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Arizona Health Care Cost Containment System (AHCCCS)

Arizona Health Care Cost Containment System (AHCCCS):  What is Managed Care?


Traditionally, Medicaid has been administered on a “fee-for-service” basis, meaning that states will employ or contract directly with providers for the care of Medicaid enrollees. This is how Medicaid was originally structured under the Social Security Act. States operating under this model draw down federal matching dollars for the care of the members and then, combined with state funds, use the dollars to pay providers directly for services. States may also choose to manage their program through a Medicaid Managed Care model. Under this model, states are permitted to enter into contracts with private and non-profit Managed Care Organizations (MCOs) who in turn use their market leverage to negotiate rates and contract with a network of providers adequate to meet the needs of their members. This model of healthcare delivery has historically proven to be cost-effective in rewarding quality over quantity and better managing the care of members. States may draw down federal funding for this model, but must be able to continually demonstrate adequate access to care and compliance with all other federal rules and statutory requirements.


The History of Managed Care in Arizona:

Arizona has the distinction of being the last state to enter into Medicaid, but the first state to create a “mandatory” Managed Care model, meaning that with the exception of the American Indian population, who under federal law cannot be mandated into managed care, all Medicaid enrollees must be enrolled in an MCO, including dual eligible and long term care members.


Prior to the inception of this model in 1982, healthcare for low income Arizonans was provided through the counties. However, as the state grew, so too did the healthcare needs of this population. The counties were no longer able to manage this program. In 1982, as a resolution to this growing crisis, Arizona sought and received approval to create a Mandatory Managed Care Medicaid program, known as the Arizona Health Care Cost Containment System (AHCCCS).


Since its inception in 1982, AHCCCS has significantly evolved by integrating new programs and reshaping payment and service models in order to provide the best quality care possible to its members. In 2013, AHCCCS integrated all services for most children enrolled in the acute care program with rehabilitative qualifying conditions under one Children’s Rehabilitative Services (CRS) contractor. In the same year, AHCCCS lead an effort to improve care coordination for AHCCCS dual eligible members; AHCCCS now requires the Contractor, or its corporate affiliate, to be a Medicare Advantage Dual Eligible Special Needs Plan in all service areas in which they hold a Medicaid contract. In 2015, AHCCCS integrated behavioral health services into three Regional Behavioral Health Authorities (RBHA) for qualifying members to create a more streamlined system of health care delivery for members with Serious Mental Illness. Furthermore, in 2015 AHCCCS integrated general mental health/substance abuse service delivery for dually enrolled members in Acute Health Plans.


AHCCCS has also integrated new payment modernization models in order to reduce costs for beneficiaries. Through value based purchasing, AHCCCS is committing resources to leverage the State’s successful managed care model to address inadequacies of the current health care delivery system, such as fragmentation, and to continue to lead efforts to bend the health care cost curve to sustainable levels. Four new models have been implemented by AHCCCS Managed Care Organizations within their provider networks all based around the concept of incentivizing providers to provide quality over quantity of care.


Managed Care Health Care plans that AHCCCS contracts with:


AHCCCS contracts with 17 MCOs statewide to provide Acute (general medical care), behavioral health, and Long-Term healthcare services to its members. Members may choose which MCO they would like to participate in upon enrollment in AHCCCS. AHCCCS also contracts with sister state agencies, such as the Arizona Department of Economic Security/Division of Developmental Disabilities (DES/DDD), to manage care for enrolled ALTCS members with an intellectual or cognitive disability. As of July 1, 2016 AHCCCS and the Division of Behavioral Health Services (DBHS) joined forces to administratively streamline monitoring and oversight of the RBHAs throughout Arizona. To carry out this new approach, RBHAs manage the delivery of physical health and behavioral health services for members who have been diagnosed with a Serious Mential Illness (SMI). This integrated model aims to increase member engagement in obtaining both medically necessary physical and behavioral health services. Members qualified to receive integrated behavioral health services are assigned to Cenpatico Integrated Care in the southern region, Health Choice Integrated Care in the northern region, or Mercy Maricopa Integrated Care in Maricopa County. Also, AHCCCS is contracted with the Department of Child Safety, a sister state agency, to administer healthcare for children in out-of-home placement through the Comprehensive Medical Dental Program (CMDP).

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