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A Rural Health Plan Success Story
by Tanya Case, Administrative Director
Prime Advantage Health Plan, Lawton Oklahoma
Prime Advantage Health Plan (Prime) is a small health plan licensed to serve Medicaid and commercial populations in Southwest Oklahoma. With the exception of Lawton, Oklahoma, a city of over 100,000 (if the local army post population is considered), the towns are rural.
Prime was the first rural based HMO in Oklahoma and one might wonder why the owners, Comanche County Hospital Authority (CCHA) would ever think about funding such a venture. Quite honestly CCHA did not set out to own a health plan. We set out to partner with an existing HMO in preparation for the onset of managed care Medicaid. As a county hospital we not only were the traditional provider of care for Medicaid recipients for Comanche County, but for many others, especially for tertiary referrals. A relationship was forged with PacifiCare of Oklahoma in 1993 and remains in place today; however, after one year’s participation as a Medicaid HMO, PacifiCare decided not to pursue this population. Unfortunately, that left CCHA with two options, to partner with another HMO or to form their own. Most of you know that we rural folks are rather head strong, learn quickly, and do not like to be dependent on others for our destiny. So it was not difficult to decide that we were going to take the “bull by the horns” and form our own HMO.
Yes, we had learned a lot from PacifiCare, but this venture was still far from easy and not inexpensive. There was so much that had to be accomplished even to be licensed; so much paper, so much money! One of the first things we did was enlist the expertise of a private consultant group. They had the legal, financial, and product design expertise that was an absolute must.
Our first task was licensure, followed by a response to the Oklahoma Health Care Authority’s Response for Proposal in order to become a contractor for Medicaid. In Oklahoma, this is a competitive process. We held our breath as there were four bidders with only three bids awarded. Fortunately, we were selected and have continued to be selected each year. One of the primary reasons for our success is our expansive provider network, especially of primary care physicians. Prime is also the only Medicaid HMO that owns and operates its own transportation system for our members. The other HMOs provide transportation, but via buses, cabs, etc. As you know, there are not a lot of buses and cabs in the country! Transportation is just a very small point that makes rural different, but if overlooked, it could have a profound impact on members’ ability to access care, and that is what a health plan’s main objective should be - providing quality health care to their members!
Eleven months after receiving our initial licensure and with the Medicaid bid behind us, we decided to pursue a license to serve commercial employer groups in nine counties in Southwest Oklahoma. This experience has been more than rewarding. What we have found is that there are many small employers in dire need of health care coverage for their employees. Unfortunately, they have not been able to afford what was being offered. Prime was the answer for them. Sure, we have large employer groups, but our true mission is to help out small businesses.
Another product we set out to offer was Medicare. This has not been a success story! After thousands of dollars were spent and a site visit was completed by the Health Care Financing Administration (HCFA), we had to withdraw our application due to the lack of certain specialty physician contracts. Why would our specialists sign our Medicaid and commercial contracts, but not Medicare??? Very simple. Because HMOs represent a loss of control to many physicians, and although they might go along with it for some populations, when it comes to Medicare, which is often sixty-five percent of their practice, especially if they are an Oncologist or Nephrologist, they simply were not willing to proceed. What is most interesting about this experience is the manner in which the HCFA rules affected Prime. Since we only asked for a Competitive Medical Plan license for Comanche County, we could not upstream specialty care for these few specialties to Oklahoma City because we were not licensed for Oklahoma County nor the county between Oklahoma County and Comanche County. This presents a real inequity for a small rural plan.
As for the organizational structure of Prime, we have 10 full-time staff members. Administration, quality assurance, utilization management, marketing, and member services are all provided locally. Due to cost restraints, specifically the purchase of a managed care information system, we out-source claims payment and data management (eligibility, capitation, HEDIS reporting, etc.). Although claims are actually paid in Oklahoma City, we still have an on-site employee that interacts with our providers. This is a must, just as on-site member services is a must. We firmly believe that the only reason there has not been a formal grievance filed against Prime is due to this local focus. Rural folks do not want to deal with people in Oklahoma City. They want to be able to drop in and explain their situation, and believe me, they do! On-site member services has also been successful in educating the Medicaid population regarding managed care; face-to-face visits are often necessary for a population that easily angers due to their lack of understanding.
One of the other functions which we thought should be handled locally was utilization review (UR). We initially thought that the local PCPs (Primary Care Providers) should perform all UR via a weekly committee; that they would feel empowered by their control of the referrals. This was not the case. Basically, the committee was a burden to them and something they came to resent. Therefore, UR is still done locally, but by UR nurses and our Medical Director. The PCPs are provided a written response to their written authorization request within 24 to 48 hours unless the authorization involves a complex case or a case which might be denied. Complex cases go to the physician committee, but now this committee only meets every two weeks and lasts 30 minutes, compared to the previous 1 ½ - 2 hour weekly meetings. These changes have provided higher physician as well as member satisfaction.
Other issues that we have had difficulty with are other physician satisfaction issues, education of our members regarding managed care, and dependency on consultants. As for our physicians, we always claimed to be involving them when actually we were not, and they knew it. We now have a physician task force that meets monthly in regards to further managed care endeavors, especially regarding how we will proceed with managed care Medicare. We have also been lacking in providing data back to physicians. Hopefully this will be resolved in the near future as we have contracted with a nationally-renowned company for this purpose.
The education of our membership regarding managed care is one that will demand our on-going efforts. Our population is especially difficult in that it includes Medicaid members; members who typically received care sporadically and in emergency rooms. As a result, our number of ER (Emergency Room) visits for this population averages 500 visits per 1,000. This behavior is very difficult to change and we believe it may take five to seven years to see change. High ER utilization is not just a Medicaid issue however, certain commercial groups can be just as bad (even with high ER copays), especially those groups associated with health care. For example, Prime is an option for Comanche County Hospital and other area hospital employees. We have found that hospital employees are the worst ER abusers. It is so much more convenient just to pop into the ER on your break to get a quick fix for your sore throat, etc. Changing behavior of your colleagues is certainly a challenge!
As for our dependency on consultants, this has been a very hard, expensive lesson. If you are starting a plan, consultants are a must at first; however, they should not become a part of your day-to-day operations. Once you are well on your way, make sure that you have or develop the infrastructure you need for daily operations. If not, consulting fees will severely cut into your progress toward a break-even financial picture.
All in all, Prime is progressing as it should. It has been a hard, up-hill climb to our goal of “break-even.” We are not there yet; however, we can see the mountain-top...
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