Colorado's HMO market is expanding rapidly. According to the state insurance commissioner, the number of HMOs increased by 58 percent within two years: from 16 in 1994, enrolling 24 percent of the insured population, to 20 licensed by the state in 1998, covering a total of almost 1.6 million enrollees. He reported that Colorado's percentage of HMO penetration was the sixth highest in the country in 1997.
The state's managed care program for Medicaid recipients has also grown. In 1994, only 10,000 of Colorado's 270,000 Medicaid enrollees were in HMOs. As of mid-1996, there were 70,000 Medicaid recipients in HMOs while another 60,000 were in primary care case management (PCCM). Colorado's managed care programs continue to grow. During the 1997 session, the legislature passed a bill requiring 75 percent of the Medicaid population to be enrolled in a managed care plan by July 1, 2000. The Children's Basic Health Plan (CBHP), a non-Medicaid managed health insurance program for children from birth to age 17 whose family incomes fall at or below 185 percent of the federal poverty level, was also created in 1997. The state also has a high-risk pool for persons whose medical conditions make them uninsurable.
The Division of Insurance (DOI) within the Colorado Department of Regulatory Agencies is the primary licensing and oversight agency for commercial HMOs. It oversees plan solvency and market practices, tracks complaints, and consults the Department of Public Health and the Environment (DPHE) on quality issues. DOI has promulgated regulations to create a regulatory framework that distinguishes between full-service HMOs and limited-service provider networks.
The Department of Public Health and the Environment (DPHE) acts as DOI's consultant for quality oversight. DPHE reviews the quality assurance procedures and network adequacy of any plan filing for licensure and reports the findings to DOI; it works with that agency on complaints regarding quality of care and access to health care services. DPHE also is the licensing agency for health facilities in Colorado where licensure is required.
The Department of Health Care Policy and Financing (DHCPF) manages Colorado's Medicaid program. It oversees the HMO and PCCM components and a fee-for-service component.
The Colorado State Legislature has considered a number of managed care reforms during the 1990s. Many proposals have been enacted to provide Colorado consumers with additional benefits and health coverage protections.
In 1992, Colorado lawmakers enacted several small-group reforms, including guaranteed renewal, portability of coverage, and rating restrictions. In 1994, the state adopted guarantees for small groups and a modified community rating plan, which were phased in over a three-year period.
The 1997 legislature passed several health insurance consumer protection bills. Among their provisions were the creation of a market conduct examination program under which the insurance commissioner must consider insurance companies' complaint analyses, pricing, and market share; the establishment of standards for the adequacy of managed care networks, including access plans for health care networks; the guarantee that consumers receive a written explanation of the medical basis for denial of medical treatment; the requirement that carriers make a standardized benefits form available; and the establishment of parity in coverage of biologically based mental illness. Further legislation increasing insurers' accountability and mandating coverage of certain conditions was enacted in 1998, including coverage for the following: minimum hospital stays after childbirth; the administration of general anesthesia and hospital charges for dental care for qualified children; and equipment, supplies, and outpatient self-management training and education for the treatment of diabetes. In 1999, Colorado passed new laws to provide for standing referrals, to require coverage for necessary therapies for children, and to implement independent external reviews.
DOI oversees and regulates the solvency of any Colorado entity that accepts prepayment for health services directly. Provider groups that accept capitation downstream from HMOs for HMO-insured risks are not subject to oversight. The division has promulgated regulations that would reduce the solvency standards for organizations that accept risk only for a single service.
DPHE shares responsibility for the oversight and regulation of HMOs with DOI. DPHE assesses the ability of the HMO to make available and provide access to health care services, and the ability of the HMO to ensure the quality of its health care services. DPHE has a critical role in the licensing of these entities, in the review and analysis of enrollee complaints relating to health care services provided directly or under contract, and in the examination of HMOs, both routinely and when a problem arises in the quality of the health care services provided. These are continuous and ongoing processes.
DPHE has joined DOI and DHCPF in the coordination of HMO regulation through the establishment of an interagency health plan work group. The project is based on goals outlined in a memorandum of understanding signed by the three agency heads. The project has grown to include representatives of the Mental Health Services Division of the Department of Human Services, the Employee Benefits Section of the Department of General Support Services and Personnel, the Medicaid Managed Care Ombudsman, and the federal Health Care Financing Administration. The group engages in coordinated policy development, problem solving, licensing efforts, enrollee complaint resolution efforts, provider issues, and access issues.
DOI has successfully used its analysis and research to head off legislative action. "We have a cooperative relationship with the legislature. They view us as a resource to work out policy issues," reports the commissioner.
"Colorado Medicaid has a strong and comprehensive quality assurance program," notes the manager of DHCPF's Quality Assurance Section. "We focus on quality in a variety of different areas, which gives the department a more complete and detailed perspective. For instance, the client survey gives the department feedback on the client perspective. This information fits into our whole puzzle so we can obtain a more complete picture of the quality of Medicaid health care."
DHCPF currently employs HEDIS measures; the Consumer Assessment of Health Plans Study (CAHPS), a nationally recognized consumer survey; focused studies on access and clinical issues; individual case reviews; and comprehensive administrative HMO site reviews. The HEDIS results for the HMOs are available in a performance report published in 1998 by the National Committee for Quality Assurance (NCQA).
Certain measures of the CAHPS survey have been placed on a consumer report card used to aid Medicaid clients in making an enrollment choice into an HMO or the Primary Care Physician Program (PCPP). In 1999, the report card will be expanded to include HEDIS and focused study results. This will provide Medicaid clients with more information and therefore offer a more informed choice.
The focused studies have been used for the PCPP, unassigned fee-for-service, and HMO populations. The first-year studies focused on diabetes, EPSDT, and discharge planning for persons with special needs. For fiscal year 1999-2000, a focused study will examine prenatal care and another will include a provider survey to assess cultural competency and disability awareness. In addition to DHCPF's External Quality Review Organization conducting the focused studies, it is also responsible for investigating quality of care concerns for Medicaid clients in an HMO. DHCPF's peer review organization (PRO) investigates quality of care concerns for Medicaid clients who are in the PCPP or unassigned fee-for-service (FFS) programs.
DHCPF conducts extensive site reviews to monitor contract compliance for the Medicaid HMOs. A desk audit is conducted and followed with an onsite review where the HMO's personnel are interviewed. Providers in the community are also interviewed to obtain their feedback on the HMO's communication and assistance with any Medicaid HMO related issue.
Managed care oversight in Colorado is primarily carried out by DOI and DHCPF. DPHE sees its role as consulting and assisting DOI with its oversight duties. Because the coordination of purchasing activities is in a formative stage, there is no joint purchasing in the Medicaid managed care program.
Colorado has an advantage in that the three regulatory agencies––Health Care Policy and Financing, Public Health and Environment, and the Division of Insurance––are able to sit down together and work out collaborative ways to address managed care. In addition, there has been a good relationship between these agencies and legislators who are involved in health care issues. This is especially important because, by state constitution, the state has a form of government that is a "weak executive and strong legislature." In 1997, the Division of Insurance, the Department of Health Care Policy and Financing, and the Department of Public Health and Environment signed a memorandum of understanding regarding the oversight of health insurance organizations. The agencies agreed to work collaboratively to: develop appropriate standards for access and adequacy of HMOs; develop a streamlined coordinated licensing process for HMOs; coordinate examination of HMOs; adopt consistent requirements for HMO grievance procedures; create a shared data system to support HMO oversight activities of the agencies; and set up a joint committee to review and coordinate, on a regular basis, activities consistent with this agreement.
The collaborative efforts of the three agencies has led to the development of a number of consumer protection measures. These developments include legislation described above, new regulations governing utilization review, and educational outreach to consumers. The new regulations provide specific time lines and procedures to be followed when health plans deny care or benefits based on utilization review. In addition, a consumer brochure has been developed to advise individuals about their rights and responsibilities with respect to complaints and grievances against health plans.
Although the three departments do collaborate effectively, they are also respectful of their differences, mandated by statutory and regulatory requirements as well as constituent input.
Colorado health officials see a number of issues on the horizon for the state. DHCPF's executive director is interested in finding a way to make managed care work for special needs groups, like the disabled. The expansion of Medicaid enrollment will continue to be widely debated.
DHCPF's executive director explains: "People took for granted that there was a lot of fluff in the system which could be used to cover the uninsured. The states have done very little direct work for the indigent, but there is a lot of indirect support. As indirect support gets squeezed, the direct funding is so small we will have a lot of tough decisions on our hands." He anticipates that maintaining the safety net will be very costly and adds, "The nature of the universal coverage debate will change dramatically if the safety net collapses."
While managed care is an accepted part of Colorado's health care system, state officials still face tough challenges in quality assessment and oversight and expansion of access to coverage.
Who Is Overseeing?
How Are They Doing?
Solvency Oversight of the Private Market
Quality Oversight of the Private Market
Medicaid Oversight
Coordinating Oversight
What Is Next for Oversight?
Additional Resources
www.chcpf.state.co.us
www.cdphe.state.co.us
www.dora.state.co.us/insurance
(Last updated September 2, 1999)
Illinois has 47 HMOs (of which five are licensed but have no enrollees), which enroll approximately 20 percent of its population. In 1993 Illinois enacted certain insurance reforms for small groups: guaranteed renewal, portability, credit for preexisting conditions, and rating-band limits. All sections of the act sunseted on July 1, 1998. In 1997, Illinois enacted the Illinois Health Insurance Portability and Accountability Act, which initiated reforms in the large- and small-group markets through its provisions on preexisting conditions, guaranteed renewability, and portability. The small-group market, which is defined as 2 to 50 lives, now has guaranteed availability of coverage.
The voluntary HMO program that Illinois offers to individuals who receive Temporary Assistance to Needy Families (TANF) has enrolled approximately 158,000 members in 14 plans.
In July 1994 the Department of Public Aid received a waiver for a statewide five-year mandatory managed care demonstration project, MediPlan Plus. The goal of the demonstration was to increase access and quality of health care for Medicaid beneficiaries and limit rising costs through the increased use of managed care. However, before MediPlan was implemented, the Balanced Budget Act of 1997 (BBA) was passed in the fall of 1997. At this time, the department has put implementation of MediPlan Plus on hold, as the BBA allows the department to implement a similar program without a waiver.
The department implemented the Responsible Choice program in April 1998. Individuals eligible to enroll in managed care will be expanded from TANF MAG (Medical Assistance with Grant) to also include Medicaid clients formerly categorized as AFDC (Aid to Families with Dependent Children) who only receive medical assistance (Medical Assistance No Grant, or MANG), clients eligible through medical extensions, clients eligible through the state Children and Family Assistance program and children (up to 133% of the federal poverty level [FPL]) and pregnant women (up to 200% of FPL) eligible under Phase 1 of the Children's Health Insurance Program (CHIP).
During 1996 and 1997, the state developed a new type of managed care provider––Prepaid Health Plans (PHPs). The state currently has contracts with seven PHPs with enrollment of approximately 23,300 members.
The Illinois Department of Insurance (DOI) shares licensing and oversight responsibility for HMOs with the Department of Public Health (DPH). DOI oversees solvency, monitors market practice, tracks consumer complaints, and refers quality-related complaints to DPH.
The Illinois Department of Public Health focuses on quality issues like network adequacy, quality assurance procedures, and physician standards.
The Illinois Department of Public Aid (DPA) runs the Medicaid program, including a voluntary statewide HMO program, and has oversight responsibility for PHPs. DPA has negotiated contracts with new plans, expanded Cook County enrollment by 35 percent, and expanded the managed care program to downstate Illinois.
The Illinois Health Care Cost Containment Council collects billing data from hospitals, and from freestanding rehabilitation and private psychiatric facilities.
The Illinois State Legislature (general assembly) has been moderately occupied with managed care issues, producing a package of small-group insurance reforms in 1993. During the 1995 session, the legislature debated, but then rejected, a strong patient protection act. Several pieces of legislation that would have changed the regulation of managed care entities or mandated certain coverages in health benefits plans have been proposed and considered in recent sessions. During 1999, SB 251 was passed and subsequently signed by the governor. This legislation is the most encompassing managed care reform bill passed in recent years. It contains provisions that broaden the definition of managed care, stipulate measures for utilization review and grievance procedures, and address provider issues.
DOI regulates all Illinois health care plans that provide services on a per capita, prepaid basis. Capitated contracts and incentive arrangements are permitted. By statute, HMOs in Illinois must belong to the State Guarantee Association, which covers the cost of all insolvent plans. The department enforces minimum standards for contracts between HMOs and providers and also has jurisdiction over acquisitions, which staff closely review for the protection of members. However, the supervisor of DOI's HMO financial analysis unit acknowledges that "it is hard to identify an HMO's true solvency when so much risk is transferred to providers without knowing these providers financial solvency." To help address this concern, a rule change established the requirement that HMOs submit financial statements from certain capitated providers to DOI upon request.
DOI also oversees registration of preferred provider organizations (PPOs). Each PPO must provide a detailed plan of operations, biographical background on its officers and directors, copies of all agreements, and descriptions of utilization review, complaint resolution, and grievance procedures.
Illinois regulatory agencies handle most quality oversight by tracking and resolving complaints. DOI conducts computerized tracking and analysis and deals with most complaints itself, including denials of specialist referral. Complaints about physician behavior or network adequacy are referred to DPH, which also inspects HMO sites and their facilities.
DOI has the statutory authority to make formal inquiries into all decisions and questions relating to care of Illinois residents enrolled in HMOs. The state does not require accreditation from the National Committee for Quality Assurance (NCQA), but "business is looking to NCQA the way they used to look for federally qualified HMOs. To be competitive it's where [the plans] have to go," explains the assistant deputy director of DOI's Life, Accident, and Health Compliance Section.
Most officials in the two agencies think that managed care organizations are not undermining medically necessary treatment, although they lack sufficient information for a definitive assessment. "We don't have a fine enough regulatory environment to tell what kind of quality HMOs are providing," admits DPH's director. DOI's assistant deputy director reports that, in his view, the financial incentives in capitation have not led to undertreatment.
During the 1998 session, the Illinois legislature considered a broad array of managed care bills ranging from redefined standards for emergency to coverage, regulation of utilization review processes, and patient advocacy programs to substantial rewrites of managed health care oversight through any of a number of proposed managed care patients' rights acts.
DPA oversees quality through peer review and supplies an 800 number for members to report unethical or illegal marketing practices or complaints. DPA's Bureau of Medical Quality Assurance responds to quality complaints, while reports of unethical or illegal activity are investigated by the Office of the Inspector General. Medicaid staff report few quality-of-care complaints. "We don't get many complaints related to quality because, under a voluntary program, clients tend to disenroll when they are not satisfied," explains DPA's bureau chief for managed care. DPA closely monitors marketing practices of the plans and prohibits plans from conducting door-to-door marketing. For quality oversight of the managed care program, DPA plans to contract with a quality assurance organization and to integrate HEDIS and other model measures.
To coordinate the multifaceted HMO regulatory activities in Illinois, DOI has established, and maintains, good working relations with DPH, DPA, and Central Management Services, which purchases health care for state employees. The agencies also work well with the federal Health Care Financing Administration. There is no joint, coordinated purchasing by Medicaid and state employees.
The business community performs some cooperative evaluations of HMO quality. The Chicago Coalition, a group of blue-chip companies, is working on a report card system, and DOI's assistant deputy director reports similar initiatives by other groups.
Illinois has strong, well-coordinated oversight policies in place. The major issue for the future is further action on patient protection measures.
Who Is Overseeing?
How Are They Doing?
Solvency Oversight of the Private Market
Quality Oversight of the Private Market
Medicaid Oversight
Coordinating Oversight
What Is Next for Oversight?
Additional Resources
www.state.il.us/INS
www.idph.state.il.us
www.state.il.us/dpa
www.state.il.us/agency/hcccc
(Last updated September 8, 1999)
Kansas was engaged in a major overhaul of HMO and managed care regulation in 1996, acting on recommendations for reform from three commissions. The Insurance Commissioner's Task Force released a report in January of that year, proposing changes in the states HMO statutes, which were originally passed in 1974; the state legislature subsequently introduced and approved a major solvency oversight reform bill. The Health Care Reform Legislative Oversight Committee was established in 1994 to carry out changes in state laws and regulations and changes necessitated by federal law. The Managed Care Implementation Committee, appointed by the secretary of Social and Rehabilitative Services and reporting to the Legislative Oversight Committee, recommended changes in the Medicaid managed care program.
In 1992, the legislature created a high-risk pool and passed a reform package to extend portability of coverage and provide for guaranteed issue and renewal in the small-group market. These reforms were refined in 1994.
Kansas has enrolled 82 percent of its eligible Medicaid beneficiaries in two managed care plans under 1915(b) waivers: Health Connect, a primary care case management (PCCM) program operating in 105 counties, serves 72,000 clients; PrimeCare Kansas contracts with licensed HMOs to provide care for 10,000 recipients in 67 counties.
Kansas's Insurance Commissioner is an elected position. The Kansas Department of Insurance (DOI) is responsible for state regulation and oversight of the commercial HMO market, and it monitors solvency and responds to consumer complaints. Recently passed legislation, based on the recommendations of the Commissioner's Task Force, revised the HMO statutes and increased the departments oversight of HMO capital requirements, stock offerings, internal grievance procedures, and disclosure of financial arrangements. The commissioner also has oversight responsibility for all risk-bearing managed care organizations.
The Kansas Department of Social and Rehabilitative Services (DSRS) oversees the state Medicaid program, including the 1915(b) waiver managed care programs, Health Connect and PrimeCare Kansas. The department has contracted with DOI to monitor the solvency of Medicaid managed care contractor plans and will use HEDIS measures as the basis for quality assurance.
The Kansas Department of Health and Environment (DHE) does not directly supervise managed care or integrated delivery systems. DHE focuses on public health issues like immunization; tracks health indicators for the state at large and for subpopulations; and oversees the development of data collection. Department staff also participated in the Medicaid Managed Care Implementation Task Force.
The Kansas State Legislature has worked actively to reform health care. Lawmakers passed a package of small-group reforms in 1992, which was expanded in 1994: the legislation created a seven-member health care data governing board to expand and systematize health care data collection; directed DSRS to begin pilot projects for Medicaid managed care programs; and mandated statewide implementation of Medicaid managed care by July 1997. During the 1996 session, the legislature passed bills to amend the state's HMO laws, strengthen DOI oversight authority, extend enrollment for some individual insurance products, and prohibit drive-through deliveries (postpartum length-of-stay restrictions).
The Kansas HMO legislative reform initiative is a response to consumer and health plan concerns about the adequacy of a 1974 law in the 1990s health care market. The insurance commissioner points out that the new kinds of risk-bearing organizations, like preferred provider organizations (PPOs) and point-of-service (POS) plans, were not even contemplated when the legislation was originally written. The commissioner appointed an advisory task force comprising the Kansas Hospital Association, Blue Cross plans, the Kansas Medical Society, representatives from managed care associations, key legislators, and consumers. The recommended bill, passed by the legislature in 1996, extends DOI authority and provides for increased financial oversight. It was modeled on legislation pioneered by the National Association of Insurance Commissioners (NAIC) and on reform measures enacted in New Jersey, Ohio, Minnesota, and Wisconsin.
The new HMO reform act in Kansas also attempts to strengthen consumer protection by clarifying emergency room reimbursement policies, introducing continuity-of-care language, and requiring HMO plans to disclose aspects of their contracts with providers. The original bill was softened in the legislature to limit the insurance commissioner's authority to determine what material should be disclosed, in keeping with Kansas policymakers' view that a proper balance should be maintained between fair market forces and regulatory consumer protection. The chair of the Legislative Oversight Committee explains: "We are in a mode of letting the market work, but still providing protections."
The goal of statewide managed care, either PCCM or capitated HMO-type, is attainable. The secretary of DSRS has established the Managed Care Implementation Committee, which consists of primary care physicians, providers, insurers, key state agencies, and advocacy groups, to advise the department on the transition. The team leader for the DSRS Managed Care Project considers that the state's diversity poses critical problems in developing Medicaid managed care. Kansas has both urban areas and very sparsely populated farming regions, each requiring different strategies. The department relies on two different plan designs: Health Connect, the PCCM program, and PrimeCare Kansas, the HMO contract component. The team leader thinks that DSRS has developed good informal ties with the Health Department and the Insurance Commission, and that the Implementation Committee has strongly influenced the shape of the managed care programs: "There have been many times we have said, 'Do things this way,' and they have said, 'You've got to be kidding,' and we've drawn back."
The legislative reform project has helped to strengthen and reinforce coordination between the legislature and the Kansas state agencies that regulate health care. The Insurance Commission, the Legislative Oversight Committee, and the Managed Care Implementation Committee have all been instrumental in devising common strategies for financial oversight, quality assurance, and Medicaid managed care.
Kansas policymakers expect to continue expanding state oversight of managed care. The insurance commissioner is developing support regulations, particularly in the area of disclosure of HMO financial arrangements. She also intends to propose legislation that would establish state oversight over PPOs and POS plans.
Several officials are interested in improving state agencies' ability to evaluate health delivery system quality. Quality issues are high on the insurance commissioner's list, although she acknowledges that her office has done "very little" in this area to date. The department has been consulting with experts in quality assessment, including the National Committee for Quality Assurance (NCQA) and the Kansas Foundation for Medical Care. "Once there is agreement on standards," explains the commissioner, "the task will be to incorporate the new upgraded standards into the enforcement process."
The public health director wants to expand data collection and analysis. While serving on the Managed Care Implementation Committee, he urged DSRS to develop concrete quality standards, such as immunization rates, and to offer incentives to plans that meet predetermined goals. The Health Department plans to take advantage of the opportunity created by the expansion of integrated delivery systems in the state to improve collection of health care data: "The hope is that data would go through a central data collection system, which only happens when there are large providers." The new system would provide comparative data on specific delivery systems, and thus might require a change in the existing statute, which prohibits the naming of individual providers. The Health Department will also monitor the success of managed care in Kansas's rural areas.
The first part of the Kansas reform program appears to have succeeded, leaving state officials with a good working basis for addressing financial disclosure, quality assurance, data collection, and Medicaid managed care expansion.
Who Is Overseeing?
How Are They Doing?
Solvency Oversight of the Private Market
Quality Oversight of the Private Market
Medicaid Oversight
Coordinating Oversight
What Is Next for Oversight?
Additional Resources
www.ink.org/public/kid
www.ink.org.org/public/srs
www.ink.org/public/hcdgh
(Last updated March 27, 1998)
Managed care has been introduced gradually into Maine, which now has seven HMOs that enroll 24 percent of its insured population. Maine was one of the first states to assure portability of insurance coverage and to institute a community rating system; the enactment of these two initiatives allowed the state to phase out its high-risk pool.
Maine filed and obtained approval of a 1915(b) waiver to implement a capitated managed care program for Medicaid clients. The state had planned to move 100,000 of its 165,000 Medicaid recipients into mandatory managed care by the end of 1997. With this goal in mind, the state bid the HMO contract in the spring of 1996 and again in August. None of the bids received could be accepted, however, because the provider networks were inadequate. The Department of Human Services has elected to pursue a primary care case management (PCCM) model to enroll Medicaid clients.
The Maine Bureau of Insurance (BOI) is the licensing agent for HMOs and preferred provider organizations (PPOs) in the state. BOI oversees insurance carrier solvency; tracks and resolves consumer complaints; and assists the Department of Human Services in reviewing quality of care for commercial HMOs.
The Maine Department of Human Services (DHS) runs the state's Medicaid program. DHS has begun voluntary enrollment of its client population in managed care, while planning to develop a primary case management system. The department also reviews and oversees cooperative agreements between hospitals' other providers under its Certificate of Need authority and is responsible for aspects of quality oversight.
The Maine Bureau of Health (BOH) is responsible for health services to the indigent and for preventing communicable diseases. The bureau has suffered extensive cutbacks during the states economic recession and has little involvement in managed care issues.
The Maine Health Care Finance Commission (MHCFC) has been eliminated. The Maine Health Data Organization (MHDO) was formed to take over the hospital discharge data set that was developed by the MHCFC. The MHDO is charged with collecting health data from a variety of health care providers.
Managed care and integrated health care delivery dominated the agenda of the Maine State Legislature in 1996. After much debate on a proposed any-willing-provider bill, lawmakers approved several of its provisions: prohibiting "gag" rules for providers who advocated on behalf of patients; enabling the formation of private purchasing alliances; and establishing a framework so that BOI could set standards for accessibility, grievance procedures, and complaint protocols.
Legislation conforming Maine law to the federal Health Care Portability and Accountability Act of 1996 (HIPAA) was easily passed in 1997 because many of HIPAA's provisions relating to guaranteed issuance, guaranteed renewal, and preexisting condition limitations already were part of Maine's small-group insurance market laws. One of the main provisions expanded the definition of the small group from up to 24 employees to up to 50 employees.
In 1997 the legislature also addressed the regulatory oversight of health carriers by implementing requirements for health care plans that addressed accessibility, grievance and complaint procedures, and coverage for emergency room services. Additional resources were allocated to the BOI for consumer education and assistance with the establishment of a Consumer Health Care Division. The three-member division was hired in 1999 to provide information regarding health plan options and obtaining health care coverage and services and assist consumers in resolving problems with the health care delivery system.
Issues related to mandatory health insurance benefits have continued to come before the legislature. Laws were enacted requiring carriers to provide coverage for certain services, including mandatory coverage of in-patient hospital stays following a mastectomy or lumpectomy for the treatment of breast cancer; coverage for annual mammograms for women age 40 and older; coverage for prostate cancer screening services; and coverage for off-label prescription drugs for the treatment of cancer, HIV, or AIDS. New laws effective in 1999 include Public Law 341, which requires health plans that cover prescription drugs to include coverage of contraceptives. Public Law 396 allows nurse practitioners to serve as primary care providers in managed care plans. Public Law 256 makes HMOs subject to the requirement to pay interest on delayed claim payments and the law prohibiting unfair claims practices.
HMO penetration has grown significantly in Maine's health care market. The state has increased its oversight activity of quality services delivered by Maine's licensed HMOs.
Contracting strategies and cooperative alliances constitute a significant area of activity. BOI has just begun to develop a regulatory plan to evaluate the solvency and assess the risk of various contracting arrangements. The bureau holds that a hospital or health care organization entering into a capitated contract must be the ultimate provider of the service, but it is also evaluating the difficulties that might arise should a provider enter into a global capitation arrangement and subcontract some of the services for which it has assumed risk. BOI submitted a bill addressing downstream risk in the 1998-1999 legislative session but it was held over until the 1999-2000 session.
DHS is authorized to approve cooperative agreements, which have traditionally involved ancillary services like joint hospital purchasing of laundry services. The commissioner reports that, despite an increasing number of hospital mergers, unless capital expansion is involved, there is little formal review of them. Two of Maine's tertiary hospitals have joined a partnership with Blue Cross/Blue Shield of Maine to develop and operate two HMOs. The consolidation among health carriers has seen CIGNA's purchase of Maine Healthsource and Aetna's purchase of Maine NYLCare. BOI has recently been apprised that Anthem is seeking to purchase Maine Blue Cross/Blue Shield. The review of this transaction will involve the formation of a charitable trust.
BOI and DHS have developed a memorandum of understanding and a working protocol and have formed an Interagency Task Force on the Quality Oversight of Commercial HMOs. DHS is in the process of proposing rules related to this quality initiative. Data collection tools and protocols have been developed with assistance from university and National Committee for Quality Assurance (NCQA) qualified reviewers to parallel the NCQA review process and look at quality requirements specific to Maine statutes.
BOI tracks consumer complaints and the new Consumer Health Division has been working with carriers to improve their complaint processes.
Since 1997, in the absence of any acceptable bids for a contract to provide Medicaid managed care services, Maine is providing health care to Medicaid clients through a PCCM mode. Only one of the 42 hospitals in the state is for-profit, and indigent residents rely heavily on Medicaid-supported clinics and on an extensive system of charity care.
BOI assists other Maine agencies with several health care issues. For example, the bureau continues to assist DHS with the quality oversight initiative. BOI also assists a Maine business group that is examining how best to collect information on service utilization in determining what data are needed and how the information could be used to control health care expenditures.
Maine's Medicaid program is likely to change dramatically over the next few years. The program has had significant success with the implementation of the PCCM system for Medicaid enrollees.
BOI intends to improve quality oversight in response to state legislators' desire for a better sense of the type and source of consumer complaints. The bureau is in the process of upgrading its licensing system. BOI is also developing regulations for legislative approval to address performance standards for health plan accreditation. As Medicaid primary care case management establishes itself in the state, and with the prospect of new health care mergers and alliances, Maine officials are working to improve their oversight structure.
Who Is Overseeing?
How Are They Doing?
Solvency Oversight of the Private Market
Quality Oversight of the Private Market
Medicaid Oversight
Coordinating Oversight
What Is Next for Oversight?
Additional Resources
www.state.me.us/pfr/ins/inshome2.htm
www.janus.state.me.us/dhs/welcome.htm
(Last updated September 2, 1999)
About 33 percent of the insured population in Minnesota is enrolled in one of the state's 10 nonprofit HMOs. HMOs are required by state law to be locally based, nonprofit organizations; Minnesota is the only state with this requirement. In addition, there are a significant number of health plans that are self-insured under ERISA; these organizations contract with HMOs or directly with provider care systems for health care but are technically fee-for-service plans.
Minnesota operates an 1115 waiver program for Medicaid recipients, known as the Minnesota Prepaid Medical Assistance Program (PMAP), in 54 counties. The state has several times expanded publicly subsidized coverage for indigent uninsured residents (MinnesotaCare). The most recent expansion occurred through an amendment to Minnesota's 1115 waiver, which achieves the following: it expands Medicaid eligibility for children between the ages of one and two whose family income does not exceed 275 percent of poverty; it incorporates MinnesotaCare families and children into Medicaid and moves them into managed care; and it expands PMAP, which by August 1999 had an enrollment of 264,000. The ultimate goal is to provide managed care coverage to the entire state. The state has also been authorized by the Health Care Financing Administration (HCFA) under a separate 1115 waiver to implement a demonstration project, Minnesota Senior Health Options, for Medicare recipients who are also eligible for Medicaid as well. The program combines Medicare and Medicaid funding. Voluntary enrollment for this project began in February 1997 for two counties and will be expanding in additional counties as health plans finalize their networks. Enrollment in 1999 was 3,000 elderly people.
The Minnesota Department of Health (MDH) is the primary regulatory entity for private-sector managed care. MDH oversees HMO solvency and quality issues; approves licenses; sets both minimum and maximum capitalization requirements; audits HMOs and their providers for compliance with quality and access standards; tracks and responds to consumer complaints; and uses a database of HMO health performance measures.
The Department of Commerce, which includes the Insurance Commission, oversees all indemnity insurance including PPOs (preferred provider organizations) and Blue Cross/Blue Shield, but it has no regulatory responsibilities for the HMO market.
The Minnesota Department of Human Services (DHS) oversees the Medicaid program, which consists of the following: PMAP for categorically eligible recipients; MinnesotaCare for low-income uninsured families and children; and Minnesota Senior Health Options for dually eligible Medicare clients. PMAP enrollment services are provided through the counties. DHS manages the health plan contracts; sets standards for access and quality; and handles consumer complaints. There is no direct marketing of health plans to Medicaid and MinnesotaCare recipients.
The Minnesota State Legislature (house and senate) has been extremely active in the managed care and the provision of subsidized care for the indigent. The MinnesotaCare plan, passed in 1992, was revised and extended in every session since it was created. Eligibility for MinnesotaCare was expanded to include adults without children with incomes up to 175 percent of poverty. The legislature also has passed a comprehensive managed care consumer protection act.
Minnesota's health commissioner reports that the public is deeply concerned about the dominance of three major health plans, which together enroll more than 60 percent of the market. Two of the three, Health Partners and Allina, are HMOs; the total membership of the third, Blue Cross/Blue Shield, is 1.4 million, of which 5 percent is in the Blues' HMO and 69 percent is in one of several PPOs. The media and advocacy groups have treated the imbalance as a major issue. As the former commissioner of the Commerce Department noted, "Mergers have happened and government does not have rules in place to respond. It is open to debate how we should respond."
Although competition is still strong in Minnesota, there are concerns that the stream of mergers has limited consumer choice. DOH thinks that the mergers have created an image problem but have not undermined actual care. DOH tracks a number of health status indicators and believes the plans are doing well on these measures.
Minnesota has been among the nation's leaders in Medicaid managed care programs and has pursued their implementation steadily but gradually. The incremental expansion of the program has allowed Minnesota to avoid the problems that other states have encountered, according to the Medicaid director. The highly developed market familiarized recipients with the nature of managed care before Medicaid began enrolling them in capitated plans.
Enrollment is an ongoing process. Participants in most counties have four or five plans to choose from, and the program relies on county workers to advise the enrollees. The department is debating the possibility of enrollment without personal contact. Face-to-face pre-enrollment educational presentations to all populations are expensive, and the director is exploring alternative ways to inform and enroll participants.
County officials are worried that capitation is leading HMOs to deny payment for certain public health and social services, thus shifting the burden to the county public health services; they have asked for more control over the capitated Medicaid program.
The 1997 legislature authorized the development of county-based purchasing, a new system in which counties, singly or in groups, would provide or contract with health care providers for Medicaid services. Counties would receive a capitated payment from the state agency, and would be at risk for costs over that amount.
The Medicaid program promotes quality through several devices, employing internal plan grievance procedures, county advocates, and the state ombudsman's office. Minnesota requires the plan to notify both the enrollee and the state every time coverage is denied. Enrollees may then appeal directly to the plan; if that fails, they may bring their case first to the county advocate and then to the state PMAP ombudsman. Fewer than ten appeals reach the ombudsman each quarter.
The advocacy and grievance process has highlighted mistakes and indicated areas for improvement. Program officials "want to focus on outcome measures" rather than rely on individual case review, according to the Medicaid director, but they have not yet undertaken such a program. The program also uses quality assurance review initiative (QARI) measures, and it worked with other public and private purchasers of health services to complete a detailed consumer satisfaction survey. The state is now implementing Medicaid HEDIS, which became available in 1996.
The Medicaid director sees contracting and purchasing services as important strategies for oversight. She thinks it important not to "take your savings out of the state administrative area. If you do that, you will see your expertise on the other side of the table." She adds that contract negotiations should be an agency, not a legislative, responsibility. "Give staff parameters and then let them do their job."
Minnesota is trying to improve managed care performance by developing connections between different forms of contracting. The Department of Employee Relations, which manages state employee health care purchasing, has allied with the Buyers Health Care Action Group (BHCAG), which comprises the 24 largest employers in the Twin Cities. According to the director of Managed Care Programs for the Minnesota Department of Human Resources, BHCAG has had "a significant impact" on contracting between purchasers and health plans. The Department of Employee Relations has an affiliated seat on BHCAG and participated in the development of its Request for Proposals but so far has not participated in actual purchasing.
Contract negotiation teams for the Department of Employee Relations and Medicaid managed care participate in each other's meetings with health plans but have not pooled their purchasing power.
Managed care quality concerns have prompted several new reform proposals in Minnesota. One measure was the Patient Protection Act of 1997, which seeks to prevent health plans from interfering with the doctor-patient relationship and to provide patients with accurate information about the financial relationship between their health care providers and health plan companies. Doctors and nurses will also be free to discuss, without fear of retaliation, diagnostic, treatment, or referral options not covered or limited by the health plan company.
The Medicaid program intends to continue to use contracting to improve managed care performance, to refine its purchasing strategies, and to use financial incentives to encourage plans to submit new ideas for better delivery of care. Officials from the Medicaid managed care program and the Department of Employee Relations are working on similar data systems and procedures for network data analysis, although they expect to keep their contracting function separate for at least the next several contract rounds.
Minnesota is also in the early stages of developing long-term care delivery system models. Minnesota Senior Health Options began providing long-term care under HMO contracting arrangements in 1997.
Who Is Overseeing?
How Are They Doing?
Solvency Oversight of the Private Market
Quality Oversight of the Private Market
Medicaid Oversight
Coordinating Oversight
What Is Next for Oversight?
Additional Resources
www.health.state.mn.us
www.health.state.mn.us/divs/hpsc/mcs/mcshome.htm
www.commerce.state.mn.us/mainin.htm
www.dhs.state.mn.us
www.mhdi.org
(Last updated August 30, 1999)
The Montana health insurance market is dominated by plans offered by Blue Cross/Blue Shield (BCBS) of Montana, which enrolls 45 percent of the insured population. Managed care penetration in this large but sparsely populated state is still less than 10 percent of the population, but growing. BCBS has expanded their HMO line of business, organizing HMOs in the central and western thirds of the state. BCBS has acquired 50 percent ownership of Yellowstone Community Health Plan, an HMO in Billings, which is available in many counties in the eastern third of Montana. New West Health Plan, licensed since October 1997, does business in the Billings, Missoula, Havre, and Helena areas. An HMO in Kalispell canceled its license due to a lack of business.
Of Montana's 80,000 Medicaid-eligible residents, 45,000 receive services through a primary care case management plan. The state began a capitated Medicaid program, under a 1915(b) waiver, and had 3,000 clients enrolled by the end of 1998. Montana requested an 1115 waiver to carve out a capitated mental health program and expand coverage to residents with incomes below 200 percent of federal poverty guidelines, but the waiver was denied by the Health Care Financing Administration (HCFA). Medicaid officials have now developed an alternative plan, funded entirely through the state budget, which will serve people with severe mental illness whose incomes are below 200 percent the federal poverty level (FPL). The contract for mental health managed care was terminated in May 1999 and the state is now operating a fee-for-service-based system with utilization controls. Eligibility for non-Medicaid eligibles was reduced to 150 percent of FPL.
The State Auditor's Office houses the Montana Insurance Department (MID). MID is the primary regulatory agency for the private managed care market. The office regulates all insurers but has no authority to regulate providers unless they assume risk.
The Department of Public Health and Human Services (DPHHS) houses public Health Programs and Medicaid. In 1997 the legislature approved regulation of managed care, establishing network adequacy and quality assurance standards to be enforced by DPHHS. DPHHS established rules for the law, which is scheduled to be fully implemented by October 1, 1999. Primary care case management and the new capitation plan are under the Medicaid program, which relies upon a set of modified HEDIS standards to measure quality. Having had a bad experience in contracting out managed care for indigent residents with severe mental illness, DPHHS has reassumed the risk and is exploring managed care options with consumers and legislative committees.
The Montana State Legislature, by law, meets for 90 days every other year, although there have been special sessions in the off years between 1983 and 1993. The 1995 legislature created the Montana Health Care Advisory Council (HCAC), which includes membership from the public and four legislators. HCAC issued its report, recommending several initiatives, in October 1996, but funding was not approved by the legislature. However, HCAC itself was extended through June 2000.
Before mid-1996 there had been only limited HMO activity in Montana, because the state is very rural and sparsely populated. HMOs must apply to the Insurance Department for licensure and meet all state standards; also, all health insurers must submit utilization review procedures to MID.
MID has a staff of eight to deal with consumer complaints related to extent of coverage, claims processing, and other insurance problems; quality assessment and network adequacy laws and rules are enforce by DPHHS.
Montana's capitated Medicaid managed care program began in 1996. Medicaid contracts with the managed care plans require them to pay for emergency room use, and for family planning services, immunizations, and sexually transmitted disease treatment, which will be provided by local public health clinics. Program officials plan to use a modified HEDIS evaluation with four to five measures for quality assessment; they will also be monitoring provider capacity and client access to services.
At the end of 1997, 19.5 percent of the state's population remained uninsured. A state legislator commented that the "whole issue of the uninsured won't go away."
Montana officials have learned from experiences in other areas and intend to be prepared for the expansion of the managed care market in their rural state.
Who Is Overseeing?
How Are They Doing?
Solvency Oversight of the Private Market
Quality Oversight of the Private Market
Medicaid Oversight
What Is Next for Oversight?
Additional Resources
www.state.mt.us/sao/insdiv.htm
www.dphhs.state.mt.us
(Last updated September 8, 1999)
Nebraska's HMO market is still young, with five HMOs enrolling less than 10 percent of the insured population. Omaha has the highest managed care penetration in the state. A policy advisor to the Health and Human Services System (HHSS, formerly the Department of Health) thinks that every primary health care provider in the city has contracted with one of the plans. However, the state is heavily rural, and networks have not spread widely elsewhere.
Nebraska began implementation of a 1915(b) waiver for Medicaid managed care in July 1995. The medical-surgical component of the program was implemented in Douglas, Sarpy, and Lancaster Counties only. A fully capitated mental health contract was implemented on a statewide basis.
The Nebraska Department of Insurance (DOI) regulates HMO solvency. The department's "market conduct" group monitors claims handling, oversees timely resolution of complaints, and reviews terminations of insurance.
The Health and Human Services System (HHSS) has the authority to oversee HMO quality assurance and has received grants and seed money from the Robert Wood Johnson Foundation to help develop managed care networks for rural areas. The department uses informal methods to monitor changes in managed care penetration.
The former Department of Social Services (now part of the HHSS), which manages the Medicaid program, implemented the transition to managed care.
Oversight by Nebraska's unicameral Legislature has been limited. The chairman of the Health and Services Committee, which handles all issues related to health and human services, reports that managed care takes only a fraction of his attention. The legislature set up a Managed Care Commission to oversee the transition to Medicaid managed care, chaired by the director of the former DOH. The commission was advisory only and did not write rules and regulations. The Commission's authority sunseted in the spring of 1997.
The DOI continues to regulate HMO solvency. During the summer of 1997, a task force conduced a study of the regulation of managed care. This task force included the DOI, HHSS, the offices of Senator David Landis and Senator Don Wesely, domestic insurers, and representatives of hospitals and medical professionals. As a result of the study, a bill, LB 1162, was introduced in the legislature in the 1998 session that adopts the following five National Association of Insurance Commissioner (NAIC) model acts: (1) Health Care Professional Credentialing Verification Act; (2) Managed Care Plan Network Adequacy Act; (3) Quality Assessment and Improvement Act; (4) Health Carrier Grievance Procedure Act; and (5) Utilization Review Certification Act.
DOI is the Nebraska state agency for oversight of the private market and is primarily concerned with solvency issues. Provider Sponsored Organizations (PSOs) that assume risk in Nebraska must be licensed either as HMOs or insurers. PSOs that contract with HMOs and insurers and do not themselves assume risk are not seen as a problem. This situation could change in light of the Balanced Budget Act of 1997, which allows PSOs to assume risk for Madicare + Choice products and to obtain a waiver from the Health Care Financing Administration (HCFA) from state regulation.
Quality oversight of HMOs has not been a major issue of concern in Nebraska. DOI receives all complaints, including issues of access to care and quality of care. Although these may be referred to HHSS for investigation, the department reports it has received only minor problems not requiring specialist review.
In 1993 Nebraska's governor and legislature directed the former Department of Social Services to implement the managed care program as quickly as possible. The managed care program for the general Medicaid population has been successful. The two HMOs offering services have "really done an outstanding job," reports the Medicaid director. The department developed contracting standards and procedures, relied on private sector contractors, and hired personnel with private sector experience. Staff also talked to Medicaid officials in states and worked with HCFA personnel.
Nebraska has completed a merger of its health-related programs, including health, mental health, and social services, into a new agency, whose three divisions will oversee service delivery, quality monitoring and regulation, and finance and support services. The merger strategy is designed to achieve three goals: better coordination of policy, greater administrative control over programs funded through block grants, and streamlining of state government. The partnering entities make up the HHSS, which combines the former agencies of Social Services, Health, Public Institutions, Aging, and Juvenile Justice.
There has not been much state effort to coordinate health care purchasing activities.
Although plans are in progress to enroll rural Medicaid clients in managed care, Nebraska's rural market is not ideal for capitated managed care. However, there is slowly evolving interest in forming integrated health organizations to provide services in rural Nebraska.
Officials think that concern about the quality of HMO care will grow. As penetration increases, people will demand more oversight from a quality assurance standpoint. Enactment of effective quality regulation will continue to be the result of pressure from the bottom up, based on public response rather than agency initiative.
The planned merger of health care agencies will have a major impact on Nebraska's efforts to extend managed care coverage, control costs, and ensure quality, but consequences of these mergers are not yet clear.
Who Is Overseeing?
How Are They Doing?
Solvency Oversight of the Private Market
Quality Oversight of the Private Market
Medicaid Oversight
Coordinating Oversight
What Is Next for Oversight?
Additional Resources
www.nol.org/home/NDOI
www.hhs.state.ne.us
(Last updated March 27, 1998)
Managed care has barely penetrated the state of North Dakota: its only two HMOs enroll 3 percent of the insured population. The state legislature passed an incremental, but wide-ranging, health insurance reform package in 1995. This act mandates portability of coverage, guarantees issue and renewal of small group insurance, establishes standard and basic health plans, and limits exclusions based on preexisting conditions. As of January 1997, this law prohibits gender-based rating in group and individual health plans.
The reform bill expanded Medicaid coverage to include children aged 13 through 17. North Dakota has implemented a statewide primary care case management (PCCM) program for Medicaid clients and is developing an HMO pilot project in one county under a 1915(b) waiver.
The position of commissioner of the North Dakota Department of Insurance (DOI) is an elected one. DOI is the sole agency responsible for licensing all commercial HMOs, and for overseeing their solvency, market practices, and quality.
The North Dakota Department of Health (DOH) has no formal oversight responsibility for private market HMOs, but it consults with the Department of Human Services regarding Medicaid managed care and with DOI when assessing the quality of care of commercial HMOs.
The Department of Human Services (DHS) manages all Medicaid programs, including the HMO pilot project and the PCCM program. The HMO pilot will provide coverage for 2,000 residents in one county. The PCCM, implemented statewide in January 1994, covers approximately 27,000 of the 47,000 Medicaid-eligible recipients in the state.
The North Dakota State Legislature (senate and house) meets every other year. Although lawmakers have not been actively involved in managed care oversight since they passed the comprehensive health care reform bill in 1995, the legislature's Human Services Committees continue to receive reports on the implementation of the Medicaid pilot project and other managed care programs.
If managed care is defined as coverage through an HMO, North Dakota's managed care enrollment is among the lowest in the nation. The DOI's life and health actuary says that managed care is not a major state issue and that DOI receives few inquiries from new plans seeking licensure in the state. The state health officer (SHO), however, points to a significant level of concentration that could facilitate the future growth of managed care. Eight hundred of the 1,100 physicians in the state belong to one of the seven medical groups that are responsible for 85 percent of all hospital admissions.
While North Dakota's small, low-density population (fewer than 1 million people, with only 9 people per square mile) has created only two home-grown HMOs, a large portion of the population covered under a group health plan receives care through an exclusive provider organization (EPO) or a preferred provider organization (PPO). In some large group health plans, up to 80 percent of the plan members receive care within a provider network offering lower co-payments and deductibles.
Under a program to increase access in rural areas, health care providers who set up cooperative ventures may request state certificates of public advantage, which protect them from antitrust laws; no group has yet taken advantage of this option. According to the SHO, providers may be establishing, acquiring, or entering into agreements to manage rural health care facilities instead of launching cooperative ventures, thereby avoiding antitrust problems altogether.
DOI has been given statutory responsibility for oversight of HMO quality of care in North Dakota. National attention to quality issues has prompted DOI and legislative activity, although no such problems have been reported within the state. The minority leader cites inappropriate 24-hour postpartum discharge as one issue, although statistical evidence in North Dakota does not support the assertion that early postpartum discharges are a problem. The department has commissioned an independent study by experts who will recommend strategies for improving oversight. The legislature has considered both patient protection and any-willing-provider bills but has not yet passed either measure.
North Dakota's Medicaid director explains that the prepaid pilot program "will go very slowly," as it is an open question whether HMOs can be successful in a rural state: "We would like to determine if a true capitated system can work in North Dakota." Medicaid officials and HMO representatives began to negotiate the design of the program and the contract in mid-1996. Although the pilot project will cover only 2,000 people, it has attracted the attention of many providers. The director comments: "We have received many inquiries . . . asking if managed care will result in reduced services to recipients." The SHO is also determined that managed care include measures ensuring quality oversight and coverage of special groups.
The DHS Medicaid program will likely coordinate oversight with DOI, DOH, and local North Dakota health agencies. The Medicaid director thinks it important to work closely with the county offices that administer Medicaid eligibility: "Local control matters in North Dakota. . . . We have a good working relationship with all agencies." The SHO, however, comments that the pilot project "is not as coordinated as I would like. . . . We've encouraged them to have per-visit indicators, National Committee for Quality Assurance (NCQA) accreditation, HEDIS, and to make sure special groups get care. They are considering these requests." The Medicaid director responds that the contract has not yet been written, but that these provisions are being considered for inclusion.
Because DOI is solely responsible for overseeing commercial HMOs, it has not had to coordinate any activities, other than data collection, with other agencies.
DOH has begun to collect extensive health data. Third-party payers supply claims abstracts, which are integrated into a database of information on every office visit made by an insured patient. The SHO plans to classify the information by region, county, and zip code to show the extent of access and utilization.
Important health care initiatives in North Dakota came to fruition in 1997. The Medicaid program planned to complete negotiations for the HMO pilot project and then to implement it. DOI will have considered the quality oversight recommendations that emerged from the independent study and will have decided what actions to take. DOH continues the long-term development of its data collection system. These programs will provide an important foundation for oversight if managed care plays a larger part in North Dakota's health delivery system.
Who Is Overseeing?
How Are They Doing?
Solvency Oversight of the Private Market
Quality Oversight of the Private Market
Medicaid Oversight
Coordinating Oversight
What Is Next for Oversight?
Additional Resources
www.state.nd.us/ndins
www.state.nd.us/humanservices
(Last updated September 1, 1999)
At the end of 1997, there were 11 licensed HMOs in Oklahoma with a total enrollment of 455,665; as of April 1998, there were 14 licensed HMOs.
The state has been active in health insurance market reform. In 1992 Oklahoma adopted small-group reforms, including portability of coverage, and enacted the Small Employer Insurance Reform Act, which established pooling and rating bands. In 1994 the legislature expanded this law by providing for guaranteed issue of a standard package, which small-group insurers are mandated to offer as a condition of doing business in the state.
Oklahoma has made moving its Medicaid recipients into managed care a high priority. In 1993 a law known as SB 76 mandated statewide conversion of the Medicaid program from fee-for-service to managed care. Approval of a 1915(b) waiver in May 1995 enabled the Oklahoma Health Care Authority (HCA) to begin enrollment of urban recipients in the five plans that had been awarded contracts. The legislature amended SB 76 in 1995, requiring HCA to have 50 percent of all Medicaid clients in the three largest cities in managed care plans by July, with the balance enrolled by 1996; however, in the 1996 legislative session, that target date was moved to July 1, 1997. In January 1995, the state submitted an 1115 waiver, requesting more flexibility to adapt managed care models for urban and rural areas, to the Health Care Financing Administration (HCFA); the new waiver was approved in October 1995.
In October 1996, the primary care case management (PCCM) program, SoonerCare Choice, was initiated in Oklahoma. As of December 1997 there were 125,337 member enrollments for Medicaid Managed Care in Oklahoma. There were 75,004 members enrolled in its urban program, SoonerCare Plus, and 50,333 in its rural program, SoonerCare Choice.
The Oklahoma insurance commissioner is an elected position. The Department of Insurance (DOI) provides information on solvency and market practices to the Oklahoma Department of Health, which licenses HMOs.
The Oklahoma Department of Health (DOH) is the statutory agency responsible for all aspects of HMO licensure. DOH evaluates network adequacy, grievance procedures, and quality assurance; and evaluates financial solvency and market practice information received from DOI.
The Oklahoma Health Care Authority (HCA) was established in 1993 to administer the state Medicaid program and to oversee some components of state-purchased health care; the agency took over complete responsibility for Medicaid in January 1995. HCA is overseen by the governor, through the secretary of human services, and by the legislature through a Joint Oversight Committee composed of three senate members and three house members. The authority also has a board composed of seven members; three are appointed by the governor, two by the president of the senate, and two by the speaker of the house.
The Oklahoma State Legislature has been active in health care reforms. Lawmakers passed insurance reforms in 1992 and 1994, and approved SB76, the Medicaid managed care act, in 1993. The legislature has also approved several health care mandates, including 48-hour postpartum care; a prohibition on "gag" rules; and coverage for equipment and supplies related to the treatment of diabetes. Important health care bills passed in 1996 addressed the Columbia/HCA agreement for joint operation of the University Hospitals and the Presbyterian Hospital and for disclosure requirements in regard to discounting practices.
Senate Bill (SB) 639 was enacted in the 1997 legislative session and was intended to utilize the state's Medicaid managed care program as a vehicle to expand health coverage to Oklahoma's uninsured children and pregnant women. Implemented on December 1, 1997, the expansion brought categorical groups of children and pregnant women into the SoonerCare program at up to 185 percent of the federal poverty level (FPL).
House Bill (HB) 1860 (1997) amended SB 76, postponing the inclusion of the aged, blind, and disabled populations into a managed care delivery system to July 1, 1999. HCA has ongoing extensive and integrated efforts underway to assure a smooth medical transition for these patients. House Bill 179 created the Task Force on Medicaid Managed Care Services for People with Developmental Disabilities to examine the application of managed care principles and practices to this population.
In 1998 Governor Frank Keating signed Oklahoma's Title XXI State Children's Health Insurance Plan application to HCFA to use Title XXI funds to expand Medicaid coverage and designated HCA as the agency responsible for the administration of the program; HCFA approved the application in March 1999. HCA will use of the funds for expanding Medicaid eligibility as a complement to the Medicaid expansion under SB 639.
DOI oversees all Oklahoma HMOs and indemnity insurance plans, but has no oversight authority over individual providers. However, in 1983 DOI adopted a new regulation, prohibiting plans from penalizing their providers for specialist referrals, in response to early HMO efforts to control utilization. There is no prohibition against provider bonuses for reducing referrals or scaling back treatment services, as these have not been issues of concern in the state.
According to DOH's deputy commissioner, the rate of HMO complaints reached a high in Oklahoma in 1987-88, has since declined, and has not increased as market penetration has increased. On the other hand, he emphatically points out that consumer complaints reflect a perception of HMO quality different from public concern over managed care, which is growing. The chair of the House Public Health Committee thinks that the media have not "picked up on managed care problems."
The deputy commissioner characterizes his department's oversight approach as the creation of a framework for quality assessment, supplemented by "after-the-fact problem solving." The agency is not heavily funded for quality oversight and "doesn't have the resources to go out and aggressively assist organizations to become effective." DOH relies on a peer review organization to conduct twice-yearly HMO reviews; requires plans to seek accreditation from one of four approved certification organizations; and plans to adopt the forthcoming series of HEDIS measures.
In addressing consumer complaints, DOH cannot overrule HMO treatment decisions, but relies on informal discussion. "We are a jawboner," explains the deputy commissioner.
Under the approved 1115 waiver, HCA moved Oklahoma's rural Medicaid population into a PCCM program. The PCCM supplements the mandatory HMO program operated in Tulsa, Oklahoma City, Lawton, and surrounding areas. The program includes a fully integrated mental health care component. The enrollment of aged, blind, and disabled Medicaid populations into managed care was set to start in July 1999.
HCA officials realize that the HMO program will require new oversight mechanisms. "In managed care, expectations are so much higher. You can expect them [HMOs] to be more responsive than fragmented providers," notes the associate director for policy. HCA views data collection as a crucial part of an effective contracting program, and staff worked to establish data systems up front, drawing on the experience of other states. The agency holds five mandatory monthly meetings with HMO representatives––senior administrators, medical directors, information systems staff, and mental health and marketing and client relations personnel––to address issues as they arise.
A survey was sponsored by HCA and carried out by the Oklahoma Foundation for Medical Quality, Inc. (OFMQ), in the winter of 1997. A total of 8,675 members of five HMOs in the SoonerCare Plus plan completed the survey. These people had been with their SoonerCare Plus HMO for at least six months and were chosen to represent all members. OFMQ analyzed the survey results and collaborated with HCA on the design of the report. The report card will be mailed out to all SoonerCare Plus members.
DOH and DOI staff characterize their relationship as "cooperative." HCA maintains close ties with the legislature through its oversight committee and will be responsible for coordinating specific aspects of state health care purchasing.
DOH's deputy commissioner thinks that the most important issue facing the state will be the impact of the managed care expansion on the medical safety net: "The system is not being designed to deal with uncompensated care. Everyone is ratcheting down their part of the system. It will force cost shifting in the system down to zero.... The only place for the uninsured to go [will be] acute care [emergency facilities]. That costs big money." He adds that capitated managed care will "define the problem rather than hide it, and maybe that's an advantage."
Oklahoma's rapid move into Medicaid managed care will require careful monitoring and planning by legislators and agency staff to ensure the most effective oversight and coordination.
Who Is Overseeing?
How Are They Doing?
Solvency Oversight of the Private Market
Quality Oversight of the Private Market
Medicaid Oversight
Coordinating Oversight
What Is Next for Oversight?
Additional Resources
www.oid.state.ok.us
www.health.state.ok.us
www.ohca.state.ok.us
(Last updated August 31, 1999)
With only three licensed HMOs, enrolling about 3 percent of the state's 480,000 people, Wyoming ranks among the lowest states in HMO penetration. The Health Reform Commission offered 49 recommendations for action in 1995; the Wyoming legislature enacted nine of these, including insurance reform measures; antitrust protections for providers and consumers; an upgraded managed care act, based on model legislation from the National Association of Insurance Commissioners (NAIC); and expansion of the Office of Rural Health. The state also passed a comprehensive any-willing-provider act, mandating that any provider who meets the published terms and conditions of an HMO or preferred provider organization (PPO) must be allowed to participate. The Medicaid program relies on fee-for-service providers and does not have a managed care component. There is a selective contracting program for recipients under 21 for specific services, including neonatal care, organ transplants, and extended psychiatric services.
The Wyoming Insurance Department (WID) shares licensing and oversight responsibility with the Health Department; oversees plan solvency; and monitors market practices.
The Wyoming Health Department (WHD) has responsibility for reviewing HMO network adequacy, quality assurance, and grievance processes. The department has no authority to overrule HMO treatment decisions or outcomes of internal grievance procedures.
The Division of Health Care Planning and Implementation (DHP&I) within WHD runs Wyoming's fee-for-service Medicaid program. The division contracts with out-of-state providers for tertiary care not available in Wyoming.
The Wyoming State Legislature (senate and state) alternates every other year between general and budget sessions. Lawmakers have passed several major health reform measures, including the HMO act and the any-willing-provider law.
Wyoming's rural and isolated population is an unpromising market for managed care. Nineteen of the 23 counties in this state are medically underserved. "People are more concerned about medical access" than about saving money through managed care, explains WID's insurance standards consultant. The newest HMO in the state was organized by local physicians as a defensive maneuver against out-of-state HMOs, according to the chairperson of the State Senate's Labor, Health, and Social Services Committee, and had not enrolled any patients as of mid-1996. There are a few PPOs, but the state does not require them to be licensed unless the PPO assumes risk.
The state adopted a law based on NAIC guidelines because of concerns that its solvency requirements were too weak. The new statutory capital requirements for HMOs are $1.5 million in net worth and operating capital and a $300,000 line of credit. The law also incorporated HMOs into the state's insurance guarantee fund.
WHD has responsibility for evaluating the provider networks and quality assurance procedures of Wyoming HMOs. Ongoing review has not been an issue because of the small market. WHD is required by law to conduct a review every five years, but WHD's director states that if the department received a large number of complaints about a particular plan, staff would probably conduct an earlier review. The director usually defers to HMO decisions on treatment or grievance resolutions.
Wyoming's Medicaid program relies entirely on fee-for-service medicine and has no contracts with HMOs. DHP&I has not been approached by any HMOs and has made the decision not to pursue contracts with them at this point. DHP&I's administrator sees the very small HMO market as a dilemma for Medicaid. A voluntary HMO alternative would offer only limited cost savings since fee-for-service medicine is so readily available. Ninety-five percent of the doctors and all of the hospitals in the state participate in Medicaid. The state also has a "freedom of choice" waiver, which allows negotiation of contracts with out-of-state providers for health care services not available in Wyoming.
The state would have to apply for an 1115 waiver to work exclusively with a single HMO. "We are open to examining managed care networks," says the administrator, "but we are not currently pursuing it."
With low levels of managed care enrollment, coordination of oversight is not a high priority in Wyoming. WID and WHD share oversight responsibility for commercial HMOs and report a good working relationship.
There is some difference of opinion about the future of managed care in Wyoming. WID's insurance standards consultant does not expect dramatic growth in managed care; the chair of the Senate's Labor, Health, and Social Services Committee thinks growth may occur after a few more years. WHD's director also expects that growth will likely be slow in the state overall, but will probably begin increasing at the borders of the state. The Medicaid program has organized a forum, including providers, state agency staff, legislators, business representatives, and other stakeholders, to discuss implementing Medicaid managed care in Wyoming. Slow market growth should continue to allow the state to prepare itself for future change.
Who Is Overseeing?
How Are They Doing?
Solvency Oversight of the Private Market
Quality Oversight of the Private Market
Medicaid Oversight
Coordinating Oversight
What Is Next for Oversight?
Additional Resources
www.state.wy.us/~insurance
www.wdhfs.state.wy.us/WDH
www.wdhfs.state.wy.us/WDH/medicaid.htm
(Last updated September 2, 1999)