Medicaid reform unveiled
After nearly a year of study and numerous meetings with stakeholders and the public, Governor Sam Brownback and Lt. Governor Jeff Colyer, MD, announced the administration's plan to reform the state's $2.5 billion Medicaid program. The Governor emphasized that their plans were guided by a several key principles: improving outcomes and quality, integrating and better coordinating care for the whole person using the health home concept, stabilizing the safety net, encouraging personal responsibility, making Medicaid more economically rational and sustainable over the long term, and doing all of the above while preserving benefits and eligibility, and safeguarding reimbursement for providers.
The state's Medicaid plan has been renamed KanCare, and it will rely on a significant expansion of managed care to achieve the stated goals. Nearly all Medicaid members will be required to enroll in one of three statewide managed care organizations (MCOs). Currently, about 240,000 pregnant women, children and their families are covered by managed care. The new program will expand managed care to another 100,000 individuals who are either blind, aged or disabled. This subgroup is the most costly in Medicaid, accounting for over 70 percent of all expenditures. KanCare will rely heavily on implementing better care coordination for this population, including ensuring that behavioral and physical health are better integrated. KanCare will be designed to align incentives for the MCOs, providers, and consumers to improve outcomes and slow the growth in costs. The state expects the program to reduce the growth in Medicaid spending by 8-10 percent, or $853 million, over the next five years through improved care coordination and achieving improved outcomes.
One of the key strategies of KanCare will be to build strong financial incentives into the MCO contracts to incentivize them to work with providers to improve quality and outcomes. The MCOs will have to meet or exceed a number of nationally recognized performance measures, including improving outcomes in diabetes and asthma care, coronary artery disease, COPD, prenatal care, behavioral health, and others.
"Through this plan, we will continue to identify very specific outcomes to improve the health of Kansans," said Robert Moser, MD, Secretary of the Department of Health and Environment. "There will be an intense focus on data as we hold ourselves accountable through the performance of our care organizations."
Although it is too early to fully understand how KanCare will impact physician practices, a few things appear to be pretty certain. Since nearly all Medicaid beneficiaries will be covered by one of three MCOs, physicians will need to contract with at least one, if not more than one MCO to participate in the program. For now, it looks like the Medicaid fee schedule will be the floor in reimbursement, with a possibility that some services could be paid at higher rates, depending on how well physicians meet the quality and outcome measures that have been identified. It also appears that an effort has been made to reduce administrative complexity through standardizing such things as credentialing, claims and appeals processes. There also appear to be incentives for MCOs to help physicians participate in and utilize health information exchange to facilitate better care coordination and improve quality.
KanCare won't become operational until January 2013. A competitive bid process will result in the selection of the three managed care companies over the next several months. KMS will continue to work with the Brownback administration as it refines its plans for KanCare over the coming months.
For more information, contact Ruth Cornwall at the KMS office. The RFP and related documents can be downloaded at the KDHE website.
