In California, Medi-Cal Managed Care
Is Superior To Medi-Cal Fee-For-Service

Richard Bruno and Dr. Bradley Gilbert

 In March 1993, the California State Department of Health Services issued a State Strategic Plan for Medi-Cal Managed Care. The goal - to transfer the delivery of care for the majority of the state’s Medi-Cal population from a predominantly fee-for-service payment system to capitated managed care.

The State of California has steadily increased its commitment to the large-scale expansion of managed care within the Medi-Cal Program in order to improve beneficiaries’ access to quality preventative and primary health care while acting as a prudent purchaser of services.

California’s Strategic Plan allows for each of nine participating counties in the program to develop a managed care program to support the Safety Net/Indigent Care Providers in partnership with traditional Medi-Cal Providers in their local counties. This public/private partnership is designated the "Local Initiative" by the State. Each county also has one designated "Mainstream Commercial Provider" that is a pre-paid, private health plan. The Local Initiative and the Commercial Provider are the two Medi-Cal Managed Care Plans to be offered. California hopes this "Two Plan Model" will provide Medi-Cal beneficiaries freedom of choice in selecting their medical services and allow for competition between the two systems in terms of service and costs.
This study examines one Local Initiative – Inland Empire Health Plan – created as a not-for-profit, joint powers, public entity by Riverside and San Bernardino counties, California.
This comparative analysis focuses on the differences between the Inland Empire Health Plan (IEHP) quality of care system as a Medi-Cal Managed Care Plan and Medi-Cal Fee-For-Service (FFS). IEHP believes the system it has instituted to assess, monitor, and improve the quality of care delivered to Medi-Cal beneficiaries produces a level of care that is demonstrably far superior to the Medi-Cal FFS system. The end result is better health care for California’s Medi-Cal beneficiaries.
Many of the areas reviewed exist in other managed care plans and, therefore, are a reflection of managed care systems in general. However, since all managed care plans are different, the descriptions cited are specific to IEHP.
The information that follows outlines the various programs, processes, or systems in place at IEHP and/or its contracted providers that are designed to assess, monitor, improve, and deliver a higher quality of care for IEHP members. In this analysis, a brief description of each particular item is presented in contrast to Medi-Cal FFS.
Detailed descriptions of each program, process or system summarized in this paper are available from IEHP’s Internet Web site (www.iehp.org) or copies may be obtained by calling (909) 890-2000.
QUALITY OF CARE
Delivering high quality care in the IEHP Managed Care environment is a multi-faceted process that begins before a member selects IEHP as their health plan. What follows is a list of specific programs, processes, or systems that positively affect the quality of care delivered to IEHP members. These items are generally not required or do not exist in Medi-Cal Fee-for-Service.  
1. Physician Credentialing

IEHP - Credentialing is the process of reviewing the medical education, residency training, work experience, malpractice history, and other pertinent information regarding all participating IEHP physicians. The credentialing process includes submission of specific documents by the IPA and subsequent review of all pertinent information by IEHP Provider and Medical Services staff. All physicians are reviewed and approved or denied participation by the IEHP Medical Director, with input and recommendation by the Credentialing and Grievance Subcommittee peer review when necessary.

An IEHP primary care physician must have appropriate credentials in General Practice, Pediatrics, Internal Medicine, Family Practice, or OB/GYN. All specialty care physicians must be board certified or demonstrate training and expertise equivalent to board certification to be approved as a specialty provider for IEHP.

Physicians with serious patterns of malpractice, actions against their licenses, or inadequate training are not approved as IEHP providers

Medi-Cal FFS - There is no equivalent process for approving physicians or allowing participation in Medi-Cal FFS. Participation in the program for outpatient care only requires completion of an application and possession of a valid medical license.
2. Physician Site Review

IEHP - All Primary Care Physician (PCP) sites are required to undergo a site audit. IEHP staff performs all site audits. These audits are a comprehensive review of the PCP facility, including review of the physical plant, policies and procedures and medical records. A 15-page facility review checklist is utilized that includes the following categories:
a. Administration
b. Physical Facility
c. Clinical
d. Pediatric Preventive Services Requirements
The site audit confirms that the PCP site meets IEHP, state, and federal standards in the areas noted above. In addition, the site visit confirms that the PCP is physically on-site a minimum of 20 hours per week to assure that they are available for patient care. Any site that scores less than 80 percent or scores above 80 percent but is unable to correct deficiencies noted at the site visit, is not approved as a site for IEHP.

Medi-Cal FFS - There is no equivalent site audit under Medi-Cal FFS.
3. Hospital Facility and Services Review

IEHP - All contracted hospitals are required by IEHP to complete a hospital review checklist that documents the facilities and services available at or through the hospital. The information provided also documents the arrangements that the hospital has made for services not provided on-site, including details regarding the subcontractor. Subsequently, IEHP Provider Services staff and IEHP’s Medical Director visit each contracted hospital to verify facilities and services provided as documented in the completed form. This activity assures that all necessary inpatient services are available and organized for IEHP members.

Medi-Cal FFS – Under Medi-Cal FFS, hospitals are required to be licensed by the California Department of Health Services (DHS).
4. Access to Care

IEHP currently has over 600 PCPs available to its members. This contrasts with the approximately 300 PCPs that provided care to Medi-Cal beneficiaries in Riverside and San Bernardino Counties under the Medi-Cal FFS system.

IEHP specifically monitors members’ access to care through the following access studies:
a. Appointment Availability

A minimum of two times per year, every PCP in the IEHP network is surveyed for the waiting time for appointments in the following categories:
i. Well Child (if appropriate)
ii. Physical Exam
iii. Routine Visits
iv. Urgent Visits
Contracted staff acting as patients perform the survey. They request appointments to learn what members actually encounter. IEHP staff prepares scenarios for each type of appointment, which are used by the contracted staff when calling for the next available appointment. Contracted staff essentially represents actual patients attempting to make an appointment. Results from the survey are collated by PCP and IPA which allows IEHP to determine compliance with appointment availability standards. Non-compliant PCPs are required to change their procedures to assure appointments are available within the required time frames.
b. 24-hour Access to Medical Care

A minimum of two times per year, IEHP staff calls every PCP’s 24-hour access phone number during off-hours. The staff member continues with the call until connected with a physician or licensed triage personnel. IPAs are notified of PCPs who fail the study and an immediate correction is requested. This study assures that members attempting to reach their PCP after hours for advice or care direction will have access to their PCP, or an appropriate triage system.
Medi-Cal FFS - There are no standards or monitoring for access in the Medi-Cal FFS system for either wait-time for appointments or after-hours access to PCPs or phone triage systems. In fact, under Medi-Cal FFS there is no requirement for physicians to be available to their patients after hours.
5. Pharmacy Benefit Management System

IEHP - A Pharmacy Benefit Management system (PBM) is utilized to deliver the IEHP outpatient pharmacy benefit to its members. Processes include:
a. Use of a Formulary

IEHP utilizes a formulary, which is a list of medications that are immediately available to IEHP members upon prescription by a physician. These medications have been selected through a rigorous review process utilizing clinical pharmacologists, input from practicing physicians, community pharmacists, and medical literature. Medications are selected based on therapeutic efficacy first and then cost-comparison if relevant. In addition to medications on the formulary, any medically necessary medication is available to IEHP members upon prescription by a physician and submission of a request through the prior authorization process.
b. Patient Identification

IEHP is able to identify members who are at risk for or have serious medical conditions using pharmacy data. These members are referred to the IEHP Case Management Program to assure that appropriate care is being arranged for and delivered through the IPAs and hospitals.
c. Drug-Drug Interactions, Inappropriate Dosing, etc.

IEHP’s PBM system immediately notifies pharmacists of potentially serious drug-drug interactions, under or over-dosing or other potential problems with a particular prescription. This allows the pharmacist to contact the prescribing physician and/or counsel the member as needed.
Medi-Cal FFS - Although the Medi-Cal FFS pharmacy system does provide certain information to pharmacists regarding drug-drug interactions, there is no equivalent case-finding activity and the Medi-Cal formulary is not primarily based on therapeutic efficacy. In developing the IEHP formulary, IEHP identified drugs on the Medi-Cal formulary that are seriously outdated and potentially dangerous. IEHP does not receive compensation or rebates from pharmaceutical manufacturers for any drugs on its formulary.
6. Member Medical Grievance System

IEHP - Medically related grievances from all IEHP members are handled by IEHP Medical Services staff. Urgent grievances involving potential negative health impact on the member are resolved immediately with the goal being the maintenance or improvement of the health status of the member. Routine grievances are handled by involving the PCP, Specialist, IPA, Hospital, Pharmacy Benefit Manager or Vision Benefit Manager to ensure accountability and follow-up. All resolutions are reviewed and approved or rejected by the Grievance Supervisor in consultation with Medical Services staff. All grievances are tracked and trended by PCP, IPA, hospital, pharmacy, vision provider, etc. Any significant trends or serious grievances are presented to the Medical Director and the Credentialing and Grievance Committee. Serious individual grievances or trends in grievances for particular providers can result in action against the providers including the termination of participation with IEHP.
Medi-Cal FFS – The state’s Medi-Cal FFS system has no process in place for the immediate or urgent resolution of a beneficiary’s grievance. In addition, there is no system for tracking or trending grievances by providers. Therefore, the state has little ability to take action against providers that demonstrate serious negative patterns of care or behavior.
7. Utilization Management/Specialty Referral Oversite

IEHP - The majority of Utilization Management (UM) is delegated by IEHP to its contracted IPAs. IPAs are required to have specific personnel, processes and reporting procedures in place to provide timely and appropriate utilization management decisions. IEHP performs pre- and post-contractual audits on all IPAs to document the timeframes and results of the IPA processes. All IPAs are required to have in place a second opinion procedure, which facilitates IEHP members getting second opinions if necessary. In addition, IPAs are responsible to coordinate care between the PCP and specialist.
IEHP closely monitors the timeliness, quality, and coordination of specialty referrals for IEHP members. This monitoring ensures that IEHP members receive the appropriate level of care at the proper time.
IEHP Medical Services staff review all deferrals, modifications and denials for specialty referrals. IPAs report each denial on a denial log that includes: 
a. Patient Name
b. Provider Name
c. Type of Referral
d. Reason for Referral
e. Decision (denial, modification or deferral)
f. Reason for Decision.
IEHP’s review looks for incorrect or inappropriate denials and trends in denials by IPA.
Medi-Cal FFS - Medi-Cal beneficiaries can self-refer to specialists for care. The specialists are not specifically credentialed and there is no specific system in place to assure coordination of care between the specialist and PCP.
8. Case Management Program

IEHP has an active Case Management Program that identifies, refers, and/or case manages IEHP members with special needs or medical issues. The goals of Case Management include providing quality care along a continuum, decreasing the fragmentation of care across many settings, enhancing the members’ quality of life, and cost containment.
a. Case Identification

IEHP uses a variety of sources to attempt to identify individuals who would benefit from case management services. Sources include:
i. Pharmacy Utilization Data
ii. PCPs
iii. IPAs
iv. Hospitals
v. County Programs
vi. Member Self-Referrals/Calls
vii. Grievances
In many cases, IEHP staff is able to identify at-risk IEHP members early, thereby assuring adequate resources can be obtained and coordination of care can occur.
b. Case Management

Case management by IPA, hospital, and/or IEHP staff involves a multi-disciplinary team approach to working with IEHP members. Specialized knowledge, services and referral entities are all utilized to determine the best approach to providing the appropriate care and/or services needed by the member. Individualized care plans are developed addressing all aspects of the member’s health care needs.
Medi-Cal FFS - Other than some specific targeted case management programs, the Medi-Cal FFS system does not have an organized case management system that identifies, coordinates care, and provides case management services to Medi-Cal beneficiaries. Many county or non-profit agencies do receive funds from other sources and deliver case management services to Medi-Cal members, but it is not organized through the FFS system.
9. Health Education

IEHP - Health Education is increasingly vital to managing health costs by implementing preventative medical programs. IEHP has the following programs:
a. Specific Member Education Programs

IEHP provides targeted member education programs to members identified with specific illnesses such as:
i. IEHP Asthma Program - The IEHP Asthma Program is a program for children with asthma and their caregivers. We actively outreach to members with asthma to initiate enrollment in our four-hour, two-part asthma classes that provide education designed to improve the health of the member through identifying asthma triggers, assessing breathing status, and proper medication use.
ii. IEHP Diabetes Program – The IEHP Diabetes Program is designed to assist members in managing their diabetes. We actively outreach to members with diabetes to initiate enrollment in a comprehensive diabetes education program.
b. Health Education Material For Members

IEHP has developed a series of health education materials for members. The materials include the Evidence of Coverage, Quarterly Member Newsletters, as well as other items that exclusively focus on health education such as:
i. Member Health Education Pamphlets – IEHP has developed six health education pamphlets that are placed in all IEHP PCP offices. These pamphlets cover the following topics:
a. Asthma
b. Immunization
c. Family Planning
d. Child Safety
e. Pregnancy
f. Role of the PCP
ii. The Healthy Child Handbook – To better inform parents about what to do when their child gets sick, as well as advise them how to prevent illness, IEHP developed a Healthy Child Handbook. This 150-page handbook covers over 35 topics and has been extensively reviewed by IEHP members and other community representatives to assure relevance and usefulness.
c. Community Resource Directory

IEHP has developed an extensive 320-page directory of community based health-related services that is placed in all IEHP PCP offices and all participating IPAs and hospitals. The directory covers many areas including adoption services, abuse, alcohol, battered women, safety, diabetes, death and dying, etc.
Medi-Cal FFS - There is no equivalent range of health education activities or resources available through Medi-Cal FFS
10. Prevention Programs

IEHP - Targeted prevention programs are delivered to IEHP’s members. Two current prevention programs are:
a. The Infant Car Seat Program

This program has been developed to increase car seat use among IEHP infant and child members. IEHP members are asked to attend a class on the importance of using car seats and how to use a seat properly. At the end of the class, car seats are provided at no cost to IEHP members. To date, over 500 infant car seats have been distributed to IEHP member mothers.
b. The Child Bicycle Helmet Program

This program is designed to increase helmet use among IEHP child members between the ages of five and 14-years old. IEHP members receive a safety pamphlet "disguised" as a comic book. After reading it, they are asked to take a brief written test on bicycle riding safety. Upon completion of the test, they receive a bicycle helmet at no cost. To date, over 30,000 helmets have been distributed at no cost to members and other children within our service area.
Medi-Cal FFS - There are no equivalent programs delivered through Medi-Cal FFS. Many county or non-profit agencies do deliver a myriad of prevention programs utilizing other funds.
11. Quality of Care Studies

IEHP – IEHP systematically performs a series of quality studies. The studies are focused in areas like well-child care, immunizations, prenatal care, Pap smear rates and other areas that relate to IEHP demographics. The studies are designed to measure how IEHP members are being cared for compared to national standards or benchmarks. The studies are designed to measure the performance of IEHP and its providers against these standards or benchmarks. With all studies, a comprehensive, multi-modality plan to correct any problems, issues or poor performance is developed, reviewed by the Quality Management Committee and implemented. Information for the studies is obtained from encounter data, chart reviews, and member enrollment data.
Medi-Cal FFS - There is no equivalent activity through Medi-Cal FFS. In fact, little or no baseline data exists from Medi-Cal FFS regarding most of these standards or benchmarks.
12. Encounter Data Reporting

IEHP - All IEHP contracted providers (IPAs, hospitals, Pharmacy Benefit Manager and Vision Benefit Manager) are required to submit encounter data on a regular basis. The encounter data consists of detailed information regarding types of visit, diagnosis, type of provider, place of service, type and level of service provided, etc. The encounter data serves as a rich source of information allowing IEHP to analyze the health care services being utilized by and provided to IEHP members.
Medi-Cal FFS - There is no equivalent activity through Medi-Cal FFS. Although claims data is collected, no process is in place to systematically review and analyze the data.
13. Cultural and Linguistic Requirements

IEHP California’s diverse, multi-cultural population adds another critical component to the delivery of effective and appropriate health care.
a. Language Access
i. Language Capability Survey

Twice annually, every PCP in the IEHP network is surveyed for languages spoken in their office other than English. Spanish is the IEHP threshold language. PCP offices are queried in Spanish if they have indicated a proficiency in this language
ii. Translation Services

IEHP maintains a contract with AT&T that can be utilized by IEHP staff and providers to provide competent translation in over 140 languages. In addition, all of IEHP Member Services Staff is bilingual in Spanish. Finally, for hearing impaired members, IEHP has a Telephonic Device for the Deaf (TDD) and a contract for signing translation.
b. Ethnicity 
In all facets of IEHP, ethnicity and culture and their impact on health care access, status, or other aspects of health are taken into account to assure IEHP is best serving its members.
14. Medi-Cal FFS - There is no equivalent activity through Medi-Cal FFS. 
15. Regulatory Oversight of IEHP

IEHP – Currently, IEHP is regulated by three agencies: California’s Department of Corporations (DOC) and Department of Health Services (DHS) and the federal Health Care Financing Administration (HCFA). The two most active, in terms of regulation, are the DOC and DHS. Both require a series of quarterly and annual reports. Their oversight requires IEHP to institute a multitude of internal processes and procedures to enable proper oversite and monitoring of IEHP providers, as well as production of required reports.
Medi-Cal FFS – There is no equivalent activity through Medi-Cal FFS.
SUMMARY
In summary, the information above clearly demonstrates that IEHP Medi-Cal Managed Care provides a whole series of programs, processes, and systems that are designed to enhance the quality of care delivered to its members. In most cases, no such equivalent activities occur through Medi-Cal FFS. In many cases, the differences are due to the contrast between a non-managed, minimally regulated fee-for-service system and a highly managed, tightly regulated managed care system. In certain instances, the differences are magnified, due to specific programs or activities designed and implemented by IEHP.
These programs, processes, and systems allow for the delivery of care in an organized manner, as well as the ability to constantly assess and monitor the care being delivered. Corrective action plans can be developed and implemented on a concurrent basis to improve care delivery and health outcomes. 
The lack of baseline data from Medi-Cal FFS and the relatively short period the Two-Plan Model has been in existence make it difficult to definitely conclude that health outcomes have been improved. However, activities such as credentialing, PCP site audits, access monitoring and correction certainly have improved access to quality providers for Medi-Cal beneficiaries.
 
 Richard Bruno is CEO of Inland Empire Health Plan, the 14th largest HMO in California. He is a former Chairman of the Local Health Plans of California and currently serves on the Board of Directors of the California Association of Health Plans.
Dr. Bradley Gilbert is IEHP’s Medical Director. In 1997, Dr. Gilbert was one of 30 members appointed by the Governor and State Legislature to the California Managed Health Care Improvement Task Force. Previously, he served as the Health Officer for Riverside County, CA and San Mateo County, CA .