Tony Rodgers, DirectorTony Rodgers, Director

Arizona Health Care Cost Containment Arizona Health Care Cost Containment SystemSystem

Tony Rodgers, DirectorTony Rodgers, Director

Arizona Health Care Cost Containment Arizona Health Care Cost Containment SystemSystem

The Perfect Storm

Arizona Health Care Cost Arizona Health Care Cost Containment SystemContainment System

AHCCCSAdministration

Product Lines

- Acute Care

- Long Term Care

- Healthcare Group

• Acute Health Plans

• LTC Program Contractors

• State Agencies

DHS

· Behavioral Health

DES

· Eligibility

• Fee-For-Service

Native Americans

Illegal Immigrants

• Policy

• Eligibility (Special Populations)

• Monitor Care and Financial Viability

• Information Services

• Budget and Claims Processing

• Legal

• Intergovernmental Relations

• MCO Contract Management

Funding

• Federal

• State

• County

• Private

PremiumsGrants

• Rate Setting and medical cost management• Assuring quality of care and heath outcomes

Arizona PopulationArizona Population TrendsTrends

• Second Fastest growing StateSecond Fastest growing State

• Large Hispanic and Native American Large Hispanic and Native American populationspopulations

• Arizona’s Elderly population is Larger Arizona’s Elderly population is Larger than Averagethan Average

• Arizona’s Elderly Population is Arizona’s Elderly Population is Growing RapidlyGrowing Rapidly

September 2004 Total Enrollment = 1,037,887

AHCCCS Enrollment by Program

KidsCare 49,148 ALTCS 39,709

Medicare Cost Sharing 20,137 Healthcare Group 11,734

Freedom to Work 542 Breast and Cervical Cancer Treatment Program 71

Acute Care 916,546

32,72135,645

38,092 38,954

30,003

0

10,000

20,000

30,000

40,000

50,000

2000 2001 2002 2003 2004

9% Annual

Increase

9% Annual

Increase

7% Annual

Increase

2% YTD

Increase

Growth in ALTCS Growth in ALTCS Enrollment Enrollment

(2000 - 2004) (2000 - 2004)

Growth in ALTCS Growth in ALTCS Enrollment Enrollment

(2000 - 2004) (2000 - 2004)

ALTCS ALTCS Arizona’s version of Long Term Care MedicaidArizona’s version of Long Term Care Medicaid

HCBSNursing FacilityICF/MR (DD only)HospiceAcute Care Services Behavioral Health

ALTCSProgram

Contractor

PotentialALTCS

Member

PCP/Case Manager

EligibilityFinancial/Medical

•ARIZONA LONG TERM CARE ARIZONA LONG TERM CARE SYSTEMSYSTEM

Current Long Term Care SystemCurrent Long Term Care System

Arizona’s dual eligible Arizona’s dual eligible populationpopulation

• Dual Eligible Enrollment in managed care health Dual Eligible Enrollment in managed care health plansplans– Total Duals = 76,723Total Duals = 76,723

• 22,084 in Arizona LTC System22,084 in Arizona LTC System• 54,639 Acute Care System 54,639 Acute Care System • 10,219 Behavioral Health10,219 Behavioral Health

• Pharmacy Spending (2003)Pharmacy Spending (2003)– Total spent = $ 256 mTotal spent = $ 256 m

• Acute Care $ 159 mAcute Care $ 159 m• Behavioral Health $50 mBehavioral Health $50 m• Arizona LTC $45 mArizona LTC $45 m

• Medical Cost Medi/MediMedical Cost Medi/Medi– Acute Care $60.5mAcute Care $60.5m– Arizona LTC elderly poor $47.7mArizona LTC elderly poor $47.7m– Arizona Dev Disabled $2.5mArizona Dev Disabled $2.5m– Behavioral Health $19.26Behavioral Health $19.26

AHCCCS Roles and ValuesAHCCCS Roles and ValuesIn Serving Arizona’s ElderlyIn Serving Arizona’s Elderly

AHCCCS employees located AHCCCS employees located throughout the state determine throughout the state determine financial and medical eligibilityfinancial and medical eligibility

Provides for consistent application Provides for consistent application of medical eligibility standards for of medical eligibility standards for vulnerable population.vulnerable population.

Member focused and family-Member focused and family-centered philosophies are critical centered philosophies are critical characteristics of the Arizona Long characteristics of the Arizona Long Term Care System services and Term Care System services and policiespolicies

Current Medicaid-Medicare Current Medicaid-Medicare CoordinationCoordination

84% E/PD have Medicare 84% E/PD have Medicare Only one plan currently qualifies as a Medicare Only one plan currently qualifies as a Medicare

Advantage health plan so it can manage both the Advantage health plan so it can manage both the Medicare and Medicaid capitationMedicare and Medicaid capitation

Medicaid and Medicare FFS members must stay in Medicaid and Medicare FFS members must stay in ALTCS MCO networkALTCS MCO network

Challenges with coordination of benefitsChallenges with coordination of benefits MCOs are responsible for coordinating benefits which MCOs are responsible for coordinating benefits which

is difficult without sharing information between plans is difficult without sharing information between plans or Medicare FFSor Medicare FFS

It is a challenge to coordinate the care and provide It is a challenge to coordinate the care and provide disease management services to Dual-Eligible disease management services to Dual-Eligible members especially if they are in Medicare Advantagemembers especially if they are in Medicare Advantage

Getting necessary medical management information Getting necessary medical management information from CMS is difficult and untimelyfrom CMS is difficult and untimely

Member satisfaction with this fragmented system is Member satisfaction with this fragmented system is low and effecting member compliance to medical low and effecting member compliance to medical regimentsregiments

Coordination of EligibilityCoordination of Eligibility

• Premium and Cost Sharing for Low-Income Premium and Cost Sharing for Low-Income Individuals Individuals – Inconsistencies need to be changed to Inconsistencies need to be changed to

make eligibilitymake eligibility determinations more determinations more streamlinedstreamlined

– Resource limits: considering SSI or spouse’s Resource limits: considering SSI or spouse’s resourceresource

– Social Security Administration give full Social Security Administration give full responsibility for determining low-income eligibility responsibility for determining low-income eligibility for Medicaid and Medicare Cost Saving Program for Medicaid and Medicare Cost Saving Program recipients to States recipients to States

• Dramatic Premium increase impact State’s Dramatic Premium increase impact State’s budget- AZ growth in Title XIX and Title XXI: budget- AZ growth in Title XIX and Title XXI: $60 million in supplemental needed in 2006$60 million in supplemental needed in 2006

Coordination of EnrollmentCoordination of Enrollment

• Currently, Part D is an Unfunded Mandate Currently, Part D is an Unfunded Mandate • Will stretch tight administrative budgets- a Will stretch tight administrative budgets- a

50% match does not relieve state from 50% match does not relieve state from requirement of new state matching funds requirement of new state matching funds

• State budgets are still a challenge- AZ State budgets are still a challenge- AZ growth in Title XIX and Title XXI causing growth in Title XIX and Title XXI causing request for $60 million in supplemental request for $60 million in supplemental

• States are not budgeted for outreach and States are not budgeted for outreach and mailings to Medicare beneficiariesmailings to Medicare beneficiaries

Coordination of PharmacyCoordination of Pharmacy

• Creation of separate PBMCreation of separate PBM

• Exclusion of barbiturates and Exclusion of barbiturates and benzodiazepines from Part D benzodiazepines from Part D coveragecoverage

• Generic Drugs need to be included in Generic Drugs need to be included in the definition of a covered Part D the definition of a covered Part D drugdrug

What Was Congress What Was Congress ThinkingThinking??• Did they really intend to take states out of Did they really intend to take states out of

the role of helping Medicaid/Medicare the role of helping Medicaid/Medicare beneficiaries?beneficiaries?

• Did congress believe that States were the Did congress believe that States were the weaker partner in the Medi/Medi program weaker partner in the Medi/Medi program “Medicaid is bad”- “Medicare is better”?“Medicaid is bad”- “Medicare is better”?

• What role did congress expect the states What role did congress expect the states to play in the future? No clear direction in to play in the future? No clear direction in the law. the law.

Organizational Biases at CMSOrganizational Biases at CMS • CMS Medicare: CMS Medicare: What they are really What they are really

thinkingthinking …. ….– View Medicare as Mainstream health careView Medicare as Mainstream health care– View Medicaid Managed Care as non-View Medicaid Managed Care as non-

mainstream health care delivery using mainstream health care delivery using primarily safety net providersprimarily safety net providers

– Medicare has standardized program benefits Medicare has standardized program benefits and services - expects states to adapt to CMS and services - expects states to adapt to CMS (top-down approach)(top-down approach)

– Only two models of delivering care- Only two models of delivering care- commercial health plan or fee for service commercial health plan or fee for service

– Less tolerant of flexibility Less tolerant of flexibility – Medicaid service delivery differs by state so Medicaid service delivery differs by state so

difficult for CMS Medicare to deal withdifficult for CMS Medicare to deal with– States aren’t good managers of Medicaid States aren’t good managers of Medicaid

dollars so they won’t be good managers of dollars so they won’t be good managers of Medicare dollarsMedicare dollars

CMS Medicare organizational CMS Medicare organizational biases impact policy formulationbiases impact policy formulation• Formula used for “clawback”Formula used for “clawback”

– Punishes states who are outliers Punishes states who are outliers – Medicare cost-sharing premium Medicare cost-sharing premium

increasesincreases

• The role states will play serving the The role states will play serving the dual eligible population in the futuredual eligible population in the future

• States role in eligibility/enrollment States role in eligibility/enrollment and providing information and providing information

• Member assistance services and Member assistance services and grievance managementgrievance management

Transition IssuesTransition Issues• New policies, rules and regulations – not New policies, rules and regulations – not

consistent between both Medicare and consistent between both Medicare and Medicaid and who knows what the Medicaid and who knows what the pharmacy benefit administration will be pharmacy benefit administration will be like like

• Tyranny of Time – Aggressive Tyranny of Time – Aggressive Implementation: No time to work Implementation: No time to work through issuesthrough issues

• MMA MMA NotNot the only Health Care Issue for the only Health Care Issue for States; continuing state budget deficits States; continuing state budget deficits and growth in Title XIX and Title XXI.and growth in Title XIX and Title XXI.

The “storm of issues” that must be The “storm of issues” that must be addressed for successful addressed for successful implementation of MMA in Arizonaimplementation of MMA in Arizona

• Coordination of Coverage and EligibilityCoordination of Coverage and Eligibility– Who will do eligibility screening?Who will do eligibility screening?– How will AHCCCS plans coordinate coverage How will AHCCCS plans coordinate coverage

issues? issues?

• Coordination of pharmacy benefit with Coordination of pharmacy benefit with Medicaid MCOs and behavioral health plans Medicaid MCOs and behavioral health plans

• Enrollment to MMA plans or FFSEnrollment to MMA plans or FFS

• Sharing of medical management Sharing of medical management informationinformation