| HIGHLIGHTS |
ACAP Hires Lobbyist to Help Protect Medicaid
The association has hired Chris Koppen, President of the Avancer Health Policy consulting firm and former employee of NACHC, to assist ACAP staff with their advocacy and public policy goals. The ACAP board recognizes that this will be a critical year in shaping the future of Medicaid. ACAP plans to insert its voice in policy discussions with health care decision makers in Congress and the Administration. In addition ACAP has identified several other emerging policy issues relevant to our members.
The overarching objectives of Mr. Koppen's work will be to: 1) increase ACAP's visibility and credibility with members of Congress and the Administration, 2) represent ACAP in efforts to protect the Medicaid program, 3) advance ACAP-specific proposals including legislation on ACAP's drug rebate proposal and a Medicare demonstration initiative, and 4) provide ACAP with timely information on policy issues impacting our plans.
ACAP Fields Survey on Actuarial Soundness
ACAP and the Medicaid Health Plans of America (MHPOA) have commissioned a study by The Lewin Group to understand how states are developing capitation rates for their Medicaid managed care programs now that the BBA actuarial soundness requirements are in effect. The final study will be used to help CMS, the states, and Medicaid health plans better understand common practices in rate development and alternative approaches that might be considered.
The Lewin Group will collect information regarding the Medicaid managed care rate-setting process from the 22 states in which ACAP and MHPOA member plans operate. The survey has also been sent to all of the members of ACAP and MHPOA. Lisa Chimento of the Lewin Group will discuss the preliminary fundings of the survey at the February 14th ACAP Board meeting. Plans are asked to submit the survey to the Lewin Group by February 7.
Actuarial Soundness Survey
ACAP Plans are reminded that February 7th is the deadline for submitting the survey regarding the Medicaid managed care rate-setting. More information is available on the Members' Only section of our website under plan surveys.
Colorado Access Wins Mental-Health Contract
For the third consecutive time, the state of Colorado selected Colorado Access, a member of ACAP, to provide mental health carve-out services for over 70,000 recipients in Denver County. Colorado Access partnered with the Mental Health Center of Denver (MHCD) in submitting its bid for the nearly $100 million, four-and a-half year contract. According to Colorado Access staff, their company proposal received the highest score in Denver and of all the proposals.
Colorado Access was selected over two other bidders, including ValueOptions Inc., the only outside contractor in the state's mental health program. The January 24th issue of Mental Health Weekly reported that under the arrangement Colorado Access will provide managed care services, while MHCD providers will offer a significant amount of the mental health care.
In an interview with Mental Health Weekly, Don Hall, President and Chief Executive Officer of Colorado Access, stated that his company has expertise that allows them to keep mental health in house rather than contracting out to provide these services like many other companies. In addition, Mr. Hall told Mental Health Weekly that Colorado Access company had excellent relationships with the community. He went on to say that they believe an integrated care approach is the best way to serve their members.
Colorado recently consolidated its regions for the state's mental health carve-out program. and selected most of its local incumbents for the state's mental health carve-out program. Five organizations, most with strong ties to the state's community mental health centers, were awarded contracts which will cover all 64 of the state's counties. All of the contracts are capitated/at-risk contracts that were implemented on Jan. 1, 2005 and will run through June 30, 2006.
NHP Promotes Enos to Role of President
This week Neighborhood Health Plan of Massachusetts announced the promotion of Deborah Enos, currently NHP's Vice President for Business Development, to President of Neighborhood Health Plan. Her appointment was unanimously supported by NHP's Board of Directors. In this transition role, Ms. Enos will work with James Hooley, CEO of NHP, over the next year as she prepares to become the CEO.
Ms. Enos first joined NHP in 1997. In his announcement of the promotion, Mr. Hooley noted that she, "…knows our business better than anyone. Her guidance has been a key part of NHP's successful turnaround last year and I feel with her leadership, she will bring even more growth and opportunities to NHP in years to come." Immediately prior to joining NHP, Ms. Enos was a Provider Relations Manager for Blue Cross Blue Shield for the Central Region of Network Development and Management.
ACAP congratulates Deb and looks forward to working with her in her new role.
New ACAP Fact Sheet on State Expansions of Medicaid Managed Care
Amidst mounting budget deficit pressures, several states have formed commissions to examine options for improving the efficiency and health care services provided by the Medicaid program. In response to the opportunities of managed care documented by many of these commissions, states have begun to expand Medicaid managed care geographically as well as to certain aged, disabled and blind populations, as appropriate.
ACAP has published a new fact sheet documenting the savings that Medicaid managed care has produced and the steps that many states are pursuing to modernize and expand their programs. ACAP has also produced a new briefing paper discussing recent efforts made by ACAP plans to evaluate the causes of inappropriate ER use among Medicaid enrollees. The fact sheet examines initiatives some plans have implemented to ensure that enrollees establish a medical home for regular health care. Several plans are working closely with the community health centers to divert clients from the emergency room. The new fact sheets can be found on the ACAP website under Publications: http://www.communityplans.net/publications/default.asp.

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| PUBLIC POLICY AND ADVOCACY |
Preview of President's Medicaid Proposals
In his State of the Union address this week, President Bush provided a glimpse of his FY06 budget proposal which is scheduled to be released on February 7th. He called upon Congress to pursue a comprehensive health care agenda which should include "…tax credits to help low-income workers buy insurance, a community health center in every poor county, improved information technology to prevent medical errors and needless costs, association health plans for small businesses and their employees, expanded health savings accounts, and medical liability reform that will reduce health care costs, and make sure patients have the doctors and care they need."
Administration officials, including newly confirmed Health and Human Services Secretary Michael Leavitt, suggested that the President's FY06 budget proposal could include the following Medicaid related proposals:
- A proposal - similar to one the President offered two years ago - to cap federal spending on Medicaid populations and services that are currently optional
- Other measures that would limit the increase in Medicaid spending over the next decade to an average of 7.3 percent annually
- $60 billion to $120 billion in proposed reductions in Medicaid in the next 10 to 15 years
- An estimated $40 billion to be raised by cracking down on the use of "creative accounting" schemes by states to induce the federal government to pay a larger share for Medicaid
- $20 billion from reducing overpayments for Medicaid-covered prescription drugs and closing loopholes that allow wealthier people to transfer assets in order to qualify for Medicaid-covered nursing home care
- $15 billion of these reductions which will be redirected back into Medicaid and the State Children's Health Insurance Program (SCHIP). The money that reverts back into the program would go to improve state flexibility options for covering long-term patients who stay at home rather than in a more expensive nursing home
- $140 billion in new spending over the next decade to provide health insurance for 12 million to 14 million individuals, most of which will be for proposed tax credits for the uninsured to buy their own coverage
In remarks to reporters, Secretary Leavitt said that Medicaid is not meeting its potential and that the time to address the program's shortcomings is now. He stated that new coverage flexibility and tighter financial oversight of state programs are needed.
CMS Administrator Mark McClellan also indicated that the Administration would support Medicaid reimbursement that would be tied in some way to meeting standards for saving money, improving treatment or expanding coverage. As reported by the CQ Healthbeat publication, Mr. McClellan indicated the Administration's support for:
- Replacing waivers with performance measures as the procedural hurdle state Medicaid programs would have to clear to adopt programs to save money or widen coverage
- Making home- and community-based care an integral part of Medicaid
- Promoting disease management and prevention programs
- Allowing parents to use Medicaid funds to pay for children's coverage if they can't afford family coverage through an employer
Sen. Kerry Introduces Bill to Provide Health Insurance to all Children
Senator Kerry (D-MA) recently introduced legislation to make health care coverage for children universal. The plan, similar to the one that he proposed during his presidential bid, encourages states to expand coverage under Medicaid and the State Children's Health Insurance Program. The bill would also give higher-income parents tax incentives to insure their own children and would be paid for by ending recent tax-cuts for the highest income Americans.
Sen. Kerry stated that he plans to work with Republican Senators to move the legislation forward. Still, the road to passage is expected to be challenging given the current fiscal constraints and indication from the Administration that they want to try to restrain costs in Medicaid.
Rep. Deal Takes the Helm of Health Subcommittee
Representative Nathan Deal (R-GA) was named chairman of U.S. House of Representatives Subcommittee on Health. The committee is a division of the Committee on Energy and Commerce. As chairman, Rep. Deal will oversee legislation, hearings and markups for all legislative areas under the committee's jurisdiction. This year the committee is expected to take up Medicaid reform proposals. Over the next two years the committee could also take up issues regarding human cloning and stem-cell research, medical malpractice liability reform, and protecting the public's health against terrorism among others.
Updated Agenda for Feb. 10 Policy Roundtable
ACAP has scheduled a Policy Roundtable call for Thursday, February 10th. The agenda will include the following topics:
- Outlook for Medicaid and new Medicaid Commission legislation
- Summary of the President's budget proposal on Medicaid and other relevant programs
- Update on participation in the Partnership for Medicaid coalition - a provider coalition spearheaded by NACHC
- Florida Waiver Concept Paper
- Update on recent ACAP meetings with Congressional staff
- Other policy issues as appropriate
The call will be held at 3 pm eastern (2 pm central, 1 pm mountain, 12 pm pacific, 10 am Hawaii). Please contact Andrea at amaresca@communityplans.net with other items you would like to see on the agenda.

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| EXCELLENCE AND ACCOUNTABILITY |
Reminder: Feb. 8 NICU Best Practices Call
On February 8th at 3 pm EST (2 pm Central, 1 pm Mountain, 12 pm Pacific, 10 am Hawaii), Jim Glauber, MD of Neighborhood Health Plan of Massachusetts and Peggy Waters, RN of Network Health will discuss their plans' respective approaches to NICU management. Neighborhood Health Plan recently outsourced its NICU management to a vendor and will discuss the "build versus buy" decision as well as a basic overview of their NICU management model. Network Health will discuss its in-house NICU case management program and how it provides NICU families with support and links to community resources both in the hospital and upon discharge. Plan materials are now posted in the Best Practices section of ACAP's website at: http://www.ahcahp.org/bppo/confcalls.asp
Deadline Approaching for IT Offer
ACAP Plans are reminded that the Gartner IT offer is only valid until February 28th, 2005. Please contact Peggy Oehlmann with any questions at poehlmann@communityplans.net or (610) 457-5739.
Recap: Medicare Roundtable
On January 27, representatives from 8 ACAP plans participated in the Medicare Roundtable to discuss the recent CMS regulations for Medicare Advantage. Each plan discussed its feasibility assessment and proposed timeline for submitting an application. One ACAP plan has already been approved as a Medicare plan and has begun enrollment. One plan intends to submit an application in time to begin enrollment in January 2006. The other six plans are evaluating whether to pursue this opportunity for a January 2007 enrollment date.
Medicare roundtables are scheduled at the members' request. If there is interest in another roundtable conference call during the next few months, please contact Peggy Oehlmann at poehlmann@communityplans.net.
Recap: Quality Management/Disease Management Roundtable
On February 1st, representatives from 10 ACAP plans participated in the Quality Management/Disease Management Roundtable to discuss the National CAHPS Benchmarking Database (NCBD) analysis of ACAP plans 2005 CAHPS scores for their Adult Medicaid Populations. Generally, ACAP plans scored better than the NCBD average for Medicaid plans in the following areas: Getting Needed Care, Customer Service, and Overall Rating of the Health Plan.
The Quality Managers also discussed the organizational structure of their Quality Departments. Of note was that a few plans include credentialing within the QM department while others have credentialing under Provider Relations. For future roundtables, Quality Managers are interested in discussing best practices in asthma, diabetes, CHF, prenatal care, and EPSDT.
Recap: Marketing Directors Roundtable
On February 2nd, ACAP Marketing Directors had a conference call with New Kirk publications to review New Kirk's proposal for an ACAP discount on their "On Demand" product for member handbooks, provider handbooks, welcome packets, and ID cards. Six ACAP plans participated in the call. ACAP staff will follow up with the Marketing Directors to get feedback on the call and determine interest in pursuing the discount.
Master, Johnston Join ACAP's QM Committee
Last month the Commonwealth Care Alliance (CCA) became ACAP's newest member. The association is pleased to announce that Dr. Bob Master, President and CEO of CCA, will serve on ACAP's Quality Management Committee. Dr. Master is a practicing physician, board-certified in Internal Medicine with over twenty-five years of experience in the clinical management of patients with advanced chronic illness and disability.
Also joining the QM Committee is Mack Johnston, M.D., who is serving as the Interim Medical Director at Neighborhood Health Plan of Rhode Island. Dr. Johnston, a member of the NHPRI team since 2000, has experience in multiple practice settings, been involved extensively in the HealthCare for Homeless program, and worked on Care Management for high acuity state Medicaid members.
The QM Committee promotes the ongoing quality improvement efforts at ACAP plans and creates opportunities for ACAP plans to collaborate with others involved in promoting quality improvement at the national level. The initiatives currently being pursued by the QM Committee include developing benchmarks relevant to ACAP plans, a grant application to HRSA to improve understanding of maternal and child health care issues, reports on operational and quality improvements such as access to specialists and sharing of best practices, among others. ACAP plans can find more information about the QM Committees activities on the Members' Only section of our website.

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| FUNDING OPPORTUNITIES & NEWS |
RWJF Seeks Applications for Investigator Awards in Health Policy Research
Through the Investigator Awards in Health Policy Research program, the Robert Wood Johnson Foundation funds individuals prepared to study America's most challenging policy issues in health and healthcare.
RWJF will award up to 10 grants of up to $275,000 to investigators from a variety of disciplines. Applicants must be affiliated either with educational institutions or with 501(c)(3) nonprofit organizations located in the United States. The deadline for submitting letters of intent is April. More information is available at: http://www.rwjf.org/applying/cfpDetail.jsp?cfpCode=IHP&type=open

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| NEWSFLASH |
NASHP's Recommendations for Making Medicaid Work for the 21st Century
The National Academy of State Health Policy recently issued final recommendations for its "Making Medicaid Work for the 21st Century" project. The project group was tasked with identifying changes that would make the Medicaid program more effective and successful in the 21st century. Those involved in the collaboration included state officials and national experts representing a broad range of stakeholder interests.
The final recommendations are focused on three key areas: eligibility, benefits, and financing. The report's detailed recommendations include:
- Identify opportunities for simplifying and expanding eligibility;
- Increase program flexibility for optional populations;
- Improve coordination and integration with the Medicare program and private insurance;
- Provide states with additional tools to manage the long-term care system; and
- Adjust current financing mechanisms.
More information and the complete report can be found at: http://www.nashp.org/_docdisp_page.cfm?LID=0D5298D4-E308-40D6-B0CE7C85E0A5C959
OH Medicaid Commission Issues Recommendations
In January 2005, Ohio's Commission to Reform Medicaid issued a list of recommendations that included establishing a statewide care management program for all Medicaid recipients. The Commission stated such an expansion is a feasible way to achieve the greatest value for the most efficient use of resources. The action items associated with this recommendation include:
- Expanding the state's full-risk managed care program to all Medicaid-covered families and children;
- Extending care management programs to non-dually eligible Aged, Blind and Disabled (ABD) consumers, as appropriate;
- Implement and monitor the effectiveness of outcome based care management strategies which include protocols for patient education and compliance, use of community health education and outreach workers, local social service organizations;
- Improving the management, quality review and financial strength of Medicaid managed care; and
- Establish a Managed Care Working Group (MCWG) among representatives such as Medicaid care management plans, major health care and behavioral health professional and trade associations, and others.
More information about the Commission's recommendations can be found at: http://www.ohiomedicaidreform.com/index.asp?p=0&text=0
NACHC Releases Updated Databook, Racial Disparities Fact Sheets
The National Association of Community Health Centers recently released its latest Databook. Each state's Databook provides state level statistics on vulnerable populations being served by health centers, Medicaid/SCHIP, disparities, and access to care. It is posted online at www.nachc.com/research/ssbysdat.asp.
This week NACHC also released a new fact sheet entitled "Health Centers' Role in Reducing Health Disparities Among Asian Americans and Pacific Islanders." This Fact Sheet describes the disparities among AAPI subgroups and how health centers overcome them. It was written in collaboration with the Association of Asian Pacific Community Health Organizations and is the fourth fact sheet in NACHC's health disparities series.
The fact sheet is available at: www.nachc.com/research/HealthDisparities/index.asp
Report Examines Growth in Medicaid Spending, FY00-03
According to a Health Affairs web exclusive article, "Understanding the Recent Growth in Medicaid Spending, 2000-2003," Medicaid spending increased by one-third between fiscal years 2000 and 2003 to $276 billion. In the January 26th article, author John Holahan found that this increase was driven largely by significant increases in enrollment, specifically in children and parents in low-income families. Holahan, a researcher at the Urban Institute, was commissioned by the Kaiser Commission on Medicaid and the Uninsured to examine spending trends in the Medicaid program.
During the study period, Medicaid spending grew an average of 10.2% annually. However, the rate of spending growth slowed to 7.1% in FY03 which Hollahan attributed to the cost-containment strategies enacted by states. He also notes that the 7.1 percent growth in FY03 is comparable to the increases the program experienced in the late 1990s
Comparing Medicaid's purchase of acute care services to private insurance costs shows the program's cost increases are below those of private insurance. The average growth rate of per enrollee Medicaid costs for acute care from FY2000-03 was 6.9 percent-lower than the 9 percent increase in per enrollee costs of the privately insured and substantially lower than the growth in employer-sponsored insurance premiums (12.6 percent).
Findings related to managed care include:
- Spending on services by pre-paid or managed care plans increased from $26.5 to $41.5 billion over the study period, an average annual increase of 16.1%. Holahan suggested this could reflect increased enrollment in managed care plans as overall program enrollment increased.
- Families accounted for only 44% of Medicaid spending growth while elderly and individuals with disabilities accounted for 56%.
- Spending per enrollee in prepaid or managed care services increased 9.9% from 2002 to 2003 compared to 6.9% from 2000 to 2002.
- Spending on physician services declined from 4.5% over the 2000 to 2002 period to 1.4% from 2002 to 2003.
Holahan suggests that the slow growth in physician and outpatient services may be attributable to a shift from FFS to prepaid managed care but that it could also reflect the broader issue of reductions in provider reimbursement rates and benefits enacted by many states.
Other major findings of the study include:
- 68% of the growth in Medicaid spending was attributable to acute care and 30% to long-term care due to the faster growth in enrollment of children and non-disabled adults between FY00-03.
- During this same period, 90% of Medicaid's total enrollment growth (8.4 million) was from families and 10% from the elderly and individuals with disabilities.
- Medicaid payments to Medicare grew from $4.7 billion to $6.3 billion over the entire study period.
The Health Affairs article and John Holahan's presentation can be accessed through the Kaiser Commission on Medicaid and the Uninsured website at: http://www.kff.org/about/kcmu.cfm
Medicare, Medicaid Costs Rising Faster Than Social Security
In its recently released annual report, the Congressional Budget Office (CBO) found that Medicare and Medicaid costs continue to serve as a "major hindrance to long-term fiscal security." The report said that if the President and Congress were not to approve additional expenditures, the federal budget deficit would reach $368 billion in fiscal year 2005. Findings of the report include:
- Social Security, Medicare and Medicaid costs will account for 10.4% of the gross domestic product in fiscal year 2015
- The estimated 10-year cumulative federal budget deficit would reach $1.3 trillion, an almost 60% increase from estimates announced last November
- Estimated Social Security costs would increase by about 4.4% annually until FY 2015.
- The increase in Social Security costs "will be dwarfed by the growth in government medical coverage.
Georgia Calls for MCO Services
On January 6th, Georgia announced it was seeking the services of managed care organizations to provide health care services to 2 million beneficiaries of Medicaid. The RFP states that MCOs would provide services to low-income families and children now enrolled in the state Medicaid and PeachCare programs through the Georgia Cares Program (GCS), a full-risk, capitated care management system.
Although the state's plan is still under discussion, the GCS will began enrolling eligible Medicaid adults and children on Jan. 1, 2006. One of the main goals of the GCS program is to slow the rate of expenditure growth in the Medicaid program, according to the RFP.

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| JOBS |
Reminder: ACAP Job Bank
You can find recent job postings at ACAP's job bank at: http://www.ahcahp.org/jobs/jobs.asp. For more information about posting a job please contact Andrea Maresca at amaresca@communityplans.net.

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| Upcoming Events |
February Events
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