Colorado Medicaid commission asks for more data before weighing cost savings

Colorado’s Commission on Medicaid asked for additional analysis before considering potential savings in the state’s Medicaid program during a Sept. 2 meeting, taking no vote or formal action.

The chair said members were gathering information and “not making any decisions today,” according to the commission’s Sept. 2 recording.

The discussion followed an Aug. 27 meeting in which Colorado officials outlined potential federal Medicaid funding losses tied to changes in state-directed hospital payments and the hospital provider-fee assessment. The eventual effect of those changes remains unsettled.

Administrative costs and care coordination

Commissioners asked the Department of Health Care Policy and Financing for an inventory of contracted functions, their costs and end dates, possible in-house alternatives, and any instances in which the state retains employees while contracting out similar work.

They also questioned whether Medicaid recipients receive overlapping care-coordination services. HCPF officials said several groups provide different types of coordination. Commissioners requested data on how many people each regional accountable entity serves, how recipients are identified and tiered, what services they receive and how costs compare with a system without the program.

HCPF Chief Financial Officer Josh Block said the Accountable Care Collaborative had reduced costs when people moved from unmanaged fee-for-service care into a more managed structure. He said those savings are now part of the system’s ongoing cost base and that eliminating care coordination could increase costs. He did not provide a new quantified analysis at the meeting.

Commissioners also asked HCPF to identify measures of the program’s success beyond spending. Block cited emergency-department revisits and hospital readmissions as examples. The department agreed to provide more information, but the meeting record did not set a firm delivery date.

Financing figures remain approximate

HCPF officials said Colorado had about 1.3 million Medicaid enrollees and estimated that roughly 440,000 people were in populations receiving a 90% federal match. An earlier estimate put that population at about 400,000.

Officials also estimated that about 80,000 people receive long-term services and supports through nursing facilities or home- and community-based services. They said roughly 75,000 CHIP enrollees receive a 65% federal match, while noting that the total CHIP population could be closer to 90,000 to 95,000 depending on how standalone CHIP and Medicaid-combined coverage are counted.

The commission requested a definitive table separating the match-rate populations, CHIP, long-term services and supports, disability buy-in participants and other populations financed through the hospital provider fee. HCPF agreed to provide the table but gave no date.

HCPF officials said the Medicaid disability buy-in program serves about 25,000 people with disabilities with incomes of up to 450% of the federal poverty level. The program is financed through the hospital provider fee rather than primarily through the General Fund, they said. Officials cited about $6.7 million in premiums, while a commissioner cited an estimated $211 million to $221 million in hospital-provider-fee support. The recording did not resolve the discrepancy or include an underlying table.

Block estimated annual costs of about $10,000 to $13,000 per low-income expansion adult, nearly $20,000 per disability buy-in participant and about $85,000 per disabled person outside the buy-in program. HCPF attributed the higher buy-in costs to more frequent and intensive home- and community-based services.

Managed care, rates and program integrity

Commissioners asked HCPF to compare the costs and outcomes of Colorado’s Accountable Care Collaborative with other arrangements, including putting more physical-health services into full-risk managed care. They also discussed whether Medicaid dental coverage could move from its current administrative-services-only arrangement to a risk-based model.

Colorado uses a hybrid system: behavioral health is generally capitated, while physical health is mostly fee-for-service, with exceptions including Denver Health and Prime, HCPF officials said. The department said it could model broader physical-health managed care but cautioned that year-to-year changes in utilization and costs could make results uncertain.

HCPF said provider rates use several methodologies. Pharmacy, federally qualified health centers and some nursing-facility services use cost-based or statutory formulas; many other services use fee schedules; and managed-care organizations receive capitated payments. Fee-schedule rates generally do not automatically track Medicare rates, officials said. Major changes usually require legislative appropriations, although HCPF has limited adjustment authority and must comply with federal access requirements.

Program-integrity officials described provider education, claims analytics, prepayment reviews, automated edits, post-payment audits and investigations. HCPF staff cited about $1.77 billion in Medicare-paid claims avoided because Medicare was the primary payer, more than $90 million in third-party-liability recoveries, roughly $15 million to $16 million in multistate fraud recoveries and about $15 million in nonemergency medical transportation claims prevented before payment.

Those figures were presented by HCPF, and the recording did not include the underlying methodology or tables. Commissioners requested historical recovery data by category and more information about recovery forecasts.

HCPF committed to provide pharmacy cost-driver information at the commission’s planned Sept. 17 meeting. Officials also referred to statutory-trigger modeling over roughly the next two weeks and to addressing current law in the state’s Nov. 1 budget submission. The record did not establish firm dates for the requested population table, care-coordination analysis, managed-care comparisons or program-success measures.

The Sept. 2 meeting added detail to the commission’s review but did not determine whether Medicaid services, rates, contracts or financing arrangements will change.