Louisiana rolls out Medicaid care management

Physician pay will be a mixture of fee-for-service and capitated rates, but the state medical society says there is resistance to the changes.

By Doug Trapp — Posted July 29, 2011

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Louisiana's Medicaid agency in late July selected five applicants to manage care for most of the states' Medicaid enrollees in a new program beginning January 2012.

Private entities contracting with the Louisiana Dept. of Health and Hospitals will serve as coordinated care networks. CCNs will be paid to contract with physicians and other health professionals to provide Medicaid benefits and services.

"We studied Medicaid programs in more than two dozen states, looking at what worked and what didn't," said Ruth Kennedy, Louisiana Medicaid's deputy director and CCN project director. "Based on these lessons learned, we were able to develop very detailed network requirements that allowed our evaluation team to select the best entities for Louisiana."

Louisiana is one of the last remaining states to operate its Medicaid program on an entirely fee-for-service model.

About 865,000 of the state's 1.2 million Medicaid enrollees are expected to sign up with a CCN operating under one of two models. Shared savings CCNs will use an enhanced primary care case management model while still paying physicians and others on a fee-for-service basis. These CCNs also will handle claims pre-processing and monitor service utilization. Prepaid CCNs will operate under a full-risk, capitated model in which the CCN handles all payment and prior authorization.

On July 25, the Louisiana Medicaid agency announced that it selected just five of 12 applicants to serve as CCNs. Three will serve as prepaid CCNs: Louisiana Healthcare Connections, Amerihealth Mercy of Louisiana and AmeriGROUP Louisiana. Two will be shared savings CCNs: UnitedHealthcare of Louisiana and Community Health Solutions of America.

The state is banking on predictions of savings from making CCNs responsible for providing preventive care and managing costly and complex cases. The Medicaid agency expects to save $135 million during the program's first full year of implementation in fiscal 2012. The state will implement the CCNs in three regions beginning Jan. 1, 2012. The second region will transition on March 1 and the third on May 1.

Some physicians remain wary of the state's Medicaid reforms even though state officials have responded to concerns from doctors, said Jennifer Marusak, associate director of government affairs for the Louisiana State Medical Society.

"We have not asked questions that they have not answered or tried to answer. It's just the uncertainty of doing a whole new way of business," Marusak said. Physicians say they are concerned about how the move to CCNs would affect their practices and their patients' access to care.

The networks will coordinate care for adults with disabilities not enrolled in Medicare, children younger than 19, their parents and pregnant women. These Medicaid enrollees will be given a chance to choose their own CCNs with the assistance of enrollment brokers provided by the state.

Physicians still are trying to understand how they fit into the concept, said Ragan Canella LeBlanc, executive vice president of the Louisiana Academy of Family Physicians. She said some CCN applicants tried to build their care networks by sending misleading letters to doctors in the spring, which created more confusion. The letters said doctors must join CCNs or they risked losing all of their Medicaid pay. Louisiana's Medicaid agency has clarified that physicians are not compelled to join any particular network.

LeBlanc said doctors also are concerned about the possible new administrative burden of contracting with multiple CCNs. The state has pledged to decrease physicians' Medicaid administrative work, but officials haven't offered specifics.

The Medicaid reforms do include protections for physicians and Medicaid enrollees. The CCNs must spend at least 85% of their Medicaid funding on actual patient care, pay physicians at least the existing fee-for-service Medicaid rates for services, and pay 99% of clean claims within 30 days of receipt. Physicians and other health professionals can contract with multiple CCNs of both types but can continue to be paid on a fee-for-service basis for seeing their Medicaid patients not enrolled in CCNs, according to the state Medicaid agency.

More Louisiana Medicaid reform information is available online (link).

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