Department  of  Health  and Human  Services 
OFFICE  OF 
INSPECTOR  GENERAL 
MEDICAID  MANAGED  CARE  AND 

HIV/AIDS 

JUNE  GIBBS  BROWN 
Inspector  General 
7 
APRIL1998 
d3a e  OEI-05-97-00210  OFFICE  OF  INSPECTOR  GENERAL 
The  mission  of the  Office  of  Inspector  General  (OIG),  as mandated  by Public  Law  95 
452, is to  protect  the  integrity  of the  Department  of Health  and  Human  Services 
programs  as well  as the  health  and  welfare  of beneficiaries  served  by them.  This 
statutory  mission  is carried  out  through  a nationwide  program  of  audits,  investigations, 
inspections,  sanctions,  and  fraud  alerts.  The  Inspector  General  informs  the  Secretary 
of program  and  management  problems  and  recommends  legislative,  regulatory,  and 
operational  approaches  to  correct  them. 
Office  of  Evaluation  and  Inspections 
The  Office  of Evaluation  and  Inspections  (OEI)  is one  of  several  components  of the 

Office  of Inspector  General.  It  conducts  short-term  management  and  program 

evaluations  (called  inspections)  that  focus  on issues of concern  to  the  Department,  the 

Congress,  and  the  public.  The  inspection  reports  provide  findings  and 

recommendations  on  the  efficiency,  vulnerability,  and  effectiveness  of  departmental 

programs. 

OEIs  Chicago  Regional  Office  prepared  this  report  under  the  direction  of William  C. 

Moran,  Regional  Inspector  General,  and  Natalie  Coen,  Deputy  Regional  Inspector 

General.  Principal  OEI  staff  included: 

REGION  HEADQUARTERS 

Joseph  L.  Penkrot  (Project  Leader)  Elise  Stein 

Victoria  Jacobs  (Lead  Analyst) 

Nora  Leibowitz 

Elizabeth  Mages 

To  obtain  a copy  of this  report,  call  the  Chicago  Regional  Office  at  (312)  353-4124.  EXECUTIVE  SUMMARY 
PURPOSE 
This  inspection  describes  how  some  States  address  the  treatment  of persons  with 
HIV/AIDS  in Medicaid  managed  care. 
BACKGROUND 
Several  factors  currently  affect  both  Medicaid  financing  and  the  treatment  of Medicaid 
patients  with  HIV/AIDS.  These  factors  include  the  devolution  of Medicaid  control 
from  Federal  to  State  authority,  the  continued  expansion  of managed  care,  the 
changing  faces  of HIV/AIDS,  and  new  drugs  to  treat  HIV/AIDS.  We  surveyed  all 
States  to  examine  the  extent  of managed  care  coverage  of Medicaid  beneficiaries  with 
HIV/AIDS.  We  also visited  six States  operating  various  managed  care  models  to 
observe  how  these  States  address  concerns  of persons  with  HIV/AIDS  in Medicaid 
managed  care. 
FINDINGS 
The  Medicaid  managed  care  organizations  that  are  paid  an AIDS-enhanced  rate 
appear  to  provide  all  needed  medical  services  and  drugs  to  AIDS  patients.  Those  not 
paid  an enhanced  rate  report  that  they  can not  afford  to  continue  providing  these 
services  and  drugs  without  adequate  financial  compensation. 
According  to  our  survey  of State  Medicaid  directors,  4 of the  37 States  paying 
capitated  managed  care  rates  adjust  the  rates  for  providing  care  to  persons  with 
AIDS;  none  pay  an HIV  risk-adjusted  rate.  We  visited  Medicaid  managed  care 
organizations  (MCOs)  in  these  four  States  and  in  two  other  States  and  found  that  for 
the  most  part,  they  appear  to  provide  comprehensive  medical  services  and  necessary 
drugs  to  enrollees  with  AIDS. 
The  MCOs  we  visited  which  are  not  paid  an AIDS-adjusted  rate  are  negotiating  with 
their  States  to  receive  one  so that  they  can  continue  to  afford  to  provide  these  services 
and  drugs.  In  the  absence  of an enhanced  rate,  MCOs  risk  a major  financial  loss if 
they  attract  an inordinate  number  of AIDS  patients  by  advertising  their  inclusion  of 
known  HIV  specialists. 
In  the  States  we visited,  the  Medicaid  managed  care  and  Ryan  White  programs  do not 
coordinate  the  services  they  provide  to  persons  with  HIV/AIDS.  The  health  of 
persons  with  HIV/AIDS  is increasingly  dependent  upon  the  integration  of these 
services. 
i  In  States  we visited,  Medicaid  managed  care  respondents  indicated  that  their  States 
are  not  engaged  in  any  efforts  to  involve  Ryan  White  programs  in the  transition  to 
managed  care  or  to  ensure  coordination  between  the  two  programs.  Medicaid 
beneficiaries  with  HIV/AIDS  often  depend  on Ryan  White  providers  for  medical  and 
ancillary  services  vital  to  their  medical  well-being.  Respondents  stressed  the  rising 
importance  of these  services  in light  of the  changing  demographics  of the  HIV/AIDS 
population.  The  HIV/AIDS  population  is increasingly  comprised  of low-income 
persons  facing  a host  of social  and  environmental  challenges  which  complicate  their 
ability  to  access and  comply  with  health  maintenance  routines. 
RECOMMEWDATIONS 
The  Health  Care  Financing  Administration,  in  consultation  with  the  Health  Resources 
and  Services  Administration,  should  develop  and  disseminate  technical  assistance  and 
guidance  on  strategies  State  Medicaid  programs  can use to  establish  appropriate 
managed  care  contracts  for  needed  medical  services  and  costs related  to  these  services 
for  beneficiaries  with  HIV  and  AIDS. 
There  is a lack  of consensus  among  State  Medicaid  and  plan  administrators  regarding 
what  services  Medicaid  MCOs  are  responsible  to  provide  to  persons  with  HIV  and 
AIDS,  and  how  they  are  to  be  compensated  for  the  costs of these  services.  Even  in 
the  four  States  which  pay  an AIDS-adjusted  rate,  State  Medicaid  and  MC0 
administrators  come  to  the  negotiating  table  with  widely  divergent  ideas  about 
appropriate  AIDS  rates  to  cover  the  costs of the  care  they  provide. 
The  Health  Care  Financing  Administration  (HCFA)  in  consultation  with  the  Health 
Resources  and  Services  Administration  (HRSA)  should  develop  a guidance  document 
for  the  States  regarding  treatment  of beneficiaries  with  HIV  and  AIDS  in Medicaid 
managed  care  which  includes  the  following  information:  the  services  to  be potentially 
provided  by Medicaid  for  persons  with  HIV  and  AIDS,  based  on  the  national 
guidelines  on  HIV  care  being  developed  by the  Department;  estimates  of the  costs of 
these  services;  and  options  on  how  to  cover  these  costs in  a Medicaid  managed  care 
program.  Recognizing  State  variation,  this  information  would  provide  States with  a 
starting  point  to  establish  contracts  with  the  MCOs  requiring  the  provision  of 
necessary  medical  care  to  HIV/AIDS  beneficiaries  in  return  for  adequate 
compensation. 
The  Health  Care  Financing  Administration  should  urge  States  to  require  Medicaid 
managed  care  plans  to  coordinate  with  Ryan  White  programs  on  the  services  they 
provide  to  Medicaid  beneficiaries  with  HIV/AIDS.  The  Health  Resources  and 
Services  Administration  should  continue  to  encourage  Ryan  White  grantees  to work 
with  Medicaid  managed  care  plans.  Together,  these  agencies  should  work  to  develop 
strategies  of coordination  for  Medicaid  managed  care  and  the  Ryan  White  programs. 
In  the  best  interests  of HIV/AIDS  patients,  MCOs  and  Ryan  White  agencies,  it is 
essential  that  parties  rendering  services  to  HIV/AIDS  patients  coordinate  these 
ii  services  with  comprehensive  care  for  the  patients  in mind.  Ryan  White  funds  fill 
service  gaps where  no  insurance  or  other  funding  streams  exist  to  pay  for  care.  Ryan 
White  providers  and  MCOs  serving  the  same patients  must  coordinate  to  prevent 
duplicating  services  and  wasting  scarce  health  care  resources. 
The  State  Medicaid  agencies  and  Medicaid  MCOs  need  to  advise  Ryan  White 
grantees  of the  services  they  provide  to  HIV/AIDS  patients.  With  this  information, 
Ryan  White  eligible  metropolitan  areas  and  consortia  will  be  able  to  assess the 
HIV/AIDS  communitys  needs  more  accurately,  and  consequently  be  able  to  deliver 
services  more  rationally.  Overlapping  of services  can be reduced  and  MC0  capitation 
rates  can  more  accurately  represent  the  costs of services  they  provide. 
Through  coordination,  MCOs  and  Ryan  White  providers  can  provide  seamless  care  to 
patients  with  HIV  and  AIDS,  addressing  all  their  varied  health  needs.  By  coordinating 
with  providers  of services  such  as HIV  counseling,  HIV  education  and  nutritional 
counseling,  MCOs  can better  meet  their  prevention  and  health  maintenance  missions. 
AGENCY  COMMENTS 
The  Assistant  Secretary  for  Planning  and  Evaluation  (ASPE),  HCFA  and  HRSA 
provided  comments  to  the  draft  report.  While  all  concurred  with  the  reports  findings 
and  recommendations,  they  offered  suggestions  for  clarifying  the  report  and  making 
other  technical  changes.  Where  appropriate,  we  changed  the  report  to  reflect  their 
comments. 
The  HCFA  felt  that  providing  States  with  aggregate  HIV/AIDS  cost  data  would  not  be 
useful  because  of the  wide  variations  in  costs and  felt  it  inappropriate  that  they 
develop  model  contract  MC0  language  for  State  Medicaid  agencies. 
We  feel  that  HCFAs  current  cost data  complements  other  Departmental  data  on the 
costs of providing  services  to  persons  with  HIV/AIDS.  In  terms  of model  Medicaid 
MC0  contract  language,  this work  is already  underway  and  is funded  by the 
Department.  Presuming  that  States  can use the  model  language  that  is suited  to  their 
distinctive  Medicaid  programs,  we  urge  HCFA  to work  with  HRSA  to  disseminate  this 
information  to  States  when  completed. 
The  HRSA  suggested  that  through  HCFA,  States  be required  to  pay  enhanced  rates 
to  Medicaid  providers  and  MCOs  with  significant  HIV/AIDS  patients  and  States 
require  Medicaid  MCOs  to  contract  with  Ryan  White  agencies.  With  respect  to 
financing  additional  costs, there  are  a variety  of options  to  cover  the  cost  of 
HIV/AIDS  care.  Paying  an enhanced  rate  is one  possible  approach  to  ensure  this. 
We  recommend  that  HCFA  and  HRSA  jointly  provide  information  States  can use to 
make  informed  judgments  on  how  best  to  reimburse  MCOs  equitably  for  services  to 
HIV/AIDS  patients.  We  do  not  agree  that  Medicaid  MCOs  be required  to  contract 
with  Ryan  White  agencies.  While  in some  locales,  MCOs  already  contract  with  Ryan 
111  White  providers  to  furnish  needed  services  to HIV/AIDS  patients,  Medicaid  MCOs 
should  not  be required  to  duplicate  services  they  can already  provide.  We  recommend 
that  Medicaid  MCOs  coordinate  service  delivery  with  Ryan  White  providers  to  avoid 
duplication  and  ensure  comprehensive  care. 
iv  TABLEOFCONTENTS 

PAGE 
EXECUTIVESUMMARY 
INTRODUCI-ION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1 
FINDINGS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  6 
Capitation  Rates  and  Service  Delivery  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  6 
l 
Lack  of Coordination  Between  Managed  Care  and  Ryan  White  ...........  10 
l 
RECOMMENDATIONS  ...........................................  13 
APPENDICES 
A: 	 Descriptions  of Sampled  States  Inclusion  of HIV/AIDS  Patients  in Medicaid 
Managed  Care  Plans  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  A-l 
B:  Descriptions  of Sampled  Managed  Care  Plans  . . . . . . . . . . . . . . . . . . . . . . .  B-l 
C:  Agency  Comments  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  C-l 
D:  Endnotes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  D-l  INTRODUCTION 
PURPOSE 

This  inspection  describes  how  some  States  address  the  treatment  of persons  with 

HIV/AIDS  in Medicaid  managed  care. 

BACKGROUND 

Medicaid  provides  health  and  long  term  care  services  to  low-income  Americans.  In 

1995, Medicaid  provided  health  care  benefits  to  approximately  36 million  Americans 

(more  than  1 in  lo),  costing  an estimated  $156.3  billion.  The  Federal  Government 

provides  matching  funds  to  States  to  administer  the  program  under  Federal  guidelines. 

Nearly  half  of the  persons  living  with  AIDS  rely  on  Medicaid  for  their  health  care. 

The  Human  Rights  Campaign  estimates  that  approximately  104,000  persons  with  HIV 

and  AIDS  receive  Medicaid  benefits.  For  children  with  HIV/AIDS,  Medicaid  provides 

90 percent  of their  total  health  care  costs.  In  fiscal  year  (FY)  1997, Medicaid  spent  an 

estimated  $3.3 billion  for  HIV/AIDS  treatments. 

Medicare  expenditures  on persons  with  AIDS  increased  from  an estimated 

$800  million  for  approximately  28,000  AIDS  patients  in  1994 to  an estimated  $1.3 

billion  for  FY  1997 for  approximately  36,000  AIDS  patients.  The  rise  of Medicare 

expenditures  for  AIDS  is a result  of more  people  with  AIDS  becoming  eligible  for 

Medicare  and  the  longer  lifespans  resulting  from  new  therapies  to  treat  AIDS. 

Medicaid  financing  and  treatment  of Medicaid  patients  with  HIV/AIDS  has been 

profoundly  affected  by several  factors,  including:  the  devolution  of Medicaid  control, 

the  continued  expansion  of managed  care,  the  changing  faces  of HIV/AIDS,  and  new 

drugs  to  treat  HIV/AIDS. 

a 	 The  devolution  of Medicaid  control  from  Federal  to  State  authority  is marked 
by the  proliferation  of Medicaid  waivers,  allowing  States  to  experiment  with 
managed  care  service  delivery.  The  Balanced  Budget  Act  of  1997 eliminates 
the  need  for  Federal  waiver  approval  of managed  care  for  States.  As  a result, 
States  may  proceed  more  quickly  with  expanding  Medicaid  managed  care. 
0 	 Increasingly,  States  are  transforming  their  Medicaid  programs  from  fee-for-
service  payment  arrangements  into  capitated  managed  care  programs. 
Currently,  all  States,  with  the  exceptions  of Alaska  and  Wyoming,  have 
implemented  managed  care  programs  for  all  or  segments  of their  Medicaid 
populations.  For  example,  many  States  mandate  managed  care  for 
beneficiaries  who  receive  Medicaid  because  of their  entitlement  to 
Supplemental  Security  Income  (SSI)  benefits.2  (People  with  AIDS  on 
1  Medicaid  are  typically  eligible  for  Medicaid  through  the  SSI program.)  As  of 
June  30,  1996,  13 million  Medicaid  beneficiaries  (40  percent  of  all  enrollees) 
were  in  managed  care  plans. 
As  we  documented  in  our  earlier  inspection,  The  Ryan  White  Care  Act: 
l 	
Local  Implementation  Issues  (OEI-05-93-00336),  increasing  numbers  of 
women,  children,  heterosexuals  and  intravenous  drug  users  are  contracting  HIV. 
These  new  groups  present  multiple  service  delivery  problems  for  providers.  In 
some  locations,  transmission  of HIV  now  occurs  more  frequently  from 
intravenous  drug  users  sharing  contaminated  needles  than  from  men  having  sex 
with  men,  as the  disease was  historically  spread.  This  change  complicates 
treatment,  as this  type  of  client  may be less likely  to  comply  with  a treatment 
regimen. 
New  drug  treatments  have  been  effective  in  treating  HIV/AIDS.  For  most  of 
l 	
those  who  stay on  the  drug  regimen,  powerful  protease  inhibitors  have  been 
shown  to  delay  the  onset  of full-blown  AIDS  and  mitigate  other  symptoms  by 
increasing  immune  system  resistance.  These  drugs  can  reduce  the  amount  of 
virus  in  the  blood  to  undetectable  levels  for  some  patients.  Protease  inhibitors 
are  typically  prescribed  in  combination  with  other  drugs.  However,  these 
therapies  are  costly  - up  to  $12,000  a year  for  these  drugs  alone,  not  counting 
supplemental  drugs  and  other  tests and  treatments.  If viral  load  testing  and 
other  monitoring  is included,  costs can approach  $15,000  annually. 
The  intersection  of these  events  presents  a markedly  different  health  care  landscape 

for  State  Medicaid  agencies,  the  Health  Care  Financing  Administration  (HCFA),  the 

Health  Resources  Service  Administration  (HRSA)  managed  care  plans,  health  care 

providers,  Ryan  White  agencies  and  persons  living  with  HIV/AIDS. 

l)pes  of Medicaid  Managed  Care 

Managed  care  aims  to  reduce  unnecessary  services,  lower  health  care  costs and 

increase  access to  services.  At  one  type  of managed  care  plan  - a health  maintenance 

organization  (HMO),  gatekeepers  direct  patients  only  to  needed  care,  usually  within 

the  managed  care  plan.  Other  types  of managed  care  plans  - Prepaid  Health  Plans 

and  Health  Insurance  Organizations  - are  similar  to  HMOs.  For  the  purpose  of this 

evaluation,  these  types  of managed  care  organizations  will  be treated  like  HMOs.  The 

State  pays HMOs  a fixed  capitated  rate  per  member  to  provide  health  care  to 

Medicaid  members.  The  HMOs  do not  submit  individual  claims  for  payment  for 

services  rendered  to  the  State.  Roughly  75 percent  of Medicaid  recipients  in managed 

care  belong  to  HMO-type  plans. 

In  a second  type  of managed  care,  called  Primary  Care  Case  Management  (PCCM)  an 

individual  or  group  of providers  act as a gatekeeper.  The  PCCMs  serve  as medical 

homes  for  their  patients  and  refer  patients  to  other  providers  when  necessary. 

Medicaid  reimburses  them  a fixed  amount  per  patient  for  case management  services 

2  only.  The  physicians  acting  as PCCMs  bill  Medicaid  on  a fee-for-service  basis for  all 

medical  care  they  provide. 

Managed  Care  and  HW/!DS 

Currently,  not  all  Medicaid  patients  with  HIV/AIDS  are  enrolled  in  managed  care 

plans.  Some  State  Medicaid  managed  care  contracts  specifically  exclude  or  carve  out 

HIV/AIDS  patients  and  others  with  chronic  disabilities. 

However,  some  Medicaid  managed  care  plans  include  HIV/AIDS  patients,  and  more 

States  are  looking  to  control  medical  costs for  their  most  expensive  Medicaid 

enrollees.  Prior  to  the  enactment  of the  Balanced  Budget  Act,  HCFA  approved  18 

Statewide  demonstration  projects,  10 of which  require  enrolling  all  HIV/AIDS  patients 

when  fully  implemented.  Another  19 States  received  managed  care  waivers  that 

include  some  or  all  HIV/AIDS  patients. 

In  addition  to  specific  State  Medicaid  waivers,  the  Ryan  White  program  sponsors  some 

demonstration  programs,  called  Special  Projects  of National  Significance  (SPNS).  Six 

SPNS  projects  test  new  methods  to  deliver  HIV/AIDS  care.  Two  SPNS  managed  care 

projects  are  in Los  Angeles  with  one  each  in Boston,  Baltimore,  North  Carolina  and 

New  York. 

&an  white  Activities 

In  1990, Congress  passed  the  Ryan  White  Act  as a comprehensive  response  to  the 

HIV  epidemic  and  its impact  on individuals,  families,  communities,  cities,  and  States. 

The  Ryan  White  programs,  which  Congress  has reauthorized  through  2000,  aim  to 

provide  health  care  and  support  services  to  persons  with  HIV/AIDS  who  would 

otherwise  not  have  access to  care.  Unlike  Medicare  and  Medicaid  where  individuals 

are  specifically  entitled  to  benefits,  the  Ryan  White  Acts  four  titles  and  Part  F direct 

resources  to various  entities  and  allow  grantees  maximum  flexibility  in the  use of 

funds,  particularly  at the  local  level. 

Title  I provides  emergency  relief  grants  to  eligible  metropolitan  areas  (EMAs) 
l 
disproportionately  affected  by the  HIV  epidemic.  Grants  are  for  HIV-related 
outpatient  and  ambulatory  health  and  support  services,  including  case 
management  and  comprehensive  treatment  services. 
0 	 Title  II  provides  grants  to  States  to  improve  the  quality,  availability  and 
organization  of health  care  and  support  services  for  individuals  and  families 
with  HIV  disease.  Title  II  funds  service  delivery  systems which  provide 
essential  services  throughout  the  complex  course  of HIV  disease  including  the 
AIDS  Drug  Assistance  Program,  which  provides  pharmaceutical  treatments  to 
persons  living  with  HIV/AIDS. 
3 
 States  may  establish  HIV  care  consortia  in  areas  most  directly  affected  by the 
disease.  Consortia  are  community-based,  coordinated,  continuums  of care  to 
which  all  persons  with  HIV/AIDS  would  have  access.  These  continuums  of 
care  are  intended  to  close  existing  gaps in  services,  coordinate  health  and 
support  services,  build  community  infrastructure  and  service  networks  with  an 
emphasis  on  integration  of expanded  community  resources,  and  provide 
continuity  of  care  through  case management. 
0 	 Title  III  supports  early  intervention  services,  including  counseling,  testing, 
referrals,  clinical  and  diagnostic  services,  and  therapeutic  services.  It  provides 
grants  to  private  non-profit  organizations  and  public  migrant,  community,  and 
homeless  health  centers,  hemophilia  centers,  and  federally-qualified  health 
centers. 
Title  IV  aims  to  improve  and  expand  comprehensive  care  services  and  increase 
l 	
access to  research  for  children,  youth,  women  and  families  who  are  infected 
with  or  affected  by HIV/AIDS.  Title  IV  grantees  provide  or  coordinate  a wide 
range  of  services,  including  prevention  and  education  activities,  primary  medical 
care,  psychosocial  services,  substance  abuse  treatment,  housing,  child  welfare, 
and  legal  advocacy. 
Part  F funds  the  SPNS  programs,  the  HIV/AIDS  Dental  Reimbursement 
l 	
Program  and  AIDS  Education  and  Training  Centers. 
Concerns  About  Medicaid  Managed  Care  and  HWjMDS 
Including  persons  with  HIV/AIDS  in Medicaid  managed  care  can be  controversial. 
Many  persons  with  HIV/AIDS  are  concerned  that  Medicaid  managed  care  will  disrupt 
the  networks  of medical  care  and  social  service  providers  established  over  recent 
years.  Some  of their  specific  concerns  follow. 
Managed  care  plans  may  not  include  providers  experienced  in treating 
l 	
HIV/AIDS.  These  plans  may  also delay  or  deny  the  specialty  care  and 
medications  that  HIV/AIDS  patients  need. 
Managed  care  plans  may  exclude  essential  community  providers  and  Ryan 
l 	
White  agencies  from  their  care  networks. 
In  capitated  plans,  capitation  rates  may be  inadequate  to  provide  all  necessary 
l 	
HIV/AIDS  services,  drugs  and  testing. 
States  and  managed  care  plans  might  not  include  people  with  special  health 
l 	
care  needs  in  planning  the  move  from  fee-for-service  Medicaid  to  managed 
care.  The  Balanced  Budget  Act  does  not  require  States  to  solicit  or  consider 
input  from  people  with  special  health  care  needs  as they  make  the  transition  to 
Medicaid  managed  care. 
4  SCOPE  AND  METHODOLOGY 
We  surveyed  all  State  Medicaid  directors3  to  examine  the  extent  of managed  care 
coverage  of Medicaid  beneficiaries  with  HIV/AIDS.  To  describe  how  some  States 
address  concerns  of persons  with  HIV/AIDS  in Medicaid  managed  care  programs,  we 
conducted  site visits  in  six States  operating  various  managed  care  models  under 
HCFA-approved  waivers  - California,  Georgia,  Maryland,  Massachusetts,  Oregon  and 
Utah.  These  States  were  selected  to  represent  a mix  of geographic  locations, 
HIV/AIDS  prevalence  rates  and  approaches  to  serving  persons  with  HIV/AIDS 
through  managed  care.  We  also purposely  selected  the  four  States  which  pay  the 
Medicaid  managed  care  organizations  (MCOS)~  AIDS-adjusted  capitation  rates  in 
order  to  examine  delivery  of care  under  an enhanced  rate.  Our  State  survey  and  site 
visits  occurred  in May,  June  and  July  1997.5 
In  each  of these  six States  we  examined:  the  rates  paid  to  contracted  MCOs  for 
serving  persons  with  HIV/AIDS,  access to  care,  quality  of  care  and  coordination 
between  the  Medicaid  managed  care  and  Ryan  White  programs.  To  examine  these 
issues, we  interviewed  representatives  of the  State  Medicaid  managed  care  offices, 
representatives  of  the  State  Offices  of AIDS,  administrators  of  contracted  MCOs 
serving  beneficiaries  with  AIDS,  representatives  of the  Ryan  White  EMAs  and/or 
consortium,  managed  care  physicians  who  treat  beneficiaries  with  AIDS,  local  AIDS 
advocacy  groups,  and  beneficiaries  with  AIDS  enrolled  in  Medicaid  managed  care. 
We  questioned  these  individuals  about  State  Medicaid  payments  to  MCOs  for 
beneficiaries  with  AIDS,  delivery  of certain  AIDS  services  and  drugs,  the  ability  to 
access these  services  and  drugs,  oversight  of the  quality  of care  delivered  by the  MCOs 
to  this  population,  and  the  existence  of coordination  activities  between  the  MCOs  and 
Ryan  White  agencies  and  providers.  With  an eye to  content  applicable  to  persons 
with  HIV/AIDS,  we  also  examined  these  States  waivers,  their  contracts  with  MCOs 
and  informational  materials  MCOs  provide  to  consumers. 
We  limited  this  inspection  to  a description  of the  delivery  of  care  to  persons  with 
HIV/AIDS  enrolled  in  Medicaid  managed  care.  We  did  not  compare  the  cost or 
quality  of treatment  of persons  with  HIV/AIDS  in Medicaid  managed  care  programs 
to  that  in fee-for-service  Medicaid.  We  did  not  identify  or  establish  a definitive 
standard  of treatment  of persons  with  HIV/AIDS  in Medicaid  managed  care.  We  did 
not  conduct  any medical  review  of records  of HIV/AIDS  patients. 
We  conducted  our  review  in  accordance  with  the  Quality Standards for Inspections 
issued  by the  Presidents  Council  on  Integrity  and  Efficiency. 
5 
 FINDINGS 

The  Medicaid  managed  care  organizations  that  are  paid  an AIDS-enhanced  rate 
appear  to  provide  all  needed  medical  services  and  drugs  to AIDS  patients.  Those  not 
paid  an enhanced  capitation  rate  report  that  they  can not  afford  to  continue  providing 
these  services  and  drugs  without  adequate  financial  compensation. 
According  to  our  survey  of State  Medicaid  directors,  33 of the  37 States  that  pay 
capitated  managed  care  rates  do not  adjust  the  rates  for  providing  care  to  persons 
with  AIDS.  Only  California  (in  certain  counties),  Maryland,  Massachusetts  and  Utah 
pay  contracted  managed  care  organizations  an adjusted  capitation  rate  for  providing 
care  to  enrollees  with  AIDS.6  No  State  adjusts  the  capitation  rate  they  pay  MCOs 
for  serving  persons  who  are  HIV-positive  but  not  AIDS-symptomatic.7 
We visited  the  four  States  which  pay  an AIDS-adjusted  rate  to  examine  their  delivery 
of AIDS  care.  We  also  examined  the  delivery  of AIDS  care  in the  absence  of an 
AIDS-adjusted  rate  in  one  county  in  California  and  in  Oregon  and  Georgia.  However, 
Georgia  is primarily  a PCCM  State  and  therefore  uses fee-for-service  reimbursement 
rather  than  capitation.  (Appendices  A  and  B provide  more  detail  on  the  States  and 
MCOs  we  visited.) 
In  every  State  we visited,  physicians,  MC0  administrators  and  AIDS  advocates 
emphasized  the  relationship  between  the  rates  received  to  care  for  persons  with  HIV 
and  AIDS  and  the  managed  care  organizations  ability  to  provide  comprehensive, 
quality  care  to  these  enrollees.  According  to  these  respondents,  plans  which  are  paid 
HIV  and  AIDS  rates  are  more  likely  to  ensure  that  HIV  and  AIDS  patients  have 
access to  the  services  they  need  and  HIV  experienced  doctors. 
Plans  not  paid  an adjusted  rate  for  serving  patients  with  AIDS  risk  financial  loss by 
enrolling  these  patients.  Hence,  they  have  an incentive  to  avoid  enrolling  these 
patients.  For  example,  MCOs  can  deter  the  enrollment  of persons  with  AIDS  by not 
including  HIV  specialists  in  their  network  or  not  advertising  their  inclusion  of these 
providers.  Managed  care  organizations  likewise  have  a financial  disincentive  to 
determine  which  of their  members  have  HIV  and  provide  services  and  drugs  to  them. 
Respondents  representing  the  plans  we visited  in San Francisco  and  Oregon  which 
were  not  paid  an AIDS-adjusted  capitation  rate  at the  time  of our  study  indicated  that 
the  capitation  rates  are  a disincentive  for  them  to  enroll  people  with  AIDS.  These 
respondents  said  that  while  they  provide  all the  necessary  services  and  drugs  for  their 
HIV  and  AIDS  enrollees,  they  would  not  be  able  to  continue  to  provide  these  services 
and  drugs  and  survive  financially  without  an AIDS-adjusted  rate.  Both  plans  were 
aggressively  seeking  an AIDS-adjusted  rate  from  their  State  Medicaid  offices. 
(Subsequent  to  our  study,  the  San Francisco  MC0  we visited  began  receiving  an 
AIDS-enhanced  capitation  rate.) 
6  Almost  half  of  Oregons  Medicaid  beneficiaries  with  AIDS  are  enrolled  in 

CareOregon.  CareOregon  includes  reputed  HIV  specialists  in  its provider  network 

and  publicizes  this  inclusion  in its consumer  materials.  These  efforts  by the  plan, 

despite  the  lack  of  any  enhanced  capitation,  to  meet  the  needs  of the  Medicaid  AIDS 

population  leave  CareOregon  at a financial  disadvantage  in  comparison  to  its 

competitors.  CareOregon  estimates  losing  between  $750  and  $1,200  monthly  for  each 

of their  AIDS  patients. 

Cost Estimates  for  AIDS  and  HIV  Care 

The  absence  of a consensus  on  the  cost of AIDS  treatment  impedes  the  ability  of 

States  and  MCOs  to  agree  on  an appropriate  AIDS-adjusted  capitation  rate. 

Physicians  and  plan  administrators  we  spoke  with  reported  estimates  between  $800 

and  $3000  for  the  average  monthly  cost of providing  all  drugs  and  services  to  an AIDS 

patient. 

States  typically  base  capitation  rates  on  fee-for-service  expenditures  for  a given 

Medicaid  population.  However,  using  estimated  fee-for-service  expenditures  to 

determine  an appropriate  capitation  rate  for  treating  persons  with  AIDS  and  HIV  is 

problematic;  there  is a significant  time  lag between  the  collection  and  use of fee-for-

service  expenditure  data.  Much  of the  available  data  precedes  the  new  and  expensive 

therapies  now  being  used.  State  Medicaid  and  managed  care  administrators  reported 

a lack  of  current  information  on  the  potential  costs of treating  persons  with  HIV  and 

AIDS  through  managed  care  programs. 

The  emergence  of combination  drug  therapy  in the  past  few  years  dramatically  altered 

the  costs of treating  AIDS.  The  cost  of the  new  drug  therapy  is estimated  between 

$10,000  and  $15,000  a year.  In  some  cases, total  treatment  costs decline  when  an 

AIDS  patient  commences  drug  therapy  because  the  need  for  more  expensive 

treatment  and  inpatient  care  is reduced.  In  other  cases, less effective  drug  therapy 

results  in  the  need  for  more  expensive  care.  Respondents  repeatedly  emphasized  the 

unpredictability  of current  treatments  and  their  effects  on  long-term  costs. 

While  the  impact  of combination  drug  therapy  on the  costs of AIDS  care  is not  clear, 

the  use of this  therapy  by persons  with  HIV  has led  to  a dramatic  increase  in the  costs 

of caring  for  this  population.  According  to  a representative  of the  AIDS  Health  Care 

Foundation  it  now  costs almost  as much  to  care  for  a person  with  HIV  as it  does to 

care  for  a person  with  AIDS.  As  a result,  normal  Medicaid  capitation  rates  may  not 

cover  the  costs for  persons  with  HIV  who  are  asymptomatic. 

Carving  Protease  Inhibitors  and  Viral  Load  Tests Out  of the  Capitation  Rates 

To  contend  with  the  unpredictable  and  high  costs of protease  inhibitors,  19 of the  37 

States  paying  capitated  rates  do not  require  MCOs  to  pay  for  these  drugs  with  their 

capitated  payments.  In  States  where  protease  inhibitors  are  not  carved  out  of the 
 capitation  rate,  financial  liability  for  the  costs of drug  therapy  can result  in  substantial 
uncompensated  costs to  an MC0  for  treating  persons  with  HIV  and  AIDS. 
In  June  1996, HCFA  advised  all  State  Medicaid  directors  to  ensure  that  their 
Medicaid  programs  provide  protease  inhibitors  to  Medicaid  beneficiaries  with 
HIV/AIDS.  They  also  instructed  Medicaid  directors  to  examine  whether  capitation 
rates  should  be  adjusted  to  account  for  the  introduction  of new  drugs  such  as the 
protease  inhibitors  if they  are  not  excluded  from  the  capitation  rates. 
Only  Maryland  and  California  (in  some  counties)  specifically  exclude  Medicaid  MCOs 
from  financial  responsibility  for  the  viral  load  tests which  measure  the  effectiveness  of 
protease  inhibitors.  The  tests cost between  $300  to  $800  annually  per  patient. 
Advocates  in  at least  one  State,  Pennsylvania,  are  concerned  that  MCOs  may  restrict 
the  frequency  of viral  load  tests because  they  are  not  specifically  compensated  for 
providing  them. 
The  following  table  shows  the  capitation  range  our  sample  States  pay  Medicaid  MCOs 
to  treat  AIDS  patients  and  whether  protease  inhibitors  and  viral  load  tests are  carved 
out  of the  rates. 
RATES  TO  MCOS  FOR  SERVING  MEDICAID  BENEFICIARIES  WITH  AIDS 

(as of July  1997) 
State Program:  Monthly  Rate Paid  Estimate4l  Is Payment  Is Payment 
Managed Care Plans  to MCOs for  Enrollment  of  for  for Viral 
Visited  Medicaid Enrollees  Beneficiaries with  Protease  Load Tests 
with  AIDS  AIDS  for whom  Inhibitors  carved out 
these rates are paid  calved  of the 
and total plan  Out of the  Capitation 
enrollment  as of  Capitation  Rate? 
July 1997  Rate? 
MA:  Community  $2,300 for active 
 115 active or  YES  NO 
Medical Alliance  cases 
 advanced AIDS 
(Rate is available  to  $2,998 for advanced 
 cases 
other non-targeted  cases 
 (45 others with HIV 
qualifLing  plans)  diagnosis) 
450 total enrollees 
MD:  Chesapeake  $2,161  ($1,812 for 
 Initial  enrollment  YES  YES 
Health  Plan  patients residing 
 underway at time of 
outside of 
 study 
Baltimore  City) 

CA:  San Mateo  $1,300 
 73 out of 48,000  NO  NO 
County 
UT:  United  Health  $1,169 
 11 out of 16,131  YES  NO 
Plan  (63 with HIV  (chart 
diagnosis)  continued 
wxt  page) 
8  State Program:  Monthly  Rate Paid  Estimated  Is Payment  Is Payment 
Managed Care Plans  to MCOs for  Enrollment  of  for  for Viral 
Visited  Medicaid  Enrollees  Beneficiaries with  Protease  Load Tests 
with  AIDS  ADS  for whom  Inhibitors  carved out 
these rates are paid  calved  of the 
and total  plan  Out of the  Capitation 
enrollment  as of  Capitation  Rate? 
July 1997  Rate? 
CA:  Positive  $1,139*  400  out of 400  YES  NO 
HealthCare,  LA 
CA:  San Francisco  $221  3.5 out of 24,000  YES  YES 
Health  Plan* * 
OR:  CareOregon* *  $104 - $625  800  out of 26,000  NO  NO 
*Note:  Inpatient  hospital  costs are not included  in this rate.  California  deposits the fee-for-service  equivalent  costs for  inpatient  care 
for  Positive  HealthCare  patients  into a risk pool  for  the plan  to draw from.  Any savings are shared equally  at years end 
**  CareOregon  currently  is seeking an adjusted capitation  rate for AIDS  patients.  Effective  October  1997, the San Francisco  Health 
Plan,  after months  of negotiations  with the State, began receiving  an enhanced capitation  of $1,130 monthly  for  each patient  who meets 
the CDC  definition  of having AIDS. 
Access to Needed Services 
For  the  most  part,  Medicaid  MCOs  we visited  appear  to  provide  enrollees  with  AIDS 
comprehensive  medical  services  and  necessary  drugs.  However,  some  State  contracts 
with  MCOs  guarantee  services  for  AIDS  patients  but  do  not  mention  persons  with 
HIV.  One  respondent  who  has consulted  with  a variety  of Medicaid  MCOs  on rate 
calculation  issues indicated  that  States  failure  to  compensate  MCOs  for  caring  for 
persons  with  HIV  may  provide  the  MCOs  with  a disincentive  to  detect  HIV  disease  in 
their  enrollees  and/or  provide  them  with  early  treatment. 
Although  our  sample  MCOs  appear  to  provide  AIDS  patients  with  access to  needed 
services  and  drugs,  some  respondents  indicated  there  are  barriers  to  receiving  the  care 
due  to  MC0  preauthorization  requirements  and  limits  on  services.  Respondents 
cited  limited  availability  of nutritional  counseling,  nutritional  supplements  and  home 
health  services  as particularly  problematic.  One  sample  MC0  serving  a rural  area 
requires  limited  duration  drug  prescriptions.  Some  drugs  are  needed  on  an ongoing 
basis.  When  they  are  used  up,  it  can take  10 days to  2 weeks  to  refill  a prescription. 
Since  it is so vital  for  HIV/AIDS  patients  to  stay on  their  drug  regimen,  this  presents  a 
special  problem  for  these  patients. 
Access  to Providers  and  Specialkfi  with  HIV  Expenmce 
At  the  managed  care  organizations  we visited,  persons  with  AIDS  have  access to HIV-
experienced  physicians  and  can select  a specialist  as their  primary  care  physician. 
Several  MCOs  we visited  contract  with  university  hospitals  and  centers  of excellence 
that  have  histories  of  specialized  HIV/AIDS  care.  They  report  that  primary  care 
physicians  can refer  patients  for  specialty  care  whenever  necessary.  Most  plans  say 
9  that  their  members  services  staff  can  direct  persons  to  HIV  care  or  HIV-experienced 

providers  if the  patients  ask specifically  for  this  referral. 

Despite  this  available  expertise,  unless  they  specifically  ask, patients  may  not  be aware 

which  providers  are  HIV-experienced  or which  specialties  treat  HIV.  Most  MC0 

provider  directories  do  not  indicate  which  physicians  or  clinics  specialize  in treating 

HIV/AIDS  patients  or  treat  them  currently.  The  MCOs  may  not  advertise  their 

inclusion  of HIV-experienced  physicians  for  fear  of the  financial  consequences  they 

may  incur  if they  attract  an inordinate  number  of HIV-positive  patients  for  which  they 

are  not  paid  an enhanced  capitation  rate. 

In  the  States  we  visited,  the  Medicaid  managed  care  and  Ryan  White  programs  do not 

coordinate  the  services  they  provide  to  persons  with  HIV/AIDS.  The  health  of 

persons  with  HIV/AIDS  is increasingly  dependent  upon  the  integration  of these 

services. 

In  the  States  we  visited,  Medicaid  managed  care  and  Ryan  White  programs  serve 

many  of the  same  clients,  but  seldom  consider  where  their  programs  could  work 

together  to  serve  these  clients.  None  of the  six sample  States  require  Medicaid  MCOs 

to  include  Ryan  White  providers  in  their  care  networks.  Nor  do  these  States  require 

managed  care  organizations  to  coordinate  with  Ryan  White  providers  on  the  care 

provided  to  mutual  Medicaid  patients.  Neither  the  State  Medicaid  offices  nor  the 

MCOs  we  visited  coordinate  with  Ryan  White  grantee  agencies  on  the  care  provided 

to  the  same  population  through  these  programs.  The  State  Medicaid  managed  care 

representatives  interviewed  indicated  that  their  offices  are  not  engaged  in  any pro-

active  efforts  to  involve  Ryan  White  programs  in the  transition  to  managed  care  or  to 

ensure  coordination  between  the  two  programs.  According  to  our  survey  of  all States, 

none  require  Medicaid  MCOs  to  share  any HIV/AIDS  data  with  Ryan  White  agencies. 

State  Medicaid  programs  are  prohibited  by law  from  disclosing  the  names  of persons 

living  with  AIDS.  The  purpose  of this  prohibition  is to  protect  patient  confidentiality, 

not  to  prevent  Medicaid  programs  from  sharing  other  information  or  coordinating  with 

Ryan  White  programs  serving  the  same patients.  However,  this  lack  of 

communication  and  coordination  is often  attributed  to  the  confidentiality  requirements 

of the  Medicaid  law. 

Beginning  with  the  1996 Ryan  White  authorization,  Ryan  White  Title  I planning 

councils  must  include  a representative  of the  State  Medicaid  program.  This 

representation  of State  Medicaid  staff  on  the  planning  councils  increases  the 

knowledge  Ryan  White  providers  and  State  Medicaid  staff  have  of  each  others 

programs  and  enables  a more  informed  allocation  of Ryan  White  funds.  However,  in 

some  States,  Medicaid  representation  has been  minimal,  translating  this  requirement 

into  a missed  opportunity  for  increased  coordination. 

10 
 The Role  of Ancillary  Services in HWjDS  Care 
Due  to  the  lack  of State  Medicaid  and  Ryan  White  agency  involvement  in the 
integration  of Ryan  White  and  Medicaid  managed  care  programs,  many  Ryan  White 
providers  who  serve Medicaid  beneficiaries  are  not  included  in MC0  provider 
networks.  Yet  Ryan  White  providers  are  often  the  patients  source  for  ancillary 
services,  such  as nutrition  counseling  and  supplements,  psycho-social  services,  home 
attendant  care  and  case management  services. 
In  all  six sample  States,  staff  of State  and  local  AIDS  administration  offices,  Ryan 
White  providers  and  managed  care  physicians  emphasized  the  need  to  provide  persons 
with  HIV  and  AIDS  access to  ancillary  and  psycho-social  services  when  addressing 
their  medical  needs.  These  respondents  stressed  the  rising  importance  of these 
services  in light  of the  changing  demographics  of the  HIV/AIDS  population. 
The  HIV/AIDS  population  is increasingly  comprised  of low-income  persons  faced  with 
a host  of social  and  environmental  challenges  which  complicate  their  ability  to  access 
health  care  and  comply  with  health  maintenance  routines.  Persons  challenged  by 
income  and  physical  constraints  often  depend  on  ancillary  services  such  as 
transportation,  day  care  and  home  attendant  services  to  access needed  medical  care. 
Respondents  in  several  States  noted  that  support  services  such  as nutrition  counseling, 
food  bank  assistance  and  health  education  are vital  to  helping  HIV  and  AIDS  patients 
comply  with  difficult  drug  regimens.  Several  respondents  expressed  concern  that  the 
case management  services  provided  by Medicaid  MCOs  to  patients  with  AIDS  are 
focused  on  the  utilization  of plan  services  rather  than  focused  on  linking  clients  with 
needed  services  and  resources  in the  community. 
According  to  a Ryan  White  provider,  MCOs  need  to work  with  community-based 
providers  experienced  in  dealing  with  low-income  persons  with  HIV  and  AIDS  if they 
are  to  serve  the  health  care  needs  of these  enrollees. 
They (the MCOs) start with  the assumption that patients can follow  a managed 
regimen.... We develop individualized  methods to get folks to the point  where they can 
take a drug regimen.  For people living  chaotic lives the role of the essential 
community  provider  is critical.  It is something managed care organizations  dont 
know how to do and dont want to do and are not really as set up to do it as are 
small, more flexible, community-based providers.  It will  be important  for managed 
care organizations  to look to Ryan White providers to do this kind of work. 
Ryan  white  fiovidem  serving MC0  Clients 
Where  our  sample  managed  care  organizations  include  Ryan  White  providers  in their 
networks,  the  plan  administrators  we  interviewed  are  not  aware  of the  non-medical 
services  their  enrollees  receive  through  these  providers  which  are  not  paid  for  by the 
plan.  The  absence  of plan  involvement  in  the  coordination  of managed  care  and  Ryan 
11 
 White  services  by plan  providers  has the  potential  to  result  in  the  use of Ryan  White 

funds  for  services  that  the  MC0  is paid  to  provide. 

For  example,  in  one  MC0  we  visited  where  the  county  AIDS  clinic  is a network 

provider,  the  clinic  bills  the  MC0  on  a fee-for-service  basis for  the  covered  medical 

services  they  provide  to  plan  enrollees.  The  clinic  uses Ryan  White  funds  to  cover  the 

cost  of the  non-medical  services  they  provide  to  their  patients,  including  health 

education,  nutrition  and  mental  health  counseling.  It  appeared  from  our  interviews 

that  neither  party  is fully  aware  of all  of the  services  for  which  the  other  is responsible. 

In  this  case, the  MC0  reports  that  they  provide  nutrition  counseling  and  supplements 

to  plan  enrollees  with  a referral  from  the  enrollees  primary  care  provider  while  clinic 

administrators  say they  use Ryan  White  funds  to  pay  for  nutritional  counseling  and 

supplements  for  all  of their  patients  who  need  it. 

Lack  of Ryan  White Experience  with  Managed  Care and  Lack  of MC0  Interest  to 

Contract  with  Ryan  white  Providers 

Respondents  in  every  sample  State  cited  Ryan  White  providers  inexperience  in  a 

managed  care  environment  as a barrier  to  coordination  between  Ryan  White  providers 

and  managed  care  organizations.  Many  Ryan  White  providers  have  no  experience 

negotiating  contracts  with  large  commercial  entities  and  do  not  share  the  MCOs 

competitive  cost-driven  orientation. 

Negotiating  contracts  and  coordination  agreements  between  Ryan  White  providers  and 

managed  care  organizations  also depends  on  the  MCOs  commitment  of resources.  In 

large  volume  markets,  managed  care  organizations  may  not  view  negotiating  contracts 

and  coordination  agreements  with  small  volume  providers  as a useful  allocation  of 

their  resources.  The  co-chair  of an EMA  planning  council  said  that  HIV  is only  a 

small  portion  of the  managed  care  business.  It  is difficult  for  them  to  realize  what  is 

small  potatoes  for  them  is huge  for  us. 

Another  consideration  impacting  whether  MCOs  contract  with  Ryan  White  providers 

is MCOs  understanding  of the  Ryan  White  program.  Managed  care  administrators 

unaccustomed  to  providing  care  to  persons  with  HIV  and  AIDS  may  not  be  aware 

how  important  ancillary  services  are  to  the  health  of these  people.  Several  managed 

care  administrators  indicated  that  they  are  not  familiar  with  Ryan  White  programs  in 

their  local  community.  A  respondent  noted  that  (Ryan  White)  providers  may  not  be 

sophisticated  enough  to  market  and  price  their  services.  And  the  managed  care 

organizations  may  not  realize  they  need  these  services. 

To  facilitate  the  participation  of Ryan  White  programs  in  managed  care,  HRSA  has 

distributed  a variety  of informational  and  technical  assistance  materials  to  Ryan  White 

programs,  sponsored  managed  care  training  conferences,  and  implemented  a training 

and  technical  assistance  program  in a number  of States  with  plans  for  future 

expansion.  State  Medicaid  and  managed  care  plan  administrators  have  been  invited  to 

participate  in  HRSAs  training  programs  but  their  participation  has been  sporadic. 

12  RECOMMENDATIONS 
There  is public  concern  about  the  spread  of managed  care.  Some  consumers  fear  that 
managed  care  organizations  maximize  profits  by withholding  medical  services;  others 
worry  that  MCOs  are  ill-equipped  to  provide  specialty  medical  care  to  special 
populations.  Our  review  of managed  care  in  six States  that  cover  persons  with  AIDS 
found  that  overall,  the  MCOs  we visited  appear  to  provide  necessary  medical  services, 
access to  specialty  care,  tests and  medications.  Some  MCOs  provide  this  care  despite 
receiving  capitation  rates  far  below  the  actual  cost  of care.  These  managed  care 
organizations  argue  that  they  will  not  be  able  to  continue  to  provide  necessary  care 
unless  they  are  paid  AIDS-adjusted  capitation  rates. 
In  addition  to  concern  over  adequate  payment  rates,  we  are  troubled  by the  absence 
of coordination  by States  and  MCOs  with  the  networks  of  comprehensive  services 
constructed  by Ryan  White  EMAs  and  consortia.  These  networks  of providers  often 
include  a full  range  of  social  services  available  to  all  HIV  positive  individuals  as well 
as those  with  AIDS.  Persons  with  HIV/AIDS  often  rely  on  the  Ryan  White 
infrastructure  for  primary  medical  and  ancillary  services  critical  to  their  health  and 
well-being. 
The  Health  Care  Financing  Administration,  in  consultation  with  the  Health  Resources 
and  Setices  Administration,  should  develop  and  disseminate  technical  assistance  and 
guidance  on  strategies  State  Medicaid  programs  can use to  establish  appropriate 
managed  care  contracts  for  needed  medical  services  and  costs related  to  these  services 
for  beneficiaries  with  HIV  and  AIDS. 
There  is a lack  of  consensus  among  State  Medicaid  and  plan  administrators  regarding 
what  services  Medicaid  managed  care  organizations  are  responsible  for  providing  to 
persons  with  HIV  and  AIDS  and  how  they  are  to be  compensated  for  the  costs of 
these  services.  Current  capitation  rates  in many  cases do  not  consider  changing  HIV 
treatment  strategies.  Even  in the  four  States  which  pay  an AIDS-adjusted  rate,  State 
Medicaid  and  MC0  administrators  come  to  the  negotiating  table  with  widely  divergent 
ideas  about  appropriate  AIDS  rates  to  cover  the  costs of the  care  they  provide. 
The  HCFA,  HRSA  and  others  in  the  Department  involved  in  HIV/AIDS  treatment 
and  research  should  develop  a list  of all  of the  services  Medicaid  potentially  provides 
that  beneficiaries  with  HIV  and  AIDS  need,  based  on the  national  guidelines  on HIV 
care  being  developed  by the  Department.  The  HCFA  and  HRSA  should  disseminate 
sample  managed  care  contract  language  requiring  provision  of these  services  as well  as 
HIV  prevention  services,  perhaps  using  the  model  language  currently  being  developed 
by HRSA  and  the  George  Washington  University,  Center  for  Health  Policy  Research. 
The  HCFA,  which  must  provide  information  on  actuarially  sound  capitation  rates  for 
specific  Medicare  populations,  should  calculate  estimates  of  costs of providing  services 
based  on  the  developing  guidelines  to  a patient  with  HIV  and  to  one  with  AIDS. 
13  With  the  quantum  growth  of Medicare  expenditures  for  persons  with  AIDS,  HCFA 

will  also need  this  data  to  project  future  Medicare  costs for  these  beneficiaries  under 

fee-for-service  and  managed  care.  Furthermore,  HCFA  should  have  available 

information  on  actuarially  sound  Medicaid  capitation  rates  as the  Department  is 

required  to  provide  this  information  at State  request. 

The  rapidly  changing  nature  of HIV/AIDS  treatment  requires  the  ability  to  react  to 

dramatically  increased  or  reduced  costs or  services.  The  HCFAs  Medicare  fee-for 

service  data  provide  information  to  project  real-time  capitation  rates  based  on very 

current  charge  and  payment  information  for  covered  medical  services.  At  present, 

States  often  rely  on  data  that  is several  years  old  and  based  on  outmoded  treatment 

practices  to  determine  appropriate  capitation  rates.  Although,  Medicare  fee-for-service 

data  does  not  reflect  the  total  costs of care  provided  to  AIDS  beneficiaries,  this  fee-

for-service  data  provides  a starting  point  for  calculating  the  costs of AIDS  care 

provided  in  accordance  with  the  developing  national  guidelines. 

The  HCFA  should  utilize  existing  Departmental  information  to  support  this  effort  to 

collect  and  disseminate  cost information.  Besides  the  considerable  Medicare  fee-for-

service  data  HCFA  maintains,  the  Special  Projects  of National  Significance  funded  by 

Ryan  White  can  provide  specific  data  on  services  and  costs for  treating  persons  with 

HIV/AIDS  under  a managed  care  model.  The  HRSA  recently  released  a study  of the 

adequacy  of  capitation  rates  to  cover  the  costs of HIV  care  in  nine  states. 

Information  on  the  costs of HIV  care  under  managed  care  and  strategies  to  cover 

these  costs was  also presented  at a May  1997 conference  on  HIV  and  risk  adjustment 

sponsored  by HRSA  and  HCFA  and  at the  November  1997 Johns  Hopkins  AIDS 

Managed  Care  Conference.  Other  Departmental  agencies  may  also  contribute  to this 

cost information  based  on  research,  service  delivery  or  other  policy  considerations. 

The  HCFA  should  then  present  the  variety  of service  options  to  States  and  provide  a 

basis for  States  to  estimate  covering  these  costs in their  Medicaid  managed  care 

programs.  For  example,  based  on  these  options  and  estimated  costs, States  could 

decide  whether  or  not  to  carve  out  certain  services  or  care  provided  by specialists 

from  their  MC0  capitation  rates,  and/or  carve  out  the  protease  inhibitors  and viral 

load  tests,  or  include  all  care  in  a fixed  capitation  rate  adjusted  to  reflect  the  costs of 

this  care.  As  a model  means  to  disseminate  this  information  to  States,  HCFA  could 

use its  June  1996 letter  to  all States  requiring  Medicaid  coverage  of protease 

inhibitors  and  options  to  cover  their  costs. 

The  HCFA  should  disseminate  this  coverage  and  payment  information  to  the  States  in 

the  form  of  a guidance  document  to  assist States  in  contracting  with  Medicaid 

managed  care  organizations,  including  information  about  how  protease  inhibitors  and 

viral  load  tests  are  carved  out  of the  capitation  rates  and  how  a beneficiary  is able  to 

get  the  items  or  services.  This  information  would  provide  States  with  a starting  point 

to  establish  contracts  with  MCOs  for  the  provision  of necessary  care  to beneficiaries 

with  HIV  and  AIDS  in return  for  adequate  compensation. 

14 
 State  Medicaid  agencies  would  benefit  from  this  information  because  few  have  reliable 

data  for  HIV  and  AIDS  care  in part  because  of patient  confidentiality.  States will 

want  to  know  if  capitation  rates  should  be reduced  because  of the  decreased  need  for 

hospitalizations  or  home  care,  or  should  be increased  because  of changes  in drug 

treatments.  States  also  do  not  want  HIV/AIDS  centers  of excellence  threatened  by 

inadequate  funding.  Furthermore,  States  will  want  to  make  informed  decisions  about 

future  program  expansions  or  carve  outs. 

The  Health  Care  Financing  Administration  should  urge  States  to  require  Medicaid 

managed  care  plans  to  coordinate  with  Ryan  White  programs  on  the  services  they 

provide  to  Medicaid  beneficiaries  with  HIV/AIDS.  The  Health  Resources  and 

Services  Administration  should  continue  to  encourage  Ryan  White  grantees  to work 

with  Medicaid  managed  care  plans.  Together,  these  agencies  should  work  to  develop 

strategies  of coordination  for  Medicaid  managed  care  and  the  Ryan  White  programs. 

In  the  best  interests  of HIV/AIDS  patients,  MCOs  and  Ryan  White  agencies,  it is 

essential  that  parties  rendering  services  to  HIV/AIDS  patients  coordinate  these 

services  with  comprehensive  care  for  the  patients  in mind.  The  Congress  believes  that 

both  programs  are  needed  to  provide  the  full  range  of medical  and  other  services 

HIV/AIDS  patients  require. 

The  State  Medicaid  agencies  and  the  Medicaid  MCOs  need  to  advise  Ryan  White 

grantees  of the  services  they  provide  to  HIV/AIDS  patients.  With  this  information, 

Ryan  White  eligible  metropolitan  areas  and  consortia  will  be  able  to  assess the 

HIV/AIDS  communitys  needs  more  accurately,  and  consequently  be  able  to  deliver 

services  more  rationally.  Overlapping  of services  can be reduced  and  MC0  capitation 

rates  can more  accurately  represent  the  costs of  services  they  provide.  Ryan  White 

funds  fill  service  gaps where  no  insurance  or  other  funding  streams  exist to  pay  for 

care.  Ryan  White  providers  and  MCOs  serving  the  same patients  must  coordinate  to 

prevent  duplicating  services  and  wasting  scarce  health  care  resources. 

Persons  with  HIV  and  AIDS  may  transition  on  and  off  Medicaid,  and  rely  on Ryan 

White  providers  for  their  total  care  in the  interim.  Coordination  is vital  to  ensure  the 

continuity  of care  for  these  patients.  Coordination  of services  also  reduces  the 

potential  for  MC0  enrollees  with  HIV/AIDS  to  seek medical  care  elsewhere  (which 

occurs  even  though  the  MCOs  are  paid  a capitated  rate  to  serve  these  patients.)  All 

the  individuals  we  interviewed  who  treat  persons  with  HIV  and  AIDS  also  emphasized 

the  need  to  integrate  ancillary  and  medical  services  in  order  to  effectively  deliver 

health  care  to  persons  with  HIV  and  AIDS. 

Non-medical  services  are  often  critical  to  improving  the  health  status  of  a person  with 

HIV  or AIDS.  While  many  of the  ancillary  services  provided  by the  Ryan  White 

program  may  fall  outside  of the  defined  set of services  MCOs  provide,  they  do not  fall 

outside  of the  set of  services  needed  to  improve  the  health  of  a person  with 

HIV/AIDS. 

15 
 Coordinating  the  services  available  through  Ryan  White  and  Medicaid  managed  care 
clearly  benefits  the  patients  and  ultimately  benefits  the  MCO.  In  the  long  run, 
healthier  patients  means  a reduced  need  for  services,  including  costly  hospitalizations. 
Indeed,  this  holistic  approach  to  patient  care  is consistent  with  the  managed  care 
philosophy. 
Through  coordination,  MCOs  and  Ryan  White  providers  can  provide  seamless  care  to 
patients  with  HIV  and  AIDS,  addressing  all their  varied  health  needs.  By  coordinating 
with  providers  of services  such  as HIV  counseling,  HIV  education  and  nutritional 
counseling,  MCOs  can better  meet  their  prevention  and  health  maintenance  missions. 
The  HCFA  should  encourage  Medicaid  agencies  to  include  the  Ryan  White 
infrastructure  in  the  shift  to  Medicaid  managed  care.  Without  their  inclusion,  the 
emergence  of MCOs  may  result  in  restricting  patients  access to  these  needed  services. 
The  HRSA  has begun  efforts  to  educate  Ryan  White  grantees  about  Medicaid 
managed  care.  These  efforts  need  to  emphasize  that  Ryan  White  grantees  be  aware 
of  services  Medicaid  capitation  pays MCOs  to  provide  and  also be  alert  to  changes  in 
Medicaid  coverage  or  contracts  with  MCOs  that  may  affect  their  clients.  Through 
their  existing  HIV/AIDS  work  group,  HCFA  and  HRSA  should  develop  a coordinated 
strategy  to  educate  both  State  Medicaid  administrators  and  Ryan  White  grantees 
about  each  others  programs  and  the  need  for  coordination  among  their  contracted 
providers. 
AGENCY  COMMENT!3 
The  Assistant  Secretary  for  Planning  and  Evaluation  (ASPE),  HCFA  and  HRSA 
provided  comments  to  the  draft  report.  While  all  concurred  with  the  reports  findings 
and  recommendations,  they  offered  suggestions  for  clarifying  the  report  and  making 
other  technical  changes.  Where  appropriate,  we  changed  the  report  to  reflect  their 
comments.  The  complete  text  of ASPEs,  HCFAs  AND  HRSAs  comments  can be 
found  in Appendix  C. 
The  ASPE  questioned  whether  there  were  any  differences  in  service  delivery  and 
access for  HIV/AIDS  patients  between  those  Medicaid  MCOs  receiving  an enhanced 
rate  and  those  who  were  not.  We  found  there  is no  difference  at present,  but  are 
concerned  that  Medicaid  MCOs  who  do not  receive  enhanced  capitation  to  deal  with 
the  HIV/AIDS  population  will  not  be  able  to  continue  to  do  so. 
The  HCFA  felt  it inappropriate  for  HCFA  to  develop  model  contracts  for  Medicaid 
MCOs  to  use in  treating  persons  with  HIV/AIDS.  Instead  HCFA  suggests they 
develop  a document  outlining  the  specialized  needs  of these  patients  as well  as likely 
gaps  or  problem  areas  in  service  delivery. 
We  support  this  approach  in  conjunction  with  our  recommendation  that  HCFA  and 
HRSA  jointly  develop  technical  guidance  in  these  areas.  Our  discussion  of model 
16  contract  language  did  not  suggest  that  HCFA  dictate  contract  language  to  States. 
Rather,  it  called  for  HCFA  and  HRSA  to  disseminate  model  contract  information  to 
States  that  the  Department  is already  funding. 
The  HCFA  also  argues  against  providing  State  Medicaid  agencies  with  aggregated  cost 
information  that  HCFA  collects  from  fee-for-service  data.  They  suggest  the  wide 
variations  in  costs makes  the  data  suspect. 
We  believe  that  HCFA  should  provide  States  with  HCFAs  current  fee-for-service 
information,  despite  the  lack  of State-by-State  specificity,  in  addition  to  all  of the  other 
Departmental  data  cited  in the  report.  These  collective  data  will  provide  States with  a 
more  complete  picture  of services  and  payments  for  HIV/AIDS  patients  and  this 
knowledge  will  benefit  them  in  arriving  at equitable  MC0  capitation  rates  for  these 
patients. 
The  HCFA  also felt  State  Medicaid  agencies  should  be  active  participants  in 
coordinating  service  delivery,  along  with  Ryan  White  agencies  and  MCOs.  We  agree 
that  Medicaid  agencies  have  a role  in this  coordination  and  can use their  contracting 
authority  to  encourage  MCOs  to  do  so. 
The  HRSA  raised  a question  about  whether  the  way  Medicaid  MCOs  reimburse 
providers  influences  service  delivery.  We  cannot  comment  since  all  the  MCOs  we 
visited  paid  providers  on  a fee-for-service  basis. 
The  HRSA  asked  about  the  impact  of enhanced  rates  on  providing  non-medical 
services.  All  MCOs  we  visited  provided  services  like  transportation  and  translation 
services,  whether  or  not  they  were  receiving  enhanced  capitation.  We  did  not  gather 
any  cost  or  reimbursement  data  for  these  services. 
The  HRSA  also pointed  out  that  in  addition  to  ancillary  services,  Ryan  White  pays for 
considerable  primary  health  care.  Approximately  half  of all  Ryan  White  funds  is spent 
on  primary  care.  In  some  cases, Medicaid  MCOs  include  Ryan  White  providers  to 
provide  primary  medical  care  and/or  ancillary  services. 
Our  report  emphasizes  Ryan  White  ancillary  services  since  respondents  expressed 
concern  about  the  lack  of  coordination  between  Medicaid  MCOs  and  ancillary  service 
providers  rather  than  concern  about  primary  medical  care. 
17 
 APPENDIX  A 

Descriptions  of Sampled  States  Inclusion  of HIV/AIDS  Patients  in Medicaid  Managed 
Care  Plans 
A-l  Descriptions  of Sampled  States  Inclusion  of HIV/AIDS  Patients  in  Medicaid  Managed 
Care  Plans 
California  - Californias  Medicaid  program  (Medi-Cal)  operates  several 
l 	
managed  care  models  on  a county  basis.  We  examined  the  County  Organized 
Health  System  model  in San Mateo  county,  the  2-Plan  model  in  San 
Francisco,  and  Positive  HealthCare,  a limited  AIDS-specific  capitated 
managed  care  project  in  Los  Angeles  which  receives  Ryan  White  Special 
Project  of National  Significance  funding. 
In  San Mateo  county,  Medi-Cal  beneficiaries  are  mandated  to  enroll  in the 
Health  Plan  of San Mateo  (HPSM).  The  HPSM  receives  an enhanced 
capitation  rate  for  serving  persons  with  AIDS.  The  plan  has an average  of 70 
members  a month  who  have AIDS. 
Under  the  2-Plan  model,  there  is a commercial  Medicaid  managed  care  plan 
and  a Local  Initiative  plan  in San Francisco.  We  limited  our  inspection  to the 
Local  Initiative  plan.  The  San Francisco  Health  Authority  operates  the  Local 
Initiative  plan  through  contracts  with  six medical  groups.  Although  there  is 
some  voluntary  SSI enrollment,  only  persons  on  Medi-Cal  through  eligibility 
criteria  related  to Aid  to  Families  With  Dependent  Children  must  enroll  in 
managed  care  in  San Francisco.  Until  October  1997, the  San Francisco  Health 
Authority  did  not  receive  an enhanced  rate  for  persons  with  AIDS.  As  of June 
1997, the  plan  had  35 enrollees  using  AIDS  drugs,  28 of whom  were  voluntary 
SSI enrollees. 
Positive  HealthCare  is a managed  care  project  for  Medi-Cal  beneficiaries  with 
AIDS  operated  by the  AIDS  Health  Care  Foundation  (AHF)  of Los  Angeles. 
All  enrollment  is voluntary  and  limited  to  beneficiaries  who  receive  Medi-Cal 
through  SSI eligibility  criteria  and  meet  the  CDC  definition  of having  AIDS. 
The  AHF  receives  an enhanced  capitation  rate  for  serving  these  enrollees. 
There  are  400 Medi-Cal  enrollees  with  AIDS  in  the  Positive  HealthCare 
program. 
Georgia  - Georgia  operates  a PCCM  managed  care  program  called  Georgia 
l 	
Better  Health  Care  (GBHC),  which  covers  over  500,000  members.  Persons 
with  HIV/AIDS  are  included  in this  Statewide  program  but  GBHC  has no 
estimate  of the  number  of those  members.  Providers  are  paid  for  services  on  a 
fee-for-service  basis. 
Marvland  - Maryland  began  its Statewide  capitated  managed  care  program  in 
l 	
July  1997.  As  yet,  Maryland  has no  estimate  of the  number  of persons  with 
HIV/AIDS  enrolled.  The  HIV/AIDS  patients  are  included  in MCOs  which  are 
paid  an enhanced  rate  for  AIDS  patients.  All  Medicaid  beneficiaries  are 
required  to  enroll  in managed  care  except  those  who  are  dually  eligible  for 
Medicare  and  Medicaid. 
A-2  Massachusetts  - Massachusetts  mandates  Medicaid  beneficiaries  to  enroll  in the 
l 	
States  Medicaid  managed  care  program.  However,  beneficiaries  who  are 
dually  enrolled  in Medicare  and  Medicaid  and  others  with  third  party  liability 
are  not  required  to  enroll  in  managed  care,  but  have  the  option  to  do  so.  All 
other  beneficiaries  choose  either  the  Primary  Care  Clinician  (PCC)  program  or 
a contracted  MCO.  The  PCC  program  is similar  to  a PCCM  program  except 
that  the  PCCs  receive  an enhanced  rate  for  all  primary  care  visits  rather  than  a 
gatekeeper  fee  for  serving  as a referral  point  for  their  patients.  The  MCOs  are 
paid  an enhanced  rate  for  serving  persons  who  meet  a definition  of having 
active  or  advanced  AIDS  if they  demonstrate  that  they  have  the  required 
capacity  to  treat  these  enrollees.  More  than  5,000  persons  with  AIDS  enrolled 
in  Medicaid  managed  care  in  Massachusetts  in  19951996,  however  the  majority 
of  these  enrollees  were  in the  PCC  program.  The  State  does  not  have  an 
estimate  of the  number  of HIV-positive  enrollees  without  AIDS. 
Oregon  - The  Oregon  Health  Plan  is a Statewide  managed  care  initiative 
l 	
covering  Oregonians  not  covered  in private  health  plans.  Oregon  has  1700 
HIV/AIDS  patients  enrolled  in its Statewide  Medicaid  managed  care  plan. 
Oregon  does  not  pay  an enhanced  rate  for  HIV/AIDS  patients. 
Utah  - Utah  operates  a capitated  mandatory  managed  care  program  for  all 
l 	
Medicaid  beneficiaries  in the  four-county  Salt  Lake  area.  Outside  of this  area, 
beneficiaries  can enroll  in MCOs  or  in Utahs  PCCM  program.  The  MCOs 
receive  an enhanced  rate  for  serving  persons  with  AIDS.  Utah  pays an 
enhanced  capitated  rate  for  approximately  60 Medicaid  beneficiaries  who  meet 
the  States  criteria  for  the  AIDS-adjusted  rate  which  is more  restrictive  than  the 
Center  for  Disease  Control  and  Prevention  (CDC)  definition  of having  AIDS. 
Additionally,  the  University  of Utah  Infectious  Disease  clinic  reports  serving 
slightly  over  200 HIV-positive  Medicaid  recipients.  Utah  does  not  pay  an 
enhanced  rate  for  these  patients. 
A-3 
 APPENDIX  B 

Descriptions  of Sampled  Managed  Care  Plans 
B-l  Descriptions  of Sampled  Managed  Care  Plans 
Community  Medical  Alliance  (CMA),  Boston,  MA 
Payment:  The  Community  Medical  Alliance  is paid  a per  member  per  month 

(PMPM)  capitation  rate  of $2300  or  $2998  for  individuals  with  active  or  advanced 

AIDS.  The  Community  Medical  Alliance  receives  one  of these  two  AIDS  adjusted 

rates  for  any plan  enrollee  who  has tested  positive  for  HIV,  or  has a CD4  count  of 

less than  200 or  CD4  percentage  less than  14; and  who  has received  treatment  for  one 

of several  listed  diagnosis  associated  with  advanced  or  active  AIDS  within  the  past 

year. 

Delivery  Approach:  Each  CMA  patient  is assigned  a nurse  practitioner  and  a 

physician  who  use a team  approach  to  care  for  the  patient.  The  nurse  practitioners 

act as the  front-line  care  coordinators  for  the  patients,  working  primarily  with  the 

patients  in  their  homes.  They  link  the  patients  to  the  other  services  they  may  need, 

such  as infusion  therapy  or  support  services.  The  nurse  practitioners  together  with  the 

team  physicians,  are  given  a great  deal  of latitude  to  make  medical  decisions  regarding 

the  patients  care. 

The  Health  Plan  of  San Mateo,  San Mateo  County,  CA: 
Payment:  The  Health  Plan  of San Mateo  receives  a PMPM  capitation  rate  of $1300 
for  individuals  who  meet  the  1993 AIDS  surveillance  case definition  of AIDS.  The 
1993 CDC  definition  includes  all HIV-infected  persons  who  have  ~200  CD4+  T-
lymphocytes,  or  a CD4+  T-lymphocyte  percentage  of total  lymphocytes  of  < 14 and 
pulmonary  tuberculosis,  recurrent  pneumonia,  or  invasive  cervical  cancer,  in  addition 
to  the  clinical  conditions  included  in the  AIDS  surveillance  case definition  published  in 
1987. 
Delivery  Approach:  All  AIDS  enrollees  who  meet  the  1993 CDC  definition  of having 
AIDS  are  referred  to  as special  members  in  the  health  plan.  The  special  members 
do  not  have  to  select  and/or  use a primary  care  provider  to  receive  care  under  the 
plan.  Special  members  can  seek  care  from  HIV  specialists  within  the  provider 
network  of the  plan  without  having  a referral  from  another  provider.  Most  of the 
AIDS  enrollees  in  the  plan  receive  their  care  from  the  Edison  Clinic  of the  San Mateo 
County  General  Hospital.  The  Edison  Clinic  provides  a full  range  of HIV  medical 
and  ancillary  care  to  their  patients  using  a combination  of Medicaid  and  Ryan  White 
funding. 
United  HealthCare  of  Utah,  Utah: 
B-2 
 Payment:  United  HealthCare  of Utah  receives  a PMPM  capitation  rate  of $1169  for 
all  individuals  who  have  =  or  <200  CD4+  T-lymphocytes.  This  definition  of 
qualifying  for  the  enhanced  rate  is more  restrictive  than  the  1993 CDC  definition. 
DeliveIy  Approach:  Medicaid  beneficiaries  enrolled  in  the  United  HealthCare  plan 
do not  have  to  choose  a primary  care  provider.  Plan  members  can  seek  care  from  any 
primary  care  provider  in  the  plans  network,  including  specialists  if the  specialist  has 
agreed  to  serve  as a primary  care  provider  and  is listed  in the  primary  care  provider 
directory.  HIV  specialists  are  not  identified  as such in the  provider  directory  but  the 
member  services  staff  of the  plan  can  direct  interested  patients  to  these  providers. 
The  plan  has several  HIV  specialists  within  its network  who  serve  as primary  care 
providers  to  individuals  with  HIV  or AIDS.  Most  of the  plan  enrollees  with  HIV  and 
AIDS  seek their  care  from  the  University  of Utahs  Infectious  Diseases  Clinic  which  is 
staffed  by  experienced  HIV  specialists. 
Positive  HealthCare,  AIDS  Health  Care  Foundation  (AHF),  Los  Angeles, 
CA: 
Payment:  The  AIDS  HealthCare  Foundation  receives  a PMPM  capitation  rate  of 

$1139  for  all  individuals  who  meet  the  1993 CDC  definition  and  who  are  receiving 

Medical  through  the  SSI program. 

Delivery  Approach:  Individuals  must  select  a primary  care  provider  on  staff  with 

AHF  within  90 days of enrolling  in the  Positive  HealthCare  program.  The  primary 

care  providers  are  located  in four  AI-IF  outpatient  clinics.  Registered  nurse  case 

managers  provide  case management  services  to  the  patients  in  an interdisciplinary 

team  approach  with  the  primary  care  physicians  and  other  health  care  professionals 

employed  by AHF  in  the  clinics.  Through  case management,  patients  have  access to  a 

wide  spectrum  of medical  and  ancillary  services,  including  mental  health  benefits, 

nutrition  services,  advocacy,  HIV  education  and  referrals  to  community  resources.  This 

program  is one  of five  Special  Projects  of National  Significance,  funded  by HRSA  to 

test  an innovative  model  for  delivering  HIV/AIDS  care  in  a managed  care  setting. 

San Francisco  Health  Plan,  San Francisco,  CA: 
Payment:  At  the  time  of our  study,  the  San Francisco  Health  Plan  received  $221.89 
PMPM  for  individuals  enrolled  in its plan  who  are  eligible  for  Medical  through  the 
SSI program  and  $88 PMPM  for  individuals  eligible  for  Medical  through  criteria 
related  to  the  former  Aid  to  Families  with  Dependent  Children  program.  The  plan 
receives  the  $88 PMPM  capitation  rate  for  7 of the  35 plan  enrollees  requiring  AIDS 
drug  therapy.  Effective  October  1997, the  San Francisco  Health  Plan,  after  months  of 
negotiations  with  the  State,  began  receiving  an enhanced  capitation  of $1,130.64 
monthly  for  each  patient  who  meets  the  CDC  definition  of having  AIDS. 
B-3 
 Delivery  Approach:  Plan  members  are  required  to  select  a primary  care  provider 
from  the  primary  care  provider  directory.  Individuals  may  select  a specialist  to  serve 
as their  primary  care  provider  if the  specialist  has elected  to  be listed  as a primary 
care  provider  in the  directory.  The  HIV  specialists  are  not  identified  as such in the 
directories.  Every  provider  in the  San Francisco  Health  Plan  network  is part  of a 
medical  group.  The  Plan  contracts  with  six medical  groups,  each  of which  is affiliated 
with  a hospital.  Individuals  are  required  to  seek their  care  from  the  specialists  and 
hospital  within  the  medical  group  of their  primary  care  provider.  The  University  of 
California  at San Francisco  and  San Francisco  General  Hospital  are  both  part  of 
medical  groups  under  contract  with  the  San Francisco  Health  Plan.  These  two 
institutions  are  considered  centers  of  excellence  in HIV  care. 
CareOregon,  Portland  OR 
Payment:  CareOregon  does  not  receive  an enhanced  rate  for  treating  HIV  or  AIDS 

patients.  Oregon  Medicaid  pays CareOregon  between  $104.40  and  $625.59  PMPM 

based  on  the  recipients  eligibility  to  Medicaid.  CareOregon  receives  the  lowest  rate 

for  the  majority  of its  AIDS  patients.  The  capitation  rate  includes  all  medical  services 

(except  dental  and  mental  health)  and  drugs,  including  protease  inhibitors. 

CareOregon  has 800 AIDS  patients,  approximately  half  the  States  AIDS  population, 

among  its  26,000  Medicaid  clients. 

Delivery  Approach:  This  MC0  includes  Oregon  Health  Sciences  University  (OHSU,) 

an HIV  center  of  excellence,  and  the  Multnomah  County  Health  Department  Clinics, 

a large  provider  of HIV  and  AIDS  services  in its  network.  Patients  choose  their 

primary  care  provider.  The  CareOregon  AIDS  patients  have  chosen  either  OHSU, 

the  Multnomah  County  Health  Department  or  other  physicians  for  primary  care  in 

approximately  equal  numbers. 

Chesapeake  Health  Plan,  Baltimore  MD 
Payment:  Maryland  Medicaid  pays MCOs  an enhanced  rate  to  treat  patients  with 
AIDS.  The  MCOs  receive  $2161  PMPM  for  patients  residing  in Baltimore  and  $1812 
for  those  outside  Baltimore.  Medicaid  carves  out  protease  inhibitors  and  viral  load 
testing  from  the  capitation  and  pays these  on  a fee-for-service  basis.  Chesapeake 
estimates  90 AIDS  patients  in their  17,000 Medicaid  enrollees.  Chesapeake  pays 98 
per  cent  of the  capitation  to  Johns  Hopkins  Moore  Clinic  to  treat  members  with 
AIDS. 
Delivery  Approach:  Chesapeake  contracts  with  the  Moore  Clinic  and  the  University 
of Maryland  and  a few  other  HIV  specialists  throughout  the  State.  The  bulk  of the 
AIDS  patients  are  treated  at the  Moore  Clinic  which  is devoted  exclusively  to  HIV 
and  AIDS  care.  The  Chesapeake  AIDS  patients  can select  a specialist  as their 
primary  care  provider,  but  those  with  HIV  cannot. 
B-4  APPENDIX  C 

Agency  Comments 
C-l  DLPARTMENTOF HRALTH 6 HUXAN SERWCES   
c-2  .. 
Page2-JusioC+BbsRmwn 
c-3  DEPARTMENT  OF HEALTH  & HUMAN  SERVICES 
Health  Care  Financing  Administration 
The  Administrator 
Washington,  D.C.  20201 
DATE: 
TO: 	 June Gibbs Brown 
Inspector General 
FROM: 	 Nancy-Ann Min DeParle 
Administrator 
SUBJECT: 	 Office of Inspector General Draft Report: Medicaid ManagedCare and 
HIV/AIDS,  (OEI-05-97-00210) 
We reviewed the above-referencedreport that describeshow somestatesaddressthe 

treatment of personswith HIV/AIDS  in Medicaid managedcare. The report found that 

Medicaid managedcare organizations (MCOs) that are paid an AIDS-enhanced rate 

appearto provide all neededmedical servicesand drugs to AIDS patients. MCOs not 

paid an enhancedrate report that they cannot afford to continue providing theseservices 

and drugs without adequatefinancial compensation. The report also found in the states 

visited, the Medicaid managedcare and Ryan White programs do not coordinate the 

servicesthey provide to personswith HIV/AIDS. 

The Health Care Financing Administration  (HCFA) concurswith both of the OIG report 

recommendations. Our detailed commentsare as follows: 

DIG Recommendation 

The Health Care Financing Administration, in consultation with the Health Resourcesand 

ServicesAdministration,  should develop and disseminatetechnical assistanceand 

guidance on strategiesstateMedicaid programscan use to establish appropriate managed 

care contracts for neededmedical servicesand costsrelated to theseservicesfor 

beneficiaries with HIV/AIDS. 

HCFMia.wms 

We concur.  HCFA could develop a documentproviding information about the 

specialized needsof personswith HIV/AIDS,  and likely  gapsor problem areasin services 

provided under managedcare. However, it is inappropriate for HCFA to develop model 

contracts since the factors which influence contract provisions (e.g., existing provider 

networks, existing accessmeasures,statefunding, political pressures,etc.) vary greatly 

from stateto state. 

c-4  The Medicaid program in each statemust cover certain mandatory servicesand may 

cover other optional services. The servicesmay be coveredthrough managedcare or fee-

for-service.  It is important to look at both managedcare contracts and fee-for-service 

contracts to determine where coordination should occur. Statescould use the information 

developed by HCFA, modified by state-specificcoveragepolicies to develop contract 

language. 

The recommendation statesthat the estimatesof the costsof servicesfor personswith 

HIV/AIDS  be provided.  These costsare not available to HCFA on a state-by-statebasis. 

The state-by-stateanalysis would be useful in developing managedcare contracts. The 

wide variation in costs among statescould be misleading. In addition, it is not clear what 

is meant by providing options  on how to cover thesecostsin a Medicaid managed care 

program. 

OIGRecommendation 

The Health Care Financing Administration should urge statesto require Medicaid 

managedcare plans to coordinate with Ryan White programs on the servicesthey provide 

to Medicaid beneficiaries with HIV/AIDS.  The Health Resourcesand Services 

Administration  should continue to encourageRyan White granteesto work with Medicaid 

MCOs.  Together, these agenciesshould work to develop strategiesof coordination for 

Medicaid managedcare and the Ryan White programs. 

HCFA Response 

We concur. Although coordination with managedcareplans is useful, it is critical that 

stateMedicaid agencies,which manageand monitor the implementation of Medicaid 

managedcare programs, be active participants in any coordination activities with Ryan 

White agencies. HCFA has been working to encouragetheserelationships.  It is the state, 

not managed care plans, that could offer Ryan White granteesthe most objective 

description of the servicesMCOs should provide and it is critical that the Medicaid 

agenciesget feedback if servicesare not being provided. Although coordination about 

the availability  of related servicesor coordination on a case-by-casebasis is important, 

the more critical discussionsexist between Ryan White agenciesand the state Medicaid 

agenciesm describing which servicesshould be provided by Medicaid, either through 

MCOs or fee-for-service. 

Technical Comments 

Page 14 suggeststhat HCFA distribute coverageand payment guidance. The guidance 

should also include information about how proteaseinhibitors and viral load tests are 

carved out of the capitation rate and how a beneficiary is able to get the item or services. 

C-5  DEPARTMENT  OF HEALTH  & HUMAN  SERVICES  Public  Health  Service 
Health  Resources  and 
Services  Administration 
Rockville  MD  20857 
25 
FEB  I998 
TO:  Inspector  General,  DHHS 

FROM:  Acting  Deputy  Administrator 

SUBJECT:  Office  of  Inspector  General  (OIG)  Draft  Report, 

"Medicaid  Managed  Care  and  HIV/AIDS." 
(Code  OEI-05-97-00210) 
Attached  is  HRSA's  response  to  your  memorandum  dated  December  17, 
1997,  requesting  comments  on  the  subject  draft  report. 
Questions  may  be  referred  to  Michael  Herbst  on  443-5256. 
Attachments 
C-6 
 JiRALTH  RESOURCES AND  SERVICES  ADMINIST=TION  C(3Q4ENTS ON 
m  OIG  DRAFT  REPORT,  "MEDICAID  WAGED  CAl?l? AND  HIV/AIDS." 
(GIN ..  0 EI-05-97-00210 
. 
RATI CmNTS. 
The  report  makes  some  extremely  important  points  about  the 
delivery  of  care  to  people  with  HIV/AIDS  in  Medicaid  managed 
care. 
HRSA agrees  to  consult  with  HCFA  regarding  the  OIG  recommendation 
that  HCFA  develop  and  disseminate  technical  assistance  and 
guidance  on  strategies  State  Medicaid  programs  can  use  to 
establish  appropriate  managed  care  contracts  for  needed  medical 
services  and  costs  related  to  these  services  for  beneficiaries 
with  HIV  and  AIDS.  HRSA agrees  that  an  AIDS  enhanced  rate  can 
provide  incentives  for  managed  care  organizations  (MCO)  to 
provide  all  needed  medical  services  and  drugs  to  AIDS  patients. 
As  highlighted  in  the  report,  people  living  with  HIV/AIDS  require 
a  full  continuum  of  medical  and  enabling/ancillary  services. 
HRSA has  already  initiated  several  projects  including  one  with 
George  Washington  University  Medical  Center  for  Health  Policy 
Studies  to  develop  model  contract  language  for  State  Medicaid 
agencies.  In  addition,  HRSA recently  published  a  report,  "HIV 
Capitation  Risk  Adjustment,"  which  documents  the  findings  of  a 
two-day  conference  on  risk  adjustment.  The  report  has  been 
distributed  widely  and  has  been  frequently  cited  as  a  reference 
The  OIG 
guide  on  the  issues  of  risk  adjustment  for  HIV  and  AIDS. 
should  also  discuss  the  impact  of  the  enhanced  rate  on  the 
provision  of  non-medical  services.  In  addition,  the  report  is 
silent  on  the  reimbursement  paid  to  AIDS  providers  by  the  MCOs, 
who  also  face  major  financial  losses  if  they  are  not  adequately 
reimbursed. 
HRSA agrees  that  Medicaid  managed  care  plans  and  Ryan  White 
agencies  must  be  integrated  in  order  to  provide  seamless, 
However,  HCFA 
coordinated  care  to  people  living  with  HIV/AIDS. 
should  urge  States  to  require  Medicaid  managed  care  plans  to 
contract  with  Ryan  White  agencies  to  avoid  duplication  of  effort. 
Several  times  in  the  report,  the  OIG  states  that  Ryan  White 
providers  are  the  patient's  source  of  ancillary  care,  which  could 
give  the  impression  that  these  are  the  only  services  they 
provide.  In  fact,  more  than  50% of  Ryan  White  CARE Act  funds  are 
People 
expended  on  primary  care  and  other  medical  services. 
living  with  HIV/AIDS  depend  on  Ryan  White  providers  for  the  full 
continuum  of  primary  care  and  ancillary  services. 
c-7  The  report  documents  the  need  and  benefit  for  rate  adjustments  or 
enhancement,  but  fails  to  recommend  that  HCFA work  with  the  State 
Medicaid  agencies  to  assure  that  there  is  an  appropriate  rate 
adjustment  to  managed  care  companies  and  providers  who  serve  a 
significant  HIV/AIDS  population. 
. 
OIG  RKOMMENQA'J'ION,
The  Health  Resources  and  Services  Administration  should  continue 
to  encourage  Ryan  White  grantees  to  work  with  Medicaid  managed 
care  plans. 
. 
SA  RESPONSE.
HRSA concurs.  HRSA has  initiated  a  technical  assistance  and 
training  program  to  assist  Ryan  White  agencies  to  participate  in 
managed  care. 
.
OIG  RECOMMENDATION, 
Together  these  agencies  (HCFA  and  HRSA)  should  work  to  develop 

strategies  of  coordination  for  Medicaid  managed  care  and  the  Ryan 

White  programs. 

HRSA RESPONSE; 

HRSA concurs.  The  technical  assistance  and  training  program  HRSA 

has  initiated  also  seeks  to  develop  collaborative  relationships 

between  key  stakeholders  including  State  Medicaid  agencies, 

Medicaid  managed  care  plans  and  Ryan  White  agencies.  HRSA  is 

planning  to  expand  this  program  to  ten  additional  states  in  the 

next  six  months. 

TECHNICAL  COMMENTS; 

Clarification  is  needed  under  the  section  summarizing  the  Ryan 

White  CARE Act.  The  section  describing  Title  II  should  be 

expanded  to  include  the  AIDS  Drug  Assistance  Program  (ADAP)  which 

provides  pharmaceutical  treatments  to  people  living  with 

HIV/AIDS.  Further  detail  is  also  needed  on  the  programs  funded 

under  Part  F,  as  most  readers  will  probably  not  be  familiar  with 

these  programs.  It  is  the  Title  III  program,  not  Title  III(b). 

Attached  is  a  fact  sheet  on  the  HIV/AIDS  Bureau  which  describes 

the  programs  funded  by  the  CARE Act. 

The  description  of  the  Special  Projects  of  National  Significance 

(SPNS)  managed  care  projects  gives  the  reader  the  impression  that 

C-8  they  are  managed  care  plans.  The  Ryan  White  CARE Act  supports
demonstration  and  evaluation  projects  through  the  SPNS.  Six  of 
the  SPNS projects  are  funded  to  test  new-methods  of  delivering 
HIV/AIDS  care  in  managed  care  settings.  These  projects  are 
located  in  Los  Angeles,  Boston,  Baltimore,  North  Carolina,  and 
New  York. 
c-9  HIV/AIDS Bureau 
The  HIV/AIDS  Bureau  of  the  Health  Resources  and  Services  Administration  (HRSA), 
administers  the Ryan White Comprehensive  AIDS  Resources  Emergency  (CARE) Act. The CARE 
. 
.  Act was signed Into law On August  78,199O  to Improve the quality and availability  of care for people 
with  HIV/AIDS  and  their families.  Amended  and  reauthorized  in May 1996, the Act is named after 
the  Indiana  teenager;Ayan  White;  who  became  an active  public  educator  on HIV/AIDS after he 
contracted  the disease.  He died  the same  year  the legislation  was passed. 
Within the HIV/AIDS  Bureau,  the Division  of Service  Systems administers  Titfes I. II and the 
AIDS  Drug Assistance  Program  (ADAP);  the  Division  of Community  Based Programs administers 
Titles  Ill, IV and  the  HIV/AIDS  Der$al  Reimbursement  Program:  and the Division of Training  and 
Technical  Assistance  administers  the AIDS  Education  and Training  Center  (AETC) Program.  The 
Sureaus Office of Science & Epidemiology  administers  the Special Projects of National Significance 
(SPNS) Program. 
HRSAs  HIV/AIDS  Bureau  conducts  programs  to  benefit  low-income,  uninsured  and 
underinsured  individuals  and families  affected  by HIV/AIDS.  Total appropriations  for HRSA-funded 
CARE Act programs  from W  1991  through  Ff  1997 was $3.8 billion. 
HRSAs  HIV/AIDS  Bureau  administers  ately affected by the HIV epidemic. These areas 
HIV/AIDS  programs  under four titles and Part F  are eligible  for Tiie  I formula grants if they have 
of the CARE Acl  reported  more than  2,000 AIDS cases  in the 
preceding  5 years, and if they have a population 
Title  I 	 HlV emergency relief grant program 
l  of at least 500,000 (this provision does not apply 
foreligiblemetropolitan  areas (EMAs) 
to EMAs funded prior to FY 1997). 
Title  II  HIV care grants to States 
l  .- Grants  are awarded  to the chief  elected 
Title  Ill  HIV early  intervention  services  official  (CEO) of the city or county that adminis
l 
ters the health agency providing services  to the 
Title  IV  Coordinated  HIV services  and 
l  greatest  number of people living with HIV in the 
access  to research  for children, 
EMA. The  CEO must  establish an HIV Health 
youth,  women, and  families 
Sewices  Planning  Council that is representative 
* l  PartF  Special  Projects of National  of the local  epidemic and includes representa
Significance  (SPNS)  Program:  tives  from  specific groups  such as health  care 
HIV/AIDS  Dental Reimburse agencies  and community-based  providers.  At 
ment Program: AIDS  Education  least  25  percent  of voting  members  must be 
and Training  Centers  (AtTCs)  people  living  with  HIV  disease. The  planning 
council  sets priorities for the allocation of funds 
Title  I 
within the EMA, develops a comprehensive plan, 
Title I funding  provides formula  and supple- and  assesses  the  grantees  administrative 
mental  grants  to  EMAs  that  are  disproportion mechanism  in allocating  funds. 
c - 10  Community-baseo  services  funded  under  through  a Health  Insurance  Continuation 
Title  I may inctude:  Program (HICP): 
-Outpatient  health care, including  medical  and  Pharmaceutical  treatments through  an AlDS 
l  l 	
dental care and developmental  and  rehabili Drug Assistance Program (ADAP); 
tative services; 
Localconsotiathatassessneeds,organ~~ 
l 
Support services such as case  management  defier  HlV services in consultation with service 
l 	
home health and hospice care,  housing  and  .  providers, and contract forservices; and 
transportation  assistance,  nutrition  services,  Oirect health and support senkes. 
l 
and day or respite care: and 
Since Ff  1991, HRSA has awarded  more 
Inpatient  case  management  services  that 
l 	 than $1.26  billion in Title II grants.  In N  1997, 
expedite discharge  and prevent  unnecessary 
$397.9  million  was  awarded,  which  includes 
hospitalization.  : 
3167 million  in ADAP funding. 
Providers  may in&de  public  or nonprofti 
Title  III 
entities:  private for-profit entities are eligible  only 
if they  are the only available  provider  of quality  We  Ill of the CARE Act supports  outpa
HIV care in the area.  tient  HIV  early intervention  services  for  low-
When the first Title I grants were awarded  in  income,  medically underserved  people  in exist
FY  1991.16  EMAs were identified:  in FY  1997,  ing primary care systems. Medical, educational, 
therewere49EMAsin  19States. PuertoRico.  and  and psychosocial  services are designed  to pm
the  District of Columbia  EiWs  received  S429.3  vent the further spread of HIV/AIDS,  delay the c 
million in Title I formula and supplemental  funds  in  onset  of illness,  facilitate  access  to  services, 
I?  1997. Since FY 1997, more than $1.8 billion  in  and provide psychosocial support to people with 
Title  I grants has been awarded.  HIV/AIDS. 
Since  N  1991, $369.4 million  has been 
-me  II 
awarded underTitle  Ill; in N  1997, $69.5  million 
Title If provides  formula  grants  to States,  was  awarded  to  166  facilities  in  37  States, 
the Districtof Columbia, Puerto Rico and  eligible  Puerto Rico,andtheDistrictofColumbia  Nearly 
U.S.  territories  to  provide  health  care  and  one-half  was awarded  to community  and mi
support  services  for  people  living  with  HIV  granthealthceoters:theotherhalffunded  home-
disease.  Grants are awarded to the State agency  less programs, local health departments,  family 
designated  by the governor to administerTitle  II,  planning  programs, comprehensive  hemophilia 
usually  thehealth  department.  diagnostic  and treatment  centers,  Federally-
Grants  are  awarded  based  on:  (a)  the  qualified  health centers, and private  nonprofits. 
estimated  number  of living  AIDS  cases  in  the 
Title  IV 
State or territory: and (b) the estimated  number 
of living AIDS cases within the State  or territory  Title  IV programs  focusbn  the  develop
but  outside  of Title  I EMAs.  States  with  more  ment and operation of systems of primary  health 
than  1 percent of the total AIDS  cases  reported  care  and social services  that benefit  children, 
youth,  and  women  living  with  HIV  and  their 
nationally  during  the  previous  2  years  must 
contribute  their  own  resources  to  match  the  families.  These  systems  aim  at  building 
Federal  grant, based on a yearly  formula.  .comprehensive,  community-based,  coordinated 
programs  that  include  both  health  and  social 
Title  II funds  may be used  to  support  a 
Outreach  elements,  as well  as  prevention.  Title 
wide  range of services.  including: 
IV  to develop new ways to effectively 
also  works 
l  Home and community-based  health  care and  link these care systems with HIV research  sup-
support  setices:  ported  by the National  Institutes  of Health  (NIH) 
Continuation  of  hea!:h  insurance  coverage  and  other OrganitatiOnS. 
l 
c- 11  Title  IV, in collaboration  with  the  Special  1996, Integrated Service Deiivery Models  were 
Projects  of  National  Significance  (SPNS)  funded  to create formal  linkages to  integrate 
Program,  funds The Womens Initiative  for HIV  health  and support services. 
Care  and Reduction  of Perinataf HIV Transmis The SPNS Program has collabomted  with 
sion  (WIN).  This initiativesupports  3yearcoop- the Substance Abuse and MentalHealth Services 
eratlve  agreements  to develop models  of care  Administration and the National lnstftute of MentaJ 
that  enhance  outreach,  HIV  counseling  and  Health, NIH, to co-fund 11 mental health services 
testing  services  for women of childbearing  age,  demonstration  projects for people living with HIV/ 
especially  during pregnancy, and offers perinatal  AIDS.  Projects are  funded for 4 years  and 
ZDV  prophylaxis  and maintenance  of ongoing  received approximately  $4.6 million in p/  1996. 
care  for  mothers  with  HfV and  their  children. 
Since  FY 1991, $60.6 million  has  been 
Title IV also collaborates with the National  Institute 
awarded in SPNS Program funding. in N  1996, 
of Child  Health and Hufnan Development,  NIH, to 
62 grantees  received more than $25 million. 
support  models of care and ,research investigating 
HIV disease and utilizaticn of care among adoles AIDS  Education  and Training  Centers 
cents  with or at risk for HIV.  The AIDS Education  and Training  Center 
In  FY 1997,  336 million was  awarded  to  (AETC)  Program is a naticnal  network  of  15 
projects  in 23 States, the District  of Columbia,  centers that conduct targeted. multi-disciplinary 
and  Puerto  Rico.  More than eighty  percent  of  education  and training programs for health  care 
the  clients  are from poor, minority  families  with  providers  in designated gecgraphic areas.  The 
limited  access  to transportation  and  housing.  AETCs  increase  the  numizer of  health  care 
Beginning  in 1988, the Pediatric AIDS  Demon providers  who are educatti  and motivated  to 
stration  Program and, since 1994, the CARE  Act  counsel,  diagnose, treat, and manage  care for 
Title  IV program,  have provided more than  S200  individuals  with HIV/AIDS  xd  to help  prevent 
million  to States and communities.  high  risk behaviors that may lead to infection. 
AETCs collaborate with CARE Act-funded 
Part  F 
organizations,  Area Health  Education  Centers 
(AHECs),  community-based  HIV/AIDS  organi
Special  Projects  of National  Significance 
zations, medical and health professional schools, 
(SPNS)  Program 
local hospitals. health departments, community 
The  Special  Projects of National  Signifi and migrant  health centers, medical societies, 
cance  (SPNS)  Program supports  the  develop and other professional organizations. 
ment  of innovative  models of HIV/AIDS  care, 
From  FY 1987 to 1996. HRSA  received 
designed  to  address  special  care  needs  of 
$153.7  million to fund the AETCs.  In N  1997, 
individuals  with HIV/AIDS in minority and hard-to-
the AETCs  received  $16.3 nillion  in funding. 
reach  populations.  These projects are designed 
to be replicable in other parts of the country,  and  HIV/AIDS  Dental Reimbursement  Program 
have  a strong evaluation component 
HRSAs  HIV/AIDS  Dental  Reimburse
SPNS  Program  models  focus  on  man- ment  Program  assists  accredited  dental 
aged  care; infrastructuredevelopment;  training:  schools  and  post-doctoral  dental  programs 
access  to care  through  reduction  of sociocul with  uncompensated  costs incurred  in provid
tural,  financial,  and transportation  barriers  for  ing  oral  health  treatment  to  HIV-positive 
rural  residents,  women.  adolescents,  and  patients.  Eligible applicants  must have  docu
children;  legal  advocaqz  comprehensive  pri mented  uncompensated  costs of oral  health 
mary  care  (including  managed  care);  integra care  for  HIV-positive  pencns.  and  must  be 
tion of mental health and primary care services:  accredited  by  the  Commission  on  Dental 
and services  forcorrecticnal  populations.  In Fy  Accreditation.  Funding  t2kes into account  the 
c- 12  -
number  of patients  served by each  individual  te!ephone  consulting service is available  excju
applicant  and unreimbursed  oral  health  costs,  sively  to primary care providers.  Operating  out 
as  compared  to the  total number  of patients  of San Francisco General  Hospital, the service 
served  and  total  costs incurred  by all eligible  offers  a toll-free number  (800-933-3413)  from 
applicants.  lo:30  AM-&00  PM EST Monday through  Friday. 
Since  FY  1994,  $23.4  million  has  been  A  multidisciplinary  consulting  team  of 
awarded to the HIV/AIDS Dental Reimbursement  physicians,  nurse  practitioners,  and  clinical 
Program: in N  1997, $75 mIlion was allocated  to  pharmacists  is available  to answer HIV-related 
support  dental cam at 103 eligible institutions.  clinical  management  questions.  After  hours, 
primary  care  providers  may leave a recorded 
Other  HRSA  HIV/AIDS Progrqms 
question  that is later answered by a consultant 
Approximately  1,200  calls  are  received  per 
National  HIV Telephbne  Consulting  Service 
quarter. Through Ott  1.1997, more than 18,000 
Through  the Western AIDS Education  and  calls covering  every aspect of HIV disease  and 
Training  Center  funded  by HASA,  an  on-line  treatment  were received. 
c  - 13  APPENDIX  D 

Endnotes 
D-l  1. 	 States  must  exempt  recipients  who  are  also  eligible  under  Medicare  and 
children  with  special  needs  from  mandatory  enrollment.  These  recipients  may 
enroll  in  Medicaid  managed  care  plans  on  a voluntary  basis. 
2. 	 The  Supplemental  Security  Income  program  provides  financial  assistance  to 
needy  aged,  blind,  and  disabled  persons.  In  many  States,  once  individuals  are 
eligible  for  both  Medicare  and  Medicaid,  they  are  disenrolled  from  managed 
care. 
3. 	 Medicaid  directors  from  Washington  D.C.  and  Puerto  Rico  also were  included 
in our  survey  for  a total  of  52 respondents. 
4. 	 For  this  report,  we  use the  term  managed  care  organization  to  include  the 
primary  care  case management  plan  operated  by Georgia  Medicaid  and  known 
as Georgia  Better  Health  Care. 
5.  All  of  the  information  in this  report  is as of July  1997. 
6. 	 Arizona  pays  managed  care  plans  a supplemental  $634  PMPM  for  Medicaid 
enrollees  who  are  using  protease  inhibitor  drugs. 
7. 	 Beginning  in July  1997, Massachusetts  began  paying  the  Community  Medical 
Alliance,  an MC0  specializing  in AIDS  care,  an AIDS-adjusted  capitation  rate 
for  individuals  with  active  or  advanced  AIDS.  The  Community  Medical 
Alliance  receives  an AIDS  adjusted  rate  for  any  plan  enrollee  who  has tested 
positive  for  HIV,  or  has a CD4  count  of less than  200  or  CD4  percentage  less 
than  14; and  who  has received  treatment  for  one  of  several  listed  diagnosis 
associated  with  advanced  or  active  AIDS  within  the  past  year.  This  criteria  is 
less restrictive  than  the  Centers  for  Disease  Control  and  Preventions  (CDC) 
definition  of  having  AIDS.  Other  States  paying  an AIDS-adjusted  rate  use 
CDCs  definition  of AIDS. 
8. 	 Persons  with  HIV  refers  to  persons  who  are  HIV  positive  but  are  not 
symptomatic  with  AIDS.  Persons  with  AIDS  refers  to  persons  who  are 
symptomatic  with  the  AIDS  virus. 
9. 	 Some  MCOs  require  preauthorization  of certain  services  and  drugs,  including 
protease  inhibitors.  Recently,  physicians  at the  University  of New  Mexico  (not 
one  of  the  States  in  this  evaluation)  reported  difficulties  in getting  MC0 
approval  for  drugs  to  treat  HIV. 
10. 	 The  HCFA  currently  is gathering  similar  information  for  patients  with  End-
Stage  Renal  Disease. 
D-2 
 11. 	 The  Adequacy  of Reimbursement  for  HIV  under  Section  1115 Medicaid 
Waivers,  Richard  Conviser,  Ph.D.,  Deanna  Kerrigan,  M..P.H.,  and  Stephen 
Thompson,  M.A.,  Office  of  Science  and  Epidemiology,  HIV/AIDS  Bureau, 
HRSA,  US  DHHS,  July  1997. 
D-3