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EVALUATION OFARIZONA'S HEALTH CARF rncr CONTAINMENTSYSTEM DEMONSTRATION FINALREPORT February 1996 Preparedfor: JoanPeterson IHeJal-thX°03L™T.dTanHceian'tghARdem,ionrirsntrDaetmio°nnstrations /bOOSecurityBoulevardC-3-18-26 Baltimore, MD21244-1850 Laguna Research Associates 455MARKETST,SUITE 1190,SANFRANCISCO.CA94,05 415-5l2-748o' EVALUATION OFARIZONA'S HEALTH CARE COST CONTAINMENT SYSTEM DEMONSTRATION FINALREPORT February 1996 Prepared for: Jodn Peterson OfficeofState Health Reform Demonstrations Health Care FinancingAdministration 7500SecurityBoulevard C-3-18-26 Baltimore, MD21244-1850 Preparedby: NeldaMcCall C. William Wrightson Jodi Korb Michael Crane William Weissert John Wilkin This reportis basedonworkfundedunderHCFA Contract Number HCFA-500-89-0067to Laguna ResearchAssociates. The HCFA projectofficersoverthedurationoftheevaluationwere Ronald Lambert, James Hadley, andJoan Peterson. Theanalysisand conclusionsaresolelythoseoftheauthorsanddo notexpressany officialopinionoforendorsementbythe Health Care financing Administration. ACKNOWLEDGEMENTS The authors would like to express their appreciation to the many people over the course of the AHCCCS evaluation who have contributed to the project either through their work on various aspects of the project or their comments on drafts of final reports or articles. We are especially grateful for their comments to those at the AHCCCS Administration as well as to Sidney Trieger, Ronald Lambert, James Hadley, and Joan Peterson from the Office of Research and Demonstrations at HCFA. Our collegues who have worked on the AHCCCS evaluation all contributed to the thinking presented in this final report and should be acknowledged directly: Donald Balaban, Ellen Jones Bauer, Suzanne Pollack Driver, Susan Haber, Sande Kiriluk, Stanley Moore, Lynn Paringer, Neil! Piland, Betty Skipper, Gordon Trapnell, Pamela Turner, Alice Wade, and Margaret Watkins. We are also grateful to the following people for their administrative, editorial and research support during the course of the project: Kathleen Foley, Leslye Garrison, James Genuardi, Melissa Constable Musliner, and Jon Tomlinson. A final thanks should be given to Steven Mangle and Tara Washburn, who managed the production of this report. i I1 TABLE OF CONTENTS GLOSSARY OF ABBREVIATIONS AND ACRONYMS v I. INTRODUCTION 1 The AHCCCS Program 1 The Program Evaluation 15 II. THE IMPLEMENTATION & OPERATION ISSUES 21 Overview 21 Effectiveness of Program Contractors 21 Method of Setting Capitation Payments 36 Preadmission Screening, Level of Care Determination, and Use of Home and Community-Based Services 51 Administrative Costs 68 Management Information System 80 III. THE OUTCOME ISSUES 93 Overview 93 Utilization of Services 94 Special Studies 110 Cost of the Program 120 IV. SUMMARY AND CONCLUSIONS 137 Implementation and Operation Findings 137 Outcome Findings 145 Conclusions 152 ENDNOTES 155 APPENDIX A A-l APPENDIX B B-l iii GLOSSARY OF ABBREVIATIONS AND ACRONYMS ABC Access Blue Connection ADL Activity of Daily Living AFDC Aid to Families with Dependent Children AHC Arizona Health Concepts AHCCCS Arizona Health Care Cost Containment System ALTCS Arizona Long-Term Care System APD Advance Planning Document APIPA Arizona Physicians Independent Physicians' Association AS AHCCCS Select CATS Client Assessment and Tracking System CCC Cigna Community Choice CCDHS Cochise County Department of Health Services CCIC Coordinated Community In-Home Care CCP Children's Care Program CMDP DES Comprehensive Medical and Dental Plan CMP Children's Medical Program CSDP Comprehensive Service Delivery Plan DES Department of Economic Security DHP Doctors' Health Plan DSH Disproportionate Share Hospital EAC Eligibility Assistance Children ELIC Eligibility Low-Income Children EPD Elderly and Physically Disabled EPSDT Early and Periodic Screening, Diagnosis, and Treatment FFS Fee-For-Service FY Fiscal Year HCA Health Choice of Arizona HCB Home and Community-Based HCBS Home and Community-Based Services HCFA Health Care Financing Administration HMO Health Maintenance Organization IADL Instrumental Activity of Daily Living ICF Intermediate Care Facility ICF/MR Intermediate Care Facility for the Mentally Retarded IHS Indian Health Service LTC Long-Term Care MCP Mercy Care Plan MDS Minimum Data Set MI Medically Indigent MIS Management Information System MN Medically Needy MN/MI Medically Needy/Medically Indigent MMCS Maricopa Managed Care System MMIS Medicaid Management Information System MR/DD Mentally Retarded/Developmentally Disabled NCH National Claims History NEAZ Family Health Plan of Northeastern Arizona NHIS-SOA National Health Interview Survey - Supplement on Aging NMAF New Mexico Abstraction Form v i NNMNEHSS NNaattiioonnaall MNeudriscianlg HEoxmpeendSiutruvreey Survey pppPACCHSLPSjC PPPPirrinemiaaamldamrHiyCesoasulCintaothrnyeSSLyPcsohrtnyeegsem-incTiienargnm Care PQPPRHMMRAXBOMHIPS PPQPRhruerogeoaeipflonaeiniisfaxdsilieodHMneeAaadMHlliCetcCdhaCiRiScedavPrliHeaeMenwaanlBatOehgrnegemafPenilnicatnziaatrIiynofnormation System Rcppvp RSteaqtueestFisfcoarlPrYoepaorsal SShHmMoO Social Health Maintenance Organization SSSSNNsOiFBpRA SSoSkiuixaptlpnhllieedmO-emnnNtiuabrlussinSg—BeucduFgr3aeic-tt-iyliR--teI-ycn--ocnomcmeiliation Act TPL Third-Party Liability VyrHjSLTC VYeanvatpaania HCeoaulntthy SLyosntge-mTserm Care vi