Texas Medicaid Medical and Dental Information Series 1 Module 4 Version 1.2 (6/22/2010) 2/22/2013

Texas Medicaid

Medical and Dental Information Series

1Module 4Version 1.2 (6/22/2010)

2/22/2013

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

Module 4

Navigating Insurance and Managed Care

3

Module 4: ObjectivesAfter 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

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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.

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The Development of insurance is the development of third-party payers,

organizations other than the doctor or patient that participate in paying for

health care services

American Medical Association & American Dental Associations become powerful national forces, establishing the beginning of “organized medicine”

A Brief History of Health Insurance in the U.S.

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1900sAmerican Medical Association becomes a powerful national force, establishing the beginning of “organized medicine”

1900s

American Association for Labor Legislation organizes the first national conference on “social insurance”

1910s

1910sAmerican 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

1920s

1920sGeneral Motors signs a contract with Metropolitan Life to insure 180,000 workers

Blue Cross,created inDallas in 1929 to provide care for school teachers at Baylor University Hospital, begins offering private coverage for hospital care

1930s

1930sBlue Cross,created inDallas in 1929to provide care for school teachers at Baylor University Hospital, begins offering private coverage for hospital care

1940s

1940sTo compete for workers during wartime, companies began to offer health benefits



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Blue Cross,created inDallas in 1929 to provide care for school teachers at Baylor University Hospital, begins offering private coverage for hospital care

To compete for workers during wartime, companies begin to offer health benefits

1900s 1910s 1920s 1930s 1940s



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Blue Cross,created inDallas in 1929 to provide care at Baylor University Hospital for school teachers, begins offering private coverage for hospital care


1900s 1910s 1920s 1930s 1940s

1950sPrivate insurance for those who can afford it and federal responsibility for the sick poor are firmly established

1950s


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1900s 1910s 1920s 1930s 1940s

Private insurance for those who can afford it and federal responsibility for the sick poor are firmly established

1950s

1950s

1960s

President Johnson signs Medicare and Medicaid into law

1960sPresident 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)

1970-1980sDental Insurance becomes available; President Nixon renames prepaid group health care plans as Health Maintenance Organizations (HMOs)

1990sBalanced Budget Act of 1997 created the State Children’s Health Insurance Program (CHIPn)

2000-2010s

President Obama signs the Affordable Care Act

2000-2010sPresident George W. Bush signs the law authorizing Medicare Part D drug benefit;



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1900s 1910s 1920s 1930s 1940s

Private insurance for those who can afford it and federal responsibility for the sick poor are firmly established

1950s 1960s

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


Medicare & Medicaid HighlightsDevelopments that have shaped health care

Module 4

11

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

1965Medicare and Medicaid enacted as Title XVIII and Title XIX of the Social Security Act, extending health coverage to Americans aged 65 or older, low-income children deprived of parental support and individuals with disabilities.

1967The Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) comprehensive health services benefit for all Medicaid children under age 21 was established.

1972The newly enacted Federal Supplemental Security Income program (SSI) provided States the opportunity to link to Medicaid eligibility for elderly, blind, and disabled residents.

1986Medicaid coverage for pregnant women and infants to 100% of the Federal Poverty Level (FPL) was established as a state option and later mandated.

1996Welfare Reform replaced the Aid to Families with Dependent Children (AFDC) entitlement program with the Temporary Assistance for Needy Families (TANF) block grant and severed the welfare link to Medicaid

1997Health Insurance Program (CHIP) and established new managed care options for Medicaid.2006The voluntary Medicare Part D outpatient prescription drug benefit became available to beneficiaries from private drug plans as well as Medicare Advantage plans.

2009Children’s Health Insurance Program Reauthorization Act is passed, financing CHIP through 2013

2010Patient Protection and Affordable Care Act (P.L. 111-148)

• Requires most U.S. citizens and legal residents to have health insurance.

• Creates state-based American Health Benefit Exchanges through which individuals can purchase coverage.

• Requires employers to pay penalties for employees who receive tax credits for health insurance through an Exchange.

• Expands Medicaid to 133% of the federal poverty level.

Medicare & Medicaid HighlightsDevelopments that have shaped health care

Module 4

12

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

Development of Managed CareHistory 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

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

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

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Shadid

Kaiser

Ellwood

Health Insurance Coverage of the Total U.S. Population, 2011Current Status of Health Coverage

Employer49%

Private/ Non-Group5%

Medicaid & Other Public18%

Medicare13%

Uninsured16%

Insurance Source

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.

Total = 307.9 million

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15

Dental Coverage by Insurance SourceEmployment-based vs. Privately Purchased

Module 4

0

10

20

30

40

50

60

70

80

27.634.6

15.222.6

8.3

18.3

4.8

68.7

Dental Insurance Status by Source for people under 65with private health insurance

Employment-based insurance Directly purchased insurance

Source of Dental Insurance

Pe

rce

nt

About 80% of people with employer-based insurance have dental coverage, compared with 30% of those with directly-purchased plans.

Health Coverage, 2010-2011Texas, California, New York & the US

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

45% 45% 48% 49%

4% 6% 4% 5%17%

19% 22% 17%

10%10%

12% 13%

24% 20%14% 16%

Uninsured

Medicare

Medicaid & Other Public

Individual

Employer

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Module 4

Health Insurance Coverage of Workers, by Firm Size, 2007Current Status of Health Coverage

Self-Employed

<25_x000d_Workers

25-99_x000d_Workers

100-499_x000d_Workers

500-999_x000d_Workers

1000 or_x000d_More Workers

Public_x000d_Sector

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

47.3%

52.0%

68.2%

75.6%

77.7%

78.3%

87.3%

19.9%

7.8%

4.9%

3.6%

3.6%

3.4%

2.4%

6.0%

8.0%

6.2%

5.4%

5.8%

5.5%

4.4%

26.9%

32.2%

20.7%

15.5%

13.0%

12.7%

5.8%

Employer Individual Medicaid/Other Public Uninsured

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Dental Coverage and Use AmongNon-Elderly Adults, 2005

* 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.

64%

50%

42%*

17%*

Insuredwith DentalCoverage

UninsuredHigherIncome

LowIncome

Percent withDental Coverage

Percent of Low-Income withDental Check-Up in Last Year

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How Important is Insurance?Current Status of Health Coverage

Adults who lack health insurance are unlikely to receive:

Primary and preventive care

Treatment for acute conditions

Management of chronic illness

The uninsured are three times more likely than the insured to be unable to pay for basic necessities because of medical bills

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Could Not Afford_x000d_Prescription

Drug*

Went Without Needed_x000d_Care Due to

Cost*

Postponed Seeking Care_x000d_Due to Cost*

No Usual_x000d_Source of Care

27%

26%

32%

56%

13%

9%

12%

11%

6%

4%

8%

10%

Barriers to Health Care AmongNonelderly Adults, by Insurance Status,

2009

Employer/Other Private Medicaid/Other Public Uninsured

*In Past 12 Months

Insurance and Health Care AccessCurrent Status of Health Coverage

Between 2007 and 2009, the number of uninsured Americans increased by almost 6 million, driven by a decline in employer-sponsored 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

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2007 2008 2009 2010 2011

43.544.2

48.3

49.2

47.9

Number of Nonelderly Uninsured Americans, 2007-2001,

in millions

Characteristics of Non-ElderlyUninsured, 2011Current Status of Health Coverage

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Total= 47.9 Million Uninsured

1 or More Full-Time Workers

61%Part-Tim

e Workers16%

No Workers23%

Family Work Status

<100%_x000d_FPL

38%

100-250%_x000d_FP

L39%

251-399%_x000d_FPL

14%

400%+_x000d_FPL

10%Family Income

0-1816%

19-2517%

26-3421%

35-5434%

55-6412%

Age

Uninsured Rates for the Non-Elderly by Race/Ethnicity, 2011Current Status of Health Coverage

Other

Hispanic

Black

White

22%

38%

23%

16%

18%

32%

21%

13%

US Texas

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National Average Uninsured = 17%

Uninsured Rates Among Non-Elderly by State, 2007-2008Current Status of Health Coverage

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Diagnosis of Late-Stage CancerUninsured vs. Privately Insured

Colorectal_x000d_Cancer

Lung_x000d_Cancer Melanoma Breast_x000d_Cancer Oropharyngeal_x000d_Cancer

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2.02.2

2.3

2.9

1.4

* 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.

Equal likelihood between

Uninsured and Insured

Ratio of probability of diagnosis of late vs. early stage cancer(Uninsured/Private Insurance)

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Three Umbrella Types of Private InsuranceInsurance Primer 101

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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.

Fee-for-Service

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.

Consumer-Directed

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.

Managed Care

Fee for Service PlansInsurance Primer 101

Key Features of Fee-for-Service (FFS) Plans

Patients can choose the doctors, dentists or other providers of their choice

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.

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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.

Fee-for-Service

Dental Fee-for-Service PlansInsurance Primer 101

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Common Fee-for-Service Dental Plans

Direct Reimbursement (DR)

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.

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.

DentalFee-for-Service

Consumer-Directed PlansInsurance 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

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.

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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.

Consumer-Directed

Managed Care PlansInsurance 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

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)

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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.

Managed Care

Additional Helpful Insurance TermsInsurance Primer 101

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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).

31

Differences BetweenMedical and Dental Needs and Treatments

Medical Dental

Unpredictable Dental disease is most often preventable, and coverage is usually

provided for those procedures, such as sealants, that can prevent dental

disease.

Predictable

Catastrophic Non-Catastrophic

High Cost

Dental treatment includes relatively low-cost diagnostic procedures, such as

exams and x-rays.

Extremes in cost and utilization (evident in many medical benefits) are rarely

observed with dental statistics.

The cost of dental treatment has risen significantly less than the cost of dental

treatment in the past few decades.

Low Cost

An Insurable Risk Low Risk

Module 4

HMOsHealth Maintenance OrganizationsSpotlight on Managed Care

Key Features of HMOsEstablished 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

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Managed Care

PPOsPreferred Provider Organizations Spotlight on Managed Care

Key Features of PPOsA managed care health insurance plan that combines features of a fee-for-service 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

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Managed Care

POSPoint of Service PlansSpotlight on Managed Care

Key Features of a POSA 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

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Managed Care

Distribution of Health Plan Enrollmentfor Covered Workers, by Plan Type, 1988-2011Spotlight on Managed Care

1988 1993 1996 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

73%

46%

27%

10% 8% 7% 4% 5% 5% 3% 3% 3% 2% 1% 1% 1% 1%

16%

21%

31%

28% 29%24% 27% 24% 25%

21% 20% 21% 20% 20% 19% 17% 16%

11%

26%

28%

39% 42%46%

52% 54% 55%61% 60% 57% 58%

60% 58%55% 56%

7%14%

21% 21% 23%18% 17% 15% 15%

13% 13%12% 18% 8%

10% 9%

4% 5% 8% 8%13% 17% 19%

Conventional HMO PPO POS HDHP/SO**

*

** * *

**High-Deductible Health Plans w/ Savings Option

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* Distribution is statistically different from the previous year shown (p<.05).

Managed Care Penetration Rate, 2011Texas, California, New York & the US

TX CA NY US0%

5%

10%

15%

20%

25%

30%

35%

13.1%

42.9%

31.3%

22.5%

The proportion of patients in ageographic region enrolled in an HMO

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* 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.

Dental Managed CareSpotlight on Managed Care

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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 theirfees; patients who buy these plans pay all of the costs oftreatment at the contracted rate determined by the plan.

DentalManaged Care

Additional Helpful Managed Care TermsManaged Care Primer 101

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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.

Three Umbrella Types of Public InsuranceInsurance Primer 101

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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.

Medicare

Medicaid, the subject of this overall curriculum, provides health care to certain low-

income 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.

Medicaid

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.

State Children’sHealth Program

REVIEW:What is Medicaid?

40

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 TexasAbout 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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REVIEW:Medicaid vs. CHIP

(Children’s Health Insurance Program)

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Texas Medicaid CHIP

Authorized by Social Security Actof 1965

Jointly Funded by State and Federal Government

Entitlement program based on income, assets and/or disability

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

Authorized by Balance Budget Actof 1997

Enrollment based on income(not an entitlement program)

Enrollment ComparisonCHIP and Medicaid

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2006 2008 2010

304,214

1,573,975

455,713

1,834,137

533,213

2,192,055

CHIP & CHIP Perinatal Medicaid

Average monthly enrollment at a given point in time

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:

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% 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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MedicaidToday

Health Insurance Coverage29 million children & 15 million adults in low-income families; 14 million elderly and persons

with disabilitiesState Capacity for Health Coverage

Federal share ranges 50% to 76%; 44% of all federal

funds to states

Support for Health Care System and Safety-net

16% of national health spending; 41% of long-term

care services

Long-Term Care Assistance1 million nursing home residents; 2.8 million

community-based residents

Assistance to Medicare Beneficiaries

8.8 million aged and disabled — 21% of Medicare

beneficiaries

Medicaid andManaged

Care

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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The Balanced Budget Act of 1997 gave state Medicaid programs the authority to mandate managed care

enrollment without a waiver, with some exceptions.

Medicaid Managed Care Penetration Rates by State, 2008

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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.

Share of US Medicaid Beneficiaries Enrolled in Managed Care, 1999-2008

1999 2000 2001 2002 2003 2004 2005 2006 2007 20080%

10%

20%

30%

40%

50%

60%

70%

80%

56% 56% 57% 58% 59%61%

63%65% 64%

71%

Percent Enrolled in Managed Care

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*NOTE: In Texas, 71% of the state’s Medicaid population were enrolled in some form of managed care as of February 2010.

Medicaid Managed Care in TexasOverview 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+PLUSProvides 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 HealthA statewide program to provide coordinated care to children and youth in foster and kinship care

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The STAR ProgramMedicaid 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 andhealth plan.

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The STAR+PLUS ProgramMedicaid Managed Care in Texas

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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

The NorthSTAR ProgramMedicaid 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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The STAR Health ProgramMedicaid 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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Medicaid Managed CareService Areas

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Service AreasEffective March 1, 2012

Texas Medicaid Benefits by Managed Care Program

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STAR STAR+PLUS NorthStarSTAR+PLUS

Dual EligiblesSTAR 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 onlyWaiver 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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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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Medicaid Buy-In for Children

Beginning January 1, 2011, the Medicaid Buy-In forChildren (MBIC) program allows families who earntoo much income to qualify for Medicaid to purchaseMedicaid coverage for their children with disabilitiesby paying a monthly premium

MBIC children must be 18 or younger and unmarriedand 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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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 overMedicaid recipients who reside in institutionsSTAR Health program recipients (foster children)

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Managed Care Dental Services

Providers must contract and be credentialed with one of 3 dental plans to provide dental services.

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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Current Managed Care Dental Plans:

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Dental Managed Care vs.Fee-For-Service (FFS)

Managed Care

Provider listings

Includes main dentist and dental specialists

Member handbook

Value-added services (varies by dental plan)

Member chooses main dentist and can change through the dental plan

Dental plan must ensure access to dentists and dental specialists per contract requirements

Fee-For-Service

Client has to locate dental providers

No member handbook

No value-added services

No mileage requirements

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What’s Next for Insurance andManaged 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 toage 26 or with pre-existing conditionsNew health insurance exchanges and premium subsidiesChanges to private insurance rulesEmployer requirements and incentivesIndividual 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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Medicaid CoverageUp to 133% FPL

(about $14,000 for an individual or $29,000 for

a family of 4)

Employer-Sponsored Coverage

Insurance ExchangesSubsidies for individuals

133-400% FPLIndividualMandate

Health Insurance Market Reforms

Universal CoverageBy 2019: 92% coverage

Expanding Medicaid: A Key Element in the Patient Protection and Affordable Care Act (ACA)

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Key Medicaid Coverage Provisions

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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 groupsProvides 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 2020Phases 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

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

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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.

Children Pregnant_x000d_Women

Working_x000d_Parents

Non-Working_x000

d_Parents

Childless_x000d_Adults

Elderly and_x000d_In

dividuals w/_x000d_Disab

ilities

235%

185%

64%

38%

0%

75%

Median U.S. Medicaid/CHIPIncome Eligibility Thresholds, 2009

Minimum Medicaid Eligibility under Health Reform = 133%FPL

Current median FPL eligibility levels for Medicaid client categories

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

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Additional HelpfulHealth Care Reform TermsHealth Care Reform 101

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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.

US Health Insurance Coverage in 2019

Without_x000d_Health Reform With_x000d_Health Reform0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

57% 56%

11% 18%

12%

18%

19%

8%

Uninsured

Medicaid/CHIP

Private_x000d_Non-group/Other

Employer-Spon-sored_x000d_Insurance

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Common Insurance Myths

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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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.

Test Your Knowledge about Insurance: True or False?

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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 providecare 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.

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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Medicaid Resources

Texas Health & Human Services Commissionwww.hhsc.state.tx.us/medicaid

Texas Medicaid & Healthcare Partnershipwww.tmhp.com

Texas Health Stepswww.dshs.state.tx.us/thsteps/providers.shtm

www.dshs.state.tx.us/dental/thsteps_dental.shtmwww.dshs.state.tx.us/thsteps/default.shtm

CHIP/ Children’s Medicaidwww.chipmedicaid.org

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http://www.hhsc.state.tx.us/medicaid

http://www.tmhp.com/default.aspx

http://www.dshs.state.tx.us/thsteps/providers.shtm

http://www.dshs.state.tx.us/dental/thsteps_dental.shtm

http://www.dshs.state.tx.us/thsteps/default.shtm

http://www.chipmedicaid.org/

This Texas Medicaid curriculumwas prepared by

Betsy Goebel Jones, EdDProject Director

Tim Hayes, MAMProject Designer

Author: Module 4 Betsy Goebel Jones, EdD

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Documents

Texas Medicaid Medical and Dental Information Series 1 Module 4 Version 1.2 (6/22/2010) 2/22/2013