Article Reflection HCS 416

https://www.openminds.com/market-intelligence/executive-briefings/making-managed-care-work-case-study/

Making Managed Care Work – A Case Study

By Steve Ramsland, Ed.D.

In many ways, the state of California is leading the way when it comes to Medicaid policy – from more managed care, to increased performance transparency, to a greater focus on community-based care. Over the past few years, we’ve seen changes come at an incredible pace: The state has expanded Medicaid to nearly one million new beneficiaries under health care reform; expanded Medicaid addiction treatment services (see California Expands Medicaid Addiction Treatment Benefit); shifted the delivery system for autism benefits (see California Medi-Cal Starts Shift Of Autism Treatment Services From Regional Centers To Managed Care Plans Effective February 1, 2016); expanded managed care in new regions with new populations (see California Shifting 24,000 Seniors & Persons With Disabilities In 19 Counties To Medi-Cal Managed Care); created new housing programs for people with serious mental illness (see California To Launch $2 Billion ‘Housing First’ Program For Homeless Individuals With Serious Mental Illness); developed new integration models for dual eligibles (see California Creates Two Options For Dual Eligibles – Mandatory Enrollment In Medicaid Managed Care Or Dual Eligibles Demonstration); and seen the extension of its mental health delivery system under a five-year waiver extension (see California’s Mental Health Carve-Out Preserved For Five Years, But With New Performance Transparency Requirements) – and that isn’t everything.

The challenge of all this change is that provider organizations in California are struggling to reinvent their strategies for sustainability in a market driven by constant change. Recently, I had the opportunity to work with a provider organization that is looking to diversify its revenue by partnering with Medicaid health plans. The organization, a non-profit behavioral health organization, provides outpatient mental health and addiction treatment services for children, youth, and families. In the interest of diversifying their revenue beyond their county contracts for specialty Medicaid services for consumers with serious mental illness, they were looking for opportunities to contract with Medicaid health plans to provide behavioral health services for consumers with mild to moderate issues. This meant understanding what the health plans in their market were looking for and how they could develop the competencies and services to meet those needs.

The first step was to conduct a managed care readiness assessment so they could understand what would be expected of them if they sought contracts with managed care organizations – especially if they were looking at value-based arrangements (see Will Value-Based Payment Happen & Will It Work (For Us)? and The Business Model Transition To Value-Based Care) The assessment helped to determine gaps in the organization’s infrastructure that could be problems in the future. By taking this step early, the organization was able to understand their problem points and address them head-on.

The truth is, many organizations will be unable to meet the demands of managed care contracting on their own – smaller organizations won’t have the infrastructure or capital to make the changes necessary to thrive in a managed care market. This means mergers, acquisitions, collaborations, and other partnerships may be needed (for more, see When ‘Being Acquired’ Is The Best Financial Move). In this case, many provider organizations are “collaborating” on a solution.

The next step was reaching out to the managed care companies within the organization’s local market to explore what their market needs were, where they had gaps in their network, and what their interest might be in contracting with behavioral health provider organizations. Some of what we found was specific to the organization’s local market, but other findings were universal and in line with what we’ve seen from health plans across the country. For example, we found that the health plans were looking for programs that integrated primary and behavioral health care and programs that could manage care transitions (including ongoing support services, care coordination, and medication management).

Next, it was time to develop services for  (and contracts with) managed care organizations. The organization developed a plan for how they could meet the needs of one of the health plans in their area, and how they could demonstrate their value (something we’ve talked about before –Four Keys To Success With MCO Contracting). After many conversations with the health plan, the organization was able to come to an agreement and develop a case rate contract with the health plan.

Finally, it’s all about implementation. Moving an organization to a value-based contracting system requires realigning traditional business models to succeed under the new approach (see I Know We Can’t Keep Doing What We’re Doing). Partnerships won’t last if one partner can’t deliver. This requires having the infrastructure and management commitment to deliver on the new programs – and having the ability to manage financial risk and track performance.

This organization was successful because they made sure their organization was prepared and they understood what the health plans in their market needed. If your organization is thinking about managed care contracting, there are four questions you need to ask:

· Can we deliver the clinical services most desired by payers?

· What services, populations, and payers do we focus on?

· How do we deliver the administrative capabilities expected by payers?

· What services, populations, and payers do we focus on?

Once you know the answers, you will be well on your way to building a successful, sustainable relationship – whether you are in California or elsewhere. For more, join me on August 25 in San Diego at The 2016 OPEN MINDS California Management Best Practices Institute. During the institute, I will be presenting “Optimizing Your Business Development Budget: How To Develop A Focused Plan For New Contracts,” where I will discuss how to approach the market mapping process, how to compare your business development spending to the return through your revenue streams, and how to use that information to optimize your business development budget.

Reflection Paper

Due: 3/27/2020

1-2 pages

Reflection Questions:

Question	Points	Grade
Briefly describe the organization, setting, situation, who is involved, who decides what, etc.	2
Why was it important to find out what the gaps in services?	2
What is the main theme of the article?	2
The organization was successful because they took steps to be prepare, what might have happened if they did not take steps prepare and understand the needs?	2
As an administrator, is there anything you would have done differently? Why or why not?	2
Total	10