Phil Heinrich, Chief, Office of HIPAA Compliance

Chief Phil Heinrich, Office of HIPAA Compliance

The California Department of Health Care Services (DHCS) recently implemented three new technology initiatives designed to help support the department’s growing use of managed care to serve Medi-Cal beneficiaries.

DHCS contracts with managed care organizations to provide comprehensive medical services to nearly seven million Medi-Cal members. As the agency transitions from a fee-for-service model to a managed care approach, the new technology initiatives should help them improve business operations and adopt and use national standards in order to simplify the business of health care.

“Our processes have traditionally been mostly manual,” said Phil Heinrich, chief, DHCS Office of HIPAA Compliance.  “These three initiatives will help us transition to a more automated approach.”

The first initiative involves coordinated care. California’s Coordinated Care Initiative will integrate the medical, social, and mental health services provided to some of the state’s most vulnerable patients – dual eligible individuals enrolled in both Medi-Cal and Medicare. This new DHCS program will collect encounters, which are the no-pay records of services received by patients under their managed care plan, in industry-standard formats. By collecting this information, DHCS can better coordinate care. The system is currently being piloted in five counties.

The second initiative seeks to change the way DHCS manages encounters. Working closely with DHCS’ new Encounter Data Quality Unit will allow the department to provide timely and detailed feedback to managed care plans about the quality, timeliness, and completeness of their encounter data. For the first time, all Medi-Cal health plans will send their data directly to DHCS in industry-standard formats. The new system will be one of the country’s most advanced encounter data systems and will ultimately improve DHCS’ ability to tie payments to the population served by each managed care plan. The initiative was spurred by the need to accommodate ICD-10, the new coding standard that goes into effect in October 2015.

The final initiative, the Capitation Management System (CAPMAN), provides an industry-standard person-level receipt to managed care plans. Since going into production in July 2011, CAPMAN has supported a 50 percent increase in Medi-Cal managed care, from 4.5 million members in July 2011 to 6.8 million in February 2014. For the first six months of the current fiscal year, CAPMAN calculated and communicated payments to managed care plans in excess of $10 billion.

Heinrich said several other changes have been made to keep up with DHCS needs related to plan payment, including the Healthy Families Program transition, the regional expansion of managed care to 28 rural counties, a California Children’s Services pilot program, Hospital Quality Assurance Fees, and increased primary care physician payments as well as several other changes related to the Medicaid expansion under the Affordable Care Act.

Heinrich added that the three new technology initiatives were developed using a team approach with state staff and relatively small contracted staff.

“Our manual processes required a great deal of human resources before,” he said. “Automating will make us more efficient. Together these three IT systems will provide the cornerstone for the future of Medi-Cal managed care.”

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