Medicaid Managed Care - U.S. Senate Special Committee on Aging

166 Communicating the Quality Message
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Minnesota's motivation for contracting on a mandatory basis with managed care plans
was threefold: affordability, accountability, and accessibility. State legislators wanted not
only to keep <strong>Medicaid</strong> costs under control, but also to ensure that the health care received
by the state's <strong>Medicaid</strong> beneficiaries was accessible and of a consistent quality. Even at that
time, managed care was a very common option in Minnesota's private sector, particularly
in the Twin Cities metropolitan area, so contracting with HMOs to enroll MA recipients
was not the big leap that it was in other states where managed care was not so prevalent.
Although it has had its share of bumps and glitches, PMAP is generally viewed as being
very successful in Minnesota, which is why the state has continued to expand the program.
Today, as a condition of licensure and in order to participate in other state-funded programs,
such as workers' compensation, HMOs operating in Minnesota are required to contract
with the state to enroll MA recipients. Furthermore, each HMO must be willing to
enroll a proportion of the market share of recipients based on a formula specified in law
which factors in private market share within a particular geographical area. Under PMAP,
a participating health plan must cover all medically-necessary <strong>Medicaid</strong>-covered services,
including the medical, dental, mental health, and home care needs of its MA recipients. It is
not required to provide the room and board costs for people living in nursing homes or in
group homes for the mentally disabled. Those costs are covered by the state outside of the
capitation payments.
MEDICA HEALTH PLANS AND MEDICAID
Medica Health Plans, part of Allina Health System, is a direct descendent of Physicians
Health Plan-one of the eight initial prepaid health plans that Minnesota contracted with
in 1985 for its PMAR. Thus, Medica Health Plans, through a direct predecessor, has been a
consistent participant in Minnesota's managed care <strong>Medicaid</strong> program from its inception.
PMAP began as a relatively small demonstration project. Originally, only three counties
participated: Dakota, a generally suburban county; Itasca, a rural county; and Hennepin
County, home to the city of Minneapolis. However, Hennepin, which has more than half-
74,000-of the state's MA recipients, did not come fully into the program until 1991.
Although it was clear from PMAP's onset that <strong>Medicaid</strong> recipients had specific health care
needs, as the program grew-especially after Hennepin County came fully into it-those
needs became further clarified. As the program evolved it also became increasingly clear that
meeting the needs of <strong>Medicaid</strong> recipients would require an entirely new and creative
approach to the delivery of health care, which, in turn, woult require new methods of
communication.
A NEED FOR A REEVALUATION
By the early 1990s, Medica noticed a troubling trend reported by its providers: <strong>Medicaid</strong>
members had a very high-about 45 percent-no-show rate for doctor appointments. Many
of Medica's providers were justifiably upset with such a high level of patients missing
appointments, for it made the running of their practices more difficult. But the providers
had an even greater concern: These no-shows meant that many <strong>Medicaid</strong> recipients were not
receiving the health care they needed.
In 1992, the Medica Foundation (now the Allina Foundation) decided to look more
closely at the health care needs of its <strong>Medicaid</strong> members. It commissioned a comprehensive
study of <strong>Medicaid</strong> recipients in Minnesota's Hennepin and Dakota counties, two of the
three original counties included in the PMAP demonstration project. The study looked at
recipients who were enrolled in Medica Choice <strong>Care</strong> and two non-Medica managed care
plans, Metropolitan Health Plan and U<strong>Care</strong>. During the entire study, which lasted from