When is paying more often for something less expensive in the long run?

When the person being paid more often is a physician case manager, guiding you and your family toward good health.

For the last decade, the Kansas Department of Social and Rehabilitation Services has operated a Primary Care Case Management (PCCM) program for Aid to Families with Dependent Children and disabled Medicaid populations in the seven most populous Kansas counties -- Shawnee, Sedgwick, Saline, Douglas, Johnson, Leavenworth and Wyandotte. Under the program, Medicaid recipients in these eligibility categories choose a physician case manager from physicians under contract with SRS. The physician provides regular primary medical services and refers them to specialists when needed.

A recent study by auditors within the SRS Commission on Income Support and Medical Services shows this method of managed care has

provided significant cost savings for the Kansas Medicaid budget. The study was done as SRS prepared information for a bi-annual renewal of a waiver from the federal Health Care Financing Administration for the state's PCCM program.

The waiver renewal application was submitted to HCFA late last month. As Kansas moves toward a managed care system for the entire state, the PCCM model is expected to be the primary managed care program for rural Kansas. The waiver renewal also included an application to operate a capitated managed care program under which SRS will contract with health maintenance organizations. Capitated managed care is expected to be the primary managed care model in urban areas. However, both forms of managed care are expected to be available in some areas.

In their study of the PCCM program, auditors compared Medicaid costs for recipients receiving care under a primary care physician in the PCCM counties to similar groups of recipients across the state who are not in a PCCM program and are provided health care based on a fee-for service program. Costs associated with the PCCM program and the fee-for service model were compared in five major categories of medical service -- inpatient hospital, outpatient hospital, physician, pharmacy and lab/xray.

The results were not close: it would have cost taxpayers an additional $22 million to provide health services to Medicaid clients in those seven counties without Primary Care Case Management, according to the audit. It is anticipated the cost avoidance attributed to this form of managed care come about because Medicaid recipients see their physician significantly more often, resulting in preventive services replacing more expensive emergency and in-patient hospital care.

"It appears by creating a direct link between clients and a primary care physician, people are receiving much more primary and preventive care," said SRS Secretary Donna Whiteman. "This results in better care for clients, less hospitalization, and much less cost to Kansas taxpayers."

Whiteman said cost savings not only come about because of a reduction in the inappropriate use of hospital emergency rooms, but also because clients establish a relationship with their physician and the physician can identify medical need early.

"It is like the proverb, an ounce of prevention is worth a pound of cure," she said.

Medicaid is a joint federal/state program, with Kansas taxpayers paying about 40 percent of costs. Besides improving service to clients and increasing access, a major reason the Kansas Legislature wants SRS to move toward managed care is that costs of the Medicaid program are skyrocketing -- up from $435.4 million in fiscal year 1990 to $814.5 million in the 1995 budget.

Although the SRS audit of the Primary Care Network shows major cost avoidance, Secretary Whiteman said the program is not without problems. For example, the current recipient enrollment process is flawed and recipients often are not assigned to a primary care physician for several months. In addition, the current provider recruitment process is inadequate and several counties in the program do not have enough physicians accepting Medicaid patients.

Whiteman said as Kansas moves toward statewide managed care, changes will be made in the Primary Care Network program to eliminate these problems. These changes include:

*Development of a provider task force and peer review committee to assist in recruitment of providers and to conduct an ongoing review of provider quality care.

*Expand the number of provider types in the PCCM program, including adding Advanced Registered Nurse Practitioners, clinics and other group practices as primary care case managers.

*Through a contract with the private sector, provide education and training for recipients on the managed care program.

Page Last Updated: May 29, 2001