The purpose of this article is to discuss the quality assessment mechanisms for monitoring the implementation of managed care. The clinical indicators and practice guidelines that direct the monitoring process are described on the national and state level. New directions for monitoring managed care as a delivery system for vulnerable populations in terms of quality of services is addressed.
Key Words: Managed Care Programs, Medicaid, Quality of Health Care
Today, over 32 percent of all Medicaid recipients are enrolled in managed care -- an astonishing growth from the 9.5 percent enrolled in 1991 (Health Care Financing Administration (HCFA, 1995). All but six states have developed managed care programs, with 32 states reporting risk-based programs (National Academy for State Health Policy (NASHP), 1995).
Rapid growth in enrollment of Medicaid recipients into a variety of managed care arrangements (e.g., risk-based HMO contracts, preferred provider organizations (PPO), primary care case management wherein the primary physician is paid a monthly fee in exchange for managing the fee-for-service care of a recipient) raises anew concerns about quality of care. Is managed care simply a method for states to reduce Medicaid budgets, thereby threatening the amount and quality of service available to recipients? Do managed care organizations truly understand the unique needs of the vulnerable populations that rely on Medicaid? How can quality be assured, especially when consumer choice is restricted?
These are some of the many issues states and the federal government have grappled with especially as the movement to managed care extends beyond mothers and children and includes Medicaid recipients who are older and/or have disabilities.
Do managed care organizations truly understand the unique needs of the vulnerable populations that rely on Medicaid? How can quality be assured, especially when consumer choice is restricted?
In 1991, the Health Care Financing Administration (HCFA) began a Quality Assurance Reform Initiative (QARI) to develop methods and standards for monitoring the quality of care provided to recipients under capitated managed care arrangements. In the development of the QARI guidelines (HCFA, 1993), HCFA was faced with two related but potentially conflicting challenges. First, with states rapidly moving to managed care as a delivery system, there was increased pressure from Congress and consumer advocacy groups to strengthen oversight of these initiatives. Concurrently, there was a push among state policy makers and the managed care industry to eliminate restrictive federal policies which, while intended to serve as proxies for quality, were seen as inhibiting the expansion of Medicaid managed care. These competing demands offered an opportunity for HCFA to rethink its approach to quality monitoring. Taking its cues from the private sector, emphasis was placed on the defining factors directly related to the delivery of quality of care at the plan level and simultaneously developing oversight systems based on valid and rigorous quality indicators and systems for use by states.
It is worth noting that this was more than a subtle shift in perspective. Historically, both the Medicare and Medicaid programs have relied extensively, almost exclusively, on a regulatory approach to quality monitoring through the imposition and compliance review of structural and process standards for managed care (e.g., composition of quality committees, collection of defined data elements). At least conceptually, the QARI guidelines break from those traditions and offer a new approach to quality management. Accountability for performance shifts from reliance on externally imposed standards to a plan's own internal quality management program. Surveillance becomes rooted in standardized performance measurement based on reasonable scientific evidence, more in-depth investigations of aspects of care most relevant to Medicaid populations, and a collaborative rather than punitive orientation. By building capacity at the managed care plan level and developing new tools for accurately monitoring performance with valid data, QARI strengthened the roles of both providers and states in achieving continuous quality improvement.
The QARI guidelines have four principal components:
- health plan internal quality management programs
- clinical indicators, practice guidelines and focused pattern of care studies
- state monitoring role
- annual, independent reviews of the quality of services
The guidelines were tested in three states (Minnesota, Ohio and Washington) under a grant administered by the National Academy for State Health Policy. From the outset, QARI was released as guidance. QARI was never perceived as a static document but was intended to evolve based on the input and insights of states working collaboratively with their managed care plans. As a result of this demonstration, as well as advancements in the field of quality improvement since publication of the guidelines, new approaches to quality management have emerged. Following is a discussion of the developments and intents with respect to each of QARI's components.
Health Plan Internal Quality Management Program
Ultimately, good quality health care can best be promoted by the actual providers of care. The establishment of standards is an attempt to create conditions favorable to the practice of quality care and to define, in advance of care being provided, expected performance levels. QARI establishes a baseline for how plans should conduct their operations in a number of key areas:
- A plan must have an organized structure and lines of authority for overseeing the quality improvement function. This includes systematic activities for identifying and addressing quality problems, using clinical indicators to track change, and implementing remedial and corrective actions when problems are identified.
- The governing body must be responsible for monitoring, evaluating, and improving care. Although the quality improvement function may actually be delegated to a committee or other oversight entity, the governing body must approve such plans and review their activities on an ongoing basis.
- The plan must have documented evidence that activities are conducted and that resources are sufficient to perform the task.
- Physician and nonphysician providers must agree to fully participate in the quality improvement process.
- The plan must have written policies and procedures for credentialing physicians and other health professionals.
- The plan must have policies on enrollees' rights and responsibilities and ensure that enrollees are aware of these rights. These include the right to choose their primary care physician, to have access to medical records, and to be informed of treatment options and consequences.
- The plan must have procedures for formal grievances and for resolving enrollee complaints.
- The plan must have methods for assessing consumer satisfaction.
- The plan must establish standards for access to routine, urgent, and emergency care; to telephone appointments; to advice; and to member service lines.
- The plan must have minimum specifications for medical records - what is recorded and how records are stored and retrieved.
- The plan needs a utilization management program that includes procedures to review the medical necessity and appropriateness of services and to inform providers of care of the findings of these services.
Clinical indicators/Practice Guidelines/Focused Studies
QARI defines 33 clinical and 6 health service areas that are of greatest interest to Medicaid and selects two of them for further development: prenatal care and childhood immunization. QARI provides the framework for conducting focused studies in each of these areas, including the development of clinical indicators and practice parameters. Since the advent of the QARI guidelines, HCFA, in collaboration with the National Committee for Quality Assurance (NCQA), has released the Medicaid Health Plan Employer Data and Information Set (HEDIS). This document adapts performance measures in use for the commercial population to the special needs of Medicaid. Recently, NCQA released a further update of their measurements, referred to as HEDIS 3.0, which develops a standardized approach for collecting performance data for commercial, Medicare and Medicaid enrollees.
QARI provides a framework for conceptualizing the states' role in monitoring their Medicaid managed care plans. Elements of this role include the following:
Coordination among entities with quality oversight responsibility: In most states, at least three departments have oversight responsibility for managed care. The Medicaid agency is the contracting body for plans serving Medicaid recipients; departments of insurance grant certificates of authority for plans to operate within the state; and departments of health license all plans, monitor services to commercial enrollees, and frequently monitor Medicaid services. In addition, most plans are also subject to standards and review processes imposed by private purchasers and private accrediting bodies such as NCQA and the Joint Commission on the Accreditation of Healthcare Organizations (JCAHO). Some of these standards may be the same while others may conflict in both minor and major ways so as to require separate treatment by plans in order to comply. To employ their resources most productively, state Medicaid agencies should consider whether requirements used by other state and private entities are sufficient for Medicaid or if, through the sharing of information, additional requirements can be reduced.
Creation of a consumer-oriented approach: While the QARI guidelines advocate consumer participation in the monitoring process, they provide no real guidance for bringing consumers into the process. States have applied these provisions in different ways, including the establishment of consumer consortia with direct input into the planning and monitoring process; consumer participation on advisory committees; and the use of focus groups with consumers to better understand the strengths and constraints of managed care in meeting their needs.
Shift from regulatory to collaborative approach: Quality assurance has often been perceived as a policing function, with the state acting unilaterally in establishing and enforcing standards. The QARI guidelines encourage states to work directly with their managed care plans to identify for continuous monitoring those clinical or health service delivery access issues of greatest interest.
Annual, independent reviews of Quality
Federal law has always required that Medicaid plans have an external review. Typically the reviewing organization would review medical charts, prepare a report, review its findings with the state and its plans, then develop actions to correct any deficiencies. This approach was very mechanical and regulatory. QARI shifts the focus from an oversight to a collaborative function and offers three options for conducting these reviews, each with a different level of plan involvement:
- The external reviewer simply can validate studies that the plan designs and conducts;
- The external reviewer and the plan can jointly design and conduct the study; or
- The external reviewer can design and implement the study with minimal involvement by the plan.
External quality reviews can expand states' capacities to implement their quality improvement programs. Because federal law requires the studies, states receive from 50 to 75 percent federal financial support to help pay for them. This arrangement makes financial resources available that states might not have otherwise and allows them to incorporate other activities into the scope of their external review, such as administration of consumer satisfaction surveys, collection of performance measurement data; or validation of data.
On the Horizon
Spurred by the success they perceive in managed care for women and children, states are turning to managed care delivery systems for older persons and persons with disabilities. States hope to have the same experience in promoting greater access and quality while restraining costs.
A system must be constructed which is capable of assessing program performance where very few absolute standards of care exist and where quality of life considerations may be as significant as those relating to quality of care.
While it is too early to conclude whether managed care is an effective delivery system for these more vulnerable populations, early experience suggests that design features of most state quality management systems for women and children are insufficient to monitor the special needs of older persons and persons with disabilities. Aware of these developments, HCFA will be revisiting the QARI guidelines and assessing their application to the Medicare and other populations. Part of this process will address how Medicaid quality monitoring responsibilities can be coordinated with those of other public and private entities thus reducing duplicative processes and effort.
We are learning already that the quality management system for programs serving more vulnerable populations, such as elders and persons with disabilities, must apply a different lens to its activities. A system must be constructed which is capable of assessing program performance where very few absolute standards of care exist and where quality of life considerations may be as significant as those relating to quality of care. These represent new perspectives for a state Medicaid agency and demand a new set of skills and expertise. Increasingly, states are learning that quality oversight cannot be an isolated activity but requires that other state agencies, community organizations, advocacy groups, consumers, and providers become meaningful partners in the quality management process.
The two most commonly cited restrictions include an enrollee's right to disenroll on demand from a plan and the "75/25 rule" requiring at least 25 percent of the enrollment of a managed care plan contracting with Medicaid to be composed of the privately insured. || Back to article
Muskie Institute of Public Affairs
University of Southern Maine
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PO Box 9300
Portland, ME 04104-9300
Maureen Booth, M.A., is Director of Managed Care Initiatives at the Edmund S. Muskie Institute of Public Affairs at the University of Southern Maine. In addition, Maureen holds a fellowship position with the National Academy for State Health Policy in Portland, Maine. Ms. Booth directed the Medicaid Managed Care Resource Center at the National Academy and has served as principal staff to the National Task Force on Medicaid Managed Care. She currently directs a HCFA initiative to revise quality guidelines and to propose their adaptation for use in the Medicare program. She also provides technical consultation to the Maine State Medicaid program in the design of their quality management system for monitoring and improving care provided under their managed care program for women, children, elders and persons with disabilities.
Article published January 6, 1997
Health Care Financing Administration, Enrollment Projections as of June 30, 1996, 1996.
Health Care Financing Administration, Medicaid Bureau, A Health Care Quality Improvement System for Medicaid Managed Care: A Guide for States July 6, 1993.
National Academy for State Health Policy, Medicaid Managed Care: A Guide for States, 1995.