5
Options for Financing and Delivering HIV Care

Building on the findings and conclusions of previous chapters, the Committee considered a range of alternative approaches in developing its recommendations for improving the public financing of HIV care. This chapter presents the Committee’s analysis of the different options, while focusing on the concept of “Centers of Excellence” as a recommended method for improving HIV care.

The Committee considered a range of alternative approaches in developing its recommendations for improving the public financing of HIV care. Most of the approaches build on existing financing programs. One approach would expand the Ryan White Comprehensive AIDS Resource Emergency (CARE) Act. Another would expand Medicare to cover individuals with HIV infection. Three approaches would give states options for expanding their Medicaid programs to cover low-income individuals who have HIV but are not currently eligible. One of these approaches would facilitate Medicaid coverage through Section 1115 demonstration waivers; the other two would create a new optional Medicaid eligibility category of individuals with HIV, but with varying federal matching rates. The remaining approaches would create new federal programs. One would establish a federal block grant to allow states to purchase services for individuals with HIV. The other would establish a federally funded, state-administered entitlement to care for low-income individuals with HIV.

Each of these seven approaches was considered in light of the Committee’s goal to develop a comprehensive vision of a system of care that is accessible and efficient and that meets accepted standards of quality and



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Public Financing and Delivery of Hiv/Aids Care: Securing the Legacy of Ryan White 5 Options for Financing and Delivering HIV Care Building on the findings and conclusions of previous chapters, the Committee considered a range of alternative approaches in developing its recommendations for improving the public financing of HIV care. This chapter presents the Committee’s analysis of the different options, while focusing on the concept of “Centers of Excellence” as a recommended method for improving HIV care. The Committee considered a range of alternative approaches in developing its recommendations for improving the public financing of HIV care. Most of the approaches build on existing financing programs. One approach would expand the Ryan White Comprehensive AIDS Resource Emergency (CARE) Act. Another would expand Medicare to cover individuals with HIV infection. Three approaches would give states options for expanding their Medicaid programs to cover low-income individuals who have HIV but are not currently eligible. One of these approaches would facilitate Medicaid coverage through Section 1115 demonstration waivers; the other two would create a new optional Medicaid eligibility category of individuals with HIV, but with varying federal matching rates. The remaining approaches would create new federal programs. One would establish a federal block grant to allow states to purchase services for individuals with HIV. The other would establish a federally funded, state-administered entitlement to care for low-income individuals with HIV. Each of these seven approaches was considered in light of the Committee’s goal to develop a comprehensive vision of a system of care that is accessible and efficient and that meets accepted standards of quality and

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Public Financing and Delivery of Hiv/Aids Care: Securing the Legacy of Ryan White accountability for individuals with HIV who rely on public programs. From this goal, the Committee derived five assessment criteria: Eligibility: Does the approach include a minimum, uniform standard for eligibility that ensures that low-income individuals with HIV (i.e., individuals with incomes at or below 250 percent of the federal poverty level, or FPL) have coverage for recommended services regardless of the state in which they reside? Benefits: Does the approach include a benefit package that meets the standard of care for HIV/AIDS and that is uniform for all eligible individuals? Provider reimbursement: Does the approach include payment rates that are adequate to enable providers to furnish services commensurate with the standard of care for HIV/AIDS? Financing: Does the approach include a financing mechanism that is capable of supporting eligibility, benefits, and provider payment elements that meet the Committee’s criteria and that is stable over time? Integrated and coordinated services that foster accountability: Does the approach include the integration and coordination of services that allows for administrative arrangements that are efficient and that support program accountability and evaluation? The Committee applied these assessment criteria to each of the alternative approaches. The Committee’s findings are summarized in Table 5-1. The remainder of this chapter sets forth the Committee’s analysis of the advantages and disadvantages of these alternative approaches in light of these criteria. The recommendations that flow from this analysis are set forth in Chapter 6. In the Committee’s judgment, the alternative that best fits the assessment criteria is a new federally funded, state-administered entitlement program for low-income individuals with HIV. The Committee recognizes that the alternatives examined here do not represent the universe of policy options for financing and delivering HIV care. The Committee selected these particular options as broadly illustrative of the alternatives that federal policy makers are likely to explore given the current configuration of federal and state programs described in Chapter 3. For example, the most recent significant health care eligibility expansion at the federal level was the State Children’s Health Insurance Program (SCHIP), enacted in 1997. Although this program is targeted at a much different population than that to which this report is addressed, the structural features of SCHIP reflect some important policy preferences. The Committee therefore modeled one of its illustrative approaches on SCHIP. The Committee notes that, in each approach presented (excluding the Medicare option), state participation is optional. In theory, the federal

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Public Financing and Delivery of Hiv/Aids Care: Securing the Legacy of Ryan White TABLE 5-1 Alternative Options for Financing HIV Care by Assessment Criteria Option Minimum Uniform Eligibility Rules for Individuals with HIV Benefit Package Meets Standard of Care for HIV/AIDS Provider Reimbursement Is Adequate to Standard of Care for HIV/AIDS Financing Mechanism Is Adequate to Standard of Care for HIV/AIDS over Time Integrated and Coordinated Services Fostering Accountability and Evaluation 1: Expand Ryan White CARE Act No No — No No 2: Medicare Eligibility for HIV Yes No Yes Yes Yes 3A: Medicaid Budget-Neutral Waiver Expansion No No No No Yes 3B: Medicaid Optional Eligibility, Regular Match No No No No Yes 3C: Medicaid Optional Eligibility, Enhanced Match No No No No Yes 4: Block Grant to States No No No No No 5: New Federally Funded, StateAdministered Entitlement Yes Yes Yes Yes Yes government could attempt to require state participation in a program responding to a national epidemic, perhaps by conditioning the flow of federal grants-in-aid for highway construction or education upon state participation. However, the Committee believes such an approach does not merit consideration. Most states are currently experiencing substantial revenue shortfalls, and there is evidence that the imbalance between the demands on state budgets and available revenues is not temporary, but structural (Boyd, 2003). In these circumstances, reliance on any measure of required state financial participation seems to the Committee to be highly problematic. More fundamentally, forcing state participation would gener-

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Public Financing and Delivery of Hiv/Aids Care: Securing the Legacy of Ryan White ate political tensions between federal and state governments that could compromise the accomplishment of the Committee’s objective: the financing of an accessible, efficient system of care for low-income individuals with HIV that meets accepted standards of quality and accountability. FINANCING OPTIONS Option 1: Expand Ryan White CARE Act Under this approach, the Ryan White CARE Act programs discussed in Chapters 1 and 3 would be continued as currently structured, but annual appropriations would be increased to enable all CARE Act programs, ranging from Title I to Title IV, to expand their capacity to meet the medical and support service needs of low-income individuals with HIV. Advantages The primary advantage of working through the existing CARE Act programs is that these programs are already operational and have a track record of providing access to care for the uninsured and the poor. Since 1990, CARE Act programs have played a pivotal role in developing and strengthening the health care delivery infrastructure for individuals with HIV/AIDS. Though a substantial proportion of CARE Act funding is spent on medical treatment and drugs, a large proportion (27 percent) is also spent on local-level support services that are critical for individuals with HIV (GAO, 2000) but are often not covered by other programs (Levi and Kates, 2000). This approach also has administrative advantages. The planning process within the Ryan White CARE Act is designed to allow local level flexibility in determining where funding should be directed. Planning councils established under Title I of the CARE Act are charged with monitoring local trends and assessing annual funding needs. These administrative structures provide the opportunity to address population-level issues and build capacity for services such as substance abuse treatment or outreach to immigrants. The planning process also allows members of the local community to have a voice in how funds are allocated and services are delivered. Disadvantages There are several disadvantages to an approach that relies on an expansion of the CARE Act. The first relates to eligibility for services, which now varies significantly from one state to the next and from one city to the next. As a “safety net program,” the CARE Act supplements other HIV/AIDS programs in a state or locality, most notably Medicaid; in practice, this

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Public Financing and Delivery of Hiv/Aids Care: Securing the Legacy of Ryan White results in CARE Act programs with widely different eligibility criteria. This variation is inconsistent with a uniform, minimum standard of eligibility. Similarly, CARE Act benefits vary substantially from state to state, for many of the same reasons that eligibility standards vary. Access to life-extending comprehensive antiretroviral therapy also varies significantly by state. Individuals in one state may be ineligible because of income level or have access to a fewer number of drugs or types of drugs than an individual with the same disease status in another state. This variation is also inconsistent with access to the standard of care for HIV/AIDS regardless of state of residence. Another disadvantage of this approach concerns financing. As a discretionary program, the CARE Act program is subject to the uncertainties of the annual congressional appropriations process. States, localities, and private providers cannot predict with any confidence that the funds required to meet the standard of care for those with HIV in need of program assistance will be available in any given fiscal year. Currently, CARE Act dollars do not match the need for services, and some grantees have been unable to serve all those in need. Budget shortfalls for the AIDS Drug Assistance Program (ADAP) in particular have resulted in waiting lists, caps on enrollment, and/or limitations on benefits available to individuals already in the program. Although an expansion of federal appropriations consistent with this proposed approach could, if enacted, annually address these shortfalls, this would not resolve the related problem of allocation. The community planning process associated with CARE Act Title I funds has provided important community input into how funds are allocated at the local level. This process does not, however, necessarily result in funding allocation decisions that reflect the greatest areas of need over time. This is partly because of inadequate and inconsistent data sources and measures used to describe severity of need for the Title I Supplemental Application (IOM, 2003b). Furthermore, current program data collection activities do not adequately support accountability or evaluation. It is currently impossible to determine national estimates of the number of clients served or the types of services received because programs do not provide unduplicated counts of clients and the services they receive. In short, there is no guarantee, even if the necessary funds were actually appropriated each year, that these funds would be allocated in a manner that enables the standard of care for HIV/AIDS for all those in need of public program assistance in each state. Option 2: Extend Medicare to Individuals with HIV Under this approach, individuals found to be infected with HIV would be eligible for Medicare coverage, subject to the same premium, deductible, and coinsurance requirements as other Medicare beneficiaries. This approach

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Public Financing and Delivery of Hiv/Aids Care: Securing the Legacy of Ryan White would parallel the current coverage of individuals with end-stage renal disease (ESRD), who qualify for Medicare benefits even though they do not otherwise meet the Medicare eligibility requirements applicable to the aged (i.e., 65 or over and 40 quarters of payroll tax contributions) or the disabled (have received Social Security Disability Insurance payments for 24 months due to total and permanent disability) (CMS, 2003). Advantages This approach has four principal advantages. First, because Medicare is a national program, and because the presence of HIV infection is a standardized medical determination, this approach would ensure coverage of individuals with HIV infection regardless of the state in which they reside. Moreover, this approach would qualify an individual for coverage upon a medical determination of HIV infection, without a waiting period and without a disability determination or a financial means test. Second, while the adequacy of Medicare payment rates for hospital, physician, and laboratory services is the subject of continuous analysis and political debate, there is little question that most providers participate in the program (MedPAC, 2003). In the Committee’s judgment, Medicare payment rates, as a general matter, would be adequate to enable providers to furnish services commensurate with the standard of care for HIV/AIDS. Third, this approach offers sources of financing—federal payroll tax revenues (Medicare Part A), federal general revenues (Medicare Part B), and beneficiary premiums (Medicare Part B)—that are as broad in scope as the epidemic itself. These financing sources, while not without their challenges, are substantially more stable than the revenue bases of individual states, many of which are ill-equipped to absorb their portion of the costs of a national epidemic. Finally, this approach relies on existing administrative structures that, while not without their shortcomings, are relatively efficient and have created a high level of uniformity in how the program is operated. The program’s national data collection requirements also allow for tracking, monitoring, and reporting on the program. To supplement the data systems and administrative capacity of the Centers for Medicare and Medicaid Services (CMS), the Congress has established an independent agency, the Medicare Payment Advisory Commission (MedPAC), the mission of which is to monitor, evaluate, and report on the operation of the Medicare program on a continuous basis. Program accountability is promoted by oversight from the Government Accountability Office (GAO) and the Office of Inspector General (OIG) of the Department of Health and Human Services (DHHS).

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Public Financing and Delivery of Hiv/Aids Care: Securing the Legacy of Ryan White Disadvantages Extending Medicare eligibility to individuals infected with HIV has two major disadvantages. First, because Medicare is a social insurance program and not a means-tested entitlement, it does not lend itself to a national program that focuses on low-income individuals with HIV. Just as Medicare now covers all individuals determined to have ESRD without regard to income or resources, so under this approach would Medicare cover all individuals with HIV without regard to income or resources. While the Committee does not object to universal eligibility in principle, the Committee recognizes that federal resources are limited, and that in the long run Medicare’s ability to finance current benefits is questionable (as of this writing the Medicare Part A Trust Fund is projected to remain solvent through 2026). In the Committee’s judgment, the federal resources potentially available to address the national HIV epidemic cannot realistically sustain an approach that offers universal eligibility of infected individuals through Medicare. The second major disadvantage relates to Medicare’s benefits. As currently configured, Medicare’s benefits package does not include a number of services that are essential to the standard of care for HIV/AIDS, including outpatient prescription drugs and case management services. The current lack of coverage for HAART is especially problematic. As the Committee deliberated and reached its conclusions, the President signed into law the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MPDIM) (P.L. 108-173). One of the major features in the law is a prescription drug benefit (Medicare Part D, planned to take effect January 1, 2006) that allows beneficiaries to choose a drug benefit plan (the number of plans to choose from will vary by region). The standard benefit package of a Medicare Part D plan requires a $250 deductible, an average premium of $35 per month, and copayments. It offers coverage of 75 percent of prescription drug costs up to $2,250, no coverage for the next $3,600 in drug costs, and 100 percent coverage of costs above $5,850. Deductibles, premiums, copayments, and coverage thresholds are linked to inflation and will rise as time goes on. For individuals whose incomes are below 150 percent of FPL, cost-sharing and premium assistance is available and the $3,600 gap in coverage does not apply. This assistance does not reach those with incomes between 150 and 250 percent of FPL, however, leaving them with out-of-pocket drug costs that the Committee believes to be unacceptably high for individuals with HIV/AIDS. In addition, the new legislation requires that plans offer medications from each class of drugs, but state plans do not have to offer every drug within a class. Since treatment for HIV requires multiple drugs within a class and treatment regimens must be altered with some frequency, this leaves individuals with HIV vulnerable to

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Public Financing and Delivery of Hiv/Aids Care: Securing the Legacy of Ryan White high, uncovered costs if all of the required drugs are not on the plan’s formulary (Kates, 2004). Even with Medicare Part D supplying coverage of prescription drugs, the Medicare benefits package remains inadequate to the task of providing the standard of care for HIV/AIDS for low-income individuals. HAART therapy alone is not sufficient. The management of HIV/AIDS requires not only therapeutic services but also attention to the patient’s social and environmental circumstances to conserve levels of independence and slow the progression of disease and disability. Patients with HIV/AIDS, especially those with co-morbid conditions, require care from multiple clinicians and multiple systems. In addition to HAART and other drug therapies, a number of adjunct services and interventions have been identified as essential to the care process and necessary for optimal reductions in the rates of infection of HIV/AIDS. These services include but are not limited to primary medical care services (Ashman et al., 2002), substance abuse treatment (Turner et al., 2001), mental health services (Ashman et al., 2002; Davis, 2002), prevention counseling for the infected population (IOM, 2001a), and medical and social case management services (Laine et al., 1999; Ashman et al., 2002; Lo et al., 2002; Levi, 2002). The current Medicare benefits package does not incorporate all of these services. Expanding the Medicare benefits package to include these services for all beneficiaries would represent a historic program expansion. Restructuring the benefits package just for one group of beneficiaries defined by HIV infection would represent a fundamental break from the Medicare program’s long-standing commitment to offering a uniform national benefit to all eligible individuals. Option 3: Extend Medicaid to More Individuals with HIV As discussed in Chapter 3, Medicaid is currently the nation’s largest source of public financing for HIV/AIDS care. The Committee considered three approaches to extending Medicaid to other individuals with HIV who are not currently eligible for the program. All three of these approaches are optional with the states, in recognition of the strong opposition on the part of many state policy makers to federal requirements. The approaches vary significantly in terms of potential cost to the federal government. The first is budget-neutral, the second would apportion the costs of HIV/AIDS care between federal and state governments as under current law, and the third would increase the federal financial responsibility. A discussion of each approach follows.

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Public Financing and Delivery of Hiv/Aids Care: Securing the Legacy of Ryan White Option 3A: Budget-Neutral Medicaid Expansion Under Section 1115 of the Social Security Act, the Secretary of Health and Human Services (the Secretary) has the authority to waive certain requirements of federal Medicaid law to enable states to engage in demonstrations that are likely to assist in promoting the objectives of the Medicaid program while continuing to receive federal Medicaid matching funds. Currently, Massachusetts, Maine, and the District of Columbia have been granted Section 1115 demonstration waivers to provide coverage to low-income individuals in the early stages of HIV disease, although Maine has not yet implemented its waiver (Shirk, 2003; Kates, 2004). Under this approach, the Secretary would set forth specifications for a national Section 1115 demonstration initiative to cover low-income individuals with HIV who otherwise would not be eligible for Medicaid prior to the onset of disability. The specifications would provide for uniform eligibility standards and a benefit package that meets the standard of care for HIV/AIDS, as well as a budget-neutrality test less stringent than applied currently (e.g., rather than focusing solely on federal Medical savings, the Secretary in applying the budget neutrality test could also consider savings to other federal programs). States seeking to operate a demonstration program consistent with the specifications and able to demonstrate budget neutrality would have their waiver applications processed and approved on an expedited basis. As under current law, the demonstrations would be subject to independent evaluation. Advantages The primary advantage to this approach is administrative. It would streamline the process of applying for and approving Section 1115 waivers, at least insofar as it applies to demonstrations involving low-income individuals with HIV who are not disabled by the disease and therefore ineligible for Medicaid. Making these waivers more readily available to states would in effect make federal Medicaid matching funds more available to assist them in meeting the treatment costs of this population. This approach would also allow for the addition of ancillary services such as substance abuse treatment and case management that would not necessarily be offered under a straight Medicaid expansion. In addition, because Section 1115 waivers by definition involve demonstrations, this approach maximizes the opportunity for the comparative evaluation of state coverage initiatives for this population.

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Public Financing and Delivery of Hiv/Aids Care: Securing the Legacy of Ryan White Disadvantages This approach has a number of disadvantages. First, although it specifies a uniform eligibility standard for state demonstrations, it does not ensure that all states would implement such waivers and adopt such eligibility policies. Similarly, although this approach specifies a uniform benefits package that meets the standard of care for HIV/AIDS, it does not ensure that all states would implement such waivers and establish such benefit packages. This approach is silent on the issue of provider reimbursement rates, which tend to be low in relation to the cost of caring for individuals with complex conditions like HIV/AIDS. In states where rates are low, however, raising them significantly would likely make it difficult for the state to satisfy the budget-neutrality requirements. Finally, this approach leaves Medicaid’s current federal–state financing arrangements in place. Thus, the federal government’s share of any state’s cost of treating individuals with HIV would vary inversely with the state’s per capita income, from a minimum of 50 percent to a maximum of 77 percent. State per capita income has no apparent relationship to the demands that the HIV epidemic places on any given state or to a state’s fiscal capacity to respond to the epidemic. Moreover, while Section 1115 demonstration projects must be budget neutral from the federal government’s standpoint over a five-year period, this does not necessarily ensure budget neutrality in state expenditures in any given year. In light of the current fiscal circumstances of most states, it seems unlikely that a majority of states would be willing to assume the risk that these demonstration projects might require additional state funds, at least in the short run. Option 3B: Optional Medicaid Eligibility Group Another approach would allow states to extend Medicaid coverage to low-income individuals with HIV who otherwise would not be eligible for Medicaid without obtaining a demonstration waiver or maintaining budget neutrality. Instead, states would be allowed to amend their state Medicaid plans to cover a new optional category of low-income individuals infected with HIV. (Conceptually, this parallels the current state option to cover individuals infected with tuberculosis.1) A minimum eligibility standard 1   In 1993, Congress created an optional Medicaid eligibility group for individuals infected with tuberculosis (Section 1902(a)(10)(A)(ii)(XII) of the Social Security Act, 42 U.S.C. 1396a(a)(10)(A)(ii)(XII)). States opting to cover this group may receive federal Medicaid matching funds for the cost of providing to eligible individuals the following defined set of tuberculosis-related benefits: prescribed drugs, physician services, outpatient hospital services, laboratory and x-ray services, clinic services, case management services, and services designed to encourage completion of prescribed drug regimens (directly observed therapy). States’ costs are matched at a state’s regular Medicaid matching rate (50 to 77 percent, depending on the state’s per capita income).

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Public Financing and Delivery of Hiv/Aids Care: Securing the Legacy of Ryan White would be established at 250 percent of the federal poverty level. The costs of this eligibility expansion would be matched by the federal government at the same rate as the costs of most other eligibility groups (e.g., 50 percent to 77 percent depending on state per capita income). States electing this option would be required to offer the full range of current Medicaid benefits to individuals enrolling under the expansion. Current Medicaid rules governing provider reimbursement rates would continue to apply. Advantages Relative to Option 3A, this option would make it significantly less difficult for states interested in expanding coverage for low-income individuals with HIV to obtain federal Medicaid matching funds to defray the costs of such coverage. States would not have to demonstrate to the Secretary of HHS that the federal government would not spend more over a five-year demonstration period than it would if the expansion did not occur. Instead, this option would make additional federal matching funds available to states willing to put additional funds of their own into such an expansion. In those states electing the option, a uniform standard for eligibility could be achieved, and the benefits provided to individuals with HIV would at least meet the standard of care offered currently under Medicaid programs. Disadvantages As in the case of Option 3A, this approach has a number of disadvantages that stem from its optional nature and the current fiscal pressures on the states. If all states were to elect this option, a minimum uniform standard of eligibility would be achieved but variations in the scope of benefits would continue. However, given the revenue shortfalls being experienced by most states, widespread state participation in an option that involves the outlay of additional state funds seems unlikely. Even in those states that elect to cover this optional group, low provider reimbursement rates may constrain provider capacity to meet the standard of care and may limit participation by providers qualified to do so. Moreover, individuals enrolled under this expansion would have access only to those benefits offered under the state’s existing Medicaid program, which may not provide coverage for the ancillary services necessary for optimal HIV care. Finally, this option does not alter the current distribution of financial responsibility between the federal government and the states. Although the HIV epidemic is national in scope, the federal government’s share of the costs of treating individuals infected with HIV under this approach would vary from state to state, from a low of 50 percent to a high of 77 percent, depending on the state’s per capita income. Many states, regardless of their relative per capita

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Public Financing and Delivery of Hiv/Aids Care: Securing the Legacy of Ryan White pies, combined with a significant number of HIV-positive individuals who do not know their disease status, creates an increased need for community outreach to achieve early status determination and referral to care. Delivery System Functions The Committee identified two key functions of an HIV/AIDS care system: (1) the provision of HAART in order to delay or prevent progression of the disease and minimize infection of others, and (2) the provision and coordination of other medical care and ancillary support services necessary to ensure that patients adhere to HAART. The evidence reviewed by the Committee in earlier chapters and much of the public testimony heard by the Committee indicate that the delivery of services for patients with HIV/AIDS falls far short of optimal. Many patients do not have a regular “medical home”; many (particularly those in rural areas) receive care from physicians with little experience in treating HIV (Cohn et al., 2001); coordination of care plans and other information among medical, mental health, and substance abuse providers is often minimal or nonexistent; and many patients face significant barriers in trying to make and keep appointments with multiple providers in multiple organizations with multiple medical records systems and phone numbers to remember. The need for medical or social case management systems comes largely from the administrative complexity of the current “system” for providing HIV/AIDS care. Boiled down to its administrative essentials, an improved delivery system for HIV/AIDS care in the public sector must have the ability to engage experienced HIV/AIDS providers and coordinate their activities in service of the two key functions described above. More specifically, the system should be made up of entities capable of identifying highly qualified, experienced providers of HIV-related services and entering into contracts with those providers for the provision of care to a defined set of patients; managing patients’ clinical information (i.e., medical records) and making that information available as needed to the range of health care providers involved in patient care; measuring and monitoring access to care, quality of care provided, and outcomes of care, and reporting that information to the public entities providing funds for HIV-related services; and receiving and managing public funds allocated for HIV/AIDS care and distributing those funds to individual providers and provider organizations in exchange for services rendered. The Committee considered several types of delivery models, and heard

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Public Financing and Delivery of Hiv/Aids Care: Securing the Legacy of Ryan White testimony from a number of organizations that have done exemplary jobs of providing and/or coordinating HIV-related services. No single organizational model has become clearly established as superior to all others. There is great variety in the organizational structure of those models—some are large integrated medical care systems such as the VA; others are smaller, HIV/AIDS-focused organizations whose roots are in social services rather than medical care. Successful organizations have all, to some extent, adapted themselves to local and geographic circumstances that are unique and therefore not precisely replicable elsewhere. Centers of Excellence In spite of this variety in current models, the Committee remains convinced that some modification to the current system for delivering HIV/AIDS services would be essential to ensure that patients receive the maximum possible benefit of the enhanced financing being recommended. The Committee focused its discussion on the concept of Centers of Excellence (CoEs) to provide high-quality, chronic care services to patients with HIV/AIDS. The CoE concept implies a system of care that offers access to clinical and support services that are comprehensive, integrated across providers, and seamless. Centers of Excellence generally include clinicians who are highly trained and experienced in providing care to a specific set of patients. Typically, CoEs focus on particular diseases that are high cost or high volume (cancer) or affect a specific population (e.g., women). CoEs often integrate or bridge the multiple services and multidisciplinary providers whose services are not necessarily coordinated. CoEs, as part of their responsibility to recruit and maintain a highly trained and experienced staff (physicians, mental health and substance abuse providers, case managers, etc.), often implement strategies for training and continuing education. Through these strategies, staff are kept abreast of changing therapies and evolving knowledge on HIV and care for HIV patients. Some CoEs are also organized to conduct research to improve the care delivery system for their target population. An administrative structure assumes responsibility for ensuring access to services and for the quality, outcomes, and cost of services provided. CoEs may receive special reimbursement consideration and/or may be involved in reimbursing participating providers through a salary or other mechanisms. The Medicaid program has some experience with disease-focused CoEs, but not with CoEs for HIV care. The state of New York, however, has been experimenting with the CoE concept since 1986 through its Designated AIDS Center Program (DACs). The 44 centers designated under the program are hospital based and state certified. These centers serve as the hub

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Public Financing and Delivery of Hiv/Aids Care: Securing the Legacy of Ryan White for a continuum of hospital- and community-based care for persons with HIV infection and AIDS. DACs provide multidisciplinary inpatient and outpatient care coordinated through hospital-based case management. The centers are held to HIV-specific care standards to ensure uniform and quality care, and an AIDS Intervention Management System is used to collect, organize, and evaluate data for utilization monitoring and quality of care reviews. Enhanced funding is provided for services delivered through the program. The program, originally established when hospital-based care was the norm, is in the process of review now that the hub of care is no longer hospital based (New York State Department of Health, 1993, 2003). CoEs for chronic conditions such as HIV/AIDS will have to be different in some respects from those for acute illnesses. The need to coordinate services from many different providers over extended periods of time, to maintain patient tracking systems and promote adherence to therapy, and to integrate with community-based programs and services will all require somewhat different organizational forms than those found in hospital-based CoEs for acute conditions. Organizing Centers of Excellence The Committee discussed a variety of structural models that a CoE might adopt. The Committee chose not to recommend one specific model over the others, recognizing that local circumstances (e.g., existing organizations, community preferences, geographical considerations) will favor one model over another in those circumstances. Furthermore, current models have not been specifically designed with the needs of individuals with HIV in mind. The Committee recognizes that testing and experimentation will need to occur before the best ways to serve people with HIV are identified. Thus, the committee remains open to different approaches for providing the most appropriate and feasible care for people with HIV/AIDS. Testing of these alternatives will require mechanisms for ensuring accountability. Experimentation with alternatives will require data collection, especially analysis and reporting related to assessing access, cost, quality, and patient satisfaction. The range of potential structural models for a CoEs is quite broad. Models can range from highly integrated systems exemplified by the VA or Kaiser Permanente to very loosely structured organizations in which there is no central administrative entity. In the former model, a single organization provides the entire range of medical and support services and receives payment for that entire range of services. The organization may occasionally contract with outside providers for a limited set of highly specialized services, but for the most part services are provided by employees of the integrated system. It is likely, but not guaranteed, that each patient will

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Public Financing and Delivery of Hiv/Aids Care: Securing the Legacy of Ryan White have a single medical record (perhaps in electronic form) and a care plan that is shared among all types of service providers. In some instances, the entire range of medical, mental health, substance abuse, and social services will be available at a single physical facility; in other instances, the organization may have multiple physical facilities that are closely linked in terms of medical records, appointments, and billing systems. In the latter model, the CoE concept comes to life primarily through a process of selecting only high-quality, experienced providers to participate in the public financing system. There would not be a mechanism for formally assigning patients to individual providers or to the system as a whole, but only designated providers would be able to receive payment for services to individuals with HIV/AIDS. Structurally, there is no distinction between this model and an unstructured fee-for-service delivery system. Payment in this model is made directly by the public entity (e.g., Medicaid program) to individual providers, including providers of case management or care coordination services. Payment for services may be made on the basis of fee-for-service, capitated, or any other model mutually agreeable between the provider and the payer. There are other models in the middle of this continuum of administrative integration. For example, there could be a “managed care model,” exemplified by many health maintenance organizations (HMOs) and other forms of managed-care or “carve-out” plans. In this model, a single entity would receive payment (almost always on a capitated basis) for the entire range of necessary services. That entity would generally not provide services directly, but would contract with a network of medical and social service providers to ensure that members/patients receive necessary services in a timely fashion. In many state Medicaid programs, individuals with HIV/AIDS are assigned to managed-care plans and receive services through this model. One might also envision a “care coordination model,” in which a defined entity is responsible for providing case management/care coordination services in the context of a loosely connected network of medical and social services providers. The care coordination entity would not receive payment for the complete range of medical and social services, though, and would not pay the other providers. An outside entity (e.g., state Medicaid program) would pay the other providers on the basis of whatever payment model(s) it can negotiate with each type of provider. In this model, the case management/care coordination entity can be (but does not have to be) given authority to set quality standards, develop and enforce coordinated care plans for individual patients, collect and analyze data on quality of care, and select the members of the provider network. Regardless of the specific organizational form used in a given area, though, the Committee believes that the key functions for CoEs are those

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Public Financing and Delivery of Hiv/Aids Care: Securing the Legacy of Ryan White identified earlier in this section: assembling a set of highly trained, experienced HIV/AIDS providers; coordinating their activities in order to achieve the highest possible levels of adherence to HAART; and providing necessary medical and nonmedical services to complement and support HAART. The Committee assumes that a wide range of providers, including community-based providers who have experience and expertise in working with the new populations affected, will be considered when organizing Centers of Excellence. Mechanisms of Accountability Any of the potential structural models for an HIV/AIDS Center of Excellence can support mechanisms of accountability to the public funders of HIV/AIDS care. That is, there can be mechanisms to collect, analyze, and report data related to standards for access, cost, quality, and patient satisfaction. Each CoE would be organized as an accountable health enterprise. Individual providers within each designated CoE would be reimbursed at a level to attract and retain the complete range of excellent providers required to meet the comprehensive service needs of the eligible HIV/AIDS population. Each designated CoE would be responsible for assuring that individual providers meet ongoing quality and service standards to maintain their individual eligibility to participate in the CoE. The designated CoE organization, itself, would receive compensation from the state Medicaid agency to support network management, quality management, and network care coordination expenses required to assure long-term efficacy and cost effectiveness of care services. Each designated CoE would be accountable for assuring appropriateness of fund expenditures and for the cost and quality of services rendered. Expenditures, service levels, and quality levels would be reported to the state Medicaid agency by each designated CoE on an annual basis. The national Medicaid program would assume responsibility for compiling and reporting program access, cost, and quality results to all participants, to the Centers for Disease Control and Prevention, and to Congress on a regular basis. Where deficiencies are deemed to exist, the national Medicaid program would ensure that plans are placed in effect to correct the deficiencies at the state level. A general overall program accountability concept is summarized in Figure 5-2. For true accountability to exist in the system, though, there must be consequences for good or poor performance that have the net effect of improving quality and efficiency. Most systems of accountability in health care involve consequences in either “market share” or funding. The former involves incentives that move members/patients to better performing orga-

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Public Financing and Delivery of Hiv/Aids Care: Securing the Legacy of Ryan White FIGURE 5-2 Overall program accountability concept. nizations or away from poorer performing organizations. The latter involves financial rewards (either supplemental payments or higher rates of basic payment) to better performing organizations and financial disincentives (e.g., no return of “withholds”) for poorer performing organizations or individual providers. In the context of a CoEs model for HIV/AIDS care, both types of

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Public Financing and Delivery of Hiv/Aids Care: Securing the Legacy of Ryan White approaches can be used within states, but each will have a mix of strengths and weaknesses. Reward in the form of increased market share can be effective for CoEs that are performing well, but only if those organizations have room to grow and the payment system is set so that the CoE at least breaks even on additional patients. If the CoE is already at capacity in terms of its providers or inpatient capacity, additional patients are a problem rather than a reward. If the payment model produces a predictable loss for each new patient seen, more patients are not a reward. This type of reward is also not effective in a region or community with only one CoE and a fixed number of HIV/AIDS patients to see. There is no way of increasing market share over 100 percent. Disincentives in the form of reduced (or possibly completely eliminated) market share are generally more effective because organizations typically depend on a predictable flow of patients to keep providers busy and facilities full. A mechanism through which patients can be reassigned from one CoE to another as a consequence of poor performance (or if patients are allowed to choose among competing CoEs) can provide a strong incentive for improvement in poor-performing organizations. This mechanism would work more effectively in moderate to large urban areas where more than one CoE is possible. A similar incentive can be provided through fixed-term contracts between individual providers and CoEs, or between competing CoEs and the state, if the contracts involve a reassessment of performance and the tangible prospect of nonrenewal. These types of incentives and disincentives, however, may not be implementable in some areas, for example rural areas, because the poor-performing entity may be the sole provider in that area. Financial rewards for excellent performance can be effective, but rarely have been used in health care, particularly in the context of HIV/AIDS care or Medicaid (IOM, 2003a). Potential models can take the form of either “bonus payments” at the end of a period of time if certain quality or efficiency targets are achieved, or higher fee-for-service or capitation payments in future time periods if performance targets are reached in a current period. These models can only be implemented if the state or other public payer has funds available that are not already committed to the basic payment model for services and if clear performance measures, data collection, and analysis systems are available to assess performance on a regular basis (Kates et al., 2001). Some models may also require an amendment of legislation or regulation that defines levels of provider payment and the extent that payment can vary from provider to provider. Financial disincentives for poor performance are typically the mirror image of financial rewards—they either involve a “take-back” of funds on the basis of poor performance or a lower rate of payment in the future if performance is poor in the recent past. These models have been imple-

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Public Financing and Delivery of Hiv/Aids Care: Securing the Legacy of Ryan White mented in the context of “withholds” in the payment agreements between HMOs and physicians, but have not been widely used in the context of publicly financed HIV/AIDS care. If base reimbursements are already low, any form of take-back or lower payment may have the effect of driving a particular provider out of the program entirely. In some instances, this may be an acceptable consequence of a financial disincentive system, but it will not allow poorer performing providers time or opportunity to improve and remain in the system. This may be a significant concern in situations where many of the HIV/AIDS service providers are not financially stable and not able to withstand any cuts in payment levels or are unable to meet all performance criteria because of having to make tradeoffs among different aspects of care (e.g., good care is provided when the patient sees the physician, but a waiting time may not meet standards because of budget constraints). At a higher level of oversight, the federal government, through CMS, can define standards of performance for the state Medicaid programs (or other public entities) that will be asked to administer the new HIV/AIDS care program. Theoretically, the federal government can create a system of accountability by providing more or less funding to states with better or poorer performance according to those standards. In practice, though, this ability is limited by the language of legislation and regulation that sets rates of federal payments to states, and by the ability of CMS staff to make and enforce decisions that would be highly visible and strongly opposed by elected officials from adversely affected states. A system of accountability based on market share is essentially impossible to implement in the context of federal–state relationships because the population of HIV/AIDS patients in a given state is essentially fixed in the short run, and it is unlikely that patients would ever be asked to travel to a different state to receive services. It is conceivable that in some regions, with large metropolitan areas that cross state boundaries, the federal government could encourage individuals to seek care in one state rather than another and allocate funds accordingly, but the Committee views this as not being feasible. SUMMARY The Committee is convinced that implementing a redesign of the HIV delivery system would result in an improved system of HIV care based on the chronic care model and driven by the six aims for health system improvement: safe, effective, patient centered, timely, efficient, and equal. The Committee also recognizes that it is almost certainly impossible to create systems of care with all these attributes in all regions of the country in a short time frame. However, the Committee believes it is possible to modify

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