Maryland Saves Millions Through High-Risk Patient Management Initiative
From 1993 to 1997, staff at the University of Maryland Baltimore County's (UMBC) Center for Health Program Development and Management (CHPDM) contributed to the design, project management and evaluation of Maryland's High-Risk Patient Management Initiative.
The purpose of the $20.2 million initiative, later called HealthChoice, was to demonstrate that, by using case management for potentially high-cost Medicaid patients, the state's Medicaid program could achieve savings in expenditures along with improved health outcomes.
During the grant period, the project team:
- Tested, refined and validated a screening tool for identifying potential high-cost inpatients.
- Developed case studies for the 100 most expensive high-cost patients as well as another 2,000 Medicaid recipients who "screened in" as potential high-cost patients.
- Convened advisory work groups to discuss and encourage the development of integrated care management systems.
- Identified the characteristics of care systems that efficiently meet the needs of people with multiple health problems, physical limitations and inadequate social supports.
- Organized private forums to educate Maryland providers and consumers about managed care financing and especially about diagnosis-related risk adjustment.
- Supported the development of a project management office for the initiative.
- Put a database system in place for case management and screening.
The Robert Wood Johnson Foundation (RWJF) supported this project through a grant of $172,852.
Between 1986 and 1991, Maryland's Medicaid expenditures increased 28 percent, while Medicaid's share of the state's budget grew from 10 percent to an all-time high of 14 percent. Almost three-quarters of this spending was generated by only 10 percent of the Medicaid patients who were high users of services. During this period, expenditures for the disabled accounted for approximately 57 percent of the growth in Medicaid expenditures, and outlays for the elderly accounted for 7 percent of the increase. The remaining 36 percent was due to the increasing numbers of women and children covered by Medicaid as a result of federally mandated expansions in coverage and an economic recession.
By 1993, most Maryland Medicaid recipients were in managed care. A Health Care Financing Administration (HCFA)-funded study of preventable hospitalizations among Maryland's Medicaid population documented complex health problems and the inadequate social supports within this group that contributed to repeated hospitalizations, deterioration, and death. The study, and Maryland's experience with primary care management in the early 1990s, revealed that many of the high-risk, high-cost patients had needs beyond the scope of most primary care providers. To achieve cost savings as well as improved health outcomes, Maryland's Department of Health and Mental Hygiene (DHMH) sought to design and pilot test a statewide system for identifying, managing, and monitoring high-risk, high-cost Medicaid patients.
This multi-year $20.2 million Initiative began in 1994 and operated for two full years, through June 1997, following which the State of Maryland implemented the HealthChoice managed care program for most Medicaid recipients. The Initiative, operated by the Policy and Health Statistics Administration of the DHMH, was designed to demonstrate that case management for potentially high-cost Medicaid patients could not only achieve savings in the state's Medicaid program but improve health outcomes as well. The Robert Wood Johnson Foundation's (RWJF) grant supported a set of specific planning, research, and project management activities that took place at the University of Maryland Baltimore County's (UMBC) Center for Health Program Development and Management (CHPDM), which was responsible for design, ongoing project management, and evaluation.
Though its funding was a small part of the overall program, RWJF's willingness to provide funding for the initial planning and development was a key consideration in the Maryland legislature's decision to approve $8.6 million for the Initiative in 1994 and to appropriate another $11.6 million in 1996. DHMH contributed in-kind services for oversight and development of the project and made a grant to CHPDM to provide technical assistance and consultation in developing instrument validation methods, financing methods, payment incentives, and approaches to clinical measurement. In addition, $302,000 of federal matching Medicaid funds was made available to this program.
This section is divided into two parts: (1) project activities undertaken at CHPDM with support from RWJF and (2) overall results of the Initiative.
Results of RWJF-funded Activities
- A screening tool for identifying potential high-cost inpatients was pilot tested, refined, and validated. Screening of Medicaid patients was initiated statewide in all hospitals with 1,000 or more Medicaid discharges per year. This screening instrument was tested through phone and field interviews. Claims data were used to assess validity of the screening instrument.
- Case studies were developed for the 100 most expensive high-cost patients as well as another 2,000 Medicaid recipients who "screened in" as potential high-cost patients. These case studies formed the basis for clinical diagnostic groupings of high-cost users, identifying the patient's characteristics, and the factors that contributed to their high costs. A report summarizing this work, "Medicaid's Highest-Cost Patients: Diagnosis Groupings for Management and Prevention Strategies" was prepared by the DHMH's Policy and Health Statistics Administration.
- As part of the development of HealthChoice, advisory work groups were convened to discuss and encourage the development of integrated care management systems. CHPDM was instrumental in preparing the second waiver request. It conducted 17 public hearings across the state attended by nearly 2,000 people: 11 meetings of the Medicaid Waiver Advisory Committee and 6 focus groups for Medicaid consumers.
- The characteristics of care systems that efficiently meet the needs of people with multiple health problems, physical limitations, and inadequate social supports were identified. A literature review on case management for specific clinical diagnosis groups and risk factors associated with high medical cost was completed along with site visits to local and international best-practice models. Twenty-two local innovative programs were visited in Baltimore. The project identified a number of attributes these programs shared, despite differences in clients and operational details. They addressed clients' social problems; became intensely involved with clients; extended interventions over prolonged time periods; stressed establishing trust and empowering individuals; and strengthened clients' informal support systems, especially families; and these programs were often financially vulnerable. A Best-Practices Team of senior health leaders from the public and private sectors visited nine European programs identified by international experts, with the travel costs supported by the Foundation's grant. The programs varied widely but there were common characteristics that contributed to cost-effective health care: unified funding streams; local management for defined populations; an emphasis on outcomes; and a strong reliance on software and information technology, staff development, and aggressive rehabilitation for the patient.
- Staff at CHPDM organized private forums to educate Maryland providers and consumers about managed care financing and especially about diagnosis-related risk adjustment. Staff members built a risk-adjustment model and tested several methods for adjusting for case mix.
- CHPDM supported the development of a project management office for the Initiative. The project office provided the infrastructure to manage and coordinate the demonstration for which the Maryland legislature approved $8.6 million in 1994 and $11.6 million in 1996.
- CHPDM put a database system in place in 1995 for case management and screening.
Results of the Overall Initiative
- In 1995 and 1996, 900 and 1,600 patients, respectively, were intensively case managed, generating an estimated $12 million in net savings to the state during those two calendar years, according to CHDPM. Beginning in July 1994, case management services were made available to Medicaid recipients identified by the screening tool as high users of care and who volunteered for case management. Case managers achieved savings by arranging for ambulatory and home health services to reduce inpatient days and emergency room services using non-Medicaid community services to benefit patients, and assisting patients with personal and social problems affecting compliance with medical regimens.
- Maryland successfully sought a HCFA waiver that required most Medicaid recipients to enroll in managed care organizations. An initial waiver request, in 1995, for high-cost patients only was never approved by HFCA. A subsequent request, in 1996, went beyond high-risk, high-cost patients to include most Medicaid recipients. This waiver was approved and ultimately provided the structure for Maryland's statewide Medicaid Managed Care program, HealthChoice, which began in July 1997, and allowed the state to mandate that Medicaid recipients enroll in managed care.
Faculty at Johns Hopkins University prepared an evaluation plan contingent on implementing the 1995 HCFA waiver request for high-cost Medicaid patients. Since that waiver was not approved, the evaluation of the Initiative was not completed.
This project produced papers on Medicaid high-cost patients, on the site visits to European models for case managed care systems, on Maryland Medicaid 1115 waiver policy options, and on the cost savings from case management during the Initiative. The project team at CHPDM presented findings from the Initiative and summaries of the site visits to program managers and policymakers in other states and at a number of conferences during the grant period. In 1998, two articles describing the program were published in the Milbank Quarterly: "Beyond Managing Medicaid Costs: Restructuring Care" and "The Collision of Economics and Politics in Medicaid Managed Care: Reflections on the Course of Reform in Maryland." See the Bibliography for other publications and presentations.
- The traditional medical model is not equipped to respond to the underlying social, economic, and demographic factors that are heavy contributors to Medicaid's high costs. Established services do not meet the diverse and multiple needs for the poorest populations, nor do these services provide equity in outcomes. Containing costs and improving the quality of care for high-cost Medicaid users will require strategies and care systems tailored to their needs. These include: early identification of high-cost users; moving patients quickly into the lowest-cost setting appropriate to their needs; reducing hospital readmission through better coordination of aftercare; and substituting, when suitable, home and community-based care for more expensive care.
AFTER THE GRANT
When Maryland's new HealthChoice program was implemented in July 1997, the case management program developed under the Initiative was restructured to provide case management for patients with rare and expensive conditions and for patients who exceed certain cost thresholds under the HealthChoice program. Additionally, it was anticipated that CHPDM would continue to play a major oversight role for capitation rate-setting and performance assessment and the intensive case management for enrollees with rare and expensive conditions.
GRANT DETAILS & CONTACT INFORMATION
Pilot Service Program for High-Risk, High-Cost Medicaid Patients
State of Maryland Health Care Access and Cost Commission (Baltimore, MD)
Dates: November 1993 to June 1997
Ann M. Kerns
(Current as of date of this report; as provided by grantee organization; not verified by RWJF; items not available from RWJF.)
Books and Reports
Center for Health Program Development and Management, University of Maryland Baltimore County. "Maryland Medicaid 1115 Waiver Policy Option Papers, Issues 111," 1994.
Center for Health Program Development and Management, University of Maryland Baltimore County. "Maryland Medicaid High-Cost User Initiative: Case Management and Cost Savings Annual Report CY 1995," March 1996.
Center for Health Program Development and Management, University of Maryland Baltimore County. "Maryland Medicaid High-Cost User Initiative: Case Management and Cost Savings Annual Report CY 1996," March 1997.
Stuart ME, "Medicaid's High-Cost Patients: Who Are They?" University of Maryland Baltimore County, June 1997.
Stuart ME and Weinrich M, "Report on the European Trips of the Maryland Best-Practices Team." University of Maryland Baltimore County, June 1997.
Policy and Health Statistics Administration, Maryland Department of Health and Mental Hygiene. "Medicaid's Highest Cost Patients: Diagnosis Groupings for Management and Prevention Strategies." Medicaid Management Short Reports, 6(March): 1997.
Oliver TR. "The Collision of Economics and Politics in Medicaid Managed Care: Reflections on the Course of Reform in Maryland." Milbank Quarterly, 76(1): 59101, 1998. Abstract available online.
Stuart ME and Weinrich M. "Beyond Managing Medicaid Costs: Restructuring Care." Milbank Quarterly, 76(2): 251280, 1998. Abstract available online.
"Case Management Decision Guide and Resource Manual." UMBC Center for Health Program Development and Management, 1994.
"Maryland Medicaid High Risk Screen." UMBC Center for Health Program Development and Management, 1994.
"Medicaid High Risk, High Cost Screeners Training Program Manual." UMBC Center for Health Program Development and Management, 1994.
"Maryland Medicaid High-Cost User Conference," July 7, 1994, UMBC, Baltimore, Md. The project was introduced, and communication with community leadership was initiated.
"The Best Practices Mission Team Debriefing for Health Officials and Providers, July 25, 1995. Martin Wasserman, M.D., Secretary of Health, Maryland Department of Health and Mental Hygiene, Baltimore, Md.
International conference highlighting innovative programs identified under this grant, September 1997. Cosponsored by State of Maryland and World Health Organization.
Experts from Scandinavian programs visited by the Maryland Best-Practices Team visited Maryland in October 1997.
Presentations and Testimony
John Folkemer, Deputy Director, Maryland Medical Care Policy Administration. "Maryland High-Cost User Initiative" at Medicaid Managed Care Conference, Scottsdale Ariz., 1995.
"Methodological Issues in Monitoring Medicaid Managed Care." October 29,1995. Panel convened by Mary Stuart at the 123rd Annual American Public Health Association Meeting in San Diego. Three panelists gave presentations based on findings from the High-Cost Patient Management Project.
Mary Stuart, Martin Wasserman, and Michael Weinrich. "Maryland's Innovative Programs" at WHO Conference, London, November 24, 1995.
Case studies to a panel of experts on November 12, 1995 at the Oklahoma State University College of Osteopathic Medicine in Tulsa, Okla. Mary Stuart and Michael Weinrich discussed how a system of care could be designed to address the needs of these high-cost patients.
Press conference: Medicaid High-Cost User Initiative, UMBC, Baltimore, Md., July 7, 1994.
"Officials Scan Europe for Ways to Cut Health Costs," Baltimore Business Journal, January 16, 1998.
Report prepared by: Nancy Leopold
Reviewed by: Timothy F. Murray
Reviewed by: Marian Bass
Program Officer: Nancy L. Barrand