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Measuring MCO Performance

— Jeffrey N. Kushner, former Director, Office of Alcohol and Drug Abuse Programs, Oregon Department of Human Resources. Mr. Kushner is currently the Drug Court Administrator for the Missouri Circuit Court in the 22nd Judicial Circuit, St. Louis, Missouri.

Forty-five States have submitted waivers to the Health Care Financing Administration to provide health care to poor people in a managed care environment.

As States move to managed care modes for their public systems of medical, surgical, chemical dependency (CD), and mental health benefits, State bureaucrats, consumer advocates, and provider constituent groups need to be acutely aware of the decisions being made by managed care organizations (MCOs). This requires that State, and sometimes county, agencies gather accurate and audited information concerning MCOs' clinical and service performance, and inform constituent groups of the results.

An effective CD benefit can be one of the most cost-effective actions for publicly funded human service agencies. We must make sure that MCO decisions are made on the basis of benefit value and cost avoidance to taxpayers and consumers, not on spending reductions.

Therefore, we must measure indicators of treatment quality and effectiveness. To ensure that public purchasers maximize their CD and mental health funds, we must build quantifiable performance indicators based on what makes a difference for successful treatment outcomes. A wide range of performance indicators should be considered. They generally fall into six categories. (See box).

State purchasers, taxpayers, and consumer advocates need to be assured that these indicators are selected, benchmarked, and utilized. These indicators should be placed in contracts with MCOs and their subcontractors, along with financial penalties and incentives. Providers and consumer advocates should insist on this type and level of accountability for public funds. The private sector, which has traditionally utilized only client and purchaser satisfaction, can also learn from this type of benchmarking and related accountability.

Oregon's ScoreCard

Evaluation Tool

The Oregon Office of Alcohol and Drug Abuse Programs (OADAP) has reviewed a ScoreCard developed for the CD benefit in the Oregon Health Plan. Although score cards are being used extensively throughout the health care industry, this is the first to be developed for CD benefits with publicly funded AOD clients.

OADAP administers CD service contracts under the Oregon Health Plan. The OADAP plan calls for working in partnership with multiple stakeholder groups to provide quality, cost-effective, and timely care to chemical dependency clients. The new consolidated ScoreCard will be just one of the tools OADAP will use to evaluate performance of the prepaid health plans. The ScoreCard responds to a number of concerns, including:

  • Implementing the State legislature's mandate that the CD benefit reduce the cost and use of medical/surgical services
  • Assuring that AOD providers have a viable, fair, managed care delivery environment

  • Assuring quality and timely care for clients

  • Assuring that the prepaid health plans operate on a level playing field, in which all plans comply with required standards

  • Monitoring whether performance is meeting the standards expected by State purchasers. OADAP will provide technical assistance when needed to improve performance.

    Selection of Performance Indicators

    The score card — a brief reporting tool — answers a need for objective information about health plan performance. The Health Plan Employer Data Information Set (HEDIS) has been adapted for the Medicaid population. Preliminary versions of this adaptation emphasized consumer convenience and satisfaction. OADAP chose not to duplicate this work. Instead, Oregon focused on developing an outcomes-based score card to supplement the HEDIS score card, using the following six measures of CD services:

  • Efficient and Accountable Operations
  • Chemical Dependency Contract Compliance
  • Prevention and Early Intervention Program
  • Access to Assessment and Treatment Services
  • Treatment Effectiveness
  • Consumer Satisfaction

    These indicators build on the provider performance indicators that are measured in the databases of a number of Oregon's public health agencies. OADAP maintains a substantial database, with access to other State data.

    For each indicator, there are specific, concrete parameters for what constitutes "below standard," "achieved standard," and "exceeded standard" performance. Among the objective performance indicators whose measurement will continue are abstinence, employment improvement, participation in self-help groups, and academic advancement.
    Performance Indicators

    Patient/Customer Satisfaction

  • Patient satisfaction survey data
  • Family satisfaction survey data
  • Appeals
  • Disenrollments
  • Purchaser satisfaction survey data

    Administrative Proficiency

  • Average time to appointment/clinical intervention for emergent, urgent, and/or routine cases
  • Number and percent of individuals referred to treatment who are admitted
  • Toll-free phone access for patients or providers to avoid busy signals, abandoned calls
  • Claims payment accuracy and turnaround time (e.g., 90 percent in 45 days)
  • Appeals resolution time

    Clinical Quality

  • Consistency in applying criteria for clinical case management
  • Linkage and lag time between inpatient, residential, and outpatient services
  • Staff with experience and credentials
  • MCO gatekeepers with experience and knowledge of chemical dependency and mental health
  • Consistency in applying a screen for chemical dependency problems at the annual physical, first prenatal visit, and other opportunities

    Financial Performance and Incentives

  • Penetration rate of chemical dependency services by enrollees
  • Ratio of utilization of inpatient/residential services
  • Nonresidential intensive alternatives and outpatient services
  • Rate of payment utilized for service (e.g., rate of capitation payment used to purchase direct services)
  • Distribution of direct service dollars by modality
  • Cost per covered life

    Productivity

  • Abstinence levels at discharge/follow-up
  • Participation in self-help during treatment/follow-up
  • Employment or school improvement at discharge/follow-up
  • Family reunification at discharge/follow-up (child welfare)
  • Educational advancement at discharge/follow-up
  • Reduction in criminal justice system involvement during treatment/follow-up

    State Policy/Cost Shifting Considerations

  • Reduction in rate of incarceration and institutionalization
  • Reduction in the number or length of foster care placements
  • Reduction in medical/surgical costs at follow-up
  • Reduction in unemployment compensation



  • Oregon's Pre-Paid Health Plan
    Chemical Dependency ScoreCard*

    Measure 1: Efficient and Accountable Operations

    Rationale: Health care providers often express concerns that: (1) authorizations for the delivery of health care services take too long (this is particularly important with chemically dependent patients because often there is a short window of opportunity to move them into treatment), and (2) reimbursement of services should be timely. This is very important within the chemical dependency treatment provider community, particularly if their primary source of revenue has been public funds. Such providers have very limited ability to accrue reserves that can cushion cash flow problems.


    Indicator A—Simple and Timely Initial Service Authorization Procedures

    The service provider is to receive a response to the initial authorization request within 2 working days from the time the health plan receives the authorization request. The Health Plan uses OADAP authorization and reauthorization (or equally simple) forms.

    Indicator B—Simple and Timely Reimbursement Procedures

    This measure reviews whether service providers receive payment or adjudication of 90 percent of their clean claims within 45 days.

    Indicator C—Submits Timely and Accurate Encounter Data

    Office of Medical Assistance Programs (OMAP) receives encounter data (Medicaid service delivery accounting system) on HCFA form 1500 within 180 days of delivered services.

    Measure 2: Chemical Dependency Contract Compliance

    Rationale: Twenty-one standards were inserted into the State's contracts with pre-paid health plans for the chemical dependency benefit. The purpose of this measure is to monitor compliance with at least some of those standards.

    Indicator A—Levels of Care Criteria

    This indicator reviews whether providers and plans are utilizing State-required criteria when making decisions concerning admission, continued stay, and discharge.

    Indicator B—50 Percent Referral to Essential Community Providers

    The State regards chemical dependency treatment providers that previously received public funds as Essential Community Providers (ECPs). The goal of the State is that each pre-paid health plan (PHP) refer to no fewer than 50 percent of OMAP members needing chemical dependency diagnostic assessment and/or treatment to ECPs.

    Indicator C—Knowledgeable Gatekeeper

    PHP staff or their delegated entities who evaluate access to and length of stay in chemical dependency treatment shall have training/background in chemical dependency services and knowledge of OADAP-approved placement, continued stay, and discharge criteria.

    Measure 3: Prevention Program

    Rationale: Managed Care Organizations have initiated an environment that emphasizes not only the treatment of acute medical problems but also prevention, early identification, and intervention. This concept is also applicable to prevention and intervention of chemical dependency within the enrolled population of the Oregon Health Plan. The measures included are structured to assess the degree of prevention and early intervention carried out by individual health plans.

    Indicator A—Establish and Implement Risk-Focused Prevention Plan

    Research has shown that a number of risk factors increase the chances of tobacco, alcohol, and other drug abuse problems, particularly among adolescents. Pre-paid health plans must develop a risk-reduction plan that also increases protective factors to reduce chemical dependency problems in their enrolled population.

    Indicator B—Dependency Screening Instrument

    PHP staff shall utilize approved screening instruments to determine whether a diagnostic assessment for chemical dependency problems is indicated for an OMAP member. Contracts require 50 percent screening of all patients in 1996, 75 percent in 1997, and 100 percent in 1998, in these circumstances:

    (1) Initial contact or routine physical exam

    (2) Initial prenatal contact

    (3) Member evidences "trigger conditions" during a physical exam or emergency room contact (such as current intoxication, needle marks, dilated pupils, or suicide talk or attempt)

    (4) Member evidences overutilization of medical, surgical, trauma, or emergency services

    Measure 4: Access to Assessment and Treatment Services

    Rationale: Public and private health care purchasers are concerned about (1) the number of people being served (is the number reasonable in relation to the total enrolled population?) and (2) special needs populations or geographic locations that may warrant attention due to low utilization of or access to chemical dependency services. This indicator acknowledges the State's accountability and responsibility to provide chemical dependency treatment to all Oregon Health Plan clients.

    Indicator A—Member Admission Rate

    This indicator examines the percentage of members in a plan that receive a chemical dependency service. The research would indicate that 2-to-4 percent of the Oregon Health Plan population should be admitted to chemical dependency treatment services per year.

    Indicator B—Demographics of Chemical Dependency Treatment Admissions

    No specific standards have been developed due to the wide variation in memberships and locations served among plans. Instead, member admission will identify and compare male vs. female, adults vs. adolescents, rural vs. urban, minority vs. non-minority. The results of the analysis will be made available to the plans and upon request to the interested public.

    Measure 5: Treatment Effectiveness

    Rationale: Health care purchasers, legislators, and other key stakeholders want to know that treatment meets quality standards and is effective. The following indicators are measures of treatment effectiveness.

    Indicator A—Client Retention Rate

    This indicator acknowledges the importance of maintaining the participation of clients once they have visited a treatment program and been admitted. Increased participation, particularly during the initial period of treatment, provides greater likelihood that a client will benefit from treatment.

    Indicator B—Re-Admission Rate

    This indicator is concerned with the durability of gains made while in treatment and measures only members who have completed treatment during a previous admission. Re-admission will be counted within one year from successful discharge. This measure does not include transfers to other program or levels of care.

    Indicator C—Functionality Improvement, Including Employment, School Attendance, and Other Life Aspects

    A critical element of sustained recovery is employment maintenance or enhancement. This indicator reviews employment status from admission to discharge for those with at least three face-to-face visits.

    Indicator D—Reduced Utilization of Medical/Surgical Services

    This indicator highlights the significant cost avoidance that derives from the reduced use of medical and surgical services by members who have completed at least two face-to-face treatment contacts for an alcohol and/or other drug problem. Two years of medical/surgical service utilization are compared: (1) the year preceding admission and (2) the year following discharge from treatment. The measure is the number of medical/surgical encounters.

    Indicator E—Treatment Completion Rate

    This indicator identifies members who completed at least two face-to-face contacts. It then calculates the percentage of those members that complete their treatment program (completion is defined as those achieving abstinence and at least 75 percent of their treatment plan objectives).

    Measure 6: Client Satisfaction

    This indicator will utilize a questionnaire yet to be selected to measure client satisfaction with services received from the health care provider.

    *Note: For each indicator, the Oregon ScoreCard establishes specific, concrete measures for performance: below standard, achieved standard, and exceeded standard. As an example, the standards for Indicator A of Measure 1 are:

    Below Standard: 10 percent or more not received within 2 working days

    Achieved Standard: 90 percent received within 2 working days

    Exceeded Standard: 90 percent or more received within 2 working days and used simplified forms

    The complete Oregon ScoreCard may be obtained from the Office of Alcohol and Drug Abuse Programs, 500 Summer Street, NE, Salem, OR 97310. Phone: (503) 945-5763.

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