RD389 - Summary of Health Care Models as Directed by 2015 Budget Bill HB 1400 Item 384 - September 30, 2015


Executive Summary:
Current Health Care Model in regards to VA HB 1400 Item 384

The Virginia Department of Corrections (DOC) has responded to HB 1400 Item 384 by enlisting the services of the Department of Health Administration at Virginia Commonwealth University (VCU) who produced a summary report regarding offender health care models based on the nine responses from the Request for Information ( RFI #DOC-15-077). The report is a third-party account of responses. An evaluation of current DOC practices that have either been implemented or explored in the past was not part of the RFI. Time spent at the DOC by the nine responding companies would shed light on the many suggestions that are already in place and have been for years as the Department strives to better serve the Commonwealth. The purpose of this preface is to provide information and clarification of current strategies used by the Department of Corrections.

Leveraging Existing State-Funded Managed Care Networks

The term managed care or managed health care is used in the United States to describe a variety of techniques intended to reduce the cost of providing health benefits and improve the quality of care for organizations that use those techniques or provide them as services to other organizations ("managed care organization" or "MCO"), or to describe systems of financing and delivering health care to enrollees organized around managed care techniques and concepts ("managed care delivery systems"). The Virginia Department of Corrections has been using managed care for over two decades. The contract with our current third party administrator, Anthem Blue Cross Blue Shield, was converted from a Preferred Provider Organization (PPO) to a Health Maintenance Organization (HMO), Anthem Health Keepers, on 7 /1/2015. This change reduced reimbursement for outpatient services to 29.5% of the charge. This move to Anthem Health Keepers will produce an estimated annual statewide cost avoidance of approximately $9.0 million. Under the Affordable Care Act if Medicaid expands in Virginia, the DOC could expand its Medicaid participation. The DOC currently has a healthcare reimbursement team which enrolls all Medicaid eligible offenders for covered inpatient visits.

Federal Health Care Funding Opportunities

There are two opportunities for federal funding identified: Medicaid and 340b drug purchasing. Both of these programs are being accessed by the DOC.

The 340b HIV Disease Telemedicine Clinic with Virginia Commonwealth University Health System (VCUHS) has been in operation since 2003 and in fiscal year 2015 saved the Commonwealth an estimated $4.5 million. Additionally, the DOC is in contract with VCUHS to operate clinics for Hepatitis C. This contract allows VCUHS to dispense both the HIV and Hepatitis C medications from their pharmacy. With the recent addition of the Hepatitis C treatment an estimated cost avoidance $6.8 million is forecasted for fiscal year 2016. To access this pricing the care must be under the supervision of a provider employed by the covered 340b entity. States that have academic medical centers running correctional health systems realize a much greater savings. This model will be discussed further in the final section, "Innovative Correctional Health Care Management Systems from Other States".

Since July, 2013, the DOC & Department of Medical Assistance Services have worked together to provide Medicaid reimbursement to providers for eligible offender inpatient hospitalizations. In fiscal year 2014 this joint effort reduced funding for the DOC by $2.7 million in General Funds. The 2013 Act transferred $1.3 million to DMAS to fund the impact and appropriated a like amount of federal matching funds. This joint effort, therefore, saved the Commonwealth a minimum of $1.3 million in General Funds for fiscal year 2014.

State of the Art Practices in Care Coordination and Utilization Review

Care coordination

Of the five topics discussed to further care coordination the Department already has four topics fully operational and has sought funding for the fifth topic for many years. The DOC has on site chronic care clinics at all correctional facilities to slow progression of disease whenever medically possible and decrease the number of hospital admissions. The DOC has been using telemedicine for specialty visits since 1995 to increase offender access and decrease security costs. Our current pharmacy services contractor provides all of the innovative services listed in the report. Offenders who are released are provided at least a month's supply of medications and provided a second month's prescription for mental health medications to promote continuity of care. Additionally, the health services unit helps reentry specialists find placement for offenders with acute care needs and connects HIV positive patients with the AIDS Drug Assistance Program (ADAP) clinics in their areas. Furthermore, for care coordination, the DOC has sought funding for an electronic health record, completed an RFP and chose a vendor, but the Virginia General Assembly has not appropriated the funding.

Utilization Review and Management

The DOC currently uses a VADOC specific electronic system to authorize and monitor offsite health care. This prospective review allows the Chief Physician to proactively collaborate with facility physicians to treat onsite or approve necessary offsite care when appropriate. According to Anthem Blue Cross Blue Shield, DOC practice was found to be in line with current community practice.

Anthem Blue Cross Blue Shield also reviews offsite care both concurrently and retrospectively. They have the ability to dispute days and charges related to visits.

The DOC also has a full time clinical care coordinator who works with VCUHS to discharge offenders when medically appropriate to decrease inpatient days and costs.

Innovative Correctional Health Care Management Systems from Other States

Two suggestions were made regarding innovations to the health care system. In the first, utilizing a fully contracted medical system was suggested. The immediate benefits are realized when a "vendor not to exceed rate" is utilized and staffing concerns are passed onto the vendor. Virginia has utilized this method for its hard to staff sites, sites that have infirmaries, and for its more acute medical need offender populations. The concern is that the driving force for selecting a totally contracted medical model will be based mainly on price. This may lead to decreased offender medical care as contractors are the recipients of and will benefit from any cost avoidance. The Commonwealth in this model is still responsible for offender care and is legally liable. This has been proven in a recent health care lawsuit from a contracted medical site.

The second suggestion is that an academic medical center would manage the DOC health system. Historically, the Department has explored an offender health system managed by an academic medical center. In the opinion of the Department this change would have to be mandated by the legislature as has been done in other states. This option would allow all medications to be purchased at 340b pricing and would reduce medication costs statewide by about 50%. This model will provide high quality care and reduce expenses by bypassing the need for most contractors.

Conclusion

The Virginia Department of Corrections has and will continue to stay abreast of emerging correctional and community healthcare trends to ensure adequate and cost effective care. This type of review provides an opportunity for self-reflection and health services looks forward to the coming months to identify areas for improvement. With concrete data gathering, review of current operation and looking for the best evidenced based practices, the Department is certain that it can find ways to continue to improve the operations to better serve the Commonwealth.