Lessons From the Managed Care Experience of the Community Health Center Network

1. Lessons From the Managed Care Experience of the Community Health Center Network Ralph Silber Chief Executive Officer, CHCN March 16, 2012

2. Introduction: What is CHCN? Mission Statement: The Community Health Center Network is a partnership of community health centers committed to enhancing our ability to provide comprehensive, quality health care in a manner respectful of community traditions and values. CHCN provides: • Managed care contracting servicesand management services for our health centers’ managed care business • Practice management services for health centers

3. Network’s Three Broad Roles • As an Independent Practice Association (IPA) • Contracting with HMOs on behalf of our health centers • As a Managed Care Management Services Organization (MSO) • Integrated managed care functions such as contracting, claims processing, utilization management, Pay for Performance (P4P) quality improvement • As a Practice Management Organization • HIT initiatives, QI, PCMH, Data Analytics • Note that our policy and advocacy work is conducted by our sister organization, Alameda Health Consortium

4. CHCN Governance • Non-Profit 501(c)(3) Corporation • Board is composed of the CEOs of 8 member health centers • Community Health Center Network Members Asian Health Services Axis Community Health La Clinica de La Raza LifeLong Medical Care Native American Health Center Tiburcio Vasquez Health Center Tri-City Health Center West Oakland Health Council

5. Health Center Services • CHCN Health Centers serve clients at 29 comprehensive primary care sites in Alameda and Contra Costa Counties • Employ more than 150 PCPs • More than 160,000 patients seen at our health centers • In aggregate, CHCs are a very significant primary care provider in Alameda County. Our health centers are the “medical home” for approximately 2/3rds of our County’s low-income residents.

6. CHCN Managed Care • CHCN has HMO contracts with Alameda Alliance for Health (AAH), Blue Cross, and Health Net • HMO Programs: • Medi-Cal Managed Care (2-plan model) • Healthy Families • Access for Infants and Mothers (AIM) • In-Home Support Services Workers • Medicare Advantage Special Needs Plan • CHCN has contracts with more than 500 specialists • Approximately 64,000 Managed Care Members (about 30% of health centers’ patients are through CHCN)

7. Network Managed Care Organization Definitions : IPA and MSO • What is an Independent Provider Association (IPA)? • Entity organized and directed by health care providers to jointly negotiate contracts with health maintenance organizations and depending on the contracts, with specialists and other providers. • The value of the IPA is aggregation into an association in order to leverage contracting strength vis-a-vis HMOs. • What is an Managed Care Services Organization (MSO)? • An organization that provides physicians or other provider groups including IPAs, services in support of HMO contracts. • These services typically include membership processing, claims processing and payment, referral and authorization processing, utilization management, P4P quality improvement, and other administrative activities.

8. CHCN is an IPA and MSO • CHCN as an IPA • Contracts with HMOs (Alameda Alliance for Health, Blue Cross, and Health Net) on behalf of our member health centers • Contracts with specialists and ancillary providers • CHCN as an MSO • Is organized to provide a range of services in support of the HMO contracts. These include membership processing, claims adjudication, utilization management, etc.

9. IPA Elements of CHCN: Health Center Participation Agreement and Criteria • Participation Agreement legally binds the health centers to participating in CHCN. • There are CHCN membership criteria. The criteria are essential to assure business success: • Assuring mutual trust • Meeting regulatory and HMO requirements

10. Membership Criteria • Financial / Administrative • Current ratio of at least 1 to 1 (assets to liabilities) • At least one month’s operating reserves • Ability to track costs of capitated services on a monthly basis • Most recent audits • Management IT reporting systems (e.g. track Medi-Cal patients by aid code) • Clinical services • Medical Director at least 50% time • Quality Assurance program • 24 hour advice and telephone call system • Provide case management services

11. MSO Components of CHCN: Managed Care Operations • Membership • Claims • Utilization Management • HMO and Provider Contracting and Relations • Finance • Quality Improvement • Information Technology • Operations Management • Pay for Performance

12. CHCN HMO Contracting • Types of Risk Contracting • Global • Inpatient • Full Professional (including specialty care) • Primary Care Only • CHCN is a “Delegated” group • CHCN takes “Full Professional Risk”

13. Payment Flows Medi-Cal Alameda Alliance for Health Anthem Blue Cross CHCN Clinic PCP Specialists, Ancillary Risk Pool Funds

14. CHCN Pay for Performance (P4P) to Our Health Centers • Board decides each year to distribute dollars from CHCN risk reserves (i.e., our “profits”) • % Health Center Member Months • % HC’s Contribution to Financial Reserves • % Based on Quality Improvement Measures • % Appropriate Utilization (PCP visits, ER visits, inpatient admissions)

15. CHCN P4P • These P4P measures are used to incentivize several areas: • Where HMOs have P4P, these give impetus to improve on those measures • Pushes us on membership growth • Pushes us to improve financial performance • Gives us a regular process to measure Patient Satisfaction • Measures our improvement in quality of care • Incentivizes appropriate utilization • Reliability and credibility of data is crucial for P4P to work. • Dollars are distributed according to data measures. These must be right! • Our clinical and utilization measurement enables us to market the health center services as quality focused.

16. Advantages of “Full Professional Risk” • By taking greater financial risk, we are able to reinvest “profits” from managed care business back into the health centers • By taking risk and operating efficiently, we are able to strengthen our position with our business partners – the HMOs, hospitals, and specialty physicians • Taking risk gives us access to extensive data that is being used to support quality improvement initiatives in chronic disease management and preventive health care.

17. More Advantages • By consolidating all our managed care contracts into one IPA/MSO, greater efficiencies are gained at the operational level for health centers. Instead of having to deal with multiple HMOs or MSOs, health center staff can operate under a single managed care system. • By taking “full professional risk”, we have developed experience with P4P programs, positioning us well for any expansion of P4P in the health care system.

18. Value of History of Joint Consortium/ Network Activities • Clinics working together on policy and advocacy issues is a “big plus” • Not just advocacy, but other experiences of successfully working together creates TRUST • For example, the common experience on grants, QI or IT facilitates the joint investigation of a business collaboration. • Where there are difficult moments, the advocacy experience helps keep the “big picture.” • Business partnerships have cycled back and strengthened our advocacy capacity.

19. Know Your Strengths: • What are a clinics’ aggregated Medi-Cal market share. • What is your geographic coverage – are you the sole provider in the area? • How do you compare in terms of quality of clinical services to other providers in the community? • Be sure to take into account your work in chronic disease management. • What is the language and cultural competency in your organization compared to others in the community? • Are you able to measure clinical performance such as immunization rates, etc. (very important to HMOs)? MORE CLINICAL DATA THE BETTER!

20. Systems to Hold Member Clinics Accountable • Regular meetings at the minimum of Clinic CEOs, Medical Directors, and Finance Managers • Keep track of physicians and other providers working at the clinics • Keep track of clinic services and clinic hours • Centralize a Patient Satisfaction Survey • Centralize clinical quality audits, either manual audits, electronic data or hybrid

21. HMO Contracting • Four Areas of Negotiations • Capitation Rate • Fee for Service (separate into buckets) • Member Auto-Assignment • Pay for Performance • Financial performance – per member per month numbers • Administrative – e.g. audits • Registry enrollment or electronic health record – e.g. diabetes registry • Clinical quality – e.g. well child, HEDIS, etc. • Bonuses • Accepting new members • Extended hours for primary care • Language capacity and services • PCMH

22. HMO Contracting • Caveats • Be sure to seek legal advice on the anti-trust issue of your ability to negotiate collectively. • Be sure your managed care arrangements are consistent with FQHC PPS requirements.