THE COMING CONVERGENCE OF CORRECTIONAL HEALTHCARE AND MEDICAID

01/22/2014





















THE COMING CONVERGENCE OF CORRECTIONAL HEALTHCARE AND MEDICAID
 
Michael Pinkert, Chief Executive Officer for MHM Services
Jason Harrold, Executive Vice President, Specialty Companies, Centene Corporation
 
With budgetary constraints and the looming pressure of providing healthcare coverage to more beneficiaries under the Affordable Care Act (ACA), states continue to look for innovative models for the coordination and delivery of health services to its beneficiaries, including individuals moving through the criminal justice system. The complexities of the criminal justice system, coupled with the disproportionately high rates of infectious diseases, chronic illnesses, mental health problems and substance abuse disorders, make managing the health of inmates challenging for state correctional facilities. In addition, the aging prison population, due in large part to stringent drug sentencing laws in the 1970s and ‘80s, requires more complex – and more expensive – healthcare services. In 2011, state spending for corrections totaled $52 billion, representing 7.5% of general funds spending. And that number continues to grow.
 
While states and the Federal Government have turned to managed care models to manage low-income and complex needs populations such as recipients receiving Medicaid, Social Security Income, Aged, Blind or Disabled or Medicare services, correctional healthcare systems remain largely unmanaged. Healthcare professionals working “inside the walls” are generally employees of the states or outside vendors, including university medical schools. Medical records are usually paper-based and specialists are either brought to the correctional facilities or are available in their offices, necessitating transportation of inmates outside the prison walls. Hospitals, which must provide secure facilities to accommodate inmates and accompanying correctional officers, are paid primarily by “fee-for-service” models. Hospitalizations can account for approximately 30% of a Department of Correction’s healthcare cost and are usually viewed as unmanageable once a prisoner is admitted to a hospital.
 
What’s more, the introduction of the Affordable Care Act (ACA) has put a new focus on state Medicaid programs and, to some extent, state correctional healthcare programs. Changing the Medicaid eligibility requirements to allow participation by anyone falling below 133% of the Federal Poverty Level will initially bring, upon their release the vast majority of a participating state’s incarcerated population into their Medicaid programs. Former inmates will now have access to Medicaid, which will greatly improve access to aftercare services and help reduce recidivism rates. Less than 2 percent of inmates serve a true “life sentence”, meaning 98 percent of the inmate population returns to the community.  Thus, the convergence of Medicaid with the criminal justice system is inevitable.
 
The financial implications of this new eligibility requirement could be significant.  Although non-coverage for the incarcerated Medicaid population will not change, inmates who spend more than 24 hours in a non-prison owned hospital facility are eligible for Medicaid coverage. And, for those states that have opted into the Medicaid expansion portion of the ACA, many more inmates will be eligible for coverage under Medicaid for off-site hospitalizations. Further, the ACA calls for the Federal Government to start paying 100% of the costs for Medicaid services for the expanded population, which could greatly offset costs for correctional agencies for inmates going off site for hospitalizations of greater than 24 hours. 
 
Clearly, the need for change in the way healthcare services are delivered to inmates has never been greater.
 
The Medicaid Managed Care Model
 
Medicaid has traditionally been one of the country’s largest and fastest growing healthcare programs. Covering more than 62 million low-income Americans, Medicaid spending totaled about $414 billion in 2011. With the advent of the Affordable Care Act, which eases the eligibility requirements and will bring millions more people into the program, the states will face even greater challenges in covering more with less.
 
Over the past two decades, more and more states have been turning to managed care companies to efficiently manage their low-income and complex populations. These companies offer states (who pay for approximately 40-50% of Medicaid’s costs) predictable costs and the assumption of much of the risk in treating these traditionally difficult populations to manage.
 
“Just one percent of all Medicaid beneficiaries account for 25 percent of all expenditures. Initiatives that integrate acute and long-term care, strengthen systems for providing long-term care to people in the community, provide better primary and preventive care for children with significant healthcare needs and lower the incidence of low-birth weight babies are among the ways that states have improved care and lowered costs” – Kathleen Sebelius, The Secretary of Health and Human Services
 
Using management tools and techniques that have proven successful in the private sector, managed care companies have successfully introduced applications, techniques and programs that focus on proactive identification, education and intervention to empower high-risk (and high-cost) members to take control of their health:
 

  • Predictive modeling- provides tracking and data analysis for early identification of high-risk populations.
  • Disease Management- offers targeted, comprehensive care for chronic diseases such as diabetes or asthma.
  • Integrated care- focuses on treating the whole person, including both physical and mental healthcare needs.
  • Incentive programs- incents patients to utilize wellness and other preventive programs (such as smoking cessation, weight management, and regular health screenings).
  • Provider partnerships- leverages partnerships to make sure members have appropriate access to quality care, and encourages proactive, preventive care.
 
Managed care companies have also made significant investments in data/evidence-based systems to allow them to efficiently manage the care of their members. For example, Centene Corporation, a national leader in managed care services for uninsured and under-insured populations, including Medicaid, has developed a platform called Centelligence that uses clinical, risk and administrative profile information obtained from medical, pharmacy and lab data to proactively identify members with high-risk profiles.  Armed with this information, clinical management protocols are developed to prevent or minimize future costs.
 
Centene also developed a system called TruCare, which allows clinical staff to track healthcare outcomes in order to isolate and target members that have unique risk characteristics. This system is an integral part of their disease management programs, which provide a comprehensive, ongoing and coordinated approach for members who have chronic diseases.
 
Both of these programs have wide applicability in correctional healthcare.  Inmates of jails and prisons are, by and large, sicker than the population as a whole.  Incidents of chronic diseases, mental illness and health problems related to lack of preventative care typify correctional populations.
 
A New Paradigm for Correctional Healthcare
 
The way in which inmate healthcare is currently provided needs to be rethought in light of advances made in the era of “free world” managed care. The division of “inside vs. outside the walls” delivery systems, with the inherent inefficiencies and lack of patient care continuity, requires a total rethinking of how correctional healthcare services should be provided in the future.
 
Centurion offers a new paradigm for inmate healthcare. Formed as a joint venture between two national companies, one specializing in inmate healthcare (MHM Services) and the other in Medicaid managed care (Centene); this joint venture combines MHM’s experience in serving the correctional healthcare market with Centene’s 30 years of experience in Medicaid managed care to provide an innovative solution. 
 
 
Centurion, which has recently been awarded three state-wide contracts to provide comprehensive inmate healthcare services to the states of Massachusetts, Tennessee, and […placeholder to name third state, pending client approval to publicly announce…] will apply proven managed care systems and philosophies to most effectively manage the care of inmates. The company will manage provider networks for care delivered outside the prison walls, provide predictive modeling techniques to better identify those prisoners with the highest needs, and implement prior authorization and other care management techniques to ensure inmates are getting the right care at the right place at the right time.
 
As the country is undergoing a historic and monumental shift in the way healthcare is being delivered nationwide, Centurion offers a unique and timely solution to the coming convergence of the correctional healthcare and Medicaid managed care markets.
 
 
 
Sources:
 
In 2011, state spending for corrections totaled $52 billion, representing 7.5% of general funds spending.

  • “Examining Fiscal 2010-2012 State Spending.” National Association of State Budget Officers. Page 52
 
Medicaid has traditionally been one of the country’s largest and fastest growing healthcare programs. Covering more than 62 million low-income Americans, Medicaid spending totaled about $414 billion in 2011.

  • “The Medicaid Program at a Glance.” The Kaiser Commission on Medicaid and the Uninsured. March 4, 2013
 
These companies offer states (who pay for approximately 40-50% of Medicaid’s costs) predictable costs and the assumption of much of the risk in treating these traditionally difficult populations to manage.

  • “The Medicaid Program at a Glance.” The Kaiser Commission on Medicaid and the Uninsured. March 4, 2013
 
Just one percent of all Medicaid beneficiaries account for 25 percent of all expenditures.

  • Letter from Kathleen Sebelius, The Secretarty of Health and Human Services. February 2011