Mark Carter | Passport strives to provide quality care

6:32 PM, Oct 14, 2012   | The Courier-Journal

 Written by



Over 15 years ago, a group of visionary leaders from the University of Louisville Health Sciences Center, the Family Health Centers, Park Duvalle Health Center and Gov. Paul Patton established Passport Health Plan. Passport was a public-private partnershipthat would, in effect, operate the Medicaid program in Jefferson and 15 surrounding counties known as Kentucky’s Medicaid Region 3.

This public-private partnership was unique in the some important ways: It was governed by a coalition of hospitals, physicians, other clinicians and member advocates. Five local, nonprofit health care organizations provided the financial capital to establish the plan. It was, and still is, a nonprofit Kentucky corporation which allows Passport to focus on medical care without the overriding goal of generating a return for shareholders.

Moreover, the founders of Passport focused on three primary goals. The first was to offer a network of providers that would equal or exceed those provided by commercial insurancecarriers. Second, the plan would focus on quality, including high member and provider satisfaction levels. Finally, Passport would use financial incentives to reward physicians who improve the quality of, and access to, care while reducing the rate of growth in cost.

Interestingly enough, then as now, reducing the cost increases in the Medicaid program was a goal of the Patton administration. His administration was able to gain agreement from the providers in Region 3 to voluntarily help the commonwealth achieve a 5 percent reduction in cost during the first year of operation of the program.

So, how did Passport perform when compared to these initial goals?

First, access to care for Medicaid beneficiaries is unfettered. Ninety-one percent of primary care physicians and every single hospital in Region 3 participate in Passport, with comparable percentages in every other provider category. When it comes to the choice that matters, the member’s choice of his or her doctor, Passport is unequaled.

Second, Passport has achieved national recognition for the quality of care provided to its members, including unusually high levels of member and provider satisfaction. This was achieved because it was the focus of the plan from the very beginning. The sponsoring providers believed that a focus on quality would represent an investment in the future and would lead to lower costs. This required meaningful collaboration with providers, continuing to this day, that experimented with using financial incentives to control cost, something that has gained widespread acceptanceonly recently and is embodied in the Affordable Care Act.

Finally, while it has received little fanfare, Passport was successful in reducing the rate of growth in costs. A recent study commissioned by Passport reports that from 2008 to 2010, the commonwealth’s cost (the amount it paid to Passport) in Region 3 increased by 0.7 percent annually while costs in the other regions of the state increased by almost 8.5 percent annually. Over the 15-year life of Passport, the commonwealth paid Passport $8 billion. Of this $8 billion, Passport has reported an excess of revenues over expenses during that time of only $34 million, or less than one-half of 1 percent. During that same time, Passport spent 91 percent of revenues on medical care in sharp contrast to the level of spending for commercial insurance carriers.

Recently, the commonwealth announced a new approach to managing care for Medicaid beneficiaries in Region 3. Under the new approach, Passport will now be one of four plans competing for Medicaid patients in this region; however, Passport will continue to be unique among the four plans. We will be the only locally controlled, provider-sponsored and community-affiliated plan that is focused solely on improving the health and quality of life of our members. Passport will work in close collaboration with the provider community, the folks who have a direct impact on the lives of our members.

While we question the wisdom of the decision to change the approach to serving Region 3, we will strive to serve all of the Medicaid beneficiaries in this region, either directly through our provider network, or indirectly through collaboration with the commonwealth and the other organizations coming to Region 3. We look forward to continuing our collaboration with the commonwealth, our providers and member advocates as we seek to help Kentuckians lead healthier lives.


Chief Executive Officer –

Passport Health Plan –

Louisville 40229 –


Dual-eligibles market creates opportunities for physician practices

The managed care market for the Medicare-Medicaid population could range from $86 billion to $183 billion in the next five years, Booz & Co. estimates.

By JENNIFER LUBELL, amednews staff. Posted Sept. 14, 2012. 

Washington- Physicians have new opportunities to partner with health plans to take advantage of the rapidly growing private market for beneficiaries who are eligible for both Medicare and Medicaid, according to a partner at a global management consulting firm.

“There’s been a tremendous interest and appetite around the so-called dual-eligibles population,” said Sanjay Saxena, MD, a partner in the North American health practice at Booz & Co. and co-author of a new Booz report ( in_the_Medicaid_and_Duals_Markets.pdf).

Several years ago, discussions about changes in the private insurance market were all about health insurance exchanges, then about accountable care organizations, and “now it’s about the duals,” Dr. Saxena said.

The Booz report discusses ways in which managed care companies could leverage both the Medicaid and dual-eligibles markets by identifying states that present the best growth opportunities and then defining their operating models or “choosing a way to play” in these markets. Managed care organizations, for example, could enable care delivery by supporting or delegating care management activities to medical groups or hospitals, or going so far as to own or manage networks of hospitals or physician groups in an effort to integrate care management and create incentives to drive care coordination.

As managed care organizations engage in these models, physician groups also should think about how they want to participate in the growing Medicaid and dual-eligibles marketplaces, Dr. Saxena said. He said some medical groups may be proactive and well-positioned enough to reach out to health plans and say, “Look, we build medical homes, we have care coordinators, and have the kind of outreach and relationships with the community where wefeel we could share in the incentives and savings and benefits and high-quality care.”

As high utilizers of care, dual-eligibles have complex health needs and rack up roughly $300 billion in costs annually to Medicare and Medicaid. These challenges notwithstanding, many health plans have been viewing government-subsidized markets as very attractive opportunities, Dr. Saxena said. “For physicians, whether we like it or not, those are the markets that continue to grow in size.” In looking at future avenues for growth, analysts have seen that employer-sponsored insurance markets have been declining steadily, and while the individual market is expected to expand through theAffordable Care Act’s insurance exchanges, that’s going to be a difficult market to navigate as well, he said.

WellPoint’s recent acquisition of AmeriGroup and Aetna’s purchase of Coventry Health Care are two developments that illustrate a growing interest in Medicare and Medicaid managed care, Dr. Saxena said. InAetna’s case, “the major driver was greater exposure in the government market. For WellPoint and AmeriGroup, it’s a very similar story.” WellPoint and its competitors have shown recent interest in managing care for the dual-eligible population.

The health system reform law’s expansion of Medicaid, moves by states toward Medicaid managed care to get budgets under control, and a series of new federal demonstration projects that aim to find more efficient ways to manage the dual-eligible population “are three separate but related things that are creating this opportunity,” Dr. Saxena said. During the next five years, Booz & Co. estimates that the managed care market size for dual-eligibles alone could range from $86 billion to $183 billion.

Copyright 2012 American Medical Association. All rights reserved.

Most employers signal they will keep offering health insurance

Beginning in 2014, companies can move workers to health insurance exchanges, but a recent survey shows that few plan to do so.

By BOB COOK, amednews staff. Posted Sept. 10, 2012.

In the first few years after the Affordable Care Act is in full effect, physicians are unlikely to see many of their patients’ insurance status change as a result of employers dropping coverage in favor of employees buying individually through health insurance exchanges. Instead, those employed, insured patients will continue to be more responsible for the cost of their care.

Those conclusions came from a report issued by Towers Watson, a global human resources consulting firm. On behalf of the National Business Group on Health, Towers Watson surveyed 440 companies representing 6.6 million employees. The survey was conducted in July and released Aug. 27.

A month after the U.S. Supreme Court had affirmed the constitutionality of the Affordable Care Act, 88% of employers told Towers Watson they had no plans to terminate their health care plans for those working 30 hours or more a week — up from 71% in 2011. Also, 77% of companies said health care benefits were central to rewarding and retaining employees, and 72% said they were not confident — with only 4% saying they were very confident — that health insurance exchanges would provide a viable alternative to employer-sponsored benefits.

Under the ACA, companies that move their insured employees to exchanges, which are designed to provide people with a choice of individual coverage, in 2014 would pay up to a $2,000-per-employee penalty after the first 30 employees if at least one worker receives federal subsidies for the coverage. The exchanges are scheduled to begin in 2014, and the penalty would rise in future years. The Congressional Budget Office has predicted that about 7% of workers in 2014, the year exchanges go into effect, would lose employer-sponsored coverage and buy it from exchanges.

In theory, employers could stop offering coverage now with no penalty at all. Towers Watson, though, said companies don’t consider dropping coverage as a good human relations move. “Affordable health care remains a top priority for employers and a key component in the employee value proposition,” said Randall Abbott, senior health care consulting leader at Towers Watson.

Moving insured employees to exchanges will cost companies $2,000 per employee after the first 30 employees.


What companies are doing instead, according to the survey, is continuing to review the coverage they offer to see where they can save money, including by increasing employee contributions as part of a strategy that equates more spending on their part as an incentive to improve their health.

The percentage of employers offering consumer-directed health plans — a high-deductible plan eligible to be paired with a health savings account or health reimbursement arrangement — will increase to 61% in 2013 from 59% in 2012. But the big jump comes after the ACA is in place, with 80% of employers expecting to offer it by 2015. About 57% of employees will see an increase of one or more percentage points in their contribution in 2013, down from 66% in 2012, but still considered a reflection of companies’ desire to offload some costs onto their workers.

“Due to the increased costs of medical benefits and the additional burden of compliance, business leaders need to keep the pressure on to control costs, increase work force accountability and engage workers to lead a healthier lifestyle,” Abbott said.

Overall, health insurance spending per employee is expected to be $11,507 in 2013, of which employees will pay $2,596. The overall total is up 5.3% for 2013, a decline from 5.9% for 2012.

Other strategies companies are using to cut health insurance costs include discontinuing plans for retirees, with 28% saying it is very likely they would do so, up from 20% in 2011. Also, companies are looking at changing their plans to avoid paying a 40% excise tax beginning in 2018 for any plan with an aggregate value of more than $10,200 in individual coverage and $27,500 for family coverage.

Copyright 2012 American Medical Association. All rights reserved. 


Pediatricians call for uniformity on kids’ essential benefits

CHIP and Medicaid trump other state benchmark options for the minimum pediatricsbenefits that plans must cover under health reform, a report says.

By JENNIFER LUBELL, amednews staff. Posted Sept. 10, 2012.


Washington Citing inconsistencies between state plan options for upcoming minimum coverage standards, the American Academy of Pediatrics is urging the federal government to designate a public insurance program as the benchmark for children’s essential health benefits.

In 2011, the Dept. of Health and Human Services issued guidance that gave states the latitude to choose from one of several existing health plans to serve as the “benchmark” plan for their essential health benefits package under the Affordable Care Act. The healthsystem reform law mandates that these minimum coverage standards be offered by all plans on health insurance exchanges and by some additional plans outside of the exchanges. Starting in 2014, plans will be required to cover 10 broad categories of essential health benefits services.

The HHS guidance specified that a state could look at some of the largest health plans operating in its jurisdiction and then select a benchmark plan from one of four plan types: small-group, federal employee, state employee or commercial HMO. Public insurance options, however, were not included in the mix.

In an Aug. 28 report, the AAP found wide discrepancies among some of these plans in terms of what they offer to children — and that none of them met the expansive coverage options of either Medicaid’s standard benefits package for children or of packages offered by individualstate CHIP plans. The report focused on the largest federal employee, stateemployee and small-group plans in five states, then judged how well they covered the 10 categories of essential health benefits compared with each other and public insurance programs.

Public insurance programs covered more than 31% of all U.S. children in 2010, up from 26% in 2008.


CHIP and Medicaid trumped other plans on cost-sharing protections and breadth of coverage, the association concluded. Outside of public coverage, federal employee plans were found to have the most comprehensive pediatric benefits, whereas small-group plans offered the least expansive options. Coverage gaps in the small-group plans “were mostly found for rehabilitative/habilitative services and especially for pediatric, oral, vision and hearing services,” the report stated, although these plans provided more generous coverage in other areas, such as ambulatory and emergency services.

The AAP said its findings run counter to what HHS concluded in its guidance: that these benchmark options did not vary significantly in terms of the range of services they provided. “We can’t allow children to have different health benefits depending on where they live,” said Robert W. Block, MD, the AAP’s president.

Even with variations in public coverage among the states, establishing a public insurance option such as CHIP or Medicaid as the benchmark for children’s essential health benefits would provide a broader, more robust range of benefits than some of these other plans, Dr. Block said. Over the long run, this approach would save more money by keeping children healthier, he said.

The AAP and the American Medical Association previously had expressed concerns about the benchmark-setting process. In letters to HHS earlier in 2012, the organizations observed that a majority of the benchmark plans did not cover some benefits that were medically necessary for children. In reading the AAP’s latest findings, other pediatric organizations, such as the Children’s Hospital Assn. and Voices for America’s Children, recommended that states use the CHIP program in particular as thebenchmark for children’s benefits.

Applying just one insurance product uniformly across states as the minimum coverage benchmark does make sense, said Chantel Sheaks, a principal in government relations with Buck Consultants in Washington who specializes in health reform issues. It would level the playing field on benefits, she said, adding that many observers were surprised when HHS decided to defer to the states on choosing benchmark plans instead of just selecting one essential benefits plan for the country.

The situation may get more complex, however, if a program such as CHIP becomes the benchmark just for children while a range of other options applies to adults, Sheaks said. She said oneplan should set the bar on essential benefits for all age groups.

At this article’s deadline, HHS had not responded to calls seeking comment.

The AAP released its report shortly before the Robert Wood Johnson Foundation came out with its own results on the impact of public insurance on closing health care access gaps for children. The ranks of uninsured children are decreasing due to more CHIP and Medicaid coverage despite a recent rise in the number of those living in poverty, the study found. Public insurance programs covered more than 31% of all children in the U.S. in 2010, an increase of more than five percentage points from 2008. In most states, these increases more than offset a drop in the portion covered by private insurance, resulting in an overall decline in kids’ uninsurance rates.

These findings “are no surprise,” Dr. Block said. “As the economy tanks, you have more people who are at the lower end of middle class who are now dumped into poverty. So, where they weren’t eligible for Medicaid and CHIP before, they are now,” meaning the public safety net is doing exactly what it’s designed to do, he said.



CHIP, Medicaid lower ranks of uninsured

A study from the Robert Wood Johnson Foundation found that Medicaid and the Children’s Health Insurance Program helped to shrink the numbers of uninsured children in the U.S. As the numbers of publicly insured children have increased over the past few years, the numbers of those with private insurance have declined.

















Source: “Keeping Kids Covered: Number of Children with Health Coverage Increases During Economic Downturn,” Robert Wood Johnson Foundation, August (

New Medical Care Networks Show Savings

Published: September 11, 2012
The New York Times

A new model for delivering medical care, one promoted by the federal health care law, holds promise for slowing the cost of treating the sickest, most expensive patients, according to a new study.


The sweeping law, enacted in 2010 and upheld by the Supreme Court this summer, encourages the creation of “accountable care organizations” — networks of hospitals, doctors groups and other health care providers that collaborate to keep a defined group of patients healthier. The groups share in the savings if they meet quality and cost targets.

The study, which is being published Wednesday in The Journal of the American Medical Association, found that a predecessor to accountable care organizations achieved particular savings in caring for patients eligible for both Medicare and Medicaid.

Many of those patients have multiple, severe health conditions and are especially expensive: The nation’s nine million “dual eligibles,” as they are known, make up 15 percent of the Medicaid population but account for 39 percent of the program’s spending.

In the predecessor program, a Medicare experiment that ran from 2005 to 2010, 10 doctors groups from around the country received bonus payments if they met quality targets and achieved lower cost growth compared with Medicare spending on other patients in their region.

The study, conducted by researchers from the Dartmouth Institute for Health Policy and Clinical Practice, found that the growth in spending per “dual eligible” patient slowed by $532 a year, or 5 percent, after doctors groups joined the demonstration program.

Over all, spending on dual eligibles in the program grew at only 60 percent of the rate of the control group.

“The fact that they saved any money at all is a pretty significant finding,” said Carrie H. Colla, the study’s lead author. “It shows promise in that they did significantly improve quality while modestly improving spending.”

The study found that for dual eligibles, the savings came largely from reducing hospital stays.

Savings for the overall patient population in the experiment was more modest: Spending per patient slowed by $114 a year after the 10 doctors groups joined the demonstration program.

The groups varied significantly in how much they spent per patient and how much they slowed the growth of spending over time. The doctors group that spent the most before joining the program — the University of Michigan Faculty Group Practice, based in Ann Arbor — also saved the most, an average of $2,499 per dual eligible patient annually.

But the group that spent the least on such patients before entering the program — Marshfield Clinic, in Wisconsin — also achieved notable savings, the study found, slowing the growth of spending per dual eligible patient by an average of $987 per year.

The findings come as accountable care organizations are forming around the country. According to the Department of Health and Human Services, morethan 150 such groups now serve about 2.4 million Medicare patients.

In the predecessor program, the Medicare Physician Group Practice Demonstration, participating doctor groups were eligible for up to 80 percent of any savings they generated if they could also show improvement on 32 quality measures.

(A version of this article appeared in print onSeptember 12, 2012, on page A22 of the New York edition with the headline: New Medical Care Networks Show Savings.)