• TABLE OF CONTENTS
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 Front Cover
 Table of Contents
 Executive summary
 Background and significance
 Description of the Minority Physician...
 Program development
 MPN performance
 Cost effectiveness analysis and...
 Summary and recommendations
 Evaluation limitations
 Appendix
 Reference






Title: Evaluation of Florida's Minority Physician Network (MPN) program
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Title: Evaluation of Florida's Minority Physician Network (MPN) program
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Creator: Lemak, Christy
Publisher: Florida Center for Medicaid and the Uninsured, College of Public Health and Health Professions, University of Florida
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Table of Contents
    Front Cover
        Front Cover
    Table of Contents
        Page i
        Page ii
    Executive summary
        Page 1
        Page 2
        Page 3
        Page 4
        Page 5
        Page 6
    Background and significance
        Page 7
        Page 8
        Page 9
        Page 10
    Description of the Minority Physician Networks
        Page 11
        Page 12
        Page 13
        Page 14
        Page 15
        Page 16
        Page 17
        Page 18
        Page 19
        Page 20
        Page 21
        Page 22
        Page 23
        Page 24
    Program development
        Page 25
        Page 26
        Page 27
        Page 28
    MPN performance
        Page 29
        Page 30
        Page 31
        Page 32
    Cost effectiveness analysis and financial results
        Page 33
        Page 34
        Page 35
        Page 36
        Page 37
        Page 38
        Page 39
        Page 40
        Page 41
        Page 42
    Summary and recommendations
        Page 43
        Page 44
    Evaluation limitations
        Page 45
        Page 46
    Appendix
        Page 47
        Page 48
        Page 49
        Page 50
        Page 51
        Page 52
        Page 53
        Page 54
        Page 55
        Page 56
        Page 57
        Page 58
    Reference
        Page 59
Full Text














Final Project Report
April 6, 2004



Christy Harris Lemak, Ph.D.
Allyson G. Hall, Ph.D.
Christopher E. Johnson, Ph.D.
Praveen Saxena
Catie Aftuck
Carianne Johnson


Prepared by
The Department of Health Services Administration
and
The Florida Center for Medicaid and the Uninsured
College of Public Health & Health Professions
University of Florida

Under contract to
Florida Agency for Health Care Administration
Division of Medicaid


UNIVERSITY OF
FLORIDA


Florida Center for Medicaid and the Uninsured
Shaping a Healthcare a Policy


Evaluation of Florida's Minority Physician
Network (MPN) Program






Evaluation of Florida's Minority Physician Network (MPN) Program

Table of Contents
E X E C U T IV E SU M M A R Y ............................................................................................................ 1
Key Programmatic Elements of the M PNs........................................................... ................ 1
MPN Program Development and Implementation .............................................. ........... 2
P ilot P rog ram P perform an ce ......................................................................................................... 3
Key Strengths of the M PN Program ............................................................... .............. 4
K ey Challenges for the A gency.............. ......................................................................... 4
C conclusion ......... ........... .................................................. 5

BACKGROUND AND SIGNIFICANCE .............. ..... ........ ............... .............. 7
M ediP ass P ilot P program .......... .................................................... .... ....... .. ............ 7
M minority Physician N etw ork Program ........... .................................. .................. .............. 7
E v alu action M methods ...... .. .. ............ .................................. .... ....... ...... .............. 9

DESCRIPTION OF THE MINORITY PHYSICIAN NETWORKS......................................... 11
F lorida N etP A S S ........................................................................................ 11
PhyTrust ........................................ ............................ 11
Contractual Relationship with Agency...................................................... ......................... 12
P ro v id er N etw o rk ...................................................................................................................... 14
M em b ersh ip ............................................................................................ 18
Program Structure ............... ......... . ........................................................ ...... 21
Administrative Structure........................................ .............. 22

PROGRAM DEVELOPM EN T ...................................................... .............. 25
"SuperGroup" .................................... .............. 25
Communication ....................... ................. ................. ......... 25
Disenrollment of MPN Beneficiaries .......................... ......... ........ .............. 26
L esson s L earned ......... ..... ............. ..................................... ............................ 26

M PN PER FO R M A N CE ................................................................... 29
Physician Satisfaction..................................... .............. 29
PCP Perspective on MPN ............................................................................ 30
Quality of Care ..................................... ............ .............. 32

COST EFFECTIVENESS ANALYSIS AND FINANCIAL RESULTS ............................. 33
Overview ................................................. ......... .............. 33
M medical Expenditure Analysis............................. .............. 33
Shared Savings Analysis ......................................... 36
A agency R sources ................................................................... 40
C conclusions and D discussion ..................................................... 41

SUMMARY AND RECOMMENDATIONS...................... ....... ........ 43

EVALUATION LIMITATIONS .............................................................................. 45

A P P E N D IX .......................................................................................................................... .. 4 7
Financial A analysis M methodology ....................................................................... 47


i April 6, 2004







Evaluation of Florida's Minority Physician Network (MPN) Program


R E FER E N C E S ....................... .................................... ....... .......... ..... 59

List of Tables

Table 1: Overview of Original M PN Contracts ...................................... ....... .............. 13
Table 2: Primary Care Physicians by Ethnicity, Fall 2003 ........................................ ...... 15
Table 3: MPN Primary Care Physicians by Type, Fall 2003.............. ........................... 17
Table 4: MPN Enrollment by Month Palm Beach, Broward, and Miami-Dade Counties
11/1/200 1 5/1/2003 ...................................................... ... ......... .......... .... 20
Table 5: Summary of Administration FTEs by Month Selected Dates
11/1/2001 7/1/2003 ......................................................................... 23
Table 6: Physician Com m ents on the M PN s............................... .......................... .... 29
Table 7: Beneficiaries with a Diagnosed Chronic Disease By Program September 2002..... 34
Table 8: Adjusted Predicted Expenditures PMPM Overall and By County
February 2002 February 2003 ........................................................... ................. 36
Table 9: Summary of Savings Compared to the UPL by MPN October 2001 -
December 2002 .................. ....... .. ....... .. ...................... 37
Table 10: Advanced Administrative Fees October 2001 December 2002.......................... 38
Table 11: Reconciliation Payments Made (Owed) by MPN October 2001 -
D ecem ber 2002 ..... .................... . ..... .... . ...... .. ........ .. .............. 39
Table 12: Administration FTEs and Salary Expenses for the Agency (MPN Program and
M ediPass) 1/1/2002 and 1/1/2003 ............................................................ ... 40
Table A-1: Variable Specification for Medical Expenditure Analyses..................................... 50
Table A-2: Evaluation of Florida's Minority Physician Network (MPN) Program PhyTrust
Administration FTEs by Month, Selected Dates 11/1/2001 7/1/2003............... 52
Table A-3: Evaluation of Florida's Minority Physician Network (MPN) Program Florida
NetPASS Administration FTEs by Month, Selected Dates
1 1/1/2 0 0 1 7/1/2 0 0 3 .......... ......... ..... ........ ................ .. .... .... ......... ...... .. 5 3
Table A-4: Evaluation of Florida's Minority Physician Network (MPN) Program
Descriptive Statistics Palm Beach, Miami-Dade, and Broward Counties
Com bined February 2002 February 2003 ............................................................. 54
Table A-5: Evaluation of Florida's Minority Physician Network (MPN) Program
Descriptive Statistics-Miami-Dade County February 2002 February 2003....... 55
Table A-6: Evaluation of Florida's Minority Physician Network (MPN) Program
Descriptive Statistics-Broward County February 2002 February 2003 ............ 56
Table A-7: Evaluation of Florida's Minority Physician Network (MPN) Program
Descriptive Statistics-Palm Beach County February 2002 February 2003........ 57

List of Figures

Figure 1: Primary Care Physicians by Ethnicity, Fall 2003 Source: Florida NetPASS,
PhyTrust ................ .. ..... .... .......... ............... ............................ 16
Figure 2: Primary Care Physicians by Type, Fall 2003 Source: Florida NetPASS,
PhyTrust ............. ..... ............... .... ..... .......................... 17
Figure 3: MPN Enrollment by Month Palm Beach, Broward, and Miami-Dade Counties
11/1/2001 5/1/2003 ...................... .... ...... ........ ........... .. ................ 19
Figure A- :Evaluation of Florida's Minority Physician Network (MPN) Program MPN
Primary Care Physicians Locations by County Fall 2003 .................................... 51

ii April 6, 2004






Evaluation of Florida's Minority Physician Network (MPN) Program


EXECUTIVE SUMMARY

In 2001, Florida's Agency for Health Care Administration (AHCA) initiated a series of "Pilot
Projects" to explore alternative managed care models for the MediPass primary care case
management program. The intent of the pilot program was to see if providing enhanced medical
management services decreases the costs of operating the MediPass program.

One of the Pilot Projects is the Minority Physician Network (MPN) program. Under the MPN
program, the Agency contracted with two physician-owned organizations in which the majority
of physicians are members of racial and ethnic minority groups: Florida NetPASS and PhyTrust.
Each MPN consists of a network of primary care physicians (PCPs) and manages an enrollment
of MediPass beneficiaries.

Both MPN organizations have grown fairly rapidly since the inception of the pilot program. As
of May 1, 2003 (the end of the study period), total MPN enrollment included 53,234
beneficiaries in Miami-Dade, Broward, and Palm Beach Counties. This represented about 24
percent of the total MediPass enrollment in these counties. In South Florida, Florida NetPASS
has 313 PCPs serving Palm Beach, Broward, and Miami-Dade counties and PhyTrust has 129
PCPs in Broward and Miami-Dade counties. Currently, MPN enrollment is over 73,000
beneficiaries and includes providers in Medicaid Areas 5 (Pasco and Pinellas Counties) and 6
(Hardee, Highlands, Hillsborough, Manatee, and Polk).

Key Programmatic Elements of the MPNs

Information dissemination and Utilization Management

The MPNs use an information approach to managing care and working with the PCPs in their
networks. PhyTrust and Florida NetPASS distribute periodic performance reports to their
physicians. Each of the MPN organizations has invested in computer systems to track and
analyze beneficiary and provider data. The organizations use sophisticated, proprietary
information systems and highly qualified staff to work with the data provided by the Agency
monthly. The information system tools and managed care experience of these organizations are
a key strength of the MPN program.

Payment Methodology

In general, payments to the MPN organizations include a $3.00 management fee paid to PCPs
on a per member per month (PMPM) basis, fee-for-service reimbursement for medical services,
and a process for calculating and distributing savings that are shared by the Agency and the
MPN. The extent of the "savings" is determined through periodic calculation of the PMPM costs
compared to the applicable Upper Payment Limits (UPL). The actual formula and procedures
used for payment to the MPNs varied by organization and contract period.

Outsourcing Administrative Services

The MPNs conduct primary care provider credentialing and beneficiary services that were
previously performed by Florida Medicaid. The process of outsourcing these services to the


April 6, 2004






Evaluation of Florida's Minority Physician Network (MPN) Program


MPNs represents an innovation for the Agency that has eased some administrative burden but
also called for new forms of Agency oversight.

Physician Incentive Plans

The MPNs were authorized to institute physician incentive plans that were in compliance with
federal regulations regarding physician incentives utilized by Medicaid managed care
organizations. PhyTrust's physician incentive plan was included in its application and has been
used since the program began in November of 2001. Florida NetPASS submitted a physician
incentive plan to the State and received approval for the plan. To date, however, Florida
NetPASS has not implemented its physician incentive plan.

MPN Program Development and Implementation

As with any new program, there were implementation issues and challenges at the beginning of
the MPN program. During the initial implementation, the administration of the MediPass pilot
programs by the Agency required additional personnel resources to monitor the programs and to
educate and train the MPNs on MediPass and Agency policies. Overall, the Agency and the
MPNs experienced challenges in three main areas: (1) issues related to the SuperGroup
identification number; (2) communication between the Agency and the pilot programs; and (3)
questions about providers disenrolling certain MediPass beneficiaries.

SuperGroup

The MPN application stated that participating organizations would become Medicaid providers.
That meant that all PCPs in an MPN would be assigned a single Medicaid provider number (the
Super Group number-one for PhyTrust and one for Florida NetPASS). As the programs were
developed, however, the Agency gave considerable latitude to the programs. PhyTrust's original
contract did not include the "SuperGroup" model; therefore, it did not conduct provider
credentialing and member service functions. At the same time, Florida NetPASS did use the
"SuperGroup" model and, thus, it was responsible for conducting credentialing and member
services. Agency staff reported that this distinction between the two groups made the MPN
program difficult to manage. In order to eliminate confusion, the Agency required PhyTrust to
comply with the "SuperGroup" model under the new contract.

Communication Issues

Because the Agency did not have changes made in its information systems to create specific
reporting and analysis functions for the pilot projects, Agency officials said they had a hard time
getting required reports regarding the pilot programs. The programs were new and different,
which meant that almost all analyses and reporting had to be conducted by hand. Area Offices
also reported that the implementation of numerous MediPass pilot programs, in the same area, at
the same time, added to the Agency's administrative burden.


April 6, 2004






Evaluation of Florida's Minority Physician Network (MPN) Program


Disenrolling Beneficiaries

The Agency expressed concern over whether or not the MPNs were moving the more difficult
beneficiaries out of their networks into regular MediPass by requesting disenrollment of non-
compliant beneficiaries. This issue is important because evidence that physicians are not willing
to deal with complex or "difficult" beneficiaries would mean that these beneficiaries are left in
"regular MediPass." In reviewing this issue, no systematic attempts to "dump" expensive
beneficiaries or high users were identified.

Pilot Program Performance

In general, Florida's Minority Physician Networks offer an improved alternative to traditional
MediPass. The private and "local" aspect of the MPNs offer opportunities to monitor and
support providers in ways the current MediPass program has not achieved. Performance was
evaluated in three areas: physician satisfaction, quality of care, and cost effectiveness and
financial performance.

Physician Satisfaction

PCPs interviewed by the research team expressed a high degree of satisfaction with the pilot
program. PCPs noted that the periodic reports permitted increased monitoring of medications
and beneficiary contact with other providers. Furthermore, they liked the increased
administrative support provided by the program. Physicians in PhyTrust also noted that the
financial incentive was a major source of satisfaction.

Quality of Care

In general, there are limited data to evaluate the quality of care and beneficiary satisfaction with
the MPNs. PhyTrust has conducted a beneficiary satisfaction survey and the results were very
positive. While the evaluation cannot identify whether overall quality of care improved or
declined in the MPN program, there is reason to believe that the specific monitoring and
reporting of beneficiary information gives PCPs improved opportunities to monitor the
appropriate use and quality of care provided to MPN beneficiaries.

Cost-Effectiveness and Financial Performance

The limited time and resources of this evaluation prohibited a comprehensive cost effectiveness
analysis. The financial impact of the MPN program was evaluated in three ways. First, the
actual medical expenditures in the MPNs were compared to MediPass for the same time period
and geographic area using data from the paid claims from February 2002 through February
2003.1 Second, an analysis of the shared savings achieved by the MPNs was conducted using
the same payment methodology employed by the Agency. Third, the financial analysis took into
consideration the time and effort spent by the Agency to administer the MPN program.




1 See full report for a description of alternative methodologies used to calculate cost savings.


April 6, 2004






Evaluation of Florida's Minority Physician Network (MPN) Program


Medical Expenditure Analysis. This analysis demonstrated that the medical
expenditures experienced by the MPNs were lower than the expenditures of the average
MediPass population when controlling for beneficiary race, age, gender, geographic
region, and eligibility category.

Shared Savings Analysis. An analysis was conducted of the "shared savings" achieved
by the MPNs using the payment methodology established in the contracts between each
MPN and the Agency. This analysis revealed that during the first 15 months of
operation, the MPNs saved approximately $8.3 million when comparing their paid claims
experience to the established UPL used by the Agency to estimate the average cost per
beneficiary. A total of $4.1 million of this "savings" was shared with the MPNs.

Time and Effort. Finally, the Agency estimated the cost of administering the MPN
program by documenting the number of person hours (FTEs) and the associated salaries
required to run the MPN program. The FTEs required to run the MPNs were reduced
from 14.55 in 2002 to 13.65 in 2003, the second full year of the program.

In summary, the results of the analyses suggest that the MPNs have saved the Agency money
during the initial two years of operation in the South Florida region. The MPNs provide
extensive utilization management and sophisticated reporting software to reduce medical
expenditures as compared to the unmanaged MediPass program.

Key Strengths of the MPN Program

Reduction in medical expenditures per member per month.

Beneficiary utilization management and local management of providers.

High degree of satisfaction among providers enrolled in the program.

Sophisticated information technology and medical management expertise.

Key Challenges for the Agency

The Agency needs better information about the costs associated with running the
program, in order to identify the "bottom line" financial implications of the MPNs.

The Agency must set clear, measurable objectives for the MPN program. Agency
officials, the MPNs, and the providers should clearly understand expectations and
objectives of the program.

Alternative cost savings and payment methodologies should be considered. The current
method may underestimate the actual medical expenditures experienced by the MediPass
program and the MPNs.

The Agency should evaluate and monitor the MPNs on a regular basis in order to
determine the effectiveness of the program in meeting its expectations and objectives.


April 6, 2004






Evaluation of Florida's Minority Physician Network (MPN) Program


On-going monitoring will also allow the Agency and MPNs to incorporate lessons
learned into the policies and procedures used to govern the program.

The Agency should consider better coordination in areas of the state where multiple pilot
programs are in operation.

Conclusion

The MPNs appear to make MediPass work better by (1) offering providers timely beneficiary
utilization information and (2) managing the networks at the local level. The result is a program
with the potential to lower utilization and expenditures that is well received by Medicaid
providers. Based on the results of the evaluation, it is recommended that the Agency consider
expanding the MPNs into additional Medicaid areas, once it addresses some of the issues
identified in this report.


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Evaluation of Florida's Minority Physician Network (MPN) Program


BACKGROUND AND SIGNIFICANCE

MediPass Pilot Program

In 2001, Florida's Agency for Health Care Administration ("the Agency") initiated a series of
"Pilot Projects" to explore alternative managed care models for the Medicaid program. The
intent of the pilot programs was to test new Primary Care Case Management models to
determine if providing medical management services to providers improves access and the
quality of care, and decreases the costs of operating the MediPass program. The Agency entered
into agreements with an administrative services organization (ASO) and a managed services
organization (MSO) to provide primary care case management, to manage referrals to specialty
care, to maintain comprehensive medical records which document the continuum of care
provided, and to adhere to the quality-of-care standards established for the Medicaid managed
care program. The general concept assumes that alternative managed care models could result in
the provision of cost-effective, quality health care for MediPass beneficiaries.

In general, the Pilot Projects use a payment methodology that includes a management fee paid on
a per member per month (PMPM) basis, fee-for-service reimbursement for medical services, and
a process for calculating and distributing "savings" that are shared by the Agency and the Pilot
Project entity. The extent of "savings" is determined through quarterly calculation of PMPM
costs compared to the applicable Upper Payment Limits (UPL) established by the Agency to
estimate the cost on a PMPM basis for Medicaid beneficiaries.

The 2001 2002 Florida General Appropriations Act identified pilot programs that would
include the development of improved approaches to managing access and utilization, the
establishment of physician-owned and -operated managed care organizations with Medicaid
experience, the establishment of at least one pilot that is a predominately minority physician
network, and utilization of a shared savings payment methodology that is budget neutral.

Minority Physician Network Program

One of the MediPass Pilot Projects is the Minority Physician Network (MPN) program. Under
this program, the Agency contracted with two organizations in which the majority of physicians
are members of racial and ethnic minority groups. One network, Florida NetPASS, is a network
that originally served Miami-Dade, Broward, and Palm Beach Counties. The other network,
PhyTrust, is a physician network that originally served Miami-Dade and Broward Counties.
Both of the MPNs began operations in late 2001 and have recently expanded to the Tampa Bay
area. The implicit premise in the formation of these networks is that minority physicians have
limited access to the MediPass program and that targeted case management may improve the
quality and access of care provided by and for minorities, of which a disproportionate high
number are enrolled in Medicaid. In addition, the networks offer alternative mechanisms for
managing the care and costs of Medicaid enrollees.

Continuing increases in the cost of medical care threaten the viability of Medicaid programs in
numerous states, and most have responded with various cost-containment initiatives (Smith et
al., 2004). In Florida, programs have included aggressive use of HMOs, case management
programs, an innovative prescription drug cost containment program, a "provider service


April 6, 2004






Evaluation of Florida's Minority Physician Network (MPN) Program


network" demonstration, and other mechanisms. The MPN Pilot Project offers yet another
model for structuring the way that care and expenditures can be managed in this sector.

The official genesis of the program was the Florida FY 2001 2002 General Appropriations Act.
The Act authorized several MediPass pilot projects.

Specifically:

"The Agency for Health Care Administration shall establish methods to improve the
quality of care and the cost effectiveness of the MediPass program. The method shall
include, but is not limited to the establishment of a pilot (or pilots) to test new approaches
to better manage the access to and utilization of appropriate health care services. The
agency shall contract with physician owned and operated organizations which have
experience in managing care for the Medicaid and Medicare programs and at least one
pilot shall utilize a predominately minority-physician network with a history of providing
services to Medicaid populations. The agency is authorized to develop a payment
methodology which may include shared savings with contractors but shall not increase
spending relative to current appropriations."

To summarize, the key elements of the GAA FY 2001 2002 included:
The development of improved approaches to managing access and utilization;
The establishment of physician-owned and -operated managed care organizations with
Medicaid experience;
The establishment of at least one pilot that is a predominately minority physician
network; and
The utilization of a shared savings payment methodology that is budget neutral.

The Application for Participation in the MediPass Pilot Program defined a Minority Physician
Network as a network in which more than 50% of the physicians in the network are minority
physicians. The original application identified different types of pilots, including
"Predominately Minority Physician Network Pilots" and "Physician Owned and Operated
Network Pilots."

The MPNs were authorized to serve the following categories of beneficiaries:
Recipients of assistance under the TANF (Temporary Assistance for Needy Families)
program
Sixth Omnibus Budget Reconciliation Act (SOBRA) children
Individuals receiving Supplemental Social Security Income (SSI) without Medicare
coverage
Children in foster care or subsidized adoption arrangements

Thus, these categories of beneficiaries would not be eligible for participation in a Minority
Physician Network:
Eligible Medicaid recipients who are domiciled or living in an institution
Those receiving hospice services
Those who also have Medicare or other major health insurance coverage


April 6, 2004






Evaluation of Florida's Minority Physician Network (MPN) Program


Those whose Medicaid eligibility has been determined through the Medically Needy
program
Children with special needs enrolled in the Children's Medical Services Network (CMS)
Women who, due to pregnancy, change SOBRA categories
Children who receive Prescribed Pediatric Extended Care Services
Recipients in a Medicaid Disease Management Initiative

The MPNs must include all services currently required of MediPass providers. Further, MPNs
would not be responsible for managing the physician components of ophthalmologic services,
mental health, or family planning services.

Evaluation Methods

The Agency contracted with the University of Florida in October 2003 to conduct an evaluation
of the Minority Physician Networks. The purpose of the evaluation was to assure the Agency
that the program is achieving its intended goal of reducing cost while maintaining health care
quality and access to the Medicaid program. The University was charged with helping the
Agency make a decision about whether or not to expand the networks based on their ability to
achieve savings and to maintain high provider and beneficiary satisfaction through the
development of an innovative care and case management program.

Qualitative organizational analyses and quantitative analysis were used in the evaluation.
Qualitative methods were used to examine data collected from interviews with the minority
physician network's stakeholders, administrators, and providers, and the Agency staff located in
the local area offices and Tallahassee headquarters.

In addition, evaluators reviewed and examined hundreds of documents and records, including the
MPN applications, the MPN contracts and amendments, reports submitted by the MPNs to the
Agency, and public information regarding organizational elements of the MPN.

The quantitative methods were used to analyze the cost effectiveness of the MPN program. To
construct the data, 3,891,555 member-month records covering a period of 19 months (November
2001 to May 2003 inclusive) were used. These separate claims files were merged into one claim
file with 22,387,881 records. The date range for these claims was 11/01/2001 to 05/31/2003, the
initial contract period.

In sum, evaluators performed analyses of the 2002 2003 expenditures using the Rand Health
Insurance 2-part model (Brook, Ware, et al. 1983). They examined member-month data between
February 2002 and February 2003 for both total paid claims and total billed claims. The full
details of this method are described in the Appendix.


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DESCRIPTION OF THE MINORITY PHYSICIAN NETWORKS

The Agency initiated an open application process to solicit potential Minority Physician
Networks for participation in the MediPass pilot program. The networks were required to be
predominately minority and physician owned and operated or non-physician owned and
operated. Two organizations, Florida NetPASS and PhyTrust, entered into contracts with
Florida Medicaid in November of 2001 to operate their networks in the south Florida area.

The two contracted MPN organizations are similar in many ways but different in others. Both
organizations were physician-owned and predominantly minority organizations that met the
requirements of the pilot project. Each organization was looking to improve on the existing
MediPass program.

Florida NetPASS

Florida NetPASS was organized to bring together the administrative and operational capabilities
of three of Florida's largest managed services organizations. Its Board of Directors is comprised
of representatives from each of these organizations. The representatives are also principals of
the firms that make up the combined Florida NetPASS organization (HS1 NetPASS, Inc.; Care
NetPASS, LLC; and Physician Consortium Services, LLC). Essentially, Florida NetPASS exists
to provide medical management and administrative services ("back office support") to large
payers and providers such as the Agency. The mission of Florida NetPASS is to implement new
information-based care management approaches to help make improvements in both the cost and
quality of care within Florida's MediPass program.

The philosophy of Florida NetPASS (FNP) is that physicians are the "solution, not the problem."
They believe in giving physicians information to manage the care of their beneficiaries and then
"leaving them alone to do their job." Their approach to the MPN is to use population
management techniques-to manage the top 3 4 percent of beneficiaries who use the majority
of the resources. Florida NetPASS stakeholders referred to the importance of information
technology and managed care "tools" that would improve on the existing MediPass program.
They also described how their ultimate MediPass program was very different from the original
concept they developed mostly due to the rules, requirements, and limitations of working within
the Medicaid program. Thus, their focus on information and population management was
described as "the only tool we have left."

Florida NetPASS has also developed a health benefits program for the low income uninsured.
While this program is not directly related to the MPN, it demonstrates the firm's commitment to
and involvement with issues of access and insurance for the underserved in South Florida.

PhyTrust

PhyTrust was established in South Florida in October 1997. It provides the day-to-day
management of Access CMO, a minority-owned and -governed physician network. In general,
PhyTrust focuses on the physician and supporting the physician. Stakeholders described their
philosophy as one that places the physicians in the center of patient care and "where respect
between patient and physician creates the trust." PhyTrust is a medical service organization


April 6, 2004






Evaluation of Florida's Minority Physician Network (MPN) Program


focused on developing and managing physician-owned networks of primary care physicians,
many of whom are racial and ethnic minorities, in order to provide quality and cost-effective care
to those who need it most. PhyTrust's mission is providing Medicaid beneficiaries greater
access to quality health care through physician-owned networks and delivering substantial cost
savings to state Medicaid programs.

The PhyTrust model of health care emphasizes primary care, which reduces health care costs,
improves outcomes of care, preserves the centrality of the doctor-patient relationship, while
simultaneously empowering physicians and making them accountable for the quality and
outcomes of the care they provide their patients.

PhyTrust directors suggested that they were working to "radically increase beneficiary access to
PCPs." When asked to describe radical access, the following characteristics were mentioned:
availability of walk-in appointments, night/evening/weekend hours, outreach to chronic illness
beneficiaries, giving patients provider cell phone numbers, and providers making house calls.
PhyTrust leaders believe that "doctors trust PhyTrust, so patients trust doctors."

Another important note is that the PhyTrust organization provided ample evidence of their
commitment to improving the access to and quality of care for minority populations in Florida.
They view the MPNs as a way to support minority physicians and enable them to keep serving
these populations (and improve their financial survival when they do).

PhyTrust has an active community relations function. They are very involved in programs to
support access to care, health awareness and other issues for minority populations. PhyTrust
remains active in the political/legislative process in the area of minority health and disparities.
They believe that the MPN is an incredible program that state and community leaders are willing
to stand up for.

Contractual Relationship with Agency

Due to the different approaches to managed care and the differences in organizational history and
philosophy, the initial approaches to establishing a minority physician network were quite
unique. These differences were reflected in the initial contracts between Florida NetPASS and
the Agency and PhyTrust and the Agency. Table 1 (next page) provides an overview of the key
differences in the original MPN contracts.


April 6, 2004






Evaluation of Florida's Minority Physician Network (MPN) Program


Table 1: Overview of Original MPN Contracts


PhyTrust (PT) Florida NetPASS (FNP)

Effective Dates: 11/1/01 6/30/03 11/1/01 6/30/03

Contract Amount: $1,974,843 $1,959,945

Reporting Requirements: Few Specified Standard
(List from Application)

PCP Credentialing: Agency FNP

Provider Billing Individual PCP Super Group ID

Administrative Fee: $10 PMPM $12 PMPM initially

Reduced to $9 PMPM

Case Management Fee: $3 PMPM to PCPs $3 PMPM to PCPs

Shared Savings Method: Two Scenarios: Three Scenarios:

(1) If total claims paid are (1) If total claims paid are
equal to or above UPL, no above the UPL, no shared
shared savings, PT repays savings, FNP repays 100%
100% of administrative of administrative fees paid
fees paid that quarter. that quarter.

(2) If claims paid are below (2) If claims paid are below
UPL, savings shared 50%- UPL but above Medicaid
50%, minus HMO capitation rates,
administrative fees paid FNP receives 30% of
for that quarter. savings, minus
administrative fees paid
that quarter.

(3) If claims are below
Medicaid HMO capitation
rates, FNP receives 40%
of savings, minus
administrative fees paid
that quarter.


April 6, 2004






Evaluation of Florida's Minority Physician Network (MPN) Program


In April 2003, the Agency solicited new applications for a continuation of the minority physician
networks under the MediPass pilot program. The new application extended the pilot projects
into Medicaid Areas 5 (Pasco and Pinellas Counties) and 6 (Hardee, Highlands, Hillsborough,
Manatee, and Polk Counties). It also continued the project through June of 2005. The new
application was designed to bring the two networks in line with one another, requiring them to
adhere to the same payment methodology and operational procedures.

More specifically, the new application included provisions allowing a physician incentive plan,
requiring networks to credential PCPs, and requiring efforts to reduce pharmaceutical
expenditures. In addition, the application stated that MPNs must use a single Medicaid provider
number (or "SuperGroup"). Finally, the monthly administrative fee was set at $12 PMPM for
each organization.

Provider Network

Each MPN organization established a primary care physician (PCP) network by employing
Agency authorized marketing materials and recruitment strategies. Both MPNs depended on
their existing physician networks and business relationships to build the foundation of their
primary care network for the MediPass Pilot program. In addition to enrolling their existing
providers, the networks used the following strategies to build their provider networks:
Word of mouth;
Provider relations departments;
Marketing representatives;
Information management and utilization management systems that employed information
technology; and
Provider training and monthly in-services on patient and other medical management
tools.

A key part of the minority physician network program is providing physicians with information
that can be used to improve the quality of care and the management of their medical practice.
Both PhyTrust and Florida NetPASS provide the primary care physicians in their networks with
provider profiles on pharmacy use, the utilization of services by their beneficiaries, and how
physicians compare to their peers. These profiles are an important tool against fraud and abuse
in that the profiles identify when the PCP did not write a prescription or when billed or
reimbursed services have codes that do not match the services ordered or rendered by the PCP.

The providers in the MPNs also benefit from the mandatory assignment process used by Florida
Medicaid to assign beneficiaries to providers and managed care organizations. Florida NetPASS
and PhyTrust began the MediPass pilot project using the existing network of physicians that they
worked with on other managed care programs. Some physicians saw the possibility of getting
more beneficiaries through mandatory assignments by contracting with the MPN program, thus
stimulating Florida NetPASS' growth in numbers of providers and beneficiaries. PhyTrust
providers were incentivized by the generous physician incentive plan established by PhyTrust.

As shown in Figure A-i (Appendix), the MPNs began their operations in South Florida. Both
Florida NetPASS and PhyTrust began operations in November of 2001 in Miami-Dade and
Broward Counties. Florida NetPASS expanded their operation to include Palm Beach County.


April 6, 2004






Evaluation of Florida's Minority Physician Network (MPN) Program


In April of 2003, both networks expanded to the Tampa-St. Petersburg area (Medicaid Areas 5
and 6).

Florida NetPASS has 313 PCPs serving Palm Beach, Broward, and Miami-Dade counties. In the
two counties served by PhyTrust, there are 129 Medicaid PCPs. In each of the counties, MPN
physicians are distributed throughout the geographic regions with the exception of the southern
part of Miami-Dade County (e.g., near Homestead).

The majority of MPN PCPs are racial or ethnic minorities (Table 2). For Florida NetPASS,
approximately 10% are African-American, 52% are Hispanic, and 6% are Asian. This compares
to PhyTrust PCP ethnic distribution of 32% African-American, 40% Hispanic, and 7% Arabic
(Figure 1 next page).

Table 2: Primary Care Physicians by Ethnicity, Fall 2003

Total MPN Florida NetPASS PhyTrust
N % N % N %
African American 72 16.3 31 9.9 41 31.8
Caucasian 24 5.4 0 0.0 24 18.6
Hispanic 216 48.9 164 52.4 52 40.3
Asian 20 4.5 19 6.1 1 0.8
Arabic 9 2.0 0 0.0 9 7.0
Native American 2 0.5 2 0.6 0 0.0
Unknown 99 22.4 97 31.0 2 1.6


Total 442
Source: Florida NetPASS, PhyTrust


100.0


100.0


100.0


April 6, 2004






Evaluation of Florida's Minority Physician Network (MPN) Program

Figure 1: Primary Care Physicians by Ethnicity, Fall 2003


100% -


80% -


60% -


40% -


20% -


0% -


7


31


52




10


4; F --o Fa N t.ass l P ust --- |
O African American U White 0 Hispanic 0 Unknown U All others

Source: Florida NetPASS, PhyTrust

All types of primary care physicians are represented in the MPNs as shown in Table 3 and Figure
2 (next page). There are some differences in the mix of PCP types between the two MPN
organizations. Notably, PhyTrust has a higher proportion of family practice PCPs (e.g., 28%
versus 20% for Florida NetPASS) and Florida NetPASS has a higher percentage of internal
medicine PCPs (e.g., 28% versus 16% for PhyTrust). The differences in PCP distribution may
have some implications for the potential cost savings accruing to each organization. For
example, internal medicine specialists may be more likely to see sicker patients, lowering the
potential for substantial savings when comparing the actual medical expenditures to the UPL, an
estimate of the average PMPM costs of serving a Medicaid beneficiary.


April 6, 2004


8 -2


"' "


"' m







Evaluation of Florida's Minority Physician Network (MPN) Program

Table 3: MPN Primary Care Physicians by Type, Fall 2003

Total MPN Florida NetPASS PhyTrust
N % N % N %
Family Practice 98 22.2 62 19.8 36 27.9
General Practice 86 19.5 64 20.4 22 17.1
Internal Medicine 110 24.9 89 28.4 21 16.3
Multiple Specialties 20 4.5 4 1.3 16 12.4
OB/GYN 14 3.2 13 4.2 1 0.8
Pediatrics 113 25.6 80 25.6 33 25.6
Pulmonary 0 0.0 0 0.0 0 0.0
Gynecologist 1 0.2 1 0.3 0 0.0


Total 442
Source: Florida NetPASS, PhyTrust


100.0


100.0


129


100.0


Figure 2: Primary Care Physicians by Type, Fall 2003


100% -

80% -

60% -

40% -

20% -

0% -


Florida NetPass


PhyTrust


* Family Practice U General Practioner O Internal Medicine 0 Pediatrics U All other


Source: Florida NetPASS, PhyTrust


April 6, 2004


I






Evaluation of Florida's Minority Physician Network (MPN) Program


Membership

Over the first nineteen months of MPN operations, the MPNs grew to include over 53,000
members in 3 Florida counties. PhyTrust grew to over 15,500 members and Florida NetPASS
grew to over 37,700 members in the three South Florida counties. When combined with
MediPass enrollment in the same areas, PhyTrust began as 1% of the total MediPass membership
and it grew to about 7%, while Florida NetPASS began with about 1% and it grew to include
nearly 17% of all MediPass beneficiaries in these areas (see Figure 3 and Table 4 on pages 19
and 20).

Like overall Florida Medicaid, the MPNs serve a large number of minority members. For the
time period and geographic region, about 80% of MediPass and MPN members were non-white.
More specifically, the membership composition was roughly 30% Black and approximately 40%
Hispanic in MediPass and in the MPNs.

The geographic mix of the MPNs by county has varied over time. In the beginning, both
organizations were predominately (over 90%) based in Miami-Dade County. By May 2003,
however, PhyTrust was split 30% in Broward County (4,570 members) and 70% in Miami-Dade
(10,862 members) while Florida NetPASS membership was divided with approximately 12%
Broward (4,628 members), 61% Miami-Dade (23,107 members) and 26% in Palm Beach County
(9,968 members).


April 6, 2004







Evaluation of Florida's Minority Physician Network (MPN) Program


Figure 3: MPN Enrollment by Month
Palm Beach, Broward, and Miami-Dade Counties
11/1/2001 5/1/2003


U
U- *
ar


to
.-
r


40,000



35,000



30,000



25,000



20,000



15,000



10,000



5,000



0


U - I *
I

I


I PhyTrust - Florida NetPASS


Source: AHCA


April 6, 2004


I
ON







Evaluation of Florida's Minority Physician Network (MPN) Program


Table 4: MPN Enrollment by Month
Palm Beach, Broward, and Miami-Dade Counties
11/1/2001 5/1/2003


Florida
Total MPN PhyTrust lNetPSS MediPass Total
~~~~Month _______ -----_-----NetPASS
Month
% % %
N N N N % Total
Total Total Total
11/1/2001 3,770 1.9 1,740 0.9 2,030 1.0 190,722 98.1 194,492

12/1/2001 6,124 3.2 1,709 0.9 4,415 2.3 187,649 96.8 193,773

1/1/2002 10,751 5.6 1,704 0.9 9,047 4.7 181,689 94.4 192,440

2/1/2002 11,431 6.0 1,717 0.9 9,714 5.1 179,287 94.0 190,718

3/1/2002 11,140 5.8 1,627 0.9 9,513 5.0 179,515 94.2 190,655

4/1/2002 16,414 8.67 2,816 1.5 13,598 7.1 175,217 91.4 191,631

5/1/2002 18,651 9.7 2,822 1.5 15,829 8.2 174,458 90.3 193,109

6/1/2002 24,415 12.3 3,117 1.6 21,298 10.8 173,549 87.7 197,964

7/1/2002 29,439 14.7 4,028 2.0 25,411 12.7 170,949 85.3 200,388

8/1/2002 33,961 16.7 5,684 2.8 28,277 13.9 168,978 83.3 202,939

9/1/2002 37,684 18.4 7,989 3.9 29,695 14.5 167,536 81.6 205,220

10/1/2002 43,312 20.8 10,454 5.0 32,858 15.8 164,718 79.2 208,030

11/1/2002 46,737 22.0 11,608 5.5 35,129 16.6 165,371 78.0 212,108

12/1/2002 47,497 22.1 12,021 5.6 35,476 16.5 167,374 77.9 214,871

1/1/2003 49,375 22.8 13,015 6.0 36,360 16.8 167,077 77.2 216,452

2/1/2003 50,212 22.8 13,493 6.1 36,719 16.7 170,299 77.2 220,511

3/1/2003 51,867 23.5 14,988 6.8 36,879 16.7 169,205 76.5 221,072

4/1/2003 53,006 24.0 15,668 7.1 37,338 16.9 168,285 76.0 221,291

5/1/2003 53,243 23.8 15,531 6.9 37,703 16.8 170,657 76.2 223,891

Source: AHCA


April 6, 2004






Evaluation of Florida's Minority Physician Network (MPN) Program


Program Structure

The intent of the Medicaid Pilot Projects was to explore the feasibility of alternative and,
presumably, improved Medicaid managed care plans. A key feature of the MPNs included their
ability to develop and manage physician networks on a local level. The pilot projects application
stated that participating organizations would become Medicaid providers, that is, be assigned a
single Medicaid identification number or "SuperGroup" ID. In addition, the MPNs were
required to credential providers, conduct member services, and other functions as described
below. During the program development and contract negotiation process, however, the Agency
gave the MPNs considerable flexibility regarding their specific implementation strategies. Later,
the Agency required that both organizations adhere to a standard set of program elements.

Provider Credentialing

The MPNS are required to credential the primary care providers enrolled in their respective
networks. At the inception of the program in November 2001, Florida NetPASS established a
credentialing program as a primary means of cost containment. PhyTrust did not initiate their
credentialing program until July 2003.

Physician Incentive Plans

The MPNs were authorized to institute physician incentive plans that were in compliance with
federal regulations regarding physician incentives utilized by Medicaid managed care
organizations. PhyTrust's physician incentive plan was included in its application and has been
used since the program began. Before September 2003, all incentives were based on
"efficiency" only-that is, physicians were eligible for bonuses if their beneficiary expenditures
were below those that were expected according to the UPL. Currently, PhyTrust has a multi-
faceted financial incentive program. Specifically, the maximum potential bonus for each PCP is
determined by: (1) efficiency performance (shared savings by PCP as a percent of all shared
savings that quarter) and (2) Quality Adjustment Score (based on six quality measures,
including: child health check-ups, adult health screenings, welcome letters, provider education
meetings attended, authorized referrals notified to PhyTrust, and beneficiary satisfaction with
care). Florida NetPASS submitted a physician incentive plan to the State and received approval
for the plan. To date, however, the Florida NetPASS incentive plan has not been implemented.

Information Systems

Both of the MPNs use an information approach to managing care and working with the PCPs in
their networks. Florida NetPASS provides their physicians with comprehensive monthly and
quarterly reports. A provider representative visits each Florida NetPASS PCP to answer
questions about the program and the reports. Florida NetPASS reports identify the physicians'
MediPass beneficiaries and show the utilization by those beneficiaries (services ordered by any
physician, hospitalizations, pharmacy, etc.). They also compare the PCPs to their peers on a
variety of measures. PhyTrust distributes similar monthly and quarterly reports to the PCPs in
their network. PhyTrust hosts monthly in-services and training for their PCPs and quarterly
meetings in addition to the distribution of a quarterly newsletter.


April 6, 2004






Evaluation of Florida's Minority Physician Network (MPN) Program


Each of the MPN organizations has invested in computer systems to track and analyze
beneficiary and provider data. These organizations use sophisticated, proprietary information
systems and highly qualified staff to work with the data provided by the Agency monthly. The
information system tools and managed care experience of these organizations are a key strength
of the MPN program.

Utilization/Medical/Case Management

Both MPN organizations are actively engaged in a variety of utilization management, population
management, and case management activities. Each organization has developed specialty
referral processes and forms (though these are not always used by PCPs).

In addition to PCP reports and profiling, PhyTrust uses nurses in hospitals to monitor beneficiary
progress, communicate back with PCPs, and develop discharge plans. PhyTrust has established
a unique relationship with KePro that allows them to concurrently review inpatient
hospitalizations to make sure ordered services are given that day and for feedback to the PCPs on
beneficiary progress, needs, and discharge.

Florida NetPASS uses its monthly "InforMed" reports to help PCPs manage patient care. Their
population management program focuses on those patients who are "heavy users" or those who
have specific chronic illnesses. A Florida NetPASS physician meets with the PCPs of
beneficiaries that have been identified as high utilizers to assist the PCP with the medical
management process. In addition, Florida NetPASS has a pharmacy cost reduction initiative
underway, including examination of generic use and comparing pharmacy use and costs among
physician peer groups.

Member Services

Each MPN provides required member services to beneficiaries, such as notifying beneficiaries
that their provider is enrolled in the MPN, maintaining appropriate medical records, and
maintaining internal complaints and grievance procedures.

Administrative Structure

The MPNs provided information about their administrative structure by reporting on the FTEs
dedicated to various MPN functions. As summarized in Table 52 for the standard functions of
enrollment, enrollee services, provider contracting, provider credentialing, financial
management, and medical management, the MPNs relied on approximately 1.0 FTE per 1000
members after the first 18 months of existence. When other functions were included (these were
defined by the MPNs), the administrative complement for the MPNs grew to 1.53 for PhyTrust
and 1.24 for Florida NetPASS (per 1000 members). In both organizations, medical management
represents the largest administrative aspect (8/49 FTEs for PhyTrust and 7/39.75 for Florida
NetPASS in July 2003).




2 See Tables A-2 and A-3 in the Appendix for more detail


April 6, 2004







Evaluation of Florida's Minority Physician Network (MPN) Program

Table 5: Summary of Administration FTEs by Month
Selected Dates 11/1/2001 7/1/2003


PhyTrust Florida NetPASS

Function: Start-Up 7/1/2003 Start-Up 7/1/2003

Recipient Enrollment and
1.00 1.00 0.25 2.00
Disenrollment Tracking
Enrollee Services, Education, 1.00 3.00 0.25 1.00
Outreach
Provider Contracting and 3.00 7.00 5.00 13.00
Relations
Provider Credentialing 0.00 0.75 0.25 1.25
Financial Management
(Including Claims Management, 2.00 3.00 2.00 2.50
Reconciliation)
Medical Management (Case
Management, Population 4.00 8.00 4.00 7.00
Management)
Grievance and Appeals 0.00 0.25 0.25 0.25
Resolution
Quality Monitoring 1.00 1.00 0.00 0.25
Program Development and 1.00 1.00 2.00 3.00
Oversight
Information Management 4.00 4.00 1.00 2.00

Suhitial FTEr: 17 00 2 nIi0 15 2 25
Subtotal FTE per 1000 ,1 Q


eerOther (Speci-
Other (Specify Functions): Other (Specify
Functions):
Senior Staff 3.00 4.00 Referrals 3.00 6.00

Administrative Staff 1.00 4.00 Credentialing 0.50 0.50
Committee
Consultants 5.00 9.00 Mailroom/Admin 1.00 1.00
Accounting/A/P/H/R 2.00 3.00

Grand Total FTEs: 28.00 49.00 19.50 39.75
Grand Total FTEv per 1000 41 1 2


Source: PhyTrust, Florida NetPASS


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Evaluation of Florida's Minority Physician Network (MPN) Program


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Evaluation of Florida's Minority Physician Network (MPN) Program


PROGRAM DEVELOPMENT

The Minority Physician Network program is one of the MediPass pilot projects designed to
provide an alternative to the traditional MediPass fee-for-service program available to Medicaid
providers. During the 2001 Legislative session, the Legislature authorized the Agency to
develop alternative approaches to managing access and utilization of services within the
MediPass program. The Agency was charged with establishing primary care and case
management organizations that were physician owned and operated. The Legislature intended
for at least one of the organizations to be a predominately minority physician network. The
Agency established the parameters of the program and ultimately contracted with two minority
physician-owned and operated networks.

As with any new program, there were implementation issues and challenges at the beginning of
the program. During the initial implementation, the administration of the MediPass pilot
programs by the Agency required additional personnel resources to monitor the programs and to
educate and train the MPNs on MediPass and Agency policies. Overall, the Agency and the
MPNs experienced challenges in three main areas: (1) issues related to the SuperGroup; (2)
communication between the Agency and the pilot programs; and (3) issues related to
disenrollment of certain beneficiaries by the MPNs.

"SuperGroup"

In the original contract between PhyTrust and the Agency, PhyTrust did not handle credentialing
and member services because they did not operate with a "SuperGroup" provider identification
number. At the same time, Florida NetPASS was using the "SuperGroup" model and Florida
NetPASS was responsible for credentialing the PCPs in their network and for providing
informational services to members. Agency staff reported that this distinction between the two
groups made the MPN program difficult to manage. In order to eliminate confusion, the Agency
required PhyTrust to comply with the "SuperGroup" model under its new contract. Essentially,
this means that all PCPs in an MPN are assigned a single Medicaid provider number (the
SuperGroup number one for PhyTrust and one for Florida NetPASS). When billing for MPN
beneficiaries, the PCP uses the SuperGroup number instead of his or her unique Medicaid
provider number.

Communication

Because the Agency did not have changes made in its information systems to create specific
reporting and analysis functions for the pilot projects, Agency officials said they had a difficult
time getting required reports regarding the pilot programs. The programs were new and
different, which meant that almost all analyses and reporting had to be conducted by hand. Area
Offices also reported that the implementation of numerous MediPass pilot programs in the same
area at the same time added to the administrative burden experienced by the Area Offices.


April 6, 2004






Evaluation of Florida's Minority Physician Network (MPN) Program


Florida NetPASS and PhyTrust held regularly scheduled teleconferences with Agency staff to
address program issues, including:

contract issues
provider credentialing
hospital inpatient utilization
reconciliation methodology
physician incentive program
claims processing
child health check-up requirements
mandatory assignments
provider enrollment and disenrollment policies
management of disease management population
provider credentialing
beneficiary/PCP alignment
reporting requirements

Disenrollment of MPN Beneficiaries

The Agency expressed concern over whether or not the MPNs were moving the more difficult
beneficiaries out of their networks into regular MediPass by requesting disenrollment of non-
compliant beneficiaries. This issue is important because evidence that physicians are not willing
to deal with complex or "difficult" beneficiaries would mean that these beneficiaries are left in
"regular MediPass." In general, these requests have to do with (1) fraud/abuse (drug seeking),
(2) clinical non-compliance, and (3) lack of contact. Each MPN has specific processes in place
to deal with physicians' requests to disenroll beneficiaries from their practices.

When the evaluation team asked for information on requests to disenroll beneficiaries, each
MPN provided it to the evaluators, including lists of patients, length of time with the PCP, and
type of non-response or non-compliance. In reviewing this data, no systemic attempts to "dump"
expensive beneficiaries or high users were identified.

Lessons Learned

As the project approaches its third year of operation, the learning curve seems to be leveling for
the MPNs and the Agency. In recent interviews, the staff in the Medicaid Area Offices noted the
utilization management program, the use of the Super Group model, and the use of inpatient case
managers as primary benefits of the program. Overall it was felt that the MPN model is a good
alternative to traditional MediPass and managed care.

During interviews with the MPNs, stakeholders identified lessons learned in the implementation
process and offered ways to improve the program.

Lessons Learned
The doctor-patient relationship is key to creating a successful program.
Having a knowledgeable and attentive contract manager is key to facilitating the
relationship between the Agency and the Network.


April 6, 2004






Evaluation of Florida's Minority Physician Network (MPN) Program


The MPNS are giving physicians tools that enable the PCCM program to work the way it
is supposed to work.
Let computers do whatever they can (e.g., use the best medical management technology
available).

Recommendations
The Agency should focus on oversight, not micromanagement.
The Agency should improve the administration of payments in order to assure timely and
accurate distributions to the networks.
The MPNs would like to improve the referral authorization process through the
development of a unique authorization number.
Develop a beneficiary realignment process that would allow the MPNs to quickly and
easily change PCP assignments based on who beneficiaries are actually seeing. This
would assure the patient-doctor relationship is maintained.
The MPNs would like the flexibility to use different physician reimbursement models.
The MPNs recommend a risk-adjusted UPL methodology.


April 6, 2004






Evaluation of Florida's Minority Physician Network (MPN) Program


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April 6, 2004






Evaluation of Florida's Minority Physician Network (MPN) Program


MPN PERFORMANCE


The performance of the MPNs was measured by examining:

(1) provider satisfaction;
(2) quality of care and beneficiary satisfaction; and
(3) cost effectiveness and financial impact.

Physician Satisfaction

The research team interviewed twenty current and former MPN PCPs (including approximately
10 PhyTrust and 10 Florida NetPASS physicians). Interviewed PCPs were identified by the
MPNs and Medicaid Area Office staff. PCPs who had left the MPNs were also contacted. In
general, physicians were very satisfied with the MPNs, as illustrated by specific comments in
Table 6.

Table 6: Physician Comments on the MPNs


PhyTrust


Good communication.
Local, personal relationship ("we know who to
call").
Helps me provide better care to my patients
(e.g., screenings, check-ups, Rx).
Case managers in hospital really help.
Financially, I am doing better under PhyTrust.
I like the financial incentives.
I am pleased w iith how this is run.
They listen to us, they like our ideas.
Quarterly meetings are good.
I have more knowledge about how Medicaid
works.
Sometimes expectationsfor stuff from me is too
quick (e.g., credentialing).


Florida NetPASS


This is not an HMO (and I'm glad).
Good communication ("we know who to
call").
Lots of information provided to me.
This helps independent physicians.
We are a busy practice, this helps us know
more about our patients.
FNP prevents patients from "doctor
shopping".
FNP finds loopholes, fraud, inappropriate use.
I am getting my patients to call me, not go to
the ER.
FNP focuses on quality, not volume.
With FNP, I better manage care so my patients
come back.
I would like them to help me in other areas
(beyond costs, Rx).
I'd like to know more about what is going on in
the "big picture ".


PCPs agreed that the following aspects of the MPN program were positive improvements over
MediPass.

Monthly Utilization Reports

PCPs said that monthly reports permit increased monitoring of medications and beneficiary
utilization of providers other than their assigned PCP. In fact, physicians said they found out


April 6, 2004


i






Evaluation of Florida's Minority Physician Network (MPN) Program


about beneficiaries they had never seen and the report helped them develop ways to reach out to
those beneficiaries or get them assigned to the doctor who does provide their primary care.
Physicians said that the MPNs' detailed beneficiary utilization data helped them detect fraud and
abuse and inappropriate use in the system in ways that MediPass never had. In general,
providers liked the profiling and peer comparisons that helped them know where they stand
relative to their peers.

Physician Incentive Plan

For PhyTrust PCPs, the financial incentives were a major source of satisfaction.

Administrative Support

PCPs and their office staff said the MPNs gave them a contact person who can "interface" with
the Agency. Some suggested that the MPNs were particularly helpful to small physician
practices and foreign-trained doctors who need administrative support and help understanding
how the health care system works. Overall, most providers said that the MPNs represented a
good alternative to the "dreaded Medicaid HMOs."

PCP Perspective on MPN

During the evaluation, the PCPs shared their perspective on the implementation of the MPN
program. In general, the PCPs expressed satisfaction with the MPNs' yet they did note areas for
improvement.

Provider-Beneficiary Relations

Some PCPs perceived a "loss" of beneficiaries in the MPNs. While evaluators found that PCPs
did not actually lose beneficiaries, there was a process that often took a few months whereby
beneficiaries were assigned to the MPN SuperGroup ID. Or, if beneficiaries lost eligibility and
then regained it, there was a more complex process of getting those patients reassigned to the
same doctor.

Two Lists (Disease Management and MPN Beneficiaries)

Also confusing for PCPs was that they were now getting two lists of beneficiaries (one for MPN
and another for Disease Management beneficiaries). Some reported that they did not have any
contact with Medicaid Disease Management staff.

Non-compliant Patients

MPN physicians were sometimes confused about their ability (or inability) to disenroll non-
compliant beneficiaries. Some PCPs expressed frustration with patients they viewed as
"difficult"-that is, those patients who did not comply with their medical advice or did not come
to see them on a regular basis. In some cases, these same patients were seeing other MediPass
providers without the management of their care by their designated PCPs. The physicians said
that it was impossible to improve care (or reduce costs of care) for these patients.


April 6, 2004






Evaluation of Florida's Minority Physician Network (MPN) Program


One example was a pediatrician who expressed frustration with parents who continued to use the
emergency department even after he had repeatedly instructed them to call him first. Another
physician described the numerous contacts (by phone and in writing) that her office had made
asking patients to come see her for routine well visits and care. Many patients never responded.
The PCP knew that the patients were getting care, because their utilization showed up on her
monthly MPN report, but she did not know how to change those patients' behavior. In this case,
the physician's financial bonus would be lower because she was not able to get all well visits
performed and, potentially because other physicians (not the PCP) were ordering tests and
prescriptions that she could not verify as appropriate (even though she was the PCP).

One PCP has a very high percentage of HIV-positive members, for whom he recommends
various courses of treatment, which he expects to be followed. When physician orders are
simply disregarded, the physicians themselves become frustrated, and generally recommend that
the patients seek treatment elsewhere.

It is not surprising that more of these requests would be made under the MPNs than in the regular
MediPass program. The ongoing oversight and financial implications for physicians lead them
to be more aware of the beneficiaries in their panel and those beneficiaries' utilization of other
providers and medications not ordered by the PCP. This information was not available to
providers under MediPass.

Mandatory Assignments

Some providers also noted that they had not seen the membership increase they had hoped for
through mandatory assignments with the MPNs. Most said "I'd like more MPN beneficiaries."

Specialty Care Access

A key issue for Medicaid in general is the availability of specialists. Technically, the network of
Medicaid specialists is identical for MediPass and MPNs. In the interviews, the evaluation team
heard conflicting comments about the availability of specialty care in South Florida. For
example, here are some of the comments the evaluation team heard from PCPs and MPN staff:

There are enough specialists.
There are not enough specialists.
Fewer specialists take Medicaid.
Some specialists only take Medicaidfor inpatient business.
Easier to get specialists in MPNs than in Medicaid HMOs.
Some specialists say they don't take Medicaid (but they really do-they only take
referrals from certain PCPs).
For those specialists who accept Medicaid, wait times for appointments are long.

When PCPs mentioned specialty shortages, they were in the following specialty areas: Dentistry,
Urology, Neurosurgery, Rheumatology, and Medical Orthopedics.


April 6, 2004






Evaluation of Florida's Minority Physician Network (MPN) Program


Because the MPNs cannot contract directly with specialists, they cannot directly improve access
to specialty care in the markets they serve. It was clear that personal and informal relationships
among PCPs and specialists were very important. The MPN organizations reported that they
would work with PCPs to find specialists. They also said they have encouraged specialists who
work with them on other managed care plans (not MediPass) to also participate in the MPN
program. There was anecdotal evidence that some specialists have applied for Medicaid because
of the MPNs.

Provider Participation

Evaluators found no evidence of a systematic exit from the MPNs by Medicaid PCPs. Over the
course of MPN operations, fewer than 10 physicians in total requested to leave the MPNs.
Attempts were made to contact several of these physicians and evaluators spoke to one who said
that there was confusion about what the MPN was and a decision was made after one month to
leave. Thus, there are not a significant number of physicians who are leaving the MPNs (and the
findings on provider satisfaction support this notion).

Evaluators also explored the issue of whether Medicaid (not MediPass) physicians were in the
MPNs. To understand this, Medicaid data from the Agency was used. No major trend with
respect to non-MediPass physicians in the MPNs was identified. More specifically, in December
2003, there were 347 MPN providers in Miami-Dade and Broward counties (by definition, they
were all Medicaid providers). Of these, only 9 were not MediPass providers.

Quality of Care

Due to the time and resource limitations, this evaluation does not include a comprehensive report
on patient satisfaction and quality of care. In general, there are limited data or evidence to
examine the quality of care and beneficiary satisfaction in this program. Both organizations have
outlined processes for collecting quality data and acknowledge the importance of quality
assurance. However, at the time of this evaluation, only the PhyTrust beneficiary satisfaction
survey results (which are very positive) have been submitted to the Agency.

The contracts with the MPNs specified that HEDIS-type reporting should be used to measure the
quality of care. Florida NetPASS, in particular, does not believe that the HEDIS system is
appropriate for this program and has raised some specific data and methods limitations that
would limit their ability to use the HEDIS model.

In general, the evaluation cannot identify whether overall quality of care has improved or
declined in the MPN program. There is, however, enhanced oversight of physician behavior in
these programs. In addition, the specific monitoring and reporting of beneficiary utilization
gives PCPs the opportunity to better monitor the appropriate use and quality of care provided to
beneficiaries.


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Evaluation of Florida's Minority Physician Network (MPN) Program


COST EFFECTIVENESS ANALYSIS AND FINANCIAL RESULTS

Overview

Due to the limited time and resources for this evaluation, it was not possible to conduct a
complete cost effectiveness analysis of the MPN program. A comprehensive analysis typically
includes: (1) an assessment of the costs of implementing and operating a health care program and
(2) an assessment of the "effectiveness" or the impact of the program on quality of care, the
appropriate use of services, and clinical health outcomes.

In this evaluation, the research team evaluated the financial impact of the MPN program using
three different measures of cost effectiveness:

(1) A statistical analysis of the medical expenditures in the MPNs and in MediPass for
the same time period and geographic areas;
(2) An analysis of the "shared savings" achieved by the MPNs using the UPL
methodology outlined in the MPN contracts with the State; and
(3) An analysis of the Agency resources used to implement and operate the MPN
program.

The multiple analyses provide three unique opportunities to assess the financial impact of the
MPN program. First, the medical expenditure analysis compares MPN medical expenditures to
MediPass expenditures for beneficiaries in the same geographic area during the same time
period. In the medical expenditure analysis, the costs of serving a Medicaid beneficiary in the
MediPass program is compared to the cost of treating a beneficiary in the MPN program with
similar demographics using retrospective data.

The "shared savings" methodology compares the actual MPN expenditures to the anticipated
costs of serving a Medicaid beneficiary as gleamed in the Medicaid UPL, a benchmark
established by the Agency for the purposes of analyzing and predicting the costs of numerous
Medicaid programs and services. This method of analysis is used by the Agency to determine
the savings achieved by the MPNs and the share of the savings that will be distributed to the
MPNs on a quarterly basis.

The third financial analysis considers the Agency's administrative and operational expenses.
The Agency must assess the personnel and physical resources used by the Agency to operate the
MPN program, in order to determine the true costs of operation. The following analysis
estimates the personnel costs by examining the change in resources used to administer the MPN
and the MediPass programs.

Medical Expenditure Analysis

Methods

To construct the data used in the medical expenditure analysis, the evaluators used 3,891,555
member-month records covering a period of 19 months (November 2001 to May 2003,
inclusive). These separate claims files were merged into one claim file with 22,387,881 records.


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Evaluation of Florida's Minority Physician Network (MPN) Program


The data range for these claims were 11/01/2001 to 05/31/2003. Provider Service Network
(PSN) and Pediatric Associates Medicaid demonstration enrollees were excluded from the
medical expenditure analysis. PSN enrollees have their care managed within the demonstration
program and not by MediPass. The Pediatric Associates Medicaid demonstration involves the
mandatory assignment of children to a large pediatric medical group practice in South Florida.
In both cases, it was felt that these enrollees do not represent typical MediPass enrollee
expenditures and were removed from the data. Further, the data set excluded the Children's
Medical Services enrollees.

The data utilized in this analysis included the remaining MediPass beneficiaries. Beneficiaries in
Disease Management organizations (DMO) during the study period were included in the
analysis. Presently, DMO beneficiaries represent 16% of the MediPass population. There are no
DMO enrollees in the MPN population, however the MPNs do serve individuals with chronic
diseases, such as HIV/AIDS, hemophilia, end stage renal diseases (ESRD), sickle cell,
congestive heart failure (CHF), hypertension, asthma, and diabetes. Approximately, 20% of the
MediPass population has chronic diseases; whereas 15.7% of PhyTrust beneficiaries have
chronic diseases and 12.3% of Florida NetPASS beneficiaries have chronic diseases. The
following table is a snapshot of the number and percent of the beneficiaries in MediPass and the
MPNs with various chronic diseases during the month of September 2002.

Table 7: Beneficiaries with a Diagnosed Chronic Disease
By Program
September 2002

September 2002 (Dade, MediPass PhyTrust NetPASS
Broward and Palm Beach Membe % of Membe % of Membe % of
counties) rs Eligible rs Eligibles rs Eligibles
s
AIDS 4,422 1.86% 66 0.91% 270 0.92%
SICKLE CELL 1,497 0.63% 44 0.61% 177 0.60%
HEMO 78 0.03% 5 0.07% 4 0.01%
Chronic ESRD 1,733 0.73% 51 0.70% 94 0.32%
Disease
Disease CHF 3,311 1.39% 81 1.12% 235 0.80%
States
(Non DIABETES 7,937 3.33% 187 2.58% 474 1.61%
DMO) ASTHMA 15,727 6.60% 182 2.51% 1,427 4.84%
HYPERTENSION 13,642 5.73% 522 7.21% 941 3.19%
Total Chronic
Total Chronic 48,347 20.29% 1,138 15.71% 3,622 12.29%
Diseases

Total Eligibles 238,247,244 29,461


The differences between the percent of beneficiaries with a chronic disease in MediPass and the
MPNs may account for differences in the total paid claims experienced by the respective
programs; however, the analysis does not control for chronic disease state. Future analyses


April 6, 2004






Evaluation of Florida's Minority Physician Network (MPN) Program


should consider disease state and severity as a means of producing a "truer" picture of the costs
associated with the average Medicaid beneficiary being served by different programs.

The Rand Health Insurance 2-part model (Brook, Ware, et al. 1983) was used to construct the
statistical analysis conducted to determine the mean medical expenditures for MediPass and
MPN beneficiaries. The regression analysis included statistical controls for service utilization,
SSI enrollment, age of the enrollee, race of the enrollee (Hispanic, other, Asian, and white, with
African-American as the referent group), and gender (male as the referent group).

Results

Tables A4-A7 (in the Appendix) present the descriptive results for the sample of 2,329,210
member-months during the 13-month time period of the analysis (for mean paid claims).
According to the medical expenditure analysis, the average MediPass beneficiary has higher paid
claims than the average beneficiary served by the MPNs during the same time period when
controlling for beneficiary eligibility category (e.g., SSI/TANF), age, race, geographic location,
and gender. These factors are associated with variation in medical expenditures. In fact, they
are the same factors used by the Agency to calculate the Upper Payment Limits (UPL).

Specifically, the mean paid claims for MediPass were $354.99 PMPM compared to $326.42 for
Florida NetPASS and $325.64 for PhyTrust.

MediPass enrollees were older than Florida NetPASS and PhyTrust during this time period and
were more likely to represent a minority group across all three programs. Age, gender, and race
are included to control for differences in health care utilization and severity of illness.

When comparing the MPNs to MediPass for paid claims using this statistical analysis, both
Florida NetPASS and PhyTrust were roughly $29 below the expected PMPM expenditures for
MediPass enrollees.

The Miami/Dade analysis examined adjusted expenditures just for enrollees within that county.
Florida NetPASS had $26 fewer mean adjusted paid claims and PhyTrust has $20 in fewer
adjusted mean claims on a PMPM basis. Broward and Palm Beach county analyses were more
in line with the total county results. In Broward, Florida NetPASS had $43 fewer mean adjusted
paid claims. PhyTrust was $71 less for mean adjusted paid claims and $143 mean adjusted paid
claims below MediPass. Florida NetPASS was $15 lower than MediPass for mean adjusted paid
claims in Palm Beach County. PhyTrust does not operate in Palm Beach County.

Table 8 (next page) summarizes the differences in medical expenditures for MediPass, PhyTrust,
and Florida NetPASS by county and overall.

In general, the MPN program experienced lower expected expenditures than MediPass when
looking at the same time period and geographic area.

These differences between the MPNs and MediPass could change if the analysis controlled for
the proportion of beneficiaries with chronic diseases. However, at this time, the Agency does not
utilize risk adjustments in its predicted expenditure analyses.


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Evaluation of Florida's Minority Physician Network (MPN) Program


Table 8: Adjusted Predicted Expenditures PMPM
Overall and By County
February 2002 February 2003


Shared Savings Analysis


The second part of the financial analyses considers the results of the "shared savings" achieved
by the MPNs as specified in their contracts with the Agency. Evaluation of the shared savings
results is based on available information on the reconciliation process and payments made to the
MPNs from October 2001 to December 2002 as opposed to February 2002 through February
2003 as presented in the medical expenditure analysis. Unfortunately, the reconciliation data
was not available for compatible time periods.

Contractual arrangements between the Agency and the MPNs specify a "shared savings"
methodology whereby MPN expenditures are compared to the UPL on a quarterly basis. That is,
for savings to be shared, the actual claims payments to the MPN must be lower than the UPL
established by the Agency (e.g., this is the "savings").


April 6, 2004


MediPass Florida NetPASS PhyTrust

All 3 Counties:

Paid Claims $354.99 $326.42 $325.64


Difference -$28.57 -$29.35

Miami-Dade:

Paid Claims $368.94 $342.64 $348.77


Difference -$26.30 -$20.17

Broward:

Paid C s $373.64 $330.20 $302.11
Paid Claims

Difference -$43.44 -$71.53

Palm Beach:

S$267.52 $252.55 NA
Paid Claimsf e -

Difference -$14.97 NA






Evaluation of Florida's Minority Physician Network (MPN) Program


Upper payment limits and capitation rates are established annually by the Agency for a set of
services covered by Medicaid. The UPLs are PMPM rates that are fixed by eligibility category
(e.g., TANF SSI), geographic area (e.g., Medicaid Service Area), gender and age (e.g., eight
distinct age/gender categories). The UPL is further adjusted by an IBNR (incurred but not
reimbursed) factor and may also be adjusted by other changes that occur in the Medicaid fee-for-
service program. By design, the UPLs are dated because they are determined using Medicaid
claims experience from a previous time period.

The first step in the shared savings analysis is a calculation of the difference between each
MPN's actual expenditures and what would have been expected for their enrolled members using
the UPL. The results by MPN for each available time period are shown in Table 9 (below).

Table 9: Summary of Savings Compared to the UPL by MPN
October 2001 December 2002

Time Period PhyTrust PhyTrust PhyTrust FNP FNP Savings FNP
(Quarter) Member Savings vs. UPL Member vs. UPL UPL
Months UPL Savings Months Savings
PMPM ___PMPM

10/01- 12/01 3,431 $ 246,029.06 $ 71.71 6,454 $ 357,989.00 $ 55.47


01/02-3/02 5,083 $ 291,428.46 $ 57.33 30,273 $ 425,434.56 $ 14.05


04/02-06/02 7,784 $ 458,266.92 $ 58.87 50,495 $ 836,554.01 $ 16.57


07/02-09/02 16,260 $ 718,804.07 $ 44.21 82,306 $ 1,380,392.44 $ 16.77


10/02-12/02 31,235 $ 1,655,526.76 $ 53.00 102,964 $ 1,975,657.73 $ 19.19


Total:
Tota12 63,793 $ 3,370,055.27 $ 52.83 272,492 $ 4,976,027.74 $ 18.26
10/01- 12/02

Source: AHCA, PhyTrust, Florida NetPASS

In each period shown above, both MPNs achieved savings relative to the UPL. The PMPM
savings ranged from roughly $44 to $72 for PhyTrust and roughly $14 to $55 for Florida
NetPASS. For this time period, the MPN program achieved expenditures that were $8.35
million lower than expenditures that would have been expected using the UPL.


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Evaluation of Florida's Minority Physician Network (MPN) Program


Next, the savings on expenditures relative to the UPL is shared between the Agency and the
MPN according to their contractual arrangements. More specifically, for PhyTrust the share of
the savings was always a 50%-50% split between the Agency and PhyTrust. For Florida
NetPASS, the Agency retained 70% of the savings initially sharing only 30% with Florida
NetPASS. The split changed over time from 70%-30% to 60%-40% to 50%-50%.

Overall, the Agency shared approximately $4.1 million of the $8.3 million saved by the MPNs
with the networks during November 2001 to December 2002. The range of savings shared with
the MPNs when comparing them to the UPL (as opposed to the paid claims as in the medical
expenditure analysis) is from $22 to $26 PMPM for PhyTrust and $4 to $28 PMPM for Florida
NetPASS.

In addition, the Agency provided each MPN with a monthly PMPM administrative fee. The
amount of this fee ranged from $9 to $12 PMPM, depending on the MPN and the time period.
Table 10 (below) provides the detailed amount of the advanced administrative fees paid to each
MPN.

Table 10: Advanced Administrative Fees
October 2001 December 2002

Time PhyTrust PhyTrust PhyTrust FNP FNP Advanced FNP
Period Member Advanced Advanced Member Admin Fees Advanced
(Quarter) Months Admin Fees Admin Months Admin
Fees Fees
PMPM PMPM

Total:
Total: 2 55,279 $ 542,353.00 $ 9.81 266,038 $ 2,637,555.00 $ 9.91
10/01-12/02

Source: AHCA, PhyTrust, Florida NetPASS

Thus, the Agency paid $3.2 million in total administrative fees for the MPN program during this
time period. The administrative fee is provided to the MPN as a risk payment; hence, all of these
administrative fees are deducted from the amount of the shared savings due to the MPN at the
time of its quarterly reconciliation. Alternatively, the MPN is obligated to repay any "over
payment" in administrative fees resulting from limited or no savings relative to the UPL.

As shown in Table 11 (next page), the "net" reconciliation payments made (or owed) to the
MPNs ranged on a PMPM basis from $6 to $36 to PhyTrust and from a positive $28 to a
negative $8 for Florida NetPASS.


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Evaluation of Florida's Minority Physician Network (MPN) Program


Table 11: Reconciliation Payments Made (Owed) by MPN
October 2001 December 2002


Time Period PhyTrust Reconciliation Reconciliation FNP Reconciliation Reconciliation
(Quarter) Member Payments Made to Payments Member Payments Made to Payments
Months (Owed by) Made to Months (Owed by) FNP Made to
PhyTrust (Owed by) (Owed by)
PhyTrust FNP
PMPM ___PMPM

10/01-12/01 3,431 $ 123,014.53 $ 35.85 6,454 $ 179,388.53 $ 27.79


01/02-03/02 5,083 $ 145,714.23 $ 28.67 30,273 $ (237,073.63) $ (7.83)


04/02-06/02 7,784 $ 192,203.46 $ 24.69 50,495 $ (135,484.00) $ (2.68)


07/02-09/02 16,260 $ 99,359.77 $ 6.11 82,306 $ (76,561.78) $ (0.93)


10/02-12/02 31,235 $ 532,540.38 $ 17.05 102,964 $ 35,496.86 $ 0.34


Total:
10/01-12/0263,793 $ 1,092,832.37 $ 17.13 272,492 $ (234,234.02) $ (0.86)


Source: AHCA, PhyTrust, Florida NetPASS


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Evaluation of Florida's Minority Physician Network (MPN) Program


Agency Resources

The "savings" calculations above tell only part of the story in evaluating the financial
implications of the MPN program for the State. The financial analysis must take into account the
increased (or reduced) administrative resources for the Agency that result from the MPN
program. For example, Agency FTEs may increase because of the reconciliation process.
Alternatively, Agency FTEs could be lower with the MPNs because the MPNs have absorbed
many of the operations related activities previously performed by AHCA (e.g., credentialing,
member services).

As part of the evaluation, the Agency estimated the number of person hours (FTEs) and
associated salary expenses that were required to operate the MPNs and MediPass, including
Headquarters and Area Office staff (Table 12 below-note these figures do not include the time
periods when the MPNs expanded to Areas 5 and 6). According to these estimates, the total
number of FTEs for MediPass and the MPNs was reduced from 61.31 in January 2002 to 59.13
in January 2003. This was a reduction of about $78,600 in direct salary expenses. Over this
time, the FTEs needed to oversee the MPNs were reduced from 14.55 in 2002 to 13.65 in 2003
(a direct salary difference of about $37,000). Of course, these reductions may have been due to
things that were unrelated to the MPN program.

Table 12: Administration FTEs and Salary Expenses for the Agency
(MPN Program and MediPass)
1/1/2002 and 1/1/2003

1/1/2002 1/1/2002 1/1/2002 1/1/2003 1/1/2003 1/1/2003

MPNs MediPass Total MPNs MediPass Total

FTEs 14.55 46.76 61.31 13.65 45.48 59.13
FTEs per 1000
FTEs per 1000 1.35 NA NA 0.28 NA NA
Members
Total Salary $511,096 $1,566,663 $2,077,759 $473,994 $1,525,211 $1,999,205
Expenses
Salary Expenses $3.96 NA NA $0.80 NA NA
PMPM
Source: AHCA

When analyzed on a PMPM basis, the Agency estimated that salary expenses for the MPN
program were approximately $3.96 PMPM in January 2002 and $0.80 PMPM in January 2003.
It is important to note that this reflects only the FTEs with direct involvement with the MPN and
that there are other expenses associated with the MPN program that are not reflected here.


April 6, 2004






Evaluation of Florida's Minority Physician Network (MPN) Program


Conclusions and Discussion

The financial results analyses suggest that the MPNs save the Agency money compared to
MediPass, even after factoring out the administrative fees and reconciliation payments made and
(some) of the costs of the Agency to run the Program.

More specifically, adjusted predicted expenditures for paid claims in the MPNs were
significantly lower than for MediPass when compared for the same geographic region and time
period. Moreover, the PMPM expenditures achieved by the MPNs were lower than what would
have been expected using the Medicaid UPL. Finally, even after factoring out the administrative
fees paid by the Agency; the "savings" that were shared with the MPNs; and the administrative
resources of the MPNs, the Agency saves money under this initiative.

There are a number of reasons that the MPNs save money relative to MediPass. First, the MPNs
provide detailed and structured utilization information to their providers. Physicians interviewed
indicated that they found such information valuable to their practice and that it enhanced their
ability to provide quality care to their patients. Other studies confirm increasing physician
acceptance of care management tools in their practices (Walsh et al., 2002). For example, in a
nationally representative sample of physicians, 51 percent of those who received provider
profiles viewed these profiles positively. One-third of all physicians surveyed reported that
practice profiles influenced their practice of medicine (Reed et al., 2003).

Second, the MPNs serve to provide physicians, particularly those in solo practice or who are new
to the United States with strong organizational and clinical support to manage their practices.
Much of the clinical support provided by the MPNs is part of the their utilization
management/provider profiling activities. Studies have shown the provider profiling activities
are most effective when they are coupled with enhanced feedback and educational activities such
as those provided by the MPNs (Borgiel et al., 1999, Braham and Ruchline, 1985, 1987, 1990).
The MPNs are able to provide feedback and education to PCPs because they are operated
"locally" and can quickly and easily respond to physician issues.

Finally, the MPNs bring to their Medicaid lines of business significant experience with managed
care organizations. Many of the enhanced targeted care and case management activities already
occurred across all lines of business within the MPN. Consequently, the MPNs are perhaps able
to employ strategies that have proven most effective in other managed care settings.

The importance of the use of physician bonuses and incentives to enhance quality of care (and
ultimately lower cost) should not be understated. Increasingly, payers are using provider
incentive programs to meet quality goals (Rosenthal et al., 2004, Mays et al., 2003). There is
some evidence that financial incentives can have some impact on physician behavior (Hillman et
al., 1989) and many managed care organizations have used incentives as a way to reduce health
services use (Stoddard et al., 2003). However, the extent to which these incentive programs
ultimately reduce health care costs without compromising overall quality remains unclear.
Nevertheless, PhyTrust's use of an incentive program may be one reason why that organization
has been able to achieve medical expenditure savings.


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Evaluation of Florida's Minority Physician Network (MPN) Program


The finding that the MPNs appear to save money relative to MediPass must be interpreted with
some caveats. First, because of time limitations the evaluation team was unable to adequately
risk adjust for patient severity. This is particularly relevant with respect to the disease
management patients who are excluded from the pilot programs and remain in traditional
MediPass. Since these patients are sicker, they could be responsible for the higher medical
expenditures associated with MediPass.

Finally, the data suggest that the MPNs are successful in reducing the expenditures relative to the
UPL. This savings should be expected versus the UPL, due to the fact that the UPL is based on
Medicaid expenditure data from a previous time period. In addition, the UPL is only adjusted for
a few beneficiary characteristics. Some suggest that the age breakdown of the UPL and the way
that newborns are assigned to MediPass vs. the MPNs may indicate a higher degree of savings
than is actually experienced. Others suggest that there are additional factors, such as specific
disease states that may be more precise predictors of future expenses.


April 6, 2004






Evaluation of Florida's Minority Physician Network (MPN) Program


SUMMARY AND RECOMMENDATIONS

Florida's Minority Physician Networks appear to offer an alternative to traditional MediPass that
results in savings for the Agency.

The most notable aspects of the MPN Program include:
The private and "local" aspect of the MPNs offer opportunities to monitor and support
providers in ways the current MediPass program has not achieved.
The MPNs appear to make MediPass work better by providing providers with timely and
important beneficiary information.
The MPNs manage their PCP networks locally and offer improved communication with
the Agency.
MPN physicians are extremely satisfied with the program relative to their experience
with MediPass and Medicaid HMOs.
The MPNs save the Agency money when compared to MediPass.

Recommendation:

The Agency should address some of the challenges in the MPN program prior to expanding the
program into other areas in the state.

Specific Problems the Agency Should Address:

The Agency needs better information about its costs to run the program in order to
identify the "bottom line" financial implications of the MPNs for the Agency. For
example, as administrative functions are assumed by the MPNs, what is the effect on
Agency FTEs or other resources?

The Agency must set clear, measurable objectives for the MPN program. Agency
officials, the MPNs, and the providers should clearly understand expectations and
objectives of the program.

Alternative cost savings methodologies should be considered. The current method is
time-consuming and may not achieve the goals of either the Agency or the MPNs. For
example, a short list of utilization or expenditures could be monitored monthly or
quarterly, with formal reconciliations conducted annually.

The Agency should evaluate and monitor the MPNs on a regular basis in order to
determine the effectiveness of the program in meeting its expectations and objectives.
On-going monitoring will also allow the Agency and MPNs to incorporate lessons
learned into the policies and procedures used to govern the program.

The Agency should consider better coordination in areas of the State where multiple pilot
programs are in operation.

There may be different implementation issues (and costs) associated with MPN
expansion. If current MPN organizations expand to other parts of the Agency, it is


April 6, 2004






Evaluation of Florida's Minority Physician Network (MPN) Program


reasonable to assume that the learning processes of the original pilot phase will reduce
the administrative costs and hassles of expansion-especially if lessons learned by Area
Office staff can be quickly transferred to other Area Offices. If, however, other
organizations are awarded MPN contracts for different geographic regions, there may be
new learning and implementation costs.

* The Agency must assure adequate resources to provide oversight and administration of
the MPNs. With any new program (especially one that is a pilot) there will be learning,
coordination, and ongoing coordination issues. The Agency must be willing to devote
needed resources to MPN oversight.

* The Agency should reconsider its use of monthly administrative fees. Expansion may
make the distribution of administrative fees on a monthly basis to numerous contractors
impossible or improbable risking the cost-effectiveness of the overall program.


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Evaluation of Florida's Minority Physician Network (MPN) Program


EVALUATION LIMITATIONS

Due to data and time limitations, claims data were not risk-adjusted beyond the control
variables. In addition, the evaluation did not examine utilization patterns for the MPNs
and MediPass.

The evaluation did not examine the networks or performance of MPN activity in
Medicaid Areas 5 and 6.

There were some reports that were specified by the MPN contracts but were not available
from the Agency (e.g., monthly service utilization, specialty care referral reports).

The MPNs have reported very little quality of care and beneficiary satisfaction data,
which made the evaluation of this aspect of the pilot project impossible.

The short time frame of the evaluation (3 months) limited the possibility of more
complex and in-depth consideration of some MPN issues (e.g., more detailed
examination of utilization such as ambulatory care sensitive admissions, more complex
severity-adjustment, others).


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Evaluation of Florida's Minority Physician Network (MPN) Program


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Evaluation of Florida's Minority Physician Network (MPN) Program


APPENDIX

Financial Analysis Methodology

To construct the data used in this analysis, a request was sent to Medicaid and 3,891,555
member-month records were sent that covered a period of 19 months (November 2001 to May
2003, inclusive). These separate claims files were merged into one claim file with 22,387,881
records. The data range for these claims were 11/01/2001 to 05/31/2003. Provider Service
Network (PSN) and Pediatric Associates Medicaid demonstration enrollees were excluded from
this analysis. PSN enrollees have their care managed within the demonstration program and not
by MediPass. The Pediatric Associates Medicaid demonstration involves the mandatory
assignment of children to a large pediatric medical group practice in South Florida. In both
cases, it was felt that these enrollees do not represent typical MediPass enrollee expenditures and
were removed from the data. Further, the data set included no CMS beneficiaries. The
MediPass data included beneficiaries enrolled in Disease Management Organization programs
during the study period.

Programs were run to calculate the total sum of billed and paid claims for each member-month in
the 19 months of data. The Medicaid data included a "plan" variable that indicated plan type
("M" for MediPass and "P" for PSN). Additional flag variables were added to indicate which
member months were also MPN enrollees and to which MPN group (e.g., Florida NetPASS,
PhyTrust). Additional data provided by Florida Medicaid allowed us to identify the individual
NetPASS and PhyTrust providers and link them to their enrollees. The evaluation team found
75,903 NetPASS recipients assigned to 526 providers and 49,860 PhyTrust recipients assigned to
197 providers in the entire 19-month dataset. The data were further truncated to February 2002 -
February 2003. This 13-month period was chosen because it represented the MPN three months
post initial startup and three months prior to the most recent available Medicaid data (May 2003).

Dependent Variables

The variables of interest in this analysis were dummy variables used to identify if an enrollee
was in NetPASS, PhyTrust or in MediPass during the member month. In most cases, MediPass
was the reference variable and the other plans were compared to MediPass' use and
expenditures. These demonstration projects were designed to impact the overall care
management of their enrollees through increased provider access to data and increased
monitoring of care processes at the plan level. The evaluation team hypothesized that the
demonstration programs would reduce use of services and costs associated with those services
when compared to MediPass enrollee use and expenditures.

Total claims paid, total billed claims, and a dichotomous variable that represents "any use" of
medical services by the beneficiary were used as dependent variables in this analysis. Total
claims paid were defined as the sum of all medical claims paid for the enrollee during the
member-month in question. Total billed claims were defined as all of the medical claims that
were billed to Florida Medicaid during the member-month. Both variables include pharmacy,
hospitalization, and other claims associated with care. A dependent variable was created to
examine whether or not during the member-month an enrollee had expenditures greater than the
Medicaid three-dollar case management fee.


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Evaluation of Florida's Minority Physician Network (MPN) Program


Control Variables

Control variables were selected to adjust for enrollee characteristics and health status. SSI
enrollees were identified using a dichotomous variable. The gender (male) and age of the
enrollee during the member month were included in the analysis. The evaluation team expected
males to use fewer services than female enrollees and the youngest and oldest enrollees to use
more services. Dichotomous variables were created for the enrollees' race, with black enrollees
being the reference group in the analysis. The evaluation team was parsimonious in the use of
control variables due to a fear that because this is such a large data set, too many controls would
mask real differences in use and expenditures between the plans. Table Al lists all of the
variables used in the analyses and their definitions.

Analytic Method

The evaluation team performed an analysis of the 2002 2003 expenditures using the Rand
Health Insurance 2-part model (Brook, Ware, et al., 1983; Dowd, Feldman, et al., 1991). The
two-part model is accurate in accommodating expenditure data where there is a large proportion
of the population that have no expenditures and when the distribution of the non-zero
expenditures are skewed to the right so that a natural log transformation will normalize the data.
This model is also used when the assumptions of linearity pertaining to ordinary least squares
regression are violated.

The model was first run as a logistic regression to predict the probability of using any services
(and incurring any expenditures above the Medicaid case management fee). The second set of
multivariate regression analyses used the natural log of costs as the dependent variable to predict
costs conditional on whether the enrollee used any health care services. Adjusted cost ratios
were obtained from exponentiated regression coefficients and costs were transformed from log
dollars into dollars using Duan's smearing estimator to control for retransformation biases
(Duan, 1983).

The multivariate logistic regression was combined with the multivariate linear regression by
multiplying the probability of incurring any expenditure by predicted expenditure conditional on
any utilization. This produced an individual enrollee's predicted total health care costs.

In more formal terms, we estimate use of services by the ith enrollee in the Sth because many
enrollees did not use services during the 13 months of the study. The expected use of services
conditional on enrollment in the Sth plan is:

E(USEIS) = P(USE > 31S) E(USEIS, USE > 3)

Where we are interested in use above the $3 enrollee management payment. Further, we are
interested in observed costs (total claims or total billed claims in this case) or:

COSTSsi = (Xis, ZS)s + (Cspis if Lis > {-(Xi, Zs) Ps /as} and COSTSsi = 0 otherwise
Where Xi is a linear function of the characteristics of the enrollee and the health plan Zs, is an Ps
parameter vector, as is the standard deviation of [his, and pis is an unobserved error.
Transforming these equations gives us the estimate for the effect of health plans on costs by


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Evaluation of Florida's Minority Physician Network (MPN) Program


comparing the predicted average observed costs (total claims or total billed claims) for all
enrollees in the sample if they are enrolled in the health plan (NetPASS, PhyTrust, or MediPass).
This equation is:

E(COSTS'i) = Prob(COSTS'i >0) E(COSTSsi|COSTSsi > 0)

When calculating the transformed dollar amounts it is also necessary to adjust these figures using
Duan's smearing estimator. We must do this because the COSTSsi is transformed by taking the
natural log of the total claims and total billed claims models when we calculate the Rand 2-part
model. Once we have calculated E(COSTSsi), we transform this value using the following
equation:

Adj(E(COSTSi)) = exp(E(COSTSSi)) n-1X exp(ei)

where n are the observations and ei are the estimated residuals from the regression models. The
smearing estimator is n-LX exp(ci).


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Evaluation of Florida's Minority Physician Network (MPN) Program

Table A-l:
Variable Specification for Medical Expenditure Analyses


Dependent Variables
Total paid claims per
member-month
Total billed claims per
member-month
Log (total paid claims)
for users
Log (total billed claims)
for users
Plan Variables
NetPASS

PhyTrust

MediPass

Control Variables
SSI

Male
Current Age
White
Black
Hispanic
Asian


= Sum of all paid claims per plan enrollee for that member
month
= Sum of all billed claims per plan enrollee for that member
month
= Natural log of total paid claims per member-month

= Natural log of total billed claims per member-month


= 1 if enrollee was a member of Florida NetPASS during the
member-month
= 1 if enrollee was a member of PhyTrust during the
member-month
= 1 if enrollee was a member of MediPass during the
member-month

= 1 if enrollee was under the SSI program for that member-
month
= 1 if enrollee was Male
= Age of enrollee during the member-month
= 1 enrollee was White
= 1 if enrollee was Black
= 1 if enrollee was Hispanic
= 1 if enrollee was Asian


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Evaluation of Florida's Minority Physician Network (MPN) Program

Figure A-l:
Evaluation of Florida's Minority Physician Network (MPN) Program
MPN Primary Care Physicians Locations by County
Fall 2003


Source: PhyTrust, Florida NetPASS


Legend:
Red= PhyTrust
Blue = Florida NetPASS


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Evaluation of Florida's Minority Physician Network (MPN) Program


Table A-2:
Evaluation of Florida's Minority Physician Network (MPN) Program
PhyTrust Administration FTEs by Month, Selected Dates
11/1/2001 7/1/2003

Number of Full-time Equivalent Staff Dedicated to
Function
Function: Start-Up 1/1/2002 7/1/2002 1/1/2003 7/1/2003

Recipient Enrollment and Disenrollment
Tracking

Enrollee Services, Education, Outreach 1 1 1 1 3

Provider Contracting and Relations 3 3 3 5 7

Provider Credentialing n/a n/a n/a n/a 0.75

Financial Management (Including 2 2 3 3
Claims Management, Reconciliation)

Medical Management (Case 4 4 4 5 8
Management, Population Management)

Grievance and Appeals Resolution n/a n/a n/a n/a 0.25

Quality Monitoring 1 1 1 1 1

Program Development and Oversight 1 1 1 1 1

Information Management 4 4 4 4 4

Other (Specify Functions):

Senior Staff 3 3 4 4 4

Administrative Staff 1 1 1 2 4

Consultants 5 5 7 7 9

Accounting/A/P/H/R 2 2 2 3 3

Total FTEs: 28 28 31 37 49


Source: PhyTrust


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Evaluation of Florida's Minority Physician Network (MPN) Program

Table A-3:
Evaluation of Florida's Minority Physician Network (MPN) Program
Florida NetPASS Administration FTEs by Month, Selected Dates
11/1/2001 7/1/2003


Number of Full-time Equivalent Staff Dedicated to Function

Function: Start-Up 1/1/2002 7/1/2002 1/1/2003 7/1/2003

Recipient Enrollment and 0 0
0.25 0.25 1 2 2
Disenrollment Tracking

Enrollee Services, Education, Outreach 0.25 1 1 1 1

Provider Contracting and Relations 5 8 9 12 13

Provider Credentialing 0.25 0.25 1.25 1.25 1.25

Financial Management (Including 2 2.5 2.5 2.5
Claims Management, Reconciliation)

Medical Management (Case
Management, Population 4 4 6 6 7
Management)

Grievance and Appeals Resolution 0.25 0.25 0.25 0.25 0.25

Quality Monitoring 0 0 0.25 0.25 0.25

Program Development and Oversight 2 2 2.5 3 3

Information Management 1 2 2 2 2

Other (Referrals): 3 4 4 5 6

Credentialing Committee 0.5 0.5 0.5 0.5 0.5

Mailroom/Admin 1 1 1 1 1


Total FTEs:


Source: Florida NetPASS


April 6, 2004


25.25 31.25 36.75 39.75


25.25


31.25


36.75


39.75






Evaluation of Florida's Minority Physician Network (MPN) Program


Table A-4:
Evaluation of Florida's Minority Physician Network (MPN) Program
Descriptive Statistics
Palm Beach, Miami-Dade, and Broward Counties Combined
February 2002 February 2003


MediPass Florida NetPASS PhyTrust

% SSI 24.17 19.21 25.66

Current Age 19.88 17.03 23.59

% White 12.34 11.63 10.75

% Hispanic 41.53 47.36 33.79

% Other 17.41 14.35 15.62

% Asian 0.23 0.37 0.27

% Male 46.36 46.34 46.50

Paid Claims $377.45 $290.36 $349.34

Source: AHCA

Note: African American and Male Gender are the Referent Category.


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Evaluation of Florida's Minority Physician Network (MPN) Program

Table A-5:
Evaluation of Florida's Minority Physician Network (MPN) Program
Descriptive Statistics-Miami-Dade County
February 2002 February 2003


MediPass Florida NetPASS PhyTrust

% SSI 24.96 18.91 25.47

Current Age 21.45 17.18 24.16

% White 06.70 06.05 07.37

% Hispanic 55.30 59.60 38.80

% Other 18.97 15.35 15.99

% Asian 00.14 00.24 00.19

% Male 45.70 46.47 44.14

Paid Claims $393.67 $292.72 $357.73

Source: AHCA

Note: African American Race and Female Gender are the Referent Categories (and are thus not
shown here).


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Evaluation of Florida's Minority Physician Network (MPN) Program

Table A-6:
Evaluation of Florida's Minority Physician Network (MPN) Program
Descriptive Statistics-Broward County
February 2002 February 2003


MediPass Florida NetPASS PhyTrust

% SSI 25.00 25.17 26.82

Current Age 17.16 19.75 21.97

% White 24.94 22.40 20.63

% Hispanic 18.94 24.45 14.94

% Other 15.16 15.72 14.28

% Asian 0.45 01.02 0.51

% Male 47.90 45.55 43.16

Paid Claims $389.28 $349.82 $330.82

Source: AHCA

Note: African American race and Female Gender are the Referent Categories (and thus not
shown here).


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Evaluation of Florida's Minority Physician Network (MPN) Program

Table A-7:
Evaluation of Florida's Minority Physician Network (MPN) Program
Descriptive Statistics-Palm Beach County
February 2002 February 2003


MediPass Florida NetPASS PhyTrust

% SSI 19.34 17.16 NA

Current Age 18.29 15.24 NA

% White 23.07 22.70 NA

% Hispanic 25.97 22.69 NA

% Other 12.81 10.74 NA

% Asian 0.40 0.45 NA

% Male 47.52 46.02 NA

Paid Claims $284.47 $254.12 NA

Source: AHCA

Note: African American Race and Female Gender are the Referent Categories (and thus not
shown here)


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Evaluation of Florida's Minority Physician Network (MPN) Program


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