Conservatively Speaking

Wisconsin’s Legislative Audit Bureau (LAB) has finished a review of dental care services provided under the state’s Medical Assistance program.

During fiscal year 2006-07, approximately $46.0 million was spent on dental services provided to Medical Assistance recipients, but only 1,342 of 3,493 licensed dentists in Wisconsin, or 38.4 percent, were certified as Medical Assistance providers statewide.

The  LAB concentrated its review on dental services in southeast Wisconsin that are provided to Medical Assistance recipients through health maintenance organizations (HMOs). The audit discovered lower utilization of dental care services among HMO enrollees, especially for those under the age of 21, and higher costs than in the fee-for-service system used in other counties. The audit also found HMO utilization rates have not improved in the past five years.

The LAB is recommending the Department of Health and Family Services (DHFS) that administers the Medical Assistance program establish alternative dental service delivery models for southeast Wisconsin before current contracts expire in December 2009.

Here are more details from the LAB’s review.

Dentists in the four counties in southeastern Wisconsin are concerned about the amount they are reimbursed for services to Medical Assistance recipients, believing the HMOs and dental administrator are keeping an unfair, larger share of the State’s total capitation payments. The dentists feel the results are reimbursement levels below fee-for-service rates that are used in the other 68 counties in Wisconsin. They submit that many of their colleagues do not participate in the Medical Assistance program, resulting in limited access to dental services for low-income persons.

Attempting to find a reasonable percentage of capitation payments, the LAB concedes it found no standard to judge the appropriateness of the amounts retained. The HMOs state that the amounts retained were necessary to pay for their administrative and other expenses, including language translation services. The dental administrator, and not the HMOs however, is responsible for a number of other services, including paying for dental care, assessing enrollees’ emergency dental needs, managing billing, and monitoring providers’ professional qualifications.

Regarding access to care, the contracts between DHFS and the HMOs, as well as those between the HMOs and the dental administrator, have several provisions designed to provide timely access to care. The contracts require a dental care provider to be located within 35 miles of each HMO enrollee who is a Medical Assistance recipient, HMOs’ contractors must keep an “adequate” number of dental providers, and HMO enrollees who are Medical Assistance recipients must have access to routine dental care within 90 days of requesting an appointment, and within 24 hours in emergencies.

The LAB found the 35-mile requirement was automatically met because the greatest distance between any two points in any of the four counties is less than 35 miles. But the HMO’s have been unable to provide an adequate number of providers and timely access to care on a consistent basis.

The HMOs must report to DHFS the number of dentists providing services to their enrollees. Every year, the HMO’s have a December 31 deadline to list the names of all dental providers serving HMO enrollees. Dental administrators reported contracting with significantly more dentists in 2006 than in 2005. During 2007, however, the overall number of dental providers declined.

In fact, the LAB notes that both DHFS’s review of the HMOs’ reports in 2007 and an earlier survey it conducted show that the number of dentists actually serving Medical Assistance recipients is likely overstated in the reports submitted by HMOs. Even so, DHFS concluded that the number of dentists was still adequate to meet the needs of Medical Assistance recipients in three of the four southeastern Wisconsin counties.

The LAB also found that the required timeliness standards have not been met consistently. One of the dental administrators, Doral reported that based on its own calls to dentists, 83.9 percent of its dentists met a 24-hour emergency standard and 79.0 percent met a 90-day routine appointment standard from 2002 through 2004.

One HMO reported that during 2004, only 40.0 percent of SEDA’s (another dental administrator) dental providers met the 24-hour standard and 60.0 percent met the 90-day standard.

As part of its 2007 reviews of dental providers, DHFS found that 32 of the 45 providers Doral listed as accepting new patients were not able to schedule non-emergency appointments within 90 days, but that SEDA’s performance had improved and only “a few” SEDA providers were unable to meet the 90-day standard.

Despite these inconsistencies, as of April 2008, DHFS has not established standardized procedures for the HMOs to use in measuring compliance with the timeliness standards spelled out in contracts.

The contracts between DHFS and the HMOs contain broad language requiring HMOs to provide enrollees with needed care.  The LAB found that based on data provided by the HMOs to DHFS, a higher percentage of Medical Assistance recipients served by fee-for-service providers in the other 68 counties received dental services than those served by the HMOs in the four southeastern Wisconsin counties. During fiscal year 2006-07, 33.8 percent of children under the fee-for-service system received services, compared to less than 30.0 percent of children enrolled in managed care plans. The LAB says it seems that HMOs have not been more successful than fee-for-service providers in ensuring that Medical Assistance recipients under the age of 21 receive dental care.

Questions about the cost-effectiveness of HMO’s in southeastern Wisconsin have been raised for many years. DHFS estimated in a June 2005 report that costs were $2.7 million higher under managed care than they would have been under a fee-for-service system. The LSAB tried to confirm the DHFS finding but had trouble doing so for the following reasons:

1) HMOs and the dental services administrators have argued that the systems are inherently different and cannot be directly compared, in part because the concept of managed care is designed to provide advantages to enrollees by facilitating access to services.

2) The population density and demographic characteristics of Medical Assistance recipients differ significantly between the four-county area and the rest of the state.

3) Certain administrative costs are expressly reflected in the managed care capitation payments received by HMOs but less expressly reflected in fee-for-service reimbursements received by dentists, and therefore cannot be readily compared.

But when the LAB compared average costs for all Medical Assistance recipients receiving dental services, including the elderly, blind, and disabled, as well as participants in Family Medical Assistance and BadgerCare, the LAB found significant differences. During fiscal year 2006-07, the average fee-for-service cost per Medical Assistance recipient receiving services was $211. Under HMO’s, it was $270.

The LAB concludes:

The number of participating dentists is declining.

HMO’s have neither documented that they are providing services more cost-effectively than the fee-for-service system nor have they improved their  rate of service delivery to Medical Assistance recipients in the four counties audited.

As a result, The LAB believes alternative models to improve access to care and utilization of dental services by Medical Assistance recipients in southeast Wisconsin should be considered.

Here is the entire LAB report.