Texas Medicaid
Medical and Dental
Information Series
Module 4
Version 1.2 (6/22/2010)
2/22/2013
1
Module 4
Medicaid Curriculum Overview
Module 1: General Structure of the Texas Medicaid System
Module 2: Understanding Medicaid Clients and Health Literacy
Module 4: Texas Health Steps
Module 4: Navigating Insurance and Managed Care
Module 5: Interfacing with Medicaid as a Provider
Module 6: Special Medicaid Programs
Module 7: Special Medical Issues
Module 8: Special Dental Issues
2
Module 4
Navigating Insurance and
Managed Care
3
Module 4
Module 4: Objectives
After completing this module, you should be able to:
Outline the history and current status of insurance and
managed care in the U.S.
List and define 3 umbrella types of insurance coverage
List and define 3 models of managed care
Describe the structure and overall function of Medicaid
managed care
Identify Medicaid managed care programs in Texas
List key provisions of the Patient Protection and
Affordability Care Act and describe its affect on
Medicaid payments and benefits
4
Module 4
True or False?
Test Your Knowledge about Insurance and Managed Care
1.
Blue Cross was created in the 1940s to provide health
care for auto workers.
2.
Between 2007 and 2009, the number of uninsured
Americans dropped by 5 million.
3.
Among families with no health insurance in 2009,
more than 60% had at least one person who works full
time.
4.
Capitation is a payment system in which a provider or
health plan is paid a set amount of money per member
patient per month to provide health care services.
5.
Patients’ enrollment in a Medicaid managed care plan
in Texas is usually based on the service area of the
state in which they live.
5
Module 4
A Brief History of Health Insurance in the U.S.
The Development
of insurance
is the
1930s
1910s
1920s
Blue
Cross,
American
Association
General
Motors
for
1900s
development1940s
of third-party
payers,
LaborMedical
Legislation
signs
acreated
contractinwith
American
Association
To
compete
forthe
workers
organizations
other
than
doctor
Dallas
in
1929
organizes
the
Metropolitan
first
national
Life
to or
becomes
a powerful
national
during
wartime,
companies
to
provide
care for
insure
180,000
on
“social
force,conference
establishing
the
patient
that
participate
in
paying
for
to offer
health
benefitsat
school
teachers
workers
insurance”
beginning
ofbegan
“organized
health care services
Baylor University
medicine”
American Medical
Association &
American Dental
Associations become
powerful national
forces, establishing
the beginning of
“organized medicine”
1900s
Hospital, begins offering
private coverage
for
Blue Cross,
in
hospital created
care
Dallas in 1929 to
American
Association for
Labor Legislation
organizes the first
national
conference on
“social insurance”
General Motors
signs a contract
with Metropolitan
Life to insure
180,000 workers
provide care for
school teachers at
Baylor University
Hospital, begins
offering private
coverage for
hospital care
1910s
1920s
1930s
1940s
6
Module 4
A Brief History of Health Insurance in the U.S.
American Medical
Association &
American Dental
Associations become
powerful national
forces, establishing
the beginning of
“organized medicine”
American
Association for
Labor Legislation
organizes the first
national
conference on
“social insurance”
General Motors
signs a contract
with Metropolitan
Life to insure
180,000 workers
Blue Cross,
created in
Dallas in 1929 to
provide care for
school teachers at
Baylor University
Hospital, begins
offering private
coverage for
hospital care
1900s
1910s
1920s
1930s
To compete for
workers during
wartime,
companies begin
to offer health
benefits
1940s
7
Module 4
A Brief History of Health Insurance in the U.S.
1900s
1910s
1920s
1930s
1940s
American Medical
Association &
American Dental
Associations become
powerful national
forces, establishing
the beginning of
“organized medicine”
American
Association for
Labor Legislation
organizes the first
national
conference on
“social insurance”
General Motors
signs a contract
with Metropolitan
Life to insure
180,000 workers
Blue Cross,
created in
Dallas in 1929 to
provide care at
Baylor University
Hospital for school
teachers, begins
offering private
coverage for
hospital care
To compete for
workers during
wartime,
companies begin
to offer health
benefits
1950s
Private insurance for those
who can afford it and federal
responsibility for the sick poor
are firmly established
1950s
8
Module 4
A Brief History of Health Insurance in the U.S.
1900s
1910s
1920s
1930s
1940s
American Medical
Association &
American Dental
Associations become
powerful national
forces, establishing
the beginning of
“organized medicine”
American
Association for
Labor Legislation
organizes the first
national
conference on
“social insurance”
General Motors
signs a contract
with Metropolitan
Life to insure
180,000 workers
Blue Cross,
created in
Dallas in 1929 to
provide care at
Baylor University
Hospital for school
teachers, begins
offering private
coverage for
hospital care
To compete for
workers during
wartime,
companies begin
to offer health
benefits
1950s
Private insurance
for those who can
afford it and
federal
responsibility for
the sick poor are
firmly established
1950s
2000-2010s
2000-2010s
1960s
1970-1980s
1990s
President
Balanced Budget Act
George W.
President Johnson
Dental Insurance
of 1997 created the
signs Medicare
becomes
1990s
1970-1980sState
1960s
Children’s
Bush signs
and
Medicaid into
available;
Health
Insurance
law
President Nixon
Balanced
Budget
Dental
Insurance
becomes
President Johnson
signs
Program (CHIP)
the
law Act
renames
prepaid
group health care
of 1997 Nixon
created
the
available;
President
renames
Medicare and
Medicaid
into
authorizing
plans
as Health
Maintenance
State
Children’s
prepaid group
health
care
plans as
law
Medicare
Organizations
(HMOs)
Health Insurance
Health Maintenance
Organizations
Part D drug
Program
(HMOs)
President
Obama signs
the (CHIPn)
benefit;
Affordable Care Act
9
Module 4
A Brief History of Health Insurance in the U.S.
1900s
1910s
1920s
1930s
1940s
American Medical
Association &
American Dental
Associations become
powerful national
forces, establishing
the beginning of
“organized medicine”
American
Association for
Labor Legislation
organizes the first
national
conference on
“social insurance”
General Motors
signs a contract
with Metropolitan
Life to insure
180,000 workers
Blue Cross,
created in
Dallas in 1929 to
provide care at
Baylor University
Hospital for school
teachers, begins
offering private
coverage for
hospital care
To compete for
workers during
wartime,
companies begin
to offer health
benefits
1950s
1960s
Private insurance
for those who can
afford it and
federal
responsibility for
the sick poor are
firmly established
President Johnson
signs Medicare
and Medicaid into
law
1970-1980s
Dental Insurance
becomes
available;
President Nixon
renames prepaid
group health care
plans as Health
Maintenance
Organizations
(HMOs)
1990s
Balanced Budget
Act of 1997
created the State
Children’s Health
Insurance
Program (CHIP)
2000-2010s
President George
W. Bush signs the
law authorizing
Medicare Part D
drug benefit;
President Obama
signs the
Affordable Care
Act
10
Module 4
Medicare & Medicaid Highlights
Developments that have shaped health care
1965:
1965Medicare and Medicaid enacted (Title XVIII and Title XIX)
Medicare and Medicaid enacted as Title XVIII and
1967:
Screening, Diagnosis and Treatment (EPSDT) established
1967
TitleEarly
XIXand
of Periodic
the Social
Security Act, extending health
The
Early to
and
Periodic Screening,
and
coverage
Americans
aged 65 or Diagnosis,
older, low-income
1972:
Supplemental Security Income (SSI) enacted
1972
Treatment
(EPSDT)
comprehensive
services
children deprived
of parental
supporthealth
and individuals
The
newly
enacted
Federal
Supplemental
benefit
for all
Medicaid
children
under age Security
21 was
with
disabilities.
1986:
Medicaid
coverage
for
pregnant
women
and
infants
established
as state option (100% of FPL)
1986
Income
program (SSI) provided States the
2010
established.
Medicaid
coverage
for
pregnant
women
and
infants
opportunity
to link to
Medicaid
eligibility
for
elderly,
Patient
Protection
and
Affordable
Care
Act
(P.L.
111-148)to 100% of the
1996:
Welfare link to Medicaid severed
1996
Federal
Poverty
Level
(FPL) was established as a state option and
blind,
and
disabled
• Requires
most U.S.residents.
citizens and legal residents to have health
Welfare
Reform replaced the Aid to Families with
later
mandated.
insurance.
1997:
State Children’s Health Insurance Program (CHIP) established
1997
Dependent
Children (AFDC) entitlement program with
• Creates
state-based
American
Health
Benefit
Exchanges through
Health
Insurance
Program
(CHIP)
and
established
the
Temporary
Assistance
for
Needy
Families
(TANF)
2006:
Medicare
Advantage
and
private
drug
plans
available
for
Medicare
Part D
which
individuals
can
purchase
coverage.
2006
new
managed
care
options
for
Medicaid.
block grant and severed the welfare link to Medicaid
The
voluntary
Medicare
Part
D outpatient
prescription
drug benefit
• Requires
employers
to pay
penalties
for employees
who receive
tax
2009:
Children’s
Health
Insurance
Program
Reauthorization
Act
finances
CHIP
through
2009
credits for
health insurance
through from
an Exchange.
became
available
to beneficiaries
private drug plans as 2013
well as
Children’s
Health Insurance
Reauthorization
Medicare
Advantage
• Expands
Medicaid
to plans.
133% ofProgram
the federal
poverty level. Act is passed,
2010:
Patient Protection and Affordable Care Act enacted
financing CHIP through 2013
11
Module 4
Medicare & Medicaid Highlights
Developments that have shaped health care
1965: Medicare and Medicaid enacted (Title XVIII and Title XIX)
1967: Early and Periodic Screening, Diagnosis and Treatment (EPSDT) established
1972: Supplemental Security Income (SSI) enacted
1986: Medicaid coverage for pregnant women and infants established as state option (100% of FPL)
1996: Welfare link to Medicaid severed
1997: State Children’s Health Insurance Program (CHIP) established
2006: Medicare Advantage and private drug plans available for Medicare Part D
2009: Children’s Health Insurance Program Reauthorization Act finances CHIP through 2013
2010: Patient Protection and Affordable Care Act enacted
12
Module 4
Development of Managed Care
History of Health Insurance in the US
Individuals credited as pioneers of managed care
Dr. Michael Shadid, who started a rural farmers’ cooperative health plan in
Elk City, OK in 1929
Henry Kaiser, who set up two medical programs on the West Coast to provide
comprehensive health services to workers in his shipyards and steel mills
during World War II, and later opened the plans to the public
Shadid
Dr. Paul Ellwood, who coined the term Health Maintenance Organization
(HMO) in 1970 to refer to prepaid health plans that enrolled members and
arranged for their care from a designated provider network
Growth of managed care from the 1970s to the present
1973: President Nixon signed the HMO Act of 1973, which approved the use
of federal funds and policy to promote HMOs
Kaiser
1982: California legislation allowed selective contracting for Medicaid and
private insurance, paving the way for other states to enact similar laws
facilitating Preferred Provider Organizations (PPOs)
1985: National total HMO enrollment reaches 19.1 million;
1990: National total HMO enrollment reaches 33.3 million
2006: National total HMO enrollment is 67.7, and national PPO enrollment is
108 million
Ellwood
13
Module 4
Health Insurance Coverage of the Total
U.S. Population, 2011
Current Status of Health Coverage
Insurance Source
Uninsured
16%
Medicare
13%
Employer
49%
Medicaid &
Other Public
18%
Private/ NonGroup
5%
Total = 307.9 million
NOTE: Medicaid/Other Public includes Medicaid, CHIP, other state programs, and military-related coverage. Those enrolled in both
Medicare and Medicaid (1.9% of total population) are shown as Medicare beneficiaries.
14
Module 4
Dental Coverage by Insurance Source
Employment-based vs. Privately Purchased
About 80% of people with employer-based insurance have dental
coverage, compared with 30% of those with directly-purchased plans.
Dental Insurance Status by Source for people under 65
with private health insurance
Employment-based insurance
Directly purchased insurance
80
68.7
Percent
70
60
50
40
30
20
10
34.6
27.6
18.3
8.3
22.6
15.2
4.8
0
Single-service
plan only
Comprehensive
plan only
Both single-service
and comprehensive plans
No dental
insurance
Source of Dental Insurance
15
Module 4
Health Coverage, 2010-2011
Texas, California, New York & the US
100%
90%
24%
20%
80%
70%
60%
50%
10%
17%
4%
10%
19%
6%
14%
12%
16%
13%
22%
17%
Medicare
4%
5%
Medicaid & Other Public
40%
Individual
30%
20%
Uninsured
45%
45%
48%
49%
TX Total
25.3 Million
CA Total
37.3 Million
NY Total
19.2 Million
US Total
303.3 Million
Employer
10%
0%
16
Module 4
Health Insurance Coverage of
Workers, by Firm Size, 2007
Current Status of Health Coverage
2.4%
Public
Sector
87.3%
4.4%
3.4%
1000 or
More Workers
78.3%
12.7%
5.5%
3.6%
500-999
Workers
77.7%
13.0%
5.8%
15.5%
3.6%
100-499
Workers
75.6%
5.4%
4.9%
25-99
Workers
68.2%
20.7%
6.2%
32.2%
7.8%
<25
Workers
52.0%
8.0%
19.9%
Self-Employed
47.3%
0%
10%
20%
Employer
5.8%
26.9%
6.0%
30%
40%
Individual
50%
60%
70%
Medicaid/Other Public
80%
90%
100%
Uninsured
17
Module 4
Dental Coverage and Use Among
Non-Elderly Adults, 2005
Percent with
Dental Coverage
Percent of Low-Income with
Dental Check-Up in Last Year
64%
50%
42%*
17%*
Higher
Income
Low
Income
Insured
with Dental
Coverage
* Indicates statistically significant difference at the p<.05 level.
Low-income is defined as living in families earning 200% of the federal poverty level (FPL) or less who live in high-poverty
Census tracts. Adults are those age 19-64. Dental coverage includes both private and public sources.
Source: 2005 Kaiser Low-Income Coverage and Access Survey.
Uninsured
18
Module 4
How Important is Insurance?
Current Status of Health Coverage
Adults who lack health
insurance are unlikely to
receive:
Barriers to Health Care Among
Nonelderly Adults, by Insurance Status, 2009
10%
11%
No Usual
Source of Care
Postponed Seeking Care
Due to Cost*
Went Without Needed
Care Due to Cost*
Could Not Afford
Prescription Drug*
56%
Primary and preventive
care
Treatment for acute
conditions
8%
12%
32%
Management of
chronic illness
4%
The uninsured are three
times more likely than the
insured to be unable to
pay for basic necessities
because of medical bills
9%
26%
6%
13%
27%
*In Past 12 Months
Employer/Other Private
Medicaid/Other Public
Uninsured
19
Module 4
Insurance and Health Care Access
Current Status of Health Coverage
Between 2007 and 2009, the
number of uninsured Americans
increased by almost 6 million,
driven by a decline in employersponsored coverage.
Both the percentage and
number of people without
health insurance decreased
between 2010 and 2011, driven
by greater numbers of
individuals covered by
government health insurance,
including Medicaid and
Medicare
Number of Nonelderly Uninsured
Americans, 2007-2001,
in millions
49.2
48.3
47.9
44.2
43.5
2007
2008
2009
2010
2011
20
Module 4
Characteristics of Non-Elderly
Uninsured, 2011
Current Status of Health Coverage
Family Work Status
251-399%
FPL
14%
No
Workers
23%
Part-Time
Workers
16%
Family Income
1 or More
Full-Time
Workers
61%
400%+
FPL
10%
Age
55-64
12%
0-18
16%
<100%
FPL
38%
19-25
17%
35-54
34%
100-250%
FPL
38%
26-34
21%
Total= 47.9 Million Uninsured
21
Module 4
Uninsured Rates for the Non-Elderly
by Race/Ethnicity, 2011
Current Status of Health Coverage
White
13%
16%
21%
Black
23%
32%
Hispanic
38%
18%
Other
22%
US
Texas
22
Module 4
Uninsured Rates Among Non-Elderly
by State, 2007-2008
Current Status of Health Coverage
National Average Uninsured = 17%
23
Module 4
Diagnosis of Late-Stage Cancer
Uninsured vs. Privately Insured
3.0
Ratio of probability of diagnosis of late vs. early stage cancer
(Uninsured/Private Insurance)
2.9
2.5
2.2
2.0
Equal likelihood
between
Uninsured and
Insured
2.3
2.0
1.5
1.4
1.0
0.5
0.0
Colorectal
Cancer
Lung
Cancer
Melanoma
Breast
Cancer
Oropharyngeal
Cancer
* NOTE: Odds ratios were adjusted for age, sex, race/ethnicity, facility type, region, and income and education on basis of postal code.
They represent the odds of being diagnosed with stage III or stage IV cancer vs. stage I cancer; for oropharyngeal cancer, odds
ratio represents stage III or IV vs. stage I or II. Analysis for oropharyngeal cancer based 1996-2003 cases; other sites based on
cases occurring between 1998-2004.
24
Module 4
Three Umbrella Types of
Private Insurance
Insurance Primer 101
Fee-for-Service
Fee-for-Service plans,
often called “indemnity
plans,” pay fees to the
hospital or provider for
each health care service
provided to the patient.
Patients can see the
doctor, dentist or provider
of their choice and the
claim is filed by either the
provider or the patient.
Consumer-Directed
Consumer-Directed plans
allow members to set up
health savings funds or
flexible spending
accounts to pay for
covered health expenses.
These plans give
consumers flexibility and
control over their health
benefits funds.
Managed Care
Managed Care Plans
provide coverage for
comprehensive health
services to their members
and offer financial
incentives in the form of
lower out-of-pocket costs
to patients who use
providers participating in a
network.
25
Module 4
Fee for Service Plans
Insurance Primer 101
Key Features of Fee-for-Service (FFS) Plans
Patients can choose the doctors, dentists or
other providers of their choice
Fee-for-Service
Fee-for-Service plans,
often called “indemnity
plans,” pay fees to the
hospital or provider for
each health care service
provided to the patient.
Patients can see the
doctor, dentist or provider
of their choice and the
claim is filed by either the
provider or the patient.
Members or employers pay a monthly
premium and an annual deductible before the
insurance company pays for covered costs
Members usually “share” the cost of health
care services with the insurance company; for
example, a plan might pay 80% of the cost of
services, while the patient or member pays
20%
Types of Fee-for-Service Plans
Basic: a cash reimbursement service that helps pay
for hospitalization and “basic” health services
Major Medical: plans that cover additional costs such
as prescriptions, rehabilitation mental health, etc.
26
Module 4
Dental Fee-for-Service Plans
Insurance Primer 101
Common Fee-for-Service Dental Plans
Direct Reimbursement (DR)
Dental
Fee-for-Service
Fee-for-Service Dental
Plans are typically
freedom-of-choice
arrangements under
which a dentist is paid for
each service rendered
according to the fees
established by the dentist.
Self-funded dental plans that allow
patients to go to the dentist of their
choice. The patient pays the dentist
directly (or the benefit can be directly
assigned to the dental office) and then
submits a paid receipt for proof of
treatment. The plan then reimburses the
patient a percentage of the dental care
costs.
Indemnity Plans
Sometimes called “traditional insurance”
in which the insurance company pays
claims based on the procedures
performed, usually as a percentage of
the charges.
27
Module 4
Consumer-Directed Plans
Insurance Primer 101
Key Features of Consumer-Directed Plans
Patients have individual responsibility and
ownership over their health care payments
Members usually pay a high deductible
(typically at least $1000) before the plan pays
Consumer-Directed
Consumer-Directed plans
allow members to set up
health savings funds or
flexible spending
accounts to pay for
covered health expenses.
These plans give
consumers flexibility and
control over their health
benefits funds.
Types of Consumer-Directed Plans, all of
which are tax-advantaged
Health Savings Accounts (HSAs): accounts that are
funded by individuals or employers to pay for qualified
health expenses. HSAs belong to the individual, are
portable, and can be rolled over from year to year.
HSAs have contribution limits.
Health Reimbursement Arrangements (HRAs):
employer-established accounts that provide non-taxed
funds that employees can use for health care
expenses. HRAs are not portable.
Flexible Spending Accounts (FSAs): employee-funded
accounts that must be spent on qualified expenses
within the year they are accrued and are not portable.
28
Module 4
Managed Care Plans
Insurance Primer 101
Key Features of Managed Care Plans
Managed care plans have contracts with dentists,
doctors, hospitals and other providers to provide
health services to plan members
Managed Care
Managed Care Plans
provide coverage for
comprehensive health
services to their members
and offer financial
incentives in the form of
lower out-of-pocket costs
to patients who use
providers participating in a
network.
Members pay a lower portion of their health care
bills for agreeing to receive care from their plan’s
network of providers
Most plans require a Primary Care Provider (PCP)
and PCP referral as well as prior authorization for
some services
Types of Managed Care Plans
Health Maintenance Organizations (HMOs)
Preferred Provider Organizations (PPOs)
Point of Service (POS)
29
Module 4
Additional Helpful Insurance Terms
Insurance Primer 101
Co-Insurance
The portion of the cost of covered health services paid by the patient under a health plan, after first meeting any
applicable plan deductible.
Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA)
A law that permits individuals to continue coverage temporarily under most employer health insurance plans when they
would otherwise lose eligibility due to a loss of employment or a change in family status (such as divorce).
Usual, Customary and Reasonable (UCR)
The portion of fees that insurers or employers reimburse for health care costs; patients are usually obligated to pay out of
pocket for a non-covered percentage of the UCR amount.
Lifetime Maximum
Limitation on the total amount of benefits or services that an individual may receive over the term of an insurance policy.
Out-of-Pocket (OOP)
Amounts such as copayments and deductibles that an individual is required to contribute toward the cost of health
services covered by a health benefits plan.
Self-Insurance or Self-Funded
Health insurance funded by an employer who takes on the financial responsibility for paying the health benefits claims of
its employees (versus a "fully insured" employer, who pays a health insurance company to take on financial responsibility
for claims).
30
Module 4
Differences Between
Medical and Dental Needs and Treatments
Medical
Dental
Catastrophic
Dental disease is most often
preventable, and coverage is usually
provided for those procedures, such as
sealants, that can prevent dental
disease.
Non-Catastrophic
High Cost
Dental treatment includes relatively lowcost diagnostic procedures, such as
exams and x-rays.
Low Cost
Unpredictable
Predictable
Extremes in cost and utilization (evident
in many medical benefits) are rarely
observed with dental statistics.
An Insurable Risk
The cost of dental treatment has risen
significantly less than the cost of dental
treatment in the past few decades.
Low Risk
31
Module 4
HMOs
Health Maintenance Organizations
Spotlight on Managed Care
Key Features of HMOs
Established by the HMO Act of 1973 as an affordable option to traditional
health plans
Provide health services to members for a fixed monthly premium (capitation,
or per member per month, pmpm)
May charge a co-payment for some services
Usually require members in a medical plan to select a PCP within the plan’s
“network” who manages their overall care
As long as members use providers and hospitals within the HMO network,
out-of-pocket costs remain limited
Care from out-of-network providers is usually limited to services not
available in the existing network
Managed Care
32
Module 4
PPOs
Preferred Provider Organizations
Spotlight on Managed Care
Key Features of PPOs
A managed care health insurance plan that combines features of a fee-forservice plan and an HMO
Provide health services to members for a fixed monthly premium, but the
premiums are often higher than for HMOs
Like HMOs, usually charge a co-payment for some services
May not require members to select a PCP within the plan’s network
As long as members use providers and hospitals within the network of
participating (or “preferred”) provider organization, out-of-pocket costs are
substantially lower than for out-of-network providers
Managed Care
33
Module 4
POS
Point of Service Plans
Spotlight on Managed Care
Key Features of a POS
A health benefits plan that provides coverage for care received from both
participating providers and non-participating providers.
Like HMOs and PPOs, provide health services to members for a fixed monthly
premium, charge a co-payment for some services, and recognize network and
non-network providers
Require members to select a PCP within the plan’s network
Allow members to choose providers and systems at the point of service
Provide higher benefit levels to patients whose care is directed through
referrals from their PCP and lower benefit levels when patients go directly to
other providers or facilities
Managed Care
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Module 4
Distribution of Health Plan Enrollment
for Covered Workers, by Plan Type, 1988-2011
Spotlight on Managed Care
**High-Deductible Health Plans w/ Savings Option
11%
16%
7%
4%
14%
21%
21%
23%
18%
17%
15%
15%
13%
5%
8%
13%
12%
8%
13%
18%
17%
19%
10%
9%
55%
56%
17%
16%
1%
2011
1%
2012
8%
26%
28%
39%
21%
42%
46%
52%
54%
55%
61%
60%
57%
58%
60%
58%
31%
73%
28%
46%
29%
*
24%
27%
10%
1988
1993
1996
1999
*
27%
24%
25%
21%
*
20%
21%
8%
7%
4%
5%
5%
3%
3%
3%
2000
2001
2002
2003
2004
2005
2006
2007
Conventional
HMO
* Distribution is statistically different from the previous year shown (p<.05).
PPO
POS
*
20%
20%
2%
2008
1%
2009
19%
*
1%
2010
HDHP/SO**
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Module 4
Managed Care Penetration Rate, 2011
Texas, California, New York & the US
The proportion of patients in a
geographic region enrolled in an HMO
35%
31.3%
30%
25%
22.5%
20%
15%
13.1%
10%
5%
0%
TX
CA
NY
US
* Data include all licensed HMOs and POS plans, which may include Medicaid and/or Medicare-only HMOs,
group/commercial plans, the Federal Employees Health Benefits Program, direct pay plans and unidentified HMO
products.
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Module 4
Dental Managed Care
Spotlight on Managed Care
Common Dental Plans
Dental Health Maintenance Organizations (DHMOs)
Capitation plans in which contracted dentists are “pre-paid” a certain
amount each month for each member patient. Dentists must then
provide contracted services at no or low cost to member patients who
may see only those dentists in the DHMO network.
Dental Preferred Provider Organizations (DPPOs)
Plans under which patients select a dentist from a network or list of
providers who have contracted to discount their fees; patients who see
non-contracted dentists may pay higher deductibles or co-payments
Discount or Referral Dental Plans
Not technically “insurance plans,” these contracted arrangements
establish a network of dentists who agree to discount their
fees; patients who buy these plans pay all of the costs of
treatment at the contracted rate determined by the plan.
Dental
Managed Care
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Module 4
Additional Helpful Managed Care Terms
Managed Care Primer 101
Capitation
A payment system in which a provider or health plan is paid a set dollar amount determined by a per member per month
(pmpm) calculation to deliver health care services to a specified group of people.
Carve-Out
Health care services that are separated from a contract and paid under a different arrangement.
Exclusive Provider Organization (EPO)
A health plan that has the characteristics of an HMO or PPO plan, with a network of providers who have entered into
written agreements with an insurer to provide health insurance to subscribers.
Network
A panel of physicians, dentists, hospitals and other providers who contract with a health benefits plan to provide services,
typically at a negotiated rate of payment. With certain plans, an individual must access care from a network provider in
order to receive the maximum level of benefits.
Preauthorization/Precertification
A requirement to receive advance authorization of particular health care services required in some plans.
Value-Added Benefit
Services covered by a health plan beyond what is available under Medicaid; examples are adult dental coverage and
diapers for newborns.
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Module 4
Three Umbrella Types of Public Insurance
Insurance Primer 101
Medicare
Medicare is the national health
insurance program for people
aged 65 or older and under
age 65 with certain disabilities.
It includes Part A (hospital
coverage), Part B (outpatient
medical care), Part C
(Medicare Advantage Plan)
and Part D (prescription drug
coverage). All but Part A are
optional.
Medicaid
Medicaid, the subject of this
overall curriculum, provides
health care to certain lowincome individuals and
families with limited
resources. Medicaid is
funded by both the federal
government and the 50
states, each of whom define
their own eligibility rules.
State Children’s
Health Program
CHIP is a joint state and
federal program that
provides insurance for
children of qualifying
families, usually families
who make too much money
to qualify for Medicaid but
cannot afford private health
insurance.
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Module 4
REVIEW:
What is Medicaid?
Medicaid is a federal health care program that is jointly funded by federal
and state money. Medicaid is jointly funded by the state and federal
governments:
About one-third funded by the State of Texas
About two-thirds funded by the Federal Government
In December 2011, about 1 in 7 Texans relied on Medicaid for health
insurance or long-term services (3.7 million of the 25.9 million).
Medicaid was created through Title XIX of the 1965 Social Security Act, and
established in Texas in 1967.
In Texas, Medicaid is administered by the Texas Health and Human
Services Commission (HHSC).
Medicaid is an entitlement program, which means:
The number of eligible people who can enroll cannot be limited.
Any services covered under the program must be paid.
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Module 4
REVIEW:
Medicaid vs. CHIP
(Children’s Health Insurance Program)
Texas Medicaid
CHIP
Authorized by Social Security Act
of 1965
Authorized by Balance Budget Act
of 1997
Jointly Funded by State and Federal Government
Entitlement program based on income,
assets and/or disability
Enrollment based on income
(not an entitlement program)
Low income families, children,
pregnant women, disabled, elderly
Children in families with too much
income or too many assets to qualify
for Medicaid and who meet the CHIP
income requirements
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Module 4
Enrollment Comparison
2,192,055
CHIP and Medicaid
Average monthly enrollment at a given point in time
1,573,975
304,214
2006
1,834,137
533,213
455,713
2008
CHIP & CHIP Perinatal
2010
Medicaid
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Module 4
CHIP Cost-Sharing
Most families in CHIP pay an annual enrollment fee to cover all
children in the family
CHIP families also pay co-payments for doctor visits, prescription
drugs, inpatient hospital care, and non-emergent care provided in an
emergency room setting
The co-pay amount and total out-of-pocket cost-sharing cap are
based on the family’s income, such as these requirements, effective
in March 2011:
% of Federal
Poverty Level
Annual
Enrollment Fee
Office Visit
Non-Emergency
ER
Hospital Stay
≤100%
$0
$3
$3
$10
101-150%
$0
$5
$5
$25
151-185%
$35
$7
$50
$50
186-200%
$50
$10
$50
$100
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Module 4
Medicaid
Today
Assistance to Medicare
Beneficiaries
8.8 million aged and disabled
— 21% of Medicare
beneficiaries
Long-Term Care Assistance
Health Insurance Coverage
29 million children & 15 million
adults in low-income families;
14 million elderly and persons
with disabilities
Support for Health Care
System and Safety-net
16% of national health
spending; 41% of long-term
care services
1 million nursing home
residents; 2.8 million
community-based residents
State Capacity for
Health Coverage
Federal share ranges 50%
to 76%; 44% of all federal
funds to states
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Module 4
Medicaid and
Managed Care
The Balanced Budget Act of
1997 gave state Medicaid
programs the authority to
mandate managed care
enrollment without a waiver,
with some exceptions.
Although Medicaid is publicly financed, the program purchases health services
primarily in the private sector on a fee-for-service basis or by paying premiums to
managed care plans under contracts
In 2008, about 70% of Medicaid enrollees in the U.S. received some or all of their
services through managed care arrangements, through:
Managed Care Organizations (MCOs) are paid a fixed monthly fee per enrollee
(capitation) and assume the financial risk for delivering services
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Module 4
Medicaid Managed Care Penetration
Rates by State, 2008
U.S. Average = 70%
* NOTE: Unduplicated count. Includes managed care enrollees receiving comprehensive and limited benefits.
Source: Medicaid Managed Care Enrollment as of December 31, 2008. Centers for Medicare and Medicaid Services.
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Module 4
Share of US Medicaid Beneficiaries
Enrolled in Managed Care, 1999-2008
Percent Enrolled in Managed Care
80%
71%
70%
60%
56%
56%
57%
58%
59%
1999
2000
2001
2002
2003
61%
63%
65%
64%
2006
2007
50%
40%
30%
20%
10%
0%
2004
2005
2008
*NOTE: In Texas, 71% of the state’s Medicaid population were enrolled in some form of managed care as of February 2010.
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Module 4
Medicaid Managed Care in Texas
Overview of Plans
STAR (Originally an acronym for State of Texas Access Reform)
A statewide managed care program in which HHSC contracts with MCOs to provide,
arrange for, and coordinate preventive, primary, and acute care covered services
STAR+PLUS
Provides integrated acute and long-term services and supports to people with
disabilities and the elderly
NorthSTAR
A capitated program in Dallas and surrounding counties that provides behavioral
health (mental health and substance abuse) services to Medicaid and medically
indigent patients
STAR Health
A statewide program to provide coordinated care to children and youth in foster and
kinship care
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Module 4
The STAR Program
Medicaid Managed Care in Texas
The Texas STAR Program provides acute care medical assistance in a
Medicaid managed care environment
As of March 2012, the STAR program expanded to serve all Texas counties
When they enroll, clients have a choice of health plans and PCPs. Each
plan has a network of providers that includes PCPs that provide patients’
medical homes.
STAR program clients receive all the benefits of traditional Medicaid. In
addition, adults receive unlimited medically necessary prescriptions and
hospital days. STAR plans also offer education classes and value-added
services.
Clients are allowed to change their PCP and
health plan.
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Module 4
The STAR+PLUS Program
Medicaid Managed Care in Texas
STAR+PLUS provides integrated acute and long-term services and supports in a
Medicaid managed care environment for residents in the Bexar, Dallas, El Paso,
Harris, Hidalgo, Jefferson, Lubbock, Nueces, Tarrant, and Travis service areas.
Within each service area, patients have a choice of health plans or MCOs. Each
plan’s network of providers includes PCPs.
STAR+PLUS program clients’ acute, pharmacy, and long-term services and supports
are coordinated and provided through a credentialed provider network contracted with
MCOs.
Many STAR+PLUS clients are eligible for Medicaid and Medicare (Dual-Eligibles);
dual eligible members choose a STAR+PLUS health plan but not a PCP because
they receive acute care from their Medicare providers.
STAR+PLUS enrollment is required for those Medicaid clients who live in a
STAR+PLUS service area and meet any of the following criteria:
Age 21 or older who receive Supplemental Security Income (SSI)
Age 21 or older and get both Medicaid and Medicare
Age 21 or older who receive Medicaid through a Social Security Exclusion program
Receive Community-Based Alternatives (CBA) services
Voluntary enrollment for children age 20 and younger who receive SSI
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Module 7
The NorthSTAR Program
Medicaid Managed Care in Texas
NorthSTAR is a behavioral health program that
serves the seven counties within the Dallas
service area.
NorthSTAR provides integrated behavioral
health services (mental health, chemical
dependency, and substance abuse treatment)
through a behavioral health organization
(BHO), currently ValueOptions®
NorthSTAR is known as a behavioral health
carve-out of the STAR and STAR+PLUS
Medicaid Managed Care Programs in the
Dallas service area.
NorthSTAR program's goal is to provide
clinically necessary behavioral health services
to enrollees, through a network of qualified and
credentialed providers.
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Module 4
The STAR Health Program
Medicaid Managed Care in Texas
STAR Health is a state-wide Medicaid managed care program that
manages the health care for children and youth in foster care and
kinship care
STAR Health benefits include medical, dental, and behavioral health
services, as well as service coordination and a web-based electronic
medical record (known as the Health Passport).
Managed care organizations for Star Health
Medical: Superior Health
Dental: MCNA Dental and DentaQuest
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Module 4
Medicaid Managed Care
Service Areas
Service Areas
Effective March 1, 2012
53
Module 4
Texas Medicaid Benefits by
Managed Care Program
STAR
STAR+PLUS
STAR+PLUS
Dual Eligibles
NorthStar
STAR Health
(Foster Care)
Spell of Illness Waiver*
Yes
No
N/A
No
Yes
Adult Well-Check 21 Years of Age or Older
Yes
Yes
N/A
Yes
Yes
Prescription Drugs
Unlimited
Unlimited for
Medicaid only
Waiver Members
N/A
Receive prescriptions
through Medicare Part
D, not Medicaid
Unlimited
Personal Care Services**
TMHP authorizes
and pays claims
for clients ≤20
MCO authorizes and
pays for claims for
members ≤20
N/A
MCO authorizes and
pays these claims
TMHP authorizes
and pays these
claims
*Spell of Illness Waiver is the removal of a time-frame limitation on medically necessary care
**Personal Care Services assist patients with “activities of daily living” in the patient’s home setting
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Module 4
Medicaid Buy-In
Medicaid Buy-In (MBI) is a program that allows people of any age who
have a disability and are earning a paycheck to receive Medicaid by
paying a monthly premium
MBI has no age limit, but eligible clients must be disabled or age 65 or
older
MBI clients must work & earn at least $1120/quarter but less than
$2257/month (which is 250% FPL) and have countable resources
≤$5,000
Premiums range from $0-$40/month, depending on earned & unearned
income
Benefits include regular Medicaid adults services:
Office visits
Hospital stays
X-rays
Vision, hearing, and prescriptions
MBI clients may also be eligible for home care & day care,
depending on their level of function
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Module 4
Medicaid Buy-In for Children
Beginning January 1, 2011, the Medicaid Buy-In for
Children (MBIC) program allows families who earn
too much income to qualify for Medicaid to purchase
Medicaid coverage for their children with disabilities
by paying a monthly premium
MBIC children must be 18 or younger and unmarried
and meet disability criteria for Supplemental Security Income (SSI)
Family income must not exceed 300% FPL
Premiums range from $0 to 7.5% of the family’s income, depending
on family size and income
Parents are required to enroll in employer-sponsored health
insurance if the employer pays at least 50% of the total costs of
premiums
Benefits include regular Medicaid state plan services
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Module 4
Medicaid Managed Care
Enrollment
Effective March 1, 2012,
children’s Medicaid dental
services are provided
statewide through managed
care for children birth through
20 years of age.
Each member should have a
main dental home provider
who delivers all aspects of oral
health care in a
comprehensive, continuously
accessible, coordinated, and
family-centered way.
Some Medicaid clients
continue to receive dental
services through existing
delivery models and not
through managed care:
Medicaid recipients age 21
and over
Medicaid recipients who
reside in institutions
STAR Health program
recipients (foster children)
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Module 4
Managed Care Dental Services
Providers must contract and be
credentialed with one of 3 dental
plans to provide dental services.
Current Managed Care
Dental Plans:
Rates are negotiated between the
provider and the dental plan.
Dental plans establish a network to
include general, pediatric, and
specialty care providers.
Dental plans are responsible for
authorizing, arranging,
coordinating, and providing
medically necessary covered
services.
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Module 4
Dental Managed Care vs.
Fee-For-Service (FFS)
Managed Care
Provider listings
Includes main dentist and
dental specialists
Fee-For-Service
Client has to locate dental
providers
No member handbook
Member handbook
No value-added services
Value-added services
(varies by dental plan)
No mileage requirements
Member chooses main
dentist and can change
through the dental plan
Dental plan must ensure
access to dentists and
dental specialists per
contract requirements
59
Module 4
What’s Next for Insurance and
Managed Care?
Key Provisions of the Patient Protection and Affordable Care Act (ACA)
On March 23, 2010, President Obama signed the Patient Protection
and Affordable Care Act (ACA). The law puts in place comprehensive
health insurance reforms that will roll out over four years and beyond,
with most changes taking place by 2014
The ACA has 46 key provisions to be implemented between 2010 and
2015, which broadly include:
Improved coverage for children up to
age 26 or with pre-existing conditions
New health insurance exchanges
and premium subsidies
Changes to private insurance rules
Employer requirements and incentives
Individual mandate to have health insurance
On June 28, 2012, the U.S Supreme Court issued a decision on ACA
provisions under consideration, ruling that the ACA is constitutional
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Module 4
Expanding Medicaid: A Key Element in
the Patient Protection and Affordable
Care Act (ACA)
Universal Coverage
By 2019: 92% coverage
Medicaid Coverage
Insurance Exchanges
Up to 133% FPL
(about $14,000 for an
individual or $29,000 for
a family of 4)
Subsidies for individuals
133-400% FPL
Individual
Mandate
Health Insurance
Market Reforms
Employer-Sponsored Coverage
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Module 4
Key Medicaid Coverage Provisions
Expands Medicaid to individuals with incomes up to 133% of the federal
poverty level (FPL) in 2014
Eligibility based on Modified Adjusted Gross Income for most groups
Provides state option to expand Medicaid coverage to childless adults with regular
match starting April 1, 2010
Provides enhanced federal funding for newly eligible individuals
100% covered by federal funds for 2014-2016, phases down to 90% by 2020
Phases in increased federal matching payment for states that have already extended
coverage for childless adults
Maintains Medicaid eligibility for adults > 133% FPL until 2014 and for
children in Medicaid and CHIP until 2019
Simplifies enrollment processes and coordinates with exchanges
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Module 4
ACA Medicaid Eligibility
Expansion
Effective January 1, 2014, ACA expands Medicaid to the following
groups:
Former foster care youth through age 25
Children ages 6-18 whose families have an income 100%-133% of
the FPL; this is the population of children currently eligible for CHIP
The “individual mandate” for health insurance could lead to the
enrollment of about 130,000 people who are currently eligible for
Medicaid or CHIP, but are not currently enrolled
If a Medicaid expansion is pursued by the state, income eligibility
could be expanded to adults ages 19 to 64 who are not currently
eligible for Medicaid, and have incomes ≤133% of the FPL.
With this option Texas could expect to experience a caseload
growth in 2014 of approximately 340,976.
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Module 4
Median U.S. Medicaid/CHIP
Income Eligibility Thresholds, 2009
235%
185%
Minimum Medicaid Eligibility under
Health Reform = 133%FPL
75%
64%
38%
0%
Children
Pregnant
Women
Working
Parents
Non-Working
Parents
Childless
Adults
Elderly and
Individuals w/
Disabilities
Prior to enactment of health
reform, state Medicaid programs
were required to provide coverage
only to certain categories of lower
income individuals.
Under ACA, by January 1, 2014,
state Medicaid programs must
extend Medicaid benefits to
individuals who are:
Under age 65
Not pregnant
Not entitled to or enrolled in
Medicare Part A or enrolled in
Medicare Part B
Not otherwise eligible for
Medicaid under any other
provision or category and have
incomes at or below 133% of
the federal poverty line
Current median FPL eligibility levels for Medicaid client categories
64
Additional Helpful
Health Care Reform Terms
Module 4
Health Care Reform 101
Benchmark coverage
Medicaid health plans that generally are less comprehensive than standard Medicaid coverage. Persons “newly eligible”
for Medicaid (under ACA) are eligible for hospital and physician benchmark coverage.
Co-ops
Private, nonprofit health organizations, run in states or regionally, to compete with private insurance companies. Co-ops
are a compromise proposal in the debate over greater government role in health reform.
Exchanges
A more competitive insurance marketplace, established by the government, where individuals and small firms would shop
among health plans for coverage under overhaul proposals.
Guaranteed access
Reform provision that bars health insurers from rejecting applicants because of their pre-existing health conditions.
Individual mandate
Requirement that people purchase health insurance or pay a penalty. The ACA provides subsidies to those with middle
incomes and below to afford a policy.
Pay or play
Requirement that employers provide health insurance for their workers or pay a fee or penalty to the government. Also
known as an employer mandate.
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Module 4
US Health Insurance Coverage in 2019
100%
90%
8%
19%
18%
80%
12%
70%
60%
Uninsured
11%
18%
Medicaid/CHIP
50%
Private
Non-group/Other
40%
30%
57%
56%
Without
Health Reform
With
Health Reform
20%
Employer-Sponsored
Insurance
10%
0%
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Module 4
Common Insurance Myths
Myth
Medicaid covers too many
people and crowds out
private health insurance.
Fact
Most of the people who are
covered by Medicaid do not
have access to other insurance,
because their employers do not
offer them coverage, or they
are ineligible for it or cannot
afford it, or because they are
priced out of the private market
due to illness or disability.
Medicaid enrollment has
swelled in recent years due to
poor economic conditions and
the loss of employer-sponsored
insurance. Many studies of
Medicaid eligibility expansions
for women and children in the
1980s and early 1990s
conclude that Medicaid growth
had not replaced private
coverage, as most people
newly enrolled were previously
uninsured.
Medicaid addresses many of
the private insurance market’s
failures, acting as the “safety
net” that covers populations
and services that the private
system excludes.
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Module 4
Test Your Knowledge about
Insurance: True or False?
1. Blue Cross was created in the 1940s to provide health care for
auto workers.
FALSE: Blue Cross was created in Dallas in 1929 to provide
care for school teachers at Baylor University Hospital
2. Between 2007 and 2009, the number of uninsured Americans
dropped by 5 million.
FALSE: Between 2007 and 2009, the number of uninsured
Americans increased by 5 million, largely due to a decline in
employer-sponsored coverage.
3. Among families with no health insurance in 2009, more than
60% had at least one person who works full time.
TRUE: Only 23% of families without insurance had no workers;
an additional 16% had part-time workers, but 61% had one or
more persons who worked full-time and still lacked health
insurance.
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Module 4
Test Your Knowledge about
Insurance: True or False?
4. Capitation is a payment system in which a provider or health
plan is paid a set amount of money per member patient per
month to provide health care services.
TRUE: In a capitated system, the provider or health plan is paid
a contracted monthly rate for each member assigned (the pmpm
rate), regardless of the number or nature of services provided.
5. Patients’ enrollment in a Medicaid managed care plan in Texas
is usually based on the service area of the state in which they
live.
TRUE: Texas Medicaid includes several managed care plans,
many of which, such as STAR, are available to residents only in
selected areas of the state.
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Module 4
Medicaid Resources
Texas Health & Human Services Commission
www.hhsc.state.tx.us/medicaid
Texas Medicaid & Healthcare Partnership
www.tmhp.com
Texas Health Steps
www.dshs.state.tx.us/thsteps/providers.shtm
www.dshs.state.tx.us/dental/thsteps_dental.shtm
www.dshs.state.tx.us/thsteps/default.shtm
CHIP/ Children’s Medicaid
www.chipmedicaid.org
70
This Texas Medicaid curriculum
was prepared by
Betsy Goebel Jones, EdD
Project Director
Tim Hayes, MAM
Project Designer
Author: Module 4
Betsy Goebel Jones, EdD
Module 4
71