Keystone Mercy Saves Millions
Proactive Case Management Saves Millions, Reduces Utilization, and Improves Quality
CHALLENGE
Keystone Mercy Health Plan (KMPH), a Pennsylvania Medicaid HMO with approximately 300,000 members, had historically practiced case management reactively, in response to such events as a member’s lengthy hospitalization or frequent visits to emergency rooms. This approach, though useful, had limited effectiveness.
SOLUTION
KMPH adopted a proactive approach to case management, a population management strategy that targeted high-risk members with multiple chronic conditions and co-morbidities. These members represent a relatively small volume in membership, yet utilize a disproportionately high volume of resources. The Plan found that two percent of its total member population was responsible for 14 percent of the Plan’s costs.
KMPH’s proactive approach, using Medstat Advantage Suite and applying Diagnostic Cost Grouper prospective risk scores, identified high-risk members up-front. The program leveraged technological solutions for data access and prior authorization, financial incentives to primary care practices for program participation, and partnership with two vendors for outreach to selected members.
RESULTS
The program resulted in favorable decreases in cost and utilization, including a $26.53 per-member-per-month decrease in inpatient costs; and a three percent decrease in specialist visits.
With gross savings at $44.77 per member per month and 14,568 targeted members, annualized savings were nearly $7.8 million. Investment in the program was $3 million for an unadjusted rOI of more than 2.5:1. The results of the program were independently validated by two actuarial firms.
In addition to decreased cost and favorable changes in utilization, the program has positively impacted members’ quality of life as evidenced by their letters of appreciation. Indeed, the proactive case management program has been so successful that KMHP is now offering the program to other health plans, states, and delivery systems.