Leading Medicaid Managed Care Plans

A State Relationship Perspective

Arlene Davidson

• Publisher: Productivity Press
• Year: 2017
• ISBN:
  9781351398428
• Edition: 1
• Topic: Negocios y empresa
• Subtopic: Gestión

Leading Medicaid Managed Care Plans examines leadership actions necessary to successfully operate a Medicaid managed care plan with emphasis on the relationship with the state Medicaid agency the health plan is contracted with. With appropriate operational and governance oversight, and with solid mutually respectful relationships with the state agency, Medicaid health plans are more likely to sustain success and prosperity for the long term.

The approach of Leading Medicaid Managed Care Plans builds on key infrastructure elements that need to be in place when contracting with a state agency, and for overall success of the organization. It takes a pragmatic and methodical approach, interspersed with real-life examples of what to do for success and what actions to avoid that frequently lead to failure. This approach is different from most managed care books (Medicaid or otherwise) as those mostly focus on the process of the business (such as details around claims payment, or provider contracting) and ignore the role of the state Medicaid agency and its importance in retaining the contractual relationship. This book differs also on its emphasis on organizational foundational elements and strategic leadership skills necessary to sustain success.

The author has years of experience in turning around failing Medicaid managed care plans and observing what they all had in common that contributed to those failures. One common feature was the deterioration of the relationship with the state Medicaid agency they were contracted with, and how close they all came to losing their multi-million dollar businesses. The purpose of this book is to educate and inspire managed care executives and senior leaders who operate Medicaid health plans and to help them understand what elements are needed for successful health plans and a sustainable relationship with the people directing the state Medicaid agency.

BUILDING A STRONG FOUNDATION

I

Chapter 1

Mission, Vision and Values

Whole books and college courses are dedicated to creating and sustaining viable mission, vision and values statements. My objective here is not to repeat what many expert authors have already covered but to underscore the importance of having meaningful mission, vision and values statements and why these are necessary in today’s Medicaid and business environment. When I have examined organizations that stumbled and failed, whether non-profit or for-profit, it is often due to a failure to adhere to their founding principles, albeit in addition to subjects covered in the following chapters. The point is, long-lasting success has a better chance of occurring if you start with a strong foundation upon which to build. Like most steps in the creative process, it starts with a main question.

Why Medicaid?

What drives a company to be in the Medicaid managed care business? Why are you involved in Medicaid managed care?

For many companies and individuals, whether non-profit or for-profit, it is to fulfill a desire to help those in need, to assist the less fortunate and to create healthier lives for them or to improve their well-being. Quite often there are strong altruistic elements in these desires, without concern for financial profit or organizational growth. For other institutions, they are focused more on providing value to a variety of stakeholders, including investors for large for-profits, as well as to their employees and contracted providers.

Whatever their motivations, it seems being involved in the Medicaid business lends itself to determining some type of purpose or mission, some over-arching credo that helps explain why people devote themselves to this line of work, aside from collecting a paycheck. I am initially addressing the purpose of Medicaid and the reasons companies (and states) invest so much of themselves in it.

Why the Medicaid program exists in the first place may be a good place to start. Medicaid was signed into law in 1965 and was originally designed to help with the medical expenses of parents and dependent children receiving public assistance and also for aged, blind and disabled individuals. It has expanded in the last 50 years to occupy a major place in America’s health care system, to cover more uninsured and underinsured, and the long-term care needs of disabled and/or elderly persons (Paradise et al . 2015).

What initially started as a way for our country to address the health care needs of impoverished individuals, has grown into a robust safety-net program with great sources of innovation and health care financing (Paradise et al . 2015). Medicaid has also evolved in its raison d’ê tre , a sort of “mission creep.” Beyond just providing health care services to vulnerable populations, states with Medicaid managed care programs have matured and expanded their missions to encompass a broader spectrum of purpose and many Medicaid health plans need to expand their own missions to address this widening need. Some of Medicaid program expansion was necessary during the years of the Great Recession; other growth was spurred on by the passage of the Affordable Care Act in 2010.

The Medicaid program itself exists as a safety net for our country’s most vulnerable and disenfranchised people. The program provides health and long-term care coverage to almost 76 million Americans who are impoverished, in poor mental and or physical health, disabled, lacking social supports and the most unfortunate suffer all of these attributes. Over half of these beneficiaries are enrolled in managed care Medicaid health plans, a program strategy employed by 39 states and the District of Columbia (Medicaid Health Plans of America 2016). The remaining states use non-managed care strategies, or a hybrid, to coordinate health care services for their constituents. The focus of this book is on the states with managed care systems and programs.

Providing health and long-term care coverage to these individuals is complex and expensive. Over $430 billion of combined federal and state Medicaid funding was spent in 2013, with Medicaid typically ranking second in state budgets (Paradise et al . 2015). States, who report certain detailed information, paid over $123 billion to managed care organizations in 2013 (The Henry J. Kaiser Family Foundation 2015). For managed care organizations, Medicaid has long been known to have thinner profit margins than other lines of business. Some Medicaid managed care plans are functioning with an average of 0.0% to 1.0% operating profit ratio; some even less (Centers for Medicare and Medicaid Services 2012).

With complex, costly care and narrow profit margins, it is a wonder that people continue to devote themselves to this line of work. This brings us back to my earlier comment about a sense of purpose that drives individuals, and the companies they work for, to pursue or to remain in the Medicaid managed care profession.

Mission, Vision and Values: A State Perspective

Over the years, as Medicaid managed care grew and matured throughout the country, state departments that ran these programs began to mirror other industry organizational trends in developing mission, vision and values statements. Some states created Medicaid dedicated mission statements of what they wished to accomplish; other states added vision statements to further outline to their constituents what they strive to be or what they wish to pursue. Still others have incorporated values statements or principles and ideals, which guide peoples’ actions and behaviors (Abrahams 1999). Still other states have separate mission, vision and values statements; and some combine them into one powerful declaration of purpose. The oft repeated dictum of “if you’ve seen one Medicaid program, you’ve seen one Medicaid program” applies equally to their operational design as to their creation of mission statements.

Here are some examples, easily available on each state’s publicly accessible websites:

CALIFORNIA MEDI-CAL MANAGED CARE DIVISION

Mission: The mission of the California Department of Health Services is to protect and improve the health of all Californians.

Vision: All Medi-Cal managed care enrollees will have access to health care which is safe, effective, patient-centered, timely, efficient and equitable, and which serves to reduce the burden of illness and improve the health and functioning of the enrolled individuals and population.

(From public domain at www.dhcs.ca.gov/Medi-cal)

NEW JERSEY DEPARTMENT OF HUMAN SERVICES

Mission: The Department of Human Services is dedicated to providing quality services that consistently meet expectations with the goal to protect, assist and empower economically disadvantaged individuals and families, and people with disabilities to achieve their maximum potential. We strive to ensure a seamless array of services through partnerships and collaborations with communities statewide. We seek to promote accountability, transparency and quality in all that we do.

(From public domain at www.state.nj.us/Medicaid)

PENNSYLVANIA DEPARTMENT OF HUMAN SERVICES

Vision: To see Pennsylvanians living safe, healthy and independent lives.

Mission: To improve the quality of life for Pennsylvania’s individuals and families. We promote opportunities for independence through services and supports while demonstrating accountability for taxpayer resources.

Values: Collaboration, communication, accountability, respect and effectiveness.

(From public domain at www.dhs.pa.gov/Medicaid)

The way states display their mission statements is equally varied. Some post them visibly on their websites, as shown above.

Other states incorporate their mission or purpose into annual reports or strategic plans. For example, the State of Tennessee and its Bureau of TennCare, their Medicaid managed care program, combined a mission (what it wants to accomplish) with a vision (what to pursue) in its cover letter of a recent annual report:

The Bureau of TennCare strives to provide health care to Tennessee’s most vulnerable population in a way that meets high quality standards while remaining cost effective in the process. [… ] Continuing to create more long-term care options for the state’s elderly and adults with physical disabilities [… ] our dedicated staff will continue to pursue opportunities to improve administrative operations and quality of care for our members.

Adapted from public domain at www.tn.gov/TennCare

The State of Arizona’s Medicaid program— the Arizona Health Care Cost Containment System or AHCCCS— publishes its mission in several places, but most prominently in its 2015 five-year strategic plan.

ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM

Vision: Shaping tomorrow’s managed health care […] from today’s experience, quality and innovation.

Mission: Reaching across Arizona to provide comprehensive, quality health care for those in need.

(From public domain at www.azahcccs.gov)

Mission, Vision and Values: A Health Plan Perspective

Managed care companies evolved right along with the states in creating mission, vision and value statements as foundations on which to build their futures. Here are some examples from national Medicaid companies which can also be accessed on their corporate websites.

UNITEDHEALTH GROUP

Mission: Our mission is to help people live healthier lives and to help make the health system work better for everyone.

Values: Integrity, compassion, relationships, innovation, performance.

(From 2016 Annual Report at www.unitedhealthgroup.com)

AMERIGROUP

Purpose: Together, we are transforming health care with trusted and caring solutions.

Vision: To be America’s valued health partner.

Values: Trustworthy, accountable, innovative, caring, easy to do business with.

(From 2017 www.amerigroup.com/aboutus)

These examples of managed care companies only reflect large, national organizations, but there are numerous regional and local managed care health plans with similar statements of purpose and vision.

Several things are clear in reviewing all of these statements and those of entities not listed here: states with Medicaid managed care programs, and health care companies that contract with them, want to protect or help those less fortunate and to improve or transform their health or the health care system itself. Those that list values commonly cite similar principles: compassion, integrity, accountability and respect. Comparing these statements across states as well as across managed care companies reveals more commonality than differences. We are more in alignment with each other than many other business relationships, and this reveals an opportunity that seems seldom realized.

Aligning State and Health Plan Perspectives

Why aren’t managed care companies more attuned to assisting states in realizing their missions and reaching their visions? Would it be so outlandish if a managed care organization actually had that in their own mission ­statement— to assist states in improving the health of their Medicaid beneficiaries? Why not help stat...