Given the rapid introduction of managed care into the health care system and the many forms managed care may take, confusion is understandable. Managed care is not the system most of us remember from just a few years ago in which patients selected their own care providers (fee-for-service). For individuals accustomed to the old system, the  transition to managed care can be unsettling.

Managed care represents the merging of health care financing and health care delivery systems such that the insurer, whether public or private, exercises some control over selection of providers, treatment options, and pharmacy formularies. Managed care organizes providers and hospitals into health care delivery networks with the goal of lowering costs and providing optimal care by "managing" the way the care is delivered. Improved health outcomes and cost savings are believed to be achieved through coordination of care and an emphasis on prevention.

Managed care plans are paid a set fee for each person they agree to serve, regardless of the care or services actually delivered, in contrast to fee-for-service, in which providers are reimbursed for each service they deliver. Both systems of care have been criticized. The fee-for-service system has been said to: encourage providers to provide costly and sometimes unnecessary medical care; lack coordination of care; and, promote duplication of services. The managed care system has been criticized for creating incentives for providers to limit access to care.

Medicaid Managed Care and Waivers

Medicaid is the primary payer for medical services for more than one-half of all PLWH, and for 90 percent of all children living with the disease. State Medicaid agencies are increasingly requiring beneficiaries to enroll in managed care plans.

Consumers, providers, advocates, and others should participate in the development of State waivers to assure that plans serve the needs of particular populations. A document entitled "Key Approaches to the Use of Managed Care Systems for Persons with Special Health Care Needs" is available for use during the planning stages of Medicaid managed care programs. This document advises, States to obtain input from key stakeholders during the planning, development, and implementation of such programs. It is important for advocates and other interested parties to initiate a dialogue with the State during waiver development.

The Balanced Budget Act of 1997 contains a State Plan Option provision that allows States to enroll Medicaid beneficiaries into managed care without a formal waiver. This option requires States to submit a plan for managed care for HCFA approval, but eliminates requirements for public notice on participation. Among other requirements, States must ensure that beneficiaries are provided with the choice of two plans or Primary Care Case Managers (PCCM), or at least one plan and one PCCM with a rural exception.

Access to Experienced Care Providers  Some MCOs have not included experienced providers in their networks and most do not provide case management and support services (i.e. transportation, food assistance, and housing).   When enrolling in a managed care plan, consumers need to be sure that experienced HIV providers and specialists are available and, if not, that the option exists to go out-of-network to obtain that care

Adequate Reimbursement  HIV/AIDS care is expensive.   Networks with experienced HIV providers may find themselves with a larger share of individuals who require more costly care than plans that do not have HIV expertise. There is a growing recognition of the need for risk adjusted capitation rates for members with chronic illness, including HIV.

Needs of Specific Populations  Providers in managed care plans should have experience working with affected populations.  The needs of populations increasingly infected and affected by HIV disease must be integrated into the benefits packages of health care plans.  The switch to managed care can disproportionately affect certain populations, creating huge barriers to care.  For example, women with children have been significantly impacted:  parents and children may be assigned to different plans, and there will likely be a lack of coordination among providers.  Moreover, the parent´s provider may be in one locate and the child´s mother in another.

Development of Appropriate Quality Assurance Activities and Performance Measures  Appropriate HIV-specific quality of care measures need to be developed so that providers and consumers can assess the performance of MCOs in providing care for PLWH.

Marketing and Enrollment Practices  Because of the high cost of caring for PLWH, some plans may discourage their enrollment.  Tactics include: excluding information about HIV-specific providers in marketing materials; locating plan providers in inappropriate areas; conducting the enrollment process in a non-confidential setting that is culturally and linguistically inappropriate; not having grievance procedures that allow PLWH to leave the plan quickly if their medical needs are not being met.

1996-Getting Started
The EMA began its managed care initiative to help local Title I and II providers prepare for managed care. A review of models developed by Medicaid and by private insurance revealed a tendency to address the need to spend less, but to place inadequate emphasis on quality of care. Because such an approach was unacceptable, the EMA decided to develop its own unique model.

1997-Moving Forward
During fiscal 1997, $60,000 of planning council support funding was re-allocated to support the managed care initiative which included:

• Four workshops on the basics of managed care for local grantees of federally-funded HIV programs, HIV service providers, members from all HIV planning bodies, and PLWH.
• Technical assistance encounters between experts and providers
• Formation of an EMA Managed Care Steering Committee
• An initial unit cost report and a blue print for a standardized cost-based accounting methodolgy
• Development of provider consortia

The grantee formed consortia of providers of medical, pharmaceutical, nutritional, and case management services to help providers avoid unnecessary duplication of effort and give them a forum in which they could cooperatively develop standards. Providers of developing networks among themselves, as well as positioning themselves for entry into managed care organizations (MCOs). Each consortium was to: develop standards of care; develop standard contractual scopes of service and outcome measures; initiate peer reviews; and review utilization data that compared per client cost among providers of like services.

1998 and Beyond
The EMA's planning council allocated $148,000 for managed care initiatives during fiscal 1998, to:

• Continue the system-wide managed care education process;
• Develop a three-year strategic plan;
• Develop a standard cost-based accounting methodology;
• Provide training to the local Title I providers;
• Develop system-wide standardized data collection methodologies; and
• Fund 1.5 positions (a part-time planner and a full-time coordinator).

In addition, representatives from the EMA have cooperated with other officials within the state to plan activities within the HRSA HIV/AIDS Bureau's managed care training and technical assistance program. A one-day training for Broward. Palm Beach and Dade counties will occur in mid June, followed by intensive technical assistance services for each county.

Sovling Data Systems Problems
A major impediment to preparation for managed care to the EMA is the lack of centralized data collection system. Plans are underway to implement a system that will allow an unduplicated client count across the EMA's Title I service delivery system. A unique client identifier will be encoded on a magnetic strip on the back of the client ID card (similar to a credit card). Information will be maintained in a centralized database. The second phase of this data management system will see a standardized case management software program that will include basic diagnostic data. The EMA will then be able to determine the number and/or percent, of clients being served by Title I within the EMA by stage of disease, and provide the data required to estimate clients' needs and costs associated with meething those needs.

Keys for Success
The Broward County EMA has identified factors essential to the success of its managed care initiative that other grantees might wish to consider:

• Flexibility in implementation and design;
• Responsiveness to local needs and structure;
• Participation of all stakeholders;
• Identification of providers' needs based on their unique strengths and weaknesses;
• Individuals with the skills to lead the process of setting service standards
• Education that is all-inclusive and ongoing.

What advice would you give a PLWH encountering managed care for the first time?
Make sure that you understand how managed care is differnt from fee-for-service, and how it affects your care options. Every single managed care plan is different. Take the time to get to know the managed care plan in which you may choose to enroll.

What are some of the primary decision points when deciding whether or not to enroll a plan?
Ask yourself, "are you going to be able to stay with your current provider"? If not, are there qualified and experienced HIV providers participating in the plan and currently accepting patients? In addition, comprehensive perscription coverage is fundamental. Make sure that the mix of drugs you are on is covered, and that the plan has an "exception process" so that you can get drugs that you need now, or may need in the future if they are not on the plans' approved list (formulary).

What happens when the PLWH's primary care provider isn't included in their new managed care plan?
If your current provider is not included, you are going to have to educate yourself and fight for qualified care. Look for a physician who has experience treating people with HIV. An increasing number of studies clearly document the relationship between a provider's expertise and the improved health status of the person living with HIV disease. As the provider how many PLWH she currently has in her practice. If she answers less than 50, ask the plan if there is someone with more experience in your area. You might also want to consider asking your primary care provider to contact the plan and see about enrolling as a provider.

What can individuals do to maxamize the effectiveness of their particular plans?
Clients have to make a commitment to be actively involved in their own care. It is important to take notes on interactions with the plan, and to be persistent about it. Also, they have to take the time to get to know their plans well. For example, does the plan require that its providers get prior approval before referring the individual to a specialist?

What are the rights of the consumer regarding quality of care or how care is delivered?
Individuals have the fundamental right to get appropriate care. The rights that patients have reside in their doctor-patient relationship. In the contract, and in State and Federal law.

When clients have concerns about the quality of care they are receiving, what should they do?
If you think you are not getting appropriate care or access to the right drugs for you, the place to start is with your primary care provider, who can and should be your most important advocate.

And if this doesn't solve the problem?
People with HIV have learned that being passive is unhealthy. This is especially true in managed care. Clients have to hold the plan accountable for providing the care they deserve, and educate themselves about how to use the system to support an appeal, when necessary. It is not enough to say, "I should get the treatment because I want it." Instead, you have to say, "It is covered, it is medically supported, and here is why." The negative stories we hear often are about uninformed people who did not appeal, and who did not get the care they needed. Subsequently, the system collapsed on them. Informed patients are less likely to be overcome by problems in the system because they know and use the procedures that guarantee their rights.

What other resources are available for PLWH in managed care?
There is a range of possible resources: benefits counselors, attorneys at AIDS legal programs, advocacy organizations like NAPWA, and local resources that know your particular plan. Clients also should use member services of health plans, the State Medical Agency, and their insurance brokers. If clients are employed or have private insurance, they should consider going to their human resource departments or their insurance brokers. The bottom line is that the best way to guarantee the care you need is to be proactively involved.

What has been the impact of managed care on your program?
Over the last year, we have experienced a decrease in net revenue from Medicaid, particularly in our community-based health centers. Currently the Parklawn Health and Hospital System provides care to 60 percent of the individuals receiving Medicaid in Dallas City and County. This population can be broken out into two groups; individuals who previously received AFDC (today called TANF), and individuals who have disabilities. With Medicaid managed care in our area, competition has increased for the first group, not the second. As a result, our Title III-funded sites are losing revenue at a time when the ambulatory costs for managing these clients is increasing.

Simultaneously, we are experiencing increased demand from individuals living with HIV disease not receiving Medicaid or any other form of insurance. Thus, the reliance on CARE Act funds is becoming more acute.

Can you explain the financial impact of individuals moving to commercial insurers?
Overall, many of the people in our program are getting better, with several returning to the work force. Most are insured through plans offered by their employers. However, the majority of these plans do not have CARE Act funded programs or providers as part of their network. The combined effects of this and decreased Medicaid have meant less revenue to cover fixed costs at a time when individuals who have no public or private insurance at all continue to come to us for care for which we are not reimbursed.

Moreover, some of the commercially insured clients come back to us for care because their commerc ial MCO was not aggressive about hiring experience clinicians. For example, the MCO may have an ophthalmologist may have no experince treating patients with CMV.

What has your program done to prepare for managed care?
We are now positioning our ambulatory care services to participate in managed care plans in our area. The biggest challenge for us, and I would imagine for others as well, is the development of administrative and management information systems. We simply must be able to provide data that demonstrate effectiveness, and outcomes.

We also are identifying the costs of providing care. We know we can't treat patients with special health needs over time without being reimbursed appropriately. And, of course, we have to determine an accurate cost basis not just for primary care, but also for inpatient care, pharmacy costs, and long-term care.

Finally, we are looking at who will provide the HIV medical care to clients within our structure. The complexity of disease management, particularly antiretroviral therapy, has made it necessary to consider a degree of HIV specialization within our system. This is the only way that we have been able to contain cost while ensuring an appropriate standard of care.

We have also taken the position because of our experience in the public arena, that we are capable of competing with commercial entities, especially for Medicaid managed care populations. Our expertise with CARE Act grants has also provided experience in managing populations with special health care needs with limited resources.

How has managed care affected your clinicians?
The biggest impact on clinicians thus far has been the demand for documentation as it relates to quality -- not simply "How man?" and "Are you getting them in the door?" but also "What are the outcomes you are generating?" Given the lack of standards and benchmarks specific to an indigent population, it has been necessary for us to define and establish these within the commercial arena.

Ultimately, we have not eliminated barriers. Rather, we have changed the types of barriers faced by our patients. We have moved from a lack of resources to a lack of available, experienced, and knowledgeable providers within plans.

Naida Sorken, V.P., Operations Development, Best Health Care, a management services and consulting company with special expertise in managed care for people with special needs.

What do ASOs providing primary care and related support services have to offer MCOs?
ASOs bring a wealth of experience in delivering care to individuals living with HIV disease. They understand the kinds of problems that PLWH face in general, and the unique problems faced by populations particularly impacted by HIV disease. ASOs also have formed systems of care that provide the full range of services needed by PLWH. Many of these services may be essential to keeping clients in care, but might not be offered by the typical MCO.

What do MCOs offer these providers?
The bottom line is that the MCO has the dollars that come with the enrolled member from the State or employer group.

But MCOs also have expertise to offer these providers. They can help develop systems relating data, reporting and, or course, costs: If you don't know how much it costs to offer your services, you are never going to be able to negotiate a good rate. In other words, the MCO has certain expertise that it can provide to an ASO, creating a kind of mentoring effect. The more community-based managed care plan, the more this is likely to occur.

How can providers get this support from MCOs?
Providers can and should ask MCOs for help. Their message should be: "We provide essential services, but you bring the business experience." Pick the plans you go after carefully, though. Perhaps look at a smaller, regional player. Find the individuals in the plan who are most likely to understand the needs of PLWH. Remember: They probably hired their case managers from hospital discharge planning units and other social service organizations. These individuals are interested in appropriate care, in the appropriate location, for the best possible price. Cost is not always he first and foremost consideration.

How can collaboration between ASOs and MCOs be increased?
Bring stakeholders together to talk. We often see each other as adversaries, viewing others in terms of their own agendas. We need to find common issues of concern. Both organizations are concerned with providing care.

And both organizations are concerned, for example, with risk adjustment.

MCOs don't always understand all the services provided by the CARE Act system. Often, MCOs perceive traditional ASOs as unsophisticated, and therefore these providers may not even be on the MCOs radar screens. But MCOs have learned increasingly that they can out-source services lik case management -- that they don't have to home-grow covered services. But MCOs aren't always good identifying where those HIV resources are.

From the financial perspective, MCOs have some hesitancy in developing their skills and services for their HIV populations unless there is adequate risk adjustment. If an MCO gets a good reputation for delivering HIV care, but does so without adequate risk adjustment, it has a financial problem, especially if there is no other population to balance the mix.

Where do ASOs/CBOs interested in becoming involved in managed care start?
Traditionally, contract negotiation takes place in provider contracting, network development, or provider relations. However, I would propose to you that because of the special nature of the products and services that ASOs bring to the table, you are probably going to come in through the case management or the medical management department. The case management area is a really good place to start, because they know about providing care to individuals living with HIV disease. Then, the case management department can take the ASO to the staff person responsible for provider contracting.

Lynda Honberg, Associate Director for Managed Care, HAB

Why is managed care important to PLWH, ASOs and the CARE Act-funded system of care?
An increasing number of PLWH are receiving care through Medicaid-, Medicare-, or commercial-managed care. If PLWH are going to be able to continue accessing their traditional providers, ASOs are going to have to participate in managed care.

As Medicaid- and commercially-insured HIV individuals are enrolled in managed care plans, managed care becomes an increasingly important revenue source for the ASO/CBO. If that revenue is taken away, the ASO becomes more dependent on limited CARE Act funds.

Explain the importance of "tradtional providers".
ASOs are the repositories of the majority of the expertise and experience in delivering HIV care in this country. These ASOs have constructed systems of care that work for the HIV community. Moreover, they are community-based, are familiar with the populations, and understand the needs of those populations that are heavily impacted by the epidemic. So the capacity to deliver expert care, and a level of trust between the provider and the client, has been developed. Both of these elements are crucial to quality care, and they don't "just happen" in an MCO.

What is the HIV/AIDS Bureau trying to achieve in managed care?
Strategically, we are trying to promote and protect the health care needs of PLWH in managed care delivery systems. If we don't respond to managed care, the systems of care that have been developed will become increasingly vulnerable, and we will not be positioned to assure quality of care for those living with HIV disease. Our strategic plan focuses on a number of key areas, which are detailed in this publication.

What opportunities does managed care offer?
We need to look at managed care as an opportunity to widen our payor base, which will allow us to provide care to more of the uninsured.

And we need to take advantage of the managed care organizations' expertise regarding coordination of care component. The fact is that, without coordination, care can become fragmented. The flip side of the "gate keeper" image is one of an informed individual -- the primary care -- coordinating the full range of medical care and securing services required by the individual.

When the system is working effectively, the provider becomes the client's advocate within the system. As HIV increasingly becomes a chronic disease, the importance of this function will only increase.

Since we are now in the managed care era, it's easy for us all to forget the fee-for-service was not perfect. More care is not necessarily good care: for example, getting an MRI when it is not indicated is not quality care. When working properly, managed care can bring some balance to the system. Our job is to make sure that the system works for PLWH.

What trends in managed care are going to increasingly impact PLWH and ASOs?
There will be a proliferation of plans and an increasing number of individuals enrolled in those plans. At the smae time, there will be growing numbers of uninsured individuals, which is going to continue to place pressure on the CARE Act-funded system.

Finally, as I mentioned before, as HIV disease becomes more chronic, people are going to be in the delivery system longer. For providers, this means providing more care over time. For PLWH, it obviously means more direct interface with the medical system. What is that medical system going to be? Managed care.

Why States Choose Managed Care
States may choose to provide Medicaid through various models. Many have selected managed care in the interest of saving money. When they first move to managed care, States usually set the total Medicaid budget at least 5 percent below the previous year's fee-for-service. Medicaid expenditures, guaranteeing that spending will drop, at least in the short run.

Capitation
the State prepays a certain monthly amount, called a capitation rate, for the care of each Medicaid recipient to MCOs that set up provider networks to deliver care. The MCOs' networks are expected to provide all necessary care to their Medicaid enrollees in return.

Every State Medicaid program sets its own capitation rates. The rates paid to MCOs for people who qualify for Medicaid because of a chronic illness or disability (such as AIDS) are usually higher than those paid for the general population. Usually, capitation rates also vary according to age, gender, and geographical location.

Theoretically, capitation rates are set so that they will cover the MCO's cost of delivering health care. But if an MCO enrolls individuals who have high-cost health care needs that are not covered in the capitation rate, it must pay for the difference out of its own funds. Therefore, MCOs may try to attract Medicaid enrollees who are likely to have lower-than-average health care costs. This is called risk selection. MCOs that enroll a high number of costly enrollees are said to be at adverse risk.

Protecting Against Adverse Risk
States may adopt policies to protect MCOs against extreme adverse risk. One option is to exclude, or carve out, certain services from the capitation rates, and continue to pay for them on a fee-for-service basis. For example, several States have chosen to exclude protease inhibitors (as well as other drugs) from their capitation rates. stop-loss insurance or adopting risk corridors, through which the State will pay for most of the excess costs if the costs for patient care exceed a certain threshold. These mechanisms exist mainly to protect MCOs against high costs from enrollees' lengthy hospitalizations. But if an MCO should happen to get more than its fair share of high-cost enrollees, the additional funds provided through these mechanisms may not be enough.

HIV/AIDS and Risk Adjustment
Several pre-studies suggest that the cost of HIV care is usually between $1500 and $2500 per person per month. The cost of combination therapy averages an additional $1000 per month. Even the highest Medicaid capitation rates usually fall short of this month.

A study of the first nine statewide Medicaid managed care plans has shown that capitation rates in 1996 for people with disabilities under 65 years of age ranged from $116 to $721 (Conviser et al., 1997), far below the expected cost of care for a PLWH. many of those States required MCOs to cover the costs of protease inhibitors out of the capitation rate, practically guaranteeing that the MCOs would lose money on any of their enrollees living with HIV.

Payment systems that base capitation rates on enrollee health status generally assume that people's use of health services in one year will be similar to their use during the previous year (risk assessment). This assumption works especially well for people with chronic conditions or disabilities (Kronick and Dreyfus, 1997). The systems then pay different capitation rates to MCOs for enrollees in different risk assessment categories (risk assessment). Maryland and Colorado instituted such payment systems during 1997 for Medicaid enrollees. In addition to these health-based payment systems, several Medicaid programs have adopted special AIDS rates.

The Future of Risk Adjustment
Other States, are developing special HIV and AIDS capitation rates for Medicaid managed care systems that may be regarded as experiments subject to change as the States gain experience. All are designed to protect MCOs against undue adverse risk.

CARE Act-funded HIV programs often provide more comprehensive services than a typical Medicaid MCO benefit package.  Unfortunately, MCOs offering many support services may have a competitive disadvantage relative to those with more limited benefit packages.  Still, the special capitation rates that some States have adopted for HIV and AIDS help relieve MCO´s pressing concerns about whether they and participating provider organizations will be able to remain solvent  At the very lease, these rates remove some of the financial disincentives to providing quality care that MCOs face in other State Medicaid managed care programs.

HCFA and the States are seeking to implement these requirements in a consistent manner for both Medicare and Medicaid.  A primary challenge is the difference in regulation and oversight of the Medicaid and Medicare programs:

For Medicare, HCFA enters into contracts with managed care plans and can therefore includes such provisions as performance measurement and quality of care standards within contract language.

Medicaid programs are largely controlled by the State and therefore HCFA has much less leverage with these programs.  Moreover, State Medicaid programs vary significantly in their level of sophistication in managing data and their ability to ensure quality of care.

Medicaid Waivers "Key Approaches to the Use of Managed Care Systems for Persons with Special Health Care Needs" has been jointly developed by HICFA, HRSA (including the HIV/AIDS Bureau), SAMHSA and other agencies.  The guidance, while not mandatory, serves as a resource to States, and is broad statement of HCFA´s goals for care delivery systems intended to serve persons with special health care needs.

Medicaid Disincentives to Work  There is considerable cross-Federal agency attention to disincentives to work under Medicaid.  A small demonstration project is being crafted to investigate the provision of funds directly to clients in order to confront the barrier of work as an eligibility disqualifier.

Formula awards will be determine as required by the statutory formula.  The supplemental component of the Title I award process will be determined on the basis of compliance related to factors including: grantee fiscal and programmatic performance, timely submission and responsiveness to required Conditions of Award contained in the FY 1998 Notices of Grant Award, and completeness/responsiveness of the application to required elements.

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