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. 

OEI’s 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 community’s 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 report’s 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 HCFA’s 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 

l Capitation Rates and Service Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 

l Lack of Coordination Between Managed Care and Ryan White ........... 10 

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-forservice 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. 

l As we documented in our earlier inspection, “The Ryan White Care Act: 

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. 

l New drug treatments have been effective in treating HIV/AIDS. For most of 

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 Act’s 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) 

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 

l 
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. 

l Title IV aims to improve and expand comprehensive care services and increase 

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. 

l Part F funds the SPNS programs, the HIV/AIDS Dental Reimbursement 

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. 

l Managed care plans may not include providers experienced in treating 

HIV/AIDS. These plans may also delay or deny the specialty care and 

medications that HIV/AIDS patients need. 

l Managed care plans may exclude essential community providers and Ryan 

White agencies from their care networks. 

l In capitated plans, capitation rates may be inadequate to provide all necessary 

HIV/AIDS services, drugs and testing. 

l States and managed care plans might not include people with special health 

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 President’s 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 organization’s 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 Oregon’s 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-forservice 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 

State Program: 

Managed Care Plans 

Visited 

MA: Community 

Medical Alliance 

(Rate is available to 

other non-targeted 

qualifLing plans) 

MD: Chesapeake 

Health Plan 

CA: San Mateo 

County 

UT: United Health 

Plan 

FOR SERVING MEDICAID BENEFICIARIES WITH AIDS 

(as of July 1997) 

Monthly Rate Paid 

to MCOs for 

Medicaid Enrollees 

with AIDS 

$2,300 for active 

cases 

$2,998 for advanced 

cases 

$2,161 ($1,812 for 

patients residing 

outside of 

Baltimore City) 

$1,300 

$1,169 

Estimate4l 

Enrollment of 

Beneficiaries with 

AIDS for whom 

these rates are paid 

and total plan 

enrollment as of 

July 1997 

115 active or 

advanced AIDS 

cases 

(45 others with HIV 

diagnosis) 

450 total enrollees 

Initial enrollment 

underway at time of 

study 

73 out of 48,000 

11 out of 16,131 

(63 with HIV 

diagnosis) 

Is Payment Is Payment 

for for Viral 

Protease Load Tests 

Inhibitors carved out 

calved of the 

Out of the Capitation 

Capitation Rate? 

Rate? 

YES NO 

YES YES 

NO NO 

YES NO 

(chart 

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. 

for Positive HealthCare patients into a risk pool for the plan 

California deposits the fee-for-service equivalent costs for inpatient care 

to draw from. Any savings are shared equally at year’s 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 HIVexperienced 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 proactive 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 other’s 

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 HWj”DS 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 don’t 

know how to do and don’t 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 enrollee’s 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 HRSA’s 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 HCFA’s 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 feefor-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-forservice 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 community’s 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 report’s 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 ASPE’s, HCFA’s AND HRSA’s 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 HCFA’s 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 

l California - California’s Medicaid program (Medi-Cal) operates several 

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. 

l Georgia - Georgia operates a PCCM managed care program called Georgia 

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. 

l Marvland - Maryland began its Statewide capitated managed care program in 

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 
l Massachusetts - Massachusetts mandates Medicaid beneficiaries to enroll in the 

State’s 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. 

l Oregon - The Oregon Health Plan is a Statewide managed care initiative 

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. 

l Utah - Utah operates a capitated mandatory managed care program for all 

Medicaid beneficiaries in the four-county Salt Lake area. Outside of this area, 

beneficiaries can enroll in MCOs or in Utah’s 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 State’s 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+ Tlymphocytes, 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 plan’s 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 Utah’s 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 recipient’s 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 State’s 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 feefor-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 

FEB 25 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 

guide on the issues of risk adjustment for HIV and AIDS. The OIG 

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, 

coordinated care to people living with HIV/AIDS. However, HCFA 

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 

expended on primary care and other medical services. People 

living with HIV/AIDS depend on Ryan White providers for the full 

continuum of primary care and ancillary services. 

c-7 
The report documents 

enhancement, but fails 

Medicaid agencies to 

adjustment to managed 

significant HIV/AIDS 

OIG RKOMMENQA'J'ION,. 

The Health Resources 

the need and benefit 

to recommend that 

assure that there is 

care companies and 

population. 

for rate adjustments or 

HCFA work with the State 

an appropriate rate 

providers who serve a 

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 

Sureau’s Office of Science & Epidemiology administers the Special Projects of National Significance 

(SPNS) Program. 

HRSA’s 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. 

HRSA’s HIV/AIDS Bureau administers 

HIV/AIDS programs under four titles and Part F 

of the CARE Acl 

l Title I HlV emergency relief grant program 

foreligiblemetropolitan areas (EMAs) 

l Title II .- HIV care grants to States 

l Title Ill 

l Title IV 

* l PartF 

Title I 

HIV early intervention services 

Coordinated HIV services and 

access to research for children, 

youth, women, and families 

Special Projects of National 

Significance (SPNS) Program: 

HIV/AIDS Dental Reimbursement Program: AIDS Education 

and Training Centers (AtTCs) 

Title I funding provides formula and supplemental grants to EMAs that are disproportionately affected by the HIV epidemic. These areas 

are eligible for Tiie I formula grants if they have 

reported more than 2,000 AIDS cases in the 

preceding 5 years, and if they have a population 

of at least 500,000 (this provision does not apply 

to EMAs funded prior to FY 1997). 

Grants are awarded to the chief elected 

official (CEO) of the city or county that administers the health agency providing services to the 

greatest number of people living with HIV in the 

EMA. The CEO must establish an HIV Health 

Sewices Planning Council that is representative 

of the local epidemic and includes representatives from specific groups such as health care 

agencies and community-based providers. At 

least 25 percent of voting members must be 

people living with HIV disease. The planning 

council sets priorities for the allocation of funds 

within the EMA, develops a comprehensive plan, 

and assesses the grantee’s administrative 

mechanism in allocating funds. 

c - 10 
Community-baseo services funded under 

Title I may inctude: 

l -Outpatient health care, including medical and 

dental care and developmental and rehabilitative services; 

l Support services such as case management 

home health and hospice care, housing and 

transportation assistance, nutrition services, 

and day or respite care: and 

l Inpatient case management services that 

expedite discharge and prevent unnecessary 

hospitalization. : 

Providers may in&de public or nonprofti 

entities: private for-profit entities are eligible only 

if they are the only available provider of quality 

HIV care in the area. 

When the first Title I grants were awarded in 

FY 1991.16 EMAs were identified: in FY 1997, 

therewere49EMAsin 19States. PuertoRico. and 

the District of Columbia EiWs received S429.3 

million in Title I formula and supplemental funds in 

I? 1997. Since FY 1997, more than $1.8 billion in 

Title I grants has been awarded. 

-me II 

Title If provides formula grants to States, 

the Districtof Columbia, Puerto Rico and eligible 

U.S. territories to provide health care and 

support services for people living with HIV 

disease. Grants are awarded to the State agency 

designated by the governor to administerTitle II, 

usually thehealth department. 

Grants are awarded based on: (a) the 

estimated number of living AIDS cases in the 

State or territory: and (b) the estimated number 

of living AIDS cases within the State or territory 

but outside of Title I EMAs. States with more 

than 1 percent of the total AIDS cases reported 

nationally during the previous 2 years must 

contribute their own resources to match the 

Federal grant, based on a yearly formula. 

Title II funds may be used to support a 

wide range of services. including: 

l Home and community-based health care and 

support setices: 

l Continuation of hea!:h insurance coverage 

through a Health Insurance Continuation 

Program (HICP): 

l Pharmaceutical treatments through an AlDS 

Drug Assistance Program (ADAP); 

l Localconsotiathatassessneeds,organ~~ 

defier HlV services in consultation with service 

. providers, and contract forservices; and 

l Oirect health and support senkes. 

Since Ff 1991, HRSA has awarded more 

than $1.26 billion in Title II grants. In N 1997, 

$397.9 million was awarded, which includes 

3167 million in ADAP funding. 

Title III 

We Ill of the CARE Act supports outpatient HIV early intervention services for lowincome, medically underserved people in existing primary care systems. Medical, educational, 

and psychosocial services are designed to pmvent the further spread of HIV/AIDS, delay the c 

onset of illness, facilitate access to services, 

and provide psychosocial support to people with 

HIV/AIDS. 

Since N 1991, $369.4 million has been 

awarded underTitle Ill; in N 1997, $69.5 million 

was awarded to 166 facilities in 37 States, 

Puerto Rico,andtheDistrictofColumbia Nearly 

one-half was awarded to community and migranthealthceoters:theotherhalffunded homeless programs, local health departments, family 

planning programs, comprehensive hemophilia 

diagnostic and treatment centers, Federallyqualified health centers, and private nonprofits. 

Title IV 

Title IV programs focusbn the development and operation of systems of primary health 

care and social services that benefit children, 

youth, and women living with HIV and their 

families. These systems aim at building 

.comprehensive, community-based, coordinated 

programs that include both health and social 

Outreach elements, as well as prevention. Title 

IV also works to develop new ways to effectively 

link these care systems with HIV research supported by the National Institutes of Health (NIH) 

and other OrganitatiOnS. 

c- 11 
Title IV, in collaboration with the Special 

Projects of National Significance (SPNS) 

Program, funds The Women’s Initiative for HIV 

Care and Reduction of Perinataf HIV Transmission (WIN). This initiativesupports 3yearcooperatlve agreements to develop models of care 

that enhance outreach, HIV counseling and 

testing services for women of childbearing age, 

especially during pregnancy, and offers perinatal 

ZDV prophylaxis and maintenance of ongoing 

care for mothers with HfV and their children. 

Title IV also collaborates with the National Institute 

of Child Health and Hufnan Development, NIH, to 

support models of care and ,research investigating 

HIV disease and utilizaticn of care among adolescents with or at risk for HIV. 

In FY 1997, 336 million was awarded to 

projects in 23 States, the District of Columbia, 

and Puerto Rico. More than eighty percent of 

the clients are from poor, minority families with 

limited access to transportation and housing. 

Beginning in 1988, the Pediatric AIDS Demonstration Program and, since 1994, the CARE Act 

Title IV program, have provided more than S200 

million to States and communities. 

Part F 

Special Projects of National Significance 

(SPNS) Program 

The Special Projects of National Significance (SPNS) Program supports the development of innovative models of HIV/AIDS care, 

designed to address special care needs of 

individuals with HIV/AIDS in minority and hard-toreach populations. These projects are designed 

to be replicable in other parts of the country, and 

have a strong evaluation component 

SPNS Program models focus on managed care; infrastructuredevelopment; training: 

access to care through reduction of sociocultural, financial, and transportation barriers for 

rural residents, women. adolescents, and 

children; legal advocaqz comprehensive primary care (including managed care); integration of mental health and primary care services: 

and services forcorrecticnal populations. In Fy 

1996, Integrated Service Deiivery Models were 

funded to create formal linkages to integrate 

health and support services. 

The SPNS Program has collabomted with 

the Substance Abuse and MentalHealth Services 

Administration and the National lnstftute of MentaJ 

Health, NIH, to co-fund 11 mental health services 

demonstration projects for people living with HIV/ 

AIDS. Projects are funded for 4 years and 

received approximately $4.6 million in p/ 1996. 

Since FY 1991, $60.6 million has been 

awarded in SPNS Program funding. in N 1996, 

62 grantees received more than $25 million. 

AIDS Education and Training Centers 

The AIDS Education and Training Center 

(AETC) Program is a naticnal network of 15 

centers that conduct targeted. multi-disciplinary 

education and training programs for health care 

providers in designated gecgraphic areas. The 

AETCs increase the numizer of health care 

providers who are educatti and motivated to 

counsel, diagnose, treat, and manage care for 

individuals with HIV/AIDS xd to help prevent 

high risk behaviors that may lead to infection. 

AETCs collaborate with CARE Act-funded 

organizations, Area Health Education Centers 

(AHECs), community-based HIV/AIDS organizations, medical and health professional schools, 

local hospitals. health departments, community 

and migrant health centers, medical societies, 

and other professional organizations. 

From FY 1987 to 1996. HRSA received 

$153.7 million to fund the AETCs. In N 1997, 

the AETCs received $16.3 nillion in funding. 

HIV/AIDS Dental Reimbursement Program 

HRSA’s HIV/AIDS Dental Reimbursement Program assists accredited dental 

schools and post-doctoral dental programs 

with uncompensated costs incurred in providing oral health treatment to HIV-positive 

patients. Eligible applicants must have documented uncompensated costs of oral health 

care for HIV-positive pencns. and must be 

accredited by the Commission on Dental 

Accreditation. Funding t2kes into account the 

c- 12 
number of patients served by each individual 

applicant and unreimbursed oral health costs, 

as compared to the total number of patients 

served and total costs incurred by all eligible 

applicants. 

Since FY 1994, $23.4 million has been 

awarded to the HIV/AIDS Dental Reimbursement 

Program: in N 1997, $75 mIlion was allocated to 

support dental cam at 103 eligible institutions. 

Other HRSA HIV/AIDS Progrqms 

National HIV Telephbne Consulting Service 

Through the Western AIDS Education and 

Training Center funded by HASA, an on-line 

-

te!ephone consulting service is available excjusively to primary care providers. Operating out 

of San Francisco General Hospital, the service 

offers a toll-free number (800-933-3413) from 

lo:30 AM-&00 PM EST Monday through Friday. 

A multidisciplinary consulting team of 

physicians, nurse practitioners, and clinical 

pharmacists is available to answer HIV-related 

clinical management questions. After hours, 

primary care providers may leave a recorded 

question that is later answered by a consultant 

Approximately 1,200 calls are received per 

quarter. Through Ott 1.1997, more than 18,000 

calls covering every aspect of HIV disease and 

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 Prevention’s (CDC) 

definition of having AIDS. Other States paying an AIDS-adjusted rate use 

CDC’s 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 EndStage 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