Care |
50,030 |
54,955 |
59,208 |
63,821 |
68,824 |
| Prescription Drugs |
10,842 |
13,403 |
16,570 |
20,485 |
25,325 |
| Total |
120,197 |
133,110 |
148,936 |
166,961 |
187,533 |
| Harris Contiguous Service Area |
| Acute Care |
71,604 |
79,831 |
90,196 |
101,905 |
115,136 |
| Long Term Care |
22,535 |
24,787 |
26,838 |
29,076 |
31,521 |
| Prescription Drugs |
15,068 |
18,627 |
23,027 |
28,468 |
35,193 |
| Total |
109,206 |
123,245 |
140,062 |
159,449 |
181,849 |
| Lubbock Service Area |
| Acute Care |
23,774 |
25,604 |
28,927 |
32,683 |
36,925 |
| Long Term Care |
16,498 |
17,854 |
19,235 |
20,733 |
22,356 |
| Prescription Drugs |
4,109 |
5,080 |
6,281 |
7,764 |
9,599 |
| Total |
44,382 |
48,538 |
54,443 |
61,180 |
68,880 |
| Nueces Service Area |
| Acute Care |
58,898 |
63,808 |
72,092 |
81,450 |
92,025 |
| Long Term Care |
60,693 |
66,260 |
71,631 |
77,479 |
83,855 |
| Prescription Drugs |
18,080 |
22,352 |
27,632 |
34,161 |
42,231 |
| Total |
137,670 |
152,420 |
171,355 |
193,090 |
218,111 |
| Tarrant Service Area |
| Acute Care |
98,360 |
109,200 |
123,377 |
139,394 |
157,491 |
| Long Term Care |
38,359 |
41,187 |
44,474 |
48,049 |
51,940 |
| Prescription Drugs |
21,860 |
27,024 |
33,409 |
41,302 |
51,059 |
| Total |
158,579 |
177,411 |
201,259 |
228,745 |
260,490 |
| Travis Service Area |
| Acute Care |
51,678 |
56,725 |
64,089 |
72,409 |
81,810 |
| Long Term Care |
38,163 |
41,619 |
44,934 |
48,538 |
52,459 |
| Prescription Drugs |
12,357 |
15,277 |
18,886 |
23,347 |
28,863 |
| Total |
102,198 |
113,621 |
127,909 |
144,294 |
163,133 |
| All Service Areas Combined |
| Acute Care |
702,657 |
769,537 |
869,442 |
982,315 |
1,109,844 |
| Long Term Care |
408,324 |
445,237 |
481,091 |
520,111 |
562,616 |
| Prescription Drugs |
133,592 |
165,151 |
204,168 |
252,403 |
312,032 |
| Total |
1,244,562 |
1,379,926 |
1,554,701 |
1,754,829 |
1,984,493 |
Methodology and Assumptions Used in Evaluating the Cost Impact of the
Integrated Care Management Model for the Proposed STAR+PLUS Service Area
Expansion
The following is a description of the methodology and assumptions
used to evaluate the cost impact of implementing the Integrated Care
Management model for the proposed STAR+PLUS service area expansion. The
analysis compares the projected program cost under three service
delivery models - (i) the Fee-for Service (FFS) model, (ii) the Health
Maintenance Organization (HMO) model and (iii) the Integrated Care
Management (ICM) model. The general methodology used in evaluating these
changes is to (a) project the cost assuming no change to the program,
(b) project the cost assuming implementation of the particular model or
change and (c) compare the two results.
The various service delivery models listed above impact the financing
of the program in various ways. HHSC's study of the fiscal impact of
these potential changes included analyses regarding the following
issues:
- Impact on the cost of client services. The impact on the cost of
providing acute care (medical excluding prescription drugs),
prescription drugs and long-term care were studied separately.
- Impact on program administrative expenses.
- Impact on state premium tax. The impact on HHSC and the state were
studied separately.
- Impact on cash flow.
A summary of the anticipated fiscal impact from the implementation of
each of the above delivery models follows this section. The exhibit
includes separate impact estimates for each of the change components
listed above for each of fiscal years 2006 through 2010. The exhibit
also shows the cost impact on both an All Funds basis and a General
Revenue basis.
In this analysis, it is assumed that Medicaid managed care will be
expanded to the service areas described below for the (i) Aged and
Medicare-related and (ii) Disabled and Blind populations. Enrollment in
managed care will be mandatory for adults in these populations and
voluntary for children. Note that the Southeast service area is not
included in the proposed STAR+PLUS expansion. The implementation
schedule for the expansion of STAR+PLUS is as follows:
- Harris Area - STAR+PLUS expanded to contiguous counties effective
December 1, 2005
- Nueces Area - STAR+PLUS effective December 1, 2005
- Bexar Area - STAR+PLUS effective February 1, 2006
- Travis Area - STAR+PLUS effective February 1, 2006
- El Paso Area - STAR+PLUS effective March 1, 2006
- Lubbock Area - STAR+PLUS effective March 1, 2006
- Dallas Area - STAR+PLUS effective April 1, 2006
- Tarrant Area - STAR+PLUS effective April 1, 2006
Below is a brief description of the methodology and assumptions used
to derive the items included on the fiscal impact tables. For each of
the estimates shown on the fiscal impact tables, historical and
projected enrollment by area and risk group are from HHSC's December
2004 caseload forecast.
1. Current Fee-for-Service Model
The Aged and Medicare-related and Disabled and Blind populations in
the proposed expansion areas are currently served by a fee-for-service (FFS)
model. The historical cost by service area for these clients was
determined for each of acute care, prescription drugs and long term care
services and projected forward using assumed cost trends. These trends
were developed based on recent experience under the FFS model.
The administrative costs for the FFS model assumed in the analysis
are those for services performed by the Texas Medicaid & Healthcare
Partnership (TMHP). The administrative fees paid to TMHP under HHSC's
current contract for FFS clients are $6.74 per member per month (PM/PM)
for Aged and Medicare-related clients and $3.60 PM/PM for Disabled and
Blind clients.
2. Health Maintenance Organization Model
In projecting the cost of the STAR+PLUS expansion under the Health
Maintenance Organization (HMO) model, the premium rates paid to the HMOs
for both acute care and long term care services were assumed to be
determined by discounting the projected FFS cost by 6 percent. In other
words, the HMO model is assumed to save 6 percent for acute care and
long term care services, relative to the FFS model.
For purposes of this analysis, the HMO premium was separated into
client service costs and vendor administrative costs. Vendor
administrative costs were determined by applying the administrative fee
formula used in deriving the FY2005 STAR+PLUS premium rates - $12.50
PM/PM plus 8.75 percent of premium. Of the fixed portion of the
administrative expenses provision ($12.50), one-half was allocated to
acute care and one-half to long term care services.
Under the FFS model, adults receive a maximum of three prescriptions
per month. It is assumed that adults in the STAR+PLUS expansion will
receive unlimited prescriptions. (All children in Medicaid receive
unlimited prescriptions.) In estimating the impact of the HMO model on
the cost of prescription drug services it was assumed that the combined
impact of (i) management of the drug cost under the HMO model and (ii)
unlimited prescriptions would result in an 11 percent increase in the
cost for adults. This factor was determined based on the prescription
drug experience under Medicaid managed care and with assistance from the
Lewin Group.
Agency administrative costs under the HMO model are for services
performed by TMHP. The administrative fees paid to TMHP under HHSC's
current contract for HMO clients are $1.74 PM/PM for all clients.
HMO's pay state premium tax on premium received for Medicaid clients.
There is no premium tax applicable under the FFS model. Therefore, the
movement of FFS clients to HMO will result in an additional HHSC
expenditure for premium tax. This cost to HHSC is offset by the increase
in premium tax revenue to the state. Also, the payment of premium tax
under the HMO model allows the state to receive a federal match on those
funds.
In the analysis of the impact of premium tax, HHSC has assumed the
following:
- Medicaid HMOs are required to pay state premium tax on all premium
received for Medicaid clients.
- HHSC will include in the HMO premium rates, a provision for the
full cost of such premium tax.
- The state is able to receive a federal match for the amount paid
to HMOs for the premium tax expense.
- The premium tax rate is 1.75 percent of premium.
The movement of clients between a cost reimbursed model (like FFS or
ICM) and the HMO model creates a material impact on the timing of
program payments (or cash flow). HMO premiums are paid at the beginning
of the month in which coverage is provided. FFS payments for claims are
made sometime later - after the client has received the service, the
provider has filed the claim, the claim has been adjudicated and the
reimbursement distributed. As a result, payments under the HMO model are
made, on average, 1 to 1 ½ months prior to those under the FFS model.
In this case, the movement of clients from FFS to HMO will have an
unfavorable impact on HHSC cash flow. Approximately one month's worth of
claims cost will be permanently advanced from one month to the previous
(relative to the FFS model). This additional cost under the HMO model is
identified on the following tables as "Cash Flow".
3. Integrated Care Management Model
The Integrated Care Management (ICM) model is similar to the Primary
Care Case Management (PCCM) model currently used in Medicaid's STAR
program. As the ICM model is a new concept (at least for Texas) many of
the details have not yet been specified. Based on the information
currently available, HHSC has applied the assumptions presented below in
order to compare the ICM model to FFS and HMO.
For purposes of this analysis, the ICM model is assumed to be
implemented on September 1, 2006 for all STAR+PLUS expansion areas. The
current STAR+PLUS plan in Harris County is assumed to continue
unchanged. The ICM model utilizes a non-capitated (cost reimbursed)
financial arrangement and employs utilization management and care
coordination. The model is assumed to be open-access (no gatekeeper) and
reimburses providers using the Medicaid fee schedule.
In this analysis, acute care costs under the ICM model are assumed to
be the same as those under the HMO model. It should be noted that this
is an aggressive assumption given the untested nature of the ICM model.
Client service costs for long term care services under the ICM model
are assumed to be 90 percent of that for the FFS model. This amount,
combined with assumed administrative expenses (described below), results
in the total cost for long term care services under ICM being
approximately equal to those under the FFS model.
Adults are assumed to receive unlimited prescription drugs under the
ICM model. It is assumed that providing unlimited prescriptions will
increase the prescription drug cost by 11 percent for adults. The cost
of prescription drugs under the ICM model is assumed to be the same as
that under the HMO model.
Vendor administrative expenses under the ICM model are assumed to be
10 percent of the projected capitation payments under the HMO model for
both acute care and long term care services. This assumption is from a
cost comparison provided by ICM model advocates titled "Integrated
Care Management vs. STAR+PLUS: Finding True Budget Certainty"
Agency administrative costs under the ICM model are for development
and maintenance expenses and services performed by TMHP. It is assumed
that agency administrative costs for development will be $2 million for
FY2007 and annual maintenance costs of $500,000 per year thereafter. The
administrative fees paid to TMHP for ICM clients are assumed to be $1.74
PM/PM (same as HMO) plus $1.35 PM/PM for claims administration.
Actuarial Review
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FISCAL IMPACT TABLES
(see pdf file)
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ISSUES
Timeline
Although this proposal assumes the ICM model can be implemented by
September 1, 2006, it may not be possible to implement that quickly. A
number of significant tasks must be completed prior to implementation
including: fully defining and developing the model; developing an RFP;
selecting a vendor and executing a contract; modifying IT systems for
exchange of data; securing the necessary federal approvals; readiness
reviews to assure vendor is prepared to accept clients; and outreach and
education to enroll clients in the new model.
Impact on UPL
The ICM model will allow public hospitals to continue to receive
current UPL funds.
Impact on Community-Based Long-Term Care Services
The model as described is a new approach to the integration of acute
and community-based long-term care services that has not been tried in
other states and has not demonstrated results. Descriptions of the model
and discussions with the provider associations have not clearly
identified how community-based long-term care services are integrated
and managed.
Community-Based Alternatives (CBA) Interest List
Unlike STAR+PLUS, the ICM model will not result in reducing the CBA
interest list.
Provider Rates
The plan as proposed would pay FFS rates to all providers. The
current PCCM and HMO plans negotiate hospital provider discounts. The
ICM model may therefore have higher costs and less savings than is
reflected in this analysis.
SB1 Assumptions
According to an SB1 rider, any required savings not achieved through
care management efforts would be achieved by reducing payments to
providers. The rider requires $109.5 million in savings while the
estimated impact of ICM is a savings of $7 million leaving $102.5 that
must be achieved with provider rate reductions. As such it will be
necessary to reduce rates for all hospitals, physicians and home health
agencies by about 8.325 percent for FY07 to achieve the $102.5 million
savings shortfall from implementing ICM. If the ICM model cannot be
implemented by September 1, 2006 then a greater amount will need to be
captured from provider rate reductions.
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For more information, please contact:
Financial -
Thomas M. Suehs
Deputy Executive Commissioner for Financial Services
Health and Human Services Commission
4900 North Lamar
Austin, TX 78751
(512) 424-6526
thomas.suehs@hhsc.state.tx.us
Programmatic -
Billy Millwee
Deputy Director for Services Operations, Medicaid/CHIP
Health and Human Services Commission
4900 North Lamar
Austin, TX 78751
(512) 491-1869
billy.millwee@hhsc.state.tx.us
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