Addictions Treatment and North Carolina Healthcare Reform: The

Addictions Treatment and North Carolina Healthcare Reform: The Future of Publicly Managed Services Presented by: Steve Puckett, Clinical Support Director Smoky Mountain LME/MCO June 9, 2016 What is Managed Care? Approach to healthcare delivery that tries to put scarce resources to best use Managed care is neither a singular process nor a static event.

Managed care struggles to meet the needs of private and governmental plan sponsors as well as patient-members. History of Healthcare Insurance in the United States At start of the 20th century, health insurance was almost nonexistent in the U.S. Broad medical insurance coverage began with indemnity insurance after WWII HMO Act of 1973: Removed some state restrictions for HMOs Required large employers to offer federally

certified HMO options IF they offered health insurance History of Health Insurance, cont. In 2nd half of 20th century, Americans began to view health insurance as a necessity, not luxury Behavioral health coverage came later than medical Behavioral health benefit was often limited U.S. is only developed, industrialized nation without universal health coverage

Who Provides Health Coverage? Employer-sponsored insurance has become an expectation for most jobs (55% of insured) ~36.5% of insured individuals in the U.S. are covered by some form of federal program: Medicare, Medicaid (with states), VA, Tricare However 11% of adults 18-64 in U.S. still have no coverage in 2016 Group Insurance Fundamentals Few individuals can afford to self-pay Group health insurance: large group pool

fixed premiums to pay for defined services for all members of the group Costs and financial risk spread over entire membership; per capita costs are manageable Copayments, coinsurance, and deductibles mean members share financial risk Insurance Fundamentals, cont. Health insurance is different from most other types of insurance: Used for routine services Not limited to catastrophic events Almost every insured member will use the benefit

Insurance Fundamentals, cont. Risk sharing is a tool to encourage only necessary use of medical resources 1960s 1980s: Indemnity insurance prevalent Go to any licensed provider for services Covered individual pays 20% coinsurance May have been cap on out-of-pocket maximum By late 1980s, managed care insurance had become common Insurance Fundamentals, cont.

Managed care expanded risk-sharing to providers Managed care developed programs for communication among providers & integration of claims data Managed care became explicit in defining benefits and required rules (e.g., prior authorization) Costs of Employer-Sponsored Healthcare: Milliman Medical Index 2016: Lowest annual increase since 2001, but MMI is now over $25,000 for family of four

% Increase in MMI is at lowest rate since 2001 But employee expense is increasing at higher rates than overall healthcare spending Prescription drugs are most rapidly growing component Changes in Insurance Type MMI, cont. Growth of Managed Care Healthcare is a competitive market-driven industry

Certificate of Coverage is the legal contract between a health plan and the purchasing sponsorexplicitly defines benefits included in the contract. Health insurers and HMOs have become subject to much state and federal regulation and oversight. Managed Care Growth, cont. Starting in 1980s, behavioral health benefits were often carved out from medical plan Trend is now being reversed with movement toward Whole-Person Care

Pharmacy benefits are often managed by separate Pharmacy Benefit management (PBM) Managed Care Growth, cont. Healthcare Policy benefits of managed care: Coordination of healthcare delivery Resource utilization management Preventive care Disease management Thus, managed care promised to solve two

fundamental issues: Rising healthcare costs and Fragmented healthcare delivery Managed Care Growth, cont. Tightly-managed HMOs earned negative reputation with members and providers: Limited choice of providers Reduced provider payments Burdensome prior approval requirements Complexities imposed by regulations raised costs Eventually, tightly-managed HMO plans became less common

Managed Care Growth, cont. Still, rising healthcare costs and need to manage healthcare delivery and outcomes led to growth and acceptance of managed care by private and public purchasers Managed care succeeded in reducing costs and improving clinical outcomes compared with traditional fee-for-service medicine and indemnity insurance. How MCOs Manage Financial Risk Practitioners

Accept discounted reimbursement Obtain prior authorization for certain services May receive performance incentives Hospitals Discounted reimbursement: contracted rates, case-rates, per diem rates Prior authorization for non-emergency services Managing Financial Risk, cont. Pharmacies Discounted reimbursement Generic dispensing incentives

Drug formulary Step and other edits Prior authorization of certain drugs Managing Financial Risk, cont. Plan Sponsors Coverage decisions Premium increases for excessive costs Members Premium share payments Higher costs for higher benefit plans Copayments and coinsurance

Managing Financial Risks, cont. Provider Contracts Capitation Discounted fee-for-service Primary Care Physicians as Gatekeepers Ancillary Service carve outs Medical Necessity Core concept in managed care Intended to control service utilization by preventing over utilization Now often used to ensure that service

provided is the right service, will be effective, and will not be harmful Example: North Carolina Medicaid Definition of Managed care Medical Necessity, cont. It is incumbent upon practitioners to: Understand the concept of Medical Necessity Follow the insurers definition of medical necessity for the service delivered Ensure that services provided are medically necessary Providers may incur retrospective penalties for

submitting claims for services that are determined to not be medically necessary (e.g., inappropriate or excessive to the members needs) How Managed Care Enhances Quality of Care Major focus today on achieving better outcomes High quality care is often less expensive Health plans often have data to identify most cost-effective and beneficial interventions and providers Outcomes that can be measured can be

managed to minimize variation Managing Quality, cont. MCOs have identified top medical conditions by cost, prevalence, incidence, etc. and have implemented disease and care management programs to deal with them MCOs are required to achieve & maintain accreditation from organizations such as NCQA, URAC and JCHO Growing evidence that high-quality care is facilitated by a person-centered approach.

The Evolution of Smoky Mountain LME/MCO 1963: Kennedy signs Community Mental Health Act 1970: Establishment of 42 Area Programs in North Carolina 1972: Creation of Smoky Mountain Area Mental Health, Mental Retardation and Substance Abuse Authority for Cherokee, Clay, Graham, Haywood, Jackson, Macon & Swain Counties Smoky Mountain History, cont.

2000: NC State Auditors Report: Area Programs should be restructured 2001: NC Mental Health Reform legislation passed: Area Programs to become managers, not providers, of services (LMEs) 2002: ValueOptions contracted with DMA to manage behavioral health for Medicaid Smoky Mountain History, cont. 2005: PBH starts Medicaid managed care pilot 2007: New River LME remains service provider; Alleghany, Ashe, Avery, Watauga & Wilkes Counties become part of Smoky

Mountain Center LME 2008 Foothills LME (Alexander, Caldwell & McDowell Counties) merges with Smoky Smoky Mountain History, cont. 2010: The Affordable Care Act (ACA) is signed into law by President Obama 2011: NC General Assembly passes Medicaid Waiver expansion bill 2012: Disability Rights Lawsuit settled: Begins transition of individuals with mental illness out of adult care homes.

Smoky Mountain History, cont. July 2012: Smoky Mountain LME/MCO begins managing Medicaid behavioral health services for 15 counties October 2013: Western Highlands LME/MCO merges with Smoky with Buncombe, Henderson, Madison, Mitchell, Polk, Rutherford, Transylvania and Yancey Counties Smoky Mountain History, cont. September 2015: NC General Assembly passes legislation to overhaul management of all Medicaid

services through commercial and provider-led MCOs March 1, 2016: DHHS presents Medicaid overhaul plan March 17, 2016: DHHS presents plan for consolidation of 8 LME/MCOs to 4 April 25, 2016: CMS releases Final Rule updating managed Medicaid regulations June 1, 2016: NC submits 1115 Medicaid Waiver application to CMS Proposed LME/MCO Mergers Smoky Authorization Review

Process Only certain services require authorization Service must be in benefit plan (EPSDT exception) Provider must be in network (a few exceptions) Provider submits service authorization request (SAR) & supporting information in Smokys electronic system Authorization Review Process, cont. Request is review reviewed to ensure all required information has been provided (e.g.,

ASAM level for Substance Use service) Licensed Care Manager reviews for medical necessityif found, authorizes service. If Care Manager does not find medical necessity, sends request to Psychiatrist or Psychologist Clinical Peer Reviewer Authorization Review Process, cont. Peer Reviewer reviews, information, may speak with Provider, and renders decision. If all or part of the requested service is not approved, the member is send a notice explaining the decision and providing appeal

rights and process First level appeal is internal with Peer Reviewer not involved in 1st decision Authorization Review Process, cont. Second level appeal is with Office of Administrative Hearings (OAH) Mediation will be offered before hearing After OAH, member may go to Superior Court Smoky Operations April 2016 Measure

Amount Medicaid Enrollees 155,416 Est. Eligible for State-Funded Services 167,109 Customer Service Calls Received

4,444 Average Speed of Answer 7 Seconds Authorization Requests Received 3,629 MH & SU Requests Processed 2,598

I/DD Requests Processed 1,009 Requests Unable to Process 336 Requests not AuthorizedAdministrative Reasons 0.3%

Requests not AuthorizedClinical Reasons 1.8% Average Authorization Decision Turn Around Time 4.3 Days Smoky Operations April 2016, cont. Measure Amount

First Level Appeal Requests 12 Second Level Appeal Requests 1 Care Coordination Persons with I/DD 1,814 Care Coordination Persons with MH/SU

2,720 Grievances about Smoky 4 Grievances about Providers 29 Claims Processed

99,765 Claims Approved & Paid 80,412 Average Time to Process Clean Claim 1.2 Days Service $ Paid $23,303,782

Contracted Providers 588 Smoky Authorizations, Denials & Appeals Processed SAR Volume by Quarter 20,000 18,000 16,000 14,000 12,000

10,000 8,000 6,000 4,000 2,000 0 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Authorizations, Denials & Appeals, cont. Medicaid Clinical Denial Rate by Quarter 10.0% 8.8%

9.0% 8.0% 7.0% 6.0% 5.1% 5.0% 4.2% 3.6% 4.0% 3.0%

2.0% 2.9% 2.5% 2.4% 1.4% 2.9% 2.3% 2.5%

2.4% 1.5% 1.0% 0.3% 0.0% Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Authorizations, Denials & Appeals, cont. % of Medicaid Denials Resulting in Reconsiderations 40%

38% 35% 30% 30% 26% 25% 20% 19% 20%

17% 18% 15% 11% 10% 5% 0% 13% 10%

9% 8% 8% 7% Authorizations, Denials & Appeals, cont. Reconsideration Outcomes 90% 80% 70% 60%

50% 40% 30% 20% 10% 0% Q4 2012 Q1 2013 Q2 2013 Q3 2013

Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015

Q2 2015 Q3 2015 Q4 2015 Authorizations, Denials & Appeals, cont. Providers may have an opportunity for a Peerto-Peer conversation before a requested service is denied 70 80% of Smoky authorization denials are partial approvals, with reduced units/days or auth span Care Managers and Peer Reviewers often

advocate for changes in services requested to better meet beneficiary needs The Affordable Care Act: Whats the Big Deal? Expanded health insurance coverage Individual mandate Expanded Medicaid coverage Premium and cost-sharing credits to individuals/families Small employer tax credits ACA, cont.

Strengthened Healthcare Coverage Essential health benefits package Dependent coverage up to age 26 No lifetime limits No rescinding of coverage except for fraud No pre-existing coverage limitations Waiting period of no more than 90 days Coverage for preventive services Employers allowed to offer rewards for wellness ACA, cont. Financial Controls Medical Loss Ratio mandates

Justification and review of proposed increases in premiums Adoption of standards for administrative simplification Far-reaching impact on Medicare, Medicaid, and commercial healthcare coverage Scope of North Carolina Medicaid North Carolina Medicaid covers more than 1.9 citizens, providing medical coverage for roughly one of every five North Carolinians. More than 55% of all births in the State are to mothers

receiving Medicaid benefits. To date, North Carolina has chosen to not expand Medicaid eligibility under the ACA. North Carolina Medicaid Reform Legislation 2015 Goals Ensure budget predictability through shared risk and accountability Ensure balanced quality, patient satisfaction and financial measures Ensure efficient and cost-effective administrative systems and structures

Ensure a sustainable delivery system with prepaid health plans (PHPs): provider-led entities (PLEs) and commercial plans (CPs) NC Medicaid Reform: Key Elements Pay for improved patient outcomes - instead of paying for how many services patients receive. Integrate physical and behavioral health instead of focusing only on physical health. Increase flexibility to invest in external factors to improve health - instead of rigidity around payments.

NC Medicaid ReformKey Elements, cont. Extend care to families to increase the likelihood of children being reunited with their parents - instead of discontinuing care in families with substance use disorders after their children are placed in foster care; Encourage providers to achieve the long-term goal of improving health outcomes - instead of limited financial incentives for providers to transform care; NC Medicaid Reform: Key Elements, cont. Health plans and providers sharing

responsibility with the state for achieving healthy outcomes within budget - instead of only the state facing financial risk. NC Medicaid Reform, cont. State will be divided into 6 regions Prepaid Health Plans (PHPs) will have capitated contracts Three Commercial Plans (CPs) will be state-wide PHPs 10 or 12 Provider Led entities (PLEs) will be regional PHPs Expect three CPs and two PLEs for each region

NC Medicaid Reform, cont. DHHS will use enrollment broker to help beneficiaries select PCP and enroll in a PHP Behavioral health services will be clinically integrated with primary care. Person-Centered Health Communities (PCHCs) will address physical health, behavioral health and social determinants of health for beneficiaries NC Medicaid Reform, cont. MH and SU integrated into Primary Care services are expected to enhance care and

save money. Specialty behavioral health will have separate payment systems, but integrate care. Current LME/MCOs will manage MH, IDD & SU services for 4 years after PHP contracts begin. (2023?) NC Medicaid Reform: Person-Centered Health Community NC Medicaid Reform, cont. Administrative and clinical performance measures

Rewards and sanctions for PHPs meeting/not meeting performance benchmarks Prompt pay requirements: 100% clean claims completed within 30 days of receipt Uniform credentialing Proposed model supports integrated, wholeperson care model NC Medicaid Reform: Proposed Regions NC Medicaid Reform: Possible Timeline (Assumes 1/1/2018 approval of 1115 Waiver) 1115 Waiver submission

June 1, 2016 DOI accepts applications for PHP licensure TBD Draft PHP RFP (including contract) October 2016 to January 2018 CMS approval of 1115 Waiver (assumed) January 1, 2018 PHP RFP issued

March 2018 PHP proposals due June 2018 PHP awards September 2018 PHP readiness reviews by DHHS

November 2018 to June 2019 PHP go-live July 1, 2019 Current LME/MCO contracts end July 1, 2023 Some question whether CMS will approve North Carolinas 1115 Waiver Application without the state expanding Medicaid eligibility

Comorbid Mental and Medical Conditions 5% of population accounts for half of all healthcare spending Persons with comorbid mental and medical conditions are at risk for high costs and poor quality of care Comorbidity: co-occurrence of mental and physical disorders in same person, regardless of chronological order of occurrence or any causal pathway Percentages of people with mental disorders

and/or medical conditions (RWJF) Comorbidity, cont. Comorbidity between medical and mental conditions is the rule rather than the exception In addition to the high prevalence of these conditions, there is also evidence that having either is a risk for developing the other Exposure to early trauma and chronic stress may be a risk factor for both mental and medical disorders

Comorbidity, cont. Socioeconomic factors such as low income and poor educational attainment (social determinants) are associated with mental disorders and medical conditions Some common treatments for diseases may actually worsen the comorbid mental or medical condition (e.g., antipsychotic meds may lead to weight gain) Comorbidity, cont. When mental and medical conditions cooccur, the comorbidity is associated with

elevated symptom burden, functional impairment, decreased length and quality of life, and increased costs. Mental disorders are associated with a twofold to fourfold elevated risk of premature mortality. Comorbidity, cont. Collaborative care approaches have been found to be highly cost-effective. Fully integrated medical, mental health, and substance use models within a single organization may be the most effective in

treating comorbidities. Model of the interaction between mental disorders and medical illness (RWJF) ACE Pyramid: Conceptual Framework for ACE Study Prevalence of ACEs by Category for CDC-Kaiser ACE Study Participants ACE Category Women

Men Total Percent (N = 9,367) Percent (N = 7,970) Percent (N = 17,337) ABUSE Emotional Abuse

13.1% 7.6% 10.6% Physical Abuse 27% 29.9%

28.3% Sexual Abuse 24.7% 16% 20.7% Mother Treated Violently 13.7%

11.5% 12.7% Household Substance Abuse 29.5% 23.8% 26.9%

Household Mental Illness 23.3% 14.8% 19.4% Parental Separation or Divorce 24.5% 21.8%

23.3% Incarcerated Household Member 5.2% 4.1% 4.7% 16.7%

12.4% 14.8% 9.2% 10.7% 9.9% HOUSEHOLD CHALLENGES NEGLECT

Emotional Neglect Physical Neglect 3 3 ACE Studies: Major Findings Almost two-thirds of study participants reported at least one ACE. More than one in five reported three or more ACEs. ACE score is used to assess cumulative childhood stress.

Repeated studies show a graded does-response relationship between ACEs and negative and wellbeing outcomes across the life course. Social & Physical Determinants of Health Research shows that social and physical factors are major determinants of health Social determinants include: Availability of resources to meet daily needs (e.g., safe housing, access to local markets) Access to educational, economic and job opportunities Access to health care services, education, and jobs

Physical & Social Determinants of Health, cont. Social Determinants, cont. Transportation options Public safety Social support Exposure to crime, violence, and social disorder Physical Determinants include: Natural environment (trees, grass, weather) Worksites, schools, and recreation Physical barriers (esp. for people with disabilities)

Recommendations for Addictions Professionals 1. Develop a strong theoretical model as the basis for evaluations and treatment you do. Beware of eclectic mishmash! 2. Learn clinical practice guidelines and evidence-based treatments. Your clinical judgement and clinical expertise are much stronger when based on professional consensus and research. Recommendations, cont. 3. Learn, practice and employ robust clinical

assessments. Update assessments when you get new information or when treatment is not progressing. 4. Become proficient across disability groups (Mental Health, Substance Use Disorders, and Intellectual/Developmental Disability). Recommendations, cont. 5. Develop and adhere to good evaluation and treatment documentation practices. 6. Understand the business side of services that you provide. Who is paying for the care that you provide? What are the clients costs?

7. Learn to measure the outcomes of treatment. Expect payment for treatment to shift from fee-for-service to client outcomes. Recommendations, cont. 8. HIPAA Privacy Regulations have more to do with effective sharing of information than secrecy. Communicate with others. 9. Accept that your clinical work is not done in secret. Expect oversight from your organization, professional group, consumers and advocates, courts, and payers.

Recommendations, cont. 10.Learn how to work with multidisciplinary teams including peer specialists and other paraprofessionals. 11.Learn and provide trauma-informed care 12.Learn to practice whole-person care. Understand the interactions between addictions and other health domains. Recommendations, cont. 13.Teach other healthcare providers about addictions contributions to healthcare: Disease model of addictions

Peer Support Specialists Recovery Model Motivational Interviewing Ethical Issues & Managed Care What ethical principles and standards apply to being an addictions professional practicing in a managed care environment? Ethical Issues & Managed Care, cont. Do payment methodologies ever create conflicts of interest? What is the ethical response to a denied

authorization request? What are the ethical principles re competence and the adoption & application of new technologies? Ethical Issues and Managed Care, cont. How do you balance the principles of confidentiality and collaboration? How can you use the ACEs research findings in your practice with clients? What are the implications of the research of the social determinants of health for your practice?

Ethical Issues and Managed Care, cont. What are your options when your values and beliefs conflict with your clients healthcare benefits?

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