Medicaid prospective payment: case-mix increase

South Carolina Medicaid implemented prospective payment by diagnosis-related group (DRG) for inpatient care. The rate of complications among newborns and deliveries doubled immediately. The case-mix index for newborns increased 66.6 percent, which increased the total Medicaid hospital expenditure 5.5 percent. Outlier payments increased total expenditure further. DRG distribution change among newborns has a large impact on spending because newborn complication DRGs have high weights. States adopting a DRG-based payment system for Medicaid should anticipate a greater increase in case mix than Medicare experienced.     

An evaluation of the impact of maternity care coordination on Medicaid birth outcomes in North Carolina.

BACKGROUND. Care coordination is an important component of the enhanced prenatal care services provided under the recent expansions of the Medicaid program. The effect of maternity care coordination services on birth outcomes in North Carolina was assessed by comparing women on Medicaid who did and did not receive these services. METHODS. Health program data files, including Medicaid claims paid for maternity care coordination, were linked to 1988 and 1989 live birth certificates. Simple comparisons of percentages and rates were supplemented by a logistic regression analysis. RESULTS. Among women on Medicaid who did not receive maternity care coordination services, the low birth weight rate was 21% higher, the very low birth weight rate was 62% higher, and the infant mortality rate was 23% higher than among women on Medicaid who did receive such services. It was estimated that, for each $1.00 spent on maternity care coordination, Medicaid saved $2.02 in medical costs for newborns up to 60 days of age. Among the women who did receive maternity care coordination, those receiving it for 3 or more months had better outcomes than those receiving it for less than 3 months. CONCLUSIONS: These results suggest that maternity care coordination can be effective in reducing low birth weight, infant mortality, and newborn medical care costs among babies born to women in poverty.     

Drawing women into prenatal care

Participation in prenatal care services in the United States is low relative to that in many other developed countries, and rates of use are declining among some high risk groups. In 1986, 18 percent of all U.S. infants were born to women who delayed care until the second trimester of pregnancy; four percent, to women who initiated care in the third trimester; and about two percent, to women who obtained no prenatal care at all. Among the major barriers to prenatal care are inadequate insurance coverage, limitations in the Medicaid program, inadequate capacity in the maternity care system, lack of coordination between health and social services for low-income women and inhospitable conditions at some sites where prenatal care is delivered. The personal beliefs, knowledge, attitudes, fears and lifestyles of some pregnant women also constitute obstacles to care. For example, having an unwanted pregnancy, attaching little value to prenatal care and having a tenuous connection to the health care system in general are important predictors of insufficient care. Encouraging universal participation in prenatal care will require a major overhaul of the maternity care system. However, while consensus for fundamental reform builds, several immediate steps should be taken--such as reducing financial barriers to care; expanding the capacity of the maternity care system; improving the policies and practices that shape prenatal services at the site where they are delivered; and increasing public information.     

A comparison of Medicaid and non-Medicaid obstetrical care in California

The use of prenatal care and rates of low birth weight were examined among four groups of women who delivered in California in October 1983. Medicaid paid for the deliveries of two groups, and two groups were not so covered. The analyses suggest that longer Medicaid enrollment improved the use of prenatal care. The association between prenatal care and birth weight was less clear. For women under Medicaid, measures of infant and maternal morbidity, hospital characteristics, and Medicaid eligibility were all statistically related to charges, payments, and length of stay for the delivery hospitalization.     

The impact of publicly funded family planning clinic services on unintended pregnancies and government cost savings

Publicly funded family planning clinics serve millions of low-income women each year, providing a range of critical preventive services and enabling women to avoid unintended pregnancies. It is important to quantify the impact and cost-effectiveness of such services, in addition to these health benefits. Using a methodology similar to prior cost-benefit analyses, we estimated the numbers of unintended pregnancies prevented by all U.S. publicly funded family planning clinics in 2004, nationally (1.4 million pregnancies) and for each state. We also compared the actual costs of providing these services ($1.4 billion) with the anticipated public-sector costs for maternity and infant care among the Medicaid-eligible women whose births were averted ($5.7 billion) to calculate net public-sector savings ($4.3 billion). Thus, public expenditures for family planning care not only help women to achieve their childbearing goals, but they also save public dollars: Our calculations indicate that for every $1 spent, $4.02 is saved.     

Children Who Are Medically Fragile in North Carolina: Using Medicaid Data to Estimate Prevalence and Medical Care Costs in 2004

Objectives: The purpose of this paper is to demonstrate a method of using medical insurance paid claims and enrollment data to estimate the prevalence of selected health conditions in a population and to profile associated medical care costs. The examples presented here use North Carolina Medicaid data to produce estimates for children ages 0–19 who are medically fragile. These children with serious health conditions are a small subset of all children with special health care needs. Methods: The children who are medically fragile were identified through selected procedure and durable medical equipment codes. We profiled the expenditures for all medical services provided to these children during 2004. Results: 1,914 children ages 0–19 enrolled in Medicaid were identified as medically fragile (0.22 percent). The amount paid by Medicaid for these children during 2004 for all medical services was $133.8 million, or $69,906 per child. By comparison, the average expenditure by Medicaid during 2004 for a randomly selected group of children receiving well-child care visits was $3,181 per child. The $133.8 million of Medicaid expenditures for the children who are medically fragile represents 6.8 percent of the nearly $2 billion spent by Medicaid in 2004 for all medical services for all children ages 0–19. Conclusions: This study presents a standard methodology to identify children with specific health conditions and describe their medical care costs. Our example uses Medicaid claims and enrollment data to measure prevalence and costs among children who are medically fragile. This approach could be replicated for other health care payer data bases and also in other geographic areas.     

Prenatal participation in WIC related to Medicaid costs for Missouri newborns: 1982 update

This study replicates a 1980 evaluation of WIC prenatal participation in Missouri by using a file of 9,086 Missouri Medicaid records matched with the corresponding birth records. This file was divided into a WIC group containing 3,261 records and a non-WIC group of 5,825 records. The 1982 results generally confirm the 1980 results, with the 1982 findings showing slightly improved pregnancy outcomes for WIC participants and slightly reduced benefit-to-cost ratios compared with the 1980 findings. In 1982, WIC participation was found to be associated with an increase in mean birth weight of 31 grams and reductions in low birth weight rates (statistically significant) and in neonatal death rates (not statistically significant). The reduction in each rate was 23 percent. WIC participation was also associated with a reduction in Medicaid costs for newborns reported within 45 days of birth amounting to $76 per participant. For every dollar spent on WIC, about 49 cents in Medicaid costs were apparently saved. However, wide 95 percent confidence intervals ($.07, $.90) make it difficult to determine precisely what impact WIC has on Federal and State budget outlays.     

The prevalence of low income among childbearing women in California: implications for the private and public sectors.

OBJECTIVES: This study examined the income distribution of childbearing women in California and sought to identify income groups at increased risk of untimely prenatal care. METHODS: A 1994/95 cross-sectional statewide survey of 10,132 postpartum women was used. RESULTS: Sixty-five percent of all childbearing women had low income (0%-200% of the federal poverty level), and 46% were poor (0%-100% of the federal poverty level). Thirty-five percent of women with private prenatal coverage had low income. Most low-income women with Medi-Cal (California's Medicaid) or private coverage received their prenatal care at private-sector sites. Compared with women with incomes over 400% of the poverty level, both poor and near-poor women were at significantly elevated risk of untimely care after adjustment for insurance, education, age, parity, marital status, and ethnicity (adjusted odds ratios = 5.32 and 3.09, respectively). CONCLUSIONS: This study's results indicate that low-income women are the mainstream maternity population, not a "special needs" subgroup; even among privately insured childbearing women, a substantial proportion have low income. Efforts to increase timely prenatal care initiation cannot focus solely on women with Medicaid, the uninsured, women in absolute poverty, or those who receive care at public-sector sites.     

Medicaid and pregnancy: issues in expanding eligibility

Recent federal and state policy has expanded Medicaid eligibility to provide health insurance coverage for pregnant women with family incomes below 133 percent of the federal poverty level. It has yet to be determined how such expanded coverage will affect enrollment in Medicaid or use of prenatal care. Using 1983 data from three states with widely divergent Medicaid programs--including one that already had most of the expanded eligibility options available today--this study found that about 40-60 percent of women who were covered by Medicaid at the time of their deliveries had not been enrolled in the program when they became pregnant. In addition, a large number of women did not receive Medicaid-covered prenatal care early in pregnancy, even though they were enrolled at that time. Almost all women in the study group visited more than one ambulatory care provider at some time during the nine months before birth and one year following birth; 29-51 percent visited more than one hospital outpatient department.     

Medicaid managed care in Chicago: changes in utilization

In 1993, Illinois implemented Healthy Moms/Healthy Kids (HM/HK) in Chicago, a Medicaid managed care program for pregnant women and children. This study examines changes in immunizations for children (n = 134,072), prenatal care use for pregnant women (n = 5,151), and inpatient stays for mothers (n = 5,151) and newborns (n = 2,699) under the HM/HK program as compared with fee-for-service Medicaid in 1992 and 1993. HM/HK children were 10 percent more likely to receive any immunizations, and HM/HK pregnant women were 13 percent more likely to receive some prenatal care. Mothers' inpatient stays at delivery did not change under HM/HK. The length of newborn stays fell between 1992 and 1993, with both the HM/HK and the Medicaid 1993 comparison group deliveries associated with statistically shorter stays. During the early months of the program, improvements in the quantity of expected preventive care received were evident among children and women.     

A Three-Tier Model for the Delivery of Rural Obstetrical Care Using a Nurse Midwife and Family Physician Copractice

To meet the needs of a large indigent rural population, a rural regional referral hospital in northeastern Kentucky developed a maternity program that utilizes nurse midwives and family physicians as the primary medical providers with support from obstetricians. After five years, the number of deliveries at the hospital has increased almost 30 percent, and the maternity center is now responsible for more than 70 percent of all deliveries at the medical center. Accounting for the large increase in the number of deliveries is an increasing number of women from surrounding areas who now utilize the maternity center and the hospital for their obstetric care. During the same time, there has been a corresponding decrease in deliveries to women with no prior prenatal care and a shift toward obtaining earlier prenatal care in the hospital service population. Results of the study suggest that combining the skills of nurse midwives and family physicians with surgical backup provided by a consulting obstetrician is an effective means of meeting the health care needs of an indigent, underserved rural population.     

Medicaid 2176 home and community-based care waivers: the first ten years.

Budget reconciliation legislation in 1981 created a waiver program whereby states could provide home and community-based care under Medicaid for certain populations. States spent nearly $1.7 billion on services delivered under these waivers, known as 2176 waivers, in 1991, compared with $3.8 million in 1982, when only six states were participating in the program. Although these programs have not been rigorously evaluated for effectiveness, they continue to be a popular approach to delivering care outside of institutions for various groups. Across all states, states spent 13.4 percent of their Medicaid long-term care dollars on care outside of institutions (which includes the 2176 waiver program).     

An evaluation of a Medicaid managed maternity program: the impact of comprehensive care coordination on utilization and pregnancy outcome

The purpose of this study is to evaluate the effectiveness of the implementation of a Medicaid managed maternity care program in a public health department service population, analyzing race-specific models of WIC participation and risk of small-for-gestational age of term. There were 13,095 singleton deliveries during the period 1987-1990 to women with prenatal care in this managed maternity care program. The research design entailed comparison of the intervention group (those receiving regular prenatal care plus comprehensive care coordination in 1989-90) with an historical comparison group of women who received only regular prenatal care in the two years (1987-88).     

Extending Delivery Coverage to Include Prenatal Care for Low-Income,Immigrant Women Is a Cost-Effective Strategy

ObjectiveTo compare the outcomes and cost effectiveness of two alternate policy strategies for prenatal care among low-income, immigrant women: coverage for delivery only (the federal standard) and prenatal care with delivery coverage (state option under the Children's Health Insurance Program).MethodsA decision-analytic model was developed to determine the cost effectiveness of two alternate policies for pregnancy coverage. All states currently provide coverage for delivery, and 19 states also provide coverage for prenatal care. An estimated 84,000 unauthorized immigrant women have pregnancies where no prenatal care is covered. Our outcomes were costs, quality-adjusted life-years, and cases of cerebral palsy and infant death before age 1. Model inputs were obtained from a database of Oregon Medicaid claims and the literature. Univariate and bivariate sensitivity analyses, as well as a Monte Carlo simulation, were performed.ResultsExtending prenatal coverage is a cost-effective strategy. Providing prenatal care for the 84,000 women annually who are currently uninsured could prevent 117 infant deaths and 34 cases of cerebral palsy. Prenatal care coverage costs $380 more per woman than covering the delivery only. For every 865 additional women receiving prenatal care, one infant death would be averted, at an average cost of $328,700. Cost-effectiveness acceptability curve analyses suggest a 99% probability that providing prenatal care is more cost effective at a willingness-to-pay threshold of $100,000 per quality-adjusted life-year.ConclusionsExtending prenatal care to low-income, immigrant women, regardless of citizenship status, is a cost-effective strategy.     

The costs and financing of perinatal care in the United States.

OBJECTIVES. The purpose of this study was to estimate the aggregate annual costs of maternal and infant health care and to describe the flow of funds that finance that care. METHODS. Estimates of costs and financing based on household and provider surveys, third-party claims data, and hospital discharge data were combined into a single, best estimate. RESULTS. The total cost of perinatal care in 1989 was $27.8 billion, or $6850 per mother-infant pair. Payments made directly by patients or third parties for this care totaled $25.4 billion, or about 7% of personal health care spending by the nonaged population. Payments were less than costs because they did not include a value for direct delivery care or for bad debt and charity care, which accounted for $2.4 billion. Private insurance accounted for about 63% of total payments, and Medicaid accounted for 17% of the total. CONCLUSIONS. National health reform would provide windfall receipts to hospitals, which would receive payment for the considerable bad debt and charity care they provide. Reform might also provide short-term gains to providers as private payment rates are substituted for those of Medicaid.     

Trends in nursing home expenditures: implications for aging policy.

Nursing home care has become a major governmental responsibility. Public expenditures for nursing home care amounted to $7.3 billion in 1977. They represented 57.2 percent of the $12.8 billion nursing home bill nationally and 12 percent of public spending on all personal health care. Nursing home care absorbs more than one-third of all Medicaid expenditures. This paper explores expenditure patterns in recent years and discusses some of the factors that will influence these patterns in the future. First we analyze recent trends over the five-year period ending 1977. Then we project future utilization based on current age-specific use rates. Finally, we review recent studies on the potential cost of savings of noninstitutional alternatives to nursing home care.     

Budget deal taps Medicaid to pay for new tax cuts

AIDS advocates are relieved that Congress and the White House have agreed on a $15 billion reduction in the Medicaid budget. While this cut is significant, a previously proposed plan would have cut Medicaid even further and instituted an annual cap on the amount of health-care dollars a patient could receive. It now appears that capping Medicaid spending per Medicaid beneficiary is no longer a component of the budget agreement. The Clinton Administration anticipates a 6 percent increase of the Federal share of AIDS-related medical costs to $1.9 billion. AIDS Action recommended increasing funding for the Ryan White CARE Act by $393.9 million; the Clinton administration suggests a $40 million increase. AIDS Action also proposed biomedical and behavioral research funded by the National Institutes of Health (NIH) to rise by $134.5 million; the Clinton administration proposes a $39 million increase. A recent survey found that almost 70 percent of Americans support the notion that Medicaid should extend AIDS drug therapies to low-income people in the early stages of HIV infection. These findings will be used to bolster AIDS Action's argument that the Federal Health Care Financing Administration should extend Medicaid to more low-income people who lack private insurance.     

Weighing costs and benefits of adequate prenatal care for 12,023 births in Missouri's Medicaid program, 1988.

Numerous studies have shown that the receipt of adequate prenatal care is associated with improvements in pregnancy outcome, particularly a reduction in the risk of low birth weight. Since medical costs for these low birth weight infants are several times higher than for normal birth weight infants, one would expect that medical costs for newborns would be lower for babies whose mothers have had adequate prenatal care than for those with inadequate prenatal care. Explored in this paper is whether the reduction in Medicaid costs for newborn and post-partum maternal care is greater than the increase in prenatal costs for a Medicaid population. The analysis used a file of 12,023 Missouri Medicaid records linked with the corresponding 1988 birth certificates. A modified version of the Kessner index was used to define the adequacy of prenatal care. Prenatal care costs were $233 higher for pregnancies with adequate prenatal care than for those in which prenatal care was inadequate. Newborn and post-partum costs starting within 60 days after the birth were $347 lower for the adequate prenatal care pregnancies, resulting in a savings of $1.49 for each extra $1 spent on prenatal care. Among the other factors studied in determining this benefit to cost ratio were global billing, Supplemental Food Program for Women, Infants, and Children (WIC), and participation in Medicaid under the expanded eligibility provisions that were effective in Missouri in 1988.