Medicaid self-insurance/ASO planning meeting

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Friday DSS met with advocates, providers, state agency representatives, and potential bidders to collect input on the RFP for an administrative services organization (ASO) contract for all 600,000 state Medicaid members. In a shift of policy, the Malloy administration announced three weeks ago that the state would be moving to a self-insured ASO model for the Medicaid program by Jan. 1, 2012 and eventually offering every member a patient-centered medical home (PCMH) through the PCCM program. The current capitated HUSKY HMO model this new contract will replace has struggled to save money and provide care to over 400,000 children and parents over its entire fifteen year history. There was a lively debate with the department over advocates’ recommendation that ASO and care management functions be contracted from separate organizations. Until PCMHs are available statewide, DSS intends to provide care management services from a centralized source. Advocates argued that some ASO functions, such as utilization management, may at times be in conflict with care management. As the administrative and care management functions are separate capacities and often do not overlap in single organizations, it would be wise to contract with a different entity than the ASO for interim care management services, ensuring that the state is able to get the best value for each set of functions. Advocates are also concerned that an ASO will have no economic incentive to support development of PCMHs as that would result in a loss of revenue. A separate contract could be written with the expectation that the care management contract would eventually cease and incentives to help develop local PCMHs could be included. It was noted that in behavioral health, administrative and care management functions have reportedly been delivered by a single company with success, however over 15 years and across at least that many HMOs, the record of co-locating administrative and care management functions for HUSKY families has been disappointing. The advocates also argued strongly for a single ASO, to have the ASO responsible for recruiting (not credentialing or paying) providers, and that financial incentives be tied to quality standards over simple savings. The RFP is expected next month.
Ellen Andrews