Lessons From the
Managed Care Experience
of the
Community Health Center
Network
Ralph Silber
Chief Executive Officer, CHCN
March 16, 2012
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Introduction: What is CHCN?
Mission Statement:
The Community Health Center Network is a partnership of
community health centers committed to enhancing our ability
to provide comprehensive, quality health care in a manner
respectful of community traditions and values.
CHCN provides:
– Managed care contracting services and management
services for our health centers’ managed care business
– Practice management services for health centers
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Network’s Three Broad Roles
– As an Independent Practice Association (IPA)
• Contracting with HMOs on behalf of our health centers
– As a Managed Care Management Services
Organization (MSO)
• Integrated managed care functions such as contracting,
claims processing, utilization management, Pay for
Performance (P4P) quality improvement
– As a Practice Management Organization
• HIT initiatives, QI, PCMH, Data Analytics
– Note that our policy and advocacy work is conducted
by our sister organization, Alameda Health
Consortium
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CHCN Governance
• Non-Profit 501(c)(3) Corporation
• Board is composed of the CEOs of 8 member
health centers
• Community Health Center Network Members
Asian Health Services
Axis Community Health
La Clinica de La Raza
LifeLong Medical Care
Native American Health Center
Tiburcio Vasquez Health Center
Tri-City Health Center
West Oakland Health Council
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Health Center Services
• CHCN Health Centers serve clients at 29
comprehensive primary care sites in Alameda
and Contra Costa Counties
• Employ more than 150 PCPs
• More than 160,000 patients seen at our health
centers
• In aggregate, CHCs are a very significant
primary care provider in Alameda County. Our
health centers are the “medical home” for
approximately 2/3rds of our County’s low-income
residents.
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CHCN Managed Care
• CHCN has HMO contracts with Alameda Alliance for
Health (AAH), Blue Cross, and Health Net
• HMO Programs:
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Medi-Cal Managed Care (2-plan model)
Healthy Families
Access for Infants and Mothers (AIM)
In-Home Support Services Workers
Medicare Advantage Special Needs Plan
• CHCN has contracts with more than 500 specialists
• Approximately 64,000 Managed Care Members (about
30% of health centers’ patients are through CHCN)
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Network Managed Care
Organization Definitions : IPA and
MSO
• What is an Independent Provider Association (IPA)?
– Entity organized and directed by health care providers to jointly
negotiate contracts with health maintenance organizations and
depending on the contracts, with specialists and other providers.
– The value of the IPA is aggregation into an association in order
to leverage contracting strength vis-a-vis HMOs.
• What is an Managed Care Services Organization (MSO)?
– An organization that provides physicians or other provider
groups including IPAs, services in support of HMO contracts.
– These services typically include membership processing, claims
processing and payment, referral and authorization processing,
utilization management, P4P quality improvement, and other
administrative activities.
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CHCN is an IPA and MSO
• CHCN as an IPA
– Contracts with HMOs (Alameda Alliance for Health,
Blue Cross, and Health Net) on behalf of our member
health centers
– Contracts with specialists and ancillary providers
• CHCN as an MSO
– Is organized to provide a range of services in support
of the HMO contracts. These include membership
processing, claims adjudication, utilization
management, etc.
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IPA Elements of CHCN:
Health Center Participation
Agreement and Criteria
• Participation Agreement legally binds the health
centers to participating in CHCN.
• There are CHCN membership criteria. The
criteria are essential to assure business success:
– Assuring mutual trust
– Meeting regulatory and HMO requirements
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Membership Criteria
– Financial / Administrative
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Current ratio of at least 1 to 1 (assets to liabilities)
At least one month’s operating reserves
Ability to track costs of capitated services on a monthly basis
Most recent audits
Management IT reporting systems (e.g. track Medi-Cal
patients by aid code)
– Clinical services
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Medical Director at least 50% time
Quality Assurance program
24 hour advice and telephone call system
Provide case management services
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MSO Components of CHCN:
Managed Care Operations
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Membership
Claims
Utilization Management
HMO and Provider Contracting and Relations
Finance
Quality Improvement
Information Technology
Operations Management
Pay for Performance
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CHCN HMO Contracting
• Types of Risk Contracting
– Global
– Inpatient
– Full Professional (including specialty care)
– Primary Care Only
• CHCN is a “Delegated” group
• CHCN takes “Full Professional Risk”
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Payment Flows
Medi-Cal
Alameda Alliance
for Health
Anthem
Blue Cross
CHCN
Specialists,
Ancillary
Clinic PCP
Risk Pool
Funds
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CHCN Pay for Performance
(P4P) to Our Health Centers
• Board decides each year to distribute dollars
from CHCN risk reserves (i.e., our “profits”)
– % Health Center Member Months
– % HC’s Contribution to Financial Reserves
– % Based on Quality Improvement Measures
– % Appropriate Utilization (PCP visits, ER visits,
inpatient admissions)
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CHCN P4P
• These P4P measures are used to incentivize several areas:
– Where HMOs have P4P, these give impetus to improve on those
measures
– Pushes us on membership growth
– Pushes us to improve financial performance
– Gives us a regular process to measure Patient Satisfaction
– Measures our improvement in quality of care
– Incentivizes appropriate utilization
• Reliability and credibility of data is crucial for P4P to work.
– Dollars are distributed according to data measures. These must be
right!
• Our clinical and utilization measurement enables us to market
the health center services as quality focused.
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Advantages of “Full Professional
Risk”
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By taking greater financial risk, we are able to
reinvest “profits” from managed care business
back into the health centers
By taking risk and operating efficiently, we are
able to strengthen our position with our
business partners – the HMOs, hospitals, and
specialty physicians
Taking risk gives us access to extensive data
that is being used to support quality
improvement initiatives in chronic disease
management and preventive health care.
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More Advantages
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By consolidating all our managed care
contracts into one IPA/MSO, greater
efficiencies are gained at the operational level
for health centers. Instead of having to deal
with multiple HMOs or MSOs, health center
staff can operate under a single managed care
system.
By taking “full professional risk”, we have
developed experience with P4P programs,
positioning us well for any expansion of P4P in
the health care system.
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Value of History of Joint
Consortium/ Network Activities
• Clinics working together on policy and advocacy issues is a “big
plus”
• Not just advocacy, but other experiences of successfully working
together creates TRUST
– For example, the common experience on grants, QI or IT
facilitates the joint investigation of a business collaboration.
• Where there are difficult moments, the advocacy experience helps
keep the “big picture.”
• Business partnerships have cycled back and strengthened our
advocacy capacity.
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Know Your Strengths:
• What are a clinics’ aggregated Medi-Cal market share.
• What is your geographic coverage – are you the sole
provider in the area?
• How do you compare in terms of quality of clinical
services to other providers in the community?
• Be sure to take into account your work in chronic
disease management.
• What is the language and cultural competency in your
organization compared to others in the community?
• Are you able to measure clinical performance such as
immunization rates, etc. (very important to HMOs)?
MORE CLINICAL DATA THE BETTER!
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Systems to Hold Member Clinics
Accountable
• Regular meetings at the minimum of Clinic
CEOs, Medical Directors, and Finance
Managers
• Keep track of physicians and other providers
working at the clinics
• Keep track of clinic services and clinic hours
• Centralize a Patient Satisfaction Survey
• Centralize clinical quality audits, either manual
audits, electronic data or hybrid
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HMO Contracting
• Four Areas of Negotiations
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Capitation Rate
Fee for Service (separate into buckets)
Member Auto-Assignment
Pay for Performance
– Financial performance – per member per month numbers
– Administrative – e.g. audits
– Registry enrollment or electronic health record – e.g. diabetes
registry
– Clinical quality – e.g. well child, HEDIS, etc.
• Bonuses
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Accepting new members
Extended hours for primary care
Language capacity and services
PCMH
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HMO Contracting
• Caveats
– Be sure to seek legal advice on the anti-trust issue
of your ability to negotiate collectively.
– Be sure your managed care arrangements are
consistent with FQHC PPS requirements.
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