Report Authors: Emma Kurnat-Thoma, PhD, MS, RN; Director, Research Services. Emily Schifrin, MS; Director, Measurement Innovation

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2 Report Authors: Emma Kurnat-Thoma, PhD, MS, RN; Director, Research Services Emily Schifrin, MS; Director, Measurement Innovation Lisa Saheba, MPH; Senior Research Analyst Robert Honigberg, MD, MBA; Medical Advisor Marybeth Farquhar, PhD, MSN, RN; Vice President, Research & Measurement URAC thanks the following individuals for contributing to the design and analysis of the 2010 survey, and preparation, review of the 2011 draft report: Stephanie Brown, Vice President, The HSM Group; Natasha Elsner, Senior Analyst, The HSM Group; Regina F. Berg, Senior Business Planning & Market Research Manager, URAC; Trinay D. Blake, Program Publication Manager, URAC; Sue Demarino, Director of Accreditation; Kristin Gill, Segment Marketing Manager, URAC; Christine Leyden, Senior Vice President & General Manager, Client Services and Chief Accreditation Officer, URAC; Jessica Lutz, Corporate Communications Specialist, URAC; Lynn Martin, previous Director, Research Services, URAC; Jane Webster, Senior Vice President, Research, Planning & Development, URAC; Anthony Wisniewski, Senior Vice President, External & Legal Affairs, URAC; and Alan P. Spielman, President & CEO, URAC. URAC would especially like to thank the survey participants and Cheri Lattimer, Executive Director, Case Management Society of America. Without your contributions this report would not have been possible URAC. All rights reserved. Reproduction by any means in whole or part without written permission is prohibited. 2

3 Acknowledgements...2 ExecutiveSummary...4 Introduction...6 Methodology...7 I. Study Design and Instrumentation...7 II. Data Collection and Analysis...7 Findings...8 I. Respondent Profile...8 II. Overview of Medical Management Practices...15 III. Utilization Management...29 IV. Case Management...38 V. Health Information Technology and Future Trends...45 Conclusions...49 Appendices A. Terminology Glossary...51 B Medical Management Interview Q&A...54 About URAC

4 URAC is a national leader in promoting and improving health care quality through accreditation programs, education, performance measurement, and research. Approximately every five years, URAC evaluates practices and trends in medical management via an industry survey. Previous medical management survey conclusions in 2001 and 2005 helped to identify industry practices and trends. URAC s 2010 medical management survey provides a snapshot of current industry practices. This report summarizes findings from the 2010 survey within the context of recent policy changes driven by the Patient Protection and Affordable Care Act (PPACA). Taking full effect in 2014, PPACA will expand health insurance coverage to an additional 32 million currently uninsured U.S. citizens and will significantly alter the medical management landscape. For example, as the demand for access to medical management programs increases, the industry will have to augment current system infrastructure to meet these needs. Also, revised incentive structures may result in shifting patient sub-populations cared for by industry providers. For instance, providers may expect to see increased frequency of Medicaid and Medicare patients with complex comorbid health conditions, affecting participation in Utilization Management (UM), Disease Management (DM) and Case Management (CM) programs and complexity of staffing caseloads. Of particular interest to URAC is how the medical management industry may be restructuring their practices in preparation for these changes. The 2010 medical management survey instrument, consisting of 37 closed and open-ended questions, was designed to identify current industry practices and changing trends. In 2010 it was distributed to 298 URAC-accredited and 217 non-accredited organizations, 587 organizations in total. Additionally, Cheri Lattimer, Executive Director, Case Management Society of America, was interviewed and asked to expand on URAC s key findings and provide her perspective on the recent PPACA legislation. The key findings are summarized below. Key Findings Coordination of services is becoming more common among medical management programs. Taking full effect in 2014, PPACA will likely alter the organizational practices of medical management programs to accommodate up to an additional 32 million insured Americans. As prelude to this, 2010 survey respondents identify integrated CM, DM, and UM programs and cross-trained staff among service lines. With technology as a key component, companies are using these strategies to improve service coordination, communication, and efficiency within and among programs. Companies are aggressively seeking improvement in internal efficiency, patient safety, and quality of service. Responding organizations identify regular evaluation of internal processes, including: clinical performance, service quality and efficiency, staff performance, access to services, patient satisfaction, and cost. To maintain best practices, responding organizations are also updating their clinical review guidelines and coverage 4

5 decision criteria annually. To fully align with PPACA s national strategy for quality improvement, these activities will need to expand to include assessment of patient care outcomes. Health Information Technology (HIT) use is progressing, but not in all areas. The increased use of HIT is supported by the findings in the survey. The majority of responding companies make their policies and procedures available online, which is a statistically significant increase from In addition, two-thirds of companies scan medical records into their management information system. However, the adoption of electronic health records (EHRs) is slow. Less than one-third of responding companies provide electronic clinical records to clinicians, and utilization of automated telephonic system and online programs to complete UM case reviews. Adoption of HIT use may be poor due to cost of implementation and training. Companies will have to overcome these barriers to support PPACA s initiatives. Despite these challenges, responding companies are optimistic about the future role of HIT, as evidenced by their future predictions for service demands that contain strong technology components, including data analysis for strategic planning and electronic/automated UM. 5

6 Traditionally, the term medical management refers to all of a health care organization s programs that are established to prevent and manage disease or improve health. Broadly included under this umbrella are utilization management (UM), case management (CM), disease management (DM), wellness programs, independent review, telephone triage and health information services, and health call centers. A full glossary of the defined terms can be found in Appendix A. As a national leader in health care accreditation, URAC recently completed a research initiative that evaluated how medical management services are evolving in today s rapidly changing health care delivery system. This research, completed in 2010, is the third survey of medical management organizations conducted by URAC to assess and report current industry trends and to identify future market issues. To place the survey results in a fuller context for the medical management industry, URAC asked Ms. Cheri Lattimer, Executive Director of the Case Management Society of America, to comment on key findings and how the recent Patient Protection and Affordable Care Act (PPACA) legislation is impacting the industry s future. URAC s two previous research efforts, conducted in 2001 and 2005, found striking evidence of medical management practices undergoing rapid change. For example, in 2001 URAC ascertained that medical management programs were beginning to link and integrate UM, CM, and DM to create more uniform and efficient processes for health referrals and information sharing 1. As most organizations were still in an early adoption phase for electronic system implementation, creating electronic-based quality management systems was challenging in By 2005, URAC researchers found that technology adoption had advanced in many organizations. For example, service delivery mechanisms were becoming more fully integrated across technology platforms to permit extensive information sharing between staff, providers, and patients 2. Use of technology to share medical management criteria and clinical practice guidelines allowed for expansion into new business opportunities, such as web-based service delivery mechanisms, to create more effective client customization approaches. URAC s 2010 medical management survey was conducted in the context of a significantly altered and actively changing health care delivery landscape. Signed into legislation in 2010, PPACA will provide health insurance coverage to an additional 32 million U.S. citizens. Among PPACA s key inclusions that are to take effect in 2014, health plans and insurers may no longer limit coverage due to pre-existing conditions, and state-based insurance exchanges must be developed to foster information transparency and accurate comparisons between health plans. Through these changes, PPACA aims to improve 1 Greenberg, L., Carneal, G., & Hattwick. (2002). Trends and Practices in Medical Management: 2001 Industry Profile. Washington DC: URAC. 2 URAC. (2005). Trends & Practices in Medical Management: 2005 Industry Profile. Washington DC: URAC. 6

7 access, affordability, quality, safety, and efficiency of health care delivery, and these changes are likely to revolutionize the way health plans and insurers structure their business practices 3. For example, payment reforms emerging from the industry in advance of PPACA include development of integrated mechanisms of health care delivery, such as the accountable care organization, and medical home care models. Given this dramatic backdrop URAC s 2010 research effort offers a snapshot of the medical management industry at a critical turning point. Specifically, this snapshot provides a moment-intime analysis of companies expanding their use and reach of technology and aiming to provide more integrated services within the greater political context of PPACA-driven goals. I. Study Design and Instrumentation Similar to its 2001 and 2005 efforts, URAC s 2010 Medical Management survey was conducted to understand the current state of the industry and to identify trends. The 2010 survey had a total of 37 questions; most were closed-ended questions that allowed a respondent to select multiple responses. Several questions asked respondents to enter numeric values (such as number of full time employees, percentage of in-house staff dedicated to a certain medical management function, average number of cases per manager), and a small number of questions were open-ended. In addition, a telephone interview was conducted with Ms. Cheri Lattimer, Executive Director, from the Case Management Society of America. The interview expanded on URAC s 2010 key findings and identified additional trends and challenges that will affect the medical management industry in light of the recent PPACA legislation. The 2010 research study questionnaire was adapted from URAC s 2005 survey instrument. Modification of URAC s original instrument was necessary to obtain greater data specificity in certain areas (i.e., technology and information management practices and integrated services) and to provide a deeper understanding of ongoing practices in the medical management industry. II. Data Collection and Analysis To recruit participants for URAC s 2010 research, a convenience sampling strategy was employed. Invitations to participate in an online survey were ed to 298 URAC accredited medical 3 Schneider, E., Hussey, P., & Schnyer, C. (2011). Payment Reform, Analysis of Models and Performance Measurement Implications. Santa Monica, CA: RAND Health, RAND Corporation. 7

8 management companies and to 217 non-accredited health care organizations. An additional 72 invitations were also faxed to non-accredited companies. Non-accredited companies are companies in the URAC database that had inquired about or held URAC accreditation in the past. Participation in URAC s 2010 research survey was voluntary, confidential, and information obtained through the survey was not used for accreditation decisions. As the survey was administered and collected by a third party (The HSM Group), respondent identities and characteristics were kept confidential and not made known to URAC. The survey instrument was fielded twice in 2010 first in June and later in November with a minor modification between the two versions to allow greater free-text responses from participants. After the removal of duplicates, 197 partial or complete responses to the survey were included for analysis, representing a 33% response rate from the 587 total organizations invited to participate. Respondents with partially completed surveys collected in June and who attained a completion threshold of at least 30% were not invited to participate in the November collection period. Analyses of survey data was conducted by the HSM Group in conjunction with URAC staff. Statistical Package for the Social Sciences (SPSS) v14.0 was used to clean, label, and categorize data. Missing data were assessed and descriptive summary statistics (mean, median, mode, quartiles, and ranges) were generated and evaluated. WinCross v7.0 was used to conduct bivariate cross-tab significance tests. I. Respondent Profile A. Broad cross-section of organizations and service lines represented The data included in this report describes a broad cross-section of medical management organizations, with the greatest contribution from independent case management organizations and health plans. There are also multiple service lines represented, with the highest representation from utilization management and case management companies. Table 1 shows the number of respondents by company type and Table 2 shows the percentage of respondents offering various services. Respondents were often of multiple types, and typically offered more than one service line. 8

9 Table 1 Respondent Profile: Number and Type of Company** N= Independent Case Management Organization 75 Health Plan 51 Population Health/Care Management Provider 36 Third-Party Administrator 35 Quality Improvement Organization 19 Health Call Center, Telephone Triage Services 12 Medical Center or Facility 10 Pharmacy Benefit Management 4 Other 17 **Multiple responses were accepted. Table 2 Respondent Profile: Service Lines Offered** N= Utilization Management 87% Case Management 80% Disease Management 51% Independent Review Client Peer Review 50% Wellness Programs 46% Telephone Triage, Health Information, Health Call Center 44% Independent Review State Mandated 40% Pharmacy benefit management 29% Predictive modeling 29% **Multiple responses were accepted. 9

10 B. Diverse population represented Table 3 shows that survey participants serve a diverse set of consumer populations. Although the majority (87%) serves the commercial sector, government-served populations are also wellrepresented. This is similar to the composition of respondents in URAC s 2005 survey (not shown). Note that organizations serve multiple sub-populations. Table 3 Respondent Profile: Populations Served** N= Commercial 87% Medicaid 35% Medicare 32% State Employees 26% Federal Employees 22% Veterans 8% TRICARE 7% Active Duty Military 5% Other/Multiple Employer Welfare Arrangements (MEWA) 3% **Multiple responses were accepted. 10

11 C. Most lives represented using Utilization Management and Case Management services Table 4 shows the average percentage of covered lives that utilize medical management services. An average of 30% of all people in the respondents covered populations utilize UM, compared to 20% for CM. Because the mean was calculated for each health care service independently across all respondents, the total does not approximate 100%. Table 4 Respondent Profile: Percentage of Covered Lives Using Health/Care Management Services (avg. %) N= Utilization Management 30% Case Management 20% Telephone Triage (Health Call Center) 6% Wellness 5% Disease Management 9% Drug Utilization Management 7% 11

12 D. Most companies Utilization Management and Case Management service lines cover between 25,000 and 1 million lives Table 5 shows the breakdown of covered lives by respondent service line. For example, respondents offering UM services most often cover fewer than 25,000 lives (22%), between 25,000-99,999 lives (18%), or between 100, ,999 lives (15%). The majority of respondents cover between 25,000 and 1 million lives under their UM and CM service lines, although a small percentage of respondents cover more than 1 million lives under their UM and CM service lines. Table 5 also shows covered lives for DM, telephone triage/health call center, and wellness lines of service. The majority of service lines offered by survey respondents cover less than 25,000 lives. Table Respondent Profile: Covered Lives by Service Line Utilization Disease Telephone N=147 Mgmt Case Mgmt Mgmt Triage (HCC) Wellness < 25,000 22% 30% 24% 20% 20% 25,000 99,999 18% 14% 6% 7% 5% 100, ,999 15% 15% 10% 5% 4% 500, ,999 10% 6% 3% 2% 3% 1 5 million 10% 7% 6% 5% 3% > 5 million 7% 1% 0% 4% 2% Not Applicable 19% 27% 51% 56% 62% 12

13 E. Accreditation status highest for Utilization Management and Case Management service lines As shown in Table 6, 65% of 140 organizations responding reported they are accredited for UM and 38% reported that they are accredited for CM. Table 6 includes data on respondent companies that are accredited or certified by URAC or other entities, including NCQA, Joint Commission, and the Accreditation Association for Ambulatory Health Care. Because responding companies could hold more than one accreditation or certification, multiple responses were accepted and values do not equal 100%. Identification of the accrediting body was not required by the survey. However, a subset of 116 organizations chose to report their source of accreditation or certification. For that subset, Table 7 highlights responding organizations source of accreditation and certification among companies offering UM and CM service lines. Again, because companies may hold multiple accreditations and certifications, values do not equal 100%. Holding accreditation through URAC for UM and CM is most common among 2010 survey participants who identified their accreditors. Values do not total 100% as companies may hold accreditation for various sites and service lines. Also note that the accreditation data presented is in the context of responding participants; nationally, URAC is a market leader for UM accreditations at 249 organizations compared to 17 organizations certified by its competitor. For CM organizations, URAC is the sole accrediting body in the medical management industry, and presently accredits 151 organizations. 13

14 Table Respondent Profile: Percentage of Programs Accredited or Certified** N=140 Accredited/Certified Program Utilization Management 65% Case Management 38% Disease Management 14% Core Organizational Quality 11% Independent Review 9% Health Plan (HMO) 6% Workers Comp UM 6% Health Network (PPO) 5% Credentials Verification Organization 5% **Multiple responses were accepted. Table Respondent Profile: Self-Reported Accreditation/Certification among UM and CM Companies** Accrediting or Certifying Organization Percentage (N=116) Company Type Accredited/Certified (N=140) URAC NCQA Utilization Management 65% 74% 9% Case Management 38% 42% 3% **Multiple responses were accepted. 14

15 II. Overview of Medical Management Practices A. Integrated staffing Case Management combined with Utilization Management most common When companies use an integrated staffing model, they cross-train their staff to perform multiple functions (e.g., the same staff members deliver both UM and CM services). Table 8 shows the percentage of respondent companies who utilize integrated staffing models to provide medical management services. Note that multiple responses were accepted. Our data indicate that 64% of responding organizations integrate their CM activities with other medical management functions. Our analysis of open-ended survey data showed that CM is most commonly combined with UM. UM and DM services are also commonly integrated with other services. Found in Appendix B, Ms. Cheri Latimer places these survey findings into the context of recent PPACA trends in moving towards integration of medical and behavioral health for UM and CM. She identifies that cross-training of UM and CM staff will be a critical component to accommodate this recent policy directive. Table 8 Staffing Model: Percentage of Companies Using Integrated Staffing Models** N=57 to Total Number Responding Utilization Management 49% 142 Case Management 64% 140 Telephone Triage, Health Call Center 29% 77 Wellness 38% 80 Disease Management 46% 90 Drug Utilization Management 35% 57 **Multiple responses were accepted. 15

16 B. Population care management organizations are most likely to have integrated staffing model Table 9 shows the percentage of each company type that use integrated staffing models for various lines of service. For example, 42% of responding health plans report using an integrated staffing model to provide UM service. Among survey participants, population care management providers and independent case management organizations were more likely to have integrated staffing models as compared to health plans and third-party administrators. When health plans and third-party administrators used integrated staffing, they were most likely to do so for CM services. Table Integrated Staffing Model by Type of Company and Service Line** N=158 Utilization Management Case Management Telephone Triage, Health Call Center Wellness Disease Management Drug Utilization Management Health Plan 42% 58% 14% 30% 34% 26% Population Care Mgmt Provider Independent CM Organizations 71% 76% 30% 44% 63% 53% 57% 60% 42% 57% 54% 36% Third-Party Admin. 46% 69% 25% 36% 42% 54% **Multiple responses were accepted. 16

17 C. In-house staff is most often used to provide Case Management services Table 10 shows the average percentage of in-house staff used by respondent companies for providing various lines of service. For example, 86% of health plans employ in-house staff to provide UM service to consumers. Of the responding participants, population care management and independent CM organizations are most likely to employ in-house staff. Additionally, respondents providing CM service lines most often use in-house staff to do so, including: 93% of health plans; 97% of population care management providers; 96% of independent CM organizations; and 93% of third-party administrators (Table 10). Table Average Proportion In-house Staff by Type of Company** N=166 Health Plan Population Care Mgmt Provider Independent CM Org Third- Party Admin. Utilization Management 86% 97% 92% 88% Case Management 93% 97% 96% 93% Telephone Triage, Health Call Center 56% 63% 76% 36% Wellness 86% 77% 84% 63% Disease Management 64% 95% 91% 71% Drug Utilization Management 29% 85% 71% 53% **Multiple responses were accepted. 17

18 D. Commercial population receiving greatest range of services Table 11 indicates the commercial population is receiving the greatest range of medical management services. However, federal and state employees have the highest integrated UM, CM, and DM service line combinations. This is most likely the result of mandates for disease management in several state and federal programs. Table Integrated Staffing Model by Population Served** Total Number Responding Utilization Management Commercial Medicaid Medicare TRICARE/ Military Federal Employees State Employees % 40% 38% 50% 35% 55% Case Management 64% 60% 52% 58% 52% 63% Telephone Triage, Health Call Center 30% 24% 19% 9% 15% 15% Wellness 39% 35% 30% 38% 35% 30% Disease Management Drug Utilization Management **Multiple responses were accepted. 48% 48% 40% 50% 55% 54% 37% 17% 18% 0% 20% 30% 18

19 E. Drug utilization management and telephone triage more likely to be outsourced Table 12 shows in-house staffing compared to outsourced functions for various service lines. In sum, drug utilization management and telephone triage are more likely to be outsourced than other activities. Because insourcing and outsourcing strategies may vary by organization type, these findings may reflect the composition of the organizations responding to the survey. Note that percentage totals (across) are slightly less than 100% due to rounding. Table Staffing Model: In-house vs. Outsourced N=166 Avg. % Inhouse Avg. % Contracted to Individual Contractors Avg. % Delegated to Outside Orgs Utilization Management 93% 4% 2% Case Management 94% 5% 1% Telephone Triage, Health Call Center 67% 20% 11% Wellness 77% 19% 2% Disease Management 81% 13% 5% Drug Utilization Management 55% 29% 14% 19

20 F. For Utilization Management: Registered Nurses (RNs) are most often performing function; highest caseloads for Licensed Practical Nurses (LPNs), dentists, and RNs Table 13 shows staffing data for all responding companies who provide UM services. Included in this table are average number of FTEs employed by companies and their caseloads, stratified by professional speciality and license. Companies that have no FTEs because they rely solely on contractors to provide UM services were excluded from this analysis. Results show that companies most often employ registered nurses for UM functions, followed by mental health clinicians and social workers. The highest caseloads for UM are reported for LPNs, dentists, and RNs and the lowest caseloads are reported for chiropractors and pharmacists. Please refer to Appendix B for supplemental perspectives from the CMSA interview concerning occupational caseload standards and workforce trends. Table UM: Average number FTEs and case load per week per FTE Licensed Practical Nurse/Licensed Vocational Nurse Avg. Number of FTEs Median (Nonzero) FTEs Avg. Caseload per FTE per Week Total Number Responding Registered Nurse Licensed Mental Health Clinician (therapist, counselor) Licensed Social Worker Chiropractor Dentist Physician Pharmacist Physical Therapist

21 G. For Case Management: RNs most often performing function; highest caseloads for RNs and Licensed Social Workers Table 14 shows staffing data for all responding companies who provide CM services. Companies most often employ registered nurses for the case management function. Licensed mental health clinicians and social workers are the next most commonly employed professionals for CM. The highest caseloads for CM are reported for licensed social workers and RNs, and the lowest caseloads for CM are reported for pharmacists and physicians. Again, companies that have no FTEs because they rely solely on contractors to provide CM services were excluded from this analysis. Table CM: Average number FTEs and case load per week per FTE Licensed Practical Nurse/Licensed Vocational Nurse Avg. number of FTEs Median (nonzero) FTEs Avg. caseload per FTE per week Total Number Responding Registered Nurse Licensed Mental Health Clinician (therapist, counselor) Licensed Social Worker Pharmacist Physician

22 Average caseload H. UM and CM caseloads are highest for telephonic services Figure 1 compares UM and CM caseloads across various modes of service delivery: telephonic, onsite, and catastrophic. Catastrophic CM is a specialized segment of service involving the CM of patients with complex diagnoses, those who have multiple co-morbidities. Numeric data shown in the figure are the average caseloads per week per FTE for all respondents (both UM and CM). Note that UM and CM caseloads are highest for the telephonic cases; on average, 45 cases per week per FTE as compared to 10 for onsite cases and 9 for catastrophic cases. However, both UM and CM caseloads align similarly across all service delivery modes. 50 Figure 1. Typical Caseloads per week per FTE Telephonic Onsite Catastrophic All respondents UM CM 22

23 I. Volume of cases managed is the most frequently reported metric (to clients) for medical management services Table 15 shows the types of information responding organizations most commonly report to their clients. The most frequently utilized metric by medical management services is the volume of cases managed. Specifically, 91% of DM, 89% of telephone triage, 88% of UM, 87% of CM, and 75% of wellness service lines report their case volumes back to clients. Other information commonly used by responding companies for reporting includes: disposition of cases and average length of stay (UM); savings and average length of stay (CM); savings and consumer adherence (DM); comparisons to population-wide and predicted benchmarks (wellness); and response timeliness (telephone triage). Please reference Appendix B to review Ms. Cheri Latimer s comments on this section s survey findings. Specifically, she addresses how these findings relate to the broader context of PPACA, industry-wide staffing trends, available CM career pathways, and standardized caseload capacity estimations. 23

24 Table Reports to Customers** UM CM DM Wellness Telephone Triage Total Number Responding Volume of cases managed 88% 87% 91% 75% 89% Disposition of cases 73% 40% 25% 18% 29% Average length of stay 68% 44% 25% 11% 14% Timeliness of our response 61% 37% 40% 10% 53% Savings report 60% 60% 47% 43% 23% LOS by diagnosis 55% 36% 15% 7% 11% Customer specific data compared to population data 39% 35% 43% 61% 29% Customer data compared to national norms 28% 15% 36% 39% 17% Re-admit rate within seven days of discharge from acute care 27% 21% 15% 20% 6% Fiscal ROI 26% 32% 40% 29% 17% Benchmark performance against predictive model for like populations 22% 16% 32% 46% 11% Clinical outcome data obtained from medical records 19% 31% 26% 25% 9% Consumer adherence to recommended treatments 11% 24% 45% 39% 23% **Multiple responses were accepted. 24

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