Assessment of Harvard Pilgrim Health Care, Inc. - DMA Health

ASSESSMENT OF HARVARD PILGRIM HEALTH CARE, INC.: PROVISION OF CARE

FROM 2000 THROUGH 2003

Submitted to:

The Massachusetts Office of the Attorney General

PREPARED BY:

DMA Health Strategies

HARVARD PILGRIM HEALTH CARE REPORT

TABLE OF CONTENTS

Executive Summary ………………..Executive Summary Page 1

I. Introduction………………………………………………… 1 II. Methodology……………………………………………….. 2 III. HPHC Background and External Factors……………….. 4

A. Background……………………………………………. 4 B. External Factors……………………………………….. 5 C. HMO Trends in Massachusetts……………………… 7 D. Conclusion…………………………………………….. 11

IV. Access to Services………………………………………….. 12 A. Introduction ………………………………………… 12 B. Large and Small Group Plans ……………………… 12 C. Non-Group Plans …………………………………… 16 D. Medicare Risk ……………………………………… 18 E. Medicare Cost ……………………………………..… 18 F. Enrollment …………………………………………… 20 G. Provider Network for Commercial Plans ………… 26 H. Clinical/Authorization Policies …………………… 35 I. Provider Survey……………………………………… 38 J. Grievances and Appeals ……………………………. 39 K. Utilization of Medical Ambulatory Services……….. 42 L. HEDIS Access and Satisfaction Measures ………… 50 M. Conclusion …………………………………………… 53

V. Access to Specific Service ……………………………… 57 A. Behavioral Health …………………………………… 57 B. Prescription Coverage ……………………………… 77 C. Rehabilitation Services ……………………………… 88 D. Conclusion……………………………………………. 92

VI. Special Populations ……………………………………….. 95 A. Limited English Speakers…………………………… 95 B. People with Chronic Illness ………………………… 105 C. Conclusion ………………………………………… 132

VII. Community Benefits………………………………………. 137 A. Department of Ambulatory Care and Prevention 137 B. Community Service Center ………………………… 138 C. Charitable Care …………………………… 139 D. Summary of Community Benefits ………………… 139

VIII. Conclusion ………………………………………………. 141

Dougherty Management Associates, Inc. Page i

EXECUTIVE SUMMARY A. INTRODUCTION

Late in 1999, Harvard Pilgrim Healthcare Inc. (HPHC) identified accounting errors that showed it to be in a significantly worse financial situation than previously recognized. It immediately reported this situation to the state, which responded by putting HPHC into receivership at the beginning of 2000. After a four-month investigation, the Massachusetts Division of Insurance and Office of the Attorney General determined that HPHC’s continuation as an independent company and implementation of its proposed rehabilitation plan would best serve the interests of HPHC’s 800,000 members. The court approved the two agencies’ petition to end the receivership and required that they continue to monitor the implementation of the approved rehabilitation plan. To address public concerns that measures to control costs might lead to withholding care or seeking to disenroll members with more intensive treatment needs, HPHC was required to finance a 4 year assessment of its provision of access and services. The Office of the Attorney General with the consultation of HPHC and Health Care for All, a health care advocacy group, selected Dougherty Management Associates, Inc. – now doing business as DMA Health Strategies (DMA) - as the independent assessor in a competitive process. This report summarizes the results of our assessment. This report describes HPHC’s performance in Massachusetts during the entire 4-year period from 2000 through 2003, using 2000 as the baseline. It focuses on HPHC’s Massachusetts operations. HPHC’s former affiliate, Neighborhood Health Plan, was not included in the receivership is therefore not included in this report.

The Office of the Attorney General identified several specific topics to be the focus of the assessment. These include: • Access to HMO coverage

Coverage and Benefits • Access to Critical Services

Behavioral Health Prescription Drugs Rehabilitation

• Access of Vulnerable Groups Non-English speakers Members with Chronic Illness

• Provision of Community Benefits The organization of the report corresponds to those target areas focusing on the indicators for which we have 4 years of data.

B. METHODOLOGY DMA consultants sought data from a wide variety of sources to assess HPHC’s provision of care. We used data from reports submitted by HPHC and other Health Maintenance Organizations (HMOs) about their operations and services to the following Massachusetts State Agencies: the Division of Insurance (DOI), the Department of Public Health’s Office of Patient Protection (OPP), and the Office of the Attorney General. In addition, we drew upon the National Committee on Quality Assurance’s (NCQA) Health Plan Employer Data and Information Set (HEDIS), a national performance benchmarking initiative addressing a number of aspects of health plan operations and provision of service, and the annual Drug Trend Report produced by Express Scripts company from a national sample of its clients’ claims.

Dougherty Management Associates, Inc. Executive Summary Page 1

To familiarize itself with HPHC’s operations, DMA consultants conducted key informant interviews. DMA also analyzed utilization and enrollment reports, reports on administrative operations, and surveys of HPHC members and HPHC providers, and reviewed key policy documents. Finally, DMA interviewed or surveyed trade associations who could represent the experience of their members who contract with HPCH and advocacy and service organizations who serve and/or represent the vulnerable populations that are a specific focus of this assessment in order to understand the impact of changes caused by the receivership and rehabilitation plan on these parties. It also surveyed a sample of HPHC employers with large numbers of limited English speaking members. Since HPHC’s provision of services was affected both by changes in the external environment and the rehabilitation plan, DMA selected other large Massachusetts HMOs to serve as a comparison group when analyzing trends in utilization, benefits and rates. These include: Aetna, Cigna, Fallon, Health New England, HMO Blue, and Tufts. For HEDIS data, the Massachusetts and national averages for HMOs and point of service (POS) plans were used for comparison.

C. BACKGROUND

HPHC’s receivership began on January 4, 2000 and lasted through April of the same year. During the receivership some employers whose contracts with HPHC came up for renewal were concerned about HPHC’s stability, and chose not to renew their HPHC coverage. These concerns may have also influenced HPHC members to transfer to other HMOs during open enrollment periods. In any case, HPHC began to experience a significant decline in its enrollment.

HPHC’s financial recovery strategy began before and continued after this brief period of receivership. It included changes in company structure and in the operations of most if not all departments. Some key aspects of financial recovery included: • HPHC terminated its contracts with Rhode Island; • It subcontracted with Perot systems to perform claims

processing and with ValueOptions to manage mental health and substance abuse benefits;

• Staffing was downsized to correspond to the decline in membership and therefore in the volume of certain member related tasks;

• HPHC invested in interactivity and web-based functionality;

• Differences between historically Harvard and historically Pilgrim accounts and providers were eliminated;

• HPHC introduced a tiered formulary and a new pharmacy benefits manager;

• It negotiated longer term contracts (4 years) with some large practice groups to provide both them and HPHC with predictability during a time of uncertainty;

• As of 2001, HPHC ended its participation in Medicare Risk in three counties in southeastern Massachusetts, Barnstable, Bristol, and Plymouth, and in Worcester County because of low federal reimbursement (which varies by County) and reduced provider participation.

• In 2001, it subcontracted for case management of members whose conditions were not being optimally treated.

• In 2002, HPHC introduced Medicare’s Resource Based Relative Value Scale (RBRVS) for payment of physicians.

HPHC progressively showed improvement in its financial performance, moving from a $17 million loss in 2000 to a $25


million gain in 2001, with gains of about $30 million following in 2002 and again in 2003. HPHC accomplished this during a period of continuing medical cost inflation, driven by increasing utilization and costs of pharmacy, increased market power of hospitals, and increased staff and liability costs. In response, HMO premiums rose at double-digit rates throughout the period. Employers shared some of that increase with their employees by choosing plans with higher co-pays and tiered pharmacy. A few moved towards a new type of product with high deductibles. Other Massachusetts plans, most notably Tufts, also experienced financial difficulties, though by the end of the period, all major Massachusetts HMOs were showing profits.

D. ACCESS TO SERVICES

1. Overall Indicators of Access and Utilization HEDIS utilization indicators which include HPHC’s group, Medicare Cost and Individual members, showed HPHC to have experienced growth in all types of utilization, outpatient, emergency, and inpatient. However, its rates of growth tended to be somewhat lower than that of the state and national averages for HMOs. This left it at the end of the period with outpatient utilization slightly lower than the state average and inpatient medical and surgical utilization lower than the state and national averages. Lower rates of inpatient utilization, especially when paired with relatively high rates of outpatient utilization may indicate a desirable pattern of preventive care. Other indicators of service provision and a more detailed look at utilization in HPHC’s different plan types also contribute to an assessment of access.

Other HEDIS measures confirm that HPHC has been doing a good job of proving preventive care. HPHC led in access to primary care in all age categories and showed increasing rates of access to primary care except in young children, where its rates were so high (97%) that further improvement might not be possible. While HPHC began the period with moderate member scores on providing care quickly and providing needed care, it increased its scores on both measures to lead the state and national averages at the end of the period. Finally, HPHC has showed increasing levels of satisfaction over the four-year period, far outpacing other Massachusetts HMOs and the national average. The rate of grievances is another indicator of how often members request changes in service authorization decisions. HPHC’s own data on appeals showed an increasing rate. In contrast, the data submitted to the Massachusetts Office of Patient Protection indicated that HPHC’s rate of internal grievances remained stable, while that of other HMOs increased over the period. Since internal appeal data did not increase faster than utilization rates and comparative data show no increase, it does not appear that authorization decisions are a significant problem area overall. 2. Access for Commercial Members

Though HPHC’s benefit plans for its three largest commercial accounts were similar to those of other large Massachusetts HMOs, its rates were considerably higher at the beginning of the period. Relatively high rates, combined with the uncertainty about HPHC’s financial condition likely had a role in the 25% decrease in group enrollment experienced between 2000 and 2001 that was much steeper than the 2% decrease experienced by the other Massachusetts plans. HPHC enrollment grew slowly after 2001. We had limited data available to analyze what groups were most likely to leave HPHC, but we did find that


HPHC’s age and gender mix showed a considerable increase in older individuals over the four year period, an indication that HPHC enrollees had become higher in need and providing one indication that more vulnerable members were not losing coverage. We did find that HPHC lost enrollment differentially across the state, with residents of the Northeast, Boston and MetroWest affected less than those in the Southeast and Western and Central Massachusetts. In the first year of the assessment period, HPHC’s PCP network had decreased somewhat, and its specialist network decreased even more. However, the magnitude of the decrease in specialists was similar to the magnitude of the decrease in enrollment, changing the ratio of specialists to members minimally, and by 2003, both the PCP network and the specialist network had grown substantially, more than outpacing the growth in members and likely increasing access. Members’ ratings of their HPHC providers were relatively high in 2000 and they increased over the period, putting HPHC above both state and national averages. Another indication that the provider network was adequate was that HPHC members increased their outpatient and inpatient utilization over the period. In comparison to other HMOs, HPHC’s rates of utilization were either the same or higher, suggesting that HPHC provided access to services that met or exceeded that of other HMOs throughout the analysis period. 3. Access for Non-group Members

HPHC and other Massachusetts HMOs were required to comply with new state regulations governing benefits and rates for non-group coverage in 2001. HPHC’s non-group rates went from lower than most other Massachusetts HMOs to only slightly lower or - for some members – a bit higher. HPHC was also required to end its existing low-cost non-

group plan and introduced another plan that attracted only about one third the number that had been enrolled in the plan that ended. This change accounted for most of the 50% decrease in HPHC’s non-group enrollment over the four-year period. Utilization of non-group members differed from other HMOs. Both outpatient and inpatient utilization began at rates that exceeded that of other HMOs, in the case of outpatient, considerably. Both experienced a dramatic drop in the second year of the period – a time when enrollment also changed and HPHC’s legacy plan was replaced by its low option plan. In the succeeding years, both outpatient and inpatient utilization rates increased, ending the period the same or higher than other plans. This pattern suggests that the enrollment changes did affect higher need individuals, who may have disproportionately left the plan. The dramatically lower rates of utilization – in the absence of different clinical utilization policies for non-group members – may well be due to the absence of higher need individuals. While high-need, individually insured members appear to have lost HPHC coverage, the loss of coverage is more likely due to changes in benefit plan and plan rates that were determined by state regulations, not by elements of HPHC’s recovery plan. 4. Access for Medicare Risk Members

In general Medicare HMOs regarded federally determined capitation rates as inadequate during this period. They responded by dropping coverage in certain counties and raising rates. Medicare providers also perceived rates as inadequate and a number of hospitals and physicians discontinued their Medicare practices, reducing the networks available to Medicare HMOs. HPHC’s Medicare Risk plan, First Seniority, shared in this industry trend. While it offered largely the same basic benefits throughout


the period, it dropped coverage for Worcester, Barnstable, Bristol, and Plymouth counties, and implemented a premium which almost doubled in each of the next two years, while pharmacy and visit co-pays also increased. Its enrollment dropped by almost thirty percent in 2001 due mostly to eliminating the coverage area. However, the remaining counties also experienced a 13% decrease. Results of the Medicare CAHPS survey at the beginning of the period indicated that HPHC members were leaving at higher rates than from other Massachusetts or national HMOs, and that they were doing so primarily because of concerns about health care or services rather than because of costs and benefits. This suggests that HPHC’s loss of hospitals and some physicians in its network may have been more important than premium and co-pay increases. However, by the end of the period, HPHC’s termination rates were lower than the state and national averages, and the reasons for leaving were equally due to concerns about services and costs. Despite dramatic changes in enrollment, HPHC’s Medicare Risk members’ utilization was relatively stable. HPHC moved from somewhat lower outpatient utilization than other HMOs to somewhat higher over the four years, while its inpatient utilization was variable, but not as variable as the average of other HMOs. HPHC’s inpatient utilization was generally higher or about the same as that of other HMOs. These patterns suggest that HPHC’s Medicare risk members had equivalent or better access to services as those enrolled in other large Massachusetts HMOs. 5. Access for Medicare Cost Members We have limited information about Medicare Cost enrollees. HPHC enrollment data shows that their enrollment increased from 1,436 average members in 2000 and to a point in time enrollment of 4,473 in 2003, approximately doubling

despite considerable increases in premiums. HPHC’s rate of increase in enrollment exceeded that of other HMOs, whose level of enrollment increased by only 20%.

E. ACCESS TO SPECIFIC SERVICES

1. Provision of Mental Health and Substance Abuse Care

Access to needed behavioral health services is one of the most critical issues identified by stakeholders. HPHC subcontracted with ValueOptions to manage its behavioral health services during the period of this contract. The number of hospitals available to HPHC members in need of psychiatric inpatient care increased considerably over the period, and a decrease in the number of individual mental health specialists was offset to some degree by an increase in mental health clinics entering the network. Member and provider surveys, as well as other feedback, indicated that administrative functions were a continuing and sometimes an escalating problem for HPHC’s provision of mental health and substance abuse services. They may have contributed to fewer individual practitioners contracting to be in ValueOption’s network. ValueOptions focused resources on and demonstrated improvements in access to services. Division of Insurance data for 2003 and HEDIS data suggest that HPHC members have better than average access to outpatient mental health services, equivalent access to day/night care, and higher access to inpatient care than other Massachusetts HMOs. However, HPHC’s high rates of inpatient care and longer lengths of stay could be indications of a higher need population or less effective preventive care. Both sources of data suggest that substance abuse treatment is an area in which HPHC members may not have as much access as other Massachusetts HMOs, as indicated by both lower


outpatient and inpatient utilization. Utilization of psychotropic drugs grew considerably. Though we do not have a benchmark for comparing the rate of increase to others, it does show increasing utilization by HPHC members. HPHC has excelled on some measures of quality of mental health care according to HEDIS, where it has exceeded state and national averages and showed consistent improvement, particularly for follow-up after inpatient discharge. However, it has shown steeply increasing rates of readmission for both mental health and substance abuse inpatient services, suggesting that longer than average lengths of stay and high rates of community follow-up are not having the desired effect of establishing patients stably in the community. Member surveys showed high and increasing rates of satisfaction with their therapist and with their outcomes of treatment. 2. Provision of Medications In HEDIS comparisons, HPHC showed both higher cost per capita of medications and a higher rate of growth in utilization than the Massachusetts and national averages, suggesting that HPHC members have a relatively high access to medications overall. Despite utilization growth, HPHC’s three tier formulary appears to constrain growth in HPHC’s cost for medications, both by sharing cost with members who are responsible for a co-pay, and by decreasing utilization of many Tier 3 drugs, for which less expensive alternatives are available. While the introduction of the tiered pharmacy benefit coincided with a high rate of pharmacy related appeals, the pharmacy appeals rate dropped considerably in succeeding years, suggesting that members had accepted it. Our comparison of HPHC utilization of specific drug classes to that of a mixed commercial population drawn from throughout the country

shows HPHC to use four classes of drugs more frequently, hypertensives, antidepressants, allergy drugs, and anti-virals; and two classes less frequently, drugs for management of lipid levels, and gastrointestinal drugs. However, HPHC’s rates of growth are either higher than in the national average or close to the same for these two classes, and HPHC exceeded the state and national average HEDIS scores for managing lipid levels after heart attacks, providing one indication that HPHC’s prescription patterns are appropriate for its clientele. We also reviewed the medications that HPHC had made harder to get through moving them to higher tiers or requiring prior approval, and found that HPHC used these mechanisms for relatively few medications, and there was strong justification for giving them additional scrutiny. 3. Provision of Rehabilitation Services We were limited in the degree of detail available to analyze HPHC’s provision of rehabilitation services. In addition, the network of rehabilitation facilities tended to stay the same or increase, suggesting a similar level of continuing access to these providers. The outpatient rehabilitation providers we contacted were generally positive about the quality of HPHC’s authorization procedures, though they expressed concern about timeliness and billing issues that can affect HPHC’s continued ability to provide rehabilitation care. However, the data we did have showed increasing rates of utilization for inpatient services, outpatient therapies, as well as for other outpatient services plus equipment between 2000 and 2003. Despite increasing authorization rates, rehabilitation authorization decisions were appealed more often than most other types of service, especially in 2000 and 2001, and physical therapy remained one of the most frequent reasons for appeal in 2002 and 2003, suggesting that some members are not satisfied with the amount of physical therapy they are receiving.


F. SPECIAL POPULATIONS

1. Provision of Services for Limited English Speakers HPHC has demonstrated a strong and continued commitment toward providing quality care for limited English speaking individuals and other members of non-dominant cultural groups, through the development and dissemination of training programs in different aspects of cross-cultural health care. The program has grown through the four years of analysis, both adding new courses and increasing the number of health care professionals receiving training, both inside and outside HPHC’s network. HPHC also ensures that its clinical and administrative staff include some individuals who speak other languages, particularly Spanish, and that they have access to telephone interpretation for languages that staff do not speak. Use of HPHC’s telephonic interpretation has grown over the period. The limited data on satisfaction of limited English speaking members showed that their levels of satisfaction on access to services was the same or higher than English speaking members. Employers with significant numbers of limited English speaking HPHC members also indicated that their employees did not have problems with aspects of HPHC’s provision of service for limited English speakers. However, both surveys indicated that limited English speakers were sensitive to the cost of health coverage. Despite these conclusions, our ability to analyze provision of care for limited English speakers was highly compromised by lack of relevant data on the number and health status of limited English speaking members and on the bilingual capacity of HPHC’s provider network. However, we could determine that: • HPHC appears to have an extensive provider network

that can serve Spanish, Portuguese, Russian, Italian and

French speaking members, though community respondents pointed out that the HPHC network in Cambridge does not include the clinics with the greatest Portuguese speaking capacity.

• It also has a high concentration of providers that speak Chinese languages, though we can’t determine whether both Mandarin and Cantonese speakers are equally well served.

• Other language groups, like Armenian, Vietnamese, and Korean, appear to have a sufficient ratio of bilingual providers in the network, but the number of providers is small enough that members in some locations may not have a bilingual provider that is easily accessible. Similarly, the network of bilingual specialists may not include the types of specialties a particular individual needs.

• A few significant language groups, Haitian Creole, and Khmer, are very limited and fall below the physicians per thousand ratio of the overall network, while no bilingual Cape Verde Kriolu speakers providers are listed.

The limitations of relevant data from HPHC are likely shared by other health plans and reflect that the customary reporting and analysis expected of them do not account for language or ethnic group, and thus prevent them from seriously assessing the health care needs of limited English speakers. 2. Provision of Services for People with Chronic Illness We also looked at a wide variety of data related to care for people with chronic illness, a population not easy to identify. Since HPHC’s First Seniority members have a greater likelihood of chronic illness than its younger commercial population, we looked at additional aspects of care for these Medicare cost members. The network of PCPs for First


Seniority members was relatively larger than that for its commercial population in most regions, but in the Northeast and Metrowest the First Seniority network dropped to or below commercial levels, which may signify problems in access. These levels, plus a smaller and changing network of hospitals, may have contributed to the decline in membership described above. Appeals of service authorization decisions by First Seniority members were significantly elevated in 2001 and 2002, particularly for outpatient services, with lesser increases for emergency care, visual services and inpatient care, though they had approached 2000 levels by the end of the period. It is possible that these are related to members losing providers who had left the network and experiencing disruptions in their usual patterns of care. Rising appeals for durable medical equipment are a special concern for members with chronic illnesses. However, HPHC’s performance on the percentage of members over 65 with an ambulatory or preventive visit in the last three years exceeded the national and state averages, suggesting high access to primary care. First Seniority also performed similarly to other Massachusetts and national HMOs on several aspects of access and satisfaction with health plan services. However, HPHC’s and other HMOs’ ratings fell over time, suggesting some across the board decline in reaching the highest levels of access and quality. First Seniority members’ access to prescription medications is affected by their benefit type. The rate of prescription claims paid by HPHC for members with quarterly caps was significantly lower that for members who continued to be fully covered, but we cannot determine whether this reflects lower utilization or simply lack of data on claims paid solely by members. However, both groups’ showed increased HPHC claims per thousand even as members’ co-pays and premiums increased and benefit caps decreased, indicating that members are continuing to benefit from

pharmaceuticals. However, members are clearly experiencing increases in their expenditures for these drugs, despite moving from the more expensive Tier 2 and 3 options. Utilization of three drug classes of special importance for people with chronic illness: hypotensives; drugs to treat hypertension; and drugs to treat seizure disorder also had a pattern of increasing utilization, suggesting that members are increasingly accessing medications to treat these three conditions. Decreases in use of Tier 3 drugs affect relatively few individuals and were more than offset by increases in the other tiers. While utilization has increased, it is hard to imagine that increased costs are not affecting access for lower income First Seniority members. However, other HMOs implemented similar pharmacy benefits and likely experienced similar trends as HPHC. HPHC increased its resources for coordinating care for people with chronic and complex illnesses over the four years. It maintained its case management staffing in proportion to enrollment, while markedly increasing the number of people served. HPHC introduced HealthAdvance, a service that identifies individuals with serious, and often multiple, conditions who are not getting optimal services and conducts outreach to establish a more appropriate treatment plan and to arrange for necessary supports, dramatically lowering subsequent hospital admissions. HPHC’s quality improvement process supported 16 Quality Improvement projects per year proposed by its providers, most frequently focused on improving care of members with diabetes, cardiac disease or asthma. The effectiveness of these and prior efforts are reflected in HPHC’s excellent and improving scores on HEDIS measures for the effective treatment of diabetes for both its commercial and Medicare members, and for asthma in children.


HPHC’s scores on cardiac treatment show more reliance on less invasive procedures than more invasive procedures, a desirable pattern. However, its performance on some other HEDIS measures for which optimal performance cannot be as clearly identified is inconclusive. HPHC had mixed performance on HEDIS measures related to surgical procedures for men and women over 65. However, it began the period low on most measures in 2000 relative to Massachusetts and national averages and ended closer to the state and national averages. While we cannot easily determine whether this is an improvement, it brings HPHC practice patterns closer to those of other HMOs. CAHPS results of respondents who classified their health as fair or poor rated some aspects of HPHC care better than individuals in good health; getting care quickly when they had an illness or an injury and getting a specialist referral, and their ratings improved over the period. However, they were not as satisfied as those in good health in being seen by their PCP or specialist for an urgent problem or understanding written materials from the health plan. While most members rated cost of health insurance as reasonable, it was more of a problem for those in fair or poor health.

G. COMMUNITY BENEFITS HPHC’s overall charitable giving increased by 14% between 2000 and 2003, but this has been a period of considerable transition in the uses of charitable resources. In 2001, an obligation to pay an assessment to the Commonwealth’s uncompensated care pool equal to over 40% of HPHC’s total gifts necessitated a considerable redistribution in its other types of charitable activity. Coincidentally, HPHC’s small existing program to subsidize the premiums of income-eligible individuals and its $15 million pledge to community health centers were decreasing as they approached their planned ending dates. Paying the free care pool assessment

dramatically decreased HPHC’s contributions toward research and teaching, though these programs leveraged sufficient grant funding to more than make up for the loss in HPHC’s share. HPHC’s Quality Improvement program also suffered significant cuts. HPHC’s grants to other community organizations, however, expanded by 60%, targeted particularly to improve access to care for underserved populations.

H. CONCLUSION

HPHC has lost membership overall, and those members who disenrolled from its individual plans appear to have higher levels of need and use for medical care than those who remained. However, in its larger commercial plans it has generally enrolled an older and therefore higher need group and fostered increased utilization of services among them. Its utilization remains similar to or above that of both state and national HMOs. Of the areas we analyzed, the following have shown stable or increasing access, quality and/or utilization. • Most indicators show that HPHC has maintained and

increased access to care for its group and Medicare Risk plan members. Quality scores have improved to very high levels, often exceeding other HMOs. Satisfaction scores for commercial members have also grown, while those for First Seniority members remain high, they have eroded somewhat, similar to other Medicare HMOs.

• HPHC has expanded Medicare Cost coverage to a greater degree than other MA HMOs. Partial data on utilization shows provision of levels of care that equal or exceed those of other HMOs.

• Overall HPHC has maintained and improved access to

behavioral health services. HPHC members had high satisfaction with their services, and HPHC has excelled


on some measures of quality of mental health care according to HEDIS.

• Both commercial and Medicare members show increasing utilization of medications, through cost sharing provisions similar to those enacted by other HMOs undoubtedly affect lower income seniors and likely prevent them from using all the medications that might benefit them.

• Overall access to rehabilitation services has increased. • HPHC shares the same limitations experienced by the

industry as a whole in its ability to reliably identify and understand the health care needs of its limited English-speaking members. However, it has made a substantial and continuing commitment to developing cross-cultural training materials and offering training to medical practitioners in its network and to the larger healthcare community.

• HPHC’s community benefit expenditures have grown modestly, even in this period of financial discipline. However, meeting its new obligations to fulfill its assessment to the free care pool has been accommodated by reducing its contributions toward education and research. During this period it completed its $15 million commitment to Health Centers.

In a few limited areas, HPHC has reduced its provision of care from prior levels or there are indications of some dissatisfaction or performance problem. • Individual members experienced both enrollment

decreases and dramatic drops in utilization between 2000 and 2001 that suggest that higher need members may have dropped coverage. The rate and coverage changes influencing disenrollment were largely determined by state regulation and rate setting decisions which HPHC attempted to moderate within allowable parameters.

• High rates of inpatient psychiatric utilization and readmission rates suggest room for additional improvements in assisting members to stabilize after discharge. We do not have data that allows us to compare these rates to those of other HMOs.

• A high level of appeals suggest that HPHC members desired more rehabilitation therapy services than they get, with physical therapy standing out as a continued issue at the end of the period.



• HPHC is providing less access for substance abuse treatment than other HMOs as indicated by lower utilization rates.

• HPHC may be providing less access for substance abuse treatment than other HMOs as indicated by lower utilization rates. However, questions about the accuracy of categorizing claims with both mental health and substance abuse diagnoses make this a tentative conclusion.

Overall available indicators show that HPHC has achieved financial stability while maintaining and / or increasing the level of services provided, and initial loss of enrollment has been followed by slow growth as its premiums have become more similar to those of other Massachusetts HMOs. Many


of the areas in which indicators show continued enrollment decrease or service limitations have been determined by external agents or are similar to the policies or performance of other HMOs.


I. INTRODUCTION

Late in 1999, Harvard Pilgrim Healthcare Inc. (HPHC) identified accounting errors that showed it to be in a significantly worse financial situation than previously recognized. It immediately reported this situation to the state, which responded by putting HPHC into receivership at the beginning of 2000. After a four-month investigation, the Massachusetts Division of Insurance and Office of the Attorney General determined that HPHC’s continuation as an independent company and implementation of its proposed rehabilitation plan would best serve the interests of HPHC’s 800,000 members. The court approved the two agencies’ petition to end the receivership and required that they continue to monitor the implementation of the approved rehabilitation plan. To address public concerns that measures to control costs might lead to withholding care or seeking to disenroll members with more intensive treatment needs, HPHC was required to finance a four-year assessment of its provision of access and services. The Office of the Attorney General with the consultation of HPHC and Health Care for All, a health care advocacy group, selected Dougherty Management Associates, Inc. – now doing business as DMA Health Strategies (DMA) - as the independent assessor in a competitive process. An interim report covering the first two years of the period was submitted to the Office of the Attorney General. This report summarizes the full results of our assessment. It describes HPHC’s performance in Massachusetts during the entire 4-year period from the beginning of 2000 through 2003, using the year 2000 as the baseline. It focuses on HPHC’s Massachusetts operations. HPHC’s former affiliate, Neighborhood Health Plan, was not included in the receivership and is therefore not included in this report.

The Office of the Attorney General identified several specific topics to be the focus of the assessment. These include:

• Access to HMO coverage

Coverage and Benefits • Access to Critical Services

Behavioral Health Prescription Drugs Rehabilitation

• Access of Vulnerable Groups Non-English speakers Members with Chronic Illness

• Provision of Community Benefits The organization of the report corresponds to those target areas, focusing on the indicators for which we have 4 years of data. • Chapter One introduces the assessment • Chapter Two describes methodology used by DMA. • Chapter Three provides background information about

HPHC and about health care trends in general. • Chapter Four analyzes indicators related to access to

HPHC coverage. • Chapter Five analyzes HPHC’s provision of targeted

services, specifically mental health care, pharmacy, and rehabilitation services.

• Chapter Six discusses HPHC’s provision of care to two vulnerable populations: limited English speakers and members with chronic illnesses.

• Chapter Seven describes HPHC’s Community Benefits program.

• Chapter Eight presents our overall conclusions from this assessment.

DMA Health Strategies Page 1


II. METHODOLOGY

DMA consultants sought data from a wide variety of sources to assess HPHC’s provision of care. We used data from reports submitted by HPHC and other Massachusetts Health Maintenance Organizations (HMOs) about their operations and services to the following: Massachusetts Division of Insurance (DOI), the Department of Public Health’s Office of Patient Protection (OPP), and the Office of the Attorney General. In addition, we drew upon the National Committee on Quality Assurance’s (NCQA) Health Plan Employer Data and Information Set (HEDIS), a national performance benchmarking initiative addressing a number of aspects of health plan operations and provision of service. Finally, Express Scripts, a pharmacy management company, produces an annual report entitled Drug Trend Report, which is based on analysis of a national sample from its commercial clients’ claims. This report provided data on national trends in pharmaceutical utilization and price that can help in interpreting those experienced by HPHC. DMA consultants conducted key informant interviews with HPHC managers at the beginning of the assessment, and as needed to understand important changes thereafter. DMA also analyzed utilization and enrollment reports, reports on administrative operations, and surveys of HPHC members and HPHC providers, and reviewed key policy documents. Finally, DMA interviewed or surveyed trade associations who could represent the experience of their members who contract with HPHC and advocacy and service organizations who serve and/or represent the vulnerable populations that are a specific focus of this assessment. We sought to understand the impact of changes caused by the receivership and rehabilitation plan on these parties. We also surveyed a sample of HPHC employers with large numbers of limited English speaking members.

Since HPHC’s provision of services was affected both by changes in the external environment and the rehabilitation plan, DMA selected

other large Massachusetts HMOs to serve as a comparison group when analyzing trends in utilization, benefits and rates. These include: Aetna, Cigna, Fallon, Health NE, HMO Blue, and Tufts. For HEDIS data, the Massachusetts and national averages for HMOs and point of service (POS) plans were used for comparison. There have been limitations in our assessment, particularly in our ability to delve deeper in certain areas. This was particularly true for limited English speakers, where we had differing counts of enrollment and no utilization data. In addition, utilization data for rehabilitation services was summarized into two categories, preventing analysis of the utilization of specific services. We also caution that many trends may be affected by case mix changes about which we have quite limited information. While we had HPHC data indicative of its changing age/gender mix over the period, we have no information about case mix in other Massachusetts HMOs. Similarly, we are not aware of how case mix changes may have affected the HMOs included in the HEDIS Compass averages or the plans included in Express Scripts Drug Trend report. Therefore, conclusions drawn from these comparisons must be qualified. Finally, we note that utilization data from the Division of Insurance may not be reported consistently by different plans. Methodology for these reports is not specified in as much detail as are HEDIS measures, and we noted several discrepancies and dramatic changes in some reporting categories that led us to exclude some observations from our comparisons. Because of these limitations, we have sought a variety of different measures from different sources for each topic of analysis. To the degree that we find similar results from a variety of related sources of data, we can put more confidence in our conclusions. Where

results do not agree, our conclusions must be considered less definitive. More detailed information about our methods is provided in the narrative that discusses specific data or in the notes pertaining to tables and charts.


III. HPHC BACKGROUND AND EXTERNAL FACTORS

A. BACKGROUND

1. About HPHC

Harvard Pilgrim Healthcare Inc. (HPHC)’s receivership was the most dramatic event that occurred as the organization identified and responded to serious financial problems. A new chief executive officer appointed 1999, 6 months before the receivership, and his new chief operating officer identified the extent of the financial difficulties and reported them to the state. They also initiated significant organizational changes and developed new management strategies, including: • Merging the administrative systems of the organization

and streamlining and standardizing policies and operations;

• Terminating HPHC’s contracts with Rhode Island; • Changing the terms of both its provider contracts and its

benefit contracts in order to make them more standardized in both terms and price;

• Subcontracting with Perot systems for claims processing; and

• Subcontracting with Value/Options to manage its behavioral health network and benefits.

Despite these swift and decisive changes, HPHC was in receivership at the beginning of 2000. 2. Receivership - January through April 2000 On January 4, 2000, the Massachusetts Division of Insurance (DOI) declared HPHC to be in unsound financial condition

and instituted a receivership. After a four-month investigation, the Massachusetts Division of Insurance and Office of the Attorney General determined that HPHC’s continuation as an independent company and implementation of its proposed rehabilitation plan would best serve the interests of HPHC’s 800,000 members. The court approved the two agencies’ petition to end the receivership and required that they continue to monitor the implementation of HPHC’s approved rehabilitation plan. During the receivership some employers whose contracts with HPHC came up for renewal during this period were concerned about HPHC’s stability, and chose not to renew their HPHC coverage. These concerns may have also influenced HPHC members to transfer to other HMOs during open enrollment periods. In any case, HPHC began to experience a significant decline in its enrollment. 3. Overall Financial Recovery Strategy In 2000, HPHC’s financial recovery strategy involved all departments. • Staffing was downsized to correspond to the decline in

membership and therefore in the volume of certain member related tasks;

• All departments evaluated the value added of their activities, looking for ways to cut staff, cut costs and improve performance;

• HPHC made a tremendous investment in moving to interactivity and web-based functionality;

• Another major theme was rationalizing HPHC’s procedures at many levels of the organization, finally fully eliminating differences between historically


Harvard and historically Pilgrim accounts and providers;

• In addition, HPHC’s insurance functions were clearly delineated from its remaining direct care functions (the Harvard Vanguard Centers), and the direct care functions were eventually spun off;

• Later in 2000, HPHC ended its participation in Medicare Risk in three counties in southeastern Massachusetts (Barnstable, Bristol, and Plymouth) and in Worcester County, because of low federal reimbursement (which varies by County) and reduced provider participation.

Over the four years of this assessment, HPHC implemented additional changes to improve quality or contain costs. Some of the most significant actions included: • In 2000, introducing a tiered formulary and a new

pharmacy benefits manager; • Also in 2000, negotiating longer term contracts (4 years)

with some large practice groups to provide both them and HPHC with predictability during a time of uncertainty;

• In 2002, introducing Medicare’s Resource Based Relative Value Scale (RBRVS) for payment of physicians.

• Over the entire four years, providing grants to physician practices for quality improvement activities targeted at illnesses such as diabetes, congestive heart failure, asthma and depression; and

• Subcontracting a case management program for members whose conditions are not receiving optimal treatment.

1. Financial Results HPHC progressively showed improvement in its financial performance, showing a $17 million loss in 2000, a $30

million gain in 2001, and remaining at about that level in 2002 and 2003. They were able to maintain these gains while some of their competitors, most notably Tufts Health Plan, were having financial difficulties, though by the end of the period, all the major Massachusetts HMOs were showing profits.

B. EXTERNAL FACTORS

The period in which HPHC experienced critical financial difficulties was one of consistently high increases in health care costs. A number of studies of health care spending and industry trends show the following factors driving higher levels of health care spending than had been seen in the previous decade.1 PricewaterhouseCooper identified the most significant factors driving prices during 2001 and 2002 as: • Drugs, medical devices and medical advances; • Rising provider expenses, including medical staff pay

rates; • Government mandates and regulation; • Increasing consumer demand; and • Litigation and risk management.2 Reflecting these increases in service cost, premium costs for employers began rising more rapidly. However, with the tight labor market in the late nineties, employers bore most of the increase, passing relatively little of it onto their


1 Strunk, Bradley C.; Ginsburg, Paul B.; and Gabel, Jon R, “Tracking Health Care Costs” Health Affairs, Web Exclusive, 2001. Levit, Katharine; Smith, Cynthia; Cowan, Cathy; Lazenby, Helen; and Martin, Anne, “Inflation Spurs Health Spending in 2000”, Health Affairs, 21:1. 2 McDonough, John E. and Hager, Christie L., “Health Care at the Crossroads: A Guide for the Perplexed”, Chapter 6 in Governing Greater Boston: Meeting the Needs of the Region’s People, 2003 Edition.

employees. The first exception to this was the introduction of a three-tiered co-pay system for prescription drugs, which has moderated the rate of growth in pharmacy spending, though pharmaceuticals continue to be a significant cost driver in health care. Between 2000 and 2004, employers continued to experience double digit increases in premium costs and increasingly moved to health plans with higher deductibles.3 As employers increasingly shopped for better deals in health care, HPHC and other health plans began to introduce high deductible managed care plans, though they had not gained a large share of the market by the end of this analysis.

There had also been changes in the health insurance marketplace, with declining enrollment into HMOs, the most restrictive insurance entities, and increasing enrollment into Preferred Provider Organizations (PPOs), which allow member to use out-of-network providers at a somewhat higher rate than charged for network providers4. In addition, through legislation and consumer preference – as reflected through employers – managed care controls were relaxed. For example, most plans have made it easier for members to see specialists and have dropped preauthorization requirements for certain procedures. Plans began to introduce incentive payments for certain hospitals and physician practices as a way to influence desirable practice patterns. They also implemented disease management programs that focus on improving health outcomes for members by using nurses to work with members to encourage lifestyle changes and coordinate

optimal service provision. These improvements also have desirable effects in containing expenditures for high cost cases. Hospitals, squeezed by the Medicare payment provisions of the Balanced Budget Act, and having experienced loss of excess bed capacity in their communities, found themselves in a stronger negotiating position with insurers, and won significant price increases over the last few years that improved their ability to carry increasing costs of personnel and liability insurance.5 The balanced budget act has also affected Medicare + Choice HMOs. Nationally, and in some Massachusetts counties, insurers deemed 2001 rates to be too low, and withdrew from offering such plans.6 Continued low rates decreased the pool of providers willing to accept Medicare payments and the combination of lower rates and smaller networks led some HMOs to reduce their Medicare + Choice offerings further. Increasing demands, higher costs, and stagnant reimbursement have eroded the practice environment for physicians, particularly in Massachusetts, where physician surveys showing continued declines from 1992. However, in 2002 and 2003 several Massachusetts insurers increased physician pay to better compensate for increases in malpractice insurance costs. In addition to the challenges posed by increasing utilization and costs, the health care industry has also experienced an increasing emphasis on quality of care. The Institute of


3 Cross, Margaretann, “Some HMOs See Dividends in Charging Deductibles”, Managed Care, October 2003. 4 Gabel, Jon, Clzxton, Gary, Gil, Isadore, Pickreign, Jeremy, Whitmore, Heidi, Holve, Erin, Finder, Benjamin, Hawkins, Samantha, Rowland, Diane, “Health Benefits in 2004: Four Years of Double Digit Premium Increases Take Their Toll on Coverage”, Health Affairs, 23:5.

5 op. cit. .McDonough and Hager. 6 Kowalczyk, Liz, “2 More Firms to End Coverage in Bay State”, Boston Globe, 7/25/2000.

Medicine identified a ‘quality chasm’ in healthcare and encouraged the adoption of continuous quality improvement methodologies in health care settings to address a variety of challenges, including: reduction of error rates in hospitals; faster and more comprehensive adoption of evidence-based practices; development of timely and responsive care processes; and greater responsiveness to health care consumers. HMOs participated in this movement by measuring their providers on certain dimensions of quality – often those measured by HEDIS - sponsoring Quality Improvement processes to help their providers address identified opportunities for improvement, and introducing financial incentives (pay for performance) related to achieving specified quality of care goals.

C. HMO TRENDS IN MASSACHUSETTS

This section presents an analysis of several information sources about the enrollment, and service provision of the major commercial HMOs operating in Massachusetts. Data relevant to HMO clients on Medicaid was excluded because HPHC does not offer Medicaid plans.

Over the analysis period, enrollment in Massachusetts’ major commercial HMOs decreased consistently for the two largest categories of coverage, Groups and Medicare Risk, with Medicare Risk losing more than 30% of covered lives. Overall enrollment in HMOs fell by 14%. Much smaller enrollment groups, Medicare Cost and Individual policies, increased.

TABLE 1 TOTAL MASSACHUSETTS ENROLLMENT IN

MASSACHUSETTS LICENSED MANAGED CARE COMPANIES 2000 THROUGH 2003

Plan Type Members as of 12/31/00

Members as of 12/31/01



% Change 2000 to 2003

Definitions and Explanatory Notes

Groups 2,233,499 2,189,404 2,087,525 1,950,661 -13%

Medicare Risk 235,697 216,003 203,251 163,044 -31%

Medicare Cost 10,505 10,859 11,864 12,620 20%

Individual 34,318 32,530 35,879 40,520 18%

Other 688 495 356 273 -60%

Total 2,514,707 2,449,291 2,338,875 2,167,118 -14%

Group coverage is offered through employer groups. Medicare Risk coverage allows Medicare eligible individuals to put their Medicare premiums toward coverage in an HMO, which may also charge a supplementary premium. Another form of Medicare coverage entitled Medicare Cost does not put the HMO at risk for providing care. Massachusetts HMOs are also required to offer individual coverage for citizens who are not affiliated with a group and wish to purchase coverage for themselves and their families.

Source: NAIC 2000 - 2003 Quarterly Report for Quarter 4, filed by MA HMOs to MA Division of Insurance


In Massachusetts, HPHC, HMO Blue and Tufts, have statewide coverage. Two smaller HMOs have significant roles in the Central and Western regions of the state. Only HMO Blue increased its enrollment from 2000 to 2003. HPHC has the greatest share of the Boston market. Tufts, HMO Blue and HPHC share Metrowest fairly equally. HMO Blue has the most enrollees in the North East. These three HMOs all experienced considerable growth in the Southeast region, with HMO Blue having the largest share. Fallon dominates in the Central region, though the other three large HMOs also have a share. HMO Blue and Health New England (Health NE) are dominant in the Western region.

CHART 1 ENROLLMENT IN MAJOR MASSACHUSETTS

HMOS BY COMPANY AND REGION AS OF 12/31/2000

Source: DOI Report of Massachusetts Managed Care

0

200,000

400,000

600,000

800,000

HPHC, Inc. HMO Blue Tufts Fallon Health NE, Inc.

Boston

MW

NE

SE

CentralWestern

Boston

MW

NE

Central

SE

Western

Boston

MW

NE

SE

CentralWestern

NESE

CentralW

MW

BostonMetro West (MW)Northeast (NE)Southeast (SE)CentralWestern (W)


Western

Boston 72,954 48,528 34,471 812 3MetroWest 157,104 191,186 159,877 16,840 9Northeast 55,290 103,409 68,961 5,202 1Southeast 212,720 250,871 147,759 4,816 5Central 41,831 76,286 60,933 148,477 323Western 6,435 402,329 34,290 2,398 62,713

0

200,000

400,000

600,000

800,000

HPHC, Inc. HMO Blue Tufts Fallon Health NE, Inc.

Boston 74,990 55,396 56,912 1,715 67,388Metro West 184,288 192,354 176,715 22,578 0Northeast 52,902 111,393 85,450 8,634 0Southeast 137,566 153,049 109,620 5,168 0Central 51,959 78,198 66,269 151,881 350Western 11,308 117,721 43,968 2,089 68,575

Boston 74,990 55,396 56,912 1,715 67,388Metro West 184,288 192,354 176,715 22,578 0Northeast 52,902 111,393 85,450 8,634 0Southeast 137,566 153,049 109,620 5,168 0Central 51,959 78,198 66,269 151,881 350Western 11,308 117,721 43,968 2,089 68,575

Boston

MW

NE

SECentral

Western

Boston

MW

NE

Central

SE

Western

Boston

MW

NE

SE

Central

Western

NESE

Central

Boston

W

MW



CHART 2 ENROLLMENT IN MAJOR MASSACHUSETTS

HMOS BY COMPANY AND REGION AS OF 12/31/2003

Source: DOI Report of Massachusetts Managed Care


Outpatient, emergency and inpatient utilization all grew during the study period, both in Massachusetts HMOs and nationally. Massachusetts HMOs use more outpatient and emergency services, and less inpatient services than the national average. Though not definitive, this pattern suggests that Massachusetts’ greater use of outpatient and emergency care may prevent some use of inpatient care. Inpatient surgery was the fastest growing category of utilization.

TABLE 2 UTILIZATION PER THOUSAND MEMBERS

(Ambulatory Visits, Inpatient Medicine Discharges, Inpatient Surgery Discharges, ER Visits)

2000 2001 2002 2003 % Change 2000 & 2003

MA

ave

rage

(H

MO

s/ P

OS)

Nat

iona

l Avg

. (H

MO

/PO

S)

MA

Ave

rage

(H

MO

s/ P

OS)

Nat

iona

l Avg

. (H

MO

/PO

S)

MA

ave

rage

(H

MO

s/ P

OS)

Nat

iona

l Avg

. (H

MO

/PO

S)

MA

ave

rage

(H

MO

s/ P

OS)

Nat

iona

l Avg

. (H

MO

/PO

S)

MA

ave

rage

(H

MO

s/ P

OS)

Nat

iona

l Avg

. (H

MO

/PO

S)

Ambulatory visits per thousand 3825.23 3191.75 3831.16 3383.41 3974.69 3520.16 4052.48 3540.88 6% 11%

Emergency Room visits per thousand 170.81 164.25 184.17 176.88 194.1 182.56 203.42 181.25 19% 10%

Inpatient Acute Care – Medicine discharge per thousand 20.87 22.97 21.47 24.31 21.82 23.65 22.15 24.32 6% 6%

Inpatient Acute Care – Surgery discharges per thousand 13.37 16.22 15.08 17.16 15.55 18.88 17.42 19.08 30% 18%

Source: Quality Compass 2001, V2; Quality Compass 2002, 2003 and 2004

Definitions and Explanatory Notes NCQA established the Health Plan Employer and Data Information Set (HEDIS) to measure key aspects of the performance of health plans and it collects these measures from a large set of health plans that agree to make their results public. They are published in NCQA’s Quality Compass.


The following table shows the percentage of respondents to a national standardized survey that rated their experience with their health plan positively. Massachusetts HMOs had higher rates of satisfaction than national HMOs in all years. Rates of satisfaction peaked in 2001 for both Massachusetts and national HMOs. However, national HMOs held steady at that level, while satisfaction with Massachusetts HMOs fell somewhat.

TABLE 3 CAHPS HEALTH PLAN RATINGS FOR

PARTICIPATING MASSACHUSETTS AND NATIONAL HMO’S

2000 2001 2002 2003 % Change 2000 & 2003

MA

ave

rage

(H

MO

s/ P

OS)

Nat

iona

l Avg

. (H

MO

/PO

S)

MA

ave

rage

(H

MO

s/ P

OS)

Nat

iona

l Avg

. (H

MO

/PO

S)

MA

ave

rage

(H

MO

s/ P

OS)

Nat

iona

l Avg

. (H

MO

/PO

S)

MA

ave

rage

(H

MO

s/ P

OS)

Nat

iona

l Avg

. (H

MO

/PO

S)

MA

ave

rage

(H

MO

s/ P

OS)

Nat

iona

l Avg

. (H

MO

/PO

S)

Percentage Rating Health Plan 8, 9, or 10 67% 59% 68% 62% 65.57% 61.3% 64% 61.8% -4% 5%

Source: Quality Compass 2001, V2; Quality Compass 2002

Table 3 - Definitions and Explanatory Notes HEDIS includes data from CAHPS, the Consumer Assessment of Health Plans, a consumer survey for health plan members. Members rate their health plans positively on a scale of 0 to 10, with 10 being the best plan possible.


2. Regulatory Changes

During the analysis period, significant regulatory changes in Massachusetts enhanced the benefits of health plan members and their rights to recourse if their benefits are not provided, and the rights of providers to timely payment. Together, they reduced the differences between health plans and constrained the types of choices health plans can make in designing benefits and managing them. “An Act Relative to Managed Care Practices in the Insurance Industry”, which became effective on January 1, 2001. This law: • Established a more liberal definition of emergency care; • Required that claims be paid or denied within 45 days

and for interest to be paid on any period exceeding 45 days (this provision became effective in mid-2000);

• Limited the types of risks that physicians can accept in their contracts with a managed care plan;

• Established several processes for reconsideration, grievance and appeal of denials of service;

• Established the Office of Patient Protection, which provides external review and binding decisions;

• Required that health plans allow standing referrals for people with chronic illnesses; and

• Required plans to provide interpretation or translation services for administrative procedures.

“An Act Providing that Certain Health Care Plans and Policies Shall Cover Payment for Costs Arising from Speech, Hearing and Language Disorders” required Massachusetts managed care plans to cover all medically necessary services to treat these disorders as of April 2001.

“An Act Relative to Mental Health Benefits”, commonly known as the Mental Health Parity Law provided that, beginning in 2001, health plans must apply the same annual or lifetime limits as they use for physical conditions to the diagnosis and treatment of biologically-based mental illnesses, and establishes a minimum benefit for other mental and substance use disorders. The Health Insurance Portability and Accountability Act of 1996 (HIPAA) met several key implementation dates during the analysis period of this assessment. In 2002, billing and payment systems of providers and payers had to conform to the electronic transaction and code set developed to move toward industry standardization. In 2003, health care providers had to comply with new privacy and confidentiality regulations, some of which required them to develop new processes for maintaining and sharing health care information.

D. CONCLUSION

Nationally, this four-year period was one of continued health care cost increases resulting in premium increases, which were increasingly shared by members. An increasing emphasis on measuring health care quality accompanied these inflationary pressures. During this period, Massachusetts HMOs saw enrollment decline and overall utilization of HMO members increase, with relatively greater use of outpatient and emergency services. Members experienced favorable but slightly declining rates of satisfaction while regulatory changes gave them and their providers more rights with respect to their care. Overall, plans ended the period with less ability to vary their benefits in ways that would differentiate them.


IV. ACCESS TO SERVICES A. INTRODUCTION

B. MALL GROUP PLANS

and $600 co-pays for inpatient and

ay plans, though with slightly higher co-pays than some.

A number of aspects of managed care operations determine access to care. First, is the ability to enroll in a health plan. This can be affected by a number of dimensions of the health plan’s perceived value, including the price of the plan relative to its benefits, network of providers affiliated with the plan (most importantly, whether current providers are included), and the reputation of the plan for authorizing services. Once enrolled in a health plan, access will depend on the location and availability of a primary care physician and other needed specialty care. Finally, if needed providers are available, certain services must be authorized by the health plan as medically necessary. This Chapter will analyze how these dimensions of managed care operations have affected HPHC enrollment overall. In addition, we will discuss HPHC’s provider network, its overall utilization management processes, and present data on utilization rates for outpatient and inpatient care.

HPHC offers several types of plans for its members. The major types of plans that HPHC offers include large group plans for groups with at least 50 members enrolled; small group plans for less than 50 members; Non-Group plans for individuals who are not affiliated with any group and wish to purchase health plan coverage; and Medicare Risk plans and Medicare cost plans for Medicare eligible individuals who wish to participate in a managed care plan for their Medicare benefits. Methods for setting prices, premiums, eligibility, and benefits all differ between these types of plans. We will discuss each in turn.

LARGE AND S

1. Benefits

HMO benefits can be summarized, in general, by the scope of services and the size of any co-pay fee for which the member is responsible. The most commonly offered plans during the analysis period had either $5 or $10 dollar co-pays for office visits. During the four-year period, the entire industry went to three-tier pharmacy plans and increased the top co-pay, while adjusting their mental health benefits in similar ways to comply with the provisions of the new parity law. Many plans also increased their emergency co-pays. Few plans changed their inpatient and outpatient surgery co-pays. Three of five plans experienced decreased enrollment in their largest $5 co-pay plans, while three experienced increases in their $10 co-pay plans, suggesting a possible move toward higher co-pays with lower premium costs. In 2000, only two companies, Tufts and Blue Cross, had significant enrollment in a plan with a $15 co-pay for office visits. Both plans have co-pays for inpatient care and ambulatory surgery. However, in 2003, both HPHC and Health NE had $15 co-pay plans with at least 5% of their total enrollment. Tufts also had a plan with a $25 co-pay, no

armacy coverage phambulatory surgery. The relatively small differences between HPHC’s plans and the other large HMOs had diminished by 2003 as plans responded to the parity law and implemented 3 tier pharmacy. In 2000, HPHC’s $5 co-pay plans were similar to other $5 co-p


Its $10 co-pay plans were somewhat more generous than other $10 co-pay plans, particularly with regard to co-payments for emergency and mental health visits. In 2004, by keeping its pharmacy co-pays the same, HPHC’s third tier pharmacy co-pays were lower than other $5 co-pay plans, but its emergency co-pays were higher than 3 of the other $5 co-pay plans. HPHC’s $10 co-pay plans were very much the same on most dimensions as the other $10 co-pay plans. In 2003, HPHC’s enrollment in its top $5 co-pay plans dropped considerably and its enrollment in its $10 co-pay options increased somewhat, as it did for several of the other plans.

TABLE 4

BENEFIT PLANS FOR MASSACHUSETTS HMOS IN 2000 AND 2003

Emergency Prescription Outpatient MH Inpatient Outpt. Surgery % Total Avg. Members. Co. 2000 2003 2000 2003 2000 2003 2000 2003 2000 2003 2000 2003

Office Visit Co–Pay $5 HPHC $30 $50 $5 / $10

$25 No

change $5 visits 1-8

$25 visits 9-20 $5 for 25

visits None No

change None No

change Sm: 10% Lg: 36%

Sm: 5% Lg: 5%

Fallon $25 No change $5 / $10 $5 / $15 $35

$10 $5 None Nochange

None Nochange

Sm: 2% Lg: 4%

Sm: 0.4% Lg: 1%

Cigna $35 No change $7 / $15 $25

$5 / $15 $35

$5 visits 1-8 50% visits 9-20

No change None No change

None Nochange

Sm: 1% Lg: 5%

Sm: 9% Lg. 31%

Health NE

$30 $50 $5 / $10 $25

$10/$20 $35

$10/$20 $5 for 20 visits

None Nochange

None Nochange

Sm: 18% Lg: 48%

Sm: 6% Lg: none

BCBS $25 No change $5 / $10 $10/$20 $35

$5 visits 1-10 $15 visits 11-20

$5 to 24 visits

None Nochange

None Nochange

Sm: 13% Lg: 44%

Sm: 11% Lg: 63%

Office Visit Co-Pay $10 HPHC $30 Some $30,

Most $50 $5/ $10

$25 $5-10 $10-20 $25-35

$10 visits 1-8 $25 visits 9-20

$10 to 25 visits

None or $50 per day to max of

$250

None None Nochange

Sm: 5% Lg: 16%

Sm: 6% Lg: 24%

Fallon N/A $50 N/A $5 / $15 $25

N/A $10 N/A None N/A None N/A Sm: 1%Lg: none

Tufts $50 No change $5 / $10 $25

$5 / $10 $25-30


$10 to 24 visits

None Nochange

None Nochange

Sm: 19% Lg: 62%

Sm: 10% Lg: 43%

Cigna $35 or$50

$35 $7 / $15 $25

$5-7 $15-20 $30-35


No change None or $500 None or $250

None or $250

No change

Sm: 1% Lg: 3%

Sm: 31% Lg: 45%

Health NE

$30 or $50

$50 $5 $7 $10 $15 $25 $30

$7-10 $15-20 $30-35

$10/$20 $10 to 20 visits

None or $250 None, $250 or

$500

None or $250

None, $250 or

$500

Sm: 12% Lg: 21%

Sm: 9% Lg: 26%

Source: Rate Filings, Division of Insurance, Quarters 1-4, 2000 and Quarters 1 and 4, 2003

Table 4 - Definitions and Explanatory Notes All Massachusetts HMOs are required to file a summary of the benefits and rates of their three largest small group and large group plans with the Division of Insurance on a quarterly basis. In 2000, plans with $5 co-pays for office visits constituted about two thirds of the enrollment in the three largest small groups and the three largest large groups.


2. Rate Setting

In 2000, HPHC initiated changes in its rate setting procedures to make the pricing of historically Harvard and Pilgrim accounts consistent, to more adequately account for actual costs, to use a county-based rating system consistent with industry practice, and to reflect broker commissions. Some groups experienced decreased rates, but more, especially smaller, companies experienced steep increases. 3. Analysis of Rates for Three Most Populated Plans

We analyzed the rates of the most populated plans included in the prior Table 4. The prices analyzed are fairly representative for HPHC and Health NE, applying to 40% of their members in 2003. They are more representative for Blue Cross/Blue Shield, Tufts and Cigna, in which the analyzed prices apply to 53% or more of their average annual members. They are not necessarily representative for Fallon, for which the analyzed prices apply to only about 4% of their average annual enrollment. As shown in the charts that follow, in 2000, though its benefit plan was similar, the average premium rates for HPHC’s three most populated plans exceeded those of other plans. HPHC’s average small plan rates for the $5 co-pay

exceeded the highest average rate of the other plans’ by at least 8% and the lowest average rates by as much as 70%, a peak difference reached in 2002. HPHC’s average $10 co-pay plan for small groups showed the same pattern, but differences ranged from a low of 7% to a high of 27%, reached in 2001. However, in 2003, HPHC’s small group plans no longer had the highest average rates and other plans averages were much closer. HPHC’s large plan averages also exceeded all other plans’ averages in 2000 and 2001, but by smaller margins - at least 5% and as much as 31%. In 2002, HPHC’s $5 co-pay large plans fell within the range of other plans and in 2003; its $10 co-pay plan did so as well. The differential between HPHC and other plans which existed through much of the period may have influenced the decrease observed in enrollment in the three largest small group plans and the increase in large group plans within HPHC, as well as HPHC’s overall drop in enrollment.


CHART 3

CHART 4

Source: Rate Filings, Division of Insurance, Quarters 1-4, 2000, 2001, 2002 and 2003

$312$301

$318$303

$251

$198$177

$196

$214 $216

$196$212

$249

$226$208

$254$260

$238

$279

$0

$50

$100

$150

$200

$250

$300

$350

HPHC Tufts Cigna Health NE Fallon Aetna

2000 2001 2002 2003

Average Rates for Most Populated Small Group Plans with $10 Co-pay and Pharmacy

$203

$285 $284

$304

$258

$205

$185$179$193

$201$211$213$228 $218

$249$242

$255$246

$0

$50

$100

$150

$200

$250

$300

$350

HPHC Tufts Cigna* Health NE Fallon Aetna

2000 2001 2002 2003

Average Rates for Most Populated Large Group Plans with $10 Co-pay and Pharmacy

Source: Rate Filings, Division of Insurance, Quarters 1-4, 2000, 2001, 2002 and 2003

CHART 5

CHART 6

$312$301

$318$303

$251

$198$177

$196

$214 $216

$196$212

$249

$226$208

$254$260

$238

$279

$0

$50

$100

$150

$200

$250

$300

$350

HPHC Tufts Cigna Health NE Fallon Aetna

2000 2001 2002 2003

Average Rates for Most Populated Small Group Plans with $10 Co-pay and Pharmacy

$203

$285 $284

$304

$258

$205

$185$179

$193$201

$211$213$228 $218

$249$242

$255$246

$0

$50

$100

$150

$200

$250

$300

$350

HPHC Tufts Cigna* Health NE Fallon Aetna

2000 2001 2002 2003

Average Rates for Most Populated Large Group Plans with $10 Co-pay and Pharmacy


C. NON-GROUP PLANS

1. Benefits

Non-Group, or individual insurance plans offer an important option for individuals who are not affiliated with a group through which they can purchase health insurance. In the late 1990’s reform of Massachusetts’ Non-Group insurance laws mandated that HMOs offer a guaranteed issue plan for individuals who wish to purchase health coverage that is available to any individual who is willing to pay the premium. The state specifies a standard set of benefits and established a rate setting methodology. The reform also eliminated certain existing individual insurance plans, which did not conform to the new standards.

The following table shows the mandated benefits for the standard option and the low option plan that HPHC initiated in 2001 to replace the individual plans that it was no longer able to offer. The low option was designed by HPHC to meet state regulations and keep the premium as low as possible so that the members of the phased out plans could continue to afford HPHC coverage. In contrast to the plans it replaced, the new low option plan had higher co-pays at all levels and did not cover prescription drugs. As the chart shows, the only change in the major plan benefits during the analysis period was to lift limitations on mental health services for certain conditions in order to comply with Massachusetts’ parity law.


TABLE 5 HPHC NON-GROUP BENEFIT PLANS

Option Office Visit Emergency Prescription Outpatient MH Inpatient Outpatient Surgery Comments

Standard Option

2000-2001 $15 visits 1-10 $25 visits 11-20

Added some services, such as diabetes care, in 2001

2002-2003

$15 $50$20/$25

Annual max of 50 $15 visits 1-24

$15 visits after 24*

$500

$300 *For parity-related

diagnosis

Low Option

2001 $25 visits 1-24

2002 - 2003 $25 $100 None $25 visits 1-24

$25 visits after 24*

$1,000 $1,000 *For parity-related diagnosis

Source: Schedule of Benefits, The Harvard Pilgrim HMO, KO and 8M, 2000 and 2003.

Table 5 - Definitions and Explanatory Notes Both options have a 6-month waiting period for new members in which only emergency services will be covered. The waiting period can be waived if the applicant has had similar coverage from another health plan and did not experience a break in coverage of 63 days or more.

2. Non-Group Rates

HPHC’s individual plan rates were increasingly prescribed by the regulatory requirements of Non-Group reform and HPHC had to raise rates on its existing plans. Likely as a result of these rate increases, HPHC’s Non-Group plans lost enrollment. Serving smaller groups further increased HPHC costs. At the beginning of the period, HPHC rates were considerably lower than other plans particularly for non-elderly members and for Boston. Rates rose considerably over the 4-year period 30% to 40% for HMOs other than HPHC, and 64% to 75% for HPHC. These increases brought HPHC close to those of the other HMOs, though non-elderly rates in Boston remained lower than for other HMOs and elderly rates in Springfield had become considerably higher.


TABLE 6 SAMPLE OF STANDARD NON-GROUP OPTION MONTHLY RATES

HPHC COMPARED TO OTHER MASSACHUSETTS HMOS

2000 2001 2002 2003 % Change 2000- 2003

HPH

C, I

nc.

Ave

rage

of

all o

ther

s

HPH

C a

s %

of

ave

rage

HPH

C, I

nc.

Ave

rage

of

all o

ther

s

HPH

C a

s %

of

ave

rage

HPH

C, I

nc.

Ave

rage

of

all o

ther

s

HPH

C a

s %

of

ave

rage

HPH

C, I

nc.

Ave

rage

of

all o

ther

s

HPH

C a

s %

of

ave

rage

HPH

C, I

nc.

Ave

rage

of

all o

ther

s

Boston

Single 25 $185 $255 73% $250 $275 91% $298 $306 97% $304 $352 86% 64% 38%

Family $556 $770 72% $749 $819 91% $894 $965 93% $912 $1,092 81% 64% 42%

63 w/spouse $742 $906 82% $999 $973 103% $1,191 $1,104 108% $1,216 $1,217 100% 64% 34%

Springfield

Single 25 $185 $224 83% $265 $236 112% $316 $281 113% $323 $311 104% 75% 39%

Family $556 $664 84% $794 $679 117% $949 $900 105% $968 $970 96% 74% 46%

63 w/spouse $742 $788 94% $1,059 $806 131% $1,264 $984 128% $1,290 $1,045 123% 74% 33% Source: Division of Insurance: Massachusetts Nongroup Health Insurance Guaranteed Issue Plan Rates for the period between December 1 and November 30,1999- 2000, 2000-2001, 2001-2002, 2002-2003 from www.mass.gov/doi/consumer/css-healthplans05-12.html.

D. MEDICARE RISK

1. Benefits and Rates

HPHC offers one Medicare + Choice Plan, called First Seniority available to individuals 65 and over or disabled who receive all Medicare A and Medicare B benefits and live in those counties where HPHC offers this program. It is available on a Non-Group (individual) basis and through HPHC groups. In addition to all Medicare A and B covered benefits, it covers preventative, hearing, vision and prescription services. A limited prescription benefit is available to Non-Group enrollees, and an unlimited prescription benefit is available to group plans. Rates paid to HPHC for Medicare A and B services are set by the Center for Medicare and Medicaid Services (CMS) by county. HPHC may also establish an additional premium to cover the benefits that exceed Medicare A and B coverage. HPHC therefore decides on a county-by-county basis which rates are favorable and in which it will offer a plan. Most of the major First Seniority benefits stayed the same over the analysis period. However, the physician visit co-pay jumped from $5 to $15 in 2003, premiums grew substantially, pharmacy co-pays grew, the maximum pharmacy benefit dropped, and the plan was offered in fewer counties.

E. MEDICARE COST

1. Benefits

HPHC has offered several other small plans to certain groups with members that carried Medicare A and B. One was an indemnity plan available with or without drug coverage. We did not analyze data from indemnity plans, which operate under a separate license, for this report. In 2000, the others were HMO plans offered only in certain parts of Southeastern Massachusetts and included drug coverage. These plans, Enhanced 65 and Preferred 65, utilize the overall HPHC network to provide


TABLE 7 HPHC FIRST SENIORITY BENEFIT PLAN

Benefits remaining constant between 2000 and 2003

Emergency Outpatient MH Inpatient Skilled Nursing Outpatient Surgery $50 $5 visits 1- 8

$25 visits 9 -20 50% of any more visits

None for acute. Up to 90 days for

rehab or long-term.

Max of 100 days per benefit

period

None

Benefit/price changes Year Office Visit Prescription Monthly Premium

2000 $5 $5/$10/$25 or by mail $8/$15/$75 Max annual benefit $800

$0 - Essex, Middlesex, Suffolk, Norfolk $30 - Plymouth, Worcester

$50 - Bristol, Barnstable 2001 $5 $5/$10/$25 or by mail $8/$15/$75

Max annual benefit $600 $35

Essex, Middlesex, Suffolk, Norfolk 2002 $5 $8/$10 or by mail $8/$15

Max quarterly benefit $130 $60

Essex, Middlesex, Suffolk, Norfolk 2003 $15 $10/$20/$35 or by mail $20/$40/$105

Max quarterly benefit $150 $120

Essex, Middlesex, Suffolk, Norfolk Source: HPHC First Seniority Summary of Benefits, January 1, 2000- December 31, 2000, 2001, 2002 and 2003.

services. They are not restricted to the First Seniority Medicare Network. Data on the members in these plans are included in the commercial category for this report. Utilization data and enrollment were reported with HPHC’s commercial population, rather than with its Medicare Risk population. The corporate home of these plans changed several times during the assessment period, and Enhanced 65 was moved to HPHC’s indemnity license. In 2003, they were both phased out and a new plan, Medicare Enhanced, was offered in their place under the indemnity license. The benefits of these plans “wraparound” the benefits of Medicare Part A and Part B, administered directly by Medicare. HPHC’s policy pays most Medicare deductibles and offers additional coverage after the Medicare maximum has been reached, for example, for hospital stays. They do have $5 or $10 co-pays for outpatient visits and for certain other services. Enhanced and Preferred 65 benefits changed ittle between 2000 and 2002. l

They were increased somewhat in 2001 to comply with new mental health parity and speech therapy regulatory requirements. However, certain Enhanced 65 benefits were slightly reduced by decreasing maximum reimbursements or specified services. f

In comparison to Enhanced and Preferred 65 plans, which preceded it, the benefits of Medicare Enhanced were substantially similar, though somewhat less generous. Its benefits were most similar to those of Medicare Preferred 65. Like that plan, Medicare Enhanced had $5 co-pays for office visits and offered the same coverage of hospital and nursing home care. It was more generous in removing limits on provision of private duty nursing in hospitals and on physical and occupational therapy, dropping the co-pay for dialysis visits, and covering deductibles and coinsurance for blood transfusions. However, it added co-payments for

outpatient mental health and substance abuse care, cardiac rehabilitation and diabetes treatment, and reduced the annual mental health inpatient benefit limit from 120 to 60 days and the annual substance abuse benefit from 60 to 30 days for conditions other than those considered biologically based or rape related. Another somewhat more restricted version of Medicare Enhanced had a higher emergency room co-pay and excluded services in rehabilitation hospitals and dental surgery.

2. Rates

As shown in the table below, HPHC’s Medicare Cost plans experienced considerable rate increases during the first three years of the assessment period, but the new Medicare Enhanced plan was priced at a level which appeared to contain the rate increase, even though its benefits had not been dramatically reduced from those of the plans it replaced.

TABLE 8 HPHC M C P P EDICARE ST LAN REMIUMSO

Average Quarterly Rate % Annual Increase

from Prior Year

Enhanced

65 Preferred

65 Enhanced

65 Preferred

65 2000 $ 238.05 $ 216.16 2001 $ 315.50 $ 278.37 33% 29% 2002 $ 347.31 $ 338.66 10% 22% Medicare Enhanced Quarter 4 2003 $ 355.00 2% 5% Source: Correspondence from HPHC by Fax 12/19/02 and by email 3/15/06.


F.

ent counts for this group are not truly

ENROLLMENT

1. HPHC Enrollment by Plan Type During the baseline year, HPHC lost considerable enrollment; during the receivership period it could not sell new business, and the uncertainty caused some groups to look elsewhere for HMO coverage. HPHC indicates that it lost healthier groups among the small group market (where it cannot set lower rates for those relatively healthy groups with lower levels of service utilization as it can for larger groups). Among the large groups, it lost those with higher rate increases. In addition, HPHC made a series of changes in its small Medicare Cost program which moved part, and then all, of its enrollment from its HMO license to its indemnity license. Since most of the enrollment tables in this section are drawn from reports required only for HMO plans, our enrollmcomparable across years.

As seen in Table 9, HPHC’s enrollment fell sharply between 2000 and 2001 in all plan types and continued to fall between 2001 and 2002. During 2003, the reversal of this pattern was een, with growth in group and individual plans that offset

continued declines in Medicare enrollment. At the end of the period enrollment remained 26% below 2000 levels, with the sharpest drop in individual, which dropped by almost half. HPHC’s individual enrollment trends contrast with the overall state, whose individual enrollment increased by about 20%. While about half of HPHC’s overall decline was comparable to state-wide declines in managed care enrollment, it is clear that HPHC’s Massachusetts enrollment decreased disproportionately.

s

The apparent decrease in HPHC’s Medicare Cost enrollment was an artifact of reporting changes that moved HPHC’s Enhanced 65 Medicare Cost enrollment to its indemnity license, which was not included in its reports to the Division of Insurance. HPHC’s replacement plan, Medicare Enhanced, was also under HPHC’s indemnity license. Thus, the following table’s 2002 and 2003 counts include only its Preferred 65 Plan, which was phased out in 2003. In 2002, at year end, Preferred and Enhanced 65 had a combined enrollment of 5,018. At the end of the following year, the replacement plan had an enrollment of 4,473, approximately 10% lower. Even with the 10% drop, HPHC ended the period with more than double the Medicare cost enrollment it had in 2000, exceeding the state average growth of 20%.


TABLE 9 HPHC

TOTAL MASSACHUSETTS AND MAINE ENROLLMENT BY PLAN TYPE AND COMPANY

Plan Type Average Members in 2000 Average Members in 2001 Avg. Members

in 2002 Avg. Members

in 2003 % Change between

HPHC Pilgrim Total HPHC Pilgrim Total HPHC HPHC 2000-2003

Groups 711,174 56 711,230 536,639 16 536,655 482,062 537,258 -24%

Medicare Risk 55,523 0 55,523 39,261 0 39,261 39,352 35,542 -36%

Medicare Cost 0 1,436 1,436 0 1,249 1,249 1,083 446** -69%

Individual 16,231 0 16,231 11,467 0 11,467 8,336 8,597 -47%

Other 0 294 294 0 101 101 21 8 -97%

Total 782,928 1,786 784,714 587,367 1,365 588,732 530,854* 581,850* -26%Source: MA Division of Insurance, NAIC Quarterly Report for Quarter 4, for HPHC, Inc.: 2000, 2001, 2002; for Pilgrim Healthcare: 2000,2001; for HPHC, New England: 2002. MA Division of Insurance HMO Supplemental Report for HPHC, Inc. and HPHC New England: 2003 Year End. * Excludes Enhanced 65 and Medicare Enhanced Enrollees.

Table 9 - Definitions and Explanatory Notes In 2000, HPHC, Inc. enrolled Massachusetts and a small number of Maine residents into two of its licensed HMOs, Harvard Pilgrim Health Care, Inc. ("HPHC") and Pilgrim Health Care, Inc. For the purposes of this report, we are disregarding Massachusetts residents who may be enrolled in an HPHC plan in a neighboring state. However, enrollment quoted for Massachusetts HPHC plans may include non-Massachusetts residents enrolled in a Massachusetts- based plan. Some HPHC reports primarily for Massachusetts also include a small number of Maine enrollees, which could not be readily separated. HPHC wrote the bulk of the group coverage, all of the Medicare Risk coverage and all of the Non-Group coverage. Pilgrim Healthcare is much smaller, and wrote primarily Medicare cost coverage, with a small percentage of group and all of the other coverage. In 2000, Maine enrollees accounted for about 10% of Group enrollment, 18% of Medicare Cost enrollment, 2% of Non-Group enrollment, and less than 1% of Medicare Risk enrollment. In 2001, Maine’s share of group enrollment fell to 7%. As of January 1, 2002, Pilgrim Health Care was eliminated and its members were rolled into a new organization, HPHC of New England except for Medicare Cost enrollees, in the Enhanced 65 Plan, who were moved to HPHC’s indemnity license and no longer included on the managed care reports to the Division of Insurance. As of June 2003, HPHC New England wrote only New Hampshire Groups and all Medicare Cost enrollees were moved to a new plan, Medicare Enhanced under HPHC’s indemnity license, which is not included in these reports. In 2002 and 2003, HPHC continued to have about 7% of its enrollment out-of-state.


Table 10 shows how HPHC’s enrollment changes compared to those of other Massachusetts HMOs. In this period, all Massachusetts HMOs consisted predominantly of group plans, with HPHC having slightly higher group enrollment than all HMOs. Total HMOs held a steady share of Medicare Risk enrollees at about 8.5% until 2003, when the percentage dropped by half to 4.4%, while HPHC maintained a 6% to 7% share. HPHC had a lower than average share of Medicare cost members, and dropped even lower in 2003, while other HMOs had a steady 0.4% share. However, these figures exclude HPHC Medicare Cost members counted under its indemnity license. Its overall enrollment more than doubled making it similar to other large HMOs. HPHC served a higher percentage of Non-Group enrollees than the other HMOs, but its percentage dropped more steeply than other HMOs, diminishing the difference between them.

TABLE 10 AVERAGE ENROLLMENT BY TYPE OF PLAN IN LARGE MA HMOS

HPHC Large MA HMOs 2000 2001 2002 2003 2000 2001 2002 2003

Groups 90.6% 91.2% 91.3% 92.3% 89.8% 89.8% 89.5% 94.1%

Medicare Risk 7.1% 6.7% 7.0% 6.1% 8.5% 8.5% 8.7% 4.4%

Medicare Cost 0.2% 0.2% 0.2%* 0.1%* 0.4% 0.4% 0.5% 0.4%

Non-Group 2.1% 1.9% 1.4% 1.5% 1.3% 1.2% 1.3% 1.1% * Excludes Enhanced 65 and Medicare Enhanced members. Source: NAIC 2000, 2001, 2002 Quarterly Reports and 2003 Supplemental Utilization Report filed by MA HMOs to MA Division of Insurance. Includes out of state and IPP members.


2. HPHC Enrollment by Region In 2000, HPHC’s enrollment was centered in and around Boston and the Southeast, with about 8% enrollment in the Northeast and another 8% in Central Mass and 2% enrollment in Western Mass. All regions lost membership between 2000 and 2003, but more members were lost in the Western and Central parts of the state than in HPHC’s core areas. Boston, the Northeast, the Southeast, and Central regions reversed the declining trend in 2003, experiencing small rebounds.

Source: DOI Quarterly Reports for 2000,2001, 2002 Membership and Supplemental Utilization Report, 2003.

CHART 7 HPHC TOTAL AVERAGE ENROLLMENT BY REGION

0

25,000

50,000

75,000

100,000

125,000

150,000

175,000

200,000

225,000

250,000

275,000

Boston Metro West Northeast Southeast Central Western

2000 2001 2002 2003

Note: Excludes IPP enrollment, except in FY2003, when Medicare Cost enrollees were reported in this category. Includes only Medicare Cost enrollees of HPHC NE in FY 2002 and 2003.

0

25,000

50,000

75,000

100,000

125,000

150,000

175,000

200,000

225,000

250,000

275,000

Boston Metro West Northeast Southeast Central Western

2000 2001 2002 20032000 20012001 20022002 20032003

Note: Excludes IPP enrollment, except in FY2003, when Medicare Cost enrollees were reported in this category. Includes only Medicare Cost enrollees of HPHC NE in FY 2002 and 2003.


3. Changes in Medicare Risk Enrollment Some data is available about the reasons members left HPHC’s Medicare Risk plans. As shown in Table 11, during the first two years of the period HPHC’s Medicare Risk plans experienced a higher rate of voluntary disenrollment than either Massachusetts or the nation, and the reasons given were related to health care and services to a greater degree than in other Massachusetts or national Medicare plans. HPHC’s rate of leaving decreased considerably in the last two years of the period, while that for Massachusetts increased and the national rate remained fairly stable. In the last two years, HPHC’s leave rate fell close to and then below the national and below Massachusetts’ rates. All rates fell in the final year of the period. In the first three years, HPHC leavers were responding to health care or service concerns more than to costs and benefits. In the final year, leavers were equally motivated by service and cost concerns.

TABLE 11 MOST IMPORTANT REASONS WHY MEMBERS CHOSE TO LEAVE MEDICARE MANAGED CARE PLANS

HPHC COMPARED TO STATE AND NATIONAL AVERAGES

2000 2001 2002 2003

HPH

C

MA

A

vera

ge

Nat

iona

l A

vera

ge

HPH

C

MA

A

vera

ge

Nat

iona

l A

vera

ge

HPH

C

MA

A

vera

ge

Nat

iona

l A

vera

ge

HPH

C

MA

A

vera

ge

Nat

iona

l A

vera

ge

Total percentage 15% 9% 11% 14% n/a 11% 11% 18% 10% 4% 6% 8%

Left because of costs and benefits 2% 3% 6% 4% n/a 6% 2% 6% 5% 2% 3% 4%

Left because of health care or services 13% 6% 5% 10% n/a 5% 9% 12% 5% 2% 3% 4%

Source: Medicare Quality Compare, medicare.gov

Table 11 - Definitions and Explanatory Notes The Center for Medicare and Medicaid services collects information on the reasons why Medicare eligibles chose to leave a specific Medicare+ Choice plan.


4. Changes in Non-Group Enrollment Table 12 shows how HPHC’s Non-Group plans changed. HPHC’s standard option plan dropped by almost half, almost as much as the overall drop in Non-Group enrollment. When the legacy plan was eliminated, the alternative low option plan enrolled only about a third of the number disenrolled. These changes suggest that Non-Group enrollees were sensitive to the rate increases these changes entailed. Enrollment in the low option plan grew over time, but not sufficiently to offset standard plan enrollment declines. In Massachusetts as a whole, Non-Group enrollment increased 18% from 2000 levels, indicating that HPHC has not maintained its share of Non-Group enrollment over this period, despite having lower than average rates for many categories during 2003.

TABLE 12 HPHC TOTAL NON-GROUP ENROLLMENT

Total Members % Change

Plan Type Dec. 1999 Dec. 2000 Dec. 2001 Dec. 2002 Dec. 2003 2000-2003

HPHC Legacy 8,717 6,589 n/a n/a n/a n/a

Standard Plan 9,367 7,478 7,241 5,401 5,372 -43%

Low Option Plan n/a n/a 2,333 2,727 3,621 n/a

Total 18,084 14,067 9,574 8,128 8,993 -50%

Source: Harvard Pilgrim Health Care, Inc "Guaranteed Issue Non-Group Membership Report” and DOI Non-Group Membership Report as of 12/31/2003.

5. Case Mix in Commercial Plans The changes experienced in HPHC’s enrollment between 2000 and 2003 resulted in a change in HPHC’s case mix as indicated by the age/sex factors they used for planning and budgeting purposes. This method categorizes all enrollees into 14 age ranges and the two genders. While there was little overall change in commercial enrollment in the first two years, by the fourth year, there was a considerable change in broad age categories. The share of enrollees over 45 increased by almost 5% for males and almost 4% for females. The age categories showing highest growth were over 65, which grew by over 20%, and 55 to 64, which grew by over 10%. No other 5-year age groups showed more than a 4% increase, and many showed decreases. Given the greater health care needs of older people, this change signifies the likelihood of a higher need case mix and would likely be reflected in somewhat higher rates. While the dynamics that created this change in age mix may have also affected case mix in ways not accounted for by the age/gender classifications available for this analysis, all other things being equal, these changes suggest that HPHC did not set its rates, market its plans, or make other public changes in such a way as to discourage enrollment of potential members with high levels of medical need more than those with moderate or low levels of need.


G. PROVIDER NETWORK FOR COMMERCIAL PLANS

This section analyzes the extent and adequacy of HPHC’s provider network, as well as a number of aspects of HPHC’s relationship with its providers that can affect its ability to attract and retain providers. There were some changes in the ways that HPHC shared risk with and paid providers that may have affected their willingness to participate in HPHC’s network. Beginning in 2000, HPHC reduced the risk carried by some of its physician groups and hospitals and negotiated longer-term agreements with some provider groups. In 2002, HPHC introduced Medicare Risk Value Based Rates (RVBS) in physician payment. 1. HPHC Network

HPHC had a total of 84 hospitals in its network in 2000, of which five were psychiatric only and seven were rehabilitation hospitals. The network included many of the most recognizable hospital names in the state and also the two hospitals most known for serving underserved and uninsured populations, the Boston Medical Center and Cambridge Hospital. The network changed little in the four years. By the end of the period, three small hospitals were no longer in HPHC’s network. Table 13 shows that HPHC’s primary care network increased from 2000 to 2003 by 4%, but because of a lower level of enrollment, this resulted in a more than 50% increase in PCP offices per thousand members. In 2001, the numbers of PCP offices had dropped, but had remained in proportion to enrollment. The smallest changes were seen in the Northeast and Southeast, where the PCP offices per thousand increased only slightly. MetroWest’s proximity to Boston likely allows some members to take advantage of the increase in Boston offices. The West showed a considerable increase in its already high rates per thousand.

TABLE 13 HPHC PRIMARY CARE PHYSICIANS PER 1,000 MEMBERS BY REGION

2000 2001 2003

Region PCP

Offices Offices Per thousand

PCP Offices

Offices Per thousand

PCP Offices


Boston 1,110 15 1,102 18 1,162 21

Metro West 1,011 6 950 7 1,053 8

North East 561 11 543 13 591 14

South East 1,457 6 1,408 7 1,408 7

Central 491 9 489 12 531 15

West 452 31 444 55 548 79

Grand Total 5,082 7 4,936 7 5,293 12

Source: HPHC Physician Directory, Volume 2 2000, Volume 2, 2001, Fall 2003.

Table 13 - Definitions and Explanatory Notes HPHC directories list the number of physician’s offices. Since some physicians maintain more than one office, the number of physicians is somewhat smaller. The ratio between physicians and members is not an absolute indicator of access, since it does not account for the available unused capacity in the doctor’s practice. In addition, when a member leaves an HMO, she does not necessarily leave her PCP’s practice if she is able to see him in the network of another insurer.


Table 14 shows that HPHC experienced a 20% increase in the offices in its specialty network, almost doubling the number of specialist offices per thousand members, between 2000 and 2003. Though the number of specialist offices dropped in 2001, the rate of specialist offices per thousand members did not drop in most regions. As for primary care, the Southeast region has the smallest specialty network per enrollee, while Boston and the West have the highest rates.

TABLE 14 HPHC SPECIALISTS PER 1,000 MEMBERS BY REGION

2000 2001 2003

Region PCP

Offices Offices Per thousand

PCP Offices


PCP Offices


Boston 3,319 45 2,780 45 3,924 72

Metro West 1,646 9 1,276 9 1,974 16

North East 916 17 692 16 1,045 25

South East 1,980 8 1,884 9 2,484 13

Central 816 15 706 18 1,020 28

West 788 54 642 80 878 126

Grand Total 9,465 13 7,980 11 11,333 25 Source: HPHC Physician Directory, Volume 2 2000, Volume 2, 2001, Fall 2003.

Table 14 - Definitions and Explanatory Notes In the 2000 directory, physical therapists, as well as some other non-physician services, like optometry, were included but practitioners such as these were only rarely listed in the 2001. This indicates that the directory is not strictly limited to specialty physicians, and that the criteria for inclusion in the listing may have been changed between 2000 and 2001.

One HPHC member living in Berkshire County who was solicited as part of a survey of members with special health care needs reported great difficulty in finding providers that would accept HPHC because of problems getting paid. Many of her providers had left the HPHC network. It is possible that HPHC’s smaller enrollment limits its market leverage in the Western part of the state, leaving it with a smaller provider network that is not necessarily able to meet all the needs of HPHC members who have more complicated health care needs.


Despite this degree of change between years in the directory listings, HPHC turnover rates for primary care practitioners reported to HEDIS showed relatively low rates. HPHC’s primary care turnover between December 31, 1999 and the same date in 2000 was 4.46%, the second lowest rate in the state, and well below the Massachusetts average of 6.49% and the national average of 10.01%. It was even lower at 2.65% on 2003, the lowest in the state and well below the state average of 4.8% and the national average of 6.5%. In contrast, HPHC’s physician termination rates reported to DPH’s Office of Patient Protection was on the high side in 2001. HPHC’s rate at which physicians terminated contracts was the second highest rate following Blue Cross, as seen in Table 15. Thereafter, HPHC’s rates fell, while some HMOs experienced increased rates. In 2003, HPHC had a much lower rate than in 2001 and was second lowest among those analyzed. The most frequent reasons for termination were similar for all the companies, including relocation, retirement, and leaving a participating provider group. Another common reason was non-compliance with recredentialing. However, plans differed as to whether they reported this as a voluntary or involuntary termination, possibly explaining some of the variation in involuntary termination rates.

TABLE 15 PHYSICIAN CONTRACT TERMINATION RATES FROM MASSACHUSETTS HMOS

2001 2002 2003

Insurance Providers % of Physicians

Voluntarily Terminating % of Physicians

Terminating Contracts % of Physicians

Terminating Contracts

AETNA Life Insurance Company – Medical 0.07% Voluntary – 1.7% Involuntary – 7.3%

Voluntary - 1.7% Involuntary - 14.5%

Blue Cross & Blue Shield of Massachusetts HMO Blue: 6.2%

Voluntary – 5.4% Involuntary – 0.3%

Voluntary - 6.5% Involuntary – 0.05%

CIGNA Health Care of Massachusetts 2.64% Voluntary – 2% Involuntary – 0%

Not available as percentage N/A

Fallon Community Health Plan N/A in 2001 Voluntary – 7.8% Involuntary – 0.16%


Harvard Pilgrim Health Care, Inc. 5.7% Voluntary – 4.7% Involuntary – 0.05%

Voluntary - 2.62% Involuntary - <1%

Health New England 4.0% Voluntary – 6% Involuntary – 0%

Voluntary - 4% Involuntary - 1%

Tufts Associated Health Maintenance Organization 5.3% Voluntary – 5.9% Involuntary – 0.04%


Source: Years 2001, 2002 and 2003 Annual Reporting Requirements for Massachusetts Health Plans (https://www.mass.gov/dph/opp/data.htm#annual).


2. HEDIS Network Measures

This table presents data about the composition of the HPHC provider network that is not entirely consistent with the counts we made from HPHC’s physician directory in the first two years of the period. The HEDIS counts of PCP’s significantly exceed our counts of PCP offices, and the HEDIS counts of specialists are fairly close to our count of offices in 2000, but exceed them considerably in 2001. Both counts show relatively stable numbers of PCPs, but the directory count shows a much more significant decrease in specialists between years than does the HEDIS count.

HEDIS data showed that HPHC’s network consists of 77% PCPs, 9% pediatricians, and 14% OB/GYNs, and changed little in 2001. All but one to three percent had completed their residencies in both 2000 and 2001. However, Compass did not include these data in 2002 and 2003. HPHC’s rates of board certification were sometimes similar to the Massachusetts average for PCPs and geriatricians, but were closer to the lower national average for some provider groups such as OB/GYNs and specialists other than geriatricians. HPHC’s rates of board certification among pediatricians were the lowest


TABLE 16 HPHC PROVIDER NETWORK COMPOSITION AND QUALIFICATIONS

Board Certification Rate

Number

Percent of

Subtotal HPHC Residency completion rate HPHC

MA Avg. (HMOs/POS)

National Avg. (HMOs/POS)

As of December 31, 2000 PCPs 5,533 77% 98.26% 86.08% 86.89% 81.08%Pediatric Practitioners 645 9% 97.36% 72.87% OB/GYNs 1,002 14% 99.00% 81.34% 85.03% 80.31%Subtotal PCPs 7,180 100% Geriatricians 197 2% 94.42% 88.32% 89.27% 80.50% Other Specialists 9,540 98% 97.09% 81.23% 84.07% 81.65% Subtotal Specialists 9,737 100% As of December 31, 2001 PCPs 5,787 78% 99.02% 87.30% 87.95% 81.68% Pediatric Practitioners 586 8% 97.95% 73.21% OB/GYNs 1,029 14% 99.42% 80.95% 84.07% 79.79%Subtotal PCPs 7,402 100% Geriatricians 194 2% 96.39% 88.66% 87.6% 78.49% Other Specialists 8,981 98% 97.84% 81.26% 83.91% 81.5% Subtotal Specialists 9,175 100% As of December 31, 2002 PCPs - 88.27% 89.38% 82.61%Pediatric Practitioners - 72.94% 76.62% 78.65% OB/GYNs - 82.45% 86.09% 80.17%Subtotal PCPs - Geriatricians - 88.02% 88.71% 78%Other Specialists - 81.95% 85.19% 80.98% Subtotal Specialists - As of December 31, 2003 PCPs 88.41% 90.1% 83.48%Pediatric Practitioners 74.06% 79.87% 79.0% OB/GYNs 83.45% 86.6% 80.41%Subtotal PCPs Geriatricians 86.82% 89.27% 76.63%Other Specialists 81.97% 84.99% 81.45% Subtotal Specialists Source: Quality Compass 2001, V2; Quality Compass 2002, 2003, and 2004

of all physician types, and actually fell below the national average in 2002 and 2003. Overall, HPHC’s network is less likely to include board certified physicians than the state average, and is especially low for pediatricians. This is a possible indication of lower quality in physician services. In contrast to these figures, HEDIS consumer satisfaction surveys show that HPHC’s provider network excels in satisfying their patients. Most consumers in all health plans are satisfied with the physicians. HPHC started the period with scores on client satisfaction with their doctors that were lower than the Massachusetts average and, except for ratings of specialists, also fell below the even lower national average, which was somewhat lower than the Massachusetts average. However, its satisfaction scores rose rapidly, exceeding both the Massachusetts and national averages by 2002 and remaining higher in 2003. These results suggest that HPHC physicians are meeting their patients’ expectations at a very high level.

TABLE 17

CAHPS RATINGS OF HEALTH CARE PROVIDERS HPHC COMPARED TO STATE AND NATIONAL AVERAGES

2000 2001 2002 2003

HPH

C

(HM

O/P

OS

com

bine

d)

MA

ave

rage

(H

MO

/ PO

S)

Nat

iona

l Avg

. (H

MO

/PO

S)

HPH

C

(HM

O/P

OS

com

bine

d)

MA

ave

rage

(H

MO

/ PO

S)

Nat

iona

l Avg

. (H

MO

/PO

S)

HPH

C

(HM

O/P

OS

com

bine

d)

MA

ave

rage

(H

MO

/ PO

S)

Nat

iona

l Avg

. (H

MO

/PO

S)

HPH

C

(HM

O/P

OS

com

bine

d)

MA

ave

rage

(H

MO

/ PO

S)

Nat

iona

l Avg

. (H

MO

/PO

S)

How well doctors communicate 89.28% 91.89% 89.92% 90.21% 92.34% 90.72% 93.63% 92.25% 90.99% 94.72% 92.86% 91.52%

Rating of personal doctor 72.94% 77.06% 74.28% 77.59% 77.40% 74.71% 78.89% 75.75% 75.04 77.58% 76.54% 76.2%

Rating of specialist seen most often 77.15% 78.76% 76.32% 85.48% 80.8% 76.33% 83.7% 78.87% 76.04% 85.77% 78.07% 77.06% Source: Quality Compass 2001, V2; Quality Compass 2002, 2003, and 2004

Table 17 - Definitions and Explanatory Notes “How well doctors communicate” represents the percentage of respondents who answered always or usually to the questions:

In the last 12 months, how often did doctors or other health providers listen carefully to you? In the last 12 months, how often did doctors or other health providers explain things in a way you could understand? In the last 12 months, how often did doctors or other health providers show respect for what you had to say? In the last 12 months, how often did doctors or other health providers spend enough time with you?

Provider ratings indicate the percentage of respondents who rated their provider with an 8, 9 or 10 on a scale where 10 is the best possible.


Other aspects of the adequacy of the provider network concern geographical accessibility and appointment availability. HPHC does set standards for access and appointment availability (see Table 18) which are checked as part of its site visit protocol. HPHC conducts site visits for all PCPs, OB/GYNs and high volume behavioral health practitioners as part of its initial credentialing process. However, ratings on performance against these standards are not summarized.

TABLE 18 HPHC STANDARDS FOR ACCESS AND APPOINTMENT AVAILABILITY

PCP Specialist Incoming phone calls answered Within 5 rings

Max time on hold before contact with office staff or a voice system 3 minutes

Symptomatic office visit Within 7 days Within 14 days

Urgent visit Within 24 hours Within 7 days

Emergency coverage 24 hours N/A Source: HPHC Policy CC 1.10: Site Visit to Affiliated Practice Sites, p.6

3. Provider Payment

Timeliness and accuracy of payment may affect providers’ willingness to join or continue with a particular managed care plan. This section analyzes HPHC’s ability to pay provider claims in a timely and accurate manner. Given its financial difficulties, HPHC was experiencing considerable difficulties in paying its claims on a timely basis at the time of the receivership and – working with its new claims processor, Perot Systems, focused considerable effort on working with providers and their associations to resolve problems. Since providers could not terminate their contracts with HPHC during the receivership, HPHC had a window of opportunity to make improvements. Representatives of provider trade associations commented favorably on the improvements in HPHC’s payment procedures, noting a dramatic improvement in timely payment. They also commented favorably on its moves toward standardization and automation, but were less pleased with the rates at which their outstanding claims were settled. Rates remained a significant concern

TABLE 19 HPHC CLAIMS AGING BY QUARTER

2000 2001 2002 2003

20 days 30 days 20 days 30 days 20 days 30 days 20 days 30 days

Quarter 1 77.3% 84.0% 91.8% 94.8% 96.0% 97.2% 96.2% 97.5%

Quarter 2 81.5% 88.7% 94.9% 97.3% 97.5% 98.7% 97.1% 97.9%

Quarter 3 86.0% 93.3% 95.8% 97.4% 97.8% 98.7% 96.6% 97.9%

Quarter 4 87.4% 93.0% 97.6% 98.5% 97.5% 98.6% 96.6% 98.1% Source: HPHC Claims Aging Report 2000-2003


of providers throughout the period, and in 2003, they also expressed concern about what they described as HPHC’s increasing tendency to unilaterally dictate the terms of provider contracts. Table 19 confirms the improvement in claims payment over the analysis period from a low of 60% in preceding years. The table shows consistently increases in the percentage of claims paid within 20 days of receipt and within 30 days of receipt. The final two years of the period showed Perot consistently paying 96% or more of its bills in 20 days and 97% in 30 days. 4. Provider Satisfaction

Provider satisfaction surveys also show that HPHC succeeded in improving providers’ satisfaction in a number of these administrative areas. Chart 8 shows that overall provider satisfaction with HPHC’s ability to pay claims has increased substantially with each survey, achieving a 20% improvement in providers who were very and somewhat satisfied and a drop of almost 15% in levels of dissatisfaction. The final survey showed that HPHC had largely maintained the gains achieved.


CHART 8 PROVIDER OFFICE SURVEY:

OVERALL, HOW SATISFIED ARE YOU WITH HPHC’S ABILITY TO PAY CLAIMS?

65%

78% 82% 85% 83%

36%

22%18% 15%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

January, 2000 October, 2000 May, 2001 February, 2002 4th Qtr 2003*

Satisfied (very & somewhat) Dissatisfied (very & somewhat)Satisfied (very & somewhat) Dissatisfied (very & somewhat)

* Results through 2002 exclude ‘don’t know’ responses from the denominator of percentage calculations, but the method of calculation for 2003 is unknown, possibly making it not directly comparable. Source: Perot Health Services Harvard Pilgrim Health Care: Survey of Provider Satisfaction with Claims Services, May 2001, Opinion Dynamics Corporation, #5408 and HPHC 2003 Survey of Primary Care, Specialty, Hospital and Ancillary Practice.

Providers were also asked to rate HPHC on their claims payment timeliness and accuracy in comparison to other managed care plans (see Charts 9 and 10). HPHC showed improvement from 2000 to 2001, being rated increasingly as the same or better than other plans. A 2002 survey comparing HPHC specifically to Blue Cross/Blue Shield and Tufts and asking separately about claims timeliness and accuracy showed HPHC more likely to be rated as least as well as its major competitors and less likely to be rated worse, except for claims timeliness, where Blue Cross met or exceeded HPHC most of the time.

CHART 9 PROVIDER OFFICE SATISFACTION SURVEY:

COMPARED WITH OTHER MANAGED CARE PLANS YOU SERVE, HOW DOES HPHC CLAIMS SERVICES RATE IN TERMS OF CLAIMS PAYMENT?

48%44%

24%21%

26%

35%

41%

32% 30%

0%

10%

20%

30%

40%

50%

60%

70%

January, 2000 October, 2000 May, 2001

Better (somewhat + significantly) About the same Worse (somewhat + significantly)

CHART 10 FEBRUARY 2002 PROVIDER OFFICE SATISFACTION SURVEY:

COMPARED WITH BLUE CROSS/BLUE SHIELD AND TUFTS, HOW DOES HPHC CLAIMS SERVICES RATE IN TERMS OF CLAIMS PAYMENT

TIMELINESS & ACCURACY?

8%

20%

11%

18%

47%

57%

70% 72%

23%

45%

19%

9%

0%

10%

20%

30%

40%

50%

60%

70%

80%

BCBS Tufts BCBS Tufts


Timeliness Accuracy

Source: Perot Health Services Harvard Pilgrim Health Care: Survey of Provider Satisfaction with Claims Services, May 2001, Opinion Dynamics Corporation, #5408


Chart 11 shows that the percentage of claims paid on the first submission by May of 2001. Data on this question were not available for 2002 and 2003. However, in 2002, 74% of provider offices rated HPHC’s claims processing accuracy as good, very good or excellent. In the first two years of the period, when there were problems with claims, HPHC frequently required a number of contacts to resolve them. As shown in Chart 12, less than half of claims problems or questions were resolved by talking to just one person in 2000 and 2001. These data were not available in 2002 and 2003. However, in 2002, 75% of responding provider offices rated HPHC’s same call resolution as good, very good or excellent. This appeared to be considerably higher than the 40% that spoke to 1 person to resolve a claims issue in 2001.

CHART 11 PROVIDER OFFICE SATISFACTION SURVEY: EXCLUDING THOSE CLAIMS

THAT ARE RETURNED TO YOU FOR ADDITIONAL INFORMATION, APPROXIMATELY WHAT % OF YOUR HPHC CLAIMS ARE RESUBMITTED

OR APPEALED BEFORE THEY ARE PAID OR DENIED?

8%

38%

32%

40%37%

41% 42%

19%

15%14%

5%

10%

0%

10%

20%

30%

40%

50%


Less than 5% 5 to 25% 26 to 50% More than 50%

CHART 12 PROVIDER OFFICE SATISFACTION SURVEY: HOW

MANY DIFFERENT PEOPLE DO YOU TYPICALLY SPEAK WITH TO RESOLVE A CLAIM PROBLEM OR QUESTION?

9%

44%

36%40%

28% 31%

25%23%23% 24%

10%6%

0%

10%

20%

30%

40%

50%


1 person 2 people 3-4 people 5 or more people

Source: Perot Health Services Harvard Pilgrim Health Care: Survey of Provider Satisfaction with Claims Services, May 2001, Opinion Dynamics Corporation, #5408


The Table 20 lists typical claims problems or questions that survey respondents encountered in 2000 and 2001, listed in the order of frequency at the start of the period. Dramatic improvements were seen in reducing incorrect information and numbers problems. Improvements were also seen in slow payments and unpaid claims, lost claims, slow processing or response, problems with authorization, and other types of problems. A few types of problems increased in frequency, including problems related to denials and general authorization problems. Two new types of problems arose in the final survey, problems with electronic claims and incorrect reimbursement. However, the number of respondents citing no problems increased over the period. These data were not available in 2002 and 2003. These responses generally suggest a pattern of improvement in claims payment and resolution functions. However, these data also suggest that there continue to be problems in resolving claims, and perhaps some minor bugs must be worked out in electronic claims processing. These new results for electronic claims and reimbursement amounts point to the value of using these surveys for quality improvement. While overall satisfaction with claims payment has remained high, in 2002 as seen in Chart 10, ratings for timeliness of claims payment were relatively low and may continue to be a relative weakness in this area.

H. CLINICAL/AUTHORIZATION

POLICIES

An HMO’s policies for determining how a member receives services are a significant determinant of members’ access to care. Policies include whether a member’s physician can authorize services or whether the service request must be reviewed by HMO clinicians for approval, the criteria used to make a review determination, and the types of


TABLE 20 HPHC TYPICAL CLAIMS PROBLEMS / QUESTIONS*

Oct 2000 May 2001 Jan-00

Unweighted Weighted Weighted

Incorrect information / Number problems 23% 23% 19% 11%

Slow payment / Unpaid claims 19% 14% 12% 13%

Denial of Claim/Denial without explanation 12% 16% 14% 16%

Lost claims 11% 5% 3% 5%

Slow processing / Response 9% 10% 9% 5%

Referral problems (general) 8% 16% 15% 13%

Problems with authorization 6% 4% 4% 2%

Problems with electronic claims 0% 0% 0% 4%

Incorrect reimbursement 0% 0% 0% 3%

Other 8% 5% 6% 3%

None/no others 2% 1% 1% 4%

Don’t Know 0% 0% 10% 10% * Excludes problems experienced by 2% or fewer of respondents. Source: Perot Health Services Harvard Pilgrim Health Care: Survey of Provider Satisfaction with Claims Services, May 2001, Opinion Dynamics Corporation, #5408

procedures used for reviews. This area of HPHC operations has not changed substantially over the review period. Outpatient medical services are managed primarily by PCPs, who recommend needed services and decide how to respond to their clients’ requests for services by providing care themselves, making referrals to specialists, and prescribing medications. Procedures for authorization of mental health and rehabilitation services will be described in related sections of this report. HPHC does not routinely review hospital admissions unless they are for procedures that require precertification. Instead, hospitals notify HPHC of the admission of their members, eligibility is checked, and the case is referred to the case management department which determines if the case meets their criteria for case management attention. In addition, several HPHC reviewers are sited in high volume hospitals. HPHC describes a process that focuses on meeting the member’s treatment needs and results in few disagreements between hospital and HPHC clinical staff on required treatment. In 2001, HPHC reduced the number of hospitals that had on-site reviewers from 45 (60% of hospitals) to 22

and used active or passive telephonic review instead. In 2002 and 2003, a few more on-site reviewers were added back, but more than two-thirds of hospitals continued to be reviewed by telephone.

HPHC has identified certain surgical procedures that require prior authorization (focused review) by HPHC’s utilization reviewers. Its goal is to reduce the number of procedures reviewed, potentially to just cosmetic procedures, by educating providers about the criteria for appropriateness for other procedures. Between 2000 and 2001, several new procedures were added to the review list, one of which was speech therapy, which previously was subject to benefit limits. Other procedures were dropped from the list, as shown in the table below. Several procedures were added to the list in 2002, including Formulas/Enteral Nutrition, Growth Hormone, case-by-case review of new technologies, and Pulmonary Rehabilitation (Outpatient), but only one, OP Pulmonary Rehabilitation remained on the list in 2003. Certain cosmetic procedures were added in 2003, while several others were removed. Overall, the list was only two procedures longer in 2003 than in 2000.


TABLE 21 HPHC LIST OF PROCEDURES REQUIRING FOCUSED REVIEW

(PRE-CERTIFICATION)

Procedure 2000 2001 2002 2003 Procedure 2000 2001 2002 2003 Advanced Reproductive Technology Services Y Y Y New Technologies

(Case by case) Y

Autologous Chondrocyte Implantation (Knee) Y Odontectomy Y Y Y

Bariatric Surgeries Y Panniculectomy (replaces “Abdominoplasty”) Y Y Y Y

Blepharoplasty Y Y Y Y Pelvic Laparoscopy YBMT/Stem Cell Transplant Y Y Y Ptosis Repair Y Y YBreast Implant Removal Y Y Y Y Port Wine Stain Removal Y Y

Breast Augmentation Mammoplasty Y Pulmonary Rehabilitation (Outpatient) Y Y

Breast Reduction Mammoplasty Y Y Y Y Rhinoplasty Y Y Y YBreast Gynecomastia Removal Y Septoplasty Y Y Y YCosmetic/Potentially Cosmetic Proced. (e.g., Scar Revision, Blepharoplasty) Y Speech Therapy Y Y Y

Formulas/Enteral Nutrition Y Spinal Fusion Y Y Y

Gastric Stapling/Gastric By-pass Y Y Y Transplants other than Kidney and Cornea Y

Growth Hormone Y Uvulopalatopharyngoplasty (UPPP) Y Y Y

Laminectomy/Fusions/Discectomy Y Y Y Y Varicose Vein Excision & Ligation Y Y Y Y

Lung Volume Reduction Surgery Y Mandibular/Maxillary Osteotomy (TMJ) Y Y Y Total 18 17 19 20

Source: HPHC Approved/revised focused review list Sept 1999- Dec 2000, HPHC Focused Review List (Effective 1/1/01) and HPHC Attorney General RFI Responses.



SATISFACTION WITH REFERRAL AUTHORIZATIONS

74%

98%92% 90%

95%90%

0%

20%

40%

60%

80%

100%

Time to Reach RARep

RA RepProfessionalism

Rep's ClearAnswers

Same CallResolution

OverallSatisfaction

OverallSatisfaction

Excellent, very good, good Very & somewhat satisfiedExcellent, very good, good Very & somewhat satisfied

February 2002 4th Qtr 2003

Source: Fact Finders 2002 and 2003 Survey of HPHC Provider Offices

I. PROVIDER SURVEY In 2001, HPHC commissioned a survey company, Fact Finders, to survey a sample of primary care physicians about HPHC’s performance of utilization management and care coordination. A high percentage of those responding to the question, 94%, agreed that HPHC’s staff worked to ensure that members receive the care they need, and 35% were very satisfied with HPHC’s utilization management program. Only 8% were not satisfied. Less detailed questions from HPHC’s 2003 provider survey found these functions to have high overall ratings. Ninety percent of providers rated the clinical utilization review process as good, very good or excellent, while 92% rated support for care managers as good or better. However, while most rated HPHC’s referral process as easy, 20%, rated it difficult, and the same percentage rated HPHC’s authorization process as difficult. There was some level of disagreement with HPHC’s authorization decisions. 81% agreed with HPHC’s decisions most of the time, but 19% agreed only some of the time. Most felt that HPHC’s decisions were timely. Eighty-eight percent rate timeliness as good to excellent. In 2002 and 2003, provider offices rated HPHC’s referral representatives and its process much more positively, other than the time required to reach a representative. In 2003, the overall rating was still high, but had fallen from 2002, as shown in Chart 13.


J. GRIEVANCES AND APPEALS

HPHC’s internal review process has a number of stages that incorporate important safeguards for members: • Initial review by a nurse, who

can approve • Review of any potential

denials by a physician advisor • Notifying the requesting

physician of a denial and allowing at least two days for response and discussion

• Issuance of a denial letter to all involved parties, including the member.

• Members can request an expedited appeal to be completed within 72 hours with a different physician than the one who denied the care.

If a procedure is denied as not medically necessary, HPHC uses an independent physician to review the case. HPHC’s Member Appeals Committee (which has some consumer members) hears appeals of any expedited appeal denials and the Member may present their case to the Committee. For the few appeals that reach this stage, members have a final option to request an external review from the Massachusetts Department of Public Health, Office of Patient Protection.

TABLE 22 HPHC COMMERCIAL MEMBER APPEALS BY MAJOR SERVICE TYPE PER 1,000

2000 2001 2002 2003 % Change between 2000 and 2003

Out-Patient Care/ Ambulatory Care 0.40 0.45 0.28 0.41 2% Pharmacy 0.50 0.43 0.38 0.27 -46% Rehabilitative Services 0.39 0.72 0.60 0.68 77% Mental Health Services/ Behavioral Health* 0.30 0.35 0.53 0.73 143% Durable Medical Equipment 0.25 0.19 0.20 0.30 21% Dental 0.19 0.18 0.19 0.18 -3% Excluded Services 0.16 0.07 0.11 0.12 -29% Emergency Care 0.12 0.15 0.03 n/a In Patient Care 0.09 0.05 0.11 0.10 8% Visual Services 0.07 0.08 0.07 0.05 -27% Cosmetic/ Reconstructive Surgery 0.11 0.11 0.06 0.06 -45% Diagnostic Services 0.08 0.06 0.02 n/a Fee For Services 0.05 0.00 0.00 0.00 -100% Infertility Care/ART Services 0.06 0.07 0.07 0.12 96% Home Health Care 0.00 0.03 Total 2.76 2.92 2.65 3.04 10%* Excludes ValueOptions Source: HPHC Appeals by Major Service Type by First and Second Appeals, 2000 through 2003

Appeals are an indicator of the degree to which members feel that their health plan is providing them the services they need. Appeals per thousand by commercial members stayed relatively stable over the first 3 years, increasing by just 6%, and then jumped by 13% in


2003 for an overall increase throughout the period of 10%. Increased appeals of rehabilitative and mental health services increased from 90% to 160%, accounting for most of the increase. Appeals of infertility services experienced a similar increase, but on a smaller base that contributed less to the overall rate. Durable medical equipment and outpatient care also experienced increases of 31% and 10% respectively. Pharmacy and cosmetic surgery appeals decreased by about 40%, which somewhat offset the dramatic increases in rehab and mental health services. In contrast to HPHC’s data on appeals, its reports to the Office of Patient Protection (see Table 23) showed a low and falling rate of internal grievances across the 3-year period, differing from most other HMOs, which showed grater variability and a rising trend of grievances and appeals. In the second and third year, HPHC had the lowest rate of external appeals of all the large HMOs. Its rate of approval of internal grievances began at 46% and increased to 57% in 2002, increasing to 60% in 2003. This rate of approval fell in the middle of other HMOs, which ranged from 45% to 69%. Approximately 4% to 5% of HPHC’s grievances were appealed externally – in the middle of the range. However, because of their low rate of grievances, they also had a low rate of external grievances per thousand, falling at the

bottom of the range. Overall, these data suggest that relatively few HPHC members have problems getting requested services authorized. When we looked at the reasons that external review requests were made, we found that in 2001, HPHC had a different profile of requests from other HMOs, with more review requests related to behavioral health, rehabilitation, outpatient and inpatient services, and fewer for experimental treatments, cosmetic/reconstructive surgery, pharmacy and durable medical equipment. In 2003, HPHC’s profile looked very similar to the total distribution. Behavioral health accounted for over half of external review requests for HPHC and all HMOs. HPHC was somewhat higher in review requests for rehab services, inpatient services, and excluded services, and somewhat lower for cosmetic reconstructive surgery and outpatient services. All other services experienced a rate of review request not markedly different from the overall profile. This suggests that HPHC’s authorization decisions are quite comparable to those of other HMOs. Behavioral health is a notable area for disagreement in all plans, and HPHC experiences a somewhat heightened rate of external review requests for rehabilitation services.


TABLE 23 INTERNAL GRIEVANCES AND EXTERNAL APPEALS


2001 2002 2003

Insurance Provider File

d G

riev

ance

s pe

r tho

usan

d

Perc

ent I

nter

nally

ap

prov

ed

Exte

rnal

App

eals

pe

r tho

usan

d

Exte

rnal

App

eals

as

a %

of D

enie

d G

riev

ance

s

File

d G

riev

ance

s pe

r tho

usan

d

Perc

ent I

nter

nally

ap

prov

ed

Exte

rnal

App

eals

pe

r tho

usan

d

Exte

rnal

App

eals

as

a %

of D

enie

d G

riev

ance

s

File

d G

riev

ance

s pe

r tho

usan

d

Perc

ent I

nter

nally

ap

prov

ed

Exte

rnal

App

eals

pe

r tho

usan

d

Exte

rnal

App

eals

as

a %

of D

enie

d G

riev

ance

s

AETNA Life Insurance Company – Medical 6.6 50% 0 0% 10.1 49% 0.04 1% 23.0 61% 0.00 0%

Blue Cross & Blue Shield of Massachusetts 2.6 55% 0.02 1% 3.4 62% 0.14 11% 3.3 63% 0.16 24%

CIGNA Health Care of Massachusetts 8.2 59% 0.09 3% 8.3 50% 0.14 3% 3.9 54% 0.04 2%

Fallon Community Health Plan 10.4 29% 0.05 4% 7.5 69% 0.05 2% 11.9 22% 0.06 4%Harvard Pilgrim Health Care, Inc. 2.5 46% 0.02 2% 2.4 57% 0.04 5% 2.5 60% 0.04 4%

Health New England 3.4 63% 0.12 9% 5.5 45% 0.11 4% 8.5 51% 0.07 2%Tufts Associated Health Maintenance Organization 2 22% 0.13 9% 4.2 58% 0.12 8% 3.0 21% 0.14 6%

Source: Department of Public Health, Office of Patient Protection, Health Plan Grievance, and Number of Requests Received by Health Plan; Division of Insurance, Data Collection Report 2001-2003.

Table 23 - Definitions and Explanatory Notes Beginning in 2001, if a health plan denies an internal appeal, the member can file an external appeal to the Department of Public Health, Office of Patient Protection (OPP). Also beginning in 2001, all Massachusetts managed care plans were required to file data on their internal grievance processes with OPP, and OPP posts these data and a summary of their own reviews on its website.


K. UTILIZATION OF MEDICAL AMBULATORY SERVICES

Actual utilization of services by HPHC members provides information about how the members, the provider network and clinical management policies interacted in the provision of services. We reviewed utilization data from HEDIS and from the Massachusetts Division of Insurance to see how utilization by HPHC members changed between 2000 and 2003, and how it compared to the experience of other HMOs in the state and nationwide. HEDIS’ measurement methodology has been defined in significant detail over the years, making measurement probably more consistent between different reporting entities than the Division of Insurance data. However, neither method accounts for case mix differences that may occur between different HMOs even within the same coverage type. Changes in case mix may therefore account for certain differences between years or between two HMOs. Though the large enrollment of most HMOs make dramatic case mix changes less likely, our conclusions must be tempered by our limited ability to account for such changes. 1. HEDIS Utilization Measures Table 23 shows HEDIS measures of utilization. Nationally, HMOs showed increasing ambulatory, emergency room and acute care surgery utilization across the period, growing at high rates between 2000 and 2002, and moderating

somewhat in 2003. Inpatient medicine discharge rates jumped from 2000 to 2001, dropped slightly in 2002 and then rebounded in 2003. Massachusetts HMOs showed similar increasing trends with outpatient and emergency utilization rates higher than the national average and inpatient medical and surgical discharge rates lower than the national average throughout the period. HPHC’s outpatient and emergency room utilization rates were initially higher than the Massachusetts average, but fell below in 2002 and 2003. HPHC slightly reduced its rates of medical and surgical discharges until 2003, when they jumped to a new 4-year high. HPHC began the period with a similar rate of inpatient medical discharges as the state average, but increased at a slower rate, ending somewhat below the state average. In contrast, HPHC’s rate of surgical discharges exceeded both the state and national averages at the beginning of the period, but HPHC actually decreased utilization in 2001 and moderated its rate of increase so that in 2003, it was less than the national average and only slightly above the state average. In general, high rates of outpatient care and low or average rates of inpatient care suggest that members get treatment at earlier stages of illness and can avoid or postpone more invasive surgical procedures and inpatient stays. Thus these patterns of somewhat reduced inpatient care likely reflect good preventive care and do not raise concerns about HPHC member access to care.


TABLE 24 HPHC UTILIZATION PER THOUSAND

(Ambulatory Visits, Inpatient Medicine Discharges, Inpatient Surgery Discharges, ER Visits)

2000 2001 2002 2003

HPH

C

(HM

O/P

OS

com

bine

d)

MA

ave

rage

(H

MO

/ PO

S)

Nat

iona

l Avg

. (H

MO

/PO

S)

HPH

C

(HM

O/P

OS

com

bine

d)

MA

ave

rage

(H

MO

/ PO

S)

Nat

iona

l Avg

. (H

MO

/PO

S)

HPH

C

(HM

O/P

OS

com

bine

d)

MA

ave

rage

(H

MO

/ PO

S)

Nat

iona

l Avg

. (H

MO

/PO

S)

HPH

C

(HM

O/P

OS

com

bine

d)

MA

ave

rage

(H

MO

/PO

S)

Nat

iona

l Avg

. (H

MO

/PO

S)

Ambulatory visits per thousand 3852.72 3825.23 3191.75 3896.53 3831.16 3383.41 3907.65 3974.69 3520.16 4006.18 4052.48 3540.88

Emergency Room visits per thousand 180.09 170.81 164.25 186.64 184.17 176.88 187.82 194.1 182.56 196.1 203.42 181.25

Inpatient Acute Care – Medicine discharges per thousand

20.29 20.87 22.97 20.26 21.47 24.31 19.96 21.82 23.65 21.38 22.15 24.32

Inpatient Acute Care – Surgery discharges per thousand

17.47 13.37 16.22 16.82 15.08 17.16 17.38 15.55 18.88 18.25 17.42 19.08

Source: NCQA Quality Compass 2001, Health Plan Employer Data and Information Set 2002, 2003 and 2004. 2. Division of Insurance Outpatient Utilization Measures

Reports submitted by Massachusetts HMOs to the Division of Insurance provide additional detail about HPHC’s utilization, by plan type. Plans showed considerable changes between 2000 and 2001, with Groups and Medicare Risk showing peaks in utilization, with gradual drops thereafter. At the end of the period, Group utilization remained above the beginning rate, while Medicare Risk rates had decreased to somewhat below the starting rate. In contrast, Individual members experienced a dramatic 54% drop in utilization between 2000 and 2001. After this drop, individual utilization rebounded to close to its starting level. In 2002, only Medicare Cost utilization looked dramatically different, about half of its 2000 level. However, this change may have been due to the exclusion of Enhanced 65 members, for which utilization data was unavailable. Over the four years there was a shift towards increasing provision of outpatient services by physicians.


TABLE 25 HPHC MASSACHUSETTS AND MAINE

TOTAL AMBULATORY ENCOUNTERS BY PLAN TYPE

Plan Type Physician Non - Physician Total Total Ambulatory Encounters %

of Grand Total Ambulatory Encounters per

Thousand 2000 Groups 3,000,164 556,627 3,556,791 83% 5,196 Medicare Risk 440,985 164,008 604,993 14% 10,896 Medicare Cost 18,995 5,244 24,239 1% 16,875 Individual 78,336 16,467 94,803 2% 5,841 Grand Total 3,538,480 742,346 4,280,826 100% 5,647 % of Total 83% 17% 2001 Groups 2,389,668 481,229 2,870,897 84.3% 5,561Medicare Risk 343,353 152,649 496,002 14.6% 12,633 Medicare Cost 7,101 1,939 9,040 0.3% 7,241 Individual 25,135 5,647 30,782 0.9% 2,684 Grand Total 2,765,257 641,464 3,406,721 100% 5,994 % of Total 81% 19% 2002 Groups 2,283,377 360,092 2,643,469 85% 5,484Medicare Risk 376,682 49,002 425,684 14% 10,817 Medicare Cost ** 4,698 2,973 7,671 0.2% 7,080 Individual 41,316 6,600 47,916 2% 5,748 Grand Total 2,706,073 418,667 3,124,740 100% 5,886 % of Total 87% 13% 2003* Groups 2,364,566 289,625 2,654,190 87% 5,364 Medicare Risk 312,444 45,393 357,837 12% 10,125 Medicare Cost No data available Individual 42,006 4,411 46,417 2% 5,433Grand Total 2,719,015 339,429 3,058,444 100% 5,677 % of Total 89% 11% * In 2003, DOI began collecting and reporting utilization data only for MA HMO members. Prior years included both in and out of state enrollees in MA HMOs. **Excludes utilization of Enhanced 65 members.

Source: “Data – Outpatient” from Harvard Pilgrim Health Care, Inc. Quarterly Report, (2000, 2001, 2002) Pilgrim Health Care, Inc. Quarterly Report (2000, 2001), Harvard Pilgrim NE, Inc. Quarterly Report (2002), and Harvard Pilgrim Healthcare, Inc. “HMO Supplemental Utilization”, 2003.


Overall, HPHC went from providing somewhat lower utilization of outpatient services than the other major Massachusetts HMOs to somewhat higher utilization. Group member utilization steadily increased from about the same as for other HMOs at the beginning of the period to more than 20% higher at the end. Medicare Risk members had lower utilization than for other HMOs at the beginning of the period, but equaled and then somewhat exceeded it by the end. HPHC Medicare Cost utilization was considerably higher at the beginning of the period – almost threefold that of other HMOs. It dropped considerably to be only 30% higher than average in 2000 and dropped again in 2002, but remained above the average. However, its 2002 figures excluded utilization of its Enhanced 65 members. There was considerable variation in outpatient utilization among HPHC’s individual members. They began with a much higher than average rate, dropped to below average, increased again in 2003 and dropped a little in the final year. In that year, utilization by the individual members of other HMOs increased considerably, making their rates equivalent to HPHC’s. These extreme variations – as those of Medicare Cost members – may be due to the effect of the potential disproportionate effect of members with outlier utilization in a


TABLE 26 MASSACHUSETTS AND MAINE MEDICAL* AMBULATORY ENCOUNTERS BY PLAN TYPE:

HPHC COMPARED TO OTHER** MA HMOS

2000 Ambulatory encounters per thousand



2003 Ambulatory encounters per thousand*

Plan Type

HPH

C

Wei

ghte

d A

vg.

Oth

er M

A

HM

Os*

*

HPH

C a

s a

perc

ent o

f O

ther

HM

Os

HPH

C

Wei

ghte

d A

vg.

Oth

er M

A

HM

Os*

HPH

C a

s a

perc

ent o

f O

ther

HM

Os

HPH

C

Wei

ghte

d A

vg.

Oth

er M

A

HM

Os

HPH

C a

s a

perc

ent o

f O

ther

HM

Os

HPH

C

Wei

ghte

d A

vg.

Oth

er M

A

HM

Os*

HPH

C a

s a

perc

ent o

f O

ther

HM

Os

Groups 5,196 5,166 101% 5,561 5,328 104% 5,484 4,678 117% 5,364 4,392 122%

Medicare Risk 10,896 12,054 90% 12,633 12,327 102% 10,817 9,950 109% 10,125 9,205 110%

Medicare Cost 16,875 5,883 287% 7,241 5,576 130% 7,080+ 6,133 115% n/a 7,111 n/a

Individual 5,841 3,588 163% 2,684 3,917 69% 5,748 3,773 152% 5,433 5,462 99%

Grand Total 5,647 6,054 93% 5,994 6,054 99% 5,886+ 5,396 109% 5,677 4,998 114% * Excludes Outpatient Mental Health visits **Excludes HMO Blue. Discrepancy in 2001 encounter data. Excludes Aetna, whose enrollment fell below 2% threshold in FY2002. + Excludes Enhanced 65 members. Source: "Outpatient Days Report” from Harvard Pilgrim Health Care, Inc. Quarterly Report, (2000, 2001, 2002), Pilgrim Health Care, Inc. Quarterly Report (2000, 2001), Harvard Pilgrim NE, Inc. Quarterly Report (2002), and Harvard Pilgrim Healthcare, Inc. “HMO Supplemental Utilization”, 2003.

relatively small caseload. In addition, we know that membership has changed considerably for these two plan types over the period, and thus, different groups are being measured in the different years. Overall, this analysis shows that the dramatic changes HPHC experienced between 2000 and 2001 brought it closer to the rates of other Massachusetts HMOs and that by the final two years of the period, HPHC provided equal or greater access to outpatient services as the other HMOs. Table 27 below shows that most outpatient visits are office visits, with small percentages for ambulatory surgery, observation stays, or the emergency room. Office visits peaked in 2001 and dropped thereafter, dropping slightly as a share of total outpatient visits from 94% to 91%. Over the four-year period, ambulatory surgery visits tripled their share from 2% to 6%, while observation days dropped from .3% to .1% and the rate of emergency visits decreased somewhat.

TABLE 27 HPHC MASSACHUSETTS AND MAINE AMBULATORY ENCOUNTERS BY TYPE

2000 2001 2002 2003

Encounters Total

Encounters % Encounters

per 1,000 *Total


per 1,000 *Total


per 1,000 **Total


per 1,000 Office Visits*** 4,031,568 94.2% 5,318 3,198,750 93.9% 5,628 2,893,629 92.6% 5,451 2,782,031 91.0% 5,164Ambulatory Surgery 90,903 2.1% 120 81,906 2.4% 144 143,184 4.6% 270 182,801 6.0% 339 Observation Days 11,823 0.3% 16 9,584 0.3% 17 4,076 0.1% 8 3,958 0.1% 7 Emergency Room 146,532 3.4% 193 116,481 3.4% 205 84,134 2.7% 158 89,668 2.9% 166

Total 4,280,826 100.0% 5,647 3,406,721 100.0% 5,994 3,125,023 100.0% 5,887 3,058,458 100.0% 5,677 * Excludes Enhanced 65 utilization. ** Excludes all Medicare Cost utilization. ***Excludes mental health office visits. Source: "Outpatient Days Report” from Harvard Pilgrim Health Care, Inc. Quarterly Report,(2000, 2001, 2002), Pilgrim Health Care, Inc. Quarterly Report (2000, 2001), Harvard Pilgrim NE, Inc. Quarterly Report (2002), and Harvard Pilgrim Healthcare, Inc. “HMO Supplemental Utilization”, 2003.


3. Division of Insurance Inpatient Utilization Measures

Table 28 shows the total number of inpatient days by plan type. Inpatient utilization differs by plan type even more dramatically than ambulatory utilization. While Group enrollees continue to utilize the majority of beds, they have the lowest rate of days per thousand. Their utilization rate slightly dropped, but by 2003, showed an increase over 2000 rates. Medicare Risk enrollees used inpatient services at almost 10 times the rate of Group members. Their rate fluctuated between 2,500 and over 2,600 in the first three years, and then increased by 2003 to considerably exceed 2000 rates. Medicare Cost enrollees initially showed a rate more than twice that of Medicare Risk enrollees, but this rate dropped 80% to be half that of Medicare Risk in 2001 and increased to become closer to Medicare Cost in 2002. However, these figures are affected in unknown ways by the exclusion of Enhanced 65 members no longer reported in this data set. Non-Group enrollees’ inpatient utilization dropped dramatically, by more than half, in 2001, but rebounded to slightly exceed initial rates in 2003. All plan types other than Medicare cost showed increased utilization at the end of the period. While Medicare Cost remained well below its initial exceptionally high 2000 rate in 2002, the last year in which data were available, these results are inconclusive since 2002 figures exclude data on Enhanced 65 members included in the two prior years.

TABLE 28 HPHC MASSACHUSETTS AND MAINE* INCURRED INPATIENT DAYS BY PLAN TYPE

2000 2001 2002 2003*

Plan Type

Tota

l H

ospi

tal

Patie

nt D

ays

Day

s pe

r Th

ousa

nd

% o

f G

rand

Tot

al

Tota

l H

ospi

tal

Patie

nt D

ays

Day

s pe

r Th

ousa

nd

% o

f Gra

nd

Tota

l

Tota

l H

ospi

tal

Patie

nt D

ays

Day

s pe

r Th

ousa

nd

% o

f Gra

nd

Tota

l

Tota

l H

ospi

tal

Patie

nt D

ays

Day

s pe

r Th

ousa

nd

% o

f Gra

nd

Tota

l

Groups 189,755 277 55.0% 141,580 274 57.1% 131,620 273 56% 136,511 294 58%

Medicare Risk 141,361 2,546 41.0% 103,065 2,625 41.6% 98,550 2,504 42% 97,041 2,746 41%

Medicare Cost 7,377 5,136 2.1% 1,258 1,008 0.5% 2,027** 1,871** 1% not available

Individual 6,234 384 1.8% 1,938 169 0.8% 2,886 346 1% 3,343 391 1%

Grand Total 344,727 455 100.0% 247,841 436 100.0% 235,083** 443** 100% 236,895 474 100% * In 2003, DOI began collecting and reporting utilization data only for MA HMO members. Prior years included both in and out of state enrollees in MA HMOs. ** Excludes Enhanced 65 member utilization. Source: "Inpatient Days Report - ALOS" from Harvard Pilgrim Health Care, Inc. Quarterly Report, (2000, 2001, 2002), Pilgrim Health Care, Inc. Quarterly Report (2000, 2001), Harvard Pilgrim NE, Inc. Quarterly Report (2002), and Harvard Pilgrim Healthcare, Inc. “HMO Supplemental Utilization”, 2003.


Table 29 shows that there is considerable variation in both HPHC and other HMOs’ inpatient utilization rates for the plan types with smaller enrollments. As mentioned earlier, in smaller groups, outlier admissions may considerably influence the group mean. The inpatient utilization of HPHC’s Group members has been at the Massachusetts HMO average or higher throughout the period, increasing to 33% higher in 2003. Medicare Risk members, in contrast, were higher or average in the first two years of the period, but had lower than average inpatient utilization in the final two years. As we saw with outpatient data, Medicare Cost and Individual inpatient utilization are highly variable. Medicare Cost utilization fluctuated considerably, but was higher or dramatically higher than other HMOs between 2000 and 2003. Individual utilization began about 10% higher than average, dropped precipitously in 2001 and then climbed back to exceed the average in 2003.

TABLE 29 MASSACHUSETTS AND MAINE* INCURRED INPATIENT DAYS BY PLAN TYPE

HPHC COMPARED TO OTHER MA HMOS

2000 2001 2002 2003*

Plan Type

HPH

C D

ays

per t

hous

and

Oth

er H

MO

s D

ays

per

Thou

sand

% D

iffe

renc

e

HPH

C D

ays

per t

hous

and

Oth

er H

MO

s D

ays

per

thou

sand

% D

iffe

renc

e

HPH

C D

ays

per t

hous

and

Oth

er H

MO

s *D

ays

per

thou

sand

% D

iffe

renc

e

HPH

C D

ays

per t

hous

and

Oth

er H

MO

s D

ays

per

thou

sand

% D

iffe

renc

e

Groups 277 240 115.5% 274 259 106.1% 273 275 99.1% 294 220 133.7%

Medicare Risk 2,546 2,268 112.3% 2,625 2,598 101.0% 2,504 3,159 79.3% 2746 2930 93.7%

Medicare Cost 5,136 796 644.9% 1,008 849 118.7% 1,871** 519 360.2% n/a 1331 n/a

Individual 384 336 114.5% 169 447 37.8% 346 421 82.2% 391 317 123.5%

Grand Total 455 507 89.6% 436 575 75.8% 443 538 82.3% 474 435 109.1%

* In 2003, DOI began collecting and reporting utilization data only for MA HMO members. Prior years included both in and out of state enrollees in MA HMOs. Excludes Aetna whose enrollment fell below 2% threshold. ** Excludes Enhanced 65 member data. Source: "Inpatient Days Report - ALOS" from Harvard Pilgrim Health Care, Inc. Quarterly Report, (2000, 2001, 2002), Pilgrim Health Care, Inc. Quarterly Report (2000, 2001), Harvard Pilgrim NE, Inc. Quarterly Report (2002), Harvard Pilgrim Healthcare, Inc. “HMO Supplemental Utilization”, 2003 and data submitted to DOI by other HMOs.


Table 30 shows how inpatient episodes break down between acute care, maternity care, and non-acute care. Average lengths of stay for the different types of inpatient care vary, but are quite stable over this period. Maternity stays are shortest, averaging three days, followed by acute care, averaging four days. Non-acute care has a longer average length of stay, 11 days, and consequently accounts for more than one quarter of discharge days, a larger share of days than it has of discharges. Acute care discharges per thousand fluctuated over the four-year period, showing a slight overall increase by the end of the period. Maternity and non-acute discharges per thousand showed little variation.

TABLE 30 HPHC MASSACHUSETTS AND MAINE*

INPATIENT DISCHARGES AND DISCHARGE DAYS BY TYPE OF SERVICE

Type of Inpatient Care Total Discharges

Discharges per thousand

Total Discharge Days ALOS

2000 Acute Care 51,700 68 212,917 4.1 Maternity Care 11,051 15 31,970 2.9 Non-acute Care 10,046 13 110,241 11.0 Total 72,797 96 355,128 4.9 2001 Acute Care 37,338 66 156,599 4.2 Maternity Care 7,657 13 22,720 3.0 Non-acute Care 6,785 12 76,210 11.2 Total 51,780 91 255,529 4.9 2002 Acute Care 36,627 74 151,818 4.1 Maternity Care 6,998 14 19,878 2.8 Non-acute Care 7,202 15 69,413 11.1 Total 50,827 103 241,109 4.7 2003* Acute Care 38,183 71 155,909 4.1 Maternity Care 7,010 13 20,783 3.0 Non-acute Care 6,329 12 69,023 10.9 Total 51,521 96 245,715 4.8

* In 2003, DOI began collecting and reporting utilization data only for MA HMO members. Prior years included both in and out of state enrollees in MA HMOs. Source: "Inpatient Days Report - ALOS" from Harvard Pilgrim Health Care, Inc. Quarterly Report, (2000, 2001, 2002), Pilgrim Health Care, Inc. Quarterly Report (2000, 2001), Harvard Pilgrim NE, Inc. Quarterly Report (2002), Harvard Pilgrim Healthcare, Inc. “HMO Supplemental Utilization”, 2003, and data submitted tot DOI by other HMOs.


L. HEDIS ACCESS AND SATISFACTION MEASURES

Table 31 shows how HPHC compares to other Massachusetts health plans and to the national average on access to health care. The Massachusetts average exceeds the national average in all categories, and HPHC exceeded the state average in all categories for all four years, except for children aged 12 to 24 months, where HPHC fell slightly below the state average in 2002 and 2003. However, this was the age category that experienced the highest rates of access; HPHC exceeded 97% in all years and Massachusetts exceeded 96% in all years. Given these very high rates of access, it was rather remarkable that both the national and the Massachusetts averages increased in all categories in all years. HPHC’s access rates also increased in all categories in all years except for children aged 12 to 24 months and children aged 7 to 11 years. The net effect was that, as HPHC’s and Massachusetts’ average approached the high 90s, HPHC’s lead over the state average lessened.

TABLE 31 HEDIS ACCESS MEASURES

HPHC COMPARED TO MASSACHUSETTS AND NATIONAL AVERAGES

2000 2001 2002 2003

HPH

C

(HM

O/ P

OS

com

bine

d)

MA

ave

rage

(H

MO

/ PO

S)

Nat

iona

l A

vg.

(HM

O/P

OS)

HPH

C

(HM

O/P

OS

com

bine

d)

MA

ave

rage

(H

MO

/ PO

S)

Nat

iona

l A

vg.

(HM

O/P

OS)

HPH

C

(HM

O/P

OS

com

bine

d)

MA

ave

rage

(H

MO

/ PO

S)

Nat

iona

l A

vg.

(HM

O/P

OS)

HPH

C

(HM

O/P

OS

com

bine

d)

MA

ave

rage

(H

MO

/PO

S)

Nat

iona

l A

vg.

(HM

O/P

OS)

Adults Access 20-44 95.41% 92.97% 90.12% 95.64% 94.14% 91.69% 95.88% 94.57% 92.01% 95.99% 94.91% 92.49%

Adults Access 45-64 96.3% 94.52% 92.6% 96.45% 95.38% 93.81% 96.72% 95.71% 94.16% 96.83% 96.03% 94.5%

Adults Access 65+ 96.39% 94.36% 93.33% 96.49% 95.4% 94.71% 96.64% 95.89% 95.16% 96.76% 96.41% 95.73%Children’s Access 12-24 months 97.9% 96.57% 92.45% 97.6% 96.63% 95.22% 97.54% 97.65% 95.66% 97.82% 98.37% 96.28%

Children’s Access 25 mos. to 6 years 94.54% 92.01% 82.43% 95.1% 92.94% 85.75% 95.48% 94.38% 87.24% 95.5% 95.14% 88.49%

Children’s Access 7- 11 years 96.43% 93.3% 83.64% 96.93% 94.42% 85.82% 96.68% 95.61% 87.43% 96.82% 96.36% 88.5%

Source: NCQA Quality Compass 2001, Health Plan Employer Data and Information Set 2002, 2003 an 2004.

Table 31 - Definitions and Explanatory Notes In contrast to utilization measures, which count the total services provided on average across all members, this set of measures determines what percentage of members received the minimum services recommended for healthy individuals. Access for adults is measured by counting the percentage of members who have seen a health care provider for any ambulatory or preventative care in the last three years. For young children, the measure is the percentage that has seen a provider for primary care in the past year. For children ages 7 to 11, the measure is those with such a visit in the preceding two years.


Starting below the state average on the measures of getting care quickly and getting needed care, HPHC experienced increases in consumer ratings on both measures that put it above the state average, which consistently exceeded lower national averages. HPHC ranked a little low on getting care quickly compared to other Massachusetts HMOs for the first three years of the period. Its score was above or the same as the national average and below the state average in those years. However, it jumped three percentage points in 2003 to exceed both the state and national averages in 2003. In the first two years, HPHC ranked slightly lower than the Massachusetts average and above the national average on getting needed care. In 2002

TABLE 32 CAHPS MEASURES OF ACCESS TO CARE


2000 2001 2002 2003

HPH

C

(HM

O/P

OS

com

bine

d)

MA

ave

rage

(H

MO

/ PO

S)

Nat

iona

l A

vg.

(HM

O/P

OS)

HPH

C

(HM

O/P

OS

com

bine

d)

MA

ave

rage

(H

MO

/ PO

S)

Nat

iona

l A

vg.

(HM

O/P

OS)

HPH

C

(HM

O/P

OS

com

bine

d)

MA

ave

rage

(H

MO

/ PO

S)

Nat

iona

l A

vg.

(HM

O/P

OS)

HPH

C

(HM

O/P

OS

com

bine

d)

MA

ave

rage

(H

MO

/PO

S)

Nat

iona

l A

vg.

(HM

O/P

OS)

Getting care quickly 79.86% 82.74% 78.34% 79.27% 82.3% 79.72% 79.78% 80.66% 77.64% 82.71% 81.77% 78.6%

Getting needed care 82.28% 82.62% 75.36% 80.79% 81.9% 76.75% 84.23% 82.19% 76.92% 86.02% 82.14% 78.4%

Source: NCQA Quality Compass 2001, 2002, 2003 and 2004 Health Plan Employer Data and Information Set

Table 32 - Definitions and Explanatory Notes HEDIS uses a standardized tool, the Consumer Assessment of Health Plans, CAHPS, for health plans to survey their members on various aspects of their ability to get medical services. “Getting care quickly” indicates the overall percentage of survey respondents who answered ‘always’ or ‘usually’ to the following three questions: • In the last 12 months, when you called during regular office hours, how often did you get the advice or help you

needed? • In the last 12 months, how often did you get an appointment for regular or routine health care as soon as you

wanted? • In the last 12 months, when you needed care right away for an illness or an injury, how often did you get care as

soon as you wanted? • And responded ‘seldom’ or ‘never’ to the following question: In the last 12 months, how often did you wait in the

doctor’s office or clinic more than 15 minutes past your appointment time to see the person you went to see? “Getting needed care” measures the percentage of respondents who answered ‘not a problem’ to the following questions: • With the choices you health plan gave you, how much of a problem, if any, was it to get a personal doctor or nurse

you are happy with? • In the last 12 months, how much of a problem, if any, was it to get a referral to a specialist that you needed to see? • In the last 12 months, how much of a problem, if any, was it to get the care you or a doctor believed necessary? • In the last 12 months, how much of a problem, if any, were delays in health care while you waited for approval

from your health plan?


and 2003, HPHC experienced an increase in ratings, which put it above the Massachusetts average and well above the national average. HPHC was close to the Massachusetts average and considerably above the national average in members’ ratings of their health plan at the beginning of the period. Its ratings grew substantially, considerably exceeding the state and national averages by 2003. In contrast, Massachusetts rates dropped below their 2000 starting point and the national average increased only a little.

TABLE 33 CAHPS MEASURE OF MEMBER HEALTH PLAN RATINGS


2000 2001 2002 2003

HPH

C

(HM

O/P

OS

com

bine

d)

MA

ave

rage

(H

MO

/ PO

S)

Nat

iona

l Avg

. (H

MO

/PO

S)

HPH

C

(HM

O/P

OS

com

bine

d)

MA

ave

rage

(H

MO

/ PO

S)

Nat

iona

l Avg

. (H

MO

/PO

S)

HPH

C

(HM

O/P

OS

com

bine

d)

MA

ave

rage

(H

MO

/ PO

S)

Nat

iona

l Avg

. (H

MO

/PO

S)

HPH

C

(HM

O/P

OS

com

bine

d)

MA

ave

rage

(H

MO

/PO

S)

Nat

iona

l Avg

. (H

MO

/PO

S)

Rating of Health Plan 66.72% 66.78% 59.3% 78.78% 68. % 61.92% 79.51% 65.57% 61.3% 83.89% 64.0% 61.8%

Source: NCQA Quality Compass 2001, 2002, 2003 and 2004 Health Plan Employer Data and Information Set

Table 33 - Definitions and Explanatory Notes CAHPS includes one question that asks respondents to give an overall rating of their health plan on a scale of 0 to 10, with 10 being the best plan possible. The measure presented in this table shows the percentage of respondents rating their experience with their health plan as 8, 9, or 10 on this scale.


M. CONCLUSION

1. Access for Commercial Members

Between 2000 and 2003, HPHC benefit plans for its three largest commercial accounts were similar to those of other large Massachusetts HMOs. However, at the beginning of the period, HPHC’s rates for these large accounts were considerably higher than those for the largest accounts of the other Massachusetts HMOs. This rate differential, together with questions about HPHC’s stability that were particularly marked during and immediately after the receivership, likely had a role in the 25% decrease in group enrollment experienced between 2000 and 2001 by HPHC, that was much steeper than the 2% decrease experienced by the other Massachusetts plans. One concern about this disenrollment was that it would take place differentially, and affect people with serious conditions and greater health needs more than those with less serious health needs. We had limited data available to analyze this, but HPHC’s age and gender mix showed a considerable increase in older individuals in comparison to the whole over the four year period, an indication that HPHC enrollees had become higher in need and providing one indication that more vulnerable members were not losing coverage. We did find that HPHC lost enrollment differentially across the state, with residents of the Northeast, Boston and MetroWest affected less than those in the Southeast and Western and Central Massachusetts. Other than the West, each region showed small increases in membership after the initial drop. Different sources of data suggested different conclusions about HPHC’s provider network. It seems likely that HPHC experienced little change in its PCP network, but some level of decrease in its specialty network between 2000 and 2001. The magnitude of the decrease in specialists listed in HPHC’s directories was similar to the magnitude of the

decrease in enrollment, changing the ratio of specialists to members minimally. However, the selection of specialists was certainly affected and may have reduced access. By 2003, both the PCP network and the specialist network had grown substantially, more than outpacing the growth in members and likely increasing access. Members’ ratings of HPHC providers on the CAHPs survey were relatively high in 2000, with three quarters or more of respondents giving their providers high ratings, though they did not excel with respect to other Massachusetts HMOs. These ratings had increased by 2003, putting HPHC above both state and national averages. Problems likely to affect provider participation in HPHC’ network generally improved with HPHC’s attention to resolving and improving claims payment, as seen by climbing ratings of these functions by providers and by claims aging reports during the first two years of the period, which were maintained in the final two years. Both outpatient and inpatient utilization of group members were either the same or exceeded utilization rates for other large MA HMOs throughout the period. Outpatient utilization grew throughout the period, moving from about average to above average. Inpatient utilization began higher than average, stayed about the same while that of other HMOs grew to reach HPHC levels, and then jumped in 2003 to substantially exceed other HMOs. These patterns of utilization suggest that HPHC provided access to services that met or exceeded that of other HMOs throughout the analysis period. 2. Access for Non-Group Members

Non-Group plans are determined largely by standard state requirements. In contrast to its group rates, HPHC’s standard Non-Group rates were less expensive than those of


most large Massachusetts HMOs in 2000. However, its rates grew faster than those of other HMOs. By 2003, HPHC’s rates remained considerably lower in Boston, but were similar in Springfield and higher for those over age 63. Not surprisingly, given these rate changes enrollment in this plan dropped considerably during 2000 and again in 2002, for an overall decrease of 43% from the start of the period. HPHC continued to offer its pre-existing Non-Group option, which provided fewer benefits at a lower cost, during 2000, but was not allowed to do so in 2001. Hoping to offer an acceptable replacement, HPHC introduced a new low option Non-Group plan with a somewhat lower price and more limited benefits than its standard plan. However, the only one-third the enrollment of HPHC’s pre-existing Non-Group plan members enrolled into its low option Non-Group plan. This change accounted for most of the overall sharp decrease in total Non-Group enrollment. This option has experienced growth over time, partially offsetting the continued erosion of the standard group enrollment. Despite this decrease in coverage, HPHC continued to serve a slightly larger share of Non-Group enrollees than the average for other large Massachusetts HMOs. Unfortunately, we lack the data to determine how this transition may have affected higher need individuals with Non-Group coverage. Non-Group members are served by the same provider network, as are commercial members. However, their utilization patterns differed considerably. Both outpatient and inpatient utilization began at rates that exceeded that of other HMOs; in the case of outpatient, considerably. Both experienced a dramatic drop in the second year of the period – a time when enrollment also changed and HPHC’s legacy plan was replaced by its low option plan. In the succeeding years, both outpatient and inpatient utilization rates

increased, ending the period the same or higher than other plans. This pattern suggests that the enrollment changes did affect higher need individuals, who may have disproportionately left the plan. The dramatically lower rates of utilization – in the absence of different clinical utilization policies for Non-Group members – may well be due to the absence of higher need individuals. While high-need, individually insured members appear to have lost HPHC coverage, the loss of coverage is more likely due to changes in benefit plan and plan rates that were determined by state regulations, not by elements of HPHC’s recovery plan. 3. Access for Medicare Risk Members

HPHC’s Medicare Risk plan, First Seniority, offered largely the same basic benefits throughout the period. However, in 2001, HPHC dropped coverage for the counties of Worcester, Barnstable, Bristol, and Plymouth and implemented a premium in addition to the Medicare A and B premiums. This premium almost doubled in each of the next two years, while pharmacy co-pays were increased and in 2003, the office visit co-pay increased from $5 to $15. Overall enrollment dropped by almost thirty percent in 2001. Most of the decrease came from eliminating coverage in the central and southeastern part of the state, but the remaining counties in the Metropolitan Boston region also experienced a 13% decrease, perhaps in part due to the imposition of a premium or the withdrawal of some hospitals from the First Seniority network. Though enrollment did not change dramatically in 2002 or 2003, the net decrease from the beginning to the end of the period was 36%. Results of the Medicare CAHPS survey at the beginning of the period indicated that HPHC members were leaving at higher rates than from other Massachusetts or national HMOs, and that they were doing so primarily because of concerns about health care or services rather than because of costs and


benefits. By the end of the period, HPHC’s termination rates were lower than the state and national averages, and the reasons for leaving were equally due to concerns about services and costs. HPHC Medicare Risk enrollees consistently accounted for 6% to 7% of its total enrollment while the other large Massachusetts HMOs served over 8% from 2000 to 2003, but experienced a sharp decrease to 4% in 2003. Despite dramatic changes in enrollment levels, HPHC’s Medicare Risk members did not experience dramatic changes in utilization rates. Outpatient utilization rates began about 10% lower than for other large MA HMOs, and grew to end at 10% higher. Inpatient utilization varied, ranging between 2500 and 2700 days per thousand. However, inpatient utilization of other HMOs varied even more, ranging from 2300 to 3200 days per thousand. HPHC was higher that the other HMOs in the first two years of the period and below in the last two, though it was quite close to the state average in the final year. These patterns suggest that HPHC’s Medicare Risk members had equivalent or better access to services as those enrolled in other large Massachusetts HMOs. 4. Access for Medicare Cost Members The changing location of Medicare Cost plans in HPHC’s corporate structure reduced the information available to analyze their access. We were able to document an increase in their enrollment between 2000 and 2003, despite experiencing considerable premium increases till the final year of the period. The new plan introduced in 2003 to replace the pre-existing plans was only slightly less generous than those it replaced, while costing somewhat less. HPHC’s Medicare Cost enrollees share the group provider network, but their utilization is only partially reported because one plan, Enhanced 65, moved to HPHC’s

indemnity company and was no longer included in reports to the Division of Insurance. While HPHC’s utilization rates were highly variable during the period, no doubt reflecting the exclusion of data on Enhanced 65 enrollees, its rates of utilization have been from 15% to 3 times higher for outpatient utilization and 6 times higher for inpatient utilization than for other HMOs. These partial data suggest that HPHC has expanded access to this type of coverage, and at least its Preferred 65 Plan provides a higher level of service utilization than other Massachusetts HMOs. 5. Clinical Review and Authorization

Clinical management policies and procedures for the authorization of care can have a significant effect on the actual utilization of services. Unlike some of its other operational functions, relatively little changed in HPHC’s clinical management of medical services as it implemented its recovery plan. However, a new state law ending benefit limits for speech therapy was implemented, and HPHC introduced a process for reviewing the medical necessity of speech therapy services. • A sample of HPHC PCPs rated HPHC care managers

relatively highly on its clinical utilization review process and getting members needed care throughout the period. However, a significant minority, 20%, rated its authorization and utilization management procedures as difficult.

• Different sources of data suggested different conclusions about HPHC’s rate of grievances. HPHC’s own data on appeals showed an increasing rate, while the data submitted to the Massachusetts Office of Patient Protection indicated that the rate of internal grievances remained stable, while that of other HMOs increased over the period. The data are consistent on the types of service decisions appealed, showing that HPHC’s most


frequent grievances concern mental health and rehabilitation services. While mental health is the most frequently appealed decision for all HMOs, HPHC’s rates for appeal of rehabilitation services are somewhat elevated in comparison to other HMOs. Since internal appeal data did not increase faster than utilization rates and comparative data show no increase, it does not appear that authorization decisions are a significant problem area. However, HPHC’s elevated appeals for mental health and rehabilitation will be considered in Sections V-A-5 and V-C-2.

6. Overall Utilization of Services Other HEDIS measures confirm that HPHC has been doing a good job of providing preventive care. HPHC led in access to primary care in all age categories and showed increasing rates of access to primary care except in young children, where its rates were so high (97%) that further improvement might not be possible. While HPHC began the period with moderate member scores on providing care quickly and providing needed care, it increased its scores on both measures to lead the state and national averages at the end of the period. Finally, HPHC has showed increasing levels of satisfaction over the four-year period, far outpacing other Massachusetts HMOs and the national average. Overall, indicators suggest that HPHC has maintained and increased access to care for its Group and Medicare Risk plan members. Enrollment in Medicare Cost plans also increased, though benefits were slightly decreased. Utilization rates reported to DOI showed a sharp drop, but remained above that of the Massachusetts HMOs, though at period end, only half of HMOs Medicare Cost members were included. However, individual plans with much smaller enrollment experienced both an enrollment decrease

and a dramatic drop in utilization between 2000 and 2001 that suggest that higher need members may have dropped coverage. The rate and coverage changes likely influencing disenrollment in Individual coverage were largely determined by state regulation and rate setting decisions which HPHC attempted to moderate within allowable parameters. Utilization rates recovered in the following two years, putting HPHC somewhat above other Massachusetts HMOs.


V. ACCESS TO SPECIFIC SERVICE

This chapter reviews access to certain specific services of special importance to vulnerable populations, behavioral health, prescription drugs, and rehabilitation services.

A. BEHAVIORAL HEALTH

1. Introduction

The four year period of this assessment was one of considerable change in the administration of HPHC’s behavioral health services. Prior to 2000, behavioral health services were administered by some of HPHC’s core groups (larger provider practices), who were at risk, or by HPHC itself. • In 2000, ValueOptions took over - on a non-risk basis -

utilization management functions for behavioral health services.

• In January 2001, the Massachusetts mental health parity law took effect and HPHC initiated an at-risk carve-out arrangement with ValueOptions. Under this arrangement, ValueOptions credentialed and contracted for a behavioral health network, managed utilization, and paid provider claims.

To promote continuity, all HPHC providers were offered the option to contract with ValueOptions.

ValueOptions implemented inpatient utilization management processes and registration of new and ongoing outpatient clients.

• In 2002, management of inpatient services was loosened, with increasing facility self-management, while

outpatient utilization management procedures were tightened.

• In March 2003, ValueOptions moved its administrative operations to offices located in New York. Different personnel performed utilization management and claims processing and the authorization process became tighter and a claims backlog developed.

2. Provider Network

Table 34 shows that ValueOptions’ included substantially more hospitals and outpatient clinics in its network than were in HPHC’s network but fewer individual practitioners. Inclusion of outpatient clinics offsets to an unknown degree to the decrease in individual practitioners in psychiatry, psychology and social work. HPHC and ValueOptions have focused attention on improving the accessibility of its mental health provider network. In September 2000, HPHC found that virtually all members sampled, 99.6%, had 2 network providers (psychiatrists or psychologists) within 10 miles. More detailed accessibility analyses performed by ValueOptions in 2001, 2002 and 2003 found that virtually all urban members had a practitioner within 10 miles, suburban members had a practitioner within 25 miles, and rural members had a practitioner within 40 miles. All categories reached 99.9% or 100%. However this geographic proximity doesn’t ensure that an individual member will find a provider within these distances; 13% of respondents in 2001, 16% in 2003, and 19% of Medicare members in 2003 indicated in response to a


TABLE 34

HPHC NETWORK OF MENTAL HEALTH AND SUBSTANCE ABUSE PROVIDERS

2000** 2001 2002 2003 Provider Type

Number Per

Thousand Number Per

Thousand Number Per

Thousand Number Per

Thousand Inpatient Hospitals (in Massachusetts) 26 47* 50 Outpatient Clinics N/A 67* 109 Psychiatrists/Physicians 998 1.3 469 0.6 414 0.8 430 0.8Ph.D. Psychologist 1,079 1.4 1,015 1.3 937 1.7 1,003 1.9LICSW and Licensed Masters Level Counselor 4,265 5.4 1,618 2.1 1,337 2.4 1,534 2.8Psychiatric Clinical Nurse Specialist 294 0.4 185 0.2 158 0.3 174 0.3Provider type unknown 4 34 2 2 *Correction – hospital counted as outpatient clinic in prior report **Provider network contracted to HPHC. Thereafter, provider network was contracted to ValueOptions Source: Physician Directory Volume 2, 2000, 2001, Fall 2003; HPHC 2000 and 2001 Credentialing Files. NAIC 2000, 2001, 2002 for HPHC, Harvard Pilgrim and HPHC NE, Supplemental Utilization Report 2003 HPHC and HPHC NE.

member survey that they traveled more than 30 minutes to their mental health provider. In addition, the 2001 survey found that respondents had a hard time finding mental health practitioners: one-third of the small number of respondents who had called for a mental health referral called a second time to get additional names and two-thirds of members who called for a referral did not find a therapist who was accepting new patients. However, the survey did suggest that respondents receiving treatment were able to get appointments at convenient times; most, 94% of respondents receiving mental health services said that their therapist offered them convenient appointment times, and three-quarter reported being able to get a first appointment within 7 days. The 2003 survey did not address members’ ease in finding a practitioner, but did find that virtually all - 99% of both commercial and Medicare members – were offered convenient appointment times, and 85 to 85% were able to get a first appointment within 7 days. Almost every interview we conducted with stakeholders in the mental health system, including providers, advocates and HPHC members emphasized the overall shortage in psychiatry that is shared by HPHC and other HMOs. Child psychiatrists, particularly those skilled in treating children age 8 and under, are a particular shortage, and residents outside of metropolitan Boston have limited choices among a small number of psychiatrists covering other parts of the state. At the beginning of the period, some representatives of provider trade associations believed that this was a bigger problem for HPHC than other HMOs. At the end of the period, HPHC was not perceived as different than other HMOs.


Seeking to improve access, ValueOptions and HPHC initiated a Quality Improvement Activity which identified barriers to access and developed interventions to address them, including educating providers on access standards, streamlining credentialing processes and speeding up claims processing. They commissioned a series of Fact Finders Open Shopper Surveys of practitioners, which found that most providers met ValueOptions’ standards for initial, routine, urgent and emergent visits in 2002 and 2003. (See Chart 14.) ValueOptions also focused specifically on child psychiatry, recognizing that the relative shortage of child psychiatrists would necessitate setting a lower goal of 50% of child psychiatrists having immediate availability for initial or routine referrals. Surveys in all four quarters of 2003 in Massachusetts and the remainder of the New England Service Area found that the standard was met and access was increasing. In 2003, another survey of HPHC Group Insurance Commission members who were seeking behavioral health services found that provision of emergency and urgent appointments met ValueOptions timeliness standards 100% or close to 100% in 2003, and routine appointments were available within standards over 95% of the time. These results suggest that access was a problem during the first two years of the period, and that progress has been made in addressing it. However, access to child psychiatry remains less than optimal, though this is a problem shared by other insurers.


CHART 14 VALUEOPTIONS OPEN SHOPPER SURVEY: PERCENTAGE OF PROVIDERS

MEETING STANDARD FOR APPOINTMENT ACCESS

98%

85% 86%

100%92%

84%77%

100%

90%86%82%

100%

84%74%

100%

89%

0%

20%

40%

60%

80%

100%

120%

Initial Routine Urgent Emergent

Spring 02 Fall 02 Spring 03 Fall 03

within 10 days of request

within 48 hours of requestStandard:

Immediate treatment options

CHART 15 2003 VALUEOPTIONS OPEN SHOPPER SURVEY: PERCENTAGE OF CHILD

PSYCHIATRISTS WITH IMMEDIATE AVAILABILITY FOR REFERRALS

57%61%

55%52%

0%

15%

30%

45%

60%

75%

1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

Chart 14 & 15 - Definitions and Explanatory Notes In an open shopper survey, the surveyor identifies themselves as a representative of ValueOptions and asks how soon an appointment could be offered. Thissurvey attempted to contact a random sample of ValueOptions providers and surveyors called back up to 5 times to complete the survey to ensure that it did notinclude only easy-to-reach practitioners.

Source: Fact Finders ValueOptions/Harvard Pilgrim 2001 Provider Survey, 2002 Provider Survey and 2003 Provider Survey.

3. Provider Issues

Provider representatives we interviewed for this project all described considerable difficulties with a number of aspects of the transition to ValueOptions and its contract terms and policies. These difficulties have been exacerbated by inconsistent access to ValueOptions managers and changes in administrative personnel caused by relocation to New York State. These concerns were of sufficient significance to make providers consider whether they should participate in the ValueOptions network and to be a consideration in deciding to serve HPHC members. However, they did not prevent ValueOptions from being able to expand its network over the three-year period. The issues most salient to providers include: • Authorization procedures that are considered overly

time consuming, including: Inpatient and continued stay authorization Registration of outpatients at the change of year Requests for outpatient continuing care that are

regarded as burdensome • According to several provider representatives, rates for

mental health counseling by psychiatrists are much lower than for other Massachusetts HMOs, and rates for other outpatient services began and have remained on the low side compared to other payers.

• Claims payment difficulties, including slow payment, claims problems taking much effort to sort out, and variable performance in paying claims. Respondents indicated an improvement in the timeliness of claims payment by the end of the period, though the move to New York created a one-time claims lag.

Fact Finders was commissioned to conduct phone interviews with a sample of ValueOptions’ provider network in 2001, 2002 and 2003. These surveys found considerable change in how providers and facility administrators communicated with ValueOptions to seek certification of mental health care. While almost half of providers and administrators preferred to certify care by phone, with about 20% each designating an Interactive Voice Response (IVR) phone system or Fax in 2001, in the following year about half preferred the IVR. Preferences of providers changed again in 2003, with providers roughly equally divided in preferring phone, IVR and Fax. ValueOptions‘ website was introduced in 2002 and preferred by almost 10%, but preferences dropped to only 3% in 2003. These patterns suggest either that this was a period in which providers were experimenting with various methods for transmitting authorization requests, or ValueOptions was promoting different methods for receiving such requests. New methods, however, did not necessarily retain volume, suggesting that they may not have realized their promise.


Despite the problems and types of changes described above, Fact Finders’ surveys found that providers and facilities were largely satisfied with ValueOptions overall, with about 90% or more somewhat or very satisfied. (See Chart 16.) Facility administrators’ ratings fell somewhat in 2002, when 14% were not satisfied. In comparison to other behavioral health management organizations (MBHOs), providers increasingly rated ValueOptions the same or better, but in 2002, over 40% of facilities rate ValueOptions as worse than other MBHOs, dramatically worse than the prior year, and an indication that the procedures implemented in that year were very unpopular. (See Chart 17.)

Chart 16 & 17 - Definitions and Explanatory Notes This survey was returned by 45 to over 60 providers and the administrators of 15 to 23 facilities. About half of the providers served 5 to 25 HPHC members, abouta quarter serving fewer than 5, and the remainder serving more than 25. Not surprisingly, the administrators who responded were from larger organizations; 80%or more of them served more than 25 HPHC members and none served as few as 5. The providers were largely psychologists and social workers, with somepsychiatrists and other types of mental health practitioners. Mental health facilities included hospitals, residential facilities and outpatient clinics.

PTIONS PROVIDERS: PERCENT VERY OR SOMEWHAT SATISFIED WITH VALUEOPTIONS OVERALL

CHART 16 VALUEO

89.4%95.6%

92.5%90.0%86.3%

0%

20%

40%

60%

80%

100%

2001 2002 2003

Providers AdministratorsProviders Administrators

CHART 17 PROVIDER OFFICE SURVEY: COMPARED WITH OTHER MBHOS,

HOW IS YOUR EXPERIENCE WITH VALUEOPTIONS?

35.6%31.0%

38.1%

52.0%

17.4%

39.1%38.0%

46.0%50.0%

42.2%

22.2%19.0%

15.9%

10.0%

43.5%

0%

10%

20%

30%

40%

50%

60%

2001 2002 2003 2001 2002


Providers Administrators


In spite of rising scores on its administrative functions over the three years, issues with authorization procedures and decisions continued to be sounded, as themes in provider and facility administrator responses to open-ended questions regarding desired changes and improvements.


4. Claims Payment

Our analysis confirms that claims payment was a problem in 2001. ValueOptions paid and resolved claims extraordinarily slowly in 2001, with almost 70% of claims paid in more than 90 days. Table 35 shows paid and other resolved claims as a percent of total closed claims. However, this performance improved dramatically in 2002, and remained at a high level in 2003, indicating that timelines of claims processing was not likely to be a problem for most providers.

TABLE 35 PAID AND RESOLVED CLAIMS

AS PERCENT OF TOTAL CLAIMS IN 2001

30 days 60 days 90 days >90 days 2001 Commercial 10% 21% 30% 100% Medicare 8% 23% 32% 100%2002 Commercial 81% 97% 98% 100% Medicare 78% 97% 98% 100%2003 Commercial 87% 96% 98% 100% Medicare 86% 97% 99% 100%

Source: ValueOptions Closed Claims Aging Summary, 2001, 2002 and 2003

The Fact Finders surveys of ValueOptions providers confirmed that claims payment was an area with continued problems. The surveys found that, while most providers rated ValueOptions claims payment as good, very good or excellent, there was a significant percentage, as high as 40% of larger practices in 2002, that rated claims payment as fair or poor (see Chart 18). Accuracy of claims payment was rated higher than timeliness, and timeliness ratings actually decreased between the first and last year rated despite the improvement showed by Value Option’s claims aging data. Over the three year period, there was a consistent increase in the number of contacts that providers had with ValueOptions over claims, and for facility administrators, a quite dramatic increase (see Chart 19). However, most providers were sometimes or usually satisfied with the resolution of their claims issues, but a significant minority, about 10% of providers, was rarely satisfied. Administrators experienced greater satisfaction with resolution in 2002, with only about 6% rarely satisfied, compared to 15% in the prior year.



PERCENT RATING CLAIMS PAYMENT GOOD, VERY GOOD OR EXCELLENT

72.8%

79.5%

68.3%71.1%

78.9%

59.6%

78.3%

88.6%

77.5%

57.9%

80.0%

72.2%

62.5%66.7%

77.8%

0%

20%

40%

60%

80%

100%

2001 2002 2003 2001 2002 2003 2001 2002 2003


Timeliness Overall RatingAccuracy

CHART 19 PROVIDER OFFICE SURVEY: NUMBER OF CONTACTS WITH VALUEOPTIONS WITH A CLAIMS QUESTION OR PROBLEM

41.0%

31.6% 32.8%

53.8%

6.7% 6.7%

0.0%

19.0%18.4%

23.1%

15.4%

34.2%

25.9%

7.7%

26.7%

20.0%

15.4%

19.0%15.8%15.4%

40.0%

23.1%

3.4%0.0%

5.1%

0%

10%

20%

30%

40%

50%

60%

2001 2002 2003 2001 2002

None 1 to 3 calls 4-10 calls 11 to 40 calls More than 40 calls


In addition, we analyzed provider complaints to ValueOptions. Balance billing and ValueOptions policies and procedures were matters of significant concern to providers, though quality of care complaints were even more numerous. In 2003, Quality of Service remained the most frequent reason for complaint, with grievances, claims, and policies and procedures following. 5. Utilization Management

Fact Finders surveys found that most providers rated ValueOptions procedures for certifying care as easy, and even more rated certification decisions as appropriate. (See Charts 20 and 21.) However, while the number of providers experiencing procedures as easy increased, facility administrators found procedures increasingly difficult, with 40% rating them so in 2002.


CHART 20 VALUEOPTIONS PROVIDERS : PERCENT RATING VALUEOPTIONS’

PROCEDURES TO CERTIFY CARE AS EASY (VS. DIFFICULT)

74.3%

89.2%

84.2%

71.4%

63.6%

0%

20%

40%

60%

80%

100%

2001 2002 2003


CHART 21 VALUEOPTIONS PROVIDERS : PERCENT RATING VALUEOPTIONS’

COVERAGE DECISIONS AS APPROPRIATE FOR CLINICAL CONDITIONS (VS. NOT APPROPRIATE)

78.6%

89.2%87.5%80.0%

78.9%

0%

20%

40%

60%

80%

100%

2001 2002 2003



A 2001 Fact Finders survey addressed members’ perceptions of the appropriateness of HPHC’s decisions to authorize their outpatient and inpatient care. While most members were satisfied with the number of approved outpatient visits, more than a quarter (27.4%) was dissatisfied. This seems quite high for the year when outpatient visit limitations were relaxed under parity laws, and there was little actual review of outpatient visits until the 24th visit. In subsequent years, the rate of dissatisfaction dropped considerably, falling to 13% for commercial members and 11% for Medicare members, despite the introduction of more frequent reviews. A smaller share of the members who used hospital care – 13.3% - were dissatisfied with the number of approved days in the hospital in 2001, but their share grew in 2002 when a full 40% were dissatisfied. In 2003, rates of dissatisfaction dropped, but the 29% for commercial remained quite high, while among Medicare members only 11% were dissatisfied. This suggests that making the inpatient review process less frequent did not necessarily make it less rigorous in terms of authorization decisions. It also suggests a difference in the perceptions of providers, who mostly rated ValueOptions clinical decisions as appropriate, and members who were not satisfied with inpatient authorization decisions. Peer Review data from 2001, summarized in Table 36, showed that HPHC members had a high chance – 52% for commercial members and 75% for Medicare members – of having ValueOptions’ service authorization decisions reversed by a peer reviewer not involved in the original decision. During the period, ValueOptions’ average time to make a decision was sometimes less than a half-day and seldom exceeded two days. We did not receive data for 2002 or 2003 on peer reviews.


Provider survey data suggests a rising trend in first level reviews over the period. Fact Finders found that facility administrators were much more likely than providers to have spoken to a peer advisor, and both were more likely to have contact with a peer advisor at the end of the period than the beginning. About 30% of providers, rising to almost 40% in 2002, and over half of administrators, rising to 70% in 2002, had spoken to a peer advisor. Ratings of peer advisors’ mastery of treatment issues were high. At least 80% of providers rated their mastery as adequate in all years. In 2001, all administrators rated their mastery as adequate, but in 2002, almost 30% rated mastery as inadequate – a dramatic change suggesting changes in personnel or review standards. In contrast, providers rated consistency between peer advisors and ValueOptions care managers fairly low, with 40% of providers in 2001 and more than a quarter in 2003 saying the two staff were inconsistent. Facility administrators were less critical, with almost 90% rating decisions as consistent. Again, we see a pattern with considerable change between years, suggesting changes in ValueOptions staff or decision making.

TABLE 36 VALUEOPTIONS PEER REVIEWS - MAY THROUGH DECEMBER 2001

Commercial Medicare

Number Per Thousand1 Number Per Thousand Total 559 0.68 75 1.27Disposition Number Percent Number Percent Approved 290 52% 56 75%Modified 9 2% 0% Denied 149 27% 9 12% Other 111 20% 10 13% 1Enrollment prorated on a seven-twelfths basis. Source: Peer review reports

If the peer review denies the appeal, the member or provider may file an appeal with ValueOptions. Table 37 shows all appeals to ValueOptions from all Massachusetts HPHC Health Plans for 2001 through 2003. The number of appeals increased considerably in 2003 and the pattern of appeals and of dispositions varied considerably over the period. Most appeals, ranging from three quarters to 94% were from or on behalf of members. Appeals from providers were between 20 and 25% except in 2002, when they represented only 6%. (This coincides with providers’ highest ratings of Value Option clinical decision making.) In 2001, most, three quarters, of appeals were upheld – that is ValueOptions affirmed the authorization decision of its peer review process, perhaps because many modifications

TABLE 37 VALUEOPTIONS APPEALS

FOR ALL HPHC PLANS IN MASSACHUSETTS 2001-2003

2001 2002 2003 Number Percentage Number Percentage Number Percentage

Member appeals 269 74% 343 94% 356 80%Provider appeals 96 26% 21 6% 88 20% External appeals 1 0% 0 0 Total appeals 365 100% 364 100% 444 100%Disposition All Appeals Member Appeals Upheld 269 74% 224 65% 98 27% Modified 4 1% 9 3% 13 4% Overturned 92 25% 110 32% 246 69% Source: ValueOptions/Harvard Pilgrim Health Care Appeals Summary for Massachusetts, Jan. through Dec. 2001, 2002 and 2003


get made during peer reviews. However, this dropped to 65% in 2002 and precipitously to 27% in 2003. This shows an extraordinary change in disposition of appeals that greatly increased members’ chances of having the original decision reversed in their favor. This may reflect a tighter approach to authorization from the New York staff that had to be modified to meet the enhanced access to care required to comply with Massachusetts’ parity law. Members may also appeal to HPHC. Appeals to HPHC increased more than peer reviews between 2000 and 2001. In 2002 and 2003, the number of Level II appeals dropped considerably, not surprising given the greatly reduced number of appeals that were upheld in Level I. 6. Coordination of Care

Increasingly, people are receiving mental health medications prescribed by their primary care physicians. From 2001 to 2003, surveys of members using ValueOptions’ services found that psychiatrists prescribed medications for at least two-thirds of those whose treatment included medications. Personal physicians prescribed psychotropic medications for 11% to 13%. It should be noted that this survey group had used specialty mental health services managed by ValueOptions. Additional HPHC members are prescribed psychotropic medications by their PCP, but do not get ValueOptions’ services. When specialty providers treat mental health conditions, it is important that this care and any medications be coordinated with care that the person may be receiving for non-mental health conditions. This requires that behavioral health providers – with appropriate client consent – communicate with primary care physicians. A variety of surveys of members, primary care physicians and ValueOptions providers found differing perspectives on the consistency

with which primary care physicians and specialty mental health providers communicate about the care of shared clients. Members and ValueOptions providers consistently reported more communication than primary care providers, who indicated in 2001 that that only 16% of PCPs had contact with mental health practitioners for most or all of their cases who were seeing mental health practitioners and 41% percent said they had contact for few cases. In response to these results, ValueOptions initiated quality improvement activities that stressed: • Addressing coordination of care in mental health

provider forums, HPHC Medical Directors’ Meetings, policy manuals and newsletters;

• Having ValueOptions care managers instruct providers to notify PCPs when one of their patients is admitted to a psychiatric hospital; and

• Treatment Record Review audits to assess whether coordination of care is documented.

In addition, HPHC’s case management program coordinates with ValueOptions for members with a serious or complex behavioral health condition or a co-occurring medical condition. HPHC has also recognized that people with chronic conditions are more likely to be depressed. HPHC case managers therefore administer a validated three-question depression-screening tool for their clients with chronic illnesses. When potential depression is identified, they notify the PCP and make a referral to ValueOptions. They are also utilizing a risk assessment tool for new Medicare enrollees, and are working to update the behavioral health questions to better apply to older individuals. HPHC follows-up if the screening survey is not returned. In addition, HPHC has recognized the increasingly important role PCPs play in identifying and treating mental health conditions and has posted guidelines for depression detection in primary care developed jointly by Value/Options and HPHC on HPHC’s website.


7. DOI Behavioral Health Measures

In 2003, the Massachusetts Division of Insurance initiated new reporting requirements for provision of mental health and substance abuse services. We found enough consistency between different health plans in their reporting of these data, to feel that they represented a reasonably accurate snapshot of the provision of behavioral health care during 2003. However, insufficient data for Medicare cost was reported to allow for analysis. Table 38 suggests that HPHC is providing a higher level of access to non-physician mental health outpatient care than other HMOs, especially for its Medicare Riskpopulation. However, Individual and Group members may have less access to psychiatry than other HMOs. HPHC showed differences in its relative use of community-based intermediate care, using more for Medicare Risk members and less for Individual members than other HMOs. However, the relatively low level of use of intermediate care by HPHC Individuals in comparison to other HMOs may well be offset by higher levels of access to outpatient care.

TABLE 38 OUTPATIENT MENTAL HEALTH - ENCOUNTERS PER THOUSAND – 2003


HPHC Other HMOs HPHC Other HMOs

Plan Type Physician Non-

physician Total Physician Non-

physician Total Intermediate

MH Intermediate

MH Group (all ages) 127.5 712.8 840.3 162.1 581.0 743.1 11.4 12.9Medicare Risk 145.5 312.8 458.3 101.3 165.4 266.7 12.8 1.4Individual 269.4 1032.9 1302.3 311.2 811.4 1122.6 14.2 30.2

Source: MA Division of Insurance 2003 Supplemental Utilization Report

Table 39 shows that HPHC members utilized more psychiatric inpatient days per thousand members than did other HMOs, with group members using 60% more


TABLE 39 INPATIENT MENTAL HEALTH - ENCOUNTERS PER THOUSAND – 2003



Plan Type

MH Days per

Thousand

Average MH Length

of Stay

MH Days per

Thousand

Average MH Length

of Stay

Intermediate MH Days per

Thousand

Average Length of Stay

Intermediate MH Days per

Thousand


Group 21 6.5 13 4.0 3.3 5.8 1.5 1.9Medicare Risk 81 13.2 64 7.3 0.5 2.7 0.6 1.1Individual 49 8.5 34 6.0 0.9 2.7 2.0 1.2 Source: MA Division of Insurance 2003 Supplemental Utilization Report

days than other HMOs, Medicare Risk members 27% more and individual members almost 50% more. However, this differential was due to HPHC’s longer lengths of stay. The number of inpatient admissions per thousand was lower for HPHC’s Medicare Risk and Individual members than for other HMOs. HPHC’s group members used more intermediate 24-hour care than other HMOs, due to longer lengths of stay rather than admission rates. But HPHC’s Medicare Risk and Individual members were less likely to use intermediate 24 hour than other HMOs, despite longer average lengths of stay. There may be a number of reasons for the patterns observed. Since this is the first year of reporting, unrecognized differences in counting services may create apparent differences in utilization patterns. HPHC may be more attractive to individuals with mental health problems, and may have a caseload with more mental health treatment needs. However, it appears that HPHC members have relatively good access to outpatient and inpatient care. They may profit from greater access to intermediate levels of care, and to outpatient psychiatry.

TABLE 40 OUTPATIENT SUBSTANCE ABUSE - ENCOUNTERS PER THOUSAND – 2003



Plan Type Physician Non-

physician Total Physician Non-

physician Total Intermediate

MH Intermediate

MH Group (all ages) 1.4 20.9 22.3 3.1 32.9 36.0 7.2 7.91Medicare Risk 1.2 7.4 8.6 0.3 1.4 1.7 1.2 0.65Individual 3.0 34.8 37.8 11.2 76.8 88.1 16.4 13.49

Source: MA Division of Insurance 2003 Supplemental Utilization Report

HPHC group and individual members were considerably less likely to use outpatient substance abuse services than members of other HMOs. Individual members, in particular, were less than half as likely to use outpatient substance abuse services. However, HPHC Medicare Risk members had a much higher rate - over five times - of using substance abuse services than members of the other HMOs. Use of intermediate community services showed a somewhat different pattern. Though Medicare Risk members had a rate of utilization twice as high as for other HMOs, individual HPHC members were also somewhat higher, and group members were slightly lower. Use of inpatient substance abuse


TABLE 41 INPATIENT SUBSTANCE ABUSE - ENCOUNTERS PER THOUSAND – 2003



Plan Type

SA Days per

Thousand

Average SA Length

of Stay

SA Days per

Thousand

Average SA Length

of Stay

Intermediate SA Days per

Thousand


Intermediate SA Days per

Thousand


Group 7.4 3.6 6 3.4 0 0 1.2 2.5Medicare Risk 3.5 5.2 5 5.7 0 0 0.2 1.6Individual 15.5 3.9 7 2.9 0 0 0.7 1.6 Source: MA Division of Insurance 2003 Supplemental Utilization Report

services showed an opposite pattern. HPHC group and individual members used more days per thousand and had longer lengths of stay than in other HMOs, while its Medicare Risk members used quite a bit fewer inpatient days and had a slightly shorter length of stay. The high rates of outpatient substance abuse treatment among HPHC’s Medicare Risk members may prevent them from needing the more intensive inpatient care, while group and individual members, who get lower rates of outpatient care, may disproportionately use hospital care. HPHC reported no use of intermediate 24-hour substance abuse care, but we do not know whether this meant that no services were used or no data was reported. Overall, it appears that HPHC’s group and individual members are not getting as much access to outpatient substance abuse care as other HMOs, which may contribute to their high rates of using inpatient care.

8. HEDIS Behavioral Health Measures

HEDIS measures are available for all four years and they have a consistent methodology across HMOs. However, though they exclude Medicare Risk members, they do not stratify for other membership types and thus have relatively little ability to account for case mix differences. Table 42 contains these measures for HPHC, comparing them to the state and national averages.

TABLE 42 HEDIS MENTAL HEALTH MEASURES - HPHC COMPARED TO STATE AND NATIONAL AVERAGES

2000 2001 2002 2003

HPH

C

(HM

O/P

OS

com

bine

d)

MA

ave

rage

(H

MO

/ PO

S)

Nat

iona

l A

vera

ge

(HM

O/P

OS)

HPH

C

(HM

O/P

OS

com

bine

d)

MA

ave

rage

(H

MO

/ PO

S)

Nat

iona

l A

vera

ge

(HM

O/ P

OS)

HPH

C

(HM

O/P

OS

com

bine

d)

MA

ave

rage

(H

MO

/ PO

S)

Nat

iona

l A

vera

ge

(HM

O/P

OS)

HPH

C

(HM

O/P

OS

com

bine

d)

MA

ave

rage

(H

MO

/PO

S)

Nat

iona

l A

vera

ge

(HM

O/ P

OS)

Mental Health Ambulatory Care 9.89% 7.08% 4.55% 10.11% 7.67% 5.14% 10.27% 8.1% 5.17% 10.53% 8.26% 5.29% Day/Night Care .11% .08% .17% .1% .1% .13% .1% 0.11% .1% 0.12% 0.11% 0.12% Inpatient .25% .23% .23% .21% .26% .26% 0.25% 0.22% 0.25% 0.27% 0.25% 0.23%Overall 9.92% 7.12% 4.63% 10.14% 7.75% 5.21% 10.31% 8.15% 5.28% 10.57% 8.32% 5.4% Discharges per thousand 3.57 3.07 2.63 3.4 3.43 2.83 3.93 3.54 2.81 4.24 3.45 2.77

Average length of stay 8.01 days

6.77 days

5.98 days

7.66 days

7.25 days

6.11 days

6.87 days

5.96 days

7.17 days

6.2 days

7.53 days

5.99 days

Source: NCQA Quality Compass 2001, 2002, 2003, and 2004


Consistent trends were seen in overall use of mental health care and in utilization of ambulatory care. Utilization increased for HPHC, Massachusetts as a whole, and nationally. HPHC had considerably higher penetration than the national average and was also higher than the Massachusetts average for both measures, though its margin decreased over time. The rate of members using day/night care was relatively similar in HPHC, Massachusetts and nationally over most of the period, and stayed similar over time. Rates of use of inpatient care and the amount of inpatient care provided, however, was variable. The Massachusetts and national averages did not show a consistent trend. HPHC had higher rates of members using inpatient care than either the Massachusetts or national average, except in 2001, a one-year drop. HPHC’s length of stay decreased considerably, putting it well below the Massachusetts average and making it similar to the national average, while continuing to have the highest rate of discharges. These results are consistent with the profile of utilization shown by Division of Insurance data for 2003 and suggest that HPHC members have better than average access to outpatient services, equivalent access to day/night care, and higher access to inpatient care. However, the high rates of inpatient care and longer lengths of stay could be indications of either a higher need population or of less effective preventive care. Table 43 shows that HPHC experienced consistent trends in provision of substance abuse services, beginning higher than the state and national averages, dropping in 2001 and then increasing, but not regaining beginning levels and ending lower than the state average. Nationally, overall utilization was remarkably stable over the four-year period, while Massachusetts experienced a trend of increasing use


TABLE 43 HEDIS SUBSTANCE ABUSE MEASURES - HPHC COMPARED TO STATE AND NATIONAL AVERAGES

2000 2001 2002 2003

HPH

C

(HM

O/P

OS

com

bine

d)

MA

ave

rage

(H

MO

/ PO

S)

Nat

iona

l A

vera

ge

(HM

O/P

OS)

HPH

C

(HM

O/P

OS

com

bine

d)

MA

ave

rage

(H

MO

/ PO

S)

Nat

iona

l A

vera

ge

(HM

O/ P

OS)

HPH

C

(HM

O/P

OS

com

bine

d)

MA

ave

rage

(H

MO

/ PO

S)

Nat

iona

l A

vera

ge

(HM

O/P

OS)

HPH

C

(HM

O/P

OS

com

bine

d)

MA

ave

rage

(H

MO

/PO

S)

Nat

iona

l A

vera

ge

(HM

O/ P

OS)

Chemical Dependency Ambulatory Care .43% .36% .29% .4% .38% .31% .37% .31% .39% 0.38% 0.44% 0.32%

Day/Night Care .1% .05% .03% .06% .07% .04% .07% .04% .05% 0.10% 0.07% 0.04%

Inpatient .15% .14% .09% .09% .14% .09% .15% .14% .09% 0.14% 0.15% 0.09%

Overall .51% .45% .35% .46% .47% .37% .47% .48% .37% 0.48% 0.53% 0.37%

Discharges per thousand 2.51 2.19 1.09 1.56 1.91 1.13 2.46 1.97 1.16 2.20 2.03 1.15

Average length of stay 4.56 days

3.71 days

4.94 days

3.93 days

4.03 days

5.12 days

2.78 days

4.05 days

5.12 days

3.11 days

4.07 days

4.78 days

Source: NCQA Quality Compass 2001, 2002, 2003 and 2004

of substance abuse services. Overall, HPHC’s members ended with somewhat less access to outpatient care, but higher or similar rates of access to day/night and inpatient care. However, its discharge rates were slightly higher and its average length of stays somewhat lower. This can be an indication that lengths of stay are not sufficient to fully institute a recovery process and result in additional admissions. These results are consistent with Division of Insurance utilization data and together suggest that substance abuse treatment is an area in which HPHC may not offer as much access as do other Massachusetts HMOs. However, in response to this report, HPHC reported that it had experienced difficulties understanding ValueOptions’ reporting conventions during this period, including how they categorized inpatient and outpatient services and inconsistencies in how they reported claims for members with both mental health and substance abuse diagnoses. If ValueOptions reported claims with both mental health and substance abuse diagnoses as mental health claims, it would elevate mental health utilization and depress substance abuse utilization, and might explain the patterns we observed in the HEDIS and Division of Insurance data. Because of the possibility that HPHC’s mental health and

substance abuse data are somewhat questionable, our conclusions about HPHC’s relative provision of mental health and substance abuse care should be considered tentative. However, HPHC’s combined level of provision of mental health and substance abuse care exceeds that of other Massachusetts HMOs, suggesting its overall provision of access to behavioral health services is high. Table 44 shows that HPHC has excelled on HEDIS mental health measures related to quality of care. It has ranked highest in Massachusetts in providing follow-up care after hospitalization within 7 and 30 days and has increased over time. In fact, its 30-day rates have probably reached a maximum level of performance at 93%. These measures indicate how well HPHC is able to link its members to continuing outpatient care after they have been hospitalized for a psychiatric condition.

A second set of measures concerns effective antidepressant medication management. HPHC usually exceeded both the state and the national averages on all three measures. These measures did not show as consistent a trend of improvement as did the follow-up measures. However, HPHC showed improvement on all measures at the end of the period.


TABLE 44 HEDIS MEASURES OF APPROPRIATE MENTAL HEALTH TREATMENT


2000 2001 2002 2003

HPH

C

(HM

O/P

OS

com

bine

d)

MA

Ave

rage

(H

MO

/ PO

S)

Nat

iona

l A

vera

ge

(HM

O/P

OS)

HPH

C

(HM

O/P

OS

com

bine

d)

MA

Ave

rage

(H

MO

/ PO

S)

Nat

iona

l A

vera

ge

(HM

O/ P

OS)

HPH

C

(HM

O/P

OS

com

bine

d)

MA

Ave

rage

(H

MO

/ PO

S)

Nat

iona

l A

vera

ge

(HM

O/P

OS)

HPH

C

(HM

O/P

OS

com

bine

d)

MA

Ave

rage

(H

MO

/PO

S)

Nat

iona

l A

vera

ge

(HM

O/ P

OS)

Follow-up after Hospitalization 7 days 68.83% 59.49% 48.23% 68.83% 59.29% 51.21% 72.58% 57.85% 52.69% 78.7% 62.47% 54.44%30 days 86.78% 80.34% 71.18% 86.78% 80.02% 73.18% 93.18% 80.06% 73.56% 91.09% 82.55% 74.42%Antidepressant Medication Management Optimal Practitioners Contact 28.83% 21.55% 27.49% 19.79% 30.03% 30.1% 19.18% 37.62% 32.46% 20.3%

Effective Acute Phase 65.33% 57.39% 63.19% 56.78% 66.7% 63.75% 59.8% 66.22% 63.32% 60.71%Effective Continuation Phase 49.44% 40.00% 48.22% 40.03% 51.96% 46.33% 42.8% 50.51% 47.57% 44.12%

Source: NCQA Quality Compass 2001, 2002, 2003 and 2004 and HPHC communication


9. Access to Psychotropic Medications

As shown in Table 45, antipsychotic use increased considerably, more than 20%, for both group and Medicare members. The rate of increase was fastest, 40% to almost 60%, for Tier 1 drugs. Tier 2 drugs, the most highly utilized tier, grew at 15% to 20%. This drug class was used much more intensively by First Seniority members. These results suggest that HPHC members have experienced increased utilization of these effective psychotropic drugs.

TABLE 45 COMMERCIAL AND FIRST SENIORITY CLAIMS PER THOUSAND

OF SPECIFIC DRUG CLASSES Commercial First Seniority Class

Description/ Tier 2000 2001 2002 2003

% Difference 2000-2003 2000 2001 2002 2003

% Difference 2000-2003

Antipsychotics, Atypical, Dopamine & Serotonin Antagonists Tier 1 0.9 1.3 1.4 1.6 42% 5 8 9 8 58% Tier 2 31 37 45 50 16% 96 114 106 120 19% Tier 3 0 1 1 0 - 2 1 1 Total 32 39 47 52 21% 101 124 116 129 23%Source: Attorney General RFI - Three Tier Analysis of Drugs in Selected Classes, 2000-2003

Table 45 - Definitions and Explanatory Notes Atypical antipsychotics are relatively new medications that are used to treat some of the more serious illnesses, such as schizophrenia. They are more effective than older medications for many people, and generally have less unpleasant side effects. However, they are among the most expensive drugs.

10. Other Outcome

Measures

Table 46 shows a reduction in the rate at which outpatient clients move to a higher level of care, with Medicare members showing a particularly dramatic reduction in the rate of


TABLE 46 VALUEOPTIONS PERCENT OF MEMBERS DISCHARGED FROM A LEVEL OF CARE

MIGRATING TO HIGHER LEVEL OF CARE 2001 2002 2003

Level of Care Commercial Medicare Commercial Medicare Commercial Medicare Outpatient 0.7% 2.5% 0.5% 1.4% 0.4% 0.8%Day Treatment 2.9% no discharges -Intensive Outpatient 2.7% 0.0% 6.3% - 5.5%Partial Hospitalization 2.9% 2.5% 8.4% 9.4% 10.0% 7.2%Residential 11.8% 12.5% 9.6% - 12.7% 12.5%Source: ValueOptions Monthly Migration to Higher Level of Care, 2001-2003

Table 46 - Definitions and Explanatory Notes Good clinical treatment should refer clients to the appropriate level of care to best meet their needs. Good treatment principles also call for treatment to be at the least restrictive level of care. That is, clients should be treated in the community rather than a residential or hospital setting as long as treatment goals can be met and clients are safe. ValueOptions reports on the number of clients who move to a higher level of care.

moving to more intensive care. Other levels of care are used by many fewer members, and may consequently vary considerably from year to year based on changes in the characteristics of the relatively small group. These other levels show an increase in the rate at which members move to a more intensive level of care. However, this may be an indication that more individuals are being offered these alternatives to hospitalization, and that they are not sufficient for some members. Table 47 shows considerable increases in readmission rates for most groups by the end of the period. The only reduction came for Medicare members discharged from mental health hospitals. Commercial members discharged from both mental health and substance abuse treatment and Medicare members discharged from substance abuse treatment were readmitted up to twice as frequently in 2003 as in 2001. For some groups, this was actually a decrease from 2002 levels. These data would suggest that, while HPHC members have relatively long lengths of stay (as compared to other Massachusetts HMOs) are receiving prompt services in the community (as indicated by HPHC’s HEDIS follow-up after hospitalization rates), these services are not successful in preventing a readmission to inpatient level of care.

TABLE 47

VALUEOPTIONS RATES OF READMISSION TO INPATIENT CARE AFTER DISCHARGE

2001 2002 2003 Mental Health Substance Abuse Mental Health Substance Abuse Mental Health Substance Abuse

Commercial Medicare Commercial Medicare Commercial Medicare Commercial Medicare Commercial Medicare Commercial Medicare

7 days 3.5% 3.5% 1.9% 6.7% 7.1% 10.4% 2.9 2.1% 7.0% 7.3% 2.7% 12.5%

30 days 9.6% 13.2% 7.7% 10.0% 16.3% 16.3% 13.9% 10.6% 15.2% 10.5% 12.8% 20.8%

90 days 16.2% 20.1% 15.9% 13.3% 24.2% 23.6% 25.3% 10.6% 24.8% 16.7% 24.2% 25.0%

Source: ValueOptions Monthly Recidivism Rates - Psychiatric vs. Substance Abuse 2001, 2002 and 2003

Table 47 - Definitions and Explanatory Notes The rate of readmission to hospital level care after a hospital discharge is an important measure of quality of behavioral health care. While readmission can be an important aspect of treatment for some individuals, in most cases it is regarded as undesirable and may indicate that the initial admission did not accomplish all that it should have and/or that follow-up care was not sufficient or effective. ValueOptions documents its rates of readmission to psychiatric and substance abuse hospital care at 7, 30, and 90 days after discharge.


11. Member Satisfaction

We analyzed several sources of information about members’ satisfaction with their behavioral health services. These included complaints, the Fact Finders member survey, and interviews with advocacy organizations. The most frequent complaints received by ValueOptions from its HPHC members had to do with quality of care or of service, followed closely by complaints about ValueOptions policies and procedures. Other concerns were appointment access and claims.

However, HPHC members surveyed by Fact Finders increasingly rated the quality of mental health services they

received quite highly. (See Charts 22 and 23.) Ninety-five percent rated their therapist as excellent, very good or good, and the percent of those completely, very, and somewhat satisfied increased from 87% to 94% for commercial and 95% for Medicare members. Most members, (77 to 86%), indicated that their general condition was better as an outcome of mental health treatment. (See Chart 24.) While there was some decline in those rating their outcomes as better, the small percentage (2.4%) that indicated that their condition was worse in 2001 dropped to nothing in 2003. More than half (57.6%) were very satisfied with their progress in 2001, growing to over two-thirds in 2003, while those who were not satisfied dropped from 8% to 2%. (See Chart 25.)

CHART 22 VALUEOPTIONS SURVEY OF HPHC MEMBERS:

PERCENT RATING THERAPIST GOOD, VERY GOOD OR EXCELLENT

94.7% 94.7%97.5% 95.0%

0%

20%

40%

60%

80%

100%

2001 2002 2003


PERCENT COMPLETELY, VERY OR SOMEWHAT SATISFIED WITH MENTAL HEALTH SERVICES

86.8%91.4% 93.8%

95.3%

0%

20%

40%

60%

80%

100%

2001 2002 2003

Source: Fact Finders 2001, 2002 and 2003 ValueOptions/Harvard Pilgrim Member Surveys.



PERCENT OF MEMBERS WHOSE GENERAL CONDITION IS BETTER, THE SAME OR WORSE

85.6%

77.4%82.1% 78.9%

21.2%16.8%

21.1%

12.0%

2.4% 1.4% 1.0% 0.0%0%

20%

40%

60%

80%

100%

2001 2002 2003 Commercial 2003 Medicare

Better About the same Worse


PERCENT OF MEMBERS SATISFIED WITH THEIR PROGRESS TOWARD TREATMENT GOALS

57.6%63.3%

68.0% 67.8%

32.4% 30.1% 30.5%34.8%

7.6%4.3%

2.0% 1.7%

0%

15%

30%

45%

60%

75%

2001 2002 2003 Commercial 2003 Medicare

Very satisfied Somewhat satisfied Not very satisfied

Source: Fact Finders 2001, 2002 and 2003 ValueOptions/Harvard Pilgrim Member Surveys.

Members were not highly impressed with the assistance they got from ValueOptions’ 800 number. Of the 48 respondents who had used it, one-third said that they did not get the information they needed on their first call. These percentages jumped in 2003 to 40% of commercial members and 60% of Medicare members. Initially, little more than one-third rated the accuracy of the information they got as excellent or very good. Almost as many (29.2%) rated it fair or poor. This improved somewhat in 2002 and stayed at that higher level for commercial members, but a third of Medicare members rated the accuracy of the information they got as poor. These figures indicate a significant worsening in ValueOptions’ responsiveness to member information needs in 2003, particularly for Medicare members. However, scores on the cultural sensitivity of phone staff was rated high. We also solicited feedback from mental health advocacy groups and sought feedback from individual HPHC members. There was considerable response about the first two years of our assessment period which identified issues such as members feeling pressure to limit their inpatient stays, problems with ValueOptions’ crisis provider and the added complexity of communicating with both HPHC (for medication related concerns) and ValueOptions for treatment concerns. One HPHC family described expending considerable energy to get the right residential and inpatient mental health services, and had difficult experiences accessing crisis care. However, one organization commented that the ValueOptions hospital network and substance abuse services were probably an improvement over the more limited HPHC resources for inpatient and substance abuse services that they replaced. For the final two years, there was less sense


that HPHC was different from other HMOs, though some were aware of HPHC’s low provider payment and burdensome authorization procedures. A number of the difficulties they noted, such as difficulties in finding psychiatric care, were noted as problems of the overall Massachusetts health system.

B. PRESCRIPTION COVERAGE

HPHC’s pharmacy program changed subcontractors close to the time of the receivership, as it began working with a new pharmacy benefits manager (PBM), MedImpact, and coincidentally, introduced a tiered pharmacy program that established different co-pays for drugs assigned to three tiers. This tiered co-pay system was introduced to members at the time their employer’s contract was renewed. An HPHC internal committee is responsible for assigning a new drug to a tier based on literature review and clinical discussion. Tier co-pays have generally increased over the 4 years, but there has been no change in the PBM or its basic processes during the four-year period of this analysis. 1. Pharmacy Network

Though the number of pharmacies in HPHC’s network decreased overall between 2000 and 2003, due to falling membership, the relative number of pharmacies per thousand members actually increased somewhat. (See Table 48.) The rate of network pharmacies per thousand members varies by region, with MetroWest having the lowest rate and the Western region having a very elevated rate. However, many towns in MetroWest have two or more pharmacies. The high rates of the Western region are partly due to its small HPHC membership and may not reflect greater access. Overall, pharmacy access does not appear to be a problem. 2. Pharmacy Appeals

Appeals per thousand regarding pharmacy services were the most frequent type of appeal for commercial members in 2000, when the tiered


TABLE 48 HPHC PHARMACY NETWORK BY REGION

2000 2001 2002 2003

Region Num

ber o

f Ph

arm

acie

s

Phar

mac

ies

per

Thou

sand

Num

ber o

f Ph

arm

acie

s

Phar

mac

ies

per

Thou

sand

Num

ber o

f Ph

arm

acie

s

Phar

mac

ies

per

Thou

sand

Num

ber o

f Ph

arm

acie

s

Phar

mac

ies

per

Thou

sand

Boston 115 1.4 115 1.7 103 1.7 104 1.6

Metro West 236 1.1 225 1.3 209 1.4 209 1.4

North East 157 2.6 119 2.5 130 2.8 114 2.2

South East 373 1.3 390 1.8 324 1.6 354 1.8

Central 123 2.0 119 2.9 105 2.9 125 3.2

Western 212 14.1 186 22.9 155 22.2 148 23.4

Grand Total 1,216 1.5 1,154 2.0 1,027 2.2 1,054 2.2

Source: HPHC Pharmacy Network List, 2000, 2001, 2002 and 2003

pharmacy benefit was introduced. However their frequency decreased 40% between 2000 and 2003, and they fell to the fifth most frequent reason in 2003. Appeals regarding the three-tier formulary decreased considerably, while those regarding drugs not being covered or the criteria for coverage not being met became more significant. This pattern suggests that much of the appeal volume was related to the introduction of the tiered formulary and that members learned to work with the formulary fairly quickly. 3. Pharmacy Cost and Utilization

We used data from Express Scripts, Inc., a pharmacy management company, to provide a point of comparison to HPHC. They analyze a sample of scripts from their customers to report on national trends in their mixed commercial population that was approximately one-third managed care in 2001 and 25% managed care in 2003 with the balance fee for service. The full retail list price of the medication is used for cost. They found a 17.2% growth in overall per member per year pharmacy costs for their managed care members in 2001, 18.5% growth in their entire (managed care plus fee for service) membership in 2002 and 15.5% in 2003. This was the lowest rate of increase experienced since 1997. Overall, per member costs increased 60.4% between 2000 and 2003. In 2001, they attributed 56.8% of the increase to a rise in prescription costs, 37.3% to an increase in utilization, and 5.9% to the introduction of new drugs. In 2003, 48% of the increase was due to a rise in costs, 4.7% was due to increases in utilization, and 4.5% was due to the use of new drugs not available in the prior year. Thus, over the period, utilization became a less important driver than price of existing drugs.

HEDIS data, as shown in Table 49, also show a pattern of growth for its wholly managed care sample similar to the trends described above. Nationally, utilization grew 17% over the four-year period, while average prescription costs increased more steeply – at 47%. This suggests an overall rate of growth in pharmacy expenditures somewhat higher than that of the Express Scripts sample. Massachusetts showed both higher utilization and costs than the national average and grew faster than the national average, and its utilization rate increased by 25%, considerably more than the national average, while its costs increased at a similar rate, 45%. According to these figures, HPHC increased most of all. While its utilization was at a similar level to the average for Massachusetts HMOS in 2000, its 34% rate of growth resulted in much higher utilization than the Massachusetts average by 2003. Its average cost per prescription was somewhat higher than the average for Massachusetts in 2000, but grew at a somewhat higher rate, 49%, determining that it would remain above the state and national average in 2003. This suggests that HPHC members have a high level of access to pharmacological treatment. Depending on cost sharing arrangements, however, they may be paying somewhat higher prices than they would for other insurers.


TABLE 49 HEDIS MEASURES OF OUTPATIENT DRUG UTILIZATION HPHC COMPARED TO STATE AND NATIONAL AVERAGES

2000 2001 2002 2003

HPH

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Average number of prescriptions per member per year

8.46 8.53 8.75 10.56 9.5 9.0 10.81 10.1 10.06 11.32 10.69 10.21

Average cost of prescriptions $32.35 $30.17 $29.11 $37.12 $34.90 $32.45 $42.6 $39.84 $37.49 $48.25 $43.89 $42.68

Source: NCQA Quality Compass 2001, 2002, 2003 and 2004 We also analyzed detailed data from HPHC’s standard reports on pharmacy cost and utilization. Table 50 shows that HPHC’s average cost of prescriptions per thousand increased 13% between 2000 and 2003, much less than the per member increase in the Express Scripts sample cited above or the 49% growth shown in HPHC’s HEDIS data. The expenditures presented are the net cost to HPHC after the member co-pay is deducted, and are thus not entirely consistent with the full price data used in HEDIS and the study described above. Increased co-pays for the higher tiers would have absorbed some of the cost increases occurring in this period and shifted some utilization from higher priced to lower priced medications. Cost changes differed considerably between different classes of medications, with some classes actually decreasing. The overall increase in HPHC payments for medications is due to some combination of increases in the price of medications, the addition of new medications, or in the percentage of members using medications, but our data do not allow us to analyze their relative contributions. The most dramatic decreases were in three drug classes used to treat pigmentation disorders, weight reduction, and pain management. Only pain management drugs are used by many individuals. Significant increases occurred for drugs to treat other respiratory disorders, psoriasis and eczema, and other drugs.



TABLE 50 HPHC COMMERCIAL PLANS

AVERAGE PRESCRIPTION EXPENDITURE PER THOUSAND BY MAJOR DRUG CLASS

Class Description 2000 2001 2002 2003

% Difference 2000-2003 Class Description 2000 2001 2002 2003


Allergy $525 $541 $571 $452 -14% Hormonal Deficiency $442 $440 $350 $192 -57% Antiemesis/Antivertigo $31 $32 $33 $33 6% Immunization $3 $3 $2 $1 -67%

Asthma $18 $414 $436 $440 $446 8% Immunosuppression/ Modulation $16 $19 $20 25%

Autonomic Nervous System Disorders $45 $42 $35 $33 -27% Infectious Disease – Bacterial $821 $860 $849 $873 6%

Behavioral Health – Antidepressants $700 $790 $883 $917 31% Infectious Disease – Fungal $43 $45 $49 $50 16%

Behavioral Health – Other $392 $434 $469 $503 28% Infectious Disease – Miscellaneous $18 $21 $21 $23 28%

Cardiovascular Disease - Arrhythmia $9 0% $10 $9 $9 Infectious Disease – Parasitic $42 $43 $42 $42 0%

Cardiovascular Disease – Cardiac Stimulant $26 $25 $20 $19 -27% Infectious Disease - Viral $63 $68 $83 $86 37%

Cardiovascular Disease - Hypertension $1,222 $1,330 $1,350 $1,393 14% Inflammatory Disease $398 $419 $422 $417 5%

Cardiovascular Disease – Lipid Irregularity $436 $4 $504 $550 $582 33% Local Anesthesia $4 $4 $4 0%

Cardiovascular Disease – Miscellaneous Agents $8 $9 $11 $12 50% Lower Gastrointestinal

Disorders–Bowel Inflammat $40 $41 $41 $40 0%

Cardiovascular Disease – Vasodilation $36 $33 Disorders - Other $37 $41 $27 $25 -31% Lower Gastrointestinal $30 $33 37%

Contraception/Oxytocics $654 20% Miscellaneous Agents $11 $10 $12 20% $545 $595 $639 $10Cough and Cold $124 $125 $120 $118 -5% Neoplastic Disease $41 $46 $11 $13 -68%

Dermatology - Acne 5% $83 $89 $92 $87 Neurological Disease – Miscellaneous $8 $9 $46 $47 488%

Dermatology – Antiinfective $133 $139 $134 $125 -6% Oral/Pharyngeal Disorders $17 $19 $11 $12 -29%Dermatology – Antiinflammatory $124 $10 $127 $127 $120 -3% Other Drugs $14 $24 $24 140%

Dermatology – Antipruritic Drugs $0 $0 $0 $0 0% Other Respiratory Disorders $0 $0 $29 $31 310%

Dermatology – Miscellaneous $20 $22 $21 $19 -5% Pain Management - Analgesics $452 $478 $0 $0 -100% Dermatology – Pigmentation Disorders $1 $0 $0 $0 -100% Parkinson’s Disease $15 $16 $502 $518 3,353%

Dermatology - Psoriasis/Eczema $8 -92% $12 $17 $21 163% Seizure Disorder $206 $224 $15 $16

Diabetes $270 $418 55% Skeletal Muscle Disorder $75 $81 $88 $294 $414 $86 17%

TABLE 50 (CONTINUED)

HPHC COMMERCIAL PLANS AVERAGE PRESCRIPTION EXPENDITURE PER THOUSAND BY MAJOR DRUG CLASS

Class Description 2000 2001 2002 2003

% Difference 2000-2003 Class Description 2000 2001 2002 2003


Ear – General Disorders $29 $31 $33 $31 7% Smoking Cessation $6 $5 $4 $3 -50%

Electrolyte Reguation $33 $34 $30 $31 -6% Upper Gastrointestinal Disorders – Digestive $3 $3 $2 $2 -33%

Endrocrine Disorder - Fertility $79 $93 $102 $108 37% Upper Gastrointestinal

Disorders – Spastic Disease $14 $14 $14 $13 -7%

Endrocrine Disorder - Other $72 $102 $126 $141 96% Upper Gastrointestinal Disorders – Ulcer Disease $343 $378 $422 $451 31%

Endrocrine Disorder - Thyroid $251 $274 $286 $293 17% Urinary Tract – Functional

Disorders $48 $55 $60 $65 35%

Eye – General Disorders $99 $100 $100 $99 0% Vaginal Disorders $27 $29 $31 $32 19%

Eye - Glaucoma $46 $48 $44 $47 2% Vitamin and/or Mineral Deficiency $135 $152 $156 $158 17%

Eye – Miscellaneous $0 $0 $0 $0 0% Weight Reduction $2 $0 $0 $0 -100%Gout and Related Diseases $40 $43 $43 $45 13% Hematological Disorders $52 $60 $63 $75 44% Grand Total $9,187 $9,907 $10,380 $10,382 13% Source: HPHC Prescriptions by tier by broad pharmacy class, 2000, 2001, 2002 and 2003

We looked in more detail at the top five drug classes for which the greatest amount was spent, analyzing data on the number of members actually using prescription medication, and the number of prescriptions written. The top five changed a little over the four years, as shown.


As presented in Table 52, these data allow us to better understand the relative importance of price changes and utilization changes in the drug classes accounting for the most expense. Each class was compared to the Express Script national sample. The sample represents about one-third managed care and two-

TABLE 51 HPHC TOP FIVE PHARMACY CLASSES

2000 2001 2002 2003 Allergy (Antihistamines) X X X

Behavioral Health – Antidepressants X X X X

Cardiovascular Disease – Hypertension X X

Cardiovascular Disease - Lipid Irregularity X X X X

Upper Gastrointestinal Disorders - Ulcer Disease X X

Infectious Disease - Viral X X

Other Behavioral Health X Source: Attorney General RFI - Three Tier Analysis of Drugs in Selected Classes

thirds non-managed care. In contrast to the net cost figures presented for HPHC, Express Script costs are average wholesale prices and they account only for price changes, where HPHC costs are the net effects of price changes and changes in the mix of drugs being prescribed.

TABLE 52

HPHC COMMERCIAL CLAIMS PER THOUSAND DRUG CL C E S T TOP FIVE ASSES OMPARED TO XPRESS CRIP SAMPLE

Claims per thousand Net HPHC cost per claim Class Description/ Tier 2000 2001 2002 2003 % Difference 2000 2001 2002 2003 % Difference

Cardiovascular Disease – Hypertension Tier 1 634 714 13% $4.68 $5.43 16% Tier 2 432 461 7% $26.54 $25.97 -2% Tier 3 72 63 -13% $20.03 $16.38 -18% Total 1,138 1,238 9% $13.95 $13.64 -2%

Express Scripts Average 710 770

Not Included in Top 5

9.8% Express Scripts

Inflation Rate


4%

Cardiovascular Disease - Lipid Irregularity Tier 1 24 25 28 $18.94 72% 29 23% $15.95 $17.98 $27.42

Tier 2 380 443 $74.38 509 527 39% $69.39 $68.39 $78.92 14%

Tier 3 6 7 12 26 335% $40.08 $45.24 $41.80 $41.21 3%

Total 411 550475 582 42% $65.75 $65.39 $70.79 $74.63 14%

Express Scripts Average 490 570 650 760 55% Express Scripts Inflation Rate 18%

Behavioral Health – Antidepressants Tier 1 153 198 282 309 102% $5.24 $23.45 $18.30 $18.52 254%

Tier 2 523 560 588 602 $79.25 15% $77.22 $76.45 $74.25 3%

Tier 3 12 12 14 5 -54% $90.38 $76.43 $66.79 $68.16 -25%

Total $61.49 688 883 770 917 33% $62.82 $56.29 $58.69 -5%


Upper Gastrointestinal Disorders - Ulcer Disease Tier 1 107 113 117 183 71% $27.40 $18.93 $9.30 $49.94 82%

Tier 2 204 239 302 266 31% $121.16 $121.87 $125.23 $127.12 5%

Tier 3 18 10 3 1 -94% $78.14 $87.01 $111.38 $120.66 54%

Total 329 362 422 451 37% $88.29 $88.84 $92.90 $95.72 8%



TABLE 52 (CONTINUED) HPHC COMMERCIAL CLAIMS PER THOUSAND

TOP FIVE DRUG CLASSES COMPARED TO EXPRESS SCRIPT SAMPLE

Claims per thousand Net HPHC cost per claim Class Description/ Tier 2000 2001 2002 2003 % Difference 2000 2001 2002 2003 % Difference

Allergy Tier 1 26 26 25 -2% $4.12 $4.48 $5.77 40%

Tier 2 400 413 451 13% $36.66 $37.98 $43.90 20%

Tier 3 94 91 94 0% $41.55 $41.43 $50.55 22%

Total 520 571531 10% $35.91 $36.92 $43.31 21%

Express Scripts Average 290 330 370 28% Express Scripts Inflation Rate

20%

Infectious Disease – Viral Tier 1 26 $24.21 -8% $10.91 $9.24 -15%

Tier 2 20 $53.00 7% $432.18 $396.78 -8%

Tier 3 7 $8.88 72% 29% $275.15 $473.63Total 83 4% $86.09 $285.47 $295.70 4%

Express Scripts Average


60 70 17%


Express Scripts Inflation Rate 7%

HPHC response to Attorney General RFI - Three Tier Analysis of Drugs in Selected Classes, 2000-2003 Express Scripts, Inc. 2001, 2002 and 2003 Drug Trend Report, www.express-scripts.com, Tables 2 and 3.

Table 52 - Definitions and Explanatory Notes Generic drugs are assigned to Tier 1, which has the lowest co-pay. New drugs with a generic or lower priced alternative are assigned to Tier 3 with the highest co-pay. Others fall in Tier 2, whose co-pay falls in the middle.

Cardiovascular disease/hypertension drugs were the most highly utilized drug class, both for HPHC and in the Express Script sample at the beginning of the period. HPHC members had considerably higher utilization of these drugs than the Express Script’s sample, suggesting a high degree of access. Overall, HPHC’s rate of growth for this class was similar to that of the Express Script sample. Express Script attributes this growth to the increasingly aggressive treatment of high blood pressure. Hypertension drugs are not particularly expensive, but they did experience price changes. Costs rose for the most inexpensive drugs, and fell for the more expensive drugs in Tiers 2 and 3, for an overall reduction of 2% in HPHC’s costs. Express Scripts showed an almost 5% increase in total wholesale cost.


http://www.express-scripts.com/

Because these drugs are relatively low priced, they fell from the top five after 2001, even though their utilization remained high.

Drugs to control lipids experienced the highest rate of growth in utilization in HPHC, as it did in the Express Script sample, which moved it into the top spot for Express Scripts. However, HPHC’s utilization rate fell well below that in the Express Script sample, and did not increase as rapidly, making it HPHC’s third drug class. This differential raises the question about whether these drugs are prescribed as much as they should be. This class of drugs is more expensive than those used to treat hypertension. Overall costs to HPHC for this class rose dramatically in Tier 1, but by 14% overall, less than the price inflation rate of 18%. Antidepressants are both quite costly and used by a considerable number of people. This class rose to become HPHC’s top drug class in 2003, but was rated third in the Express Scripts sample. Both groups showed a dramatic change in utilization between 2000 and 2003, reflecting, at least in part, the introduction of a generic version of the drug Prozac in 2001. This increased utilization in Tier 1 by over 100%, while raising the costs to HPHC for that tier 250%. Utilization also increased in Tier 2, while costs were stable. Utilization of Tier 3 drugs, much less significant than utilization levels in Tiers 1 and 2, fell considerably and costs dropped. HPHC showed a significantly higher rate of utilization of anti-depressants than the Express Script sample, but didn’t grow as fast. HPHC costs actually dropped slightly, despite a 21% increase in prices.

Drugs to treat ulcer disease were the most expensive in the top 5 tiers, but are not quite so widely used as some of the other drug classes listed in this table. HPHC does not prescribe these drugs as frequently as the Express sample, but utilization grew at a similar rate. Some of the growth in

this group of drugs is in response to advertising direct to the consumer. Most HPHC utilization falls into Tier 2, but most of the growth was in Tier 1, which almost doubled its average cost. Utilization of Tier 3 declined precipitously. However, it appears that much of the reduction in that tier was due to reductions in prescriptions for Pepcid, a drug also available in over the counter versions, and in drugs also listed in Tier 2, where their utilization rates increased. Therefore, this utilization reduction may not have reduced access substantially. HPHC’s cost for this class of drugs was contained to a growth rate of 8%, considerably less than the price inflation rate.

Allergy medications are moderately priced within the top five tiers, and their Tier 2 options are used at quite a high rate. Utilization in this tier increased a little, by 13%. HPHC’s utilization was much higher than that in the Express Script sample, but did not grow as fast. This drug category was affected by having a major drug, Claritin, released for over the counter distribution, which likely reduced the use of prescription Claritin and possibly other antihistamine drugs. These utilization patterns suggest that HPHC makes this class of drugs widely available, and may have met most of the need. HPHC costs for Tier 2 drugs increased by 20%, similar to the price inflation rate.

Antiviral medications entered the top five in 2002, due to high cost and increasing utilization, partly driven by a flu epidemic in the fall of 2003. This category includes both tamiflu and the Herpes and HIV anti-virals. HPHC members used these medications at higher rates than the Express Script sample. The least used Tier 3 medications experienced substantial growth in both utilization (29%) and cost (72%), while the other tiers experienced small or declining utilization growth and drops in average price. HPHC’s overall costs for this class did not grow as fast as price increases.


Overall, this analysis suggests that HPHC experiences relatively high utilization in 4 of the 6 drug classes, when compared to a primarily non-managed care commercial population, and has experienced similar rates of growth in three of the classes. In most of these classes, ‘Express Scripts’ sample experienced the same or higher rates of growth, tending to somewhat lessen the difference with HPHC. Utilization of lipid management drugs and those to treat ulcer disease are significantly less for HPHC, and may be a reason for concern, especially for lipid lowering drugs where the gap is growing. HPHC’s tiered pharmacy program appears to be effective in sharing drug price increases with members, in encouraging use of Tier 1 drugs and in reducing utilization among Tier 3 drugs. In general, HPHC’s expenses have been less than drug price increases. We caution that his analysis is not definitive, because we have no way to account for any differences in case mix that might explain the variation. Later in the chapter, we review use of lipid lowering drugs in a high-risk subpopulation to provide one indication of the effects of HPHC’s prescription patterns. We asked HPHC to identify any changes in its formulary that moved a drug from one tier to a higher tier. Since the co-pay would be higher for a higher tier, this kind of change could discourage utilization, while a change in the opposite direction would make access to the drug easier for those for whom it was prescribed. It is very unlikely that a drug would move from Tier 1 into a higher tier, since the drugs in this tier are generic and will remain so. The only tier changes made in our analysis period were to move Cytoven and Lariam from Tier 2 into Tier 37 (see Table 53).

Initially, utilization dropped about ten percent in the number of members per thousand who used it. Then use of both drugs dropped markedly, with only 34 members using Lariam and only 3 using Cytovene, resulting in negligible utilization. However, the number of scripts for each drug did not vary substantially. Thus, it did not appear that the increased cost of the drug decreased the use of it by those who chose to continue it. Lariam is used to prevent Malaria, and may be also used to treat it. Alternatives for this purpose include Chloroquine, Doxycycline, and Malarone. Chloroquine and Doxycycline are on HPHC’s formulary and are available as both a Tier 3 brand and as a Tier 1 generic. In 2002 and 2003, Lariam was the focus of several articles in major newspapers and Consumer’s Reports magazine that described significant neuropsychiatric side effects on some users. This information validates the logic of making this a less preferred medication, and the negative public attention is likely to have caused members and their physicians to select an alternative anti-malarial agent.

TABLE 53 HPHC DRUGS MOVED TO A HIGHER TIER :

PENETRATION AND SCRIPTS PER USER

Penetration – Members Using Drug per Thousand

Scripts per Members Using Drug

Drug 2000 2001 2002 2003 2000 2001 2002 2003

Lariam 3.160 1.25 3.530 0.094 0.004 1.19 1.19 1.00

Cytovene 3.37 0.074 0.067 0.002 0.000 3.13 2.6 3.0

Source: HPHC Response to the Attorney General’s RFI, 2000-2003


7 Correction. In our prior report, we indicated that the tier changes were made in 2001. HPHC has informed us that they became effective on January 1, 2002.

Cytovene is used to treat certain herpes viruses. These viruses are present in all adults, but only cause disease and possible blindness in individuals with compromised immune systems, such as those with AIDS or recent transplants. Cytovene’s falling utilization may be influenced by shortages due to manufacturing problems affecting one formulation of the drug announced during 2001 and 2002. It may also be related to falling rates of new HIV/AIDS cases in the state of Massachusetts. Foscarnet is an alternative antiviral, but is not listed on the HPHC formulary, and is much more costly. Though CMV retinitis affects a small number of people, they are highly vulnerable individuals at risk of serious disability, making the possibility that cytovene may have been less available due to shortages, and its major alternative not included in the formulary a concern. HPHC also manages utilization for a small number of drugs by requiring prior authorization. Table 54 shows that, on average 4 or 5 drugs were added to the list each year. Drugs requiring prior approval fall into two classes, relatively expensive drugs used to treat

TABLE 54 MEDICATIONS REQUIRING HPHC PRIOR APPROVAL

Medication 2000 2001 2002 2003 Indications Vioxx 4/1/2000 Osteoarthritis, pain management, menstrual pain Mobic 4/1/2000 Osteoarthritis Celebrex 4/1/2000 Osteoarthritis, rheumatoid arthritis, menstrual painLamisil 5/15/2000 Nail fungus infection Sporanox 5/15/2000 Nail fungus infectionZyvox 7/1/2000 Certain pneumonias, resistant infections, and skin infections

Gleevec therapy 5/24/2001 Chronic myeloid Leukemia after failure of interferon-alpha

Quinolones: Avelox, Cipro, Levaquin, Tequin, Zagam 11/9/2001 * Class of antibiotics requiring careful management of

resistance Penlac 12/4/2001 Nail fungus infection Bextra 2/14/2002 Adult rheumatoid arthritis; pain mgmt; menstrual pain Protopic 6/11/2002 * Atopic dermatitis; eczema Elidil 6/11/2002 * Atopic dermatitis; eczema EMLA *6/11/2002 Topical anesthesiaTretinoin Topicals: Retin A; Retin A Micro Gel; Avita; Altinac

10/1/2002 * Acne

Zelnorm 1/2003 Irritable Bowl Syndrome (IBS) with constipation Iressa 12/2003 Non-small cell lung cancer

Forteo 12/2003 Postmenopausal women w/osteoporosis who are at high risk for fracture

Zetia 12/2003** High cholesterol* Prior authorization required only when restriction/limitation is exceeded. ** Prior authorization required only when step therapy is not met. Source: HPHC correspondence


common, but not life threatening conditions, like osteoarthritis, nail fungus, and acne and those whose use must be carefully managed, like a class of antibiotics with high potential for resistance or a drug with potential negative side effects used to treat osteoporosis. In 2003, HPHC freed some of its prior approval drugs to be available without prior authorization within established limits, and one drug did not require prior approval if step therapy had been followed. Step therapy begins by prescribing lower cost and lower risk medications, moving toward higher cost and/or higher risk medications only if the first medication has not been efficacious.

4. HEDIS Measures on Appropriate Use of Medications Several HEDIS measures indicate the percentage of individuals with a particular condition who receive the types of medication considered to be the standard of care. Use of beta-blocker medication for people discharged from the hospital after a heart attack can lower the risk of a second heart attack. People for whom use of beta-blockers is clinically contraindicated are excluded from this measure, so that the higher the percentage for this measure, the better the treatment. Table 55 shows that HPHC was above the Massachusetts average on this measure in all four years, and considerably above the national average, reaching an extraordinarily high level – 99%- of prescribing beta blockers after heart attacks.

TABLE 55 HEDIS MEASURES OF APPROPRIATE USE OF CARDIAC MEDICATION


2000 2001 2002 2003

HPH

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HPH

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(H

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. (H

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HPH

C (H

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HPH

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Beta Blocker after Heart Attack 94% 94.33% 93.33% 89.35% 99.06% 95.41% 92.47% 99.06% 97.05% 93.54% 99.6% 97.51%

Cholesterol Mgmt. - Screening 81.75% 80.64% 74.16% 81.41% 80.57% 77.07% 89.58% 83.4% 79.36% 87.83% 85.92% 80.34%

Cholesterol Mgmt. – control 59.37% 68.15% 57.31% 53.42% 63.57% 63.87% 59.25% 74.48% 61.4% 76.89% 69.67% 65.05%

Controlling high blood pressure 54.5% 53.41% 51.49% 58.68% 60.08% 55.41% 66.83% 65.17% 58.37% 71.16% 68.0% 62.2%


The Cholesterol Management measures pertain to individuals hospitalized for a heart attack or certain cardiac procedures, and indicate whether they were screened for cholesterol levels between 60 and 365 days after discharge. The control measure indicates the percentage whose LDL cholesterol levels were controlled to less than 130 mg/dL during the same period. In many cases, medications are necessary in addition to dietary and activity changes to achieve this level. HPHC exceeded state and national averages on these two measures, and all parties demonstrated improvement. HPHC’s success in controlling cholesterol levels in this high risk group suggests that its relatively low utilization rates for cholesterol lowering drugs have not negatively affected this group. Treatment of high blood pressure is important in reducing deaths from heart disease, stroke and renal failure, and affected individuals may need to be treated with medications in addition to dietary and lifestyle changes. HPHC was above the national averages for this measure in all but 1 year, and all parties demonstrated improvement.

C. REHABILITATION SERVICES

Rehabilitation services focus on helping people regain functioning that may have been impaired by accident, illness, or surgery. Some rehabilitation begins in acute care hospitals and may continue in rehabilitation hospitals or nursing homes. Rehabilitation is also provided on an outpatient basis, and for homebound patients, may be provided in their own home. 1. Rehabilitation Network

2. Utilization Management Practices

HPHC requires a PCP referral for rehabilitation services. This allows rehabilitation providers to assess the patient and submit a request for services to meet the identified needs. In April 2001, a new law required Massachusetts managed care plans to cover all medically necessary services to treat speech, hearing and language disorders. This law effectively eliminated benefit limits, so HPHC reviews

We looked at HPHC’s network for some of the provider types most relevant to ensuring adequate access to rehabilitation services. (See Table 56.) There was minimal change over the four-year period. Other than a jump in the number of home health care providers, early intervention and skilled nursing facilities showed small decreases while hospices and rehabilitation hospitals had small increases. However, where the number of providers is relatively small – as for these provider types – the location of providers or the catchment area that home health providers serve are also important dimensions of access.

TABLE 56 HPHC NETWORK FOR SPECIFIED SPECIALTY SERVICES

NUMBER OF CONTRACTED PROVIDERS

Service Type 2000 2001 2003

Early Intervention 40 40 38

Home Health Care 43 46 67

Hospice 38 30 32

Rehabilitation Hospital 18 17 20

Skilled Nursing Facilities 162 159 153

Source: HPHC Physician Directory, Volume 2, 2000, Volume 2, 2001, Fall 2003


speech therapy cases to determine medical necessity. For other rehabilitation services, HPHC’s functional therapies department assists rehabilitation providers and their patients to work within benefit limits. Inpatient rehabilitation services must be authorized by HPHC in advance of admission and non-hospital alternatives are utilized if they make clinical sense. Rehabilitation services provided in the home require HPHC prior authorization by Nurse Case Managers when the member is homebound, or when the home is the most practical or clinically appropriate setting for services to be provided. The plan must have concrete goals or be medically necessary to maintain the Patient safely at home. The plan must be regularly reviewed by a physician. The rate of appeals for rehabilitation services provides some indication about the types of service where members have most concerns. Appeals regarding rehabilitation services were the third most frequent reason for appeals by commercial members in 2000. (See Table 22.) The rate per thousand of rehabilitation appeals increased considerably, by 88%, in 2001, making it the most frequent type of appeal in that year. This was due primarily to increases in appeals for physical and occupational therapy and the “other“ category. The rate of appeals for speech therapy declined by 22% as the benefit limit was ended. The rate of appeal dropped in 2002 and then increased again in 2003, but not as high as it had been in 2001. Physical therapy appeals accounted for most of the appeals by the end of the period. This suggests a continued level of dissatisfaction in the provision of physical therapy, but not with speech therapy, early intervention or cardiac rehabilitation. 3. Provider Feedback We distributed a brief survey on HPHC’s provision of rehabilitation care in 2002 (covering 2000, 2001, and 2002),

and again in early 2004 (covering 2003) with the assistance of the trade association of physical therapists. Twenty-one of their members responded to the first survey. The survey was also distributed by the trade association for occupational therapists and one response was received to each of the surveys. A speech therapist was also interviewed on the same topics as the survey in 2002, and 5 submitted surveys during the second administration. We note that this method of dissemination tends to elicit responses from individuals who want to call attention to problems and is a better method for identifying problems than for determining how widespread and significant they are. Most respondents rated the adequacy of HPHC’s network of rehabilitation providers as adequate or extensive, with some rating it as better than the networks of other HMOs operating in Massachusetts. Despite these high ratings, there were comments that HPHC’s network was extremely closed to new providers, and that there was little recognition of high quality service provision or appropriate response to poor performance. Claims payment and payment rates were a source of considerable criticism from physical, speech and occupational therapists. They rated HPHC’s rate of payment for rehabilitation services as inadequate, with most of them also indicating that HPHC’s rates were worse than other Massachusetts HMOs. One speech therapist commented that HPHC’s rates were 25% lower than average. Payment accuracy and timeliness was rated low. Speech therapy providers described terrible claims payment problems for 2000 dates of service and frustrating interactions with HPHC’s provider services staff. This was evidently improved in 2002, as indicated by more excellent scores and fewer poor scores, but 2003 results showed no excellent ratings.


The rehabilitation providers who responded to us were happier with HPHC’s authorization procedures than with claims payments, rating them as good or excellent during the first three years. However, those who responded to the 2003 survey were more critical, with 3 of 5 rating HPHC’s authorization procedures as poor. The criticisms expressed included: difficulties getting an authorization decision within 48 hours; restrictive and unrealistic expectations for progress in treating autism; and authorizations issued for very short periods, requiring extra work. Another commenter regretted not having more involvement and notice about changes in the authorization process. From this information, we can tentatively conclude that HPHC’s rates and administrative practices cause significant problems for at least some rehabilitation providers, but the problems with authorization practices have more to do with its administration than with decisions about how much care is authorized. This type of problem can result in providers choosing to leave the HPHC network. However, for the same period in which they criticized aspects of HPHC’s administration, most responding providers rated the network as adequate or extensive, and rated the overall provision of rehabilitation care as good or excellent. This suggests that the problems are more likely to affect providers than their HPHC clients. 4. Outpatient Rehabilitation Utilization

Table 57 shows the limited data we received on utilization of rehabilitation services for HPHC’s commercial population. These services are grouped into two categories: physical, occupational and speech therapies; and a more disparate group of services that includes durable medical equipment (DME), home health services, and hi tech therapy. Both categories showed steady increases in per thousand utilization, over the period, resulting in increases in utilization per thousand in the magnitude of 40%. However, lack of more stratified service categories makes it impossible to monitor the effects of the reduction in the DME covered benefit in 2000, and how the changes in authorization of speech therapy affected utilization. In addition, we do not know if the increases were from more members utilizing services, or from increases in the amount of service used by those receiving rehabilitation services.

TABLE 57 HPHC REHABILITATION SERVICES

COMMERCIAL UTILIZATION PER THOUSAND FOR MASSACHUSETTS MEMBERS

2000 2001 2002 Thru Q3,

2003 % Change

2000 to 2003 DME, VNA Home Health, Hi-Tech Therapy 2,383 2,919 3,298 3,424 44%

Physical, Occupational, Speech, CR, NC Therapy 548 761 576 681 39%

Source: HPHC Response to Attorney General, 2000, 2001, 2002 and 2003

5. HEDIS Non-Acute Care Measure HEDIS employs only one set of measures that pertain to rehabilitation services: the utilization of non-acute inpatient care. This measures utilization of care provided in hospice, nursing homes, rehabilitation, skilled nursing facilities, transitional care and respite, excluding stays with a diagnosis of mental health or chemical dependency. As can be seen in Table 58, HPHC utilized these services substantially more than Massachusetts or national HMOs in terms non-acute inpatient treatment episodes per thousand at the beginning of the period


and remained higher throughout the period, though it experienced a considerable drop in utilization followed by a slow increase. Massachusetts and national HMOs experienced slow increases during the period. In 2000, HPHC’s lengths of stay were significantly shorter than the Massachusetts or national averages, but they increased dramatically in 2001, exceeding both averages and remained higher for the remainder of the analysis period.

TABLE 58 HEDIS MEASURES OF NON-ACUTE INPATIENT SERVICES HPHC COMPARED TO STATE AND NATIONAL AVERAGES

2000 2001 2002 2003

HPH

C

(HM

O/P

OS

com

bine

d)

MA

ave

rage

(H

MO

/ PO

S)

Nat

iona

l A

vg.

(HM

O/P

OS)

HPH

C

(HM

O/P

OS

com

bine

d)

MA

ave

rage

(H

MO

/ PO

S)

Nat

iona

l A

vg.

(HM

O/P

OS)

HPH

C

(HM

O/P

OS

com

bine

d)

MA

ave

rage

(H

MO

/ PO

S)

Nat

iona

l A

vg.

(HM

O/P

OS)

HPH

C

(HM

O/P

OS

com

bine

d)

MA

ave

rage

(H

MO

/PO

S)

Nat

iona

l A

vg.

(HM

O/P

OS)

Inpatient non-acute average length of stay

11.48 days days 13.01

days 14.3 days

15.31 11.17 days

14.77 days

15.09 days

13.54 days

14.4 days 14.61% 12.38% 13.49%

Discharges per thousand 3.66 1.72 1.16 2.57 2.25 1.32 2.79 2.12 1.51 2.7 2.1 1.52

Source: NCQA Quality Compass 2001, 2002, 2003 and 2004 These results suggest that HPHC members have a desirable level of access to these services, both in admission for treatment and for length of stay, as compared to the state and the nation. However, further interpretation is limited since this measure compiles data on a wide range of services; hospice is for end of life care, rehabilitation for regaining functioning, and respite to provide safety without significant treatment or rehabilitation goals. Differences in the composition of the non-acute provider network and in the needs of enrolled populations may also influence these results.


6. Division of Insurance Utilization Data The picture shown by Division of Insurance data for non-acute inpatient care in Table 59 differs somewhat from what is shown for HEDIS. These figures are not computed using an identical methodology, nor for the same composition of HPHC members. Like HEDIS, the Division’s data shows HPHC providing non-acute hospital care for a greater proportion of its members than other HMOs, but does not show as much change between years nor a clear trend. Unlike HEDIS, HPHC’s length of stay appears to be shorter than for other HMOs, and shows length of stay to be quite stable. Taken together, the two data sources suggest HPHC members have good access to this level of care in comparison to other HMOs, though there is a question whether their lengths of stay may be shorter.

TABLE 59

NON-ACUTE INPATIENT DISCHARGES AND DISCHARGE DAYS HPHC COMPARED TO OTHER MASSACHUSETTS HMOS

2000 2001 2002 2003

HPHC Other HMOs HPHC Other

HMOs HPHC Other HMOs HPHC Other

HMOs Total Discharges 10,046 16,613 6,785 21,478 7,202 20410 6,233 18796 Discharges per thousand 13 9 12 11 15 11.7 12 10.8 Total Discharge Days 110,241 263,959 76,210 350,456 69,413 331,630 68,113 258,920Average Length of Stay 11 15.9 11.2 16.3 11.1 16.2 10.9 13.8 Source: Harvard Pilgrim Health Care, Inc "Inpatient Days Report - ALOS" Quarterly Report, 2000, 2001, 2002) Pilgrim Health Care, Inc "Inpatient Days Report - ALOS" Quarterly Report (2000, 2001), Harvard Pilgrim NE, Inc. “Inpatient Days Report – ALOS”, Quarterly Report (2002), Harvard Pilgrim Healthcare, Inc. “HMO Supplemental Utilization”, 2003.

D. CONCLUSION

1. Provision of Mental Health and Substance Abuse Care

Overall, it appears that HPHC’s provision of mental health care is relatively generous and increased over the period, likely influenced, at least in part, by the implementation of mental health parity. In contrast, HPHC was less generous in providing substance abuse care. The number of hospitals available to HPHC members in need of psychiatric inpatient care increased considerably over the period, and a decrease in the number of individual mental health specialists was offset to some degree by an increase in mental health clinics entering


the network. ValueOptions focused considerable attention on measuring access through geo-access mapping, open shopper surveys and provider and member surveys, and instituted quality improvement projects that demonstrated high rates of compliance with standards for provision of timely appointments. Special attention was focused on access to child psychiatrists, which is a shortage affecting HPHC and all insurers. Division of Insurance data from 2003 and HEDIS data suggest that HPHC members have better than average access to outpatient mental health services, equivalent access to day/night care, and higher access to inpatient care than other Massachusetts HMOs. However, HPHC’s high rates of inpatient care and longer lengths of stay could be indications of a higher need population or less effective preventive care. Both sources of data suggest that substance abuse treatment is an area in which HPHC members may not have as much access as other Massachusetts HMOs, with lower outpatient and inpatient utilization. However, these conclusions are somewhat tentative due to possible inconsistencies in categorizing mental health and substance abuse services. HPHC’s combined provision of mental health and substance abuse care exceeds the practice patterns of other Massachusetts HMOs in ValueOptions data. Utilization of psychotropic drugs grew considerably. Though we do not have a benchmark for comparing the rate of increase to others, it does show increasing utilization by HPHC members. HPHC has excelled on some measures of quality of mental health care according to HEDIS, where it has exceeded state and national averages and showed consistent improvement, particularly for follow-up after inpatient discharge. However, it has shown steeply increasing rates of readmission for both mental health and substance abuse inpatient services, suggesting that longer than average lengths of stay and high rates of community follow-up are not having the desired effect of establishing stability in the community. Member surveys showed high and increasing rates of satisfaction with their therapist and with their outcomes of treatment. However, member and provider surveys, as well as other feedback, indicated that administrative functions were a continuing and sometimes an escalating problem during the analysis period. The most important operational issues for members and providers were: • Low rates, slow payment, billing problems, cumbersome outpatient authorization procedures, and intensive scrutiny of inpatient

cases are significant sources of frustration and have contributed to an unwillingness to participate in the ValueOptions network. Some had become more problematic over time, rather than being resolved.

• A customer service function that did not get high ratings from the HPHC members who used it. 2. Provision of Medications In HEDIS comparisons, HPHC showed both higher cost per capita of medications and a higher rate of growth in utilization than the Massachusetts and national averages, suggesting that HPHC members have relatively high access to medications overall. Despite utilization growth, HPHC’s three tier formulary appears to constrain growth in HPHC’s cost for medications, both by sharing cost with members who are responsible for a co-pay, and by decreasing utilization of many Tier 3 drugs, for which less expensive alternatives are available. While the introduction of the tiered pharmacy benefit coincided with a high rate of pharmacy related appeals, the pharmacy appeals rate dropped considerably in succeeding years, suggesting that members had accepted it. Our comparison of HPHC utilization of specific drug classes to that of a mixed commercial population drawn from throughout the country shows HPHC to use four classes of


drugs more frequently - (hypertensives, antidepressants, allergy drugs, and anti-virals); and two classes less frequently - drugs for management of lipid levels, and gastrointestinal drugs. However, HPHC’s rates of growth are either higher than the national average or at least the same for these two classes, and HPHC exceeded the state and national average HEDIS scores for managing lipid levels after heart attacks, providing one indication that HPHC’s prescription patterns are appropriate for its clientele. Two drugs were moved from a lower tier to a higher tier, and both experienced dramatic decreases over the four year period. However, one experienced considerably publicity about dangerous side effects, and the other experienced several shortages. Therefore, we cannot attribute their dropping utilization to HPHC’s management. HPHC has added a prior authorization requirement for approximately 5 drugs per year. However, in 2003, HPHC added protocols for some of them that eliminate the authorization requirement if other drugs have been found ineffective, or if utilization falls within prescribed limits. Drugs on the list are either expensive drugs to treat conditions that are not life threatening or are drugs with serious side effects to treat very serious conditions. In both cases, requiring review seems appropriate. 3. Provision of Rehabilitation Services We were limited in the degree of detail available to analyze HPHC’s provision of rehabilitation services. However, the data we did have showed increasing rates of utilization for inpatient services, outpatient therapies, and other outpatient services plus equipment between 2000 and 2003. In addition, the network of rehabilitation facilities tended to stay the same or increase, suggesting a similar level of continuing access to these providers. The outpatient rehabilitation providers we contacted were generally positive about the quality of HPHC’s authorization procedures, though they expressed concern about timeliness. In addition, rehabilitation authorization decisions were appealed more often than most other types of service, and experienced a very high rate of increase between 2000 and 2001, due primarily to increases in appeals for physical and occupational therapy and the “other“ category. While appeals moderated somewhat in 2002 and 2003, physical therapy remained one of the most frequent reasons for appeal, suggesting that some members are not satisfied with the amount of physical therapy they are receiving. Providers also expressed some significant concerns around billing problems, low rates, and frustration in resolving billing problems that can affect HPHC’s continued ability to maintain its rehabilitation network.


VI. SPECIAL POPULATIONS This chapter assesses provision of service to limited English speakers and people with chronic illness whose special needs that may affect their access to health care. Both populations are hard to identify within HPHC’s overall membership, and that has limited our ability to analyze the care they receive. We do discuss the provision of some of the special services each population may need and have also reported on the provision of care for First Seniority members, an elderly group that we are able to identify and that has a greater likelihood of suffering both acute and chronic illness. A. LIMITED ENGLISH SPEAKERS

1. Limited English Speaking Enrollment

HPHC’s Director of Diversity estimates that about 9000 members indicate that English is not their first language, and that it has stayed pretty much the same across the years. However, HPHC has not focused on identifying all individuals who speak a second language. New members may identify a primary language on their application form, but language is not a required field and many new members do not complete it. Our data is limited to a 2002 point in time count of those members who indicated a second language on their enrollment form, as shown in Table 60. Should the enrollment of limited English speakers have stayed constant, as suggested by the Director of Diversity, they would represent less than 1% of average members in any year. The largest language group was Spanish speakers, who accounted for a third of all self-identified limited English speakers followed by Portuguese speakers at 15%, with Chinese languages accounting for 10%. All other language groups listed represented 6% or less of limited English speakers. An additional 47 languages accounted for a total of 6%. Since this is the best information we have about enrollment of limited English speakers, we have used it to represent enrollment in all years.

TABLE 60 SELF-IDENTIFIED LIMITED ENGLISH SPEAKERS

ENROLLED IN HPHC INC. AND HPHC NE AS OF 5/31/2002

Language Number of Members

Percentage of Limited English Speakers

Spanish 3,001 34%Portuguese 1,326 15%Subtotal Chinese languages 917 10% Cantonese 488 6% Mandarin 368 4% Chinese 61 1% Armenian 557 6%Vietnamese 504 6%Russian 442 5%Haitian 379 4%French 373 4%Khmer 234 3%Cape Verde 224 3% Italian 152 2%Korean 111 1%Greek 108 1%Other Languages (47) 507 6% Total 8,83 5 100%

Source: HPHC and HPHC NE Integrated Product Member Language Report (Amysis) 5/31/2002


The following table, drawn from another set of data, shows that many limited English speakers are concentrated in the largest Local Care Units (LCUs), HPHC’s term for its physician groups. The total of limited English speakers in the dataset from which this table was drawn is over 14,000, far exceeding the 9,000-point in time count from the prior table. Though a year’s enrollment will exceed a point in time count, we do not think that this phenomenon would fully explain the extent of this discrepancy. Should this larger figure be an accurate count, it suggests that HPHC’s population in need of bilingual service provision is greater than the original count would suggest.

TABLE 61 500 LIMITED LOCAL CARE UNITS WITH MORE THAN ENGLISH SPEAKING HPHC MEMBERS

MARCH 2001- FEBRUARY 2002

Local Care Unit Location Number of Limited English

Speaking Members

Harvard Vanguard Medical Boston, Braintree, Burlington, Cambridge, Chelmsford, Medford, Peabody, Quincy, Somerville, Watertown, Wellesley, West Roxbury 4,952

Beth Israel Deaconess PHY Boston 1,376

Primary Care, LLC Brockton, Cape Cod, Mass Bay, Milton, Norwood, Plymouth, Quincy, Southwest Boston 924

Mass General Hospital Boston 799

Boston Medical Center Boston 723

Brigham & Women's Boston 605

Pilgrim Independent Practice Association Mostly Boston and South Shore 571

Mt. Auburn Cambridge Cambridge 561

Pediatric Physician's Org. at Children’s Hospital Boston 507

Source: HPHC Integrated Product Member Language Report (Amisys) 4/3/02


2. Network of Bilingual Providers

We analyzed HPHC’s provider lists to see how many physicians spoke these most common languages among members and tracked it over time. We see an increase in bilingual providers in 2001, and then a decrease in 2003. However, because we only have a listing of HPHC’s members who speak another language from a single point in time, we cannot determine whether the need for bilingual practitioners has grown, decreased or stayed the same over this 4-year period. In addition, the listing itself varied considerably between years; for example in 2003 we found that many PCPs newly listed as bilingual had been part of the network in the prior year, but not listed as bilingual. Conversely, we also found that many providers listed as bilingual in 2001 remained in the network in 2003, but were no longer listed as bilingual. Where a provider is listed will not affect access for current patients who will continue to have access to a bilingual practitioner, but it does affect access for potential new patients seeking a bilingual physician and selecting from a shorter list. HPHC reports that physicians determine whether they are listed as bilingual and for which languages, and that they can


TABLE 62 OFFICES OF BILINGUAL PHYSICIANS BY LANGUAGE

2000 2001 2003

Language PCP

Off

ices

Per

Thou

sand

*

Spec

ialis

t O

ffic

es

Per

Thou

sand

*

PCP

Off

ices

Per

Thou

sand

*

Spec

ialis

t O

ffic

es

Per

Thou

sand

*

PCP

Off

ices

Per

Thou

sand

*

Spec

ialis

t O

ffic

es

Per

Thou

sand

*

Spanish 547 182 327 109 558 186 612 204 469 156 802 267

Portuguese 84 63 63 48 96 72 123 93 80 60 150 113

Chinese languages 141 123 134 70 76 136 148 103 112 89 97 154

Armenian 18 32 15 27 19 34 31 56 17 31 31 56

Vietnamese 18 36 7 14 17 34 11 22 15 30 15 30

Russian 65 147 49 111 77 174 83 188 60 136 88 199

Haitian Creole** 21 55 4 11 24 63 2 5 12 32 10 26

French 351 941 294 788 353 946 524 1405 263 705 578 1550

Khmer 2 9 0 0 2 9 2 9 2 9 5 21

Cape Verde Kriolu* 0 0 0 0 0 0 0 0 0 0 0 0

Italian 104 684 65 428 96 632 110 724 64 421 117 770

Korean 14 126 14 126 13 117 25 225 8 72 27 243

Greek 42 389 31 287 39 361 63 583 28 259 73 676

Total 1107 1389 167 939 113 1430 172 1689 203 133 2037 245*Per thousand is calculated using 5/31/2002 count of limited English speaking enrollees. **We have counted all Creole speakers under Haitian Creole. Possibly some speak Cape Verde Kriolu. Source: HPHC Physician Directory, Volume 2, 2000, Volume 2, 2001, and Fall 2003

Table 62 - Definitions and Explanatory Notes We were unable to consistently account for providers with more than one office, so we counted the number of offices. This results in an over count of the number of physicians. In addition, some physicians speak more than one language, and so are double counted in our totals. Finally, unlike our earlier network counts, the listing of bilingual specialists counts both physicians with specialties and mental health providers such as licensed social workers and psychologists.

change their listing at any time. However, these decisions may not, in fact, be made by the physician. HPHC reports that administrative staff usually complete physician information forms, and these forms are often incomplete. Thus, there is every reason to think that HPHC’s directory under represents the full linguistic capability of its provider network, and changes in how linguistic capacity is listed may not have much to do with physician preferences for the clientele they wish to attract. However, the limitations of the directories mean that HPHC members seeking a bilingual provider do not generally get to choose from the full spectrum of linguistically capable providers. We had hoped to look at HPHC’s bi-lingual network in comparison to the available bi-lingual physicians licensed to practice in Massachusetts. This would have allowed us to better account for the limits in availability of bi-lingual physicians that constrain HPHC and other insurers from providing bi-lingual services to its limited English speaking clientele. However, the Board of Registration in Medicine’s physician database was not structured in a way that allowed for such an analysis. While we cannot provide a good context for evaluating HPHC’s network of bilingual providers, we can identify that the following language groups are most likely to have a hard time finding bilingual services.

• Cape Verde Kriolu had no bilingual providers listed.

• Khmer speakers have only seven providers, who may not be geographically accessible nor include needed specialties.

• Haitian Creole, Korean, and Armenian had high per thousand ratios, but had relatively few providers, which may limit geographic accessibility and access to certain specialty types.

3. Utilization of Limited English Speakers

We explored the possibility of reporting on the utilization of non-English speakers, but it would have required a major programming effort, including matching different databases. The results would have also been difficult to interpret in the absence of information on the basic health status of this subpopulation compared to overall enrollment. However, this gap is a major limitation of our ability to assess the care provided to limited English speaking members of HPHC. 4. Accommodations for Limited English Speakers HPHC has few standards or policies on providing clinical or administrative services to limited English speakers. However, it does do a number of things to enhance the ability of its staff and provider network to serve them effectively. In 2000, HPHC’s Customer Services department included eight multi-lingual representatives, four of whom spoke Spanish and four others spoke Portuguese, French Creole, Polish or Swedish. The capacity was similar in 2003, with three Spanish speakers, two French speakers, and three other individuals speaking Portuguese, Haitian Creole, and Hindi. HPHC provides an introductory flyer in English and the following ten languages:

• Spanish; • Portuguese; • Russian; • Polish; • Vietnamese; • Mandarin; • Cantonese; • Khmer (Cambodian);


• Haitian; and All translation needs are managed through the services of Pacific Interpreters, which can support the translation of approximately 2000 languages. Table 63 shows that the number of such interpretations decreased in 2001, and over the next two years increased to a similar level as 2000 (this takes into account that 2000 data were not for the full year). Our per thousand calculations use the count of self-identified non-English speakers presented in Table 55 as of May 2002. This gives us an idea of the relative utilization of this service by different non-English groups, but limits our ability to determine how changes in the number of interpretations correspond to the actual enrollment of non-English speakers in other years. It is notable that Spanish speakers use this service at a much higher rate than other language groups. Of the most common languages in HPHC’s membership, Haitian and Armenian speakers use this service quite rarely. However, Khmer and Creole speakers have increased their use over the four-year period in terms of numbers of interpretations requested. This pattern suggests that either HPHC’s limited English speaking members are making better us of this capacity, or their level of enrollment has increased.

• Italian. This list covers most of the most frequently occurring languages among HPHC members, but excludes Armenian, French, and Cape Verde Kriolu, of which there are as many or more members than those indicating that they speak Italian. The flyer invites new members to call a toll-free number with a tape orientation available in the same languages. Benefit handbooks also include statements in the same languages on how to contact member services. The phone orientation covers topics such as choosing a primary care physician, seeing a specialist, receiving mental health services, accessing emergency, weekend and evening care, co-payments, out-of-area care prescription benefits, and how to resolve billing questions. The flyer directs speakers of other languages to call HPHC customer services who can access a translation service to speak with them. HPHC has arrangements with an outside vendor to translate its schedule of benefits when requested by the Marketing department or by a member.

The case management staff includes several individuals who

speak non-English languages, and staff are trained in the use of phone interpretation. Healthsource also has Spanish speaking case managers on its HPHC team and has its letters translated into Spanish. Half of the ten cancer patient treatment guidelines utilized by HPHC are also available in Spanish language versions. All disease management materials produced by HPHC have a Spanish language notation providing a phone number where additional assistance in Spanish can be requested.


TABLE 63 TELEPHONE INTERPRETATIONS PROVIDED TO HPHC MEMBERS

Jan.-Aug.,

2000 2001 2002 2003 Jan.-Aug.,

2000 2001 2002 2003

Language No. No. No.

Per thousand* language

group members No. Language No. No. No. No.

Most Common Languages Among HPHC Members Less Common Languages Among HPHC Members Spanish 690 719 747 249 988 Polish 4 2 1 1Portuguese 149 91 111 84 174 Arabic 3 2 1 2Subtotal Chinese languages 102 68 46 50 62 Farsi 3 0 0 2

Russian 25 0 39 18 57 24 Czechoslovakian 1 0 0Vietnamese 18 13 23 46 20 German 1 0 0 0Italian 15 11 6 39 16 Albanian 0 2 0 0French 14 15 9 24 7 Bosnian 0 1 1 8Greek 6 4 5 46 10 Hebrew 0 1 0 0Haitian 4 0 0 0 6 Hindi 0 4 0 1Korean 3 4 4 36 4 Turkish 0 1 0 0Armenian 2 1 5 9 3 Amharic 0 1Cambodian / Khmer 2 5 5 21 9 Bulgarian 1 0

Creole 1 3 6 26 13 Gujarati 1 1Japanese 9 7 3 34 15 Punjabi 0 1Subtotal 1,054 959 995 57 1,351 Tagalog 1 0

Tamil 0 1 Urdu 0 1

Subtotal Less common languages 12 13 6 19

Grand Total 1,066 972 1,001 1,370 Per thousand is calculated using 5/31/2002 count of limited English speaking enrollees. Source: HPHC Response to Attorney General, 2000-2003

HPHC has an Office of Diversity that addresses the needs of diverse cultures and linguistic groups, as well as the needs of some individuals with disabilities. Staffing of this small office has grown somewhat as its offerings have grown. In 2001, its director began reporting directly to the CEO. Its most significant function is to provide training related to cross-cultural provision of care. It has piloted


and added courses, and trains both direct care providers as well as faculty in Dental and Medical Schools. In 2003, federal funding from the Health Resources and Services Administration (HRSA) has expanded the reach of HPHC’s cultural competency trainers, including a national closed circuit broadcast that reached 2000 people. Courses are offered in-house to HPHC staff as well as to HPHC network providers. In some cases, HPHC waives the fees. For example, HPHC encourages providers who have bilingual office staff to send them to a course in medical interpretation. This is a very significant effort that contributes not only to improving the capacity of HPHC’s network to effectively serve its members from different linguistic and cultural groups, but also improves the capacity of the larger health care community. 5. CAHPS Results for Spanish

Speakers

TABLE 64 TRAINING IN CROSS-CULTURAL CLINICAL CARE OFFERED BY HPHC

Course 2000 2001 2002 2003

No.

of

Sess

ions

No.

of

Trai

nees

No.

of

Sess

ions

No.

of

Trai

nees

No.

of

Sess

ions

No.

of

Trai

nees

No.

of

Sess

ions

No.

of

Trai

nees

Medical Interpreter (42 hours) (Spanish, Cape Verdean, Haitian Creole, Portuguese, Cantonese)

4 72 3 52 4 75 7 143

Foundations in Cross Cultural Health Care (3 days) 3 2 53 30 10 684

Foundations in Cross Cultural Behavioral Health (CME and CEU accredited) (2 days)

3 51 2 46 3 46 3 38

Foundations in Cross Cultural Nurse Case Management (full day)

1 pilot 15 5 114 6 111

In-service Cross Cultural Clinical Training (in-service at HPHC providers)

6 110 7 250 26 2,947

Leadership Practice in Medical Interpretation 1 pilot 14 1 25

Source: HPHC’s Response to Attorney General

HPHC stratified its 2001 and 2003 CAHPS survey results for respondents who identify themselves as Hispanic. (See Table 60) The number of Hispanic respondents was quite small, at most 17, for the questions we analyzed. This is small compared to over 400 non-Hispanic respondents, though it was not out of proportion to the relative proportion of self-identified Spanish speaking members among HPHC’s membership. In general, this small group of Hispanic respondents gave HPHC quite high ratings in comparison to non-Hispanic respondents. Both groups rated different aspects of communication as having improved from 2001 to 2003, and Hispanics tended to rate communication factors higher than all other respondents. However, both groups experienced more access problems in 2003 than in 2001. These problems made the ratings of Hispanic clients more similar to other respondents than they were in 2001, when Hispanics tended to rate access higher than others. None of the between group differences reached the level of statistical significance in 2003. (This is affected, at least in part, by the small sample size of Hispanic respondents). There was one dramatic change in ratings. While in 2001, Hispanic respondents were more likely to rate the overall cost for health insurance coverage as reasonable than other respondents, in 2003, they


were much less likely to rate cost of insurance as reasonable. With such a small sample size for Hispanics, results can be affected substantially by the particular individuals surveyed. However, there is a suggestion here that cost increases have affected Hispanic members more than others. We must be guarded in drawing any conclusions from such a small sample. In general Hispanic populations are known to respond somewhat more positively in their global rating of health care than on their descriptions of specific aspects of health care, suggesting a possible upward bias.

TABLE 65 2001 & 2003 CONSUMER ASSESSMENT OF HEALTH PLANS STUDY

BY HISPANIC/NON-HISPANIC RESPONSES

2001 Hispanic 2001 All Other 2003 Hispanic 2003 All Other ACCESS TO PHYSICIANS Problem to see personal doctor or nurse N= 17 453 11 310 Not a Problem 90.9% 76.3% 82.0% 76.0% Small Problem 9.1% 18.8% 9.0% 17.0% Big Problem 0 4.9% 9.0% 8.0%Problem to get referral to specialist N= 15 304 8 302 Not a Problem 100.0% 82.2% 87.0% 79.0% Small Problem 0 12.8% 13.0% 13.0% Big Problem 0 4.9% 0 8.0%Problem to get care necessary from doctor N= 15 452 13 355 Not a Problem 80.0% 83.6% 85.0% 88.0% Small Problem 20.0% 14.2% 15.0% 10.0% Big Problem 0 2.2% 0 2.0%COMMUNICATION In the last 12 months, how often did office staff at the doctor's office or clinic treat you with courtesy and respect? N= 14 453 14 441 Always 71.1% 70.2% 93.0% 75.0% Usually 21.1% 24.9% 7.0% 22.0% Sometimes 7.1% 4.9% 0 3.0% Never 0 0 0 0


TABLE 65, CONTINUED 2001 & 2003 CONSUMER ASSESSMENT OF HEALTH PLANS STUDY

BY HISPANIC/NON-HISPANIC RESPONSES 2001 Hispanic 2001 All Other 2003 Hispanic 2003 All Other Doctors/health providers listen carefully N= 14 453 14 441 Always 66.7% 56.9% 50.0% 65.0% Usually 20.0% 33.2% 43.0% 29.0% Sometimes 13.3% 9.3% 7.0% 6.0% Never 0 0 0 0Doctors/health providers explain things understandably N= 15 453 14 441 Always 73.3% 62.9% 79.0% 70.0% Usually 6.7%* 30.5%* 7.0% 27.0% Sometimes 13.3% 5.5% 7.0% 3.0% Never 6.7% 1.1% 7.0% 1.0%In last 12 months, how much of a problem, if any, was it to find or understand information in written materials? N= 8 169 2 138 Not a Problem 87.5% 67.5% 100.0% 75.0% Small Problem 12.5% 24.9% 0 19.0% Big Problem 0 7.7% 0 7.0%COST How would you rate the overall cost to you for your health insurance coverage? (0 = Extremely Unreasonable – 10 = Extremely Reasonable) N= 17 524 17 479 Ratings of 8, 9, 10 69.8% 41.4% 24.0% 54.0% Ratings 7 or below 30.2% 58.6% 76.0% 46.0%

* Statistically significant from nonHispanic Source: HPHC NCQA/Consumer Assessment of Health Plans Study, Hispanic vs. Non-Hispanic


6. Community Informants

It was difficult to find community informants who worked with privately insured limited English speakers; many advocacy and community support organizations that work with specific linguistic/cultural groups work primarily with those who have Medicaid coverage or are uninsured. However, in 2001 and 2002 we spoke with two directors of hospital interpreters’ programs, an elderly Limited English speaking couple with long-time membership in HPHC, and representatives from organizations that work with some of the larger ethnic communities. These conversations identified some of the important issues in HPHC’s and the overall health care system’s provision of care to people with limited English. • HPHC’s cultural competency training was noted as an

important contribution to quality care for limited English speaking communities.

• Some of HPHC’s clinics were noted as having particularly well-developed bi-lingual capacity that included both bilingual providers and considerable interpretation capacity.

• However, HPHC’s network in Cambridge was noted as not including some of the Cambridge Health Alliance Health Centers with the greatest Portuguese speaking capability in providers and throughout the staff.

• Across the health care system, there is limited health care information published in Asian languages, especially Cantonese and Vietnamese.

• Also affecting the entire health care system, it is difficult to get a bilingual Spanish or Chinese speaking specialist, and interpretation is not often scheduled when the specialist does not have linguistic capacity.

• Bilingual physicians are sometimes reluctant to serve limited English speakers; unless their support staff also

speaks the language, the physician must do the scheduling and nursing tasks as well as the examination.

7. Employer Survey

To get feedback on 2003 services, we surveyed employers who had significant enrollment of limited English speakers in an HPHC plan. Late in 2004, we drafted a survey using CAHPS wording wherever applicable. It was sent to a sample of 33 employers which HPHC had identified had significant enrollment of non-English speakers. Twelve providers responded, for a response rate of 36%. The respondents represented a total of at least 3270 and up to or exceeding 6340 members. They represent a very small percentage of HPHC’s average total group enrollment for 2003, probably about 1%. Estimates of the number of non-English speaking employees of these companies ranged from about 360 to 1600 or more, constituting between 4 and 18% of the total members who disclosed speaking languages other than English. Given that this counts only the employee holding the policy, and not the total family members covered by the policy, this survey likely covered a larger percentage. Most of the respondents were companies that employed from 50 to 250 staff eligible for health care benefits. Five companies were larger, ranging from 250 to over 1000 and two were smaller, with 10 to 49 eligible employees. Spanish was the most common language, with 10 of the 12 companies citing that a significant percentage of their employees or their families spoke it. Six cited Portuguese and five cited Haitian. Other languages indicated were Chinese (3 companies), Cape Verde and Vietnamese (2 companies), and Armenian, French, Korean and Greek (1 company each). The companies predominantly offer HMO plans to their employees, but some also offer a PPO, while one self-insures with HPHC as administrator. Most have long-term relationships with HPHC.


Half, 6, have contracted with HPHC since before this entire assessment period. A quarter, 3, initiated a relationship with HPHC during 2000 or 2001, and the remaining quarter contracted with HPHC beginning in 2002 or 2003. Most contract only with HPHC; only 3 also offer plans from other HMOs. In selecting a health plan, the dominant consideration of most plans (9) was the premium. Other considerations include the size of the provider network (4), quality of care (3), HPHC’s reputation (3), and their broker’s recommendation (3). Only 2 mentioned the linguistic capacity of the provider network. Over the 4-year assessment period, plans offering more than one option indicated how their HPHC enrollment changed. Four of ten responding to this question indicated that HPHC’s enrollment had increased and 5 that it had stayed the same. Only 2 experienced decreased enrollment in HPHC. Respondents rated the enrollment of their non-English speaking employees similarly. Only 1 provider whose overall HPHC enrollment increased reported that non-English enrollment remained the same. In all other cases, non-English employees were reported to have behaved the same as total employees. Of the 5 employers that gave reasons for experiencing changes in enrollment, 4 cited cost – of premiums or co-pays and deductibles as reasons for employee decisions. None cited changes in the linguistic capacity of the provider network. Employers were asked to rate their non-English speaking employees’ satisfaction with a number of aspects of HPHC’s health plans and to compare them to other HMOs. As shown in Table 66, the only area in which HPHC was rated lower than good was premiums, and it was the only aspect at which HPHC was rated lower than other HMOs. On those dimensions specifically focused on the experiences of non-English speakers, HPHC was generally rated high. Satisfaction with mental health services was notable in having 2 ratings of fair, and access and pharmacy coverage also were rated fair by 1 provider each. However, HPHC was rated as the same or better than other HMOs on all these dimensions, suggesting that any problems are found throughout the health care system.

B. PEOPLE WITH CHRONIC ILLNESS 1. Identifying the Population

There is no easily defined subgroup of people suffering from chronic illness, though it is possible to identify those with a specific chronic illness like diabetes, asthma, and HIV/AIDS. However, community informants and advocates indicated that they were less concerned with performance on management of specific diseases, than with


TABLE 66 SURVEY OF EMPLOYERS WITH SIGNFICANT NON-ENGLISH ENROLLMENT

Percent rating

HPHC good and above

Percent rating HPHC as better than other plans

Percent rating HPHC as worse than other plans

Premium 44%50% 11%Non-English speaking employee satisfaction with: Linguistic Capacity of Provider Network 100% 20% 0% Linguistic Capacity of Member Services 100% 13% 0% Access 92% 14% 0% Quality of Care 100% 0% 29% Satisfaction with Mental Health Services 80% 0% 0% Satisfaction with Pharmacy Coverage 92% 8% 0% Source: DMA Health Strategies Survey of Selected HPHC Employers, 12/2004.

members’ ease in accessing and coordinating the specialized medical care, rehabilitation treatment, medical equipment and medications they need. One major identifiable population is HPHC’s First Seniority program, its Medicare Risk program serving primarily individuals over 65. As we saw when analyzing utilization data, this group uses many more services than those in HPHC’s commercial population. We have also collected information about HPHC’s processes for clinical authorization, and its specialty case management program which serves higher need individuals with more complex conditions. Another source of information is consumer satisfaction data for respondents who rate their care as fair or poor, and those who are older. We have also analyzed HPHC’s performance on certain measures related to the appropriate treatment for some specific chronic conditions. Finally, we have contacted community informants who can help us to identify relevant issues and report on their experience receiving care from HPHC. 2. Network of Providers Serving Individuals with Chronic

Illness There is no discrete network of providers serving people with chronic illness; it is likely that HPHC’s entire network serves people with chronic illness to a greater or lesser extent. We did however, request turnover data for certain specialties that stakeholders had indicated were of particular importance for people with chronic illnesses. Table 67 shows that there was minimal turnover in geriatricians, rheumatologists, and podiatrists, and a net addition over the 4 years, despite the reduction in HPHC membership. Another aspect of the provider network that is important to some individuals with a chronic illness is that they work more closely with a specialist than with a primary care

doctor. It may therefore be most convenient and effective for that physician to serve as a primacy care physician. HPHC does allow this if the specialist is willing to fulfill all the responsibilities of the PCP. HPHC reports that oncologists are the most common type of specialist to do this. First Seniority has its own dedicated network, which split from the overall network beginning in 2001. First Seniority’s network overlaps that of the commercial population. Because Medicare sets the payment rates to HPHC, rather than HPHC determining what to charge, rates and contract terms for First Seniority providers are different from those offered for the HMO/POS program. As indicated earlier, HPHC withdrew as a provider of First Seniority in several counties, and lost enrollment from those counties as well as within those that remained. These changes were also reflected in the network of HPHC First Seniority Providers. Eleven of 24 First Seniority Network Hospitals affiliated in 2000 were no longer included in the network in 2001. Three of the eleven were in counties no longer covered by HPHC First Seniority. The other eight hospitals that left the network were located in Gloucester, Waltham, Lawrence, Newton, Weymouth and Norfolk. There continued to be change in the network in the next two years. Hospitals in TABLE 67

TURNOVER IN GERIATRICIANS, RHEUMATOLOGISTS, AND PODIATRISTS IN THE HPHC NETWORK


2000 2001 2002 2003

Number leaving the network 5 3 1 4

Number entering the network 0 4 1 14

Net effect (5) 1 0 10 Source: HPHC Response to Attorney General

Winchester and Needham were dropped in 2002, and hospitals in Norwood and Framingham were lost in 2003, but hospitals in Medford, Melrose and Salem were added. Though the overall capacity did not decrease dramatically between 2001 and 2003, it can make a dramatic difference to an individual First Seniority member when the hospital where he or she is accustomed to receiving services is no longer available in the network. The number of First Seniority primary care providers dropped considerably between 2000 and 2001 and continued to contract slowly as seen in Table 68. Because enrollment also dropped, however, the rate of physicians per thousand actually increased somewhat. However, this did not affect all regions equally. The rate of PCPs per Boston member increased throughout the period, while the rates in the Southeast stayed about the same and rates in Metrowest decreased somewhat and decreased considerably in the NorthEast, where they were lowest to start. This left rates in these areas as low or lower than the penetration rates for HPHC’s healthier, commercial population. Given the higher levels of medical need in older members, HPHC’s First Seniorityprovider network may be somewhat stretched, especially in the North East.


With a relatively small network covering a wide area, it is important to understand the geographic access of the provider network. While HPHC accessibility analyses in 2000 found that most provider groups meet HPHC’s standard that 95% of members have a practitioner within 30 minutes of their residence, such analyses were not available in subsequent years. Given the reduction in the number of providers, it is likely that fewer members had most provider types available within 30 minutes. These two measures suggest that First Seniority had a sufficient network of primary care providers, and an accessible network of specialists, mental health professionals and hospitals in 2000. Reductions in the network of PCPs have stretched provider PCP coverage in certain regions, the Northeast, particularly. We do not have relevant data to assess what happened to the specialist network, nor whether the network met the same high accessibility standards as in

TABLE 68 FIRST SENIORITY PRIMARY CARE PHYSICIANS

PER 1,000 MEMBERS BY REGION 2000 – 2003

2000 2001 2002 2003

Region Number Per

Thousand Number Per

Thousand Number Per

Thousand Number Per

Thousand

Boston 277 45 296 58 309 64 314 66

Metro West 361 16 264 13 214 11 181 10

North East 72 14 62 13 39 7 45 8

South East 241 15 169 19 99 11 118 17

Central 103 23

Grand Total 1,062 19 793 14 662 17 658 19

Source: First Seniority Primary Care Physician Directory, Volume 1, 2000, 2001, 2002, 2003 and DOI 2003 Supplemental Utilization Schedule NAIC 2000, 2001, 2002 for HPHC, Harvard Pilgrim and HPHC NE, Supplemental Utilization Report 2003 HPHC and HPHC NE.

2000. Changes in hospitals included in the network may have constituted a hardship for the members who had been using them. These changes in the available network may have contributed relatively high disenrollment rates, which leaving members attributed mostly to problems with services. 3. First Seniority Member Ratings of HPHC Network

The Center for Medicare and Medicaid services publishes the results of certain CAHPS survey questions for members of Medicare plus Choice plans. Table 69 shows how HPHC’s First Seniority plan compares to other Massachusetts and national Medicare Risk HMOs on questions related to physicians. First Seniority members rate their physicians’ communication quite highly, with over 70% scoring their physicians ‘always’ on questions related to how well doctors communicate. This was similar to the Massachusetts average and higher than the national average. However, all ratings fell over the period and HPHC ended at about the same level as the state average. Eighty percent or more of First Seniority members did not have a problem seeing a specialist, similar to the Massachusetts average and higher than the national average, but these rates fell as well and HPHC dropped below the Massachusetts average. Finally, almost all, 95% of First Seniority Members, were seen by a provider in the past year, equaling the Massachusetts average and exceeding the national average. These already high rates improved by one percentage point for all parties, maintaining their relative positions. This suggests that the diminished network has had some effects in making it harder to see a specialist, but has not diminished primary care rates.

TABLE 69 HPHC ACCESSIBILITY ANALYSIS FOR FIRST SENIORITY MEMBERS

% of Members Within 25 Miles of

1 Provider

% of Members Within 30 Minutes Drive of

1 Provider Jun-00 Sep-00 Dec-00

Adult PCPs 97.5% 97.6%

OB/GYNs 97.1% 96.8%

Cardiologists 99.8% 95.4% 95.2%

General Surgeons 99.8% 95.9% 96.7%

Other Surgeons 100.0% 96.9% 96.9%

Behavioral Health Providers (MDs and PhDs) 100.0% 97.0% 97.0%

Gynecologists 92.2% 91.3%

Oncologists 96.2% 96.2%

Opthamologists or Optometrists 97.0% 97.4%

Urologists 97.2% 97.2%

Hospitals 94.5% 99.9%

Source: Col 1. Massachusetts Managed Care Accessibility Analysis, June 30, 2000. Col 2,3. HPHC Medicare Accessibility Analysis, December 2000.



TABLE 70

MEDICARE SATISFACTION SURVEY RESULTS 2001, 2002 AND 2003

2001 2002 2003

HPHC MA National Average HPHC MA National

Average HPHC MA National Average

How well doctors communicate

72% E/M 74% S/N 72% 67% 68% E/M

73% N/S 72% 66% 66% E/M 70% N/S 69% 66%

Not a problem to see a specialist

83% E/M 80% S/N 83% 79% 81% E/M

81% N/S 81% 78% 78% E/M 81% N/S 83% 78%

Percentage of plan members seen by a provider in the past year

95% 95% 91% 96% 95% 91% 96% 96% 92%

E/M signifies that measures pertain to Essex and Middlesex counties N/S signifies that measure pertain to Norfolk and Suffolk counties Source: Medicare Health Plan Compare Quality Measure Details, Medicare.gov, 2001-2003

Table 70 - Definitions and Explanatory Notes “How well doctors communicate” represents the percentage of respondents who answered ‘always’ to the questions:

• In the last 12 months, how often did doctors or other health providers listen carefully to you? • In the last 12 months, how often did doctors or other health providers explain things in a way you could understand? • In the last 12 months, how often did doctors or other health providers show respect for what you had to say? • In the last 12 months, how often did doctors or other health providers spend enough time with you?

4. HPHC Clinical Management Practices of Importance for People with Chronic Illness HPHC’s practices continue to conform to the Massachusetts managed care reform law, which requires that HMOs allow physicians to issue standing referrals to specialists. This allows a member to see a specialist multiple times without needing to get a separate referral for each visit, an important benefit to people who need to see specialists on a frequent basis.

HPHC has a Specialty Case Management program intended “to identify … members who are likely to be at risk for needing complex, costly, or long-term health care services … and … would benefit from specialized expertise or an additional intensity of coordination of services”. The program is staffed by nurse case managers, with staffing levels determined by enrollment levels. As seen in Table 71, the

clinical and direct care staff decreased by 41 FTE between 2000 and 2003, a drop of 30%. However, the rate of clinical staffing per thousand members stayed at or above the 17 per thousand level present in 2000, indicating that these reductions were in proportion to enrollment reductions.

The maintenance of access to case management is confirmed by the counts we received from HPHC. While the number of members receiving specialty case management dropped from 646 to 592 between 2000 and 2002, the proportion of members provided this service actually increased considerably – by almost 45% - from 0.8 per thousand to 1.19 per thousand. In 2003, the number of members receiving this service jumped considerably, to 1066, reaching 1.98 per thousand, almost three times the rate of 2000. However, since staffing did not change so remarkably, these results suggest that the method of counting clients or the types of case management services provided may have changed.

CASE MANAG ARTMENT FTE

TABLE 71 EMENT DEP

Clinical and Direct Care Positions 2000* 2001* 2002* 2003**

Director 1.00 1.00 1.00 1.00Regional Case Manager 8.00 6.50 7.00 6.75Nurse Case Managers 112.00 84.98 73.15 70.20 Primary 93.00 68.98 57.80 54.35 Specialty 19.00 16.00 15.35 15.85Social Workers 5.00 5.00 4.00 4.00Clinical Trainers 5.00 5.00 5.00 4.85Intake Coordinators 3.00 4.85 5.00 5.90Total FTE 134.00 107.33 95.15 92.70Clinical & Direct Care FTE per thousand 0.17 0.18 0.19 0.17 * Excludes Disease Management and Functional Therapies ** Projected staffing prior to 2003 Source: HPHC Response to Attorney General

5. Providers’ Opinions of Care Managers

HPHC’s 2001 survey of primary care providers conducted by Fact Finders found that they had a largely positive view of HPHC care managers. About one quarter, 26%, of respondents interacted with HPHC care managers, and 81% of them rated care managers’ decisions as consistent with current standard of practice most of the time. In 2003, a higher percentage, 92%, rated support from care managers highly.

6. Health Advance A new service, initiated in 2001, is called HealthAdvance, provided by a company called Status1. This vendor uses encounter data to identify members whose care is fragmented or incomplete for their identified conditions. Company nurses then work directly with the PCP and the member, developing an active plan of care with at least one goal set by the patient and nurse together, usually reaching goals


within 6 to 9 months. As Table 72 shows, this program continues to work with a small percentage of commercial members, and a significant percentage of First Seniority members. Clients receiving this service rate their health as Fair to Good on average. Almost all participants have a care plan for continued services and it has succeeded in reducing their rate of hospitalization by two-thirds for commercial populations and one half-for First Seniority compared to the baseline. This service is an important improvement in the care of HPHC’s high need individuals, many of which have multiple co-morbidities and few natural supports. 7. 2001 Grievances and Appeals

As shown in Table 73, appeals from Medicare Risk members were more frequent than those for Commercial members, being received at almost three times the rate of those for Commercial members in 2000. They also increased dramatically between 2000 and 2001, by over 40%, much in excess of the 6% increase experienced by HPHC’s Commercial members. The greatest increase came for outpatient care services, which more than doubled, suggesting that members experienced significant problems in access to outpatient care. By the end of the period, the rate of complaints had dropped to near the starting level. However, different services were being appealed. While ambulatory care remained the most type of appeal, visual services and durable medical equipment appeals became much more frequent, while dental and mental health appeals decreased dramatically. Clearly 2001 was a year when First Seniority members experienced a higher level of difficulty getting the services they wanted. This may be related to changes in the provider network as members transitioned to new providers with somewhat different treatment approaches or tried to access out of network care in order to continue with the providers they knew. Without more detailed data, it is impossible to know whether the high rate of ambulatory and visual services appeals indicates a broad-based problem or a problem for particular classes of First Seniority members. However, complaints related to durable medical equipment are likely to be of particular significance for individuals with certain chronic illnesses, and may indicate difficulty in getting those items that physicians recommend.

TABLE 72 HPHC MEMBERS RECEIVING STATUS1 HEALTHADVANCE SERVICES

2001 2002 2003

Commercial

% Managed Care Members 0.50% 0.54% 0.45% Mean of Self-rate Health Status, where 1 = Poor and 5 = Excellent 2.99 3.07 2.99

Active Care Plan Rate 97% 96% 97%

Baseline Hospitalization Rate 16.7% 16.7% 16.7%

Hospitalization Rate 6.6% 5.8% 6.3%

First Seniority

% Managed Care Members 7% 8% 7%

Mean Functional Status 2.86 2.97 2.79

Active Care Plan Rate 97% 94% 97%

Baseline Hospitalization Rate 17% 17% 17%

Hospitalization Rate as of 4/6/04 9% 7% 9% Source: HPHC’s Response to AG Request for Information, 2001 and 2003.


TABLE 73 FIRST SENIORITY MEMBER

APPEALS PER THOUSAND BY MAJOR SERVICE TYPE

2000 2001 2002 2003 % Change between Years

Out-Patient Care/ Ambulatory Care 1.91 4.97 2.96 2.34 22%

Pharmacy 0.65 0.43 0.64 0.79 22%

Rehabilitative Services 0.38 0.41 0.30 0.37 -3%

Mental Health Services/Behavioral Health 0.14 0.10 0.07 0.03 -80%

Durable Medical Equipment 0.49 0.59 0.54 1.15 137%

Dental 0.36 0.20 0.15 0.03 -92%

Excluded Services 0.47 0.23 1.06 0.70 50%

Emergency Care 1.03 1.63 0.45 n/a n/a

In-Patient Care 0.81 1.17 0.96 0.93 15%

Visual Services 0.63 0.99 1.43 1.58 150%

Cosmetic/ Reconstructive Surgery 0.04 0.05 0.10 0.03 -22%

Diagnostic Services 0.58 0.36 0.10 n/a n/a

Fee For Services 0.32 0.03 0.00 0.00 -100%

Home Health Services 0.07 0.06 n/a Total 7.80 8.9711.16 7.99 2%

Source: HPHC Appeals by major service type and by first and second appeals, 2000 and 2001


8. First Seniority Access to Prescription Medications

As noted earlier, the average number of members decreased by 40% between 2000 and 2003. As shown in Table 74, almost 80% of First Seniority members in 2000 were Non-Group members, dropping to 73% in 2003. They have a limited drug benefit which was capped at $800 per year in 2000 and $600 in 2001. It went to a quarterly benefit structure in 2002, with 4 quarterly maximums of $130, resulting in an annual maximum of $520. In 2003, the quarterly benefit increased to $150, back to the annual maximum of $600 available in 2001. First Seniority group members had access to an unlimited prescription benefit in 2000 for a monthly premium of $77, increasing to reach $190 in 2003. HPHC introduced a limited benefit option for group members in 2001, which had a $1200 cap on brand name drugs and unlimited generics for a monthly premium of $91. This benefit remained unchanged in 2002 and the price increased to $145 in 2003.

TABLE 74 AVERAGE FIRST SENIORITY MEMBERS WITH PRESCRIPTION BENEFITS

2000 2001 2002 2003

Number Percentage Number Percentage Number Percentage Number Percentage

Non-Group 76% 48,569 79% 30,892 30,566 75% 26,887 73%

Group 12,962 21% 9,537 24% 9,934 25% 9,849 26%

Total 61,532 100% 40,429 100% 40,500 100% 36,735 100%

Source: HPHC Response to Attorney General RFI Drug for Member Months

The nature of the First Seniority benefit makes it more complicated to use HPHC’s prescription data to analyze access for Medicare members. The use of caps in the First Seniority prescription benefit means that HPHC did not see any claims that exceeded the annual cap in 2000 and 2001, and the quarterly cap in 2002 and 2003 for Non-Group members, and the higher cap in place for branded pharmaceuticals among some group members beginning in 2001. For members with high cost brand name prescriptions that they must take on a continuous basis, or those with multiple medications, HPHC will see claims for only a portion of the medication that they use. Thus, the following analysis looks only at HPHC’s share of pharmacy utilization and pharmacy costs.


Even considering the significant share of prescription costs carried by Non-Group First Seniority members, HPHC’s per thousand drug costs for First Seniority are considerably higher than those of HPHC’s commercial members, reflecting the greater health needs of this population. HPHC’s average prescription expenditures per thousand for First Seniority increased less than the rate for the commercial members, 8% between 2000 and 2003, (see Table 75) compared to 13% for commercial members. This is consistent with the reduction in the First Seniority Non-Group prescription benefit and the introduction of a capped option for group subscribers. This relatively low rate of increase in HPHC’s pharmaceutical expenditures for this high utilization group compared to the overall increase

TABLE 75 FIRST SENIORITY PLANS

N EXPENDITURES PER TPRESCRIPTIO HOUSAND

April – Dec. 2000 2001 2002 2003

% Difference 2000 - 2003

Grand Total $25,588 $21,077 $22,166 $22,810 8%

Source: HPHC Response to Attorney General RFI, Three Tier Analysis of Drugs in all Classes by Cost

in prescription expenditures of 60.4% experienced in the ExpressScripts sample suggests that First Seniority members have been bearing a considerable share of the likely increase in expenditures for the prescriptions they need. Those members whose income is not sufficient to cover these escalating costs may not be purchasing all the medications that might benefit them.

TABLE 76

At the beginning of the period, HPHC incurred 15% lower average pharmacy costs for Non-Group First Seniority members than for group members, as shown in the Table 76. Over the four years, the differential was somewhat reduced to 12%. Initially, HPHC incurred a higher share of pharmacy expenses for Tier 1, generic drugs and a lower percentage on Tier 2, brand name drugs for its Non-Group members than for its group members. Both groups experienced an increase in Tier 1 expenditures and a decrease in Tier 2 expenditures. HPHC’s share of expenditures for the highest tier 3 drugs is quite similar for both groups, however, and remained very stable at about 4% across all four years. HPHC’s overall average costs for both groups increased between 2000 and 2002, and then began to fall in 2003, remaining above the starting costs.

HPHC PRESCRIPTION EXPENDITURE PER THOUSAND BY TIER FOR FIRST SENIORITY MEMBERS

April – Dec. 2000 % 2001 % 2002 % 2003 % Non-Group Tier 1 $ 10,723 53% $ 11,416 53% $12,376 56% $13,183 60% Tier 2 $ 8,491 42% $ 9,241 43% $8,838 40% $7,982 36% Tier 3 $ 1,103 5% $ 940 4% $891 4% $833 4% Total $ 20,317 100% $ 21,598 100% $22,105 100% $21,998 100% Group Tier 1 $ 11,584 48% $ 11,617 48% $13,617 51% $13,869 55% Tier 2 $ 11,157 47% $ 11,385 47% $12,126 45% $10,168 41% Tier 3 $ 1,185 5% $ 1,003 4% $1,085 4% $991 4% Total $ 23,925 100% $ 24,006 100% $26,828 100% $25,028 100%

Source: Attorney General RFI, Three Tier Analysis of Drugs in all Classes by Cost

The analysis of the five most costly pharmacy classes by Tier shows a different pattern than for HPHC’s commercial population. Three of the classes were the same as for the commercial population and for both Non-Group and group First Seniority members, medications for hypertension, to control lipids, and those to treat upper gastro-intestinal conditions. Antidepressants were also included in the top five for commercial and First Seniority except for Non-Group in one year. Both group and Non-Group included hematology pharmaceuticals for most of the first two years, but diabetes drugs replaced them in the final two years. Asthma, a top drug for commercial members, and other endocrine drugs each appeared once in the first two years. In the last two years there were no differences in the most drugs with largest expenditures between the two plan types, with both including diabetes drugs and antidepressants as the forth and fifth items. Table 77 presents utilization data on the drugs for which we had at least two years of data for the same sub-group. The differences in drug benefits between group and Non-Group make a difference in the utilization of most of the medication classes, with group claims per thousand exceeding Non-Group claims per thousand for all medication classes with data available for both types of medication coverage. Utilization between the two types of medication coverage was most similar for hypertension drugs and those to treat hematological disorders. In 2003, expenditures for these classes differed overall by less than 10%, while drugs for lipid irregularity and upper GI disease differed by 33% to 67%.


TABLE 77

HPHC FIRST SENIORITY CLAIMS PER THOUSAND OF TOP FIVE DRUG CLASSES

Non-Group Group Class Description/

Tier April –

Dec. 2000 2001 2002 2003 % Difference 2000-2003

April – Dec. 2000 2001 2002 2003 % Difference

2000-2003 Cardiovascular Disease – Hypertension Tier 1 3,617 3,978 4,563 5,254 31% 3,913 3,998 4,923 5,459 40%Tier 2 1,955 2,013 1,568 1,006 -94% 2,299 2,156 1,705 988 -57% Tier 3 96 262 193 190 -172% 225 146 162 102 -55%Total 5,834 6,184 6,321 6,356 8% 6,437 6,299 6,789 6,550 2%Cardiovascular Disease - Lipid Irregularity Tier 1 7775 94 104 39% 85 87 104 109 28%Tier 2 1,309 1,511 1,574 1,573 20% 1,923 2,036 2,289 2,185 14%Tier 3 52 29 31 54 4% 42 33 27 48 14%Total 1,617 1,435 1,699 1,731 21% 2,050 2,156 2,420 2,342 14%Upper Gastrointestinal ders - Ulcer Disease DisorTier 1 346 389 329 336 18% 402 383 397 503 25%Tier 2 361 408 432 374 688 4% 642 728 886 7%Tier 3 30 13 3 0 -99% 30 19 5 1 -95%Total 720 767 771 764 6% 1,074 1,130 1,287 1,192 11%Hematological Disorders Tier 1 342 380 400 Tier 2 163 184 164 Tier 3 10 13 18 Total

Not included

515 577in top five

Not included in

top five 583

Not included in top five

Diabetes Tier 1 590 617 668 645 Tier 2 851 813 1.060 947 Tier 3 20 16 22 26 Total


1,460 1,447


1,750 1,618Behavioral Health – Antidepressants Tier 1 317 399 469 57% 48% 299 402 468 Tier 2 495 468 461 -7% 561 617 564 1%Tier 3 29 44 18 -38% 21 36 15 -29%Total 841

Not included in

top five 910 949 13% 881

Data not available

1,053 1,047 19%Source: Attorney General RFI - Three Tier Analysis of Top Five Drug Classes


All but one of the drug classes for which we have two years of data showed growth in the utilization covered by HPHC. Only diabetes utilization held steady, contrasting to the 56% rate of growth experienced for commercial populations in HPHC for this class of medication. However, this drug class is used much more intensively in First Seniority than in the commercial population, and may have less room to grow than in other age groups. Other drug classes increased from 2% to 21%. However, this varied between the tiers, with most third tier utilization considerably decreasing from 29% to 172% from 2001. Tier three drugs to treat lipid irregularity were the exception, growing at 4% and 14% on a very small base.

We also analyzed HPHC’s costs for these drug classes, presented in Table 78. Not surprisingly, the differences in the benefit structure between group and Non-Group had a more dramatic effect on HPHC cost than that seen on utilization. HPHC’s average claims costs for Non-Group members fell considerably below those for group members. In addition, HPHC’s average claims cost for Non-Group either declined faster or grew slower than its average claim cost for group members, except for diabetes drugs. Average costs per claim actually decreased for half of the Non-Group and half of the group categories. Drugs for hypertension and lipid irregularities decreased for both groups, while drugs to treat upper gastro-intestinal disorders decreased for Non-Group members and diabetes drugs showed a very small decline for group members. In contrast, hematological drugs and antidepressant drugs average HPHC claims cost increased considerably. These results show that HPHC’s tiered pharmacy plans have succeeded in containing HPHC costs, even in the face of increasing utilization rates. With HPHC’s increasing limits on pharmacy benefits, this undoubtedly means that members are both paying more for prescriptions as their share increases, and minimizing their payments by moving to lower tier alternatives, when possible. However, HPHC’s benefit structure is very similar to those of the Massachusetts HMOs, so it is likely that all HMO members are experiencing higher medication costs.


TABLE 78 FIRST SENIORITY NET HPHC COST PER CLAIM

OF TOP FIVE DRUG CLASSES

Non-Group Group Class Description/

Tier April –

Dec. 2000 2001 2002 2003 %

Difference April – Dec.

2000 2001 2002 2003 % Difference Cardiovascular Disease – Hypertension Tier 1 $3.44 $3.15 $3.92 $3.95 13% $6.13 $7.43 $9.67 $8.80 30% Tier 2 $20.03 $17.92 $19.61 $18.32 -9% $33.86 $37.56 $45.98 $44.74 24% Tier 3 $10.90 $8.91 $9.76 $23.47 54% $21.44 $ 26.39 $28.78 $34.87 39% Total $9.34 $8.14 $7.99 $6.52 -43% $16.56 $ 18.18 $19.24 $14.63 -13% Cardiovascular Disease - Lipid Irregularity Tier 1 $11.14 $11.04 $14.02 $17.29 36% $22.84 $23.64 $33.64 $33.73 32% Tier 2 $46.93 $40.81 $43.71 $42.78 -10% $86.25 $93.61 $102.02 $92.64 7% Tier 3 $18.90 $20.83 $20.06 $19.09 -1% $39.10 $68.21 $53.26 $44.04 3% Total $44.05 $39.03 $41.64 $40.51 -9% $82.65 $90.41 $98.54 $88.92 -7% Upper Gastrointestinal Disorders - Ulcer Disease Tier 1 $11.26 $7.15 $4.62 $9.00 -25% $22.41 $15.32 $11.68 $46.94 52% Tier 2 $52.21 $39.62 $41.40 $40.98 -27% $145.35 $159.40 $165.90 $156.48 7% Tier 3 $30.85 $31.78 $22.77 $37.59 18% $69.12 $86.43 $113.53 $130.73 47% Total $32.61 $24.82 $25.28 $24.68 -32% $97.23 $109.34 $118.21 $110.22 12% Diabetes Tier 1 $9.84 $8.61 -13% $28.06 $22.66 -19% Tier 2 $39.04 $43.53 12% $59.70 $62.01 4% Tier 3 $11.79 $14.08 19% $78.50 $84.68 8% Total


$26.87 $28.30 5% $47.86 $46.67 -2% Hematological Disorders Tier 1 $13.14 $12.10 -8% $26.65 Tier 2 $170.69 $271.41 59% $312.03 Tier 3 $57.21 $24.09 -58% $96.00 Total $63.79 $95.03


49%


$109.29


Behavioral Health – Antidepressants Tier 1 $2.44 $3.23 $15.14 $12.80 425% $8.28 $13.47 83% Tier 2 $31.26 $24.18 $40.87 31% $74.58 $84.00 $80.72 8% Tier 3 $18.53 $12.11 $11.68 -37% $56.27 $57.21 $40.92 -27% Total $19.95

Data not available

$14.42 $26.42 32% $30.63

Data not available

$56.21 $50.81 66%

Source: Attorney General RFI - Three Tier Analysis of Top Five Drug Classes


This analysis suggests that– even in an environment where prescription costs are rising - HPHC has been effective in controlling its average per claims costs for the five most expensive drug classes by sharing a greater percentage of the cost with its members. However, though the claims paid at least in part by HPHC grew for each of the drug classes, HPHC saw fewer claims for its Non-Group members than for group members. This is undoubtedly due in part to the Non-Group members paying in full for prescriptions once their quarterly cap has been reached. The relatively small differential between group and Non-Group utilization in hypertension and hematological drugs suggests that higher member shares for prescriptions do not significantly decrease access. However, the larger differentials in use of medications for upper Gastrointestinal diseases and lipid irregularity suggest at least a different pattern of utilization and a potential for diminished access. 9. Medications of Importance for People with Chronic

Illness

We requested data on two drug classes and one subclass of special importance for people with chronic illness and analyzed their utilization for both commercial and First Seniority members. We looked at one broad class of drugs to reduce high blood pressure (hypertension), and one of its important subclasses, hypotensives. These drugs can make it easier for the heart to pump and improve the functioning of an ailing heart. In addition, they can slow the progression of kidney disease from high blood pressure or diabetes. They are needed on an ongoing basis since they only reduce blood pressure while they are being taken. They may also be used on a preventive basis before there has been significant damage to the heart or blood vessels. We also looked at the class of anticonvulsant medications used to prevent seizures. Medication is one of the first treatments to be tested for people with epilepsy or seizure disorders. They

must reach a certain level in the blood stream to work, and patients must take the medication regularly to maintain that level. As seen in Table 79, all three drug classes were used more intensively by First Seniority members than commercial members. All classes showed a pattern of growth in utilization for both populations, though First Seniority utilization grew slower on its higher base. Hypertension drugs were the most intensively used drug class in this analysis, and grew 14% for commercial members and only 7% for First Seniority members. They also experienced a net shift from Tiers 2 and 3 to Tier 1. Hypotensives/Ace Inhibitors also showed increasing utilization overall. Members showed a dramatic shift from Tiers 2 and 3 to Tier 1 drugs. Utilization of drugs used to treat seizure disorders also increased. The very low utilization of Tier 3 drugs in this class declined for both Commercial and First Seniority members.

This pattern of increasing utilization suggests that members are increasingly accessing medications to treat these three conditions. The data also suggest that the tiered co-pay structure is effective in containing the utilization of Tier 3 medications. However, relatively few prescriptions are written for this tier, compared to Tiers 1 and 2 where the bulk of prescriptions are written. Thus the steep declines probably affect relatively few individuals and may reflect the availability of good alternatives in Tiers 1 or 2.

As mentioned previously, HEDIS measures the percentage of people who receive Beta-blockers after a heart attack. A very high percentage of First Seniority members, 98% and 97% in 2003, were given Beta-blockers in this circumstance. This was slightly lower than the state average of 99% for


http://www.medicinenet.com/script/main/art.asp?ArticleKey=11148

Medicare managed care plan members, and higher than the 94% national average for the same population. Both averages remained the same in both years. TABLE 79

COMMERCIAL AND FIRST SENIORITY CLAIMS PER THOUSAND OF SPECIFIC DRUG CLASSES

Commercial First Seniority Class Description/

Tier April –

Dec. 2000 2001 2002 2003 % Difference

2000-2003 April –

Dec. 2000 2001 2002 2003 % Difference

2000-2003 Hypotensives, Ace Inhibitors Tier 1 13 26 152 304 2,240% 96 139 715 1,350 1,307% Tier 2 289 332 222 75 -74% 1,245 1,293 809 148 -88%Tier 3 20

15 16 13 -33% 67 35 32 22 -68%

Total 322 3 373 91 393 22% 1,408 1,467 1,555 1,520 8%Cardiovascular Disease – Hypertension Tier 1 684 770 880 1,049 53% 3,679 3,983 4,651 5,309 44%Tier 2 458 491 399 300 -34% 2,028 2,047 1,602 1,002 -51%Tier 3 80 69 70 43 -46% 254 182 183 98 -62% Total 1,222 1,330 1,350 1,393 14% 5,961 6,211 6,436 6,408 7%Seizure Disorder Tier 1 86 95 100 100 16% 161 186 183 179 11% Tier 2 118 128 144 151 28% 194 215 211 205 6%Tier 3 2 1 1 1 -75% 3 1 0 0 -99% Total 206 224 245 252 22% 358 402 394 384 7%

Source: HPHC Response to Attorney General RFI - Three Tier Analysis of Drugs in Selected Classes

10. CAHPS Ratings

Table 80 illustrates responses from HPHC’s CAHPS survey stratified for health status. The sample size of the smallest category, people in fair or poor health, was relatively robust, 49 in 2001 and 35 in 2003. Samples in other years were likely of similar size. These responses show that HPHC performs very well on some dimensions of care needed by people in poor health; in some they rated their access higher than those in better health. This was true of the rating of getting needed care for illness or an injury as soon as they wanted and their ability to get a referral to a specialist. Getting needed care was rated high and improved over time, while those in better health had declining ratings. Referrals to specialists stayed about the same, with an unusually low rating in 2002, while ratings of people in better health declined. However, people in poor health rated other important aspects of care lower than those who were healthier. They were less satisfied with the time it took to get appointments with a personal doctor or specialist for an urgent problem or health condition, and


TABLE 80 HPHC CONSUMER ASSESSMENT OF HEALTH PLANS SURVEY BY SELF-RATED STATE OF HEALTH

State of Health 2000 2001 2002 2003 2000 2001 2002 2003 RATING OF HEALTH STATUS

Fair, Poor 49 35 Good 148 138 Excellent, Very Good 372 363 ACCESS TO PHYSICIANS

Satisfied with the amount of time you had to wait to get an appointment with your personal doctor or nurse for urgent care?

When needed care for illness or injury, how often dias soon as you wanted?

d you get care

% Yes % Yes % Yes % Yes % Always or Usually

% Always or Usually

% Always or Usually

% Always or Usually

N 274 Customized Customized 272 223 223Fair, Poor 75.0% Question - Question - 94.7% 90.3% 79% 100%Good 87.2% Not Available Not Available 91.5% 85.7% 86% 87%Excellent, Very Good 94.9% In 2002 In 2003 93% 88% 89% 89%

COMMUNICATION

Satisfied with the amount of time you had to wait to get an initial appointment with a specialist for an urgent problem or health condition?

Doctors/health providers explain things understandably

% Yes % Yes % Yes % Yes % Always or Usually

% Always or Usually

% Always or Usually

% Always or Usually

N 194 Customized Customized 502 481 481Fair, Poor 66.7% Question - Question - 100% 86.4% 90% 94% Good 73.1% Not Available Not Available 97.1% 93.3% 91% 94%Excellent, Very Good 75.9% In 2002 In 2003 95.5% 94.2% 96% 97%

Problem to get referral to specialist In last 12 months, how much of a problem, if any, was it to find or understand information in written materials?

% Not a Problem

% Not a Problem

% Not a Problem

% Not a Problem

% Not a Problem

% Not a Problem

% Not a Problem

% Not a Problem

N 343 328 328 189 149 149Fair, Poor 81.3% 84.2% 61% 84% 42.9% 55.6% 50% 50%Good 85.1% 80.4% 80% 78% 63.8% 60.9% 57% 68%Excellent, Very Good 85.6% 82.8% 82% 80% 68.2% 73.6% 69% 78%

In the last 12 months, how much of a problem, if any, was it to get the prescription medicine you needed through your health plan?

How would you rate the overall cost to you for your health insurance coverage? (0= Extremely Unreasonable - 10= Extremely Reasonable)

% Not a Problem

% Not a Problem

% Not a Problem

% Not a Problem

Ratings of 8, 9 or 10




N 521 Customized Customized 526 515 515Fair, Poor 66.7% Question - Question - 31.3% 47% 49%Good 77.3% Not Available Not Available 31.8% 61% 42%Excellent, Very Good 83% In 2002 In 2002 47.3% 59% 58%*Statistically significant from Source: HPHC NCQA/Consumer Assessment of Health Plans Study by Health Status, Hispanic vs. Non-Hispanic


more indicated that they had problems getting the prescription medicines they needed. People in fair or poor health improved somewhat in understanding written communications from the health plan but half of them continued to have difficulties, more than those in better health. All members rated the understandability of doctors’ and health providers’ explanations quite high, 90% and above in most years, and members with fair or poor health rating were similar. Finally, people with fair or poor health rated the affordability of their overall cost for health insurance as less reasonable than those with better health. Surprisingly, given continued premium increases, more members rate coverage as reasonable at the end of the period. Stratifying these ratings by age did not show as much differentiation as state of health. The survey sample was fairly evenly divided between the different age categories, though the youngest age group was less well represented in the 2003. As seen in Table 91, those in the oldest category had similar perceptions of getting a referral to a specialist as those of other ages. They rated their satisfaction with the amount of time to get an appointment with a personal physician or specialist higher than those of other ages, and considerably higher than those in poor health. Similarly, they generally rated their ability to get needed care for an injury or illness higher than other ages and similar to those who rated their health as fair or poor. However, their ratings of getting needed medication were worse. Their ratings of their providers’ explanations were high and similar to those of other ages. However, their ratings of written communications were not markedly different from other age categories. Those in the oldest age category had the highest ratings of the reasonableness of the overall cost for health insurance coverage, and ratings peaked in 2002.


TABLE 81

HPHC CONSUMER ASSESSMENT OF HEALTH PLANS SURVEY BY AGE

2000 2001 2002 2003 2000 2001 2002 2003 SAMPLE SIZE 18-34 109 44 35-44 103 78 45-54 164 109 55+ 134 92

Satisfied with the amount of time you had to wait to get an appointment with your personal doctor or nurse for urgent care?

When needed care for illness or injur , how often did you get care as soon as you want y ed?Years of Age % Yes % Yes % Yes % Yes % Always or Usually % Always or Usually % Always or Usually % Always or Usually N 274 272 218 18-34 85.2% 93.9% 87.5% 79% 93%35-44 87.8% 89.4% 85.2% 82% 82%45-54 94.4% 95.2% 84.3% 88% 92%55+ 93.4% 92.9% 96.4% 94% 91%

COMMUNICATION Satisfied with the amount you had to wait to get an initial appointment with a specialist for an urgent problem or health condition?

of timeDoctors/health providers explain things understandably Years

of Age % Yes % Yes % Yes % Yes % Always or Usually % Always or Usually % Always or Usually % Always or Usually

N 194 502 473 18-34 70% 95.1% 91.3% 93% 96%35-44 59.6% 98.6% 92.8% 94% 96%45-54 75% 95.3% 91.7% 91% 95%55+ 86.4% 95.8% 95.7% 97% 98%

Problem to get referral to specialist In last 12 months, how much of a problem, if any, was it to find or understand information in written materials? Years

of Age % Not a Problem % Not a Problem % Not a Problem % Not a Problem % Always or Usually % Always or Usually % Always or Usually % Always or Usually

N 343 323 189 146 18-34 84% 82.7% 77% 77% 70.4% 71.4% 55% 65%35-44 84.2% 79.5% 79% 74% 64.1% 67.2% 71% 83%45-54 85.7% 93.5% 82% 78% 60% 72.7% 61% 71%55+ 85.5% 83.7% 80% 87% 67.4% 63.2% 68% 72%

In the last 12 months, how much of a problem, if any, was it to get the prescription medicine you needed through your health plan?

COST - How would you rate the overall cost to you for your health insurance coverage? (0= Extremely Unreasonable - 10= Extremely Reasonable) Years

of Age % Not a Problem % Not a Problem % Not a Problem % Not a Problem Ratings 8, 9 or 10 Ratings 8, 9 or 10 Ratings 8, 9 or 10 Ratings 8, 9 or 10

N 521 526 18-34 82.6% 42.9% 57% 48%35-44 83.9% 38.9% 54% 52%45-54 76.8% 40% 60% 50%55+ 76.7% 46.9% 64% 61%* Statistically significant from other age groups - Source: HPHC NCQA/Consumer Assessment of Health Plans Study, 2000, 2001, 2002 and 2003


We also analyzed several similar measures for HPHC’s First Seniority programs. As seen in Table 82, in 2001, quite a high percentage, 59% to 63%, of First Seniority members responding to the survey met the high standard of always getting the care they needed, similar to the Massachusetts and national averages. Ratings fell somewhat over the next two years, and HPHC fell somewhat with respect to the state and national average. A higher percentage of respondents, 87% to 88%, had no problems getting needed care in the past six months. Again, this was similar toMassachusetts and above the national average. These rates also fell somewhat over the three years, but HPHC remained similar to the MA average and somewhat higher than the national average.

HPHC was rated quite highly as being

TABLE 82 MEDICARE CONSUMER ASSESSMENT OF HEALTH PLAN SURVEY


2001 2002 2003

HPHC MA Average

National Average HPHC MA

Average National Average HPHC MA

Average National Average

Always got care

59% E/M* 63% N/S** 63% 59% 53% E/M*

60% N/S** 61% 54% 52% E/M* 57% N/S** 59% 55%

No problems getting needed care

87% E/M 88% N/S 86% 83% E/M 82% 84% E/M

84% N/S 83% 79% 82% N/S 84% 80%

Best Possible Health Plan

47% E/M 45% N/S 46% 40% 44% E/M

47% N/S 44% 38% 33% E/M 35% N/S 33% 32%

Best Possible Care

53% E/M 52% N/S 53% 46% 49% E/M

49% N/S 51% 44% 44% E/M 47% N/S 47% 43%

* E/M signifies that measures pertain to Essex and Middlesex counties ** N/S signifies that measure pertain to Norfolk and Suffolk counties Source: Medicare Health Plan Compare Quality Measure Details, Medicare.gov, 2001, 2002 and 2003

Table 82 - Definitions and Explanatory Notes

Getting the care they and their doctor believed necessary; or

Answers to the following questions were combined to determine how many members always got the care they needed: • Got the advice or help they needed when they called the doctor’s office during regular office hours; • Got treatment as soon as they wanted when they needed to be seen right away for an illness or an injury; • Got an appointment as soon as they wanted for regular or routine care; and • Waited only 15 minutes or less past their appointment time to see the person they went to see.

Answers to the following questions were combined to determine how many members said that they did not have problems in the past 6 months:

• Finding a personal doctor or a nurse; • Getting a referral to a specialist that they wanted to see; • • Getting care approved by the health plan without delays.


The final two measures asked respondents to rate their health plan and their own health care on a 10 point scale where 10 was the best possible.

the best possible health plan and providing the best possible care, with almost half rating their health plan and slightly more than half rating their own health care as the best possible, similar to the Massachusetts average and above the national average. Again these ratings fell by about 10 percentage points over the three years, but the relative relationships remained the same.


TABLE 83

Taken together, these results suggest that HPHC’ network is highly responsive to its sickest and oldest members. Though responsiveness has declined somewhat, this is shared by other HMOs, and HPHC has maintained a rating similar to other Massachusetts HMOs. Access to medications is one area in which people in poor health and those who are older rate their experience as worse than those who are healthier or younger. This could well be related to increasing co-pays for individuals needed more medications. However, premiums were not generally rated as problematic. Written communication is also an area with room for improvement.

HPHC QUALITY AWARD PROGRAM GRANTS

FY00 FY01 FY02 FY03 # Submissions 29 34 30 Unknown # Grants Awarded 16 16 15 18 Funding $ $1.4M $1.4M $1.3M $1.5M

11. Quality Improvement HPHC’s Quality Improvement program focuses the attention of its clinical managers and provider network on effective management of certain chronic diseases. This section describes HPHC’s processes for improving the quality of care provided to its members.

Funded Topics Diabetes 6 7 2 6Asthma 1 5 1 0Cardiac Disease 7 0 1 0 Behavioral Health 1 1 3 4 Other 7 6 8 9

Projects by size of Local Care Unit XL 5 2 4 Unknown

One important method HPHC uses to communicate with its physician network is quarterly meetings with the Medical Directors of its Local Care Units. They are used to address system changes and discuss topics related to treatment quality. Their meetings continued throughout the period. Topic in 2003 included e-health and radiology.

L 4 6 4 Unknown M 4 4 2 Unknown S 3 3 3 Unknown XS Unknown0 1 2

By Region Mass – Ctrl 3 4 2 2 Mass – East 6 5 5 9 Mass – SE 7 3 3 4 Maine Not eligible 2 3 2

HPHC implemented a Quality Award Program in 2000. It is a grant-based incentive program that provides financial and consulting support to selected quality improvement initiatives conducted by network providers or physician groups. In earlier years, bonus programs for physician groups were based on performance on key quality indicators without consideration of the group’s focus on improvement. Table 83 shows the funds awarded for this program, and how they were distributed by topic, size of provider group, and region. Focus appeared to shift from cardiac disease and asthmas toward behavioral health. Projects included

NH Not eligible 2 2 1

Source: QAP Mini-Summary 2000 and 2001, Update on Grant Recommendations 2002, 2003.

practices from all regions and sizes. Funding averaged $1.4 per year with minimal changes. Late in 2003, HPHC initiated the first payments under a “Rewards for Excellence” program for larger practices that met target levels of performance for mammography, PAP and Chlamydia testing, well child care, and diabetes and depression management. Target levels are set to reward practices that reach the higher percentiles of performance. Rewards are 25¢ or 50¢ per member per month. Some of the following HEDIS measures capture HPHC’s effectiveness in improving quality of care for some of these targeted conditions. 12. HEDIS Measures Related to Chronic Illness Several HEDIS measures presented earlier are relevant to adults over 65. As reported in Chapter 4, Table 31, HPHC exceeds the state and national average in the percentage of adults over 65 with an ambulatory or preventative visit within the last 3 years, but it does not excel in this area for elder adults as much as it does for younger populations, where it is ranked as high as first or second in the state. HPHC is similar to the state average in the percentage of its geriatric specialists who are board certified. (See Chapter 4, Table 16.) Another area of special significance to older adults is cardiac treatment. Table 84 shows several measures related to appropriate treatment for cardiac problems. In 2000, HPHC fell on the low side for males over 65 on these measures,

below the Massachusetts average, which is below the national average on all measures. In comparison to the national distribution, HPHC was in the low middle for angioplasty, somewhat lower than that for cardiac catheterization, and near the lower band boundary for coronary bypass surgery. It ended close to or exceeding the MA average. All parties increased their use of less invasive angioplasty. HPHC’s increase was so great that it exceeded both averages in 2002, and fell between the two in 2003. State and national bypass averages ended lower than they started but HPHC’s increased, making it comparable to Massachusetts average. These results suggest that HPHC is becoming more similar to state practice patterns and is increasingly emphasizing less invasive treatments over more invasive treatments, a desirable treatment practice. The female rates on all these procedures fall below those for males. HPHC’s rates for females on most measures fell between the Massachusetts average and the national average, placing HPHC near the middle of the national distribution, suggesting that access for females is similar to that in many other health plans. However, in 2003, HPHC’s female rates fell well below the state and national averages for angioplasty and cardiac catheterization, though it fell between the state and national averages for bypass. These changes made HPHC’s rates for angioplasty of women quite a bit lower than the averages for both Massachusetts and national HMOs and raise a potential concern about access. However, the fact that its 2002 rates were in the high range indicates that HPHC is willing to use this procedure more frequently, and fluctuations in rate may be due to differences in need in a relatively small population.


TABLE 84 HEDIS MEASURES OF CARDIAC CARE


2000 2001 2002 2003

HPH

C (H

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MA

ave

rage

(H

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Nat

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HPH

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MA

ave

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HPH

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HPH

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MA

ave

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(H

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Nat

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. (H

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Angioplasty per thousand males over 65 9.72 10.43 13.92 10.62 11.52 14.93 17.34 12.97 16.34 14.01 13.6 17.18

Cardiac Catheterization per thousand males over 65 19.45 24.28 28.64 20.67 23.14 30.36 20.43 20.73 30.79 22.88 22.63 28.53

Coronary bypass per thousand males over 65 6.92 8.60 12.26 5.69 7.21 10.85 4.62 6.4 10.65 7.63 7.44 9.63

Angioplasty per thousand females over 65 3.94 3.65 5.50 3.24 4.81 5.76 5.93 4.88 6.61 2.78 4.76 6.59

Cardiac Catheterization per thousand females over 65 12.69 9.39 16.86 11.57 11.27 18.09 10.67 11.62 18.77 8.33 11.05 17.8

Coronary bypass per thousand females over 65 2.74 1.92 4.32 1.62 1.59 3.68 2.13 1.74 3.52 2.14 2.08 2.7


Table 84 - Definitions and Explanatory Notes Angioplasty is a procedure used to treat patients whose coronary artery disease cannot be properly managed with medication. Very low rates may indicate insufficient use of this treatment option. Very high rates, especially if rates of bypass procedures are also high may indicate overuse of invasive treatments. Cardiac catheterization is a procedure used to diagnose the location, severity and extent of coronary artery disease. It is needed particularly if coronary artery surgery is contemplated. Unusually high rates may indicate that some patients are receiving an unnecessarily invasive diagnostic procedure. Low rates may indicate problems with access to this service. Coronary artery bypass graft surgery represents the standard surgical treatment for patient with coronary artery disease who fail to respond to medical treatment and for whom angioplasty is either not possible or has not been effective. HEDIS suggests that the rates be judged together.


HEDIS includes measures of other procedures stratified for older adults, prostate surgery for males over 65, hysterectomies for females over 65, and cholecystectomy (surgical removal of the gall bladder). In 2000, HPHC’s provision of prostatectomies, surgical removal of a man’s prostate to treat cancer or enlargement, was similar to the Massachusetts average, and well below the national average, putting it in the mid-range of practice patterns. (See Table 85.) However, in 2001, HPHC’s rate had increased considerably, exceeding both the MA and national averages but then fell, putting it somewhat below both averages in 2003. The range in rates was considerably smaller at the end of the period. In 2000, HPHC’s rates of abdominal hysterectomy for women over 65 were relatively low in comparison to the Massachusetts and national averages, which were similar. At the end of the period, HPHC had increased and the state and national averages had dropped, making practice patterns more similar. This pattern suggests that HPHC remains successful in minimizing the rates of hysterectomy,

a procedure that tends to be overused. HPHC was more in the mid-range of health plans in its provision of vaginal hysterectomies, a less invasive procedure, in 2001, falling between the higher national average and the lower Massachusetts average. While it was at or above the other averages for most of the period, it dropped considerably in 2003, putting it well below the other averages, which had also dropped from 2000 levels. There was considerable fluctuation in rates over the period, but overall rates of closed procedures increased and of open procedures fell. In addition, variation between the different parties was reduced with a smaller range in 2003 than in 2000. HPHC’s rates for males for gallbladder removal and its rate for the open procedure females fell between the Massachusetts and national averages at the beginning of the period. At the end, HPHC fell below the average for males and for closed procedure females, while it was above for open procedure females. However, its scores were very similar to the averages for all except closed procedure females.


TABLE 85 HEDIS MEASURES FOR OLDER ADULTS OMPARED TO STATE AND NATIONAL AHPHC C VERAGES

2000 2001 2002 2003

HPH

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MA

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Nat

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. (H

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HPH

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HPH

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MO

/ PO

S co

mbi

ned)

MA

ave

rage

(H

MO

/PO

S)

Nat

iona

l Avg

. (H

MO

/PO

S)

Prostate surgery per thousand over 65 8.55 8.37 10.41 11.57 8.44 9.66 9.83 9.59 9.63 7.27 8.37 8.92

Abdominal Hysterectomy per thousand over 65 1.20 2.07 2.10 2.08 1.97 2.64 2.61 3.02 2.58 1.5 1.99 1.98

Vaginal Hysterectomy per thousand over 65 1.89 1.51 2.11 1.68 2.31 1.61 1.79 1.66 1.93 1.67 0.43 1.25

Gallbladder removal per thousand males over 65 – closed 2.65 3.76 3.82 2.29 2.98 3.22 2.96 4.03 2.31 2.72 4.17 3.72

Gallbladder removal per thousand males over 65 – open 1.03 1.02 1.33 1.52 1.23 1.16 1.16 1.45 1.2 0.89 1.0 0.98

Gallbladder removal per thousand females over 65 – closed

3.43 5.70 4.03 4.86 4.1 7.15 5.22 4.25 6.76 4.06 4.91 6.07

Gallbladder removal per thousand females over 65 – open

.86 .60 .95 1.62 0.92 0.99 0.47 0.68 0.93 0.64 0.61 0.62


Table 85 - Definitions and Explanatory Notes These procedures can be overused, while very low rates may indicate access problems. Removal of gallbladders can be done by conventional surgery (open), or with a laparascope, requiring only a small incision (closed). However the closed procedure is more challenging and may cause complications and require additional surgery.


HEDIS has a set of measures, which together assess the provision of comprehensive care for people with diabetes. HPHC began and remained above both the Massachusetts and national averages as all parties improved performance on screening for diabetic complications, the first four measures. (See Table 86.) The final two measures are indicators of the control of diabetes, and on these measures HPHC began between or worse than the Massachusetts and national averages and ended better than most, as all parties realized dramatic increases.

TABLE 86 HEDIS MEASURES OF COMPREHENSIVE DIABETES CARE HPHC COMPARED TO STATE AND NATIONAL AVERAGES

2000 2001 2002 2003

HPH

C (H

MO

/ PO

S co

mbi

ned)

MA

ave

rage

(H

MO

/ PO

S)

Nat

iona

l Avg

. (H

MO

/PO

S)

HPH

C (H

MO

/ PO

S co

mbi

ned)

MA

ave

rage

(H

MO

/ PO

S)

Nat

iona

l Avg

. (H

MO

/PO

S)

HPH

C (H

MO

/ PO

S co

mbi

ned)

MA

ave

rage

(H

MO

/ PO

S)

Nat

iona

l Avg

. (H

MO

/PO

S)

HPH

C (H

MO

/ PO

S co

mbi

ned)

MA

ave

rage

(H

MO

/PO

S)

Nat

iona

l Avg

. (H

MO

/PO

S)

Eye Exams 60.79% 55.74% 48.07% 66.67% 62.68% 51.99% 67.64% 60.84% 51.71% 72.26% 61.76% 48.77%

HbA1c Testing 83.37% 81.34% 78.42% 87.59% 84.05% 81.39% 92.21% 86.97% 82.58% 92.7% 89.05% 84.55%

Lipid Profile 80.40% 76.73% 76.52% 84.91% 82.05% 81.39% Not Available 93.67% 90.83% 88.41%

Monitoring diabetic neuropathy

42.18% 40.52% 41.35% 59.85% 49.51% 46.30% 68.37% 59.63% 51.82% 66.18% 57.95% 48.24%

Poor HbA1c control 44.17% 36.86% 42.27% 42.52% 31.87% 38.2% 27.49% 30.18% 33.92% 27.49% 29.29% 31.95%

Lipid Control 40.69% 39.95% 44.27% 49.15% 47.3% 49.77% Not Available 63.26% 61.25% 60.44%


Table 86 - Definitions and Explanatory Notes The measures are based on a sample of members with diabetes and measure the percentage of the sample that received needed services. For all measures except for poor HbA1c control, higher percentages indicate better provision of diabetes care.


Table 87 shows some of the diabetic screening measures for HPHC’s First Seniority members. Level of performance on these measures was higher for Medicare members than for overall commercial members in all cases. Eye exam scores rose and then fell below starting levels, while HbA1c Testing exceed the national average and Lipid Profile rates rose each year. HPHC continued to meet or exceed MA average and to exceed the national average.

TABLE 87 MEDICARE HEDIS MEASURES 2001 AND 2002


2001 2002 2003

HPHC MA

Average National Average HPHC

MA Average

National Average HPHC

MA Average

National Average

Eye Exams 87% 79% 69% 87% 82% 72% 84% 79% 68%

HbA1c Testing 94% 93% 92% 86% 95% 93% 87% 94% 89%

Lipid Profile 87% 84% 87% 94% 92% 91% 97% 95% 93%

Source: Medicare Health Plan Compare Quality Measure Details, Medicare.gov, 2001, 2002 and 2003

Asthma is a high incidence chronic condition of importance for children, sometimes requiring restricted activity and potentially causing death if not appropriately treated. In 2000, HPHC ranked third in the state and exceeded both state and national averages in prescribing appropriate medications to manage children’s asthma. (See Table 88.) All parties increased their performance on these measures between 2000 and 2003. HPHC continued to exceed the state and national averages.

TABLE 88 PEDIATRIC ASTHMA


2000 2001 2002 2003

HPH

C

(HM

O/ P

OS

com

bine

d)

MA

A

vera

ge

(HM

O/

POS)

N

atio

nal A

A

vera

ge

(HM

O

/PO

S)

HPH

C

(HM

O/ P

OS

com

bine

d)

MA

A

vera

ge

(HM

O/

POS)

Nat

iona

l A

vera

ge

(HM

O/P

OS)

HPH

C

(HM

O/ P

OS

com

bine

d)

MA

A

vera

ge

(HM

O/

POS)

Nat

iona

l A

vera

ge

(HM

O/P

OS)

HPH

C

(HM

O/ P

OS

com

bine

d)

MA

A

vera

ge

(HM

O/P

OS)

Nat

iona

l A

vera

ge

(HM

O/P

OS)

Appropriate asthma med. Ages 5-9 71.06% 66.18% 61.35% 78.6% 71.26% 63.17% 78.82% 70.42% 69.51% 83.46% 78.81% 72.4%

Appropriate asthma med. Ages 10-17 67.33% 63.62% 59.50% 72.82% 66.52% 61.62% 73.89% 66.93% 65.24% 74.21% 72.69% 68.18%




• und it quite easy to get the referrals they need for specialists, but sometimes found it difficult to get a timely appointment.

This analysis shows HPHC excelling and improving in treating conditions for which there is a clear direction for desirable performance. These results may point to the effectiveness of HPHC’s quality improvement program, which targets diabetes and asthma, among others. This analysis is unable to address whether emphasizing care for specific conditions generalizes to improve care processes for all patients with chronic diseases, or whether it might divert practice attention from non-targeted conditions and actually decrease quality of care. Where optimal provision of surgical care is not well established, HEDIS measures of HPHC’s performance are difficult to assess. For most surgeries, HPHC moved closer to state and national averages, suggesting that its members had similar levels of access to needed surgeries and protection from unneeded surgeries. However, its performance in 2003 differed from state and national averages for vaginal hysterectomies and closed gallbladder removal surgery for females in being lower than state and national averages. This raises the possibility that access is reduced, or alternatively that HPHC is excelling in preventing unnecessary surgeries. However, there is sufficient variation in these rates to suggest that HPHC’s rate may be more affected by variation in need from year to year than by over- or under- utilizing practice styles.

13. Consumer Feedback

We used a number of different approaches to gather input from HPHC members with special healthcare needs and from advocacy organizations about the first three years of the analysis period. We conducted three phone interviews with members of the Federation for Children with Special Needs, and two organizations distributed email surveys to their members, of which we received seven responses. These respondents were generally quite satisfied with their

HPHC services, and all but one of our email survey respondents rated HPHC 8, 9, or 10 where 10 is the best health plan possible. Most had been quite long-term HPHC members and were members in 2000 and/or 2001. Most were insured through their employers, though one young adult had Medicare coverage. They had a wide variety of special health care needs in their family, which included gastro-intestinal problems, seizures, mental retardation, congenital heart defect, and autism. Many individuals had more than one condition, and a number of families had more than one member with a serious medical condition. However, most were in good or excellent health over the three-year period. The same organizations agreed to solicit their members, requesting their response to an email survey about their HPHC experiences in 2003, but no responses were received. Overall, responses were quite positive. • Respondents use a variety of providers, including their

PCP, specialists, and Children’s Hospital. They were generally happy with their primary care physicians, and have often been with them for quite awhile. One changed PCPs to get one willing to treat her son’s seizure disorder. Most respondents fo

• Experiences with provider transitions varied; some easily obtained approval to see a physician who had left the network when they had a pre-existing relationship, while others transitioned to an in-network replacement.

• People who use HPHC case managers were quite positive about the value of their assistance.

• Some individuals use rehabilitation services provided by HPHC, while others receive similar services in schools. Respondents whose children use speech therapy said

that provision had improved when the state mandate was passed.

• While medication is significant for these families, they felt that HPHC had clearly communicated the tiered pharmacy program, and none indicated that it was any problem to get the medications they needed.

• Individuals who had contacted HPHC’s customer services department did not experience problems getting the service they needed.

• Cost was a problem for a disabled young adult having difficulty paying the Medicare premium out of a stipend, and a family with 3 members who have health care needs, and most of whose medications are in higher tiers.

One respondent had a much more negative view of HPHC; she rated it as 5 on the scale where ten is the best health plan possible, and was the only respondent to attribute recent changes to the receivership. While she has been satisfied with the care she receives and with the assistance of an individual HPHC customer services staff person, she describes difficulties in accessing services in Berkshire County because physicians are reluctant to accept new HPHC patients because of payment problems. We also spoke to several advocates from groups that assist people with cerebral palsy, diabetes, multiple sclerosis, and seniors at the time of the first survey. They had a range of comments: • HPHC was flexible in approving all current clients of a

specialty clinic to continue with their specialist out-of-network on an ongoing basis.

• Overdue HPHC bills were “sky high” at the time of the receivership.

• A number of HPHC members newly diagnosed with diabetes call the diabetes organization for information that they should be getting from a health plan nutritionist.

For the first three years of the analysis period, these responses suggest that HPHC is often quite flexible in authorizing out of network care, and its case management staff offer valued assistance to families with more complex health needs. However, at least in the Western part of the state, where HPHC does not have the leverage of large market share, its payment problems have affected the adequacy of the provider network. Lack of response about 2003 limits our ability to describe whether HPHC’s desirable practices continued. In our experience with qualitative data collection methods, this may be an indication that there are no salient issues that people wish to address.

C. CONCLUSION

1. Provision of Services for Limited English Speakers HPHC has demonstrated a strong and continued commitment toward providing quality care for limited English speaking individuals and other members of non-dominant cultural groups, through the development and dissemination of training programs in different aspects of cross-cultural health care. The program has grown through the four years of analysis, both adding new courses and increasing the number of health care professionals receiving training. HPHC has emphasized dissemination within its provider network, has waived fees for community health centers, and opened enrollment outside of its network. HPHC’s network includes its former health centers, many of which have a significant enrollment of limited English speakers and rich interpreter resources. HPHC also ensures that its clinical and administrative staff include some


individuals who speak other languages, particularly Spanish, and that they have access to telephone interpretation for languages that staff do not speak. Use of HPHC’s telephonic interpretation has grown over the period. Written information is readily available for Spanish speakers, and members who speak other languages can request translations. The limited data on satisfaction of Spanish speaking members showed that their levels of satisfaction on access to services was the same or higher than English speaking members. Employers with significant numbers of limited English speaking HPHC members also indicated that their employees did not have problems with aspects of HPHC’s provision of service for limited English speakers. However, both surveys indicated that limited English speakers were sensitive to the cost of health coverage. Despite these conclusions, our ability to analyze provision of care for limited English speakers was highly compromised by lack of relevant data. Members self-identify as speaking a non-English primary language on their application form. Any additional information on their language needs would only be included in their individual medical charts. Even the counts of self-identified individuals were ambiguous. Two different reports resulted in very different counts, and we could not follow either report for a subsequent year to track change. Similarly, we found that HPHC’s Provider Directory differed between years in whether it identified the linguistic capacity of certain bi-lingual providers, making our counts questionable and compromising new members’ ability to identify the full range of practitioners who speak their language. The state licensing board is also limited in its information. While practitioners list their linguistic ability as part of their licensing information, it was not possible to produce a database that would allow us to analyze the size of the pool of bi-lingual physicians that HPHC could potentially recruit into its network. Because member self-

reported language status was in a different database than utilization data, it was beyond the scope of this project to produce utilization information about limited English speaking members and any such information would have been difficult to interpret in the absence of data on the group’s health status. The available data allowed us to draw broad comparisons between the incidence of the most common language groups in HPHC’s enrollment and compare them to the language capacity in HPHC’s provider network, clinical and administrative staffing and written information. HPHC’s network capability of serving limited English speakers varies considerably depending on the language needed. • HPHC appears to have an extensive provider network

that can serve Spanish, Portuguese, Russian, Italian and French speaking members, though community respondents pointed out that the HPHC network in Cambridge does not include the clinics with the greatest Portuguese speaking capacity.

• It also has a high concentration of providers that speak Chinese languages, but since many don’t specify whether they speak Mandarin or Cantonese, it is difficult to determine whether both major Chinese languages are equally well served.

• Other language groups, like Armenian, Vietnamese, and Korean, appear to have a sufficient ratio of bilingual providers in the network, but the number of providers is small enough that members in some locations may not have a bilingual provider that is easily accessible. Similarly, the network of bilingual specialists may not include the types of specialties a particular individual needs. A few si• gnificant language groups, Haitian Creole, and Khmer, are very limited and fall below the physicians per thousand ratio of the overall network, while no


bilingual Cape Verde Kriolu speaking providers are listed.

The limitations of relevant data from HPHC are likely shared by other health plans and reflect that the customary reporting and analysis expected of them do not account for language or ethnic group. This attempt to analyze services for limited English speakers makes it clear that the health care industry as a whole is far from even beginning to be able to seriously address the health care needs of limited English speakers. While HPHC’s provision of training in cross-cultural health care exceeds what other Massachusetts health plans have committed to this area, lack of data prevents it from assessing the real outcomes of the resources it has committed. 2. Provision of Services for People with Chronic Illness We also looked at a wide variety of data related to care for people with chronic illness, a population not easy to define. One of our major sources of information was to look at care received by HPHC’s First Seniority members, a group with a greater likelihood of chronic illness than its younger commercial population. First Seniority members had a higher proportion of PCPs per thousand in its dedicated network than did its commercial population in most regions, but the Northeast and Metrowest dropped to or below commercial levels, and may signify problems in access. These levels, plus a smaller and changing network of hospitals, may have contributed to some members leaving because of problems with health care or services. As determined in Chapter III, First Seniority members had increasing ambulatory utilization, putting it higher than other Massachusetts HMOs and inpatient utilization that varied but remained higher than or equivalent to that provided by other Massachusetts HMOs. Its performance on the percentage of members over 65 with an ambulatory

or preventive visit in the last three years exceeded the national and state averages. These indicators suggest that HPHC’s First Seniority Members experienced some difficulties with HPHC’s reduced physician and hospital networks, which may have contributed to elevated appeals levels for several years and to some disenrollment due to problems with services. However, continuing members showed high and expanding rates of utilization that was better than or equivalent to other Massachusetts HMOs. We also looked at First Seniority prescription access, which varies according with the capped Non-Group benefit and the more generous group benefit for the five highest cost drug classes. The effects of higher level of cost sharing in HPHC’s First Seniority Plans compared to its commercial plans was dramatic. Within First Seniority, the difference between Non-Group members with quarterly caps, and group members, some of whom continued to be fully covered, was also significant. However, it is difficult to determine whether differences in claims per member are due to utilization among Non-Group members, or to the less complete claims records for these members, since HPHC does not see the claims for prescriptions over the quarterly cap. Increases in utilization occurring even as members’ co-pays and premiums are increasing and benefit caps are decreasing indicates that members are continuing to benefit from pharmaceuticals. However, members are clearly experiencing increases in their expenditures for these drugs, despite moving from the more expensive Tier 2 and 3 options. It is hard to imagine that increased costs are not affecting access for lower income First Seniority members. However, we have no reason to think that HPHC benefit structure is worse than for other Medicare HMOs. We also analyzed data on utilization of three drug classes of special importance for people with chronic illness: hypotensives, drugs to treat hypertension, and drugs to treat


seizure disorder. All had a pattern of increasing utilization, suggesting that members are increasingly accessing medications to treat these three conditions. Decreases in use of Tier 3 drugs affect relatively few individuals and were more than offset by increases in the other tiers. First Seniority also performed similarly to other Massachusetts and national HMOs on several aspects of access and satisfaction with health plan services. This suggests that though selection of hospitals may be more restricted than previously and the cost of care has risen, First Seniority members get an increasing level of service and prescriptions, and are pleased with their care. However, HPHC’s ratings fell over time and with respect to other HMOs in getting care and ratings of the health plan. Members were somewhat less likely to say that they always got the care they needed, somewhat more likely to have problems getting care and less likely to rate their health plan and the care they received as the best possible. Another avenue for considering care provided to people with chronic illness is to examine HPHC’s processes for authorizing and coordinating care, since these processes are more frequently used for individuals with chronic and complex illnesses. Our analysis shows that HPHC actually increased its case management staffing and the number of people served between 2000 and 2001, suggesting an enhanced ability to assist in coordinating care. HPHC also introduced a new service called HealthAdvance in 2001. This service identifies individuals with serious conditions who are not getting optimal services and conducts outreach to establish a more appropriate treatment plan and to arrange for necessary supports. It represents a proactive effort to reach people whose health status is not optimal. However, there were some indications that HPHC’s First Seniority service authorization process experienced problems. Though they had returned to 2000 levels by the

end of the period, appeals of authorization decisions were significantly elevated in 2001 and 2002, particularly for outpatient services, with lesser increases for emergency care, visual services and inpatient care. It is possible that these are related to members losing providers who had left the network and experiencing disruptions in their usual patterns of care. It would be interesting to know how many appeals may have involved requests for out of network services. We also note that HPHC has a quality improvement process that involves quarterly meetings with the medical directors of its Local Care Units, and a grants program that supports 16 Quality Improvement projects per year proposed by its providers. These projects generally set goals to improve care of a specific disease. They have most frequently targeted diabetes, cardiac disease and asthma. The effectiveness of these and prior efforts are reflected in HPHC’s excellent and increasing scores on HEDIS measures for the effective treatment of diabetes for both its commercial and Medicare members, and for asthma in children. However, while its scores on cardiac treatment show more reliance on less invasive procedures than more invasive procedures - a desirable pattern - its use of less invasive angioplasty for women tends to be low compared to Massachusetts and national averages, and may indicate less than optimal access. A counter indication is that HPHC provided the procedure at quite a high rate in 2002. HPHC had mixed performance on HEDIS measures related to surgical procedures for men and women over 65. While it was low on most measures in 2000 relative to Massachusetts and national averages, it ended the period closer to the state and national averages, indicating that its practice patterns were similar to those of other HMOs. Our final method for considering care of people with chronic illness was to analyze the CAHP results of respondents who classified their health as fair or poor. They rated some aspects of HPHC care better than individuals in good health


- getting care quickly when they had an illness or an injury and getting a specialist referral - and their ratings improved over the period. However, they were not as satisfied as those in good health in being seen by their PCP or specialist for an urgent problem or understanding written materials

from the health plan. Their ratings of the understandability of their doctors varied, but were quite high. While most members rated cost of health insurance as reasonable, it was more of a problem for those in fair or poor health.


VII. COMMUNITY BENEFITS

Harvard Pilgrim Healthcare’s community benefit program is primarily administered by the Harvard Pilgrim Health Care Foundation, which also tracks community benefit activities conducted by other HPHC departments. A separate not-for-profit, tax-exempt corporation, the Foundation operates on an annual allocation from HPHC and is overseen by a board whose membership overlaps with HPHC’s board. The Foundation has been affected by HPHC’s financial difficulties and by the imposition of a new assessment on HMOs to support payments to hospitals and health centers that provide services for low-income patients who are uninsured. However, despite these challenges, HPHC’s community benefit expenditures increased from the baseline year of this assessment, ending the period 14% higher than it began. Nonetheless, HPHC’s allocations between types of community benefit have changed considerably. Most dramatically, free care pool assessments represented 40% of total expenditures in 2001, when they were introduced, and then virtually doubled in the next year. They fell considerably in 2003, but constituted almost two-thirds of total expenditures. In order to fulfill this requirement, HPHC reduced other community benefit expenditures considerably. The research/teaching program was impacted most dramatically, with a 70% decrease in dollars contributed from HPHC. However, these funds have always been leveraged by grant and other funds from additional sources. These leveraged grant funds increased from $15 million in 2001 to $22 million in 2003, more than making up for the loss in HPHC support. Administrative expenses increased considerably, by 97% between 2000 and 2003, primarily due to accounting changes. The year 2000 included only DACP administrative expenses, while subsequent years included staffing costs for the other community service functions.

TABLE 89 HPHC COMMUNITY BENEFIT EXPENDITURE BY MAJOR CATEGORIES

A. DEPARTMENT OF AMBULATORY CARE AND PREVENTION


DACP is a joint undertaking of HPHC and the Harvard Medical School and, as shown in the table, is one major avenue for HPHC charitable endeavors. Its function is to enhance the clinical competencies ofclinicians as needed to adapt to the rapid

Foundation Areas 2000 2001 2002

2003 Percentage

Change Department of Ambulatory Care and Prevention (DACP)

Provider Teaching Program* $2,737,203 $1,834,829

Research* $7,500,000 $1,747,700 $2,626,967 $3,065,289 -70%

Community Service Center $6,585,250 $6,061,532 $4,169,428 $3,725,320 -43%

Free Care Pool Assessment n/a $8,077,834 $16,569,393 $12,292,039 52%

Subtotal Program Areas $16,822,453 $17,721,895 $23,365,788 $19,082,648 13%

Administrative $204,325 $360,727 $488,891 $403,131 97%

Grand Total $17,026,778 $18,082,622 $23,854,679 $19,485,779 14 % *Occupancy and IT expenses were allocated between these two programs in proportion to their direct allocations. Source: HPHC 2000 Community Benefits Report, HPHC Community Benefits Annual Report 2001, 2002 and 2003 changes of the current

medical system. Training focuses on primary care, prevention, population based care, clinician/patient relationships, and responsiveness to social concerns. Programs are geared both to students and to practicing professionals. In addition to course work, HPHC affiliated clinicians act as preceptors to clinicians participating in structured clinical clerkships. The Department also has a research component that funds projects related to improving the quality of care. In 2001, HPHC’s funding contributed to research projects that were supported by an additional $15.1 million from other sources, and in 2003 by an additional $22 million. These projects address many different healthcare areas such as pediatric asthma care, breast cancer screening in the elderly, and public health preparedness and response to bioterrorism.

B. COMMUNITY SERVICE CENTER

HPHC’s second major avenue for charitable giving is the Community Service Center of the Foundation. The mission of the center emphasizes prevention. In the year 2000, the Center continued its existing priorities, which were:

HPHC also participates in the MA Health Funders Network, a group that includes other HMO foundations and several regional and other charitable foundations that focus on health. This group allows individual foundations to select complementary and non-duplicative funding goals and can facilitate meeting emergency financial needs of community health agencies by more easily identifying a compatible source of available funds.

HPHC’s Quality Award Program was described previously as a component of HPHC’s Quality Improvement program. Community benefits fund the awards made to practices that implement practice-based improvement initiatives such as

• AIDS/HIV prevention. • Violence prevention. • Substance Abuse prevention. • Elder health promotion. • Teen pregnancy prevention. • Support for Healthy Communities Initiatives.

Simultaneously, as the result of wide ranging conversations with community stakeholders the Foundation increased its focus on “reducing health disparities among populations disproportionately affected by conditions related to the

Healthy People 2010 Leading Health Indicators”8 using the healthy communities model. This resulted in a shift from the categorical issues bulleted above to a broader approach. However, initiatives for the above goals continue to be supported as well.

1. Community Service Expenditures by Program The table that follows shows community service expenditures by program. During the assessment period, the Community Health Centers Enhancement Fund completed HPHC’s $15 million commitment to community health centers. It issued grants to help them improve their ability to compete with other health care providers by implementing projects to address such issues as decreasing administrative costs and improving information and clinical management systems. HPHC’s goals for addressing health disparities were integrated into this grant program.


8 Harvard Pilgrim Health Care 2001 Community Benefits Report, June7, 2002. Page 4.


smoking cessation and asthma management. This program has declined from the $2 million spent in 2000 to $1.3 million spent in 2003. The Supplementation Program consisted of two premium subsidy programs for certain groups of HPHC members. One program provided assistance to purchase insurance coverage for those individuals residing in the Mission Hill and Parker Hill neighborhoods of Boston who had access to insurance coverage but could not afford the employee portion of the coverage. The second program subsidized members of HPHC who elected coverage under the Federal Consolidated Omnibus and Reconciliation Act (COBRA) for individuals who qualified based on income. The first program ended on May 31, 2000 due to HPHC’s financial losses and the second program, established in 1996 as a four-year program, ended as originally scheduled on March 31, 2000.

TABLE 90 COMMUNITY SERVICE CENTER EXPENDITURES BY PROGRAM

Foundation Areas Foundation

Expenditures in 2000

Foundation Expenditures

in 2001


in 2002


in 2003

Percentage Change

Community Health Centers Enhancement Fund $3,048,773 $3,612,682 $1,689,789 $414,580 -86%

Quality Award Program $2,084,726 $1,400,000 -39% $1,031,200 $1,281,025

Supplementation Program $185,309 $1,409 n/a n/a

Community Grants $1,266,442 $1,047,441 $1,448,439 $2,029,715 60%

Total $6,585,250 $6,061,532 $4,169,428 $3,725,320 -43%

Source: HPHC 2000 Community Benefits Report, HPHC Community Benefits Annual Report 2001, 2002 and 2003

The Foundation’s support for community-based health and human service organizations working in the Foundation’s priority areas has grown from around one million to over two million dollars in 2003.

C. CHARITABLE CARE In 2001, a third major avenue of charitable giving was established as the Commonwealth levied a fee on all HMOs operating in Massachusetts to strengthen funding for the Massachusetts Uncompensated Care Pool. The Massachusetts Office of the Attorney General considers this to be a form of charitable giving, though it is not voluntary. Clearly, HPHC’s payment of this assessed fee displaced funds that previously had supported other forms of giving.

D. SUMMARY OF COMMUNITY BENEFITS HPHC’s overall charitable giving increased by 14% between 2000 and 2003. This has been a period of considerable transition. The necessity in 2001 to pay an assessment to the Commonwealth’s uncompensated care pool equal to over 40% of HPHC’s total gifts necessitated a considerable redistribution in its other types of charitable activity. Coincidentally, HPHC’s small existing program to subsidize the premiums of income-eligible individuals and its $15 million pledge to community health centers were decreasing as they

approached their planned ending dates. Fulfilling the free care pool assessment had the most dramatic impact in HPHC’s contributions toward research and teaching, though these programs leveraged sufficient grant funding to more than make up for the loss in HPHC’s share. HPHC’s Quality Improvement program also experienced a cut. HPHC’s grants to other community organizations, however, expanded by 60%, targeted particularly to improve access to care for underserved populations.


VIII. CONCLUSION

HPHC has lost membership overall, and those members who disenrolled from its individual plans appear to have higher levels of need and use for medical care than those who remained. However, in its larger commercial plans it has generally enrolled an older and therefore higher need group and fostered increased utilization of services among them. Its utilization remains similar to or above that of both state and national HMOs. Of the areas we analyzed, the following have shown stable or increasing access, quality and/or utilization.

• unity benefit expenditures have grown modestly, even in this period of financial discipline. However, meeting its new obligations to fulfill its assessment to the free care pool has been accommodated by reducing its contributions toward education and research. During this period it completed its $15 million commitment to Health Centers.

• Most indicators show that HPHC has maintained and

increased access to care for its group and Medicare Risk plan members. Quality scores have improved to very high levels, often exceeding other HMOs. Satisfaction scores for commercial members have also grown, while those for First Seniority members remain high, they have eroded somewhat, similar to other Medicare HMOs.

• HPHC has expanded Medicare Cost coverage to a greater degree than other MA HMOs. Partial data on utilization shows provision of levels of care that equal or exceed those of other HMOs.

• Overall HPHC has maintained and improved access to

behavioral health services. HPHC members had high satisfaction with their services, and HPHC has excelled on some measures of quality of mental health care according to HEDIS.

• Both commercial and Medicare members show increasing utilization of medications, through cost sharing provisions similar to those enacted by other HMOs undoubtedly affect lower income seniors and

likely prevent them from using all the medications that might benefit them.

• Overall access to rehabilitation services has increased. • HPHC shares the same limitations experienced by the

industry as a whole in its ability to reliably identify and understand the health care needs of its limited English-speaking members. However, it has made a substantial and continuing commitment to developing cross-cultural training materials and offering training to medical practitioners in its network and to the larger healthcare community. HPHC’s comm

In a few limited areas, HPHC has reduced its provision of care from prior levels or there are indications of some dissatisfaction or performance problem. • Individual members experienced both enrollment

decreases and dramatic drops in utilization between 2000 and 2001 that suggest that higher need members may have dropped coverage. The rate and coverage changes influencing disenrollment were largely determined by state regulation and rate setting decisions which HPHC attempted to moderate within allowable parameters.

• High rates of inpatient psychiatric utilization and readmission rates suggest room for additional


improvements in assisting members to stabilize after discharge. We do not have data that allows us to compare these rates to those of other HMOs.

• A high level of appeals suggest that HPHC members desired more rehabilitation therapy services than they get, with physical therapy standing out as a continued issue at the end of the period.



• HPHC is providing less access for substance abuse treatment than other HMOs as indicated by lower utilization rates.

• HPHC may be providing less access for substance abuse treatment than other HMOs as indicated by lower utilization rates. However, questions about the accuracy of categorizing claims with both mental health and substance abuse diagnoses make this a tentative conclusion.

Overall available indicators show that HPHC has achieved financial stability while maintaining and / or increasing the level of services provided, and initial loss of enrollment has been followed by slow growth as its premiums have become more similar to those of other Massachusetts HMOs. Many of the areas in which indicators show continued enrollment decrease or service limitations have been determined by

external agents or are similar to the policies or performance of other HMOs.


Assessment of Harvard Pilgrim Health Care, Inc. - DMA Health

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