Wisconsin Medicaid HMO Accreditation Incentive

Privately accredited health maintenance organizations (HMOs) often have more effective quality improvement programs than non-accredited organizations. Recent federal regulations allow state Medicaid programs to leverage HMO quality improvements driven by private accreditation to reduce mandatory oversight activities, cutting administrative costs for both the state and the HMO. Wisconsin has implemented a Medicaid HMO Accreditation Incentive program that reduces administrative costs for oversight while encouraging quality improvement.

Situation

Privately accredited health maintenance organizations (HMOs) have more effective quality improvement programs than non-accredited organizations. Creating incentives for Medicaid HMOs to achieve accreditation reduces mandatory oversight activities for states and HMOs, reducing administrative costs and preventing duplicative oversight activities by state Medicaid programs, thus driving system-wide quality improvement while helping to drive down administrative costs to both HMOs in the delivery system and the State Medicaid agencies.

Solution

According to the National Committee for Quality Assurance (NCQAÒ), HMOs that have private accreditation perform better on clinical performance measures than do non-accredited HMOs (“The State of Health Care Quality, 2004,” NCQA, page 13).

Congress and the State of Wisconsin Department of Health and Family Services have recognized private accreditation of HMOs as an important part of a managed care performance improvement strategy.

The Balanced Budget Act of 1997 allows State Medicaid programs to deem accredited managed care organizations as having met certain quality standards (Ref. 42 CFR, §438.360 Non-duplication of mandatory activities), preventing duplication of certain mandatory quality oversight activities with respect to accredited MCOs.

In 2001, the Wisconsin Medicaid HMO program implemented a program that provides regulatory relief for fully accredited HMOs. The program, known as the “Wisconsin Medicaid HMO Accreditation Incentive” provides an incentive to accredited HMOs in the form of reduced administrative costs associated with recertification and certain mandatory external quality review activities.

The program provides the necessary documentation to allow the state to implement the “non-duplication of mandatory activities” provisions of the new federal External Quality Review Final Rule (42 CFR §438.360). This results in reduction of administrative costs associated with mandatory external quality review for both the state and the MCO.

Incentive benefits

HMO submission of selected biennial quality program-related recertification documentation is not required. The necessary documentation is provided by the HMO as part of the HMO Accreditation Incentive application process. The Accreditation Survey documentation thus becomes the basis of other quality oversight reviews, preventing duplication of oversight activities.
On-site recertification and external quality review activities related to HMO quality improvement programs are not performed during the period the accreditation is in effect.
Performance improvement projects conducted by the HMO for the accrediting body are acceptable for compliance with Medicaid contract requirements as long as they include Medicaid enrollees, thus preventing duplicative activities and excess costs.

Other benefits

Reduces duplicative administrative paperwork costs-for the State as well as the HMO.
Speeds up and simplifies biannual HMO recertification and mandatory annual external quality review processes.
Provides substantive incentive for HMO accreditation and the associated organizational improvements.
Elevates quality in program operations where private accreditation standards are more rigorous than contract requirements, provider credentialing, for example.

Quality Safeguards

The incentive is not available to an HMO:

entering the Medicaid/BadgerCare program for the first time;
with less than unrestricted accreditation;
that loses or gives up accreditation;
sanctioned for non-compliance with state contract requirements;
re-entering Medicaid after 2 or more years out of program.

The accrediting body must be recognized by CMS and Wisconsin.
Where accreditation standards are inconsistent with the standards set forth in the HMO contract, the contract prevails unless the accreditation standard is more stringent.
The accreditation standards of the proposed accrediting body that the HMO has selected must meet or exceed all the Medicaid/BadgerCare requirements. This is verified by the DHFS Accreditation Standards Screen completed at application for the incentive.
Approval of the HMO for the incentive does not alter the conditions of participation nor relieve the HMO of any of the responsibilities under the contract except as provided in the incentive description.

Better Health & Lower Costs

Wisconsin leads the nation in successful implementation of an HMO Accreditation incentive compliant with the federal EQRO Final Rule. The program has become a model for such incentives, for example:

Individual states and other organizations have requested information on the program, such as: the Leapfrog Group, the Center for Medicare and Medicaid Services (CMS), the Center for Healthcare Strategies, the state of Indiana, the state of Ohio, the National Committee for Quality Assurance (NCQA®), and the state of Minnesota.
In July 2004, Wisconsin offered a presentation on the program to the Managed Care Quality Technical Advisory Group of the American Public Health Services Association (APHSA). The presentation was requested to facilitate replication in other states.
In August, 2003, CMS reviewed Wisconsin's Medicaid managed care quality improvement strategy, including the HMO Accreditation Incentive and found it to be in compliance with all applicable federal regulations, including the new Medicaid Managed Care Final Rule and new External Quality Review Final Rule.

Innovation sparks participation and improvement:

Seven of 13 Medicaid/BadgerCare HMOs have qualified for the incentive. Prior to implementation of the incentive, only 3 of the program’s participating HMOs held private accreditation.
Accredited HMOs averaged 19 points on Wisconsin’s HMO Report Card in 2004; non-accredited HMOs averaged only 17.8 points. (Maximum possible 27 points.) The HMO Report Card ranks the HMO’s performance on five clinical and four non-clinical measures and assigns a score based on performance.
Four of the top five HMOs ranked on the basis of NCQA’s HEDIS Effectiveness of Care performance measures in the East North Central Region are HMOs participating in the Wisconsin Medicaid program’s HMO Accreditation Incentive program. (“The State of Health Care Quality, 2004,” NCQA, page 59).