- The Washington Times - Monday, August 15, 2005

The D.C. Department of Health is overhauling how it does business with health plans that provide services to low-income residents on Medicaid, ultimately linking pay to reductions in HIV, heart disease, diabetes and other illness.

The District’s Medicaid program, funded by federal and D.C. tax dollars, costs about a $1.3 billion per year, and its membership has risen since last year from 138,706 to 140,702 residents.

Still, many of the city’s leading health indicators of HIV, diabetes and cancer are far behind those of other states.

Starting this month, D.C. health officials say Medicaid contracts include dozens of “performance measures” aimed at showing how health plans stack up against each other in areas such as rates of cancer, heart disease, diabetes, smoking and asthma.

Next year, city officials say, they plan to use that information to tie financial terms of future Medicaid contracts to how successful health plans are at hitting or surpassing targets in improving health statistics, officials said.

“We want to reward good performance,” D.C. Department of Health Director Gregg A. Pane said yesterday. “When you highlight these things and have public accountability, you’ll see movement in the numbers.”

According to the D.C. Office of Contracting and Procurement, the health department on Aug. 1 extended Medicaid contracts with three health plans through July 31, 2006.

The latest Medicaid contracts with Amerigroup and D.C. Chartered Health Plan are for $95 million each through July, while the one-year contract with Health Right Inc. pays $30 million.

Dr. Pane said health providers worked with city officials to come up with the new contract provisions.

The District isn’t alone in the new provisions. Martha Roherty, director of the District-based National Association of State Medicaid Directors, said the city’s move toward performance-based contracts follows a national trend that began about five years ago.

“The majority of states are trying this,” Miss Roherty said. “It isn’t something where they’re picking on the HMOs.”

Sharon Baskerville, executive director of the D.C. Primary Care Association, called the move a good first step, but said city officials also should include performance measures in the D.C. Healthcare Alliance.

The alliance is an entirely District-funded health-insurance plan that provides health coverage for low-income residents who do not qualify for Medicaid..

“At least we’ll know what we’re buying now,” Miss Baskerville said.

Exactly how the city plans to link pay with performance remains to be seen.

Nikki Highsmith, senior vice president of the Princeton-based Center for Health Care Strategies, a research organization, said some states provide health plans with higher quality scores with higher Medicaid reimbursement rates.

However, other states send those Medicaid recipients who did not select an insurance plan to the HMO with the highest-quality rating, boosting its enrollment numbers.

“These are powerful mechanisms to get health plans to focus on quality issues,” Miss Highsmith said

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