2009 ACAP CEO Summit Controlling Long Term Care Costs and Improving Quality:

The Role of Medicaid Managed Care

Hank Osowski

Senior Vice President

SCAN Group

July 15, 2009

2009 ACAP CEO Summit Controlling Long Term Care Costs and Improving Quality:

It’s not your mother’s Medicaid!

Hank Osowski

Senior Vice President

SCAN Group

July 15, 2009

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Overview

Why Long Term Care Integration is critical

SCAN’s experience in California and Arizona

Opportunities to meet the challenges

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Why Long Term Care Integration

State and Federal spending on long term care projected at $3.7 trillion over the next twenty years*

Currently fifteen states spend $1 billion or more on long term care; by 2027 twenty-five states will exceed $1 billion in long term care expenditures*

* State Medicaid Expenditures for Long Term Care, Shostak and London, September 2008: Congressional Budget Office estimate

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Top Ten States in LTC Expenditures

2008

New York - $10.0b

California - $5.6b

Pennsylvania - $3.5b

Ohio - $2.4b

Texas - $2.3b

New Jersey $2.1b

Florida - $1.9b

Illinois - $1.8b

Massachusetts - $1.6b

Minnesota - $1.6b

2027

California - $19.4b

New York - $17.9b

Pennsylvania $7.3b

Ohio - $5.4b

Florida - $5.2b

New Jersey - $4.4b

Minnesota - $4.1b

North Carolina - $2.8b

Illinois - $2.8b

Washington - $2.6b

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Why Long Term Care Integration

Elderly (10%) and Disabled (14%) represent a quarter of the Medicaid beneficiaries, yet consume 70% of Medicaid expenditures

Long term care, including home and community based services (HCBS), and acute care services each represent about half of those costs

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SCAN Profile

California

109,000 members

6,983 Medi-Cal Dual Eligibles (52% Aged, 40% Long Term Care)

21,000 NHC members

Average age is 78

Arizona

2,700 unique members

2,500 ALTCS (49% are dually enrolled with SCAN)

Average age is 75

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California Experience

Twenty-five years as a Social HMO (intense care coordination model); goal was to maximize members’ independence

Provided acute and HCBS services to about 26,000 Medicare beneficiaries

CMS discontinued demonstration program December 2007

SCAN only Social HMO to continue benefits to members at a cost of about $30 million per year

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California Experience

Contract with state since 1985 to provide secondary acute care and HCBS services to Dual Eligible beneficiaries

2008 contract expanded to also include custodial care

Currently have 6,983 Dual Eligible members; two thirds are long term care

Care coordination now mostly telephonic, supplemented with specialty case management for complex cases

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California Experience

USC Andrus Gerontology Center researchers compared likelihood of transition to the community between SCAN members and Medicare FFS beneficiaries

– SCAN members spent fewer days in a facility on average (127 vs. 270 days)

– Significantly fewer SCAN members had stays lasting more than a year (11% vs. 23%)

– Being a SCAN member increased the odds of transitioning out of the facility by 150%

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Geriatric Health Management

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Prior 6 months First 6 months Second 6months

Inpatient AdmitsER Admits30 Day Readmission

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Geriatric Health Management

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20%

30%

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Prior 6 months First 6 months Second 6months

Inpatient AdmitsER Admits30 Day Readmission

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Arizona Experience

Awarded ALTCS contract October 2006; began operations with 164 members

Parallel development of MAPD Dual Eligible SNP (2007) and MAPD (2008) to coordinate care

Currently over 2,500 ALTCS and 1,500 MA members

Projected 2009 revenue over $200 million

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ALTCS Integration Model

Program encompasses full integration of acute care services, HCBS services and custodial care

Membership divided among skilled nursing facilities (27%), alternative residential (40%) and home and community settings (33%)

Membership ranges from seven years to mid-nineties– 62% receive some form of behavioral health

– HCC Risk Score of MAPD SNP members is 2.012

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ALTCS Integration Model

Case Management is program cornerstone

Began with 14 staff (director, supervisor, ten case managers, a behavioral health coordinator, and an intake coordinator)

Case Management staff now at 62 (fifty case managers) and growing

– Effectively a remote workforce

– Key forms and assessments are automated

– Access to all member information in SCAN systems

– Shared responsibility for 24/7 coverage

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Opportunities Abound

Current disconnected care model is not sustainable

More states seeking solutions to meet long term care challenges and reduce impact on budgets; policy and model development leadership

Some federal health reform proposals include additional flexibility and funding for Medicare and Medicaid long term care integration

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Questions ??