Medicaid managed care: how to target efforts to reduce costs.

Mary E Charlson,Walid Michelen,Martin T Wells,Balavenkatesh Kanna,Van Dunn

doi:10.1186/1472-6963-14-461

Abstract

BackgroundTo be successful, cost control efforts must target Medicaid Managed Care (MMC) beneficiaries likely to incur high costs. The critical question is how to identify potential high cost beneficiaries with simple, reproducible, transparent, auditable criteria. Our objective in this analysis was to evaluate whether the total burden of comorbidity, assessed by the Charlson comorbidity index, could identify MMC beneficiaries who incurred high health care costs.MethodsThe MetroPlus MMC claims database was use to analyze six months of claims data from 07/07-12/07; the analysis focused on the total amount paid. Age, gender, Charlson comorbidity score, serious mental illness and pregnancy were analyzed as predictors of total costs.ResultsWe evaluated the cost profile of 4,614 beneficiaries enrolled at MetroPlus, an MMC plan. As hypothesized, the comorbidity index was a key correlate of total costs (p < .01). Yearly costs were more related to the total burden of comorbidity than any specific comorbid disease. For adults, in addition to comorbidity (p < .01) both serious mental illness (p < .01) and pregnancy (p < .01) were also related to total costs, while age, drug addiction and gender were not. The model with age, gender, comorbidity, serious mental illness, pregnancy and addiction explained 20% of the variance in total costs. In children, comorbidity (p < .01), serious mental illness (p < .01), addiction (p < .03) and pregnancy (p < .01) were associated with log cost; the model with those variables explained 6% of the variance in costs.ConclusionsComorbidity can be used to identify MMC beneficiaries most likely to have high costs.

Highlights

To be successful, cost control efforts must target Medicaid Managed Care (MMC) beneficiaries likely to incur high costs
States have steadily increased mandates for Medicaid recipients to enroll in Medicaid Managed Care (MMC)
In this analysis of beneficiaries enrolled in an MMC plan, our objective was to evaluate whether the comorbidity index identified Medicaid beneficiaries who incurred high health care costs, controlling for other important contributors to costs in Medicaid patients, such as mental illness and pregnancy [8]

Summary

Introduction

Cost control efforts must target Medicaid Managed Care (MMC) beneficiaries likely to incur high costs. The critical question is how to identify potential high cost beneficiaries with simple, reproducible, transparent, auditable criteria. Our objective in this analysis was to evaluate whether the total burden of comorbidity, assessed by the Charlson comorbidity index, could identify MMC beneficiaries who incurred high health care costs. It has been estimated that under the Patient Protection and Affordable Care Act 25%, of U.S residents are likely to be insured by Medicaid [4], increasing the need to identify potential high cost MMC beneficiaries with simple, reproducible, and auditable criteria that can be applied prospectively as patients enroll. The Charlson comorbidity index can be assessed by questionnaire, analysis of medical records or claims data [6,7]

Objectives

Results

Conclusion