II. Key Content Areas for the Workshops

While each workshop was customized to meet the needs of the individual States, in fact, some
standardized subject areas were covered by the workshops on issues ranging from Medicaid,
SCHIP, managed care contracting, and their relationship to maternal and child health programs.
Each of the trainings was a mixture of didactic presentations by the facilitators, discussions led
by the facilitators, and group problem solving. The pages that follow in this section contain the
standardized information that was transmitted at the workshops. See the Appendices for the
background information specific to each of the States visited.

Medicaid and SCHIP Policies to Improve Child and Family Health

• Medicaid is a leading purchaser of pediatric care. It is a source of coverage for one out of
  every five U.S. children, including more than one-third of births. Seen in another light, the
  program covers 60 percent of poor children younger than 18 and nearly half of births to low
  income women.
  
  
• Children need coverage and benefits tailored to their unique needs and designed to foster
  their health, growth, and development. Medicaid’s Early and Periodic Screening, Diagnosis,
  and Treatment (EPSDT) package of benefits and services are specifically designed to fit with
  pediatric clinical standards and children’s health needs.
  
  
• With Medicaid, poor children's access to health care is similar to that of non-poor, privately
  insured children.
  
  
• Millions of uninsured children are eligible for, but not enrolled in, publicly financed health
  coverage through Medicaid or SCHIP. Effective outreach and enrollment can make a
  difference in coverage levels.
  
  
• Children are half of all Medicaid enrollees, but represent only 16 percent of the total program
  spending primarily because they use less expensive, primary and preventive services. The
  average per capita Medicaid cost for a child is approximately $1,150, compared to more than
  $10,000 per elderly enrollee.
  
  
• In more than half of the States, Medicaid has been used to expand health coverage beyond
  traditional groups. Under current Federal law, Medicaid can be used to cover millions more
  children and their parents.
  
  
• SCHIP offers no individual legal entitlement to a federally defined benefit. In the 35 States
  that maintain separately administered SCHIP programs, child health benefits vary. States are
  obligated to use their funds to purchase coverage known as “child health assistance,” making
  separately administered SCHIP plans a form of premium support, with broad discretion given
  to contracting health plans.

Managed Care and Children

An increasing number of children receive health coverage and services through Medicaid or
SCHIP managed care arrangements.

• Overall, more than half of all Medicaid beneficiaries are enrolled in some form of managed
  care in all States and the District of Columbia, except Alaska and Wyoming.
  
  
• Children are the group in Medicaid most likely to be required to enroll in managed care.
  Children are more likely than beneficiary groups such as the elderly, pregnant women, adults
  with disabilities to be included in mandatory managed care enrollment rules under Medicaid.
  
  
• In 1998, more than half (55 percent) of Medicaid beneficiaries enrolled in managed care
  were children under age 21. Many SCHIP eligible children are enrolled -- on a voluntary or
  mandatory basis -- in managed care arrangements.
  
  
• Children in Medicaid SCHIP plans are entitled to the same benefits and protections as
  children in regular Medicaid plans.
  
  
• Among 26 States using separate, non-Medicaid SCHIP and comprehensive managed care in
  2000, 11 States integrate the SCHIP managed care contract with the Medicaid contract.¹

The promise of managed care is that it can reduce costs to purchasers while improving health
outcomes for the insured individual. Managed care organizations (MCOs) seek to fulfill this
promise through three basic mechanisms: organizing provider relationships, limiting what will be
covered, and controlling enrollee access to services. Controls on access to service generally are
aimed at high-cost and unnecessary services (e.g., some elective surgery, and emergency
department use for routine care).² In theory, MCOs also will seek to ensure necessary care,
which can help enrollees remain healthy and reduce long-term costs. In practice, MCOs’ limits
on care are more frequent than promotions for utilization of health services, primarily because
they have greater incentives to reduce short-term than long-term costs. For children, such
emphasis on short-term results is a disadvantage.

Improving Child Health Access and Outcomes through Effective Managed Care
Contracting

Managed care arrangements are defined in contracts between the purchaser and the MCO, as
well as between the managed care organization and its network providers. The contract between
the MCO and the purchaser – in this case the State Medicaid or SCHIP Agency – sets the
boundaries on what services will be delivered, when, and how. As use of managed care has
increased, contracts have become an increasingly important part of the legal and regulatory
framework under which children and families receive health care. (See Figure A).

Solid managed care contracts are based on negotiation and an agreement that reflects “a meeting
of the minds.” Success depends on clearly defining the terms of the contract, specifying the
performance objectives and measures, and using multiple enforcement tools with varying levels
of severity. When State governments are the purchasers, contracts also should specify the nature
of the agreements and interactions expected between MCOs and various public programs (e.g.,
local health departments, WIC Supplemental Food Program sites).

[D]

Managed care contracts are a particularly useful tool for States to use in efforts to improve health
care quality. (See Figure B.) State Medicaid or SCHIP Agencies cannot overcome certain
systemic barriers to effective pediatric preventive care, such as constraints on access to care,
inadequate provider training and practice, or deficits in parental knowledge and parenting skills.
States can, however, set out expectations for quality and, in turn, monitor quality, pay for
performance, or penalize those who do not perform.

Managed care contracts represent a unified policy Statement by the State and are the principal
means to create legally binding agreements with managed care organizations (MCOs). Contracts,
and the negotiations around contracts, are the means for working out some very specific
challenges in the delivery system. Furthermore, if a benefit, quality standard, or other
expectation is not in the contract, MCOs and their providers cannot be expected to meet the
State’s expectations. Contracts are also useful for policy makers, as a means to express
priorities. If the State’s contract development process is inclusive, it creates inter- and intradepartmental
communication about the inter-relationship of categorical and entitlement
programs. Such processes force categorical programs to think about adapting their programs to
an evolving health care delivery and financing system. Finally, well-expressed contracts set the
framework for communication with beneficiaries (covered persons), including what should be
contained in enrollment materials, how people can engage in grievance processes, and what
protections exist for those involuntarily disenrolled.

[D]

Managed Care Contracts and Child Health

A series of analyses of States’ Medicaid managed care contracts by GWU researchers ³
found that such contracts express a vision of health care and the health care system, not
merely health coverage. As State Medicaid Agencies become more sophisticated health
care purchasers, contracts have become larger and more complex. Increasingly, States include
detailed specifications that emphasize the structure and process of care. Contracts are
generally comprehensive and specific in the areas of networks, access, service delivery,
quality improvement, data collection and reporting, consumer protections, and provider
payments. At the same time, States continue to make fairly limited use of provisions regarding
resolution of conflicting treatment decisions in the case of contractors and agencies responsible
for the same member. Detailed analysis of contract provisions on pediatric care found that State Medicaid
managed care contracts generally have:

• Merged coverage and care into comprehensive specifications that give attention to
  pediatric care delivery -- not just coverage.
• Increased specificity regarding services for special populations, such as children with
  special health care needs.
• Attempted to close the gap between Federal
  requirements and State contracts.
• Not often met the challenge of incorporating the broad EPSDT benefits into contracts,
  despite greater attention to child health.
• Specified the inclusion of "pediatric providers" in the managed care network.⁴

Pediatric Purchasing Specifications

GWU has prepared purchasing specifications to assist State agencies, private purchasers, and
others interested in improving managed care contract provisions. The Medicaid Pediatric
Purchasing Specifications include numerous provisions addressing a wide range of issues for
Medicaid-eligible children and adolescents.

The purchasing specifications are based on an understanding of existing contract provisions
(such as those in the Medicaid managed care contract database), as well as review by Federal and
State government agencies, issue content experts, and consumer advocates.

The GWU Pediatric Purchasing Specifications are not official government policies and do not
define a right and a wrong way to set up contracts. They do provide advice on how to construct
contract provisions so that they accurately and precisely reflect the intentions and expectations of
those who purchase managed care coverage. They give options and alternatives based on legal or
clinical guidelines -- they do not indicate a single "correct" course of action. The Purchasing
Specifications are designed for “plug and play” to address key issues in the context of a larger
purchasing process in a specific State context. Thus, they can assist Medicaid and SCHIP
agencies operating in different health systems and under different State policies.

Purchasing specifications might be used as a checklist for comparing contract language, as a
source for examples of legally accurate provisions, or as a way to explore specific contract issues
in greater depth. The following examples illustrate how purchasing specifications might be used
by different agencies.

State Maternal and Child Health (MCH) Programs may wish to use the Pediatric Purchasing
Specifications to:

• Raise maternal and child health issues with the State Medicaid agency;
• Integrate appropriate public health surveillance activities -- such as immunization registries
  or birth defects surveillance -- with managed care efforts;
• Clarify the role of Programs for Children with Special Health Care Needs (CSHCN) in
  financing extra items and services for Medicaid beneficiaries under age 21;
• Ensure that quality standards appropriate to children's unique developmental, physical, and
  mental health needs are reflected in the contract;
• Ensure reimbursement for Medicaid-covered services provided through local health or early
  intervention agencies (under Part C of IDEA); and
• Define linkage and referral mechanisms between outreach and home visiting programs for
  families with young children.

State Medicaid Agencies may choose to use pediatric specifications to:

• Maximize the value of purchasing Medicaid or SCHIP coverage for children;
• Better define standards and expectations of MCOs, particularly under the EPSDT benefit for
  children and services for children with special health care needs;
• Better define services that go into determination of a capitation rate for Medicaid or SCHIP,
  particularly the EPSDT benefit for children and services for children with special health care
  needs;
• Better define performance expectations of MCOs, beyond typical measures such as
  immunization or prenatal care rates;
• Define the outreach, informing, and support services required under EPSDT, clarifying and
  specifying the expected role of MCOs;
• Better integrate Medicaid or SCHIP managed care with other publicly supported services
  such as early intervention for infants and toddlers, school-based health services, home
  visiting, or mental health services;
• Assist in reducing overall State spending by avoiding unnecessary public health expenditures
  for children enrolled in Medicaid or SCHIP (e.g., immunization, lead poisoning,
  transportation, or case management); and
• Focus on selected outcomes to improve health and reduce costs in areas such as obstetrical
  risk management, early childhood developmental screening, or preventive services to
  adolescents.

Having clear and specific contracts is key to optimal service for children and families enrolled in
managed care plans. The Pediatric Purchasing Specifications are a tool to assist with improving
contract language. Each player in the health care system has a role to play. Suggestions for
using the pediatric purchasing specifications to improve contract provisions related to pediatric
care are shown in Table 2.

¹ Rosenbaum S and Markus AR. Policy Brief #2 "State Benefit Design Choices under SCHIP: Implications for
pediatric health care. Washington, DC: The George Washington University, 2002.
² Rosenbaum S, et al. Negotiating the New Health System: A nationwide study of Medicaid Managed Care
Contracts. (First Edition) Washington, DC: The George Washington University, 1997.
³ Rosenbaum S, et al. Negotiating the New Health System: A nationwide study of Medicaid Managed Care
Contracts. First Edition, 1997; Second Edition, 1998; Third Edition, 1999; Fourth Edition, 2001. Washington, DC:
The George Washington University.
⁴ Rosenbaum S, Sonosky CA, Shaw K, et al. Negotiating the New Health System: A nationwide study of Medicaid
Managed Care Contracts. Third Edition, Vol. 1, 1999. Washington, DC: The George Washington University.