Emerging Practices in Medicaid Primary Care Case Management Programs. Referral Policies


Referral policies can impact PCCM programs in several ways. First, case-study states reported that the more rigorous the policies, the more accountability is built into the system. On the other hand, more rigorous policies can create obstacles for PCPs as well as their patients, which may discourage the PCPs' continued participation in the program.

Referral policies vary among the eight case-study states, ranging from a requirement for paper referrals (which can be faxed to the state) prior to authorization to phone referrals with documented follow-up. State officials working solely with paper referrals noted that this is the largest source of complaints among PCPs; however, a physician interviewed noted that MCOs often have the same requirements, so it has become standard procedure.

Several states expressed concerns that specialists or emergency room physicians were using referral authorization numbers repeatedly and without the PCP's knowledge. A recent study on PCCM programs found that Florida requires its new fiscal intermediary to implement a system to provide a unique number for each specialist referral. Upon need, the provider will place a call to an 800 number, where an automated system will generate a unique referral authorization number valid for 90 days.33 Several states, such as Maine and North Carolina, send out periodic utilization reports showing referrals; the state follows up incidents with the specialist or emergency room staff in cases where the PCP claims not to have made a referral. Iowa reports on emergency room utilization and pharmacy utilization by members.

Florida officials noted that they are tightening the prior authorization process by creating disincentives for PCPs to make frequent referrals. They are concurrently increasing their interaction with PCPs in order to make the system more user-friendly.

Florida also manages pharmacy costs by imposing a four-drug limit on brand-name drugs that have generic counterparts. PCPs wishing to override this limit must seek authorization from the state's pharmacy benefits manager. State officials are pleased with the results of this policy.

Iowa has a behavioral health organization (BHO) contracted to serve Medicaid beneficiaries, called the Iowa Plan. PCPs can provide mental health services to patients up to 12 times per year without authorization from the Iowa Plan; after the twelfth session, they must obtain this authorization. The state has worked to educate PCPs about the Iowa Plan in the hope that they will make referrals to the plan before the patient's twelfth visit. The state also encourages the Iowa Plan to coordinate with the PCP, since services that it provides may impact the general health of the member.

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