Oregon Benchmark Rate Study 11 29 04

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Informations

• Publié par: Erdie
• Nombre de lectures: 26
• Langue: English

Extrait

November 29, 2004


SFY 2006-07 Benchmark Rate Study
Oregon Health Plan
Technical Report





Oregon Health Plan

Contents
1. Executive Summary.......................................................................................................1
2. Introduction....................................................................................................................5
3. The Dynamic Healthcare Marketplace ..........................................................................9
Overview of Payer Sources in Oregon...................................................................10
Disproportionate Profit Margins............................................................................12
4. Methodology Overview...............................................................................................16
Experience Base Data ............................................................................................16
Estimation of 2002 Benchmark Rates....................................................................17
Projection of 2002 Benchmark Rates to 2006 .......................................................20
Benchmarks Rates for Eligibility Groups..............................................................21
5. Limitations...................................................................................................................23
Purpose of Report ..................................................................................................23
General Constraints................................................................................................24
Data Considerations...............................................................................................24
Methodology Issues
Profitability of Healthcare Providers .....................................................................25
Role of The Oregon Health Plan Medicaid Program.............................................25
Recognizing and Rewarding Efficiencies..............................................................26
6. Benchmark Rates.........................................................................................................27
Methodology and Data Limitations .......................................................................28
Hospital..................................................................................................................30
Physician................................................................................................................40
Prescription Drugs .................................................................................................53
Mental Health Inpatient .........................................................................................70
Mental Health Outpatient.......................................................................................76
Chemical Dependency ...........................................................................................82
DME/Supply ..........................................................................................................87
Dental.....................................................................................................................94
Other Services......................................................................................................102
7. References..................................................................................................................111
Mercer Government Human Services Consulting

Oregon Health Plan

8. Appendices
Appendix A: Health Services Commission
Appendix B: Health Services Commission Actuarial Advisory Committee
Appendix C: OMAP Service Categories
Appendix D: Program Benefit / Eligibility Changes and Prioritized List Changes
Appendix E: Benchmark Rates by Service Category
Appendix F: Benchmark Rates by Eligibility Group
Appendix G: Glossary



Mercer Government Human Services Consulting

Executive Summary Oregon Health Plan

1
Executive Summary

House Bill 3624, enacted during the 2003 Regular Session of the Oregon Legislature,
provided for the establishment of benchmark rates for Oregon Health Plan (OHP) members.
Benchmark rates were to be developed for both fee-for-service (FFS) providers and prepaid
managed care health services organizations based on the actual cost of providing services.
The benchmark period is July 1, 2005, through June 30, 2007 (referred to as 2006 in this
report). The legislation also identified minimum requirements for eligibility groups within the
OHP, and provider categories (e.g., hospital, physician).

The Health Services Commission (HSC) was tasked with overseeing the development of
these benchmark rates. The HSC engaged Mercer Government Human Services Consulting
(Mercer) to develop the benchmark rates. This report summarizes the benchmark rates
developed pursuant to House Bill 3624.

There were several significant challenges with respect to developing benchmark rates that
reflect cost. First, cost needed to be defined. Discussions with both the HSC and an Advisory
Committee, consisting of provider and managed care organization representatives, provided
guidance as to the elements of providing services to Medicaid participants that should be
considered in the definition of cost. The consensus of both groups was that direct costs of
providing services, as well as operating expenses, should be considered as cost, whereas costs
to provide non-Medicaid services should not. Costs should reflect only the costs of direct
providers of services and not administration or management costs of managed care entities,
third-party payments, or OHP enrollee cost sharing.

The second challenge was to determine what information or data would be used to develop
cost. If reliable cost data were available, such as hospital cost reports, this cost data was used
to develop the benchmark rates. If reliable cost data were not available, alternative
approaches were used to develop an estimate or proxy of cost. These approaches are
described in Section 4 of this report. There was no data available for drug acquisition costs,
Mercer Government Human Services Consulting 1

Executive Summary Oregon Health Plan

therefore, we were unable to develop a true benchmark rate for prescription drugs. OHP’s
prescription drug costs were instead benchmarked against other states.

The last challenge was to develop benchmark rates that provided equity among all provider
groups. Although it is intended that the results of this benchmark study provide sufficient
information to improve equity among providers, it will not eliminate the inequity that
currently exists among provider groups. There was not sufficient cost data available,
particularly for prescription drug services, to enable Mercer to use the same methodology or
data sources to develop uniform estimates of provider costs. The current inequity can be
noted in Section 3 of our report, Disproportionate Profit Margins.

The final benchmark rates are summarized in Appendix E and F of this report and are for the
2006 time period (the midpoint of the 2005–07 biennium), as required by this study. We did
not have 2006 Medicaid reimbursement rates available from the Office of Medical Assistance
Programs (OMAP) to reference for comparison, but have provided State Fiscal Year (SFY)
2002 and SFY 2003 (referred to as 2002 in this report) Medicaid FFS reimbursements (for
the 2001–03 biennium) compared to 2002 FFS Unit Cost Benchmarks. These are shown in
Figure 1.1 below. We have highlighted the Prescription Drugs bar to emphasize that a true
unit cost benchmark was not developed for that category. Hospital values have been adjusted
to reflect supplemental OMAP payments as discussed in the Hospital COS sub-section.

These are provided only for illustrative purposes. This report does not provide a direct
comparison to the rates anticipated to be paid by OMAP for July 1, 2005, through
June 30, 2007. No conclusions are discussed, nor are, we believe, relevant, related to the
appropriateness of the rates to be paid by OMAP. We understand that OMAP will be
responsible for evaluating the benchmark rates developed pursuant to House Bill 3624, as
they relate to the rates anticipated to be paid.

Figure 1.1
Comparison of 2002 Medicaid FFS Reimbursements per Unit to 2002 FFS Unit Cost
Benchmarks
120%
100%
80%
60%
102% 10 1%
40% 78% 81%72% 74%70%68%67%
45%20%
0%

Mercer Government Human Services Consulting 2


Hospital
Physician
Prescription Drugs
Mental Health Inpatient
Mental Health Outpatient
Chemical Dependency
DME/Supply
Dental
Other
All ServicesExecutive Summary Oregon Health Plan


The benchmark study uses the same definitions of units that OMAP uses in the development
of the 2005 – 2007 per capita cost report. Because the study aggregates the 101 OMAP
“service buckets” into nine provider categories of service (COS), there are multiple unit types
used within individual COS. The unit types, shown in