Background: Georgia Medicaid simultaneously maintained three managed care models in the same counties. Upon implementation of the statewide FFS-based PCCM program, two types of capitated plans were introduced. One was a risk-bearing, private HMO plan, which was paid a monthly capitation amount and was at-risk for the provision of services. The other was a non-risk, hospital-based Public Health Service Network (PHSN), which was initially paid a monthly capitation amount and later cost-settled to cover any difference between actual costs and capitated payments. Methods: Hospital and physician encounter claims were analyzed for the two capitated plans along with FFS claims data for the PCCM program, in order to compare the cost impact of the three delivery systems. Over 227,500 encounter claims (spanning from January 1996 to September 1998) were examined and compared to FFS claims data for the same time period. Cost impact was calculated by applying the FFS average cost per visit to each plan's utilization rates for hospital and physician claims. These costs were aggregated and compared between the three plans for the same counties and quarters. Results: The non-risk PHSN demonstrated much higher costs (more than three times) than the risk, private HMO for all services. In addition, PHSN costs were higher than the PCCM (most notably for hospital services). Conclusion: Even though under-reported encounter claims were used, this analysis demonstrated that non-risk PHSNs cost much more than established FFS-based delivery systems. States' Medicaid programs considering such models of managed care should proceed with caution, establishing appropriate control mechanisms.
Learning Objectives: Learning Objectives: As a result of this session, participants should: 1) Understand Georgia's three alternate Medicaid managed care delivery systems that were in existence in the same counties at the same time: A Private HMO (Risk), a hospital-based Public Health Service Network (Non-Risk), and a Fee-For-Service Primary Care Case Management Program (PCCM); 2) Review methodology for assessing costs between the three managed care delivery systems; 3) Recognize limitations of encounter claims data as the only source for cost data; and 4) Assess the potential cost impact of a Non-Risk hospital-based PHSN plan
Keywords: Cost Issues, Medicaid Managed Care
Presenting author's disclosure statement:
Organization/institution whose products or services will be discussed: Georgia Division of Medical Assistance, Department of Community Health
I do not have any significant financial interest/arrangement or affiliation with any organization/institution whose products or services are being discussed in this session.