Medicaid: HealthPASS: An Evaluation of a Managed Care Program for Certain
Philadelphia Recipients (Chapter Report, 05/07/93, GAO/HRD-93-67).

Federal and state policymakers believe that managed care programs are
less expensive than traditional fee-for-service medical care, but
critics express concern that cost-control measures may harm patient
access to care and the quality of care. In 1986, Pennsylvania contracted
with the private sector to create HealthPASS, a managed care program
available to Medicaid recipients in south and west Philadelphia.  GAO
found that pregnant women enrolled in HealthPASS receive appropriate
obstetrical care when they seek it, but often women seek prenatal care
too late or too infrequently, despite the program's outreach efforts.
Many children enrolled in HealthPASS are not receiving timely and
federally mandated care, such as immunizations, vision tests, hearing
tests, and lead poison and sickle cell anemia screening, apparently
because doctors are unaware of federal requirements or because parents
and guardians are not seeking these services for children.  Outreach
efforts and increased reimbursement for these services have not
significantly boosted the number of children receiving care.  Several
reviews of HealthPASS' quality assurance program show it to meet federal
and state requirements; GAO found, however, that the program has
unknowingly contracted with physicians whose performance is substandard
or whose conduct is unprofessional.  GAO suggests that the program use
information from the Federation of State Medical Boards and the National
Practitioner Data Bank to spot doctors with questionable histories.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  HRD-93-67
     TITLE:  Medicaid: HealthPASS: An Evaluation of a Managed Care 
             Program for Certain Philadelphia Recipients
      DATE:  05/07/93
   SUBJECT:  Health care services
             Health care programs
             Medicaid programs
             Disease detection or diagnosis
             Health care cost control
             Medical services rates
             Quality assurance
             Immunization services
             Women
             Disadvantaged persons
IDENTIFIER:  Philadelphia Accessible Services System
             HealthPASS Program
             Special Supplemental Food Program for Women, Infants, and 
             Children
             WIC
             Philadelphia (PA)
             Pennsylvania
             Medical Assistance Transportation Program (Philadelphia, PA)
             HHS National Practitioner Data Bank
             
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Cover
================================================================ COVER


Report to the Chairman, Subcommittee on Health and the Environment,
Committee on Energy and Commerce, House of Representatives

May 1993

MEDICAID - HEALTHPASS:  AN
EVALUATION OF A MANAGED CARE
PROGRAM FOR CERTAIN PHILADELPHIA
RECIPIENTS

GAO/HRD-93-67

HealthPASS


Abbreviations
=============================================================== ABBREV

  ACOG - American College of Obstetricians and Gynecologists
  AIDS - acquired immunodeficiency syndrome
  CEO - Chief Executive Officer
  C.F.R.  - Code of Federal Regulations
  DTP - diphtheria, tetanus, and polio
  EPSDT - Early and Periodic Screening, Diagnostic and Treatment
     services
  HCFA - Health Care Financing Administration
  HealthPASS - Philadelphia Accessible Services System
  HMA - Healthcare Management Alternatives, Inc. 
  HMO - health maintenance organization
  WIC - Special Supplemental Food Program for Women, Infants, and
     Children

Letter
=============================================================== LETTER


B-252699

Letter Date Goes Here

The Honorable Henry A.  Waxman
Chairman, Subcommittee on Health
 and the Environment
Committee on Energy and Commerce
House of Representatives

Dear Mr.  Chairman: 

In response to your request, we have reviewed certain aspects of the
Philadelphia Accessible Services System (HealthPASS).  We found that
(1) women who avail themselves of pregnancy- related care are
receiving appropriate services, (2) some providers are not furnishing
preventive care services to children as federally mandated, and (3)
enrollment of eligible HealthPASS members in the Special Supplemental
Food Program for Women, Infants, and Children (WIC) is no greater
than the enrollment of eligible Medicaid fee-for-service women and
children.  However, if the names of HealthPASS members were shared
with the WIC contractor, enrollment could increase.  We also found
that the HealthPASS quality assurance program meets federal and state
standards, but its physician credentialing program could be improved
if additional information about physician sanctions were sought.  We
have made specific recommendations about sharing the names of
HealthPASS members with the WIC program and improving HealthPASS's
physician credentialing procedure. 

In response to physician concerns and competitive pressures, the
HealthPASS administrator recently revised its physician incentive
program.  It is to early to determine the effects of these changes. 
However, previous incentive arrangements may have had an adverse
impact on access to specialty care. 

Unless you publicly announce its contents earlier, we plan no further
distribution of this report until 30 days after its issue date.  At
that time, we will send copies to the appropriate congressional
committees; the Secretary of Health and Human Services; the Director,
Office of Management and Budget; and other interested parties.  We
also will make copies available to others on request. 

This report was prepared under the direction of David P.  Baine,
Director, Federal Health Care Delivery Issues.  Should you have any
questions, please call him at (202) 512-7101.  Other major
contributors are listed in appendix X. 

Sincerely yours,


EXECUTIVE SUMMARY
============================================================ Chapter 0


   PURPOSE
---------------------------------------------------------- Chapter 0:1

Federal and state policymakers believe that managed care programs are
a less expensive alternative to the traditional fee-for-service
medical system.\1 However, critics have warned that managed care's
use of capitation rates\2 and financial incentives to control costs
could impede patients' access to necessary treatment and diminish the
quality of health care.  In 1986, the state of Pennsylvania
contracted with several private companies to offer managed care to
all Medicaid recipients,\3 approximately 115,000, living in south and
west Philadelphia.  The largest program is called the Philadelphia
Accessible Services System--HealthPASS.  the result of other risk
factors, such as the use of tobacco, alcohol, or drugs.  GAO's
findings were similar for women who delivered under the traditional
Medicaid fee-for-service system in Philadelphia, which does not
feature an extensive outreach program.  (See ch.  2.)


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--------------------
\1 Managed care programs are designed to reduce the number of
unnecessary medical services provided to patients. 

\2 A capitation rate is a fixed, prepaid, monthly payment based on
the number of patients enrolled in a program or assigned to a
provider.  The rate often takes into consideration the age and sex of
the patient as well.  Frequency of visits and services provided have
no effect on the reimbursement received. 

\3 Approximately 76,000 Medicaid recipients are enrolled in the
HealthPASS program.  As of December 1, 1992, about 43,800 of these
recipients were women and about 31,200 were children under the age of
21.