Louisiana Expands Bayou Health Medicaid Managed Care Program, Ditches Shared Savings Model
Beginning in February 2015, the Louisiana Department of Health and Hospitals (DHH) revamped Bayou Health, its Medicaid managed care program. The changes are portrayed as next steps in the evolution of the relationship between Medicaid and MCO’s and the adoption of Medicaid managed care across the country.
Bayou Health: Round 1–2012
Bayou Health was implemented in 2012, utilizing two managed care models:
• A shared savings model with MCOs acting as third-party administrators. • A prepaid capitated model where MCOs received a monthly capitation fee to cover all services.
The initial selection of MCOs occurred in July 2011. Twelve companies submitted proposals. Five providers were chosen, each a subsidiary of a national MCO already providing Medicaid managed care:
Due to its purchase by Louisiana Healthcare Connections’ parent company in July 2014, Community Health Solutions ceased Louisiana operations, leaving Bayou Health with four MCO’s.
Bayou Health announces coming changes–2014
In mid-2014, DHH announced changes to Bayou Health, including eliminating the shared-savings model. DHH predicted this would improve budget predictability and provide greater incentives to improve health outcomes. According to DHH, prepaid capitated plans saved $13 PMPM compared to the shared-savings plans. Five companies responded to the Request for Proposals (RFP) in July 2014; all five were selected–the four contracted MCO’s plus Aetna Better Health of Louisiana. The proposals were evaluated based on experience, qualifications and additional benefits. DHH established the PMPM rates based on utilization and market trends.
Features of Bayou Health Round 2
The new contracts retain many Round 1 features:
• MCO’s are required to spend at least 85% of Medicaid revenue on direct patient services. • The state continues to set absolute rate floors for most providers. • Prompt payment rules ensure timely reimbursement. • Grievance and appeals processes for enrollees and providers are available at the MCO and state levels.
Round 2 includes new benefits, including hospice care. (Previously, MCO enrollees were transitioned back to FFS Medicaid for hospice.) New services include in-home personal care for children under age 21 and non-emergency medical transportation (NEMT) for all services, including services managed by other companies. The Round 2 contracts include what DHH called a best practice from the shared-savings plans—financial incentives to more directly engage MCO’s and providers to improve patient outcomes. Twenty new performance metrics were added.
Marketing and enrollment
New MCO contracts took effect February 1, 2015. Enrollees in existing capitated plans were automatically re-enrolled. Members who had been in a shared savings plan were auto-enrolled into one of the available health plans based on their PCP network participation. Every enrollee could change plans within the first 90 days. In a significant care coordination improvement, new Bayou Health enrollees now choose or are auto-assigned to a plan at the time of Louisiana Medicaid eligibility. Previously, new enrollees were enrolled in fee-for-service and then given an opportunity to choose a plan, resulting in waiting two months or more to receive care coordination. Now, care coordination is provided immediately upon enrollment in Medicaid. Providers may inform patients what plans they are members of and what services are offered by plans. However, if a provider discloses participation in one plan, the provider must identify all of the plans in which the provider participates. Providers cannot provide incentives to enrollees to choose a plan and may not choose plans for an enrollee. Existing enrollees have a 60-day open enrollment each November; this year, the open enrollment period is August 24 through November 6. Enrollees who make no choice will be auto-assigned. Changes made during open enrollment will be effective December 1, with the 90-day period to change plans ending on February 26, 2016.
DHH projected savings of $135.9 million for the first full year of Bayou Health; the state exceeded those initial projections. Prepaid capitated plans saved $30 PMPM, a reduction of more than 12%. Over the first three-year period, DHH reported a reduction of $23.83 PMPM and significant improvements in frequency of well-care visits, timelines of immunizations and early prenatal care. The first legislatively mandated Bayou Health Transparency Report was released in January 2014 and was met with criticism. The Louisiana Legislative Auditor audited the report and found numerous flaws, including:
• Using numbers provided by the plans without independent verification. • Including non-required global assertions not supported by data. • Including outlier data without explanation. • Not including audited MCO financial report. • Omitting the first five months of Bayou Health operation.
Louisiana’s Medicaid Director admitted the first report should have included more disclaimers and the data were“marginally legitimate.” The second annual Transparency Report was issued December 30, 2014. The Legislative Auditor released afollow-up audit in September 2015 identifying positive and negative points:
• Repeating six months (January 2013 through June 2013) from the first report. • Using comparisons to pre-Bayou Health Medicaid only for outcome measurement. • Not including unsupported global assertions regarding savings and health outcomes. • Improved data validation. • Mathematical errors.
Data from Round 2 of Bayou Health will be available in late 2016/early 2017.
While Bayou Health covers about 900 thousand enrollees, approximately 100 thousand individuals receive traditional FFS services due to their Louisiana Medicaid eligibility. Dual-eligibles (individuals eligible for both Medicare and Medicaid) participate in Bayou Health only for NEMT and behavioral health services. Dental services continue to be provided by a separate managed care entity. Long-term services and supports Individuals receiving long-term services and supports (LTSS) are primarily either nursing home residents or residents who received home- and community-based services in order to stay at home. DHH began planning for managed LTSS (MLTSS) in 2012 and targeted implementation of MLTSS for adults with disabilities and elderly adults by October 2015 and for individuals with intellectual and developmental disabilities (I/DD) by early 2016. However, DHH announced in August 2015 that it was putting MLTSS plans on hold due to the fact that Louisiana will have a new Governor in 2016. Without time to get the necessary federal approvals, DHH put the plans on hold. Individuals receiving LTSS in their homes can opt into Bayou Health for full coverage. Nursing home residents and children in ICF-IDDs cannot participate in Bayou Health. Their NEMT is the responsibility of the facility. Behavioral health Louisiana operates a managed care plan for Medicaid enrollees–the Louisiana Behavioral Health Partnership (LBHP), administered by Magellan Health, Inc. LBHP includes Medicaid and non-Medicaid services. In November 2013, BHH announced plans to integrate behavioral health into Bayou Health plans rather than continue the contract with Magellan. Each Bayou Health MCO is affiliated with a managed behavioral health company. The target implementation date for behavioral health integration is December 1, 2015. Bayou Health enrollees will receive behavioral health services through the same plan that manages their medical care. New services include residential treatment, therapeutic group homes, crisis intervention, addictive disorder services and family and youth support services. Dual-eligibles, nursing home residents and beneficiaries receiving home and community-based services will be required to enroll in Bayou Health for behavioral health services. On August 28, 2015, DHH issued a Request for Proposals for administrative management of behavioral health services for the non-Medicaid, non-insured population.
The future of Bayou Health
The future of Bayou Health is uncertain, due to the upcoming gubernatorial elections. The election will be held October 24, 2015, with a runoff on November 21. The new Governor will take office in January 2016. The major candidates are former Lieutenant Governor and former Public Service Commissioner Scott Angelle, Louisiana House Minority Leader John Bel Edwards, Lieutenant Governor Jay Dardenne and U.S Senator David Vitter. Decisions regarding Medicaid and MCO’s in general and MLTSS and Bayou Health Round 3 in particular will be made during the new Governor’s term.