The Care Coordination Model: A Path to Managed Care

By Joseph J. Kanjamala  |  October 2, 2018

The Care Coordination Model: A Path to Managed Care

Managed care is a healthcare delivery system that coordinates the provision, quality and cost of care for its enrolled members. Medicaid managed care provides for the delivery of Medicaid health benefits and related services through contracts between a state and managed care organizations (MCOs). Improvement in health plan performance, quality of care and reduction of cost is the focus of Medicaid managed care.

New York spends more than $63 billion on its Medicaid program, second only to California. Some form of managed care has existed in New York state since 1967; however, none of those forms were able to control the escalating cost and diminishing quality of care. To address these issues, in 2011, New York Governor Andrew Cuomo appointed a Medicaid Redesign Team (MRT) to develop a multiyear reform plan. One of the key objectives of the MRT was to take advantage of the Affordable Care Act (ACA) mandated “health home” structure to effectively manage the health, behavioral health and long-term care needs of complex high cost populations.

A health home is not a physical house, but rather a network of health care and service providers working together to make sure that an enrolled member of the health home gets the service and care he or she needs. A health home concept ensures access to appropriate services, improves health outcomes, reduces preventable hospitalizations and emergency room visits, promotes use of health information technology and avoids unnecessary care and costs.

New York state’s initial focus on the MRT recommendations was in the behavioral health sector. Accordingly, the state moved mental health and substance abuse health services (generally known as behavioral health services) for adults in New York City to managed care beginning October 2015, with adults in other areas of the state beginning in July 2016 and children in 2017. Some aspects of the implementation are still in progress.

Now that the behavioral health managed care transition is substantially completed, the state is focusing on services for individuals with intellectual and developmental disabilities (I/DD). Effective July 1, 2018, the care for individuals with I/DD in New York is coordinated through People First Care Coordination. Under this model, the Medicaid Service Coordination (MSC) program will be replaced by health home care management. Health homes designated to serve individuals with I/DD are known as People First Care Coordination Health Homes (CCO/HHs) and generally referred to as Care Coordination Organizations (CCOs).

As of this writing, there are seven approved CCOs in New York State. Individuals with I/DD who participated in the MSC program were requested to enroll with a CCO by July 1, 2018. The CCOs work with individuals with I/DD and their families to bring together healthcare and developmental disability service providers to develop an integrated, comprehensive care plan known as a “life plan” that includes health, behavioral health, community and social support and other services.

Although health home care management is not managed care, enrollment in care coordination agencies is the first phase and the foundation for transition to managed care for the I/DD population. The transition is anticipated to take 4-5 years. Currently, an individual with I/DD enters into the New York State Office of People With Developmental Disabilities (OPWDD) service delivery system through a Medicaid service coordinator employed by a nonprofit provider or state-owned facility. The Medicaid service coordinator assesses the service needs of the individual and prepares an Individualized Service Plan (ISP), which is later reviewed and approved by OPWDD. The ISP becomes the underlying document for receiving service from the nonprofit or state-owned provider. The provider can bill and collect Medicaid dollars from the state for the MSC services. The ISP is periodically reviewed and revised as needed.

Under the new CCO model, the current Medicaid service coordinator will be known as a care manager and will be employed by the CCO, not the nonprofit or state-owned provider. Some of the CCOs are initially leasing the care managers through the nonprofit provider. Each CCO will have a team of professionals such as physicians, nurses, therapists, care managers, etc. who will evaluate the care needs of an individual and manage the care, refer the individual to an appropriate provider, support the family, refer social support services and more.

Although there are some concerns and anxiety among the provider community, care receiving individuals and families, the transfer of service plan development from a Medicaid service coordinator employed by a provider to an independent CCO will ensure conflict free care management service referral. The CCO will not authorize services; the authorization of services is still with OPWDD.

Enrollment in a CCO is optional for an individual and once enrolled, the individual can continue to choose the care provider he/she has in the current model. If the individual does not enroll in a CCO, the CCO will help the I/DD individual to find an OPWDD provider but no other services. If an individual is dissatisfied with the service received from a CCO there is an option to join a different CCO.

The seven CCOs in New York State are for profit companies sponsored by nonprofit providers, and the state has provided startup funds to pay for the initial expenses. The CCO will receive a fixed rate from the state for providing the care management services to an individual. The tiered rate structure for CCO service is based on the acuity/functional capability status of the individual.

Effective July 1, 2018, the provider agencies lose all the MSC revenue and only receive rates for direct services, if any, that they provide to an individual. MSC revenue currently billed by the OPWDD provider community is estimated to be over $325 million and, in general, the MSC program generates a surplus for the provider agency. In the health home care management model, this revenue will be shifted to the CCOs, and the provider agencies must look for alternative sources of revenue to compensate for the loss of the surplus that the MSC program had generated. In addition, previously the provider agencies could allocate a portion of their management and administrative expenses to MSC programs through the ratio value method for the Consolidated Fiscal Reporting (CFR) system. Now the provider community must either reduce their administration expenses or find new programs to allocate the administration expenses that could have been allocated to the MSC program.

There are several issues surrounding the health home care management model transition that have yet to be addressed. These include cost reporting requirements for a CCO, Office of Medicaid Inspector General (OMIG) audits on service documentation maintained by the CCO, security of electronic health records, and a CCO’s reporting responsibility to OPWDD. As in any new model, some problems are anticipated in the transition phase, but this model is anticipated to develop a comprehensive care management plan for an individual with I/DD, ensure improvement in the quality of care delivery, bring in cost efficiencies and become a stepping stone to managed care.

About Joseph J. Kanjamala

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Joseph J. Kanjamala, CPA, CGMA, is a Partner in the Nonprofit, Government & Healthcare Group at Marks Paneth LLP. His responsibilities in this role include designing audit strategies, supervising and training staff, liaising with clients, and providing oversight so that audits are conducted in a timely and cost-effective fashion. During his more than 20 years of public accounting experience, Mr. Kanjamala has developed deep skills in serving nonprofit organizations and has served numerous charitable organizations,... READ MORE +

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