Restructuring the Health Care Delivery System under DSS

Convert Medicaid administration to managed Administrative Services Organization (ASO) with Primary Care Case Management (pCCM)/Medical Home Options:

.,/ HUSKY A&B and Charter Oak transition from at-risk capitated Managed Care Organizations (MCO's)

.,/ Aged Blind and Disabled (ABD) and Low Income Adults (LIA) transition from unmanaged Fee-For-Service (FFS) to managed FFS

.,/ Authorized under current state statute. No federal Medicaid waiver or State Plan Amendment required to implement


.,/ ASO model will enhance cost-effectiveness and produce greater efficiencies for both the

state and the provider community

.,/ The state will rightly assume financial risk and responsibility to pay medical costs .,/ Will result in greater transparency and more accountability

.,/ Builds on successful model currently used for behavioral health, dental, and pharmacy .,/ Provides care management and improved patient care for ABD and LIA clients

.,/ Supports emergence of Medical Homes in line with federal emphasis and other states' experiences producing savings while improving health outcomes

.,/ Aligned with Federal Health Care Reform. Supports development of Health Homes (90% FMAP) and innovative Integrated Care Organization model for dual eligibles .,/ State will provide contracting, credentialing and claims payment

.,/ Implementation Date of January 2012

In addition:

Implement Presumptive Eligibility for HUSKY B:

.,/ State will make a determination that child is eligible based on family's declaration of income -- no verification is needed at that time

.,/ Will enable children to get coverage sooner

.,/ Will allow Connecticut to receive about $1-$4 million in federal bonus funds

Expand Money Follows the Person (MFP) Rebalancing Demonstration:

../ Federal MFP encourages states to transition individuals out of institutional settings .,/ Have submitted federal application and have received positive indications from CMS ../ Significant expansion of:MFP from 890 (thru 2012) to 5,200 (thru 2016)

../ Will receive enhanced match for new positions necessary to administer and implement .,/ Includes $21 million over five years for a strategic nursing home rebalancing plan - to

"rightsize" bed capacity and guide the industry on business diversification

Restructuring of the Health Care Delivery System under the Department of Social Services

The Department of Social Services currently manages services for individuals who qualify for Medicaid on the basis of age or disability status, as well as low-income adults, under a fee-for-service program. Consistent with existing statutory authority, the Department of Social Services is in the process of procuring an Administrative Services Organization (ASO) to manage the medical services provided to these Medicaid recipients. Under its contract with DSS, the ASO will provide a range of management services including centralized customer call center services, utilization management, care coordination, care management, predictive modeling, health risk assessment, provider profiling and other administrative services. The ASO will provide assistance with referrals and appointment scheduling and will help Medicaid recipients to better navigate the health care system. It is anticipated that over the next several years, the ASO will provide technical assistance in the field to support the emergence of medical homes, health homes, and other service delivery innovations, such as Integrated Care Organizations. The ASO contract will support medical homes that are in place as early as January 1, 2012.

As is the case now under the Connecticut Behavioral Health Partnership, the medical ASO contract will contain financial incentives to encourage the ASO to meet performance targets set by the department. Medicaid recipients will continue to use the existing Medicaid fee-for-service network and claims will continue to be processed through the department's claims processing system. The administration will be expanding the network of providers in order to ensure access to necessary medical seryices.

For more than a decade, the Department of Social Services has managed health care services for HUSKY A and HUSKY Brecipients through capitated contracts with managed care organizations. In an effort to achieve greater transparency, more accountability, and greater efficiencies, capitated managed care for the HUSKY A and HUSKY B programs will be discontinued. Rather than the state paying the managed care organizations to assume full risk, the state will assume all risk by paying medical claims directly as they are accrued, similar to what is now being done under the state employee health plan. The medical benefits for recipients under these programs will be managed by the new medical ASO. In order to ensure that the Charter Oak Health Plan remains viable, this program will also move from a capitated managed care model to an ASO model, with services reimbursed through the department's claims processing system in accordance with Medicaid rate methods. After factoring in those populations currently receiving benefits through managed care organizations, the new ASO will be responsible for managing care for nearly 600,000 recipients, which will allow for greater administrative efficiencies for both the state and the Medicaid provider community.

The Department will be pursuing approaches to health care purchasing that promote improvements in service delivery and organization, accountability among local health care systems, and better efficiencies and patient outcomes. The Department will begin by supporting the emergence of medical homes for all Medicaid, HUSKY A, HUSKY B, and Charter Oak recipients. Although there are many definitions of medical home, it is essentially a person-centered approach to providing comprehensive primary care that facilitates partnerships between individuals and their providers and, when appropriate, the individual's family and other supports. It typically relies on advanced health information systems to support evidenced-based care and includes resources to support the coordination of care. It is expected that the provision of medical homes will allow better access to health care, increased satisfaction-with the care process, and improved health and outcomes. The department will soon undertake an

evaluation of the existing Primary Care Case Management (PCCM) pilot under the HUSKY program. The results of this evaluation and associated recommendations will inform the design of a new statewide medical home program.

The Department of Social Services will also begin planning for the submission of a state plan amendment to establish health homes, a new opportunity under the Affordable Care Act to improve care for indlviduals with multiple chronic conditions. Health homes expand on the medical home concept by placing a greater emphasis on: comprehensive care management; disease education, self-management, and health promotion; care transitions including appropriate follow-up from inpatient to other settings; referral to needed community and social support services; use of health information technology to link services; and reliance on a team of health care and support professionals.

Finally, DSS has applied for federal funding to support full integration of care for individuals who are eligible for both Medicare: and Medicaid (i.e., dual eligibles). The federal Centers for Medicare and Medicaid Services will be awarding funds to 15 states. If awarded, Connecticut's demonstration will establish local Integrated Care Organizations (ICOs) with accountability for the delivery and coordination of primary/preventive, acute, and behavioral health integrated with long-term supports and services and medication management for dual eligibles. The ICO model features partnerships among multiple provider types and is facilitated by health information technology and the measurement of quality, outcomes and cost. In order to promote value, the state will align financial incentives to performancethe enhancement of quality of care, the care experience and health outcomes at a lower overall cost.

Regardless of whether Connecticut is selected as one of the states to receive additional federal support, transitioning clients to an ASO will provide needed care management and improved patient care. In summary, the restructuring of the health care delivery system under DSS will not impact the ability of clients to receive necessary medical care and will allow for improved care management, while also ensuring that the state's limited resources are spent in a cost effective and efficient manner.

M,edicaid Care Managem:ent Model

MedicalASO 2011 2011 2011 2011 2012
Procurement Timetable Qtrl Qtr2 Qtr3 Qtr4 Qtrl
1 2 3 4 5 6 7 8 9 0 1 2 1 2 3
RFP Development X
RFP Release X X X
RFP Evaluation X
Contract Award and X
Contract Execution X
Pre-implementation X X X X
Go-live X X X Managed Care - HUSKY A
FY 06 FY07 FY08 FY09 FY 10 * FY 11
Health Plans - MCOs $722,945,944 $638,890,609 $699,118,579 $727,348,009 $754,500,188 $863,663,215
Carve-Outs (Estimated) :
Behavioral Health 94,563,847 104,931,365 121,600,000 128,600,000 144,700,000
Pharmacy 57,500,000 136,800,000 155,000,000 180,100,000
Dental 57,270,000 101,930,000 106,700,000
FQHCs 47,100,000
Total 722,945,944 733,454,456 861,549,944 1,043,018,009 1,140,030,188 1,342,263,215
Increase 10,508,512 128,095,488 181,468,065 97,012,180 202,233,027
Increase 1.43% 14.87% 17.40% 8.51% 15.07%
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Medicaid Caseload and Expenditures - Excluding LlA

Fiscal Expenditures / Average Average Fee-for- Average HUSKY
Current Services Service
Year Recommended Caseload Caseload A Caseload
'06 3,140,688,632 390,145 89,746 300,399
'07 3,151,508,864 385,584 93,129 292,455
'08 3,470,655,785 400';881 90,089 310,792
'09 3,851,691,907 422,699 91,484 331,215
'10 3,855,090,206 453,410 92,836 360,574
'11 Est. 3,968,419,919 460,575 97,478 363,097
'12 Fest. 4,217,830,000 512,625 102,352 410,274
'13 Fest. 4,360,311,223 537,446 107,469 429,977 :a: 4,000
~ 3,500
en ~
... 3,000 .0) ..
::::l C!>.
:!: ""'I _..
"C a
!:: 2,500 ~
x 2,000
1,000 5,000 - 4,500

Medicaid Expenditures and Caseload (HUSKY A and Fee-for-Service) - Excludes L1A

450 :0-
400 J::
350 "C
300 0
250 (J)
200 o
150 01
100 (I)
0 '06





'10 '11 Est. '12

Fiscal Year

Fest. Fest.

r:::=:=J Expenditures / Current Services Recommended

350 "C
300 t:..
250 C/)
:J: 110,000
(I) 90,000
(I) 80,000
, 70,000
50,000 -.-Average Caseload

Medicaid Eligible Cases Fee-for-Service and HUSKY A





'10 '11Est. '12


Fiscal Year

Fest. Fest.

c=:3Average Fee-for-Service Caseload

--- Average HUSKY A Caseload

Excludes expenditures and caseload related to the recent expansion of Medicaid to tow-lncorne adults ellA). This data is included in the UA / SAGA chart

SAGA I L1A Medical Expenditures and Caseload

Fiscal Expenditures / Average
Current Services
Year Recommended Caseload
'06 135,690,877 31,293
'07 152,518,714 31,818
'08 170,751,602 33,255
'09 188,810,229 37,285
.'10 182,070,554 43,431
'11 Est. 398,063,936 58,559
'12 Fest. 441,720,000 66,456
'13 Fest. 460,130,000 72,908 SAGA I LlA Medical Expenditures and Caseload

500 80
450 70
400 "C
60 I/)
2 350 t:..
~ 300 50 "C
CI) 250 40 0
... a;
::: 200 I/)
"C 30 CIS
:: o
CI) 150 CI)
c.. 20 C)
>< 100 01 CIS
W UJ tv ...
01 ·01 10 CI)
50 >
-..J «
0 0
'06 '07 '08 '09 '10 '11 Est. '12 Fest. '13 Fest. Fiscal Year

_.c::::::J Expenditures / Current Services Recommended

---- Average Caseload


On 6/21/10, DSS received federal approval to expand Medicaid coverage to low- income adults ellA) that were formerly served under the State Administered General Assistance (SAGA) program retroactive to 4/1/10. This approval allows DSS and DMHAS to receive

50% federal reimbursement on non-hospital services provided to this population (under

the Disproportionate Share Hospital (DSH) program, the state was already receiving 50% reimbursement on SAGA hospital expenditures). The extension of services under Medicaid resulted in significant increases in hospital reimbursement, as well as greater access to non-emergency medical transportation and home health care benefits, which were limited under SAGA.

Due to the delays in federal approval of the Medicaid expansion for low-income adults, some obligations for FY 10 were paid in FY 11.

Presumptive Eligibility for HUSKY B

As of April 1, we will implement II presumptive eligibility" for HUSKY H which will enable children in HUSKY B (children over 185% FPL) to get coverage sooner. By implementing this simplified eligibility strategy, Connecticut will become eligible . for federal bonus dollars. This process is already in place for HUSKY A children (up to 185% FPL).

CHIPRA Bonus Summary:

The Children's Health Insurance Program Reauthorization Act of 2009 (CHIPRA) contains Performance Bonus provisions allowing qualifying States to receive additional federal funding if their Medicaid enrollment of children has increased above a baseline level. To qualify during a Federal fiscal year, a State must be implementing during the year at least five of eight program features that simplify the application and renewal process. The goal is to encourage and assist States in reaching and enrolling more uninsured children who are eligible for Medicaid.

The State currently meets four of the conditions required. With the inclusion of the statutory authority to extend presumptive eligibility to HUSKY B bands 1 and 2 as provided by the Legislature in the last session, we can move forward to implement the HUSKY B presumptive eligibility conditions by April 1, 2011. We will then meet the necessary 5 of 8 requirements to qualify for a CHIPRA enrollment/ retention bonus in late calendar year 2011. These conditions are summarized in the chart below.

Already In Place In Process (to start Bonus qualifying enrollment/retention
by Aprill,2011) process
12 month continuous eligibility
X Remove or simplify asset test
X Eliminate face to face interview
X Use of same application for
Medicaid/CHIP & information
verification processes
X Administrative or Passive Renewal
X (Medicaid) X (CHIP) AllowPE
Allow Express Lane
Provide Premium Assistance Summary of Estimate:

Additional HUSKY B expenditures of $128,000 in FY12 and $253,000 for FY13 are expected in order to implement presumptive eligibility. The amount of one-time bonus dollars that will accrue to the state is not yet determined, but likely to be in the range of $1 million to $4 million.

Money Follows the Person

The federal Money Follows the Person (MFP) Rebalancing Demonstration encourages states to reduce their reliance on institutional care for Medicaid recipients by transitioning individuals out of institutional settings and into community settings with appropriate supports. DSS receives enhanced federal Medicaid reimbursement for the first year of an individual's transition. Originally, the department had planned to transition 700 individuals to the community under MFP. Given the recent successes and with the encouragement and support of the federal government, DSS is increasing their goal to over 5,200 transitions by 2016. The Governor's budget includes funding to support 2,251 transitions to the community under MFP by the end of FY 2013. The department is also pursuing federal support to help nursing facilities diversify their existing business model by restructuring and reducing the number of skilled nursing beds to help address low census due to individuals transitioning to the community. The Administration has had favorable discussions with the Centers for Medicare and Medicaid Services (CMS) regarding this "right-sizing" initiative.

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