Total cost of care is challenging to define. In general, we consider total cost of care to be the total cost of what it takes to treat a population. Is it direct provider fees and hospital fees? What about labs? Medications? Caregiver burden? Time away from work?

When I was in clinical practice—whether internal medicine or psychiatry out-patient clinics— I commonly saw what I called the Ziploc phenomenon—the arrival of a patient carrying a Ziploc bag of prescription drugs. We would spend time going through that bag to help me understand what the patient was actually taking. There would be medications from an ER visit, from an in-patient stay, and those that had been in the medicine cabinet at home. There would be brand names and generics of the same medication or different doses with different instructions. And despite all these medications, some patients invariably had ended up with higher total cost of care due to medication-related issues such as confusion, side-effects, falls, or just from not taking the medication at all because they did not feel better.

Typically, the total cost of care is the sum of in-patient, out-patient, clinic, ancillary, pharmacy, and all other types of direct care services and is defined as a per member per month expenditure. Members continuously enrolled in the health plan for at least a year make up the denominator. Groups who receive an intervention, like case management, are compared against a like-group that does not. The challenges really come when trying to attribute whether the intervention or some other occurrence made the difference in lowering the total cost of care. In order for comparisons to be statistically valid, techniques such as risk adjustment, case-matched controls, trend analyses, and regression analyses are used.

A couple of years ago, I took a role that focused on developing innovative clinical programs for Magellan Rx Management, a pharmacy benefits management company. The CEO challenged me with bringing forward clinical programs that looked different than what typical PBMs offered. I went back to my roots in med/psych and epidemiology. We drew on the interventions more commonly used in health plans. Surely, in the data, we could find the groups of people who needed support, whether in dealing with the Ziploc bag or in other areas at the intersection of medication and well-being. My teams focused on providing the right kinds of interventions to bring better clinical outcomes. As a side effect, we saw improvements in the total cost of care for those members.

Here are two innovative strategies to manage total cost of care

1. Having access to data is critical to address the total cost of care.

Unfortunately, it is often the case that PBMs don’t have access to medical claims or other data, including medical pharmacy spend. To hone in on the populations that could benefit from clinical programs, a combination of medical, behavioral, and pharmacy claims is necessary. My team works with a data science company, Arine, to support our work. Arine ingests all sorts of data, including the typical claims data and information from health risk assessments, social determinants factors, and remote monitoring data from devices such as blood pressure monitors. Arine’s technology includes hundreds of algorithms that can help identify individuals at risk for gaps in care, non-adherence, and even heightened suicide risk.

2. Identifying at-risk individuals and offering provider academic detailing services

Navigate Whole Health is one of our signature programs directed at improving quality and addressing spend. The original idea behind Navigate Whole Health was to find individuals who were prescribed potentially lethal combinations of opioids and other drugs, high doses of opioids, or poly-pharmacy with behavioral health medications. Using a set of algorithms running through pharmacy, behavioral and medical claims, we can identify individuals who fall into one of the target groups. With Arine’s support, we have expanded the number of algorithms we use to identify at-risk individuals and prescribers.

In fact, provider outreach with academic detailing is the salient intervention. The pharmacists providing the academic detailing have nearly universally found that the providers welcome our input. Our approach has never been threatening or punitive. Rather, the team approaches each case with an attitude of “How can I help you?” Many providers do not know all the medications an individual is taking, including prescriptions written by other providers, medications coming from an in-patient stay, an ER visit, or even the dentist. For one Medicaid client, the team’s work with providers resulted in significant reductions in combinations of opioids and benzodiazepines, reduction in the number of prescribers, and reduction in pharmacy spend, in-patient spend and emergency department utilization during the measurement period. This is one program that I unequivocally believe saves lives. And here is the thing, in doing the right thing, the positive outcome is that we also save total cost of care dollars.

I have a hard time supporting the logic that buckets cost in such a way that could adversely affect overall health outcomes. It is a privilege to bring forward clinical programs that save total cost of care dollars which in turn promote positive health outcomes. What is even better is knowing that these programs positively affect the well-being of those we serve.

Technological and scientific advancements have dramatically altered the treatment landscape in several disease states. These include orphan diseases and conditions that previously had no disease-modifying treatment options. These innovative therapies have also come with unprecedented costs, with some agents introduced at a price exceeding one million dollars for a single patient. Value-based purchasing arrangements (VBPs) have attempted to manage the initial cost of these agents. In a VBP, which is sometimes referred to as an outcome-based arrangement, the ultimate price that is paid for the drug is dependent on the clinical outcome. In addition to a plan’s traditional utilization management initiatives to maintain sustainability, this strategy aims to hold pharmaceutical manufacturers responsible for the result of their product. This is similar to other healthcare environments, such as when readmissions impact hospital reimbursement. Under VBPs, a pharmaceutical manufacturer would issue a reimbursement if their product failed to produce the desired clinical outcome. In addition, this strategy incentivizes the development of unique therapies that are more likely to have a clinically significant impact. Novel medications that improve outcomes would provide a greater healthcare value and could be priced higher in the market. Currently, volume is a large driver of cost, with discounts from pharmaceutical manufacturers often tied to the number of units dispensed. This is less helpful for niche-area pharmaceuticals and genuinely innovative treatments used for uncommon conditions.

Practical considerations of VBPs, such as a higher administrative burden (e.g., paperwork, electronic database access, automated retrieval of data), limit their application to all products. Since it can be expensive to measure outcomes in order to assess the worth of a product to an individual patient or plan, VBP concepts are most commonly applied only to the costliest medications. For instance, VBPs can have a significant impact on the pricing of agents like gene therapy or select oncology agents. Some of these agents can have a large clinical impact on disease progression, survival, or quality of life, but a drug may not have the same results in all patients. However, value-based or outcome-based pricing may provide an increased incentive to payers by decreasing their initial risk and providing more sustainable treatment coverage.

While there has been an increase in the use of VBPs by states, manufacturers, and other payers in order to control drug spending and tie patient outcomes to cost, uncertainty remains in developing novel VBPs. The Medicaid Drug Rebate Program (MDRP) created by Congress under the Omnibus Budget Reconciliation Act of 1990 ensures that Medicaid receives the lowest net price for a single source drug or innovator multiple source drug during the rebate period charged to any payer. Simply put, pricing net of all discounts, must be reported to Medicaid, and the best price would have to be offered to Medicaid as well. It is critical that Medicaid programs continue to receive the lowest price available for a single source drug or innovator multiple source drug.

On June 19, 2020, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that is aimed at promoting VBP flexibility for a variety of payers, including Medicaid, with a goal of maintaining a best price for Medicaid. CMS notes that best price creates challenges related to the availability of VBP arrangements. For example, under existing best price rules, if an individual fails to achieve the specified clinical outcome under the VBP arrangement, the drug manufacturer may be required to provide a discount or otherwise may not be entitled to payment for that patient. Thus, the best price of that drug for purposes of the MDRP could become zero. This possibility has stunted the development and proliferation of VBPs. This new proposal from CMS, which includes other regulatory revisions as well (e.g., minimum standards for Drug Utilization Review [DUR] programs), could ultimately lower healthcare costs and potentially limit spending on treatments with limited value over time.

The ultimate goal of a VBP is for all parties to have a vested interest in the outcomes of drug therapy and to share the risk related to healthcare costs. Specifically, it calls on manufacturers to have more “skin in the game.” Moreover, the change to the Medicaid market could have potential savings applicable to a variety of market segments, impacting all Americans. Regardless of the final outcome or any changes made to the current draft prior to its possible rollout, the proposal demonstrates readiness from CMS to pivot prior strategies to mitigate rising drug prices.

Wyoming’s High Fidelity Wraparound program continues to show successful outcomes for enrolled youth with complex behavioral health challenges.  Operated by Magellan Healthcare, Inc. through a collaboration with the Wyoming Department of Health, Division of Healthcare Financing (Medicaid), Wyoming’s High Fidelity Wraparound demonstrates that young people are getting more needs met in their own homes and communities.

High Fidelity Wraparound, an evidenced-based non-clinical intensive care coordination program, is a national model designed to bridge gaps for youth where challenges in behavior and mental health exist. The program uses peers and lived experience in a strengths-based way, focusing on what people do well and provides alternative options in addition to therapy and other traditional methods that fit individual preferences and cultures. This team approach provides a network of support for families, allowing them to be the experts of their lives and learn to drive the process.

“When youth behavior is extreme, there is higher probability of needing to leave home or school to address their needs in a clinical, therapeutic or detention setting. We meet people where they are, use assessments like the Child and Adolescent Needs and Strengths (CANS) to identify needs and strengths, which inform the team of behaviors that should be addressed,” said Tammy Cooley, senior director of operations, Magellan Healthcare. “Youth are supported in meeting challenges like staying in school, having more positive relationships, and doing more of the things children should be doing at their age, which ultimately builds confidence and lasting positive change.”

In Wyoming’s High Fidelity Wraparound programs, CANS are administered at the beginning of a youth’s enrollment into the program and every three months until the youth successfully completes the voluntary program and transitions out.

Barbara Dunn, Director of Program Innovation and Outcomes for Magellan of Healthcare in Wyoming, said, “From July 2018 to June 2019, over 75 percent of youth enrolled in Wyoming’s High Fidelity Wraparound program experienced reduced severity of needs. The typical youth enrolls with nine treatment needs and resolves almost four while increasing strengths to maintain their gains.”

 Decreased Needs and Increased Strengths

July 2018-June 2019

Cooley said, “The evidence is powerful and shows reductions in high prevalence needs between a youth’s enrollment and discharge. Our program works when youth and families are engaged. Wyoming’s Department of Health, Division of Healthcare Financing (Medicaid) has given us a chance to deliver a quality home and community-based program through a care management entity model that gives high risk youth more access to care right where they need it most. From the results of this year’s CANS report, we show Wyoming’s High Fidelity Program is making a positive impact in the lives of our youth participants. We want all youth who qualify for this Medicaid program to see the benefits.”

 Wyoming CANS Initial Scores vs. CANS Discharge Scores in Key Intervention Areas

June 2019-July 2019

For more information about Wyoming’s High Fidelity Wraparound program, please visit www.MagellanOfWyoming.com.

About Magellan Health: Magellan Health, Inc., a Fortune 500 company, is a leader in managing the fastest growing, most complex areas of health, including special populations, complete pharmacy benefits and other specialty areas of healthcare. Magellan supports innovative ways of accessing better health through technology, while remaining focused on the critical personal relationships that are necessary to achieve a healthy, vibrant life. Magellan’s customers include health plans and other managed care organizations, employers, labor unions, various military and governmental agencies and third-party administrators. For more information, visit MagellanHealth.com.

Two patients, both 73-year-old males with newly diagnosed congestive heart failure, are seen by the same provider and prescribed the same therapeutic regimen. Despite the similarities, the 2 patients experienced drastically different therapeutic outcomes. These divergent outcomes were not attributable to the clinical care they received but instead to non-clinical factors surrounding each patient’s circumstances. These non-clinical factors are also referred to as social determinants of health (SDOH). According to the Centers for Disease Control and Prevention (CDC) website, SDOH are conditions in the places where people live, learn, work, and play that affect a wide range of health risks and outcomes. Some key SDOH that may influence clinical outcomes include housing insecurity, food insecurity, lack of transportation, and lack of family or other social support.

It is widely known that social and economic factors have significant impacts on health outcomes of both individuals and communities. At a population level, it has been estimated that clinical care accounts for only 20% of a community’s health outcomes while the remaining 80% is related to a combination of health behaviors (e.g., diet and exercise), the physical environment (e.g., housing security), and socioeconomic factors (e.g., education and social support). Despite this insight, addressing SDOH has traditionally been the purview of government and charitable organizations rather than healthcare providers. However, with the shift toward value-based reimbursement and increased accountability for the costs and health status of patients, there is an incentive for health plans and providers to further consider the social and economic barriers that contribute to poor health outcomes. Models are being developed that link healthcare systems, providers, and community resources in an integrated fashion to address SDOH. These models are evolving from systems that rely on acute episodes of care to a coordinated system focused on prevention and care management.

As the largest payer for healthcare in the United States, Medicare has also recently begun to make accommodations in order to address SDOH in the privately administered Medicare Advantage (MA) program. MA is a capitated system placing health plans that administer MA benefits at risk for the cost of caring for each beneficiary. MA plans are permitted to offer supplemental benefits beyond traditional Medicare offerings as long as those benefits are “primarily health-related.” Historically, the most common supplemental benefits offered by MA plans have been services not traditionally covered by medical insurance such as vision exams, hearing tests, and preventative dental services.

The Centers for Medicare & Medicaid Services (CMS) have recently begun to implement regulatory changes allowing MA plans more flexibility with regard to these supplemental benefits. First, the definition of “primarily health-related” has been expanded. Examples of this expanded interpretation include providing in-home support for activities of daily living (ADLs) or installation of grab bars in the bathroom in order to prevent injuries and reduce avoidable emergency room utilization. In addition, supplemental benefits that may reduce exacerbations of existing illnesses, such as installing air conditioning units or providing carpet shampooing for patients with asthma, may be considered. Beginning in 2020, MA plans may offer chronically ill patients additional benefits that directly impact SDOH, such as expanded meal delivery options to address food insecurity and transportation for non-medical needs like grocery shopping. In announcing the expanded options for MA plans, CMS Administrator Seema Verma said the changes “give plans the ability to be innovative” and the changes permit “benefits and services that address SDOH for people with chronic disease.”

The shifts occurring in healthcare delivery, including the expansion of accountable care organizations (ACOs), the rise of capitated reimbursements, and penalties associated with hospital readmissions, incentivize healthcare systems to become increasingly focused on holistic care for beneficiaries. By addressing individual and population SDOH, healthcare systems, providers, and community support can be integrated to improve health outcomes and reduce unnecessary healthcare utilization.

Parity Progress

Ten years ago today, the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA) was passed into law. This ground-breaking legislation required health plans to treat mental health and substance use conditions like physical medical conditions without treatment or financial limitations. For more than 40 years, Magellan has wholeheartedly supported and actively advocated for parity. Every day, we work together with our customers — health plans, employers, state Medicaid and military and government clients — to innovate new solutions on behalf of those we serve, which continues to advance the law and helps to reduce the stigma around mental health and substance use issues. At Magellan, mental health is fundamentally as important as physical wellness, but it’s just a start.

Beyond equal to individualized and integrated

While our country has made positive strides in parity, we know achieving a healthy, vibrant life is tied to many factors beyond parity – namely social determinants, such as housing, poverty, education and access to transportation and healthy food. One way we are addressing and accounting for these social determinants is by focusing on providing individualized, integrated care.

Complete Care-Person-centered. Community-focused. Evidence-based.

A great example is Magellan Complete Care, which operates person-centered health plans that provide complete care coordination for recipients in Medicare and Medicaid. In the state of Florida, we developed the first-in-the-nation Medicaid specialty health plan to integrate physical and behavioral healthcare and address the social determinants of health for individuals living with serious mental illness and substance use disorders. In Arizona, Massachusetts, New York and Virginia, our Medicaid health plans integrate the full continuum of healthcare services – including mental health and substance use disorder services and treatments individualized to help each member live their healthiest, most vibrant life.

Integrated Health Neighborhoods

Magellan Complete Care plan participants include many individuals who contend with complex conditions that impact their physical health and mental well-being every single day. These individuals need to stay connected to their families, friends, neighbors and others in their communities to maintain independence and achieve optimal health and well-being. Doing so makes the difference between surviving and thriving. To these ends, we have pioneered a care coordination model called the Integrated Health Neighborhood (SM).

This model challenges the definition of what you might think a traditional health plan does for its members. Instead of just focusing on physical and behavioral health treatment, Integrated Health Neighborhoods work within existing community support agencies and local public health systems to strengthen and extend their reach. Our local teams help each member navigate these systems and supports based on their needs as well as their preferences for connecting in their own communities. This helps minimize member disruption through the use of familiar local provider networks and support from trusted community organizations.

Our Integrated Health Network teams are comprised of Magellan associates who live in the same communities as the members they serve. Our assigned teams personally know people at agencies, organizations and local resources across their neighborhood, whom they can call on, person to person, to find the right resources for each member. They work collaboratively to help each individual member find his/her path to independence and well-being.

Recovery Support Navigators

A unique part of the team are the Recovery Support Navigators. These are certified peer support specialists who have lived experiences with some of the same challenges our members face – they have experienced substance use disorders or psychiatric disabilities and may have personally been homeless, had their utilities turned off or experienced food insecurity. They can relate to the members they support, empathize, and then draw on real-world solutions to help them.

For the past 20 years, Magellan has been a leader in increasing access to peer support through partnerships with the recovery community and providers.  We have assisted state customers in developing robust certified peer specialist capabilities, driven in large part by our depth and breadth of experience.   We create shared learning opportunities for the peer workforce and others to improve and enhance the knowledge, skills, and competencies of the peer workforce across the continuum.  Our Recovery Support Navigators represent our best practice approach to tapping the power and potential of peer support.

We know people are more than just a diagnosis – or multiple diagnoses. Truly living healthy, vibrant lives means seeing more than parity for the pieces. It’s seeing and caring for the whole person and bringing together the right resources across the community to help. Integration and individualization are the next steps, and I am proud to say Magellan is out front and on the ground in neighborhoods around the country, taking these steps with our partners and members – together!

The Centers for Medicare and Medicaid Services (CMS) Star Rating program is designed to measure and improve the overall performance and quality of care health plans provide to

Medicare beneficiaries.  Due to changes in individual measure specifications, benchmarks, and inclusion into the overall calculation, this quality rating system continues to evolve – which can make it challenging to achieve and maintain 5-Star performance.

Listen to our latest webinar to learn about clinical strategies that can help you stay ahead of the curve for various Part C and D clinical measures such as rheumatoid arthritis management, osteoporosis management, statins in diabetes, and medication adherence for diabetes, hypertension (renin-angiotensin system antagonists), and cholesterol (statins).

Magellan Behavioral Health of Pennsylvania, Inc., a Medicaid managed care organization (MCO), started as the new HealthChoices behavioral health exclusive contractor for the Cambria County Behavioral Health Services Program on July 1, 2017. Magellan currently administers behavioral health benefits for Medicaid members through HealthChoices contracts with Bucks, Delaware, Lehigh, Montgomery and Northampton counties.

Magellan has over two decades of experience managing behavioral health benefits for HealthChoices members through close collaboration with members, providers and community organizations. Through this collaborative mindset, Magellan has succeeded in producing innovative efforts in the following areas:

• increases in access to care
• improved service use rates
• expansion of the continuum of services in alignment with evidence-based models
• maximization of clinical appropriateness
• nationally recognized level of quality services

Read more about Magellan’s collaboration with Cambria County, local providers, community organizations and members in the Tribune Democrat: New Behavioral Health Provider Brings Options, Jobs to Cambria County.

When I was selected to join the National Quality Forum’s Medicaid Innovation Accelerator Project Coordinating Committee, I thought about the background and experiences I would bring with me – both personally and professionally. As a trained pediatrician, my medical training focused largely on the care and treatment of young children. According to the Centers for Medicare & Medicaid Services (CMS), more than 45.2 million children were “ever-enrolled”¹ in Medicaid and the Children’s Health Insurance Program (CHIP) during fiscal year 2015. In addition, in the time since I was in practice, I’ve worked for several national healthcare companies, with a focus on population health, clinical delivery systems delivery and improvement.

Since joining Magellan as the company’s chief medical officer, I’ve worked with my colleagues to help continually looks for ways to reinvent how care is delivered. I am passionate about supporting the volume-to-value payment transformation, and Magellan has a key role to play because of the deep expertise we bring in behavioral health. Oftentimes, we don’t realize how specialized and important that expertise is, and how it impacts the overall quality of care for a patient, particularly with comorbid conditions. Magellan is also considered a trusted partner because we are an independent company and not part of a big health plan. In addition, we also bring a breadth of experience in medical specialty, medical pharmacy and long-term services and supports (LTSS) which is not found in most other organizations.

NQF’s Medicaid Innovation Accelerator Project (IAP) Coordinating Committee is tasked with identifying and recommending measures in four priority areas to help support states’ efforts related to payment and delivery system reforms.

The four priority areas are:

• Reducing Substance Use Disorders (SUD)
• Improving Care for Medicaid Beneficiaries with Complex Care Needs and High Costs (BCN)
• Promoting Community Integration – Community-Based Long-Term Services and Supports (CI-LTSS)
• Supporting Physical and Mental Health Integration (PMH)

The challenges – and opportunities – are many. Medicaid behavioral health does not currently have standard benefit packages from state-to-state, and there are also not standard billing practices. Both of those elements make it much harder to develop metrics which are reliable, and more technical expertise is needed to ensure that the metrics selected can be broadly used. Ultimately, this committee will provide guidance on performance measures for areas which are unique to Medicaid, including patients with complex health needs, LTSS needs and those with behavioral health and substance use/opioid disorders. The states will then have a list of standardized measures for use in Medicaid performance program evaluation.

All of the committee’s meetings are open to the public. The IAP will issue its draft report in July, and its final report at the end of September. I look forward to working with my committee colleagues as we work to draft these important metrics related to state’s efforts regarding payment and delivery system reforms.

¹These enrollment data are unduplicated counts of children who were enrolled in Medicaid and CHIP at any point in FFY 2015. A child who was enrolled in more than one program (e.g., Separate CHIP and Medicaid) at different times during the FFY is only counted in the program in which he or she was last enrolled.