A national study of commercial health insurance and medicaid definitions of medical necessity: what do they mean for children?

OBJECTIVE

To analyze medical necessity standards used by state Medicaid agencies and the largest commercial insurers in the United States on the basis of criteria related to scope of health problems covered and requirements for effectiveness and cost.

METHODS

Information was obtained from managed care contract documents used by the 45 state Medicaid agencies enrolling children into managed care organizations and from certificates of coverage used by the largest health maintenance and preferred provider organization insurers in each state.

RESULTS

Commercial insurers are more likely than Medicaid agencies to articulate medical necessity standards that limit coverage to treatment for illnesses and injuries and to include stringent requirements for cost and evidence of effectiveness.

CONCLUSION

To reduce the discretion retained by insurers in determining medical necessity, particularly around the scope of health problems covered, much greater clarity and uniformity in medical necessity language will be required in the future.

Managed care for people with disabilities: caring for those with the greatest need

Disability is discussed in terms of three categories: conditions that result from biomedical conditions and chronic, lifelong illnesses; role or social functioning difficulties that result from behavioral, developmental, or brain disorders; and conditions that limit physical functioning. The range and depth of services needed by the disabled result in higher costs of health care for this population. Because their service needs vary so widely, no single program can address all of the needs equally. Currently, no integrated public policy or program is specifically designed to serve people with disabilities. Rather, they are served by a range of programs that provide specific benefits (e.g., health, social services, and income). Section 1 of this chapter provides an overview on extending the concept of managed care to disabled populations. Special attention is paid to the financing of health care, the delivery of care, reforming the health care system, the cost-containment potential of managed care, and the need to align care with the nature of the individual disability. In sections 2 and 3, the current status of managed care for two special populations--children and the mentally ill--is discussed in greater detail. Section 2 addresses the characteristics of chronically ill and disabled children, public and private health insurance coverage of children with disabilities, other public programs for chronically ill children, and current directions and strategic choices for managed pediatric care. Section 3 describes the mentally ill and the system of providers that currently supplies care to them, offers some conclusions regarding how managed care is changing the policy debate in mental health care, assesses the key factors affecting policy choices in managed care, and considers prospects for the future shape of managed behavioral health care.

How far have state Medicaid agencies advanced in performance measurement for children?

BACKGROUND

While children represent the largest population group enrolled in Medicaid managed care, little is known about the pediatric performance measures used by state Medicaid agencies.

OBJECTIVE

To identify Medicaid managed care requirements for using Health Plan Employer Data and Information Set and other performance measures for children (defined as those aged 0-21 years in this study).

DESIGN

A structured telephone survey of pediatric performance measures.

PARTICIPANTS

Survey respondents were state Medicaid officials responsible for managed care quality oversight in 39 states.

MAIN OUTCOME MEASURES

Percentage of states in 1998 with effectiveness-of-care measures on health promotion and disease prevention, early detection and screening, and acute and chronic illness; with use measures on preventive care, ambulatory care, pharmacy, inpatient hospital care, and mental health and chemical dependency services; and with access measures on primary care, low-birth-weight neonates delivered at appropriate facilities, and dental care.

RESULTS

In 1998, state Medicaid agencies placed most of their emphasis on monitoring preventive care for children, with immunization rates being the primary focus. Far less attention was directed at assessing the treatment of acute illness. Although more than half of states monitored the treatment of chronic childhood conditions, they focused exclusively on asthma and selected mental health diagnoses.

CONCLUSIONS

States are still in the initial phases of designing and implementing quality oversight systems for Medicaid-insured children. Additional quality reporting requirements are clearly needed to assess the treatment of acute and chronic illness among children along with more age-specific reporting requirements.

Access to health care for children with special health care needs

OBJECTIVE

To assess the role health insurance plays in influencing access to care and use of services by children with special health care needs.

METHODS

We analyzed data on 57 553 children younger than 18 years old included in the 1994-1995 National Health Interview Survey on Disability. The survey obtained information on special health care needs, insurance status, and access to and use of health services. Bivariate and multivariate analyses were used to assess the association of insurance with several measures of access and utilization, including usual source of care, site of usual care, missed or delayed care, and use of ambulatory physician services.

RESULTS

Using the federal Maternal and Child Health Bureau definition of children with special health care needs, we estimate that 18% of US children under 18 years old had an existing special health care need in 1994-1995. An estimated 89% of these children had some form of health insurance coverage, most often private health insurance. Insured children were more likely than uninsured children to have a usual source of care (96.9% vs 79.2%). Among those with a usual source of care, insured children were more likely than uninsured children to have an identified regular clinician (87. 6% vs 80.7%). Insured children were less likely to report unmet health needs, including medical care (2.2% vs 10.5%), dental care (6. 1% vs 23.9%), prescriptions, and/or eyeglasses (3.1% vs 12.3%), and mental health care (.9% vs 3.4%). Insured children were also more likely to have a physician contact in the past year (89.3% vs 73.6%) and have more physician contacts on an annual basis (8.5 vs 4.1 contacts). Unexpectedly, no differences were found between insured and uninsured children in availability of after hours medical care (evenings and weekends) or satisfaction with care. We also found some modest differences in access between publicly and privately insured children. Privately insured children were more likely to have a usual source of care (97.6% vs 95.3%) and a regular clinician (91.0% vs 81.1%). Privately insured children were also less likely to report dissatisfaction with care at their usual site of care (14. 9% vs 21.0%) and have access to care on evenings and weekends (6.8% vs 13.4%). No substantial differences were found between privately and publicly insured children in prevalence of unmet health needs or delays in obtaining care due to cost.

CONCLUSIONS

This study illustrates the importance of health insurance for children with special health care needs. Continued efforts are needed to ensure that all children with special health care needs have insurance and that remaining access and utilization barriers for currently insured children with special health care needs are also addressed.

An examination of state Medicaid financing arrangements for early childhood development services

OBJECTIVE

To determine the extent to which Medicaid finances early childhood development services, either on a capitated or fee-for-service basis, and to gauge future interest in financing such services.

METHODS

We analyzed state Medicaid managed care contracts in effect in April 1998 in 45 states using capitated arrangements for children at the end of 1997 to ascertain whether state Medicaid agencies financed any of six types of early childhood development services, including parent counseling, home visiting, comprehensive assessments, telephone advice lines, parent education classes, and case management. We also conducted structured telephone surveys with the same 45 states' Medicaid managed care directors.

RESULTS

Overall, state Medicaid agencies finance few early childhood development services on a capitated or fee-for-service basis. Case management was the most popular service to be paid for fee-for-service. Parent education was the most popular service required in managed care contracts. Parent counseling and telephone advice lines for information on child development or parenting issues were the services least likely to be reimbursed through either Medicaid financing mechanism.

CONCLUSION

To date, Medicaid agencies generally have not required managed care plans to cover early childhood development services, nor have they paid for such services on a fee-for-service basis. However, 17 states expressed an interest in expanding early childhood development services, particularly home visiting, parent education, and telephone advice lines. Nonetheless, several challenges exist in expanding Medicaid financing, including the need for more evidence on cost-effectiveness and greater political support for promoting early childhood development.

Improving state Medicaid contracts and plan practices for children with special needs

The rapid transition of state Medicaid beneficiaries into fully capitated managed care plans requires a special focus on children with chronic or disabling conditions, who often depend on numerous pediatric physicians and other specialty services for health care and related services. Because managed care arrangements for this population are growing in popularity nationwide, it is important that states craft managed care contracts to address the unique needs of children with complex physical, developmental, and mental health problems. Based on the research reported in this article, in-depth interviews with state Medicaid agency staff, interviews with medical directors and administrators of managed care plans serving Medicaid recipients, and input from experts in pediatrics and managed care, a set of recommendations is made for tailoring managed care contracts to meet the needs of this vulnerable group of children. Six contracting elements that should be adopted by state Medicaid agencies include (1) clarifying the specificity of pediatric benefits, (2) defining appropriate pediatric provider capacity requirements, (3) developing a medical necessity standard specific to children, (4) identifying pediatric quality-of-care measures, (5) setting appropriate pediatric capitation rates, and (6) creating incentives for high-quality pediatric care. Nine approaches that should be adopted by managed care practices interested in providing high-quality care for children with special needs also are identified. These include (1) ensuring that assigned primary care providers have appropriate training and experience, (2) offering support systems for primary care practices, (3) providing specialty consultation for primary care providers, (4) establishing arrangements for the comanagement of primary and specialty pediatric services, (5) arranging for comprehensive care coordination, (6) establishing flexible service authorization policies, (7) implementing provider profiling systems that adjust for pediatric case mix, (8) creating financial incentives for serving children with special needs, and (9) encouraging family involvement in plan operations. Implementing these changes to managed care contracting could have a major impact on the quality and comprehensiveness of health care received by children with special needs. Successful implementation, however, requires strong support from both state Medicaid agencies and the managed care plans dedicated to serving this population.

Managed care's impact on Medicaid financing for early intervention services

Medicaid has been a major source of financing for early intervention services since the inception of the Infants and Toddlers with Disabilities Program in 1986. In this article, the authors analyze Medicaid financing of early intervention services in 39 States before and after the introduction of managed care. The association between level of Medicaid financing and program characteristics, provider arrangements, managed care carve-out policies, and managed care contract requirements is assessed. The authors discuss the reduction of Medicaid financing after managed care and its implications for State Infants and Toddlers with Disabilities Programs, State Medicaid agencies, and managed care organizations.

Enhancing preventive and primary care for children with chronic or disabling conditions served in health maintenance organizations

Health maintenance organizations serve an estimated 20 percent of the child population, approximately 12 million children, many of whom have chronic conditions or disabling conditions. These children consume a disproportionate share of health resources and represent an important challenge in terms of care management. As HMOs increasingly enroll children with private insurance and Medicaid who have various physical, developmental, behavioral, and emotional disorders, they must find new and innovative ways to provide their care. Almost one third of children are affected by chronic conditions, and a smaller percentage (6 percent) suffer from chronic disabling conditions. Seven design elements for enhancing preventive and primary care for children with chronic conditions are presented in this article with illustrative examples from HMOs and state Medicaid programs.

Medicaid managed care policies affecting children with disabilities: 1995 and 1996

The authors present findings from a study of State Medicaid managed care enrollment and benefit policies in 1995 and 1996 for children with disabilities. During this time the number of States serving children through fully capitated plans grew by more than one-third, and enrollment of children receiving Supplemental Security Income (SSI) payments and children in subsidized foster care increased. Most States required plans to provide all mandatory and most optional Medicaid services. Although States have begun to make noticeable improvements in their contract language concerning medical necessity and the early and periodic screening, diagnosis, and treatment (EPSDT) benefit, overall State guidance in these areas remains weak.

Health maintenance organizations and children with special health needs. A suitable match?

OBJECTIVE

To address how well health maintenance organizations (HMOs) meet the needs of almost 700,000 children with disabilities due to chronic conditions enrolled in these plans.

DESIGN

A cross-sectional survey.

MEASUREMENTS/MAIN RESULTS

Health maintenance organizations offered better protection than conventional plans against out-of-pocket expenses and were much more likely than fee-for-service plans to cover ancillary therapies, home care, outpatient mental health care, and medical case management. In addition, few HMOs maintained exclusions for preexisting conditions. Other aspects of HMO policies, however, were found to operate against the interest of families with chronically ill children. In particular, HMOs commonly made specialty services available only when significant improvement was expected within a short period. Also, HMOs typically placed limits on the amount and duration of mental health, ancillary services, and certain other services frequently needed by chronically ill children. Probably the most serious problems for chronically ill children enrolled in HMOs were the lack of choice among and access to appropriate specialty providers.

PARTICIPANTS

Individual HMO plans.

SELECTION PROCEDURE

A sample of 95 geographically representative HMOs were selected; 59 (62%) responded.

INTERVENTIONS

None.

CONCLUSIONS

Health maintenance organizations offer several advantages over traditional fee-for-service plans for families whose children have special health needs. However, the results also indicate that HMOs do not always operate effectively as service provision systems for these children. To a large extent, the availability and quality of services available to a child with special needs is likely to depend on the parents' ability to maneuver within the system.

State Medicaid health maintenance organization policies and special-needs children

Little research has been done to ascertain what enrollment in a health maintenance organization (HMO) may mean for the care of Medicaid recipients who regularly require specialty health services. This article presents the results of a survey of all State Medicaid agencies regarding their policies for enrolling and serving special-needs children in HMOs. The survey revealed that many States have implemented one or more strategies to protect special-needs Medicaid recipients enrolled in HMOs. The survey results suggest, however, that such strategies are too limited in scope to ensure appropriate access to specialty services for all children with special health needs.

How will children and pregnant women fare under current national health insurance proposals?

OBJECTIVE

To compare the following five major national health insurance proposals and their implications for children and pregnant women: the MAtsui "play or pay" bill (HR 3393); the Russo Canadian-type bill (HR 1300); the Rockefeller "play or pay" bill (S 1177); the Stark Medicare-type bill (HR 650); and the president's market reform proposal.

RESEARCH DESIGN

Using an analytic framework developed by the Association of Maternal and Child Health Programs, we examine the differences among the five proposals in basic approach, eligibility and enrollment, benefits, cost-sharing requirements, provider reimbursement, and cost-control measures.

RESULTS

All of the plans, except for President Bush's, would provide coverage for virtually all children and pregnant women, using a combination of private and public approaches. President Bush's market approach provides financial incentives to purchase health insurance benefit plans that states can design within actuarial limits. The remaining four plans strive for uniformity in benefits, covering physician and hospital services in a manner similar to most plans today. Preventive care benefits extend beyond what has been offered in the past. The four plans differ sharply in their coverage of extended care services, with the Matsui and Russo bills covering the most generous package of benefits. The Rockefeller and Stark plans, on the other hand, require less cost-sharing for their basically preventive and primary care plans.

CONCLUSIONS

Most of the health insurance proposals are aimed at extending preventive and primary care health insurance plans to more uninsured Americans. Only the Matsui bill devotes significant attention to developing a comprehensive benefit plan for children and pregnant women. Additional attention should be directed at extended care services for those with special health care needs, the future role of Medicaid, and the public health system infrastructure.

Prevalence and impact of chronic illness among adolescents

A sample of 7465 persons aged 10 to 17 years from the 1988 National Health Interview Survey on Child Health was used to assess the prevalence and impact of chronic conditions in adolescents. We defined a condition as chronic if it was first noted more than 3 months before the interview or a condition that ordinarily would be of lengthy duration, such as arthritis or heart disease. An estimated 31.5% of US adolescents were reported to have one or more chronic conditions. The most commonly reported chronic conditions included respiratory allergies, asthma, and frequent or severe headaches. Chronic conditions had widely varying impact on adolescent activity levels. On average, adolescents with chronic conditions experienced 3.4 bed days and 4.4 school absence days related to their chronic conditions in the year before the interview. Adolescents with chronic conditions were also reported to experience 35% more behavioral problems than their counterparts without chronic conditions. Adolescents with multiple chronic conditions had substantially more bed days, school absence days, and behavioral problems than adolescents with a single chronic condition. Implications of these findings are discussed.

Private health insurance of chronically ill children

Accurate information regarding the adequacy of private health insurance coverage available to the families of chronically ill children is scarce. A national survey was conducted of firms offering health insurance to employees and their dependents. Data were collected concerning private health insurance coverage of services needed by chronically ill children, including basic medical care services, ancillary therapies, mental health services, and long-term care. Nearly all surveyed firms offered health insurance. Coverage of inpatient hospital care, outpatient physician services, medical supplies and equipment, x-ray studies, laboratory services, and prescription medications was widespread, but coverage of services such as physical therapy, speech therapy, occupational therapy, and nutrition services was much less prevalent. More than two thirds of the firms covered comprehensive home health services but often with limits and only in lieu of more expensive inpatient care. Long-term care, such as skilled nursing home care, was covered by only one third of firms. Overall, the survey results, combined with information concerning recent trends in private health insurance, reveal increasing coverage of lower cost alternatives to hospital or institutional care and improved maximum lifetime benefits and stop-loss coverage but also increased cost-sharing requirements. These results suggest that, although families with chronically ill children may have access to a widening range of services such as home health care or individual benefits management, they may be forced to bear an increasing proportion of the cost.

Trans-activation of human globin genes by HTLV-I tax1

We studied the effects of a known retroviral trans-activating factor, HTLV-I tax1, on transcription of human globin genes. Transfection of HeLa cells by the cloned tax1 gene stimulated activity of both the beta- and epsilon-globin promoters approximately 20-fold, as measured by chloramphenicol acetyl transferase (CAT) assays. Studies of promoter 5'-deletion mutants revealed that the trans-activation response required only 185 base pairs (bp) of beta-globin 5'-flanking sequence or 177 bp of epsilon-globin 5' flanking sequence. These promoter regions contain either two (for beta) or three (for epsilon) copies of the pentanucleotide sequence CTGAC, which is characteristic of previously described tax1-responsive promoters. We also stably transfected tax1 into the erythroid cell line K562. Transfectants expressing tax1 showed increased transcription of epsilon-, gamma-, zeta-, and alpha-globins. This indicates that tax1 can stimulate transcription of globin genes in their native chromosomal location. This was confirmed by measurements of increases in intracellular hemoglobin as determined by an increased percentage of cells staining with benzidine and by spectrophotometric measurements of hemoglobin. The observed trans-activation of globin genes by tax1 may provide insight into normal regulation of globin genes by clarifying cis regulatory sequences. Furthermore, it suggests that the trans-acting effects of tax1 on heterologous genes are more widespread than was previously appreciated.

Plasmids in bacteria exposed to activated neutrophils mediate mutagenesis when transferred to new hosts

The plasmid pUC18 contains a lacZ alpha-complementation gene that codes for a small peptide that can complement the delta M15 mutation of the Escherichia coli lacZ (beta-galactosidase) gene, converting bacteria carrying that mutated gene from the lacZ- to the lacZ+ phenotype. This plasmid was used in experiments designed to study mutagenesis by human neutrophils. E coli carrying pUC18 were incubated with neutrophils under conditions in which little ingestion of the bacteria took place; the plasmid was then isolated and transformed into an E coli strain (BOZO) that carries the lacZ delta M15 mutation. Of these transformants, 11 of 205,000 were lacZ, suggesting that in these 11, alpha-complementation had been lost through a mutation. No lac- colonies were detected among several hundred thousand BOZO transformed with plasmid isolated from incubations in which phagocytosis could take place, nor from incubations from which neutrophils were omitted. Despite the lac- phenotype of these 11 transformants, plasmids reisolated from nine of them showed normal alpha-complementing ability when transformed into fresh BOZO. These findings indicated that in these nine, the mutations were located in the chromosomes of the transformed BOZO. It thus appears that on exposure to activated neutrophils, a plasmid may acquire a lesion (? mutation) that can somehow be transferred to the genome of a recipient microorganism, resulting in repair of the damaged plasmid accompanied by mutation of the recipient's chromosome. Restriction mapping of the DNA from four of these nine chromosomal mutants suggested that the mutations did not represent major insertions or deletions in the portion of the bacterial chromosome corresponding to the pUC18 lac operon insert, nor in the remainder of the lacZ delta M15 gene. These results confirm previous work showing that exposure to activated neutrophils can induce mutations in biological systems, and provides an experimental model in which the mechanism of neutrophil-mediated mutagenesis may be examined.

Fate of the DNA in plasmid-containing Escherichia coli minicells ingested by human neutrophils

Escherichia coli minicells containing the plasmid pSC101 (approximately 10 kb) or pBR322 (approximately 4 kb) were opsonized and incubated with human neutrophils. The neutrophils responded to the minicells as they would to native E coli: they ingested the minicells, discharged their granule contents into the minicell-containing phagosomes, and expressed a respiratory burst. After one hour of incubation, the fate of the ingested plasmid DNA was examined. No DNA degradation was detected by trichloroacetic acid precipitation or agarose gel electrophoresis. Moreover, when pBR322 recovered from ingested minicells was transformed into E coli, no mutations in either of the antibiotic resistance genes carried by the plasmid were detected out of many thousand transformants screened. These findings confirm the surprisingly limited effect of neutrophils on ingested DNA.

Chromatin structure during bleomycin-induced DNA damage and repair

We have demonstrated that treatment of human erythroleukemia (K562) cells with bleomycin, an agent known to create both double and single DNA breaks through an oxygen-radical-dependent mechanism, alters higher order chromatin structure (supercoiling) as shown by a reduction in the rate of sedimentation of nucleoids from bleomycin-treated cells. This agent, however, did not appear to induce generalized changes in the organization of chromatin at the nucleosomal level as determined either by rates of digestion of nuclear DNA or by gel electrophoresis of DNA fragments obtained by limited digestion of nuclear DNA. We conclude that while higher chromatin structure is altered by bleomycin damage, organization at the nucleosomal level remains largely conserved.