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The American Journal of Managed Care March 2019
Fragmented Ambulatory Care and Subsequent Emergency Department Visits and Hospital Admissions Among Medicaid Beneficiaries
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Implications of Eligibility Category Churn for Pediatric Payment in Medicaid
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Implications of Eligibility Category Churn for Pediatric Payment in Medicaid

Deena J. Chisolm, PhD; Sean P. Gleeson, MD, MBA; Kelly J. Kelleher, MD, MPH; Marisa E. Domino, PhD; Emily Alexy, MPH; Wendy Yi Xu, PhD; and Paula H. Song, PhD
Analyses of Ohio Medicaid claims data from 2013 to 2015 reveal that instability among eligibility categories is common and affects average capitation but not health service use.

Objectives: To describe the extent and implications of “churn” between different Medicaid eligibility classifications in a pediatric population: (1) aged, blind, and disabled (ABD) Medicaid eligibility, determined by disability status and family income; and (2) Healthy Start Medicaid eligibility, determined by family income alone.

Study Design: As a result of a 2013 policy change, children with ABD eligibility transitioned from fee-for-service to capitated care. We used Ohio Medicaid claims data from July 2013 through June 2015 to explore the relationships among instability in eligibility category, demographics, and utilization.

Methods: To examine the potential financial effect of categorical churn, an effective capitation rate was created to capture the proportion of the maximum potential capitation rate that was realized.

Results: More than 20% of children exited ABD-based eligibility at least once. Switching was associated with younger age and rural residence and was not associated with healthcare use.

Conclusions: Switching between eligibility categories is common and affects average capitation but not health service use.

Am J Manag Care. 2019;25(3):114-118
Takeaway Points

Analyses of Ohio Medicaid claims data for children aged 3 to 16 years from 2013 to 2015 reveal that instability among eligibility categories is common and affects average capitation but not health service use.
  • The potential financial impact of churn should be considered when designing alternative payment models (APMs) to target high-cost populations. 
  • In addition, the impact of churn should be considered when setting rates because the risk associated with revenue uncertainty may deter APM organizations from taking on risk-bearing contracts.
  • Policy changes that enhance categorical stability (eg, reduced frequency of redetermination) could reduce churn without adding payment system complexity.
In most states, children who qualify for Supplemental Security Income (SSI) under the Social Security Administration’s definition of disabled children also automatically qualify for Medicaid under the aged, blind, and disabled (ABD) eligibility category. Because of the complex needs of these children, state Medicaid programs have traditionally retained them in the fee-for-service (FFS) system rather than mandating them into managed care, accountable care organizations (ACOs), or other alternative payment models (APMs).1 Increasingly, states are rethinking this choice.2 There is a growing belief that the benefits of APMs may outweigh the perceived risks regarding inherent limitations on service access and provider networks.3,4 Rather than exclude Medicaid-eligible disabled children from APMs, states are instead experimenting with modified payment approaches, including differential experience-based capitation rates, that allow APMs to provide this patient population with healthcare services, care coordination, and social supports that meet their higher needs. Changes in Medicaid enrollment categories due to changes in children’s health conditions and their families’ financial conditions can, however, complicate these efforts. For example, data from Ohio—a state that transitioned children from FFS to an APM—show that in a 2-year period, more than 20% of children moved between higher and lower capitation rates, potentially blunting the impact of differential capitation (Figure).

In this case study, we explore the extent and impact of “churn” between different Medicaid eligibility classifications for enrollment reasons on the financial exposure of organizations that use APM models, drawing on the experience of Partners for Kids (PFK), an Ohio Medicaid ACO that serves approximately 330,000 Medicaid-covered children in 34 of Ohio’s 88 counties. PFK began enrolling children in Medicaid’s ABD eligibility classification as part of a policy change that ended the ABD managed care exclusion, effective July 2013.

In the time frame studied, July 2013 through June 2015, Ohio operated as a 209(b) state, which allowed the eligibility criteria for Medicaid ABD to be more restrictive than for SSI.5 Specifically, ABD eligibility required both an SSI determination and a family income level of less than 64% of the federal poverty level (FPL). This linking of disability status and income selects a very high-risk population, given research documenting that family poverty is associated with worse health status and higher health-related financial burden, even after controlling for insurance status.6-8

On a monthly basis, changes in household income could change categorical eligibility from ABD to Healthy Start, Ohio’s implementation of the State Children’s Health Insurance Program, which expands Medicaid to cover children 18 years or younger with family incomes up to 206% of the FPL. Changes in eligibility category generated changes in capitation, with the per-month experience-based capitation rate for ABD children being nearly 5 times the experience-based capitation rate for children who qualify for Healthy Start. The changes in capitation rates did not, however, change the services for which enrollees were eligible. Whether covered under ABD or Healthy Start, children had access to the full range of Medicaid-covered services and were eligible for care coordination appropriate for their clinical needs.


Data Sources and Study Population

Analyses used 2 years of Medicaid administrative claims data (July 1, 2013, to June 30, 2015). The study cohort included 7262 children aged 3 to 16 years who were enrolled in PFK as ABD in July 2013. Children younger than 3 years were excluded because they did not have sufficient claims history to calculate their medical complexity status. Those older than 16 years were excluded so that the full sample would be age eligible for Medicaid throughout the follow-up period. Enrollees whose initial entry to ABD occurred after July 2013 were also excluded from the analysis in order to focus on transitions over 2 years.

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