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

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though only the NACHRI approach has been developed specifically for children with chronic
conditions. Existing approaches are based on demographic models (age, sex, and geographic
area), categorical eligibility models, prior expenditure models, diagnoses or diagnostic
groupings, functional status or severity of illness measures, or service utilization groups. Four
of the major diagnostic approaches are summarized below.
1i. Ambulatory <strong>Care</strong> Groups (ACGs)
Purpose
Predictors
Method
Testing and Use
Strengths
Limits
Profiling and utilization review, quality assurance, capitation and risk
adjustment
Diagnosis, age, and sex
6,000 diagnoses are assigned to 34 clusters or Ambulatory Diagnostic
Groups (ADGs) on the basis of clinical judgement (service and
functional needs) and statistical analysis. The 34 ADGs are collapsed
into 12 'collapsed ADGs' or CADGs and they are assigned to 25
mutually exclusive major ambulatory group (MACs), then split into
51 mutually exclusive ACGs.
Many HMOs, Maryland <strong>Medicaid</strong>, and international use
* Takes into account ambulatory diagnoses and co-morbidities
and now includes inpatient codes.
* Validated on pediatric populations, though not specifically for
children with special health needs.
* Data system to implement ACGs is available.
* Individuals are classified into only one group, limiting the
sensitivity of this approach.
* Inability to adjust for severity of illness across patient groups.
* No method exists for assigning payment to the diagnostic
classification.
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