Last week, I wrote about state adoption of Medicaid care coordination and integration initiatives such as patient-centered medical homes, health homes, certified community behavioral health clinics, accountable care organizations, Medicaid-Medicare health plans, vertical/specialty health plans, and managed long-term services and supports. The adoption of these initiatives can have a major effect on provider organization strategy, referral generation, and reimbursement (see The Medicaid Care Coordination Models Driving Strategy In Your State).

As I reviewed data in the report, adoption of vertical/specialty health plans over the past year really stood out. As a reminder, these plans—which are also called consumer specialty plans—are population-specific, separate managed care organizations that provide integrated care and increased care coordination to enrollees who have complex needs. The model is used to serve a number of high-needs populations including foster care children, consumers with serious mental illness (SMI), children who are medically fragile, consumers with HIV/AIDS, and individuals with intellectual/developmental disabilities (I/DD).

There are currently 12 state Medicaid programs with some form of vertical/specialty health plans. The four states that recently added this model are Arkansas, California, Illinois, and West Virginia.

Arkansas – In March, the state implemented the at-risk Provider-led Arkansas Shared Savings Entity program, which provides care to individuals with I/DD and behavioral health needs including children with serious emotional disturbance (SED). For more, see Arkansas Medicaid To Launch Full-Risk Phase Of Medicaid Shared Savings Program In March 2019 and Arkansas Behavioral Health System State Profile Report.

California – In July, the AIDS Healthcare Foundation (AHF) became a full-risk California Medicaid managed care plan for beneficiaries age 21 or older in Los Angeles County who have a prior diagnosis of Stage 3 HIV infection (AIDS). AHF previously operated as a Medicaid primary care case management (PCCM) plan called PHC California (see California Medicaid PCCM For HIV Has Converted To A Full-Risk Managed Care Plan In Los Angeles).

Illinois – On November 1, child welfare system recipients began receiving care coordination from IlliniCare (Centene is in the process of selling IlliniCare to CVS Health – see Centene & CVS Health Announce Agreement For CVS Health To Acquire IlliniCare Health), the single, statewide health plan chosen to serve this population. The health plan will be at-risk for the provision of health care services starting February 1, 2020 (see Transition Of DCFS Youth To YouthCare).

West Virginia – On October 31, West Virginia awarded a contract to Aetna for a single, statewide health plan to serve the child welfare and children with SED population effective January 1, 2020 (see West Virginia Behavioral Health System State Profile Report and West Virginia Issues An RFP For A Health Plan For Foster Children).

The increasing adoption of consumer specialty plans is an important trend for the strategy of specialty organizations in the field. It presents both a growth opportunity and a strategic threat. The expectation of payers for these specialty plans is that they will coordinate the physical, behavioral, pharmacy, and social aspects of care. To make this happen, payers are increasingly looking towards bundled payments and alternative payment models.

Additionally, with the vertical bundling of services (and financing) for specialty populations, the ability of specialty provider organizations to participate in an integrated system of care becomes more essential. Provider organizations must have the ability to share data, make and track referrals, collect and report performance data, and accept some form of reimbursement linked to value. These will soon become basic requirements for success (see How Do You Compare On Tech Spending & Adoption?).

For more on the growth of specialty health plans and their implications for service delivery, join us at The 2020 OPEN MINDS Performance Management Institute in Clearwater, Florida on February 13 for the keynote address, “Improving Care: Engaging Communities & Providers Is Key To Success In The Complex Consumer Market” featuring Tonya Copeland, Vice President, I/DD Services & Employment & Community First CHOICES, UnitedHealth Care.

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Specialty Health Plans On The Increase In Medicaid – OPEN MINDS