State Health Department Launches Medicaid Utilization Management Program to Improve Patient Safety and Quality of Care

State Health Department Launches Medicaid Utilization Management Program to Improve Patient Safety and Quality of Care

Project Advances Medicaid Reform Goals

ALBANY, N.Y. (March 5, 2009) - As part of efforts to ensure that Medicaid enrollees receive safe, quality health care and rein in unnecessary costs, the New York State Department of Health today announced it has awarded APS Healthcare a contract to conduct an extensive utilization review of Medicaid fee-for-service payments for physical and behavioral health services, as well as prescription pharmaceuticals.

"Governor Paterson is committed to ensuring that health care spending supports clinically appropriate care," said State Health Commissioner Richard F. Daines, M.D. "This initiative will advance New York's efforts to ensure that medically necessary services are delivered to New York's Medicaid patients, effectively and efficiently."

"The project is closely aligned with our Medicaid reform goals of improving patient safety and quality of care, while bringing New York Medicaid closer to the best utilization review technology used by many private insurance companies and health maintenance organizations today," said State Medicaid Director Deborah Bachrach.

APS Healthcare, headquartered in White Plains, performs health care utilization reviews in several states. Under this contract, APS Healthcare will be responsible for reviewing Medicaid claims to identify practice patterns that do not conform to evidence-based standards or that suggest that health care resources are not being utilized appropriately. The scope of work will include a review of most fee-for-service claims, including claims for behavioral services and fee-for-service claims incurred by managed care enrollees such as pharmacy, mental health, substance abuse and other services not covered by the beneficiaries' health plan.

Specifically, New York Medicaid will be positioned to:

  • Maintain up-to-date, evidence based guidelines in order to flag the use of inappropriate medical services;
  • Notify providers whose patients show a pattern of over-using services that do not improve health outcomes (e.g. excessive medical tests), or underutilizing services documented to improve outcomes (e.g. dilated eye exams for diabetic patients);
  • Analyze the use of high-cost medical services to ensure they are appropriately ordered;
  • Review utilization patterns of high-cost, high-risk Medicaid patients who typically have multiple chronic conditions and receive services from multiple providers;
  • Document excessive Medicaid payments due to inappropriate utilization; and
  • Educate providers about best practices in order to improve outcomes and ensure appropriate use of services.

Funding of up to $7 million in state and federal funds was authorized in the 2008-09 state budget. The project is eligible for federal matching funding and when fully implemented is expected to pay for itself by achieving significant Medicaid savings, as well as improving the health care of Medicaid patients.