Minnesota Senior Health Options (MSHO)

Project Overview

Introduction

MSHO integrates Medicare and Medicaid financing and benefits and acute and long-term care services in a market-based managed care delivery system under a Medicare+Choice (M+C) contract between the federal government and the State of Minnesota. The State of Minnesota contracts with health plans to provide and manage health care and support services for seniors age 65+ in the seven-county metro area and in three rural counties in Minnesota. MSHO provides individualized care coordination to meet the chronic care needs of seniors. In September 2001, the state expanded the MSHO model to enroll people from 18 through 64 with physical disabilities in a program called Minnesota Disability Health Options (MnDHO).

Nationally, MSHO is the first and largest state-sponsored demonstration that integrates Medicaid and Medicare for people in all settings. As a model that shows promise of meeting the chronic care needs of aging baby boomers, MSHO has attracted the interest of other states, providers, researchers, national organizations such as the American Association for Retired People and National Governors Association, and even other countries.

Development of MSHO has been supported by grants from the Robert Wood Johnson Foundation. Minnesota participates in the RWJF Medicare and Medicaid Integration Project (MMIP) a 10-state initiative focused on improvement of chronic care and administered by the Center on Aging, University of Maryland.

Eligibility and Enrollment

Currently, seniors must be eligible for both Medicaid and Medicare ("dually eligible"). However, beginning sometime in 2002, MSHO will also enroll seniors who are eligible only for Medicaid.

Enrollment in MSHO is completely voluntary. In Minnesota, seniors receiving Medicaid are normally required to enroll in the State's Medicaid managed care program, Prepaid Medical Assistance Program (PMAP), which operates in 56 of the State's 87 counties. However, in the 10 MSHO counties, Medicaid-eligible seniors may choose to voluntarily enroll in MSHO instead.

MSHO enrolls the full range of dually eligible seniors regardless of level of need, including those that are healthy, or frail and living in the community, or institutionalized. As of November 1, 2001, MSHO's enrollment was 4,560; PMAP enrolled 29,117 dual-eligible seniors in that month.

Benefits

MSHO benefits include all Medicaid and Medicare services including home and community based "waiver" services and 180 days of nursing home care for community enrollees. (Nursing home care is paid fee for service (FFS) for enrollees who stay in a nursing home beyond 180 days or who were already in nursing homes when they enrolled). The wide array of home and community based services includes assisted living, adult day care, home modifications, personal care attendant services, and others.

Care Coordination

As a crucial piece of the MSHO model, each MSHO enrollee is assigned a care coordinator. Care coordinators are encouraged to develop ongoing personal relationships with enrollees. Coordinators may work for the health plan or the care system, clinic or county, depending on the particular clinical model employed by the health plan. They may be RNs, social workers or geriatric nurse practitioners (GNP). Care coordinators for community members are often involved in all aspects of their care, from primary care visits to arranging home and community based services. Coordination of primary care for most nursing home residents is provided by GNPs, who work with care coordinators or health service coordinators (staff who assist with the administrative side of care coordination).

Health Plans

The State contracts with health plans to provide integrated primary, acute and long term care services under MSHO. Medicare and Medicaid service requirements are combined in a single contract managed by the State. Three licensed nonprofit HMOs participate in MSHO: Medica, Metropolitan Health Plan, and UCare Minnesota.

Clinical models may vary among plans, but each plan must meet basic program requirements for providing and coordinating a full range of services to enrollees including risk screening of new enrollees within 30 days and provision of care coordination.

MSHO health plans often subcontract with geriatric "care systems," organized affiliations of clinics, hospitals and long-term care providers that may coordinate all or most services for the enrollees.

Health plans and providers in MSHO have invested a large amount of resources in new approaches to serving seniors with chronic needs. Minnesota care systems such as Evercare, Access Alliance, and AXIS Healthcare could not operate in these new ways without the integrated financing provided through this program, and their future business plans depend on continued growth under MSHO and MnDHO.

Payments

New service delivery options for dual eligibles are important because fiscal incentives between Medicare and Medicaid are misaligned, causing cost shifting, consumer confusion and inefficient care delivery. Costs for dually eligible beneficiaries drive expenditures for both the Medicare and Medicaid programs.

In MSHO, the payment design aligns financial incentives between both programs in order to reduce institutional placements and encourage use of home and community based services. Medicare and Medicaid payments are capitated. The federal Centers for Medicaid & Medicare Services, or CMS (formerly Health Care Financing Administration) makes Medicare payments directly to the health plans. Health plans receive Medicaid capitation payments from the state. Enrollment, member materials, appeals/grievances and other administrative procedures and paperwork are combined into a single process for both Medicare and Medicaid.

Payment for Medicare services is capitated under Medicare demonstration waivers approved by CMS in 1995. For seniors who meet nursing home criteria but live in the community, the Medicare waivers provide a risk adjustment (the same as that for PACE programs - 2.39 times the county Medicare rate) to the regular Medicare managed care payments. Without this risk adjustment, health plans and providers would find it hard to serve frail seniors or people with disabilities. Payments for other enrollees (people in nursing homes and the community non-frail) are the same as for other M+C plans.

Federal Waivers

The original Medicare waivers extended from MSHO's implementation in February 1997 through February 2002. On October 1, 2001, the State received approval from CMS to extend the MSHO Medicare payment demonstration through December 31, 2004. As one condition of the waiver extension, enrollment of the community frail population will be capped at projected enrollment levels. Another condition is that MSHO will also enroll seniors who are eligible only for Medicaid and not for Medicare.

Originally, Medicaid services were provided under a Section 1115 waiver. However, since MSHO enrollment is voluntary, CMS and the State agreed in 2000 to replace the Section 1115 waiver with a combination of Section 1915(a) waiver for state plan services and Section 1915(c) waiver for home and community based services.

Quality Assurance

The State is responsible for oversight of health plan services, with CMS overseeing the State. Quality assurance activities include: the collection of full encounter data plus additional utilization and HEDIS measures, focus groups, annual satisfaction surveys, disenrollment surveys, biennial audits by the Minnesota Health Department, health plan reviews of care systems, quarterly complaint reporting, meetings and annual training for care coordinators, county managed care advocacy services, state managed care ombudsman services, collaboration between plans and with the Peer Review Organization on clinical quality improvement measures and an annual forum on chronic care issues. An MSHO Advisory Committee includes representatives of consumer advocacy and provider organizations as well as MSHO enrollees.

MSHO Accomplishments

Accomplishments under the MSHO demonstration include:

• Reorganization of the service delivery system through the development and support of specialized networks (geriatric care systems.)
• Attracting and maintaining committed health plans and providers
• Reduced administrative duplication
• Seamless point of access to primary, acute and long term care services through the care coordination function
• Exceeding enrollment goals
• Low disenrollment rates (averaging 3%), few complaints and only 1 appeal in almost 5 years
• High satisfaction among enrollees and providers as measured by several surveys and focus groups
• Reduced institutional utilization (lower than the FFS base)
• Increasing access to home and community based services for under-served and ethnically diverse populations. MSHO serves a higher proportion of Asian and black seniors compared to PMAP or FFS home and community based services program. Approximately 55% of community MSHO enrollees are Asian or African American.
• Collaborative efforts among MSHO plans and the PRO on clinical initiatives such as immunization and congestive heart failure.
• Single point of accountability: collection of encounter and utilization data for all primary acute and long term care services,
• Expansion to 3 rural counties
• In September 2001, MSHO expanded to include people with disabilities under Minnesota Disability Health Options (MnDHO). MnDHO is designed to support the goals of the New Freedom Initiative, the President's proposed measures for increasing opportunities for people with disabilities. AXIS Healthcare, a care system specializing in serving people with physical disabilities, coordinates care under a contract with UCare Minnesota, which calls this new product UCare Complete. The MnDHO Consumer Advisory Committee is made up of consumers and advocates for people with disabilities, who helped design MnDHO. CMS approved capitating Medicare payments for MnDHO enrollees on 10/01/01. Development of MnDHO has been supported by the RWJF Center for Health Care Strategies.

MSHO - looking forward

Both MSHO and MnDHO have high levels of consumer and health plan support. Both programs are designed to provide increased flexibility and consumer direction while maintaining financial viability and budget neutrality. MSHO has reduced institutionalization and increased access to community services for under-served groups. We plan to continue building on these successes in the next several years.

Although MSHO has been operational for five years there is much left to learn. The formation of MSHO, a program targeted for dual-eligible elders, resulted in the creation of a geriatric care infrastructure. This infrastructure makes possible collaborations between health plans on clinical outcome measures and interventions for elders that were rarely considered before MSHO. In the next few years, we look forward to seeing the results of these interventions. We also look forward to conducting more detailed analyses of encounter data to get a better picture of the MSHO program in its first few years.

In less than a decade, the Baby Boom generation will reach retirement age, and, in the year 2030, this group will begin turning 85, putting unprecedented challenges on the long-term care system. Because of the size of this group, their need is likely to overwhelm the traditional responses from family, communities and government. An innovative model such as MSHO, holds promise for providing quality, cost-effective health care for this large group. In particular, models like MSHO, with its stress on care coordination, will be crucial to enable elders to manage their chronic conditions while living comfortably in their own homes.

Contact Information

Pamela Parker
Director, Integrated Purchasing Demonstrations
Minnesota Department of Human Services
444 Lafayette Road
St. Paul, MN 55155-3854
Phone: 651-296-2140
FAX: 651-297-3230
E-Mail: Pam.Parker@state.mn.us
Website: http://www.dhs.state.mn.us/agingint/

Sue Kvendru
MSHO Project Coordinator
Phone: 651-215-1828

Deb Maruska
MnDHO Operations Coordinator
Phone: 651-296-0825