Texas officials are experimenting with a program that provides community-based services and long-term institutional services to aged and disabled Medicaid recipients under a single capitated payment. Effective April 1, approximately 60,000 Houston-area residents were converted to Star+Plus, a mandatory managed care program for Supplemental Security Income (SSI) residents in the state’s Medicaid program. Incentives are offered to attract other Medicaid enrollees into the program as well.
"We think we’re getting better access and certainly getting the right amount and type of care," Texas deputy commissioner of Medicaid Cathy Mossberg said.
Three health maintenance organizations (HMOs) are participating in the project: Access, a joint venture between the Memorial Sisters of Charity Hospital and the University of Texas Medical Branch; Americaid, a Medicaid HMO; and HMO Blue, a Blue Cross/Blue Shield plan offered in conjunction with Managed Care Solutions, a managed care long-term care provider.
Enrollment is mandatory for nursing home residents receiving SSI as of April 1, 1998. In order to avoid disrupting long-established patterns of care, the mandatory assignment to a health maintenance organization was waived for residents who had been in a nursing home for more than 12 months as of the effective date of the program.
Program is budget neutral
While cost control is one of the goals of Star+Plus, the program is designed to be budget-neutral. Star+Plus capitation rates are discounted 2% from projected fee-for-service nursing facility costs and 5% from projected fee-for-service acute and community care costs.
HMOs retain the first 3% of any profit, but split equally with the state any profit between 3% and 7%. Any profit over 7% must be paid back to the state.
The limitation on the profit available to HMOs is "based on the idea that there’s a certain amount of money that has to be spent to do a good job," Medicaid project analyst Hope Morrison said. "There’s probably not a lot that can be squeezed out of this."
Traditional providers given hedge
To attract HMO providers, Texas Medicaid officials gave bidders hoping to serve its traditional Temporary Assistance to Needy Families (TANF) clients extra points if they agreed to serve the elderly and disabled in the Star+Plus program.
HMOs are capitated for Star+Plus on a per member per month basis by client risk group. The largest group of enrollees, about 45,000, are those who are not institutionalized and who are expected to receive community-based services.
For residents who are receiving health services exclusively through the Medicaid program, reimbursement is set at $616.31 per month. This rate covers acute and long-term care services.
State officials hope the single capitation rate for community, long-term and acute care services will create an incentive for HMOs to coordinate care and maintain enrollees in their homes as long as possible.
If the person also is on Medicare, the HMO will provide only long-term care services. For community residents who are eligible for Medicare, the capitation rate is set at $77.06 per month. Reimbursement for nursing home clients who are not eligible for Medicare ranges from $2,992.31 to $3,295.60 per month. For residents also on Medicare, the monthly reimbursement ranges from $1,460.95 to $1,709.96.
Half are eligible for Medicare HMO
One goal of the program is to attract dual-eligible residents, about half of the Star+Plus enrollment, into a Medicare HMO. Two of the three companies in the program, Access and Blue Cross/Blue Shield, offer Medicare risk products.
One powerful inducement for dual eligibles to join a Medicare HMO is the prescription benefit. Prescriptions for dual eligibles in the conventional Star+Plus program are limited to the standard benefit under Texas Medicaid of three per month. The Medicaid benefit for Star+Plus is expanded to unlimited prescriptions.
"I think that’s why I’m so popular," said Henry Parsons, director of Senior Blue, the Blue Cross/Blue Shield Medicare risk product in Texas. Senior Blue started operations in the Houston market on July 1. Within two months, about 250 of its 450 enrollees were dual eligibles in the Star+Plus program.
"We, like everybody in managed care, are re-evaluating what we believe managed care is all about," said Don Hall, Blue Cross/Blue Shield vice president of strategic business development. "What we want to do is move managed care up the continuum to people that are sick, to people who need a lot of services. That’s where we believe managed care can be a positive."
Even this early in the program, the Blue Cross/Blue Shield officials have spotted some unexpected developments. Children receiving SSI, who were not required to enroll, have joined in larger than expected numbers. Star+Plus program director Sherry Rohlfing attributes the children’s enrollment to the variety of community-based services available and a growing confidence on the part of parents that services will not be cut back under Star+Plus.
Formal evaluations of the program have not yet been completed, but Ms. Mossberg is encouraged by anecdotal reports of the program’s flexibility in delivering care. She cited the example of the purchase of a prosthesis for a person who was using a wheelchair. The prosthesis, which would not have been covered under the conventional Medicaid program, allowed the person to discontinue the use of a wheelchair as well as extensive personal care services.
Formal evaluations will focus on specific populations in the Medicaid program, e.g., patients with diabetes. "Diabetes is one of the top diagnoses in long-term care. We have patients come into the hospital four or five times a year with complications. If we can do a better job up front, we’ll probably save some money," Ms. Mossberg said.
Alternative to runaway costs
Cost savings, however, are not the primary goals of the program. The legislative directive to the Texas Health and Human Services Commission was to create a more effective, budget-neutral alternative to the current system of care for the aged and disabled on Medicaid. Legislators were prodded into action by a large and growing demand on the state’s Medicaid budget.
Aged and disabled clients represent 23% of the state’s Medicaid population but almost 60% of its expenditures. Texas’ population overall is expected to increase by about 50% by 2020, while the elderly population will almost double, from 1.9 million to 3.8 million. The program is supported by a $293,000 grant from the Robert Wood Johnson Foundation.
Minnesota system similar
Minnesota also has announced a program to attract dual eligibles (see State Health Watch, December 1997, "Acute, long-term care providers team up to manage Minnesota’s dual eligibles," p. 3). Each of three participating plans — Medica, Metropolitan Health Plan and Ucare Minn es ota — have set up arrangements with provider networks and community-based service providers. While cost savings have yet to be documented, early reports on the program’s progress are positive, from both providers and plan executives.
Contact Ms. Mossberg at (512) 424-6511 and Mr. Hall at (972) 766-6809.
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