Massachusetts Medicaid to contract with fewer plans State hopes greater investment in Medicaid by selected plans will boost quality
Massachusetts Medicaid
January 31, 1998
In an effort to improve the quality of its Medicaid managed care program and make HMO enrollment a more attractive option to its medical assistance population, Massachusetts plans to enter into longer, more intensive partnerships with fewer health plans.
The state is soliciting proposals for new five-year contracts to replace the current three-year contracts. The goal is to make plans more accountable and provide a more comprehensive package of services through capitated managed care. In return, HMOs will get higher enrollments and rates adjusted according to the needs of certain populations, state officials say.
Bids are due Feb. 3. Contracts take effect July 1.
Officials hope the changes will lead more medical assistance recipients in mandatory managed care to choose HMOs rather than the more popular Primary Care Clinician Plan (PCC). So far, two-thirds of the 460,000 MassHealth clients in mandatory Medicaid managed care have chosen the PCC Plan, which pays for care on a fee-for-service basis. Primary care physicians, who are paid a fee enhancement for office visits, provide most primary and preventive care and are responsible for authorizing most specialty services. The state had, at one point, considered phasing out the PCC Plan, but its current strategy is to make the HMO option more desirable.
More capitated services
"We’re going to strengthen our purchasing relationship with managed care organizations and also ensure that we have comprehensive benefits coverage that any recipient would feel comfortable choosing," said Bruce M. Bullen, Commissioner of Medical Assistance.
It would be best for Division of Medical Assistance (DMA) to reduce the number of managed care organizations it contracts with from nine to four or five HMOs "who really want our business" and can provide the necessary statewide coverage, he said.
Successful bidders will be required to show their commitment to the MassHealth line of business by providing dedicated staff, including a full-time equivalent MassHealth executive director at a senior executive or vice-president level, and full-time equivalent MassHealth Quality and Behavioral Health Managers.
Services that are currently provided on a wraparound basis such as pharmacy, durable medical equipment, home health, and many rehabilitation services will now be included in the capitation rate. "Wraparound can create problems of access when the services are needed," Mr. Bullen said. The only significant services that will not be included in the capitation rate, according to the commissioner, are some community longterm care services, and he expects them to be phased in over the life of the contract.
The new contracts also will require HMOs to "make an investment" in serving some of the more difficult populations such as the homeless, children with special needs, those needing special behavioral health services, and child welfare cases. One of the evaluation criteria in assessing bids will be previous experience in serving those with special needs. State officials say they want plans to include providers in their networks who are already caring for patients with special needs.
The number of disabled and special needs enrollees is growing, Mr. Bullen said. "We want managed care organizations to be prepared to enroll the entire spectrum of the population and have services and administrative capability in place for them."
Some capitation rates will be adjusted to reflect the cost of serving higher-need populations. Division staff expect to continue to move toward greater riskadjustment based on health status and case mix. Contracts also may include incentives for HMOs that are tied to performance standards in serving special needs groups, much like the incentives given to the statewide behavioral health provider.
Enrollment almost certainly will increase for the plans that win contracts, not only because fewer plans will be chosen to participate, but also because of expansions to the medical assistance program. MassHealth covers more than 650,000 lowincome children, families, and people with disabilities. Eligibility expansions implemented July 1 and Nov. 26, 1997 are expected to bring approximately 170,000 more nonelderly individuals into the program in the next two years.
Neil Cronin of the Massachusetts Law Reform Institute said one of the biggest surprises in the Request for Response issued Nov. 26 is the DMA’s decision not to carve out mental health and substance abuse services for HMO enrollees. Enrollees in the PCC Plan obtain mental health and substance abuse services through a statewide provider that separately manages these services.
No mental-health carve-out
The DMA had considered carving out this benefit in the HMO contracts as well, but Mr. Bullen said one aim of the revised contract is to "strengthen the behavioral health benefit." Mr. Bullen said the agency wants "the playing field to be leveled so that members with a need for behavioral health services will feel free to choose an HMO rather than having to use the Primary Care Clinician and carve-out provider."
The division is incorporating the performance standards now required of the carve-out provider into managed care contracts so that managed care organizations will be held equally accountable.
However, Mr. Cronin said he has concerns about using the carve-out provider as a benchmark because of anecdotal complaints he has heard from providers and patients about the carveout. Furthermore, he said, "we don’t know how much we can trust DMA to manage contracts so that people get quality care."
Massachusetts is in a better position than many other states to take this approach to its medical assistance contracting, said Mr. Bullen, because it has (1) a high HMO penetration in the general population, (2) a longer history of managed care than many other states, and (3) several locallycontrolled nonprofit HMOs that provide high quality services.
—John Hope
Contact Mr. Bullen at 617-210-5690 or Mr. Cronin at 617-357-0700.
Massachusetts Medicaid to contract with fewer plans State hopes greater investment in Medicaid by selected plans will boost quality
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