Texas STAR program, the state's Medicaid managed care program, is comprised of three models: MCO, PHP and PCCM (Texas Health Network). The administration of Texas Health Network program resembles that of a managed care organization. According to state officials, the PCCM program is a state-administered health plan. The state has entered into several contracts for program operation but does not require its contractors to assume any financial risk. The state Medicaid agency has developed what they describe as an enhanced PCCM model, featuring increased member services, significant case management, improved services to providers, and linkages between services. Texas Health Network began as a pilot program and has gradually expanded to six service areas in the state. The state now has the following four separate contracts for the administration of the program:
- plan administration;
- claims processing; and
- certain quality improvement activities.
Originally, claims processing was included in the plan administrator's responsibilities, but state officials subsequently decided that there would be better checks and balances if the functions were not combined.
The core of Texas Health Network is the contracted plan administrator. This contractor is responsible for provider network development and contracting, provider services, member services, case management, utilization management, and health and wellness education. Field staff are located in the six regional service areas in which the STAR program has implemented the PCCM model, where they can provide information and assistance directly to both members and network providers. In addition to negotiating contracts with PCPs, the plan administrator has the authority to negotiate state contracts with hospitals. Using claims data that is provided through the fiscal agent, the contractor sets hospital payment rates for PCCM members.
State staff maintain that having a plan administrator is a great asset to the program, because it allows for greater flexibility in managing the resources dedicated to the program and, ultimately, better program support. The plan administrator can provide adequate staffing and resources to the program, without state limitations on personnel and on the transfer of funds between categories. Staff note that the burden is on the state to ensure that sufficient funds are in the contract so that the administrator can do the work required. State Medicaid agency staff work closely with plan administrator staff, viewing the contractor as the state's administrator of the PCCM program. The state retains the authority for policy development and decisions. Financial goals are set for the plan administrator, and the contract is monitored quarterly through selected financial measures, required reporting, and state contract oversight.