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Executive Summary

Background: At the Joint Budget Committee (JBC) hearing on November 15, 1995, Senator Elsie Lacy requested that the Developmental Disabilities Services of the Colorado Department of Human Services provide the JBC with a brief history of the Community Centered Board (CCB) service system and a brief history of the controversy regarding the potential for conflict of interest when the case management organization delivers services as well as purchases services. This question was asked in light of the DDS proposal that CCBs expand their case management role by incorporating additional functions common to managed care organizations. The JBC also wanted to know if the department had considered bidding the managed care role rather than having it reside with CCBs and what efforts the department has made to involve constituency groups in considering systems change. The following is an executive summary of this special report. Please refer to the fuller report for more details regarding the summary points presented below.

What are Community Centered Boards? Community Centered Boards are private organizations defined by state law as the organizations with whom DDS contracts to coordinate and deliver community services statewide. Their key functions include: case management, eligibility determination, single-entry point for services, planning, resource allocation, new services development, contract management, waiting list management, human rights protection, service coordination, and service monitoring. They also may provide services and supports directly and/or through contract with other service providers.

Should managed care organizations, like CCBs, also be able to deliver direct services? Does this present a conflict of interest? Should the managed care role of CCBs be bid?

These questions are not new to the Proposed Blueprint for Change. The same concerns have been expressed previously related to the potential conflict of interest between the CCB’s case management role and direct service provision. Much of this concern relates to the fear that CCBs will favor their own services over those of other providers and that case management decisions regarding services may not be objective when organizations include both a case management aspect and a service delivery arm. Case management functions have many factors in common with managed care: i.e. eligibility determination, approval and referral for services, and monitoring service delivery. Therefore, the following history of the controversy regarding separation of case management from direct service holds many parallels for today’s controversy regarding the locus of managed care and its potential separation from direct service.

Short History of the Separation of Case Management Controversy

• 1987 State Auditor’s Report - the legislature directed the State Auditor’s Office to study the effectiveness of case management and to determine if case management should be separated from direct services. The State Auditor’s Report to the legislature concluded that CCB case management appears to be effective when considered in terms of three important outcomes: individual progress, individual satisfaction, and family satisfaction. They studied quality assurance standards, satisfaction and progress of individuals, and appeals and found no clear patterns of differences across CCBs purchasing all services, to those providing all services, to those having a mixture of approaches. From this study, they concluded that there was no evidence to support a change in the current organization of case management.
• 1989 Case Management Task Force Reports - two workgroups presented conflicting recommendations to the legislature in 1989. One recommended separating case management from direct services, while the other recommended that CCBs continue to have the option to provide case management and to provide services directly and/or to purchase them. Both committees agreed that services could benefit from a lower ratio of case managers to individuals served.
• Supervision of Case Managers - Rules and regulations were implemented to reduce conflict of interest by requiring that case managers report to someone at the executive level of the CCB who does not supervise a service program.

Checks and Balances - Over time, many checks and balances have been put in place through state law (CRS 27-10.5) and/or rules and regulations to minimize the potential for conflict of interest and to encourage that CCBs remain responsive to their customers. These include controls on: (1) supervision of case managers, (2) quality assurance process, (3) provider safeguards, (4) dispute resolution, (5) composition of the board of directors for CCBs, and (6) consumer choice. (See the fuller report for more details on these controls.)

DDS’s recommendation on bidding out the managed care type functions - DDS believes that if there is a managed care entity, it is best that this entity be locally based, not-for-profit, and dedicated to the needs and interests of people with developmental disabilities. This is the structure of CCBs and we see no need to drastically change this structure at a time when there are many other changes occurring. We offer the following reasons for this position. (See fuller report for more details on each of these reasons.)

• CCBs are experienced in case management and many other functions identified as managed care.
• CCBs collect and utilize close to $11 million from non-state and non-federal sources of funds. These funds could be jeopardized if CCBs do not remain the managed care organizations.
• DDS is concerned that most large for-profit, out-of-state organizations might direct any savings from managed care towards increasing their profit margin and would take the profits out-of-state. DDS believes that locally based non-profit organizations, with boards of directors from the community they serve, would provide the best internal incentive to put savings towards addressing the waiting list.
• Within the managed care field, health care organizations use a variety of organizational structures. For example, Kaiser Permanente Health Care, Inc. and Colorado mental health managed care organizations both provide service directly and purchase services, while other health care organizations primarily purchase services from outside entities. CCBs have the same diversity in structure.
• A joint CCB and service agency work group has developed recommendations for consideration by DDS to address service provider concerns.
• Studies of satisfaction of persons in services and their families demonstrate that the majority of customers are satisfied with CCBs and the services they provide.
• DDS believes that additional controls can be put in place to address concerns regarding conflicts of interest and to improve responsiveness. A committee with broad representation will make recommendations in this and other areas related to moving towards a more managed care approach to services.

System Involvement in Continued Development of Systems Change - DDS recognizes the need for representation of major stakeholder groups as partners in designing systems change. DDS has invited persons with developmental disabilities, families, and associations of advocates, CCBs, and providers to provide members to a Policy Advisory Committee for this project and to two other workgroups related to this project. Many issues have been identified for discussion, including options for additional checks and balances to ensure that services remain responsive to the needs of persons with developmental disabilities. Some of the options under consideration include:

• Controls on CCBs, including:
  • election, composition and term-length of CCB boards of directors,
  • guidelines for administrative expenses, etc.
• Consumer safeguards regarding:
• minimum levels of services and consistent service level expectations,
• vouchers and other means of having more choice of services and providers,
• having resources follow individuals who move between geographic service regions,
• dispute resolution processes,
• involvement on quality assurance teams, etc.
• Provider safeguards, including appeals, timely payment, vouchers, hold-harmless or caps on annual changes to contract amounts, etc.

Blueprint Timeframes: We are working on specifics now, but may be delayed because:

• Federal uncertainty as to whether there will be Medicaid cuts and/or block grants.
• If Medicaid is not block granted from the federal level, then DDS will need to request approval of a special waiver to implement systems change which is a time consuming process.
• More stakeholder involvement will take time.
• There are some tough policy and implementation issues which remain to be resolved.
• May want to pilot or phase starting January, 1997.