Section 1: Planning a Care Management Program
In creating new care management programs or considering expansions to current programs, States have a wide variety of options. Dedicated planning can help a State consider various program design options, assess existing internal resources and capacity, and understand the needs of Medicaid members.
This section of the Guide, Planning a Care Management Program, incorporates information from the 13 State Medicaid care management programs in the initial AHRQ Learning Network and additional literature to provide information to State Medicaid staff and policymakers about:
- Considerations for developing a care management program.
- Readiness for care management.
- Considerations for program design.
Program Development Considerations
Although each State faces a unique environment, all States share several considerations in developing a Medicaid care management program. Medicaid officials and State policymakers should take time to consider each of these issues and evaluate their State's support, resources, and readiness to design and implement a care management program.
Checklist: Program Development Considerations
√ Understand motivations for establishing program.
√ Establish program goals and identify short- and long-term objectives.
√ Assess financial environment to determine most appropriate program.
√ Secure Federal support and approval.
√ Engage stakeholders to build program support.
√ Build on lessons learned from other States by attending national meetings and networking with other States.
Understand Motivation for Program
and Establish Program Goals
States might consider implementing a care management program for a variety of reasons. Most States implement a program based on some combination of the following three reasons:
- Quality Improvement Effort. States can use care management as a strategy to improve health care quality, care coordination, and service delivery, especially for beneficiaries with chronic conditions.
- Cost Savings Effort. States might focus solely on the cost containment or cost reduction issue when considering a care management program in response to particular budget constraints or other financial concerns.
- Policymaker Mandate Effort. In some States, the decision to launch a care management program might originate from the Governor's office or through a legislative mandate.
States usually establish care management programs to meet multiple needs. For example, a State might want to improve the quality of care provided to beneficiaries with chronic conditions while containing costs in response to a legislative mandate.
Medicaid programs that implement care management programs to meet multiple needs should understand the probable short-term and long-term results. For example, North Carolina experienced improved outcomes in asthma management more quickly than in diabetes management.a In addition, the evidence base suggests that programs might see improvements in process measures such as screening rates more quickly than desired changes in utilization rates, financial outcomes, and health outcomes. Please go to Section 8: The Care Management Evidence Base for more information on the related care management literature.
If goals have not been set already by the State legislature or Governor's office, Medicaid program staff should determine program goals based on the motivations for establishing a care management program. Every care management program should have an overarching aim, which might be as simple as "to maximize the quality of life and promote a regular source of care for patients with chronic conditions." However, to track progress on an ongoing basis, staff must identify short-term objectives, such as members selecting a primary care physician or decreased emergency room (ER) utilization. As described later in this section, after establishing program goals, staff must think about a measurement and evaluation strategy as a critical step early in the development process.
Assess Financial Environment
States should explore funding issues during program planning to determine the most appropriate program for their State. To estimate program costs and understand program financing, they should consider the following issues:
- Program Model and Associated Costs. Program staff should consider whether they will build, buy, or assemble a care management program and should estimate startup costs, costs associated with data exchange, and ongoing operations costs. Sharing this estimate with senior leadership and other stakeholders is useful to secure program support. Please go to Section 5: Selecting a Care Management Program Model for a description of program models.
- Federal Funding. Because Medicaid is jointly funded by States and the Federal Government, States should consider their options for requesting Federal match at the administrative or medical match rate.b Although the medical match percentage varies from State to State, the administrative match is 50 percent. Care management programs using medical professionals are eligible for the medical match. State staff should communicate with their Centers for Medicare & Medicaid (CMS) regional office to understand their options and must consider the implications tied to each funding option. For example, CMS requires States operating a care management program under Section 1115 waivers to demonstrate cost neutrality.
- Program Expectations. For either the State or Federal share of funding, program staff should consider whether specific conditions exist that they must take into account when calculating program costs. For example, some State legislatures, such as Illinois and Texas, require cost savings as part of the care management program.
- Grant Funds. Local grants might be available from the State, a Federal agency (which cannot be matched with Medicaid funds), or a private foundation. States have used grant funds to support pilot programs and chart reviews for program evaluation.
Secure Federal Support and Approval
Many programs require Federal approval from CMS in the form of a State plan amendment (SPA) or a waiver. Although many States have implemented care management programs, considerable variability exists in program design and Federal authority. Therefore, approval procedures are individualized, usually depending on the care management program model. As a result, during the planning stage, program staff should work with CMS staff, both at the regional and national levels, to solicit feedback and understand the type of authority that must be used to implement certain care management program components versus others. Texas worked closely with its regional and central offices to communicate its care management program design and to identify a model that it could use to seek CMS approval for its program. CMS might also be able to provide points of contact in other States to share their SPA or waiver documents.
Exhibit 1.1 provides information on ways to secure CMS approval through waivers, SPAs, and the Deficit Reduction Act.
Developing relationships with senior Medicaid and agency leadership, the Governor's office, the provider community, the patient and advocacy community, the State legislature and staff, and CMS is critical for the success of a care management program.
States should consider expectations from Medicaid and agency leadership during the initial planning stage to ensure their support. Senior leadership within the Medicaid program, its umbrella agency or department, and the Governor's office might have specific program goals that program staff must understand as they plan and develop the program. Senior leadership might also have areas and directions that they have no interest in pursuing. In situations where Medicaid staff develop the program, program staff should involve senior leadership as early as possible to help shape expectations.
Similar to the Governor's office, the State legislature or individual legislators can greatly influence some of the key questions around a care management program's design, such as whether a mandatory savings requirement exists or whether the program can be operated in-house or with a vendor. States should coordinate and communicate routinely with these stakeholders. For more information on strategies to engage the Governor's office, State legislators, and senior Medicaid and agency leadership, please go to Section 2: Engaging Stakeholders in a Care Management Program.
Build on Lessons Learned from Other States
State staff can learn from successes and "productive failures" of other State Medicaid care management programs. States should consider relevant components from multiple States and develop a care management program best suited to that State's individual needs while building on the experiences of other State Medicaid programs. In planning a care management program, States have found the following strategies helpful:
- Attending national health policy meetings, such as meetings sponsored by the National Association of State Medicaid Directors, National Academy for State Health Policy, National Conference of State Legislatures, National Governors Association, or the Disease Management Association of America.
- Speaking with colleagues in other States to better understand their programs.
- Reviewing formal evaluations of other States' programs.
Each of these strategies can be useful to learn about other States' experiences and to understand a care management program's impact on outcomes.
Readiness for Care Management
After considering each of the issues outlined above, program staff should answer the following questions in determining whether and how to proceed with a care management program.
Checklist: Readiness for Care Management
√ Availability of necessary staff and resources.
√ Role of care management in Medicaid program.
√ Timing of other State initiatives to coordinate outreach and stakeholder support.
√ Support of potential program partners, such as other State agencies and local organizations.
√ Support of providers and patients.
√ Development of relationships with stakeholders, such as State legislators and their staff, the Governor's office, senior Medicaid leadership, and key Federal government staff.
Are Necessary Staff Available?
States need a variety of staff to oversee and perform care management program operations, identify areas for improvement, and monitor the program. A State administering or operating a care management program should ensure that it has the internal capacity and budget to hire necessary personnel. If appropriate or adequate staff are unavailable, States can contract with a vendor, share staff with other State agencies, or partner with local organizations to perform needed services. Existing staff who can perform certain interventions, such as nurses or care managers, might be available. Please go to Section 5: Selecting a Care Management Program Model for more information.
How Does Care Management Fit into the Medicaid Program?
Linking a care management program with other Medicaid initiatives can increase the effectiveness of both programs. Care management programs often are linked with primary care case management (PCCM) programs or medical home initiatives, because Medicaid fee-for-service (FFS) might not offer the consistency of care typically provided at medical homes and necessary for successful patient interventions.
Rhode Island, which broadened the American College of Physicians' standards for an advanced medical home for use in its PCCM program, Connect CARRE, has drafted "Connect CARRE Choice Participation Standards." Standards include:
- Partnering with patients to ensure that all of their health care is effectively coordinated.
- Incorporating the Chronic Care Modelc into community supports and programs through the Department of Health Services.
- Encouraging patients with chronic diseases to enroll in the Connect CARRE Choice program.
Linking the medical home and care management can provide additional benefits to both Medicaid and the care management program, including the following:
- Impact on the Provider. Provider efforts within the care management program can be better coordinated if a medical home initiative is already in place and members have an established relationship with a single provider. Through a care management program, the member's primary care provider might have access to member-specific Medicaid data, which would enhance reinforcement of care management program principles. In addition, a medical home enables care management programs to provide physicians with practice or physician profiles. These profiles provide physicians with feedback on their treatment patterns and members' utilization.
- Impact on the Member. Because members with a medical home might seek care from their primary care provider before acute care facilities or ERs, the medical home might lead to decreases in inappropriate ER utilization and hospitalizations.
- Impact on the Medicaid Program. The medical home model represents an important first step toward creating a patient-centered, primary care-oriented health system. The medical home facilitates partnerships among individual patients, their personal physicians, and care managers. By coordinating care management and medical home programs, Medicaid can benefit from increased communication and care coordination with both providers and members.
Are Other State Initiatives Underway?
Implementation of another State initiative might enhance or hinder implementation of a care management program. Understanding competing priorities will help State staff synchronize efforts between programs and increase program effectiveness.
Indiana implemented the Indiana Chronic Disease Management Program (ICDMP) soon after a statewide PCCM program for the aged, blind, and disabled population. The PCCM program established a medical home for patients. Subsequently, the care management program was able to leverage the new linkages between patients and providers.
Understanding the other programs the State is already operating ensures that the care management program is not duplicating efforts and encourages sharing of ideas. Other State agencies, such as the Department of Health or the Department of Education, might be stakeholders. For example, the Department of Education might be interested if the care management program focuses on children's health, such as environmental management for asthma.
Washington partners with other State agencies that also work on chronic care management. The care management program works with the Aging and Disability Services Administration to develop educational materials, apply similar approaches for members, use equivalent measures related to health outcomes, and employ similar approaches for program evaluation.
Do Potential Program Partners Exist?
Input from potential partners who will assume responsibility for implementing the program should be solicited as early as possible. Their experiences and understanding of their own limitations might help in the early planning stage. For example, if a State plans an external
evaluation of the program, having the evaluator provide input as program measures and data collection are discussed might be useful.
Indiana Medicaid invited its evaluator and nurse care managers to participate in planning its care management program, ICDMP, thereby creating an environment that valued the input of individuals experienced in providing a service. This approach also allowed for faster uptake of their roles as vendors to the program.
How Can We Engage the Provider Community?
Engaging providers is an important component of a care management program, because interested providers will endorse the intervention concepts with patients, identify needed interventions for patients, and follow practice guidelines. As well as having ideas to share on clinical aspects of the care management program, large provider groups, hospitals, provider associations, and individual providers can serve as ambassadors to patients for the program.
By involving providers, States can improve program outcomes and physician practice in addition to building support for the care management program. Kansas' model assists providers in implementing evidence-based treatment plans while supporting members to better manage their health care choices. For more information on strategies to engage providers, please go to Section 2: Engaging Stakeholders in a Care Management Program.
Potential Benefits of Provider Engagement
- Endorse the concepts of the interventions with patients.
- Encourage members to take advantage of the program.
- Participate in reporting and data exchange included in the program.
- Identify interventions needed for patients.
- Refer patients into program.
How Can We Engage the Patient Community?
A significant component of a care management program focuses directly on understanding the patient and his or her needs and subsequently providing appropriate interventions. By securing the patient and patient advocacy community's support, States have received useful input on program design and significant support for program sustainability.
Pennsylvania's vendor assembled Regional Advisory Committees (RACs) in which consumers and physicians met regularly to provide feedback on disease management activities and input on evaluation and selection of potential vendors in the early planning stages. The RACs provide ongoing feedback to the vendor and State.
By involving consumers during the planning, implementation, and evaluation stages, program staff will be better able to gauge the possible impact of certain interventions and will be able to design a better, more effective program overall. Engaging patients also can help program staff understand the program's effects on consumer behavior and identify areas for program improvement. For more information on patient activation strategies, please go to Section 2: Engaging Stakeholders in a Care Management Program.
Considerations for Program Design
Program staff also should consider factors such as target population, interventions, resource availability, time for a pilot program, and strategies for measurement and evaluation. Planning these components early will allow staff to design an appropriate care management program for their members.
For more information on these topics, please go to Section 3: Selecting and Targeting Populations for a Care Management Program, Section 4: Selecting Care Management Interventions, Section 6: Operating a Care Management Program, and Section 7: Measuring Value in a Care Management Program.
Design Program as Opt-In or Opt-Out
An important consideration that will affect how programs approach and enroll their members is whether the program is opt-in or opt-out. Opt-in programs notify patients of their eligibility for the program; members then must actively choose to enroll. In opt-out programs, members are enrolled automatically but have the option to disenroll themselves. Both enrollment mechanisms have advantages and disadvantages.
Opt-out programs generally have higher member enrollment than opt-in programs. By easing the enrollment process, the opt-out model allows members to try the program even if they are hesitant. However, with an opt-in program, a stronger likelihood exists that the vendor will be able to engage most of the members successfully. In this model, States might assume that all of the members enrolled want to improve their health conditions through program participation. Please go to Section 3: Selecting and Targeting Populations for a Care Management Program for more information on opt-in and opt-out care management programs.
Select, Identify, and Enroll Target Populations
An integral part of any care management program is a thorough understanding of the population it will affect. A key challenge that States must address is targeting resources most effectively for members who are presently high risk and impactable versus members who might be low risk or medium risk currently but who can be prevented from migrating to high risk. As a result, most programs target specific populations because they are more "impactable."
A State must decide which population to target and how to identify and stratify members for enrollment into the program. In doing so, program staff will be better equipped to tailor appropriate interventions and resources to impact members most effectively. Please go to Section 3: Selecting and Targeting Populations for a Care Management Program for more information on identification and stratification strategies.
Checklist: Considerations for Program Design
√ Determine whether program will be opt-in or opt-out.
√ Select program model based on available staff and resources.
√ Select and target populations to allocate resources most effectively.
√ Determine program interventions that will be most effective for selected populations.
√ Consider pilot testing to test intervention on a smaller scale.
√ Develop a measurement and evaluation strategy to demonstrate program value.
Determine Program Interventions
Program staff should assess the type of interventions appropriate for their care management program. When choosing interventions, considering their outcomes, timing, and efficacy in managing certain diseases is important.
After a State targets a specific population for its program, it should consider specific interventions that will prove most effective for that population. Interventions may target the patient or the provider and generally range from "low-touch" interventions, such as mailings, to "high-touch" interventions, such as home visits by nurse care managers. Please go to Section 4: Selecting Care Management Interventions for a comprehensive discussion of types of interventions and a comparison of the relative costs of various interventions.
Consider Pilot Testing
States often choose to implement a pilot of their care management program as a way to test the intervention on a smaller scale or if they have limited resources. A smaller, more focused project will allow State staff to thoroughly assess the pilot and make improvements to the program as it is expanded. A pilot can be approached by targeting one location, by using a regional rollout, or by focusing on a specific population. Please go to Section 6: Operating a Care Management Program for additional information on pilot care management programs.
Develop a Measurement and Evaluation Strategy
Based on program goals, program staff should develop a measurement and evaluation strategy. Staff can demonstrate and communicate results by understanding program goals and identifying early outcomes that key stakeholders would consider a "success." For example, the goal of the care management program might be to increase the quality of life for program members. Subsequently, staff can define program success as a decrease in the number of school days missed due to illness. As a result, staff would want to track incremental progress in performance measures related to this goal or conduct a formal program evaluation. Please go to Section 7: Measuring Value in a Care Management Program for more detailed information.
Careful program planning is critical to the success of the next stages of designing, implementing, and evaluating the impact of a care management program. Understanding available resources and considering program design options will help State Medicaid staff decide whether to move forward with a care management program, determine the most appropriate program design for the Medicaid population, and decrease the need for program refinements. Garnering support from leadership and other stakeholders, developing realistic program expectations early in the process, and designing a strategic evaluation process affect program success and sustainability significantly.
Exhibit 1.1. Federal authority options for operating a disease management or care management programd,e,f
|Research and Demonstration Projects
Section 1115 provides the Secretary of Health and Human Services broad authority to approve projects that test policy innovations likely to further Medicaid program objectives.
Demonstrations must be "budget neutral" over the life of the project, meaning they cannot be expected to cost the Federal Government more than it would cost without the waiver.
|Managed Care/Freedom of Choice
This section provides the Secretary of Health and Human Services authority to grant waivers that allow States to implement managed care delivery systems or limit individuals' choice of provider under Medicaid.
States may request Section 1915(b) waiver authority to operate programs that impact the delivery system of some or all of the individuals eligible for Medicaid in a State by:
- Mandatory enrollment of beneficiaries into managed care programs (although States have the option, through the Balanced Budget Act of 1997, to enroll certain beneficiaries into mandatory managed care via an SPA), or
- Creation of a "carve out" delivery system for specialty care, such as behavioral health care.
Section 1915(b) waiver programs need not be operated statewide. They may not be used to expand eligibility to individuals ineligible under the approved Medicaid State plan.
Four types of authorities exist under Section 1915(b) that States may request:
- 1915(b)(1): Mandates Medicaid enrollment into managed care.
- 1915(b)(2): Uses a "central broker" to help individuals select among competing health plans.
- 1915(b)(3): Uses cost savings resulting from beneficiary use of more cost-effective medical care to provide additional services.
- 1915(b)(4): Limits the number of providers from which members can obtain services.
|State Plan Amendment
The State Medicaid plan is a document that defines how the State will operate its Medicaid program. The plan addresses the areas of administration, eligibility, service coverage, and provider reimbursement. After approval of the original State plan, program staff must submit to CMS all relevant changes (required by new statutes, rules, regulations, interpretations, and court decisions) to determine whether the plan continues to meet Federal requirements and policies.
An SPA authorized under section 1932(a) of the Social Security Act provides much of the same flexibility available under waivers and also does not require the periodic renewals associated with programs operating under waiver authority. Created by the Balanced Budget Act of 1997, this SPA authority to mandate enrollment applies to primary care case management or MCO-model disease management programs. Similar to waivers, a section 1932(a) SPA authority provides flexibility with respect to limiting providers, eligible populations, and geographic areas that normally is unavailable under traditional SPAs.
An SPA may authorize disease management activities through expansions of the covered benefits for "other licensed practitioners" or "preventive services," as appropriate. A disease management SPA must meet the requirements of section 1902(a) of the Social Security Act, including statewideness, comparability, and freedom of choice. These requirements apply to both capitated and fee-for-service disease management providers.
|Deficit Reduction Act
The Deficit Reduction Act (DRA), passed in 2007, provides States additional flexibility to make changes to their Medicaid programs. Mandatory requirements include an increase of the look-back period for long-term care beneficiaries to 5 years and proof of citizenship for all new Medicaid applicants and current Medicaid beneficiaries. Specifically, among other requirements, the DRA allows States to impose cost-sharing requirements on services such as prescriptions, increase copayments on emergency services, and alter existing Medicaid benefits packages to mirror certain commercial insurance packages through use of "benchmark" plans.
Some States are using DRA-related SPAs to provide targeted disease management for conditions such as chronic obstructive pulmonary disease, congestive heart failure, coronary artery disease, diabetes, pediatric obesity, and pediatric asthma.
a Available at: Cecil G. Sheps Center for Health Services Research. Evaluation of Community Care of North Carolina Asthma and Diabetes Management Initiatives. http://www.communitycarenc.com/PDFDocs/Sheps%20Eval.pdf. Accessed November 12, 2007.
b The Federal Medical Assistance Percentages (FMAP) are used in determining the amount of Federal matching funds for Medicaid expenditures. Section 1905(b) of the Social Security Act specifies the formula for calculating FMAP. States also receive enhanced FMAPs for the State Children's Health Insurance Program under Title XXI of the Social Security Act. Tables displaying the FMAPs by State and the District of Columbia are available at: http://aspe.hhs.gov/health/fmap.htm. Accessed February 11, 2008.
c Available at: Robert Wood Johnson Foundation. Improving Chronic Illness Care. The Chronic Care Model. http://www.improvingchroniccare.org/index.php?p=The_Chronic_Care_Model&s=2. Accessed February 11, 2008.
d Available at: Centers for Medicare and Medicaid Services. Medicaid State Waiver Demonstration Projects—general information. http://www.cms.hhs.gov/MedicaidStWaivProgDemoPGI/01_Overview.asp. Accessed December 11, 2006.
e Available at: National Association of State Medicaid Directors. Medicaid waivers. http://www.nasmd.org/waivers/waivers.htm#1915b. Accessed December 11, 2006.
f Available at: Centers for Medicare and Medicaid Services. State Medicaid Director Letter: Guidance on how States can cover disease management. http://www.cms.hhs.gov/smdl/downloads/smd022504.pdf. Accessed July 26, 2007.
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