Managed Care Long Term Care Model The Texas Experience

1. Managed Care Long Term Care ModelThe Texas Experience Presentation to: San Diego County LTCIP October 26, 2001 Cindy Adams

2. STAR+PLUS CBA Eligibility • MAO Applicants for CBA Waiver Services • TDHS informs applicant that services are provided through an HMO and allows applicant to select HMO • TDHS informs selected HMO and requests pre-enrollment assessment be completed* • HMO completes: • Medical necessity form • CBA eligibility assessment • HMO provides results of assessment activities to TDHS * HMO is authorized payment for assessment regardless of final eligibility determination

3. STAR+PLUS CBA Eligibility • THDS notifies applicant and HMO of their eligibility determination • Applicant eligible: • HMO notified of applicant eligibility and effective date • Applicant will be enrolled in HMO • HMO will initiate ISP on date of enrollment • Applicant ineligible: • Applicant notified and provided information on their right to appeal the adverse determination • HMO not notified if applicant is ineligible

4. STAR+PLUS CBA Eligibility • SSI Member CBA Upgrades • Currently enrolled members who meet screening criteria based on TDHS Risk Assessment Indicator (RAI) • Care Coordinator completes: • Medical Necessity Form • MDS-HC • Complete Personal Attendant Services (PAS) tool • Assesses current equipment and supplies • Completes cover sheet • Submits to TDHS Regional Nurses for review and eligibility determination

5. STAR+PLUS CBA Eligibility • Denial of CBA Upgrade • Regional nurse notifies HMO • HMO authorizes identified medically necessary services • No increase in capitation • Approval of CBA Upgrade • Regional nurse notifies HMO • HMO authorizes identified medically necessary services • Member enters 120-day wait • At end of 120-days capitation increases to CBA payment amount

6. STAR+PLUS CBA Eligibility • CBA Annual Reassessments • Completed on all enrolled CBA waiver members • Up to 120-days prior to expiration of ISP • Care Coordinator completes: • PAS Tool and MDS-HC • Assesses member for equipment and supplies • Completes Medical Necessity Form • Completes CBA cover sheet • Assessments completed and forwarded to TDHS Regional Nurses

7. STAR+PLUS Population • STAR+PLUS is the largest population enrolled in an integrated, acute and LTC managed care model in the country • 47% of the STAR+PLUS population are dual eligibles • Approximately 18% of the STAR+PLUS population are members under the age of 21 • 2.7% of the STAR+PLUS population are CBA waiver members • 7% of the STAR+PLUS population have the diagnosis of SPMI • 85% of the total mandatory enrollees selected the HMO model

8. STAR+PLUS Capitation • DHS pays health plans prospectively on a capitated, per member per month basis by client risk group • There are six risk groups with amounts differing by Medicare status, care setting and status at enrollment • Rates for Medicaid only members are higher than those for dual eligibles to reflect HMO liability for acute care • Capitation rates are discounted 2% from projected fee-for-service nursing facility costs and 5% from projected fee-for-service acute and long term care costs

9. Development of STAR+PLUS Capitation Rates • Information used in rate development: • Reduced fee-for-service (FFS) methodology • Calendar year 1997 FFS experience data trended forward • Relativity factor for Harris Co. • Assumed all-plans cost increase of 6% (FY2002) • Assumptions • STAR+PLUS program must be cost neutral so aggregate claims and average costs become the balancing items with PCCM and FFS • Equitable distribution of risk among plans • Costs for CBA waiver members are comparable to 1997 FFS nursing facility claims costs

10. STAR+PLUS Capitation

11. STAR+PLUS Capitation Continued

12. STAR+PLUS Capitation Continued

13. Risk Adjusters • Risk Adjusters • Medicare status • Waiver status • Geographic relativity factor • Harris County - 14% higher medical costs that statewide average • Share of Cost • Members are required to contribute toward the cost of their care based on their income and type of placement • Provider is responsible for collecting the SOC • HMO payment to facility is based on total payment due facility less the member’s SOC

14. Risk Sharing • HMOs retain the first 3% of any profit, but split equally with the state any profit between 3 and 7 percent • Any profit over 7 percent must be paid back to the state