Providence Health Plan, 2003 Quality Assessment Statistics - Part 05

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					2002 Quality Management Program Evaluation
Providence Health Plan - Oregon
Table of Contents

I.        QM Program Structure, Organization and Resources                            3
         A. QM Program Annual Maintenance Activities                                  4
         B. QM Structure and Organization                                             4
         C. QM Committee Structure                                                    5
         D. QM Staffing and Operational Resources                                     5
         E. Physician Involvement                                                     6
         F. Enhancements to Data Systems and Data Resources                           6
         G. Special Recognition

II.      Member/Practitioner Profile Analysis                                          8
         A. Member Population Demographics                                             9
         B. High Prevalence Disease Categories and Supporting QI Initiatives          10

III.     Clinical Quality Improvement Activities                                      13
         A. Clinical Improvement Processes                                            14
             §  Asthma Management Program                                             15
             §  Diabetes Management Program                                           15
             §  Tobacco Cessation Program                                             16
             §  Mental Health Initiative – Depression and Anxiety Education Project   17
             §  Behavioral Health Initiative – Stress, Health, and Wellness Program   17
             §  Flu and Pneumonia Vaccination Education                               17
             §  Medical Back Program                                                  18
             §  Early Childhood Cavity Prevention                                     18
         B. Disease Management Programs                                               19
             §  Rare Disease Management Program                                       19
             §  CHF Disease Management Program                                        19
             §  CAD Disease Management Program                                        20
             §  COPD Disease Management Program                                       20
             §  High Risk Maternity Program                                           21
         C. Guidelines                                                                21
             §  Preventive Care                                                       22
             §  COPD                                                                  22
             §  Depression                                                            22
             §  Mental Health Follow-Up                                               22
             §  Tobacco Cessation                                                     22
             §  Asthma                                                                22
             §  Diabetes                                                              22
             §  CAD                                                                   22
             §  Rare Diseases                                                         22
             §  CHF                                                                   22
             §  Acute Myocardial Infarction                                           22

IV.      Service Quality Improvement Activities                                       23
         A. Member Letter Improvement Project                                         24
         B. Online Provider Directory Project                                         24
         C. Member Satisfaction                                                       24
         D. Availability of Practitioners and Accessibility of Clinical Services      25


2002 Quality Management Program Evaluation                                                 1
V.       Clinical and Service Quality Monitoring Activities   27
         A. Key Indicator Report                              28
         B. Under/Over-Utilization of Care and Service        28
         C. Continuity and Coordination of Care and Service   28
         D. HEDIS 2003                                        28
         E. Provider Profiling                                28
         F. Member Complaints, Appeals, and Grievances        29
         G. Medical Record Documentation Reviews              30
         H. Pharmacy Services                                 31
         I. Quality Bonus Program                             32
         J. Providence RN – Telephonic Medical Advice Line    33

VI.      Credentialing and Reappraisal                        35
         A. Individual Practitioner Credentialing             36
         B. Facility Credentialing                            36

VII.     Utilization Management                               37
         A. Utilization Management Program                    38
         B. Utilization Management Committee Structure        39
         C. Concurrent Review                                 40
         D. Case Management                                   41
         E. Prior Authorization                               43
         F. Medical Audit                                     45

VIII.    Delegation                                           47
         A. Credentialing                                     48
         B. Utilization Management                            48

IX.      Accreditation and Regulatory Compliance              50
         A. Quality Management Standards                      51
         B. CMS                                               51
         C. OMAP                                              52

X.       Conclusions                                          53
         A. Recommendations for 2004                          54

XI.     Approval                                              56

XII.     Attachments                                          58




2002 Quality Management Program Evaluation                         2
I. QM PROGRAM STRUCTURE,
ORGANIZATION,
   AND RESOURCES

    A. QM PROGRAM ANNUAL MAINTENANCE ACTIVITIES


    B. QM STRUCTURE AND ORGANIZATION


    C. QM COMMITTEE STRUCTURE


    D. QM STAFFING AND OPERATIONAL RESOURCES


    E. PHYSICIAN INVOLVEMENT


    F. ENHANCEMENTS TO DATA SYSTEMS AND DATA
       RESOURCES

    G. SPECIAL RECOGNITION




2002 Quality Management Program Evaluation     3
A. QM Program Annual Maintenance Activities

This document is an evaluation of the Quality Management (QM) Program of Providence Health Plan (PHP). It
outlines changes to the QM Program and Work Plan based on 2002 accomplishments and changes to PHP’s
QM Committee Structure.

The PHP QM Program has been developed to maximize and improve the health care and satisfaction of PHP
members in the delivery of acute, chronic and preventive care services. The Quality Improvement Team (QIT)
and Service Improvement Team (SIT) conduct this annual evaluation to assess the methods, activities, and overall
effectiveness of the QM Program. This evaluation reports the progress and barriers to meeting the performance
goals of the QM Program outlined in the QM Work Plan.

The QM Program Description and Work Plan, Medical Management Program, supporting policies and
procedures, including those relating to credentialing, confidentiality, service operations, communications, and
practitioner/provider contracts, were reviewed, updated as needed, and approved.

Accomplishments                              Barriers/Limitations            Recommendations
The QM Evaluation is performed               Due to the delay in receiving   Continue performing the annual QM
on an annual basis. The QM                   HEDIS results, the              Program Evaluation.
Program and Work Plan are                    evaluation is not performed
updated annually as needed.                  until mid-year.                 Centralize policies for all of PHP to a
                                                                             single location for the purpose of
Policies were reviewed and/or                                                developing a consistent system and
revised, and approved.                                                       practice to trigger annual policy reviews.

B. QM Structure and Organization

The Providence Health System (PHS) Board in Seattle, reviews and approves the QM Program, and regularly
approves the work of the local PHP Advisory Board. The Administrative Quality Council (AQC) reports up to
the PHP Advisory Board. The chairman of the AQC is a participating physician. Progress toward meeting the
goals of the QM Work Plan is reported regularly to the PHP Board by the Chief Executive Officer (CEO).
PHP’s Chief Medical Officer (CMO), who is the designated physician responsible for the implementation of the
QM Program, and the QI Director submit quarterly progress reports to the PHP Advisory Board.

The AQC is responsible for recommending policy decisions to the PHP Board, reviewing and evaluating results
of QI activities, allocating resources, instituting needed action and ensuring follow-up on identified issues.

Accomplishments                                      Barriers/Limitations         Recommendations
The AQC and Board reviewed and                                                    Continue to increase awareness of
approved PHP’s QM Program                                                         managed care organization
Evaluation, QM Program Description,                                               governance accountabilities as
and Work Plan.                                                                    defined by regulatory and
                                                                                  accrediting bodies.
As of January 2002, all commercial HMO
groups were rolled over to EPO                                                    Continue to maintain the QM
products. The rollout went smoothly.                                              program via the Quality
                                                                                  Management Standards
Quarterly reports for both clinical and                                           Committee.
service quality improvement initiatives
were reviewed and evaluated by the AQC.




2002 Quality Management Program Evaluation                                                                   4
C. QM Committee Structure

Quality is an organization-wide endeavor. The AQC is the highest-level quality committee in PHP. The AQC,
whose executive sponsor is PHP’s CEO, reports to the PHP Board. For a detailed diagram of the QM
committee structure, see Attachment 1. The Quality Improvement Team (QIT), Credentialing Committee, Quality
Management Standards Committee (QMSC), Grievance Committee, and Service Improvement Team (SIT)
report in aggregate to the AQC. The chairs of these committees also sit on the AQC.

The remaining quality committees report to either the QIT or the SIT depending on whether their quality focus is
clinical or service. The Data Security Committee, PPO Advisory Team, and MCO Advisory Team report up to
the SIT. The Utilization Management Committee (UMC), Clinical Review Committee (CRC), Medical Expense
Management Committee, and the Quality Bonus Program Committee report up to the QIT. The following
committees report to the UMC: Technology Assessment Committee, UM Delegation Committee, Pharmacy
Committee, and Medical Policy Committee. The UMC shares a two-way relationship with the CRC.

Accomplishments                                           Barriers/Limitations        Recommendations
The QMSC was developed in lieu of external                                            Continue to re-
accreditation. Processes that have been developed produce                             evaluate the QM
monthly/quarterly/yearly data that is reviewed by the                                 committee structure
committee at quarterly meetings. At least two processes                               to ensure internal and
are audited annually by external independent reviewers.                               external needs are
Results are reported to AQC for approval and/or                                       being met.
recommendations. PHP’s QM Committee hierarchy
approved the format and content of the QMSC.

D. QM Staffing and Operational Resources

PHP staffing, augmented by staff support from PHS, was adequate to carry out the activities included in the QM
Work Plan. Some project leadership was supplied by corporate (PHS Oregon Service Area) support services
when clinical QI activities identified by PHP were also of interest to the healthcare delivery system. The
organizational charts in Attachment 2 describe PHP’s 2002 QM staffing resources.

Accomplishments                                Barriers/Limitations      Recommendations
Operational goals defined in the QM                                      Continue measuring performance
Work Plan were met and improvement                                       against established standards, use
was achieved in nearly all of the activities                             data to identify opportunities for
listed on the plan.                                                      improvement.

E. Physician Involvement

Participating physicians continued to support PHP through committee membership and involvement in quality
improvement activities. The following quality committees include representation from the provider community:
§   Administrative Quality Council (AQC)
§   Quality Improvement Team (QIT)
§   Credentialing Committee (CC)
§   Grievance Committee (GC)
§   Utilization Management Committee (UMC)
§   Clinical Review Committee (CRC)
§   Technology Assessment Committee (TAC)
§   UM Delegation Committee (UMDC)
§   Pharmacy Committee (PC)
§   Medical Policy Committee (MPC)
§   Quality Bonus Program Committee (QBPC)


2002 Quality Management Program Evaluation                                                         5
2002 Quality Management Program Evaluation   6
Accomplishments                                Barriers/Limitations                        Recommendations
Physician support of PHP continues to be strongSome physicians attend                      Continue strong presence
as demonstrated by committee participation and committees telephonically,                  of provider community
involvement in QI activities.                  which is oftentimes not as                  on QM committees.
                                               effective as face-to-face
QM Committee structure provides opportunities participation.
for physicians to participate in committees
focused on their particular areas of interest.

F. Enhancements to Data Systems and Data Resources (Hardware and Software)

Analytic Capabilities
PHP’s Clinical Performance Measurement (CPM) department provides analytical support (data source, data
collection, and analysis) including provider profiling, the Quality Bonus Program, HEDIS performance reporting,
and data extraction for disease management, quality improvement, and UM activities. Live claims and enrollment
data are regularly transferred to a data warehouse. CPM staff are adept at retrieving data for QI activities. QM
department staff are also proficient in performing data analysis and display.

Data Resources
Personal computer-based data in the form of individual or shared databases, administrative data from the
Amisys transaction processing system, audit, and survey results are available data sources for the QM Program.
Personal computer requirements for individual staff members are assessed to ensure that adequate hardware and
software are available to successfully complete job responsibilities. Staff training is available through PHS for the
majority of standard software packages used and supported by Providence.

Accomplishments                          Barriers/Limitations                                 Recommendations
PHP made the decision to                 Extracts or downloads are not available for all      Continue methodical
change from the Amisys                   data requirements, which means information           preparation for the
transaction processing system to         must be transferred through manual data entry        Facet conversion.
the Facets system. Plan-wide             from paper reports into databases.
preparation is in process for a
September 2003 implementation            The membership conversion process from
date.                                    Amisys to Facets will not include the transfer of
                                         historical data from Amisys, the member history
                                         remains in Amisys. If historical data are needed,
                                         data extraction is required from both systems.

G. Special Recognition

Providence received special recognition is several areas over the past year. These include:

§   PHS was ranked #4 among the nation’s Top 100 Integrated Healthcare Networks. The award was
    announced in the January 7, 2002 issue of Modern Healthcare magazine. The ranking, conducted by SMG
    Marketing Group in Chicago, examines how well health care networks integrate facilities and services.
    Specifically, SMG looks at integration of technology, physicians, inpatient and outpatient utilization, services
    and access, contract capabilities and financial stability. PHS moved up from last year’s ranking of 9th place.
    The only other Oregon system ranked was Legacy, at #16. 578 health care networks were evaluated.

§   The Oregon State Health Division requested permission to use PHP’s internally developed depression and
    anxiety brochures. The brochures were developed as part of PHP’s Mental Health Initiative, a clinical quality
    improvement activity.



2002 Quality Management Program Evaluation                                                                7
§   PHP’s QM staff reviewed medical records of Medicare members with congestive heart failure (CHF). The
    review showed that of the members hospitalized with CHF, over 95% of them received evaluation of their
    left ventricular function. Of the members with demonstrated left ventricular dysfunction, over 90% were
    treated with appropriate medications. Based on these findings, we received notification from CMS that PHP
    met the quality indicator thresholds entitling extra reimbursement for Medicare members with CHF in 2003.

§   PHP’s CPM Director developed and implemented a provider profiling process for comparing physicians.
    Mercer, a nationally known consulting business, reviewed the methodology for accuracy and determined that
    the methodology was the “best in the USA.”

§   PHP collected and reported HEDIS data for the ninth consecutive year. Health Research Associates (HRA), a
    certified HEDIS auditor firm, conducted the HEDIS audit. Based on the audit results, all planned measures
    were approved for submission. Based on national accreditation ranking through NCQA, all applicable PHP
    measures met/exceeded 75th and 90th percentiles. Refer to graphed HEDIS results in Attachment 3.




2002 Quality Management Program Evaluation                                                      8
II. MEMBER / PRACTITIONER PROFILE
     ANALYSIS


         A.       MEMBER POPULATION DEMOGRAPHICS


         B.       HIGH PREVALENCE DISEASE CATEGORIES AND
                  SUPPORTING QI INITIATIVES




2002 Quality Management Program Evaluation            9
                  A. Member Population Demographics

                  As of December 31, 2002, PHP commercial, Medicare, and Medicaid products had 179,239 members, which
                  represents a 14.2% decrease from 2001 year-end enrollment (n=208,994). There was an overall decrease among
                  all lines of business. For the commercial product, the HMO line of business was discontinued, while an EPO
                  product was introduced. The decrease in membership was expected. PHP exited from the Medicaid market in
                  mid-2001 and then re-entered the market as an integrated health system in December 2001. A cap was set for a
                  maximum of 10,000 Medicaid members. Although the enrollment numbers were down for all lines of business,
                  PHP did exceed budgeted enrollment.

                                                                                                      Enrollment Distribution by Line of Business
                                  150,000
                                                                133,053
                                                                                 122,402
                                  120,000
                    Number of Members




                                        90,000


                                        60,000
                                                                                                                                            36,420                         34,332
                                        30,000
                                                                                                                                                                                                                                      9,766                       9,116
                                             0
                                                                       Commercial                                                                       Medicare                                                                                  Medicaid

                                                                                                                            2002 Enrollment                                               2002 Budget




                  By age and gender, the membership numbers break out as follows for 2002:

                                                                                                 2002 PHP Member Month Enrollment by Age and Gender
                 100,000
                                                                                                                                                         89,160




                  80,000
                                                                                                                                          82,381




                                                                                                                                                                            82,345
Members Months




                                                                                                                                                                  71,381
                                                                                                                  69,705

                                                                                                                                 69,003




                                                                                                                                                                                 68,539




                  60,000
                                                                                                                                               68,280




                                                                                                                                                                                                                                      62,946
                                                              61,219


                                                                        61,459
                                                              59,973




                                                                                                                                                                                               61,152
                                                                       60,355




                                                                                                             59,895

                                                                                                                            60,040




                                                                                                                                                                                                                    59,312
                                                                                                    57,826




                                                                                                                                                                                                                                                        56,557
                                                                                      55,206
                                                     54,517
                                                    52,846




                                                                                                                                                                                           52,989
                                           49,964




                  40,000
                                          47,170




                                                                                               45,573
                                                                                 44,803




                                                                                                                                                                                                                                               45,045



                                                                                                                                                                                                                                                                      43,814
                                                                                                                                                                                                                             43,197
                                                                                                                                                                                                           41,529




                                                                                                                                                                                                                                                             37,881
                                                                                                                                                                                                        35,321




                  20,000
                                                                                                                                                                                                                                                                                            25,864
                                                                                                                                                                                                                                                                               24,819



                                                                                                                                                                                                                                                                                                      14,785
                                                                                                                                                                                                                                                                                        12,127

                                                                                                                                                                                                                                                                                                     4,786




                                  0
                                           0-4       5-9      10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 80-84 85-89                                                                                                                                        90+
                                                                                            Years of age
                                                                                                                           Female                  Male




                  2002 Quality Management Program Evaluation                                                                                                                                                                                                                   10
Our members are located across the state of Oregon, with some enrollment in Southwest Washington. The chart
below provides enrollment distribution by major service areas:
                                                        Population by Service Area

                                           38   8,754       2,526
                                                                       7,345
                                                                                              24,115
                                                                                                         3,886

                                                                                                           9,018




                          118,366

     Central OR          SW WA      Lane        Linn/Benton           Marion/Polk          Portland        Southern OR       Yamhill


B. High Prevalence Disease Categories and Supporting Quality Improvement Initiatives

A comparison of 2001 and 2002 PHP HEDIS data in the table below reveals that some quality indicators have
improved (p), while others have declined (q). Refer to Attachment 4 for full HEDIS reports.

For the Medicare population, improvement was noted in 10 of the 13 areas being measured. The improvement
in four of the measures was statistically significant. The decrease in rate for the remaining three measures was not
statistically significant.

                                                                                                HEDIS            Performance      Is Change
Medicare                                                                  HEDIS 2002
                                                                                                 2003            since HEDIS     Statistically
HEDIS Effectiveness of Care Measures                                           (2001 CY)
                                                                                               (2002 CY)              2002       Significant?
Breast Cancer Screening*                                                       85.22%           85.62%                 p              No
Diabetes – Retinal Exam                                                        83.21%           86.37%                 p               No
Diabetes – HbA1c Testing                                                       92.21%           95.86%                p          Yes (p<0.05)
Diabetes – Poor Control of HbA1c                                               15.09%           7.30%                 p          Yes (p<0.001)
Diabetes – Lipid Profile                                                       91.48%           94.40%                p              No
Diabetes – Lipid Control                                                       64.48%           70.56%                p              No
Diabetes – Nephropathy Monitoring                                              59.85%           67.15%                p          Yes (p<0.05)
Follow-up After Mental Health Discharge (30 days)                              77.01%           70.15%                q              No
Follow-up After Mental Health Discharge (7 days)                               51.72%           43.28%                q              No
Beta Blocker After AMI                                                         93.75%           96.97%                p              No
Controlling High BP                                                            51.58%           49.88%                q              No
Cholesterol Management After CV Event                                          73.71%           85.93%                p          Yes (p<0.01)
Cholesterol Management - LDL-C Level < 130                                     66.86%           76.38%                p          Yes (p<0.05)
* Administrative Rates                                                                                                      q= Performance
Declined
                                                                                                                   p= Performance Improved


PHP performed the mandated Medicaid measures. The numbers of members eligible for the each of the
measures were low. There was only one measure that had enough members to perform the measurement. The
rate for Initiation of Prenatal Care increased over the previous year by almost 5 percentage points.

                                                                                                HEDIS            Performance      Is Change
Medicaid                                                                  HEDIS 2002
                                                                                                 2003            since HEDIS     Statistically
HEDIS Effectiveness of Care Measures                                           (2001 CY)
                                                                                               (2002 CY)              2002       Significant?



2002 Quality Management Program Evaluation                                                                                  11
Initiation of Prenatal Care                                     85.71%      90.66%          p               No
                                                                                         p= Performance Improved
PHP performed 38 effectiveness of care measures for the commercial population. Of those 24 (63%) showed
improvement and five of those showed statistically significant improvement. Of the 14 that showed a decline in
improvement, only two showed a statistically significant decrease.

                                                                           HEDIS       Performance      Is Change
Commercial                                                    HEDIS 2002
                                                                            2003       since HEDIS     Statistically
HEDIS Effectiveness of Care Measures                           (2001 CY)
                                                                           (2002 CY)        2002       Significant?
Breast Cancer Screening*                                        79.85%      79.78%           q              No
Cervical Cancer Screening*                                      79.79%      81.19%          p          Yes (p<0.001)
Prenatal Care in First Trimester                                94.40%      96.11%          p               No
Check-ups After Delivery                                        74.94%      77.13%          p               No
Childhood Immunization – DTP                                    82.97%      82.73%          q               No
Childhood Immunization – MMR                                    91.97%      93.19%          p               No
Childhood Immunization – OPV                                    87.35%      90.51%          p               No
Childhood Immunization – Hib                                    87.10%      86.86%          q               No
Childhood Immunization – Hepatitis B                            82.48%      86.13%          p               No
Childhood Immunization – Varicella                              83.94%      86.13%          p               No
Childhood Immunization – All Immunizations except Varicella     70.80%      71.29%          p               No
Childhood Immunization– All Immunizations                       65.94%      61.31%          q               No
Adolescent Immunization – MMR                                   79.56%      79.81%          p               No
Adolescent Immunization – Hepatitis B                           60.83%      58.88%          q               No
Adolescent Immunization – Varicella                             37.71%      40.63%          p               No
Adolescent Immunization – MMR and Hepatitis B                   57.66%      54.99%          q               No
Adolescent Immunization – MMR, Varicella, and Hepatitis B       24.57%      27.74%          p               No
Diabetes – Retinal Exam                                         63.99%      68.86%          p               No
Diabetes – HbA1c Testing                                        85.16%      91.24%          p               No
Diabetes – Poor Control of HbA1c                                23.26%      20.92%          p           Yes (p<0.01)
Diabetes – Lipid Profile                                        87.10%      90.75%          p               No
Diabetes – Lipid Control                                        60.58%      60.10%          q               No
Diabetes – Nephropathy Monitoring                               58.64%      65.69%          p           Yes (p<0.05)
Follow-up After Mental Health Discharge (30 days)               79.34%      77.50%          q               No
Follow-up After Mental Health Discharge (7 days)                50.55%      63.50%          p           Yes (p<0.01)
Beta Blocker After AMI                                          93.33%      94.20%          p               No
Chlamydia Screening – Ages 16-20*                               23.09%      25.86%          p               No
Chlamydia Screening – Ages 21-26*                               17.94%      20.70%          p           Yes (p<0.05)
Controlling High BP                                             54.50%      59.12%          p               No
Cholesterol Management After CV Event                           77.47%      79.87%          p               No
Cholesterol Management - LDL-C Level < 130                      64.84%      69.48%          p               No
Appropriate Asthma Medication Use – Ages 5-9*                   65.18%      60.24%          q               No
Appropriate Asthma Medication Use – Ages 10-17*                 56.52%      50.32%          q               No
Appropriate Asthma Medication Use – Ages 18-56*                 61.73%      53.47%          q          Yes (p<0.001)
Appropriate Asthma Medication Use – Combined Ages*              61.48%      53.53%          q          Yes (p<0.001)
Antidepressant Rx Mgmt – Optimal Practitioner Contact *         11.13%      9.98%           q               No
Antidepressant Rx Mgmt – Effective Acute Phase Tx*              58.71%      61.48%          p               No
Antidepressant Rx Mgmt – Effective Continuation Phase Tx*       38.74%      38.05%          q               No



2002 Quality Management Program Evaluation                                                        12
* Administrative Rates                                                                                     q= Performance
Declined
                                                                                                  p= Performance Improved
Based on claims data, the CPM department performed an analysis of how PHP dollars are spent. After
reviewing this and other utilization data, the QMM department listed five potential drivers of utilization: cataract,
upper endoscopy, knee arthroscopy, left heart catheterization, and colonoscopy. These will be reviewed for
future impact in 2003.

                                 How PHP Dollars are Spent
                                      Commercial



                                             Other
                             HH/DME                  Surgical Inpt
                                              6%
                         MH/CD 1%                        12%
                           3%
                     Lab                                                Medical Inpt
                     4%                                                     6%

           Imaging
                                                                             OB
             7%                                                              4%

                                                                                 Other Inpt/SNF
                                                                                       5%



        Pharmacy
          16%
                                                                          Amb Surg
                                                                            14%



                                                              ED
                                 Referrals             PCP    4%
                                   16%                 2%




                                 How PHP Dollars are Spent
                                Medicare (no pharmacy benefit)
                                    Other
                                     8%
                     HH/DME
                       5%                                                 Surgical Inpt
           MH/CD                                                              25%
            1%
           Lab
           3%

    Imaging
      7%




    Referrals
      11%
                                                                                   Medical Inpt
                                                                                      15%


                   PCP
                   5%
                           ED
                                                                Other Inpt/SNF
                           2%
                                         Amb Surg                     5%
                                           13%




2002 Quality Management Program Evaluation                                                                 13
III. CLINICAL QUALITY IMPROVEMENT
     ACTIVITIES


         A. Clinical Improvement Processes
            §  Asthma Management Program
            §  Diabetes Management Program
            §  Tobacco Cessation Program
            §  Mental Health Initiative – Depression and Anxiety Education
               Project
            §  Behavioral Health Initiative – Stress, Health, and Wellness
               Program
            §  Flu and Pneumonia Vaccination Education
            §  Medical Back Program
            §  Early Childhood Cavity Prevention

         B. Disease Management Programs
            § Rare Disease Management Program
            § CHF Disease Management Program
            § CAD Disease Management Program
            § COPD Disease Management Program
            § High Risk Maternity Program

         C. Guidelines
            § Preventive Care
            § COPD
            § Depression
            § Mental Health Follow-Up
            § Tobacco Cessation
            § Asthma
            § Diabetes
            § CAD
            § Rare Diseases
            § CHF
            § Acute Myocardial Infarction



2002 Quality Management Program Evaluation                           14
                A. Clinical Improvement Processes

                ProvAir Asthma Management Program
                The intent of the program is to improve the health of PHP members with asthma. In 2002, PHP in partnership
                with PHS initiated a new systems change wherein all members at the ED with a diagnosis of asthma are
                automatically referred to an asthma class as part of the discharge summary. This did not result in the majority of
                members following through with the classes. In 2002, only 32 members attended class, and not all completed the
                full series. It was determined to discontinue the classes in 2003. The other interventions include:
                §    Develop/distribute quarterly member education mailings
                §    Produce quarterly list for provider distribution of members with asthma including what asthma medications
                     they are taking, and their inpatient, outpatient, and ED utilization
                §    Annually report on asthma HEDIS results

                PHP measures improvement in asthma care by tracking ten HEDIS-defined asthma medication measures for
                commercial members. Results are displayed below. Rates declined in all of the age groups, with statistically
                significant decreases in ages 18-56 and combined ages 5-56.

                       Commercial: Percent of Members with Asthma receiving Appropriate Asthma Medications (HEDIS Measure)

          100

          80


          60
Percent




                                                              68.2
                   61.4        61.5                59.2                 60.2                   56.5                62.4      61.7
                                                                                      57.3
          40                                53.5                                                          50.3                          53.5


          20


           0
                          ** Ages 5-56 **                    Ages 5-9                        Ages 10-17                   Ages 18-56

                                                                2000           2001              2002


                Accomplishments                           Barriers/Limitations                     Recommendations
                Merged the physician asthma               Despite renewed promotion                Discontinue asthma education classes in
                mailing with the physician                of asthma education classes,             2003, but continue to focus on physician
                diabetes mailing, thereby                 attendance remained low in               reports and member mailings.
                decreasing the amount of paper            2002.
                sent to physicians.                                                                Increase focus on asthma medications.

                Diabetes Management Program
                The intent of the program is to improve the health of members with diabetes by providing coordinated
                preventive and routine health care services. In 2002, interventions included:
                §   Develop/distribute quarterly member education mailings
                §   Produce quarterly provider mailings listing members with diabetes and which services they have received
                §   Annually report on diabetes HEDIS results
                §   Including diabetes measures as part of Provider Quality Bonus Program
                §   Select telephonic education regarding retinal exams to members with diabetes
                §   Participation in the Oregon Diabetes Coalition, as well as other regional collaborative efforts

                During 2002, physicians made 3,452 referrals for diabetes classes. Of those, 717 members enrolled in PHS
                diabetes classes. However, class enrollment may be under reported. PHP measures improvement in diabetes care
                by tracking HEDIS-defined diabetes measures. Results for the commercial and Medicare lines of business are



                2002 Quality Management Program Evaluation                                                                             15
     displayed in the two graphs below. For commercial rates, statistically significant increases were shown for HbA1c
     testing and nephropathy monitoring. There were increases in all measures except for lipid control, which declined
     by less than half of a percentage point. The Medicare rates showed improvement in all rates with statistically
     significant improvement in HbA1c testing, adequate HbA1c control, and nephropathy monitoring.

                                             Commercial: Percent of Members with Diabetes who received Recommended Care

          100

               80                                              91.2                                                 90.8
                                               88.1    85.2                                      85.4       87.1

               60                   68.9
Percent




                            64.0                                                                                                      60.6     60.1                       65.7
                                                                                                                                                                 58.6
               40   51.3                                                                                                     51.3                       51.1

               20
                                                                       25.1 23.4
                                                                                      20.9
               0
                       Eye Exam                  HbA1c Testing           HbA1c >9.5                  Lipid Testing              LDL <130                 Neph Monitoring

                                                                        2000                  2001                  2002


                                                Medicare: Percent of Members with Diabetes who received Recommended Care

           100

                                                        92.2    95.9                                                  94.4
               80                               91.5                                                         91.5
                                      86.4                                                           84.9
                             83.2
               60   70.6                                                                                                                         70.6
     Percent




                                                                                                                                                                            67.2
                                                                                                                                        64.5
                                                                                                                               57.9                       58.4     59.9
               40

               20

                                                                        13.4   15.1
                                                                                        7.3
                0
                           Eye Exam               HbA1c Testing            HbA1c >9.5                   Lipid Testing               LDL <130               Neph Monitoring

                                                                          2000                 2001                 2002


     Diabetes care for Medicare members was the mandated 1999 QAPI 3-year project. PHP selected
     microalbuminuria as the measure to demonstrate improvement. The completion date was August 2002. PHP
     demonstrated sustained improvement for this project.

          Accomplishments                                        Barriers/Limitations                                                                 Recommendations
          Members without ophthalmology                          Continued lack of member understanding of disease                                    Continue current
          claims received phone calls to                         process and reasons for diabetes follow-up care.                                     interventions.
          ascertain whether a retinal exam
          was performed and to educate on                        Continued difficulty in getting accurate diabetes care
          the importance of the exam.                            and services information during HEDIS due to
                                                                 differences in practitioner billing, charting, record
          Improvement in all but one                             legibility, multiple physician involvement, etc.
          diabetes HEDIS measure.
                                                                 Difficulty in tracking enrollment in PHS diabetes
          Successfully completed the 3-year                      classes. Enrollment is potentially under reported.
          diabetes QAPI project and
          demonstrated sustained                                 Medicare members do not have a pharmacy benefit,


     2002 Quality Management Program Evaluation                                                                                                           16
          Accomplishments                                  Barriers/Limitations                                     Recommendations
          improvement for nephropathy                      making pharmacy data unavailable to assist in
          monitoring.                                      identifying diabetes in this population.


      Tobacco Cessation Program
      The goal of the program is to reduce the prevalence of smoking in adult members. This is a program in which
      PHP identifies current tobacco users and refers them to PHS tobacco cessation programs. Other interventions
      include:
      §    Monthly mailing of smoking cessation and resource information to Medicare and Medicaid members
           identified as smokers
      §    Display tobacco cessation fliers at all Providence facilities
      §    Quarterly mailings to high risk members for other projects, such as asthma and diabetes (smoking is a risk
           factor)
      §    Smoking cessation information and resources are included as a regular part of member and provider
           newsletters
      §    Forward listing of tobacco users from disease management programs to PHS’ tobacco cessation program

      PHP measures improvement in smoking rates by tracking CAHPS survey-defined measures. Results for the
      commercial and Medicare lines of business are displayed in the two graphs below. During 2000, less emphasis
      was placed on the commercial population as smoking prevalence had been decreasing. Subsequently, the
      incidence rose from 12.0% to 14.5% from 2000 to 2001. Interventions were once again refocused on the
      commercial population resulting in an almost two percentage point drop in rate from 2001 to 2002. Medicare
      smoking prevalence has statistically fallen in both 2001 and 2002.
                                       Tobacco Use Prevalence (CAHPS Data)
            15

                                     14.5
            10           12.0                    12.8                         12.1
Percent




                                                                                            9.4
                5                                                                                      7.7


                0
                                  Commercial                                              Medicare
                                                        2000     2001       2002



                                            Advising Smokers to Quit (CAHPS Data)
                    80

                    60     71.7         75.3
                                                    64.9                           63.1       59.0
      Percent




                    40

                    20

                    0
                                    Commercial                                              Medicare
                                                          2000     2001       2002



      Accomplishments              Barriers/Limitations                   Recommendations
      Collaboration with           Difficulty for PHP to                  Continue working with PHS tobacco cessation program.
      PHS tobacco                  identify members who
      cessation programs.          use tobacco.                           Continue to re-focus tobacco cessation interventions on


      2002 Quality Management Program Evaluation                                                                         17
Accomplishments Barriers/Limitations         Recommendations
                                             the commercial population.




2002 Quality Management Program Evaluation                                18
Mental Health Initiative – Depression and Anxiety Education Project
The intent of the mental health initiative is to improve care to members with co-occurring mental health disorders
including antidepressant management and coordination of care between primary care and behavioral health
providers. Interventions performed during 2002 included:
§    Clinic presentations for physicians to receive information on treatment approaches
§    Distribution of an internally developed Pocket Guide
§    Provider and clinic data of treatment with antidepressants
§    Follow up presentation in 12 months to address treatment changes and current provider data

By the end of 2002, 41 clinic presentations and 2 dinner programs were performed to an audience of 291
physicians. Two luncheon presentations were also performed for PHP staff.

Accomplishments                                      Barriers/Limitations            Recommendations
Positive physician feedback on program.              Presentations are time          Continue current interventions.
                                                     intensive.
State asked to use our internally developed
depression and anxiety brochures.

Behavioral Health Initiative – Stress, Health, and Wellness Program
The intent of the behavioral health initiative is to provide education to providers about members with co-
occurring problems exacerbated by stress and depression/anxiety. Interventions include:
§   Clinic presentations for physicians to receive information on treatment approaches
§   Provide a brochure for providers to give to members on stress, health, and wellness
§   Provider and clinic information on treatment with antidepressants
§   Reinforce depression and anxiety (Phase I) goals
§   Stress class provided through PHS
§   Follow up presentation in 12 months to address treatment changes and current provider data

By the end of 2002, 23 clinic presentations and 2 dinner programs were conducted with 120 physicians in
attendance.

Accomplishments                              Barriers/Limitations                Recommendations
Positive physician feedback on               Presentations are time intensive.   Continue current interventions.
program.

Flu and Pneumonia Vaccination Education
The goal of this education program is to increase the vaccination rate among elderly and at-risk members.
Interventions include:
§   Mail educational material focused on the importance of pneumonia vaccine to non-vaccinated newly enrolled
    Medicare members (identified through HRA) on a monthly basis. Then a list of these members were mailed
    to their PCPs for follow-up
§   Provider and member newsletter articles
§   Participate in OMPRO collaborative pilot project for pneumonia vaccine standing orders
§   General reminders through newsletters and advertising in local newspapers
§   Targeted reminders
§   Process for direct member reimbursement for flu vaccinations received through non-plan providers
§   Promotion of Providence- and community-sponsored flu vaccination clinics

In 2002, PHP measures improvement in vaccination rates by tracking CAHPS survey-defined measures. Results
are displayed below, but the 2002 rates are pending.




2002 Quality Management Program Evaluation                                                               19
                           Percent of Medicare Members who received Vaccinations
            100

            75                  86.1         85.0
  Percent           81.5                                                      74.7      77.3
            50                                                       71.7

            25

             0
                                Flu                                         Pneumonia
                                               1999   2000    2001



Flu Vaccination for Medicare members was the optional 1999 QAPI 2-year project. Improvement in 2000 was
noted over the 1999 baseline. The project was completed December 2002. Pneumonia vaccination for Medicare
members was the mandated 2000 QAPI 3-year project. The completion date was December 2002. PHP
demonstrated sustained improvement for this project.

 Accomplishments                        Barriers/Limitations                            Recommendations
 Successfully completed 3-year          Difficult to track claims-based                 Continue education interventions
 QAPI projects for both flu             pneumonia vaccinations as they are              targeted toward non-vaccinated
 and pneumonia vaccination.             only given once.                                members.

                                        There are individuals who refuse flu            Encourage PCP office sites to
                                        and/or pneumonia vaccinations.                  contact non-vaccinated members.

Medical Back Program
The intent of the medical back program is to provide physical therapy for commercial patients, in the Portland
Metro area, with acute lumbar conditions that currently have not received conservative treatment prior to the
consideration of surgical intervention. Program interventions include:
§   Clinic presentations to primary care physicians educating about the program and referral process
§   Distribution of informational program brochures
§   Create new physical therapy prescription pads with medical back program check box

Accomplishments                    Barriers/Limitations                        Recommendations
Successful rollout of new program.                                             Continue development of the program.

Early Childhood Cavity Prevention (ECCP)
ECC is a term used to describe cavities that children get in their baby teeth. Interventions include multiple
mailings to providers and clinic managers. These mailings included ECCP guidelines, lists of Medicaid members
born after 1/1/00, ECCP fliers which were purchased from OMAP, and risk assessment recommendations.
Other interventions focus on the pregnant Medicaid members and include counseling by ProvBeginnings and
mailings of “Dental Health During Pregnancy” fliers to this population. PHP has also published ECCP related
articles in our provider newsletters and member newsletters.

Before implementation of the ECCP project, input was collected from pediatric offices, and periodic feedback
has been gathered over the last year.

Accomplishments                                              Barriers/Limitations       Recommendations
Successfully collaborates with the State on this                                        Continue current interventions.
project.




2002 Quality Management Program Evaluation                                                                     20
B. Disease Management Programs

Accordant Rare Disease Management Program
In January 2002, PHP partnered with Accordant Health Services, Inc., a leading provider of technology-enabled
disease management programs. Accordant focuses on improving the health of commercial and Medicare
members with rare and chronic conditions in the areas of neurology, pulmonology, hematology, and
rheumatology (includes focused diseases such as seizure disorders, rheumatoid arthritis, multiple sclerosis,
Parkinson’s disease, lupus, myasthenia gravis, sickle cell anemia, cystic fibrosis, hemophilia, scleroderma,
polymyositis, chronic inflammatory demyelinating polyneuropathy, amyotrophic lateral sclerosis, dermatomyositis,
Gaucher disease). Accordant interventions include:
§   Members can access nurse who specializes in their condition, improving patient compliance and increasing
    knowledge of disease/condition
§   Members receive a monthly educational newsletter and a disease specific educational newsletter quarterly
§   Physicians receive member care plans on an as needed basis to obtain physician feedback and keep physician
    apprised to information being provided to the member
§   Members and physicians have access to disease-specific web-based tools and consultation services

During 2002, 80.5% (n=1,306) of the 1,623 eligible members were enrolled in the program. Another 252 were
pending enrollment.

Accomplishments                              Barriers/Limitations         Recommendations
Positive program feedback from                                            Continue current interventions.
physicians and members.

Congestive Heart Failure (CHF) Disease Management Program – ProvRN Health Management
In January 2001, PHP contracted with LifeMasters CHF disease management program to provide primary
intervention with a select group of physicians/providers. In May 2002, PHP initiated an internally developed and
managed CHF program for members and physicians/providers not involved with LifeMasters. PHP ended its
contract with LifeMasters and expanded the internal program statewide in December 2002 incorporating
members from LifeMasters into the program. The intent of the CHF disease management program is to
improve the health of commercial and Medicare members with CHF by providing coordinated preventive and
routine health care services. Program interventions include:
§    Provider Interventions:
     §   List of new eligible members for confirmation monthly (Presumptive eligibility after 10 days)
     §   Alert reports when indicated
     §   Direct provider line/secure web access available
§    Member Interventions:
     §   Providence RN nurses manage members using national standards, developed by Pfizer Health Solutions
         and customized for PHP
     §   Member-centered interventions depend on the member’s level of risk
     §   Low risk members receive quarterly educational mailings
     §   Moderate/high risk members are invited to enroll in CHF telephonic care management. Members
         enrolled in telephonic case management receive:
         §    Regular telephone contact with cardiac nurse housed in the Providence Care Management Call
              Center
         §    Assistance with health monitoring (health journal, scales if needed, alerts to providers)
         §    Ongoing education and support

In 2002, 77.8% (n=1,919) of 2,465 eligible members were enrolled in the program. Enrollment is pending for an
additional 546 members.

CHF Management for Medicare members is the mandated 2001 QAPI 3-year project. Initial results listed at the
left indicated under-performance. Anticipated completion date is late-2003.


2002 Quality Management Program Evaluation                                                         21
                                                Medicare - Manadated 2001 CHF QAPI Project Results
           100

           80
                                                                                                                  85.7
 percent


           60                     77.9
                        67.7
           40

           20                                                   38.0
                                                                         32.6                            29.6
            0
                 Left Ventricular Function was Evaluated Left Ventricular Systolic Dysfunction     There was Appropriate ACE Inhibitor
                                                              was Documented as <40%                             Usage
                                                            2000 Baseline         2001           2002


Accomplishments                                                                  Barriers/Limitations                    Recommendations
Expanded program from Portland area to statewide.                                                                        Continue current
                                                                                                                         interventions.
Transition from vendor to internal statewide process
was virtually seamless to members.

Coronary Artery Disease (CAD) Management Program
In April 2002, PHP contracted with QMed, a disease management vendor. QMed provides physicians with
recommendations based national guidelines to improve the health of members with, or at risk for, coronary
artery disease (CAD) by providing physicians with recommendations based on national guidelines. The program
is for commercial and Medicare members with, or at risk for, CAD served by physicians in the Portland IPA.
QMed interventions include:
§    Members receive heart healthy educational materials once enrolled in program
§    Chart reviews and member monitoring with ohms/cad device to determine recommendations for physicians
§    Physicians receive individual reports for each enrolled member, based on national guideline
     recommendations. Frequency of the reports depends on risk level of the member

By the end of 2002, 78% of physicians contacted agreed to participate with the program. Of the 3,702 members
deemed eligible by their physicians, 67.5% (n=2,497) were enrolled in the program with 15.7% (n=582) more
members with enrollment pending. The remaining 16.8% either declined or disenrolled after initially enrolling.

Accomplishments                                                 Barriers/Limitations                       Recommendations
Program manager and vendor                                      Physicians have been slow to               Continue current interventions.
representative have been meeting regularly                      embrace the program.
with providers to discuss issues.

ProvAir Chronic Obstructive Pulmonary Disease (COPD) Management Program
In January 2003, PHP launched this program to improve the health of commercial and Medicare members with
COPD (emphysema, chronic bronchitis, or chronic irreversible asthma), and to minimize potentially preventable
exacerbations of their illness by providing coordinated preventive and routine health care services. Program
interventions include:
§    List of new eligible members for confirmation monthly (Presumptive eligibility after 10 days)
§    Alert reports when indicated
§    Direct provider line/secure web access available
§    Patient-centered interventions depend on the pt’s level of risk
§    All enrolled and pending members receive quarterly educational mailings
§    500 Moderate/high risk members invited to enroll in COPD telephonic care management. Members
     enrolled in telephonic cm receive (1) regular telephone contact with a PHP Case Management respiratory
     nurse; (2) assistance with health monitoring; and (3) Ongoing education and support
§    Nurses manage pts using InformaCare web platform


2002 Quality Management Program Evaluation                                                                                               22
   Accomplishments                      Barriers/Limitations                 Recommendations
   Member response to the new           Enrollment calls and                 Target enrollment of 500 members was
   program has been favorable.          documentation have taken             determined based on staffing limitations – two
                                        longer than anticipated.             nurses with caseload of 250. This is still to be
                                                                             assessed and may change.

High Risk Maternity Program
PHS’ Providence Beginnings offers a maternity case management program providing an organized system to
identify pregnant women at their first prenatal visit. Triaging is performed with the highest risk members targeted
for case management. Each member receives services based on her particular need. Services may include:
§   Development of personal goals for pregnancy including educational materials and resources to meet those
    goals
§   Help in understanding the use of PHS resources
§   Other community resources, such as nutrition assistance, home visits, addictions treatment, health nursing
    services, etc.
§   Information about prenatal and parenting classes for special needs

PHP evaluates our performance in this area as part of our annual HEDIS reporting. Listed below are the
HEDIS rates. Commercial rates increased by almost 2 percentage points. The Medicaid rate increased by 5
percentage points.

                    Percent of Pregnant Female Members Who Received Timely Prenatal Care

          100

          80                   94.4          96.1
                  91.5                                                91.2                      90.7
                                                                                     85.7
Percent




          60

          40

          20

           0
                           Commercial                                              Medicaid
                                                    2000   2001     2002


Accomplishments                                                   Barriers/Limitations             Recommendations
Members/practitioners were notified of the prenatal               Often unable to identify         Continue notifying
care guidelines through distribution of the preventive            pregnant women until             members and
guidelines.                                                       after claims for services        practitioners of the
                                                                  are received.                    guidelines.
Providence Beginnings continues to utilize eligibility
information provided by the State Medicaid
Program to identify newly enrolled pregnant
members to encourage early entrance into prenatal
care.

C. Guidelines

PHP standardized the process for initiating new or updating existing guidelines. See Attachment 5 for the
workflow process.




2002 Quality Management Program Evaluation                                                                       23
Preventive Care
The intent of the guideline is for the preventive care management of members by providing physicians with
recommendations based on national guidelines. The guideline was initially developed in 1993 and was last
reviewed and updated in late 2002/early 2003.

Chronic Obstructive Pulmonary Disease (COPD)
The intent of the guideline is for the management of members with, or at risk for, COPD by providing
physicians with recommendations based on national guidelines. The guideline was initially developed in 2002.

Depression
The intent of the guideline is to assure that all patients with depression receive optimal care. The guideline was
initially developed in 1999 and was last reviewed and updated in 2001.

Mental Health Follow-Up
The intent of the guideline is to ensure continuity of care and follow-up treatment for members hospitalized for
mental illness. The guideline was initially developed in 1998 and was last reviewed and updated in 2002.

Tobacco Cessation
The intent of the guideline is to reduce the prevalence of smoking in adult members. The guideline was initially
developed in 2001.

Asthma
The intent of the guideline is to assure that all patients with asthma receive optimal care. The guideline was initially
developed in 1998 and was last reviewed and updated in 2001.

Diabetes
The intent of the guideline is for the management of members with diabetes by providing physicians with
recommendations based on national guidelines. The guideline was initially developed in 1997 and was last
reviewed and updated in 2002.

Coronary Artery Disease (CAD)
The intent of the guideline is for the management of members with, or at risk for, CAD by providing physicians
with recommendations based on national guidelines. The guideline was initially developed in 2002.

Rare Diseases
The intent of the guideline is for the management of Commercial and Medicare members with rare and chronic
conditions in the areas of neurology, pulmonology, hematology, and rheumatology (includes 15 focused diseases
such as MS, hemophilia, ALS, lupus, rheumatoid arthritis, etc.). The guideline was initially developed in 2002.

Congestive Heart Failure (CHF)
The intent of the guideline is for the management of commercial and Medicare members with CHF. The
guideline was initially developed in 2001.

Acute Myocardial Infarction (AMI)
The intent of the guideline is to provide a standard measure of care with the intention of minimizing the life-
threatening effects of AMI, as well as preventing complications and recurrent infarctions. The guideline was
initially developed in 1998 and was last reviewed and updated in 2002.

Accomplishments                                      Barriers/Limitations             Recommendations
PHP redefined and standardized the process                                            Continue to provide
used for developing, adopting, and distributing                                       practitioners and members
clinical guidelines within scheduled timeframes.                                      with guidelines and updates.



2002 Quality Management Program Evaluation                                                               24
By early 2002, all of the clinical practice
guideline were available on the PHP website.




2002 Quality Management Program Evaluation     25
IV.          SERVICE QUALITY IMPROVEMENT
             ACTIVITIES

              A. MEMBER LETTER IMPROVEMENT PROJECT


              B. ONLINE PROVIDER DIRECTORY PROJECT


              C. MEMBER SATISFACTION


              D. AVAILABILITY OF PRACTITIONERS AND
                 ACCESSIBILITY OF CLINICAL SERVICES




2002 Quality Management Program Evaluation            26
A. Member Letter Improvement Project

This project was initiated as an active QI activity in late summer, 2000. Interventions implemented to improve
PHP's member letters included:
§   Completion of creating all member letters for the new EPO product by July 1, 2001. After July 2001, EPO
    letter review went into maintenance mode being monitored by the letter review committee (representatives
    from Regulatory, Communications, Operations and Systems Administration)
§   Completion of a review and overhaul of all Medicare member letters in time for the CMS audit in April
    2001. The April audit found no significant compliance issues with the content of the member letters. After
    April Medicare letter review went into maintenance mode being monitored by the letter review committee
    (representatives from Regulatory, Communications, Operations and Systems Administration)
§   With the re-implementation of the OHP product, the need for letter improvement for this line of business
    was established
§   In mid-2002, a process was developed where a committee composed of representative from
    Communications, Regulatory, and Operations reviews new letters or changes to existing letters. A written
    policy to formalize the letter review process is under development

B. Online Provider Directory Project

This project was initiated as an active QI activity in fall 1999. Interventions implemented to improve PHP's
Online Directory included:
§   Listing printable pdf files for printing a replica of all paper copies of directories via the Internet
§   Established criteria and design for improving the online directory for a March 2002 completion date.
    Improvements included adding alternative care, pharmacy, and facility providers to the searchable directory,
    adding MCO, PPO, Medicare and Medicaid lines of business to the searchable directory and including an
    enhanced printable feature for search results obtained from the searchable directory
§   In 2002, key areas will focus on adding searchable pharmacies, hospitals, other facilities, alternative care
    provider, and MCO providers
§   In mid 2002, minor changes/improvements were made to the front two search pages to improve
    functionality
§   In late 2002, the project was completed. Further need for changes will be addressed after the Facets
    conversion is completed

C. Member Satisfaction

Surveys
For 2002, PHP utilized the CAHPS survey to measure member satisfaction. The survey is conducted to provide
standardized data and allow comparisons to other health plans for specific measures of access and quality. Scores
regarding satisfaction with PHP increased for the commercial population. Results for the Medicare population
are pending. CAHPS will be fielding a Medicaid survey in fall 2003.

            Commercial CAHPS Survey - Rating of Plan                     Medicare CAHPS Survey - Rating of Plan
     2.12                                                      2.68

                 2.11
     2.08                                                      2.64                           2.66
                                                           Score
 Score




     2.04                                           2.06           2.6       2.61
                                  2.03

     2.00                                                      2.56
                 2000             2001              2002                     2000            2001               2002

                        2000      2001       2002                                    2000      2001      2002




2002 Quality Management Program Evaluation                                                                         27
PCP Changes
PCP changes are captured as members call or write Customer Service to notify PHP of their intent to change
PCPs. The QM unit tracks PCP changes to identify potential outliers. With the implementation of the new EPO
product, commercial members are no longer required to have PCPs as they were on the HMO product. When
QM ran the annual PCP change report to determine outlier thresholds, the numbers were so low that the findings
were not usable. In the past, individual practitioner PCP Change scores were included in the practitioner
performance profile utilized during the recredentialing process. Annual reports are produced listing PCPs who
exceeded PCP change-related thresholds. This process was discontinued.

Grand Analysis of Member Satisfaction
PHP compiles the annual Grand Analysis of Member Satisfaction for review by AQC, QIT, and SIT. This
analysis includes all data sources measuring member satisfaction to obtain a clearer understanding of issues
affecting member satisfaction and identify the most meaningful issues to address. These sources included:
§   Telephone member satisfaction survey
§   CAHPS member satisfaction survey
§   Member complaint database
§   Appeals database
§   PCP change report
§   Medicare disenrollment survey
§   Quality Bonus satisfaction survey

Identified issues are referred to SIT and QIT for action and follow-up.

Accomplishments            Barriers/Limitations   Recommendations
                                                  Discontinue PCP change reporting.

                                                  Utilize interim satisfaction measures, such as member
                                                  complaint, appeal reporting, ad hoc PCP change reports,
                                                  and phone log summaries to ensure areas of vulnerability
                                                  are identified to early.

                                                  Develop actions to improve member satisfaction in areas
                                                  of concern.


D. Availability of Practitioners and Accessibility of Clinical Services

PHP’s Network Management Plan outlines the strategy for maintaining a network of sufficient numbers and
types of PCPs and high-volume specialty care practitioners to meet the membership needs and to define our
mechanisms to assure the accessibility of clinical services.

The Administrative Quality Council approved the Network Management Plan on May 1, 1997. It was last revised
and subsequently reviewed and approved by the Service Improvement Team in July 2001. See Attachment 6 for a
copy of the Network Management Plan.




2002 Quality Management Program Evaluation                                                          28
                 Percent of Urban Members with Access to 2                               Percent of Rural Members with Access to 2
                     PCPs within 10 Miles of Residence                                       PCPs within 20 Miles of Residence
           100                                                                    100
            80     98   97 99          98    98    98      95 97   97             80               97      97            98      97      98
                                                                                              87
 percent




                                                                        percent
            60                                                                    60
            40                                                                    40
            20                                                                    20
             0                                                                     0
                   Commercial           Medicare           Medicaid                            Commercial                     Medicare
                                2000        2001   2002                                                  2000     2001   2002




                Percent of Urban Members with Access to 2                                Percent of Rural Members with Access to 1
              High-Volume Specialty Provider within 30 Miles                            High-Volume Specialty Provider with 30 Miles
                               of Residence                                                            of Residence
           100                                                                    100
            80                                             97                      80                                            97      96
                  90 89 91             88 90
 percent




                                                                                                    81
                                                                        percent
            60                                                                    60                       80
                                                                                             64
            40                                                                    40
            20                                                                    20
             0                                                                     0
                   Commercial           Medicare           Medicaid                            Commercial                     Medicare
                                2000        2001    2002                                                 2000    2001    2002



Accomplishments                           Barriers/Limitations                                                  Recommendations
QM/PR collaboration in identification                                                                           Continue to develop strategies to
and follow-up identified practitioners is                                                                       measure access and availability.
strong. Regular reporting is submitted
to the SIT and CRC.




2002 Quality Management Program Evaluation                                                                                                    29
V. CLINICAL AND SERVICE QUALITY
   MONITORING ACTIVITIES

         A.        KEY INDICATOR REPORT


         B.        UNDER/OVER UTILIZATION OF CARE AND
                   SERVICE

         C.        CONTINUITY AND COORDINATION OF CARE
                   AND SERVICE

         D.        HEDIS 2003


         E.        PROVIDER PROFILING


         F.        MEMBER COMPLAINTS, APPEALS, AND
                   GRIEVANCES

         G.        MEDICAL RECORD DOCUMENTATION
                   REVIEWS

         H.        PHARMACY SERVICES


         I.       QUALITY BONUS PROGRAM


         J.       PROVIDENCE RN




2002 Quality Management Program Evaluation              30
A. Key Indicator Report

The Key Indicator Report (KIR) provides plan-wide monthly and cumulative annual performance figures plotted
on control charts. Data is compared to established performance goals/standards. The report in its entirety and
condensed versions are reviewed at all levels of the QM committee structure. Refer to Attachment 7 for the KIR.

Accomplishments                                       Barriers/Limitations       Recommendations
One comprehensive report provides indicators          The amount of data and     Continue ongoing
from all areas of PHP including: finance,             length of the report can   development of report as
membership, service, complaints and appeals, sales,   be overwhelming.           needed.
credentialing, cost savings, transplants, disease
management, behavioral health, continuity and                                    Consider other ways of
coordination of care, pharmacy, and utilization.                                 making report less
                                                                                 cumbersome.
Added a summary sheet for a “quick look” update
on the measures.

B. Under/Over Utilization of Care and Service

The QM department routinely monitors practitioner, POD, and/or medical group performance against
established thresholds. These performance indicators include information from the following data sources:
utilization data, PCP changes, member complaints, and medical record documentation reviews. Plan-wide
monitors include: HEDIS Use of Services, Milliman and Robertson, referral volume, and utilization data. In
addition, PHP utilized Quality Bonus Program comparative information as a means of identifying potential
under- and over-utilization of clinical services.

C. Continuity/Coordination of Care and Service

The QM department routinely monitors continuity and coordination of clinical care and service through many
different sources. Refer to Attachment 8 for the continuity and coordination of care measures. Other measures are
also included in the Key Indicator Report. Additionally, continuity and coordination of care is seamlessly woven
into many day-to-day Medical Management functions including Case Management, Exceptional Needs Care
Coordination (ENCC), and Providence RN.

D. HEDIS 2002

PHP collected and reported HEDIS data for the ninth consecutive year. Health Research Associates (HRA), a
certified HEDIS auditor firm, conducted the HEDIS audit. Based on the audit results, all planned measures were
approved for submission.

PHP’s HEDIS results are documented in this report in sections describing member satisfaction and the various
clinical and preventive health QI activities, which use HEDIS 2003 (2002 data) methodology to monitor
performance. HEDIS results are displayed in Attachments 3 and 4. PHP elected to perform only the mandated
measures Medicare and Medicaid members. The number of Medicaid members eligible for the mandated
measures was so low that Initiation of Prenatal Care was only measure that could be performed/reported.

E. Provider Profiling

The Clinical Performance Measurement department began devising an internal method of identifying PCP
profiling. The new profiling takes into account the non-gatekeeper EPO environment. The new PCP Profile
methodology includes:
§   Evaluated 12 months of claims data
§   Assigned most likely PCP


2002 Quality Management Program Evaluation                                                         31
§   Age/sex weights based on cost (adjusted)
§   Diagnosis weights within age/sex cells
§   Comorbidity counts within age/sex cells
§   Excluded outlier cases >$30,000
§   Separate models for FP/GP, IM, and Peds
§   Excluded PCPs with <50 members (<25 peds)
§   Step-wise multiple regression (SPSS)
§   Independent variables:
    §   Weighted average ratios for each PCP
    §   Age/sex, disease comorbidity
§   Dependent variable:
    §   Average cost per case (adjusted)
§   Tested variables for independence
§   Significant relationships were found

The new format was first presented to practitioners in 2002. See Attachment 9 for report samples.

Accomplishments                          Barriers/Limitations                          Recommendations
A new format for physician profiling was                                               Continue to use the reports to
developed internally taking into                                                       identify potential over- and/or
consideration the commercial EPO non-                                                  under-utilization.
gatekeeper model.

Independent review by Mercer stated “
Mike Bragg’s methodology best in USA.”

F. Member Complaints, Appeals and Grievances

Complaint, appeal and grievance data is captured monthly in the Key indicator Report (see Attachment 6).

Member Complaints
A complaint is defined as an issue that a member calls or writes about that is not a denial. Multiple issues can be
identified within one complaint. Each issue within a complaint is identified as an indicator. There may be multiple
indicators for each complaint received.

541 complaints for which 615 indicators were identified were received in 2002. The top complaint issues are as
follows:
      Quality of
                                        Benefits
        Care
                                         21%
        17%
                                                         §   Provider/Provider Office Communication (133 indicators)
                                                         §   Quality of Care (104 indicators)
                                                         §   Benefits (132 indicators)
                                             Provider/   §   Other (246 indicators)
                                               Office
        Other                                 Comm
        40%                                    22%




Member Appeals
Members have the right to appeal a denial of service or authorization. Almost 75% of the appeals were
forwarded to QMM for review. 1,002 appeals were received in 2002; some had more than one indicator. The
types of appeals are listed below. Almost 70% of the appeals received in 2002 were upheld.



2002 Quality Management Program Evaluation                                                                      32
              Other
              21%

                                                §       Authorizations (520 appeals)
                                       Auths    §       Referrals (114 appeals)
                                       46%      §       Out-of-Plan Services (189 appeals)
       OOP                                      §       Not a Covered Benefit (69 appeals)
      Services                                  §       Other (150 appeals)
       17%

              Referrals     Benefit
                10%        Exclusion
                              6%



Member Grievances
In 2002, 4.0% (n=40; some had more than one indicator) of appeals became grievances. Over half of the
grievances were for authorization issues. Almost 75% of the grievances were upheld.


       OOP
       22%
                                                    §     Authorizations (22 grievances)
                                                    §     Out-of-Plan Services (9 grievances)
                                                    §     Maximum (5 grievances)
      Other                                         §     Other (5 grievances)
      12%                              Auth
                                       54%
       Max
       12%


Accomplishments             Barriers/Limitations                 Recommendations
                            Current tracking database            Continue to streamline and refine the process as
                            continues to be cumbersome           necessary.
                            and difficult to query for
                            reporting purposes.                  Incorporate complaint, appeals, and grievances
                                                                 processes into the design of the new core
                                                                 transaction system (Facets).

G. Medical Record Reviews

PHP contracts with the Oregon Medical Association (OMA) – Ambulatory Record Certification (ARC) Program
to collect medical record documentation data. This program was developed as a collaborative effort among
MCOs and IPAs located in the State of Oregon, Southwest Washington, and the OMA. The purpose of this
program is to offer a single source for collecting data and monitoring corrective action plans for practitioners.
PHP is represented as a founding member of the ARC User’s Board, the body responsible for program and
policy development, oversight, and approval. The Board meets monthly.

The ARC program is staffed by registered nurses and a physician who conduct medical record documentation
reviews, as well as site and access audits at practitioner sites. ARC forwards audit results to affiliated MCOs
monthly via computer diskette. All audits are conducted using a common audit instrument specific to the type of
review (e.g., medical record documentation, site, or access).

On a quarterly basis, the Clinical Review Committee (CRC) reviews analysis of PHP’s aggregate network-wide
compliance of medical record documentation (see Attachment 10). They also monitor practitioners under
corrective action plans whose performance fell below established thresholds.




2002 Quality Management Program Evaluation                                                              33
PHP collaborates, when possible, with the OMA-ARC Program to implement improvement activities related to
medical record documentation practices. Opportunities for improvement (those areas falling below 80%
performance goal) and effectiveness of past interventions.

Accomplishments Barriers/Limitations                                             Recommendations
Ongoing                                                                          Continue to promote the importance of medical record
collaboration with                                                               documentation, with focus on areas needing improvement, in
ARC regarding                                                                    providing quality health care.
review needs.
                                                                                 Continue to address individual practitioner’s compliance with
                                                                                 established documentation standards, contacting those
                                                                                 practitioners who score below the 80% threshold for the
                                                                                 targeted elements.

                                                                                 Continue to collaborate with the ARC Users Board to
                                                                                 develop strategies to improve medical record documentation
                                                                                 for PHP providers.

H. Pharmacy Services

The Pharmacy Benefits department accomplishments during 2002 include initiative for managing drug
expenditures, assessing drug therapy as a part of disease management, and an overall educational program aimed
at improving drug therapy and patient compliance in the treatment of depression. Listed below are PMPM and
utilization rates for all lines of business.

                   2002 Pharmacy Costs PMPM - Commercial                                                         Average # Scripts PMPM - Commercial
 $28                                                                                           1.00

 $26
                                                                                               0.90
 $24

 $22
                                                                                               0.80
 $20

 $18                                                                                           0.70
                                                                          Oct
                                                                   Sep
             Feb




                                                                                Nov
                                                           Aug
                           Apr



                                         Jun




                                                                                      Dec
                                                 Jul




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                     Mar



                                  May




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    Jan




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                                                                                                                  Mar



                                                                                                                                May
                                                                                                    Jan




                                          2001                     2002                                                              2001                 2002



              2002 Pharmacy Costs PMPM - Medicare                                                         Average # Scripts PMPM - Medicare
 $130                                                                                   4

 $110
                                                                                       3.6
  $90
                                                                                       3.2
  $70

  $50                                                                                  2.8
                                                                          Nov




                                                                                                                                                                  Nov
                                                     Aug




                                                                                                                                              Aug
                                                                    Oct




                                                                                                                                                            Oct
                           Apr




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                                               Jul




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                                                             Sep




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             Feb




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                                 May




                                                                                                                        May
       Jan




                                                                                             Jan
                    Mar




                                                                                                          Mar




                                 2001                  2002                                                                   2001                  2002




2002 Quality Management Program Evaluation                                                                                                                              34
                2002 Pharmacy Costs PMPM - Medicaid                                            Average # Scripts PMPM - Medicaid
 $56                                                                         1.8

 $52                                                                         1.7

 $48                                                                         1.6

 $44                                                                         1.5

 $40                                                                         1.4




                                                                                                                                                   Nov
                                                                                                                                Aug



                                                                                                                                            Oct
                                                                                                      Apr



                                                                                                                  Jun




                                                                                                                                                         Dec
                                                                                                                          Jul



                                                                                                                                      Sep
                                                                                         Feb
                                              Aug



                                                           Oct




                                                                                                            May
                      Apr



                                  Jun




                                                                       Dec
                                        Jul



                                                    Sep
          Feb




                                                                 Nov




                                                                                   Jan



                                                                                               Mar
    Jan



                Mar



                            May

                                  Medicare                                                                              2002


The following pharmacy-based programs were in place:
§  Generic and cost-effective brand drug communication
§  Acid suppression
        Protonix initiative
§  Depression
        Half tablet request
        Fluoxetine PCP education)
§  NSAIDS
        COX-2 initiative
§  CII Narcotics (Long acting)
        Oxycontin initiative
        Narcotic restriction pathway (pilot in Medicaid)
§  Topical anti-inflammatories
        Elidel and Protopic criteria

The following programs are planned for 2003:
§  Generic and cost-effective brand drug communication
§  Rhinitis
        Alavert (OTC loratadiner) initiative
        Allegra, Clarinex criteria
§  Cholesterol lowering drugs
        Half-tablet request expansion
§  Antibiotics
        PCP and member education
§  Migraine
        Create EBM communication around most cost/clinically effective choice
§  Hormone replacement therapy
        Length of therapy assessment

Accomplishments                                           Barriers/Limitations                       Recommendations
Initiated several very successful                                                                    Continue current initiatives and add
initiatives in 2002.                                                                                 additional initiatives in 2003.

I. Quality Bonus Program (QBP)

The QBP continues to be PHP’s strongest initiative to support the improvement in clinical care and service in the
PCP setting. When the 1996 risk model changes were introduced for the Portland IPA, PHP wanted to ensure
that the increased emphasis on cost containment did not create a backlash in the under-provision of services. The
QBP was built into the payment structure of Portland Service Area’s PCPs.




2002 Quality Management Program Evaluation                                                                                                        35
An amount of $2.00 per member per month is allocated to the PODs (Pools of Doctors) Primary Care Quality
Bonus Fund. Thus, if a POD has 2,000 total PHP members enrolled for each month during the year, their
Quality Bonus funding would be $48,000 (2,000 members x 12 months x $2.00). Practitioners earn points if they
comply with standards set for appointment access, patient satisfaction, and clinical quality (provision of certain
care services).

A total of 100 points are available (50 for clinical quality, 25 for access, and 25 for patient satisfaction). The ratio
of points earned out of the possible 100 determines the portion of quality funds to be distributed to each POD.
For example, if the POD referenced above earned 95 out of 100 points (95%) and does not have a deficit in its
medical fund, the result is a bonus of $68,400 ($45,600 x .95).

Quarterly reports are sent to each POD (about 75 days after the end of each calendar quarter) reflecting the
proportion of members that met/did not meet the criteria for each affiliated PCP and also a listing of those
members with a missing preventive service(s). PCPs may fill in the date of service if indeed the service was
actually performed but was not billed through PHP. These reports are returned to PHP and the QBP database is
updated to reflect the services documented and attested to by the POD/PCP.

Final scoring of 2002 results was completed. The following graphs include the final 2002 Quality Bonus Reports
for the categories of Clinical Quality Measures and Diabetic Management.

                                                            Quality Bonus Program - Preventive Health Outcomes
        100


            80                                                         86                                                                    89
                                                                               83                                  86    85        85             86
                                           82   80              81                                          82
  Percent




                                 73                   71
            60
                           65
                                                                                              59                                                                    63

            40   52                                                                                                                                         52
                                                                                                     46
                                                                                       34                                                                                   27
            20
                      Flu shot              Child Imm                Varivax            Adol Imm                 Mamm              Cervical Screen          Asthma mgmt
                                                                                2000          2001         2002




                                                     Percent of QBP Physicians Meeting Diabetes Management Criteria
      100

        80            90        89    91
                                                                                                80    83
        60                                                    73                       77
                                                                                                                        70    71        71
  Percent




                                                       67             67
        40                                                                                                                                                         50       49
                                                                                                                                                            46
        20

            0
                            HgA1c                     Microalbuminuria                      Lipid Panel                 Retinal Exam                             All Svcs
                                                                       2000                  2001                2002

Accomplishments                                         Barriers/Limitations                    Recommendations
PHP successfully met the                                                                        Continue to promote the benefits and
implementation and reporting                                                                    concepts of the QBP to increase practitioner
(quarterly and annual) schedules.                                                               involvement in submitting reports and
                                                                                                undertaking initiatives to increase the provision
                                                                                                of preventive services to members.


2002 Quality Management Program Evaluation                                                                                                             36
J. Providence RN – Telephonic Medical Advice Line

Providence RN is a free, 24-hour, medical advice line for PHP members. Members can speak with a registered
nurse about health-related issues. The objectives for this program include:
§   Enhance member access, especially after-hours
§   Reduce inappropriate utilization of medical services
§   Increase member satisfaction
§   Support physicians and enhance continuity and coordination of care




2002 Quality Management Program Evaluation                                                    37
VI. CREDENTIALING AND REAPPRAISSAL

         A. INDIVIDUAL PRACTITIONER CREDENTIALING


         B. FACILITY CREDENTIALING




2002 Quality Management Program Evaluation      38
A. Individual Practitioner Credentialing

PHP Credentialing Services processed 727 new practitioners in 2002. An average of 92% of these were
completed within 60 days. During the same time period, 1,685 practitioners were recredentialed.

In 2002, Credentialing Services became a credentials verification organization for five of the PHS hospitals. There
was an approximate 70% overlap in practitioners that were being credentialed by both PHS and PHP. This
endeavor has been well received by practitioners as it has eliminated some of the redundancy in their credentialing
paperwork. This process also involved a database conversion. PHP became remote users of the hospital
credentialing database, MSO for Windows. This required data conversion and extensive training on the new
software.

Quality Management Standards Committee (QMSC) requested an external audit be performed for PHP’s
credentialing and recredentialing processes in 2002. The QMSC committee was developed in lieu of external
accreditation. In addition to reviewing process on a quarterly basis, the committee selects at least two processes
that will be audited annually by external independent reviewers. Results are reported to AQC for approval
and/or recommendations. The credentialing and recredentialing processes were reviewed during the first part of
2002. The credentialing process received 98% and the recredentialing process received a perfect score of 100%.

Accomplishments                                                                 Barriers/Limitations             Recommendations
Developed and maintained accurate system for                                    Using software in ways           Maintain program and
tracking volume and timeliness.                                                 it was not designed to           look for additional ways
                                                                                be used.                         to collaborate.
Converted to new credentialing software.
                                                                                                                 Continue working with
Received almost perfect scores during an external                                                                vendor to make
audit of the credentialing/recredentialing processes.                                                            improvements to reports.

B. Facility Credentialing

Facility credentialing is current with ambulatory surgery centers being credentialed in 2002/2003. In addition, all
new contracts in these areas were initially credentialed. Credentialing/recredentialing was performed as noted
below:
                                      Number of Facilities Credentialed or Recredentialed During 2001 and 2002
           60

                 52
           40                                           47
  Number




           20
                                                                                          17
                                  2                                  9                               3                     3           0
           0
                      Hospitals                    Skilled Nursing Facilities       Ambulatory Surgery Centers         Home Health Services

                                                                    2001          2002



Accomplishments                                                          Barriers/Limitations            Recommendations
Revised audit tool for ambulatory surgery                                                                Collaborate with other health
centers and conducted site surveys on those that                                                         plans to develop a standard
had not been visited by the state in the last three                                                      audit tool.
years.
                                                                                                         Complete application for and
Begin to work with other health plans to create a                                                        work towards standardizing


2002 Quality Management Program Evaluation                                                                                        39
standard facility credentialing application.   usage.




2002 Quality Management Program Evaluation              40
VII. UTILIZATION MANAGEMENT


         A.        UTILIZATION MANAGEMENT PROGRAM


         B.        UTILIZATION MANAGEMENT COMMITTEE
                   STRUCTURE

         C.        CONCURRENT REVIEW PROGRAM


         D.        CASE MANAGEMENT PROGRAM


         E.        PRIOR AUTHORIZATION PROGRAM


         F.       CLINICAL CLAIMS AUDIT AND CLAIMS REVIEW
                  PROGRAM




2002 Quality Management Program Evaluation             41
A. Utilization Management Program

PHP’s UM Program maximizes health outcomes and assures quality care to our members through an array of
programs and services designed to meet the health care needs of the populations we serve. Health plan
population data and industry health care trends and practices guide the selection and development of programs
and services provided for or offered to members. These programs and services focus efforts on identification
and management of conditions and illnesses, both concurrent and predicted, that would benefit from
appropriate, timely, and robust interventions. The UM Program promotes continuum of care principles that
integrate a range of services appropriate to meet the needs of individuals and specific populations while
maintaining flexibility in adapting programs and services as needs change.

The UM Program includes the analysis of data and the development of programs to meet the needs of health
plan populations; the review of care and services for quality, medical necessity, and appropriateness of utilization
and cost; and the use of case management and disease management to identify individual and population health
care needs, educate members, and coordinate and monitor care. This Program serves the membership of the
Providence Health Plans and Providence Preferred Provider Organization. The scope and content of the
Program includes UM activities that have been delegated to participating medical groups and organizations.

The UM Program includes the following core functions:
§  Prior review and authorization of selected inpatient and ambulatory services and out-of-plan/out-of-area
   care
§  Concurrent review and discharge planning in hospitals, skilled nursing facilities and other ancillary care settings
§  Complex case and disease management
§  Clinical audit of high dollar claims, facility claims, select modifiers, and targeted services/supplies
§  Utilization analysis, monitoring and program development related to utilization and cost trends and over-
   and under-utilization

The goal of PHP’s UM Program is to prevent illness, improve health, manage disease, and provide effective
stewardship of health plan and community resources.

The goal will be met through the following objectives:
§  Analysis of utilization data for identification of utilization trends, both over and under, and the development
   of programs and interventions to address opportunities for improvement in areas of health care and financial
   stewardship
§  Review and evaluation of health care services for quality, medical necessity and appropriate level of care
§  Facilitation and coordination of the delivery of efficient and effective medical care
   §   Adoption and implementation of interventions that promote effective management and outcomes of
       care, including encouragement of prevention and early detection of disease
   §   Establishment of guidelines and policies that support consistent and equitable allocation of medical
       services
   §   Meeting or exceeding the expectations and standards of Federal and State regulatory bodies, accrediting
       organizations, and our contracted provider network and members
   §   Ensuring delegated entities have adequate systems and resources to meet quality of care and service
       demands of our members in cost-effective and efficient ways
   §   Evaluation and revision annually of the effectiveness of the UM Program

Beginning in 2001 and continuing through 2002, the UM program evolved to meet new medical management
challenges. Changes in products, utilization trends, and physician relationships resulted in a refocusing of medical
management programs. PHP discontinued its commercial HMO product, moving instead to an Exclusive
Provider Organization (EPO) product. This product no longer requires primary care providers or referrals for
specialty care, and requires more cost sharing on the member’s part. Although Medicare and Medicaid provider
contracts for the most part remained as group contracts with shared risk, on the commercial side as an EPO,
PHP’s relationship with providers changed from shared risk IPA and group contracts to individual physician


2002 Quality Management Program Evaluation                                                             42
contracts. Thus, delegation of medical management was no long possible or desirable for the commercial
population. To help manage this full financial risk for commercial lines of business and reduce the medical trend,
quality and medical management programs were developed to focus on core medical management functions and
disease specific programs. For the UM Program, this included a renewed focus on core medical management
capabilities along with improving linkages to disease management and other integrated health system programs.
Medicare and Medicaid programs benefited from this renewed focus as 50-75% of utilization in core programs
was attributed to Medicare and Medicaid membership.

B. Utilization Management Committee Structure

The UM Program is an integral part of the QM Program, and as such, reports to the AQC through the QIT. In
2000, the QIT gave responsibility for the ongoing oversight and direction of the UM Program to the PAC. Due
to lack of physician and general committee participation, a decision was made during the last quarter of 2001 to
redesign the committee membership and refocus the charter to better support the UM Program. The PAC was
dissolved and the UM Committee (UMC) was developed to be effective January 2002. The UMC was designed
to provide direction to the UM Program and to act as an advisory and oversight committee. It is responsible for
evaluating current and proposed UM Programs for effectiveness and performance against goals, analyzing
utilization, and recommending direction and evaluating program performance against standards recommending a
course of action as necessary. The TAC, UM Delegation Committee, Pharmacy Committee, and Medical Policy
Committee all report to the UMC.

The UMC held ten meetings during 2002. The first meeting of the year was devoted to developing the
committee charter, identifying committee members, setting a calendar and establishing a reporting schedule. The
UMC monitored regulatory compliance, internal and external site audits, core program functions, delegated entity
performance, and overall utilization. Several areas of utilization received special focus throughout 2002-ED
utilization, orthopedic procedure utilization, ambulatory surgery rates, pharmacy utilization, and hospital admits
and days/thousand members. Information reviewed by the Committee was either used to initiate new program
proposals, to revise current programs, or to monitor current program success.

C. Concurrent Review Program

After a successful 2001 Concurrent Review program, 2002 brought an increased effort in discharge planning
through better coordination of care for the member. This resulted in increased averted days and decreased facility
denials for lack of medical necessity. The Concurrent Review program is focused on improving quality of care
and reducing the number of hospital days per 1000 members by assessing the medical appropriateness of the
treatment, setting, and discharge plan, and by referring members into such programs as disease management, case
management, and palliative care. The concurrent review program includes hospital and skilled facility review, data
collection related to the hospital and skilled facility stay, and daily/weekly/monthly reporting for concurrent
management of cases and resources. The concurrent review program infrastructure includes nurses onsite daily in
seven hospitals and multiple skilled facilities in PHP service areas around the state, with others providing
telephonic reviews. Evaluation of each service area’s days/1000 members and length of stay is done monthly and
concurrent review staff is deployed to service areas and hospitals as needed to achieve optimal results.

Outcomes
The hospital concurrent review program was successful in keeping the days/1000 members trend flat through
2002. Commercial admissions/1000 members and days/1000 members were comparable to those of 2001.
Medicare admits were the same as those of calendar year 2000 and days/1000 members were an improvement
over both 2000 and 2001. The 2002 Commercial admits/1000 were 39.1 and days/1000 were 144.9. The 2002
Medicare admits/1000 were 249.1, and days/1000 were 1083.8.




2002 Quality Management Program Evaluation                                                         43
              Inpt Admits per 1000 Members - Commercial                                                             Inpt Days per 1000 Members - Commercial
 44                                                                                                 180

 42
                                                                                                    160
 40
                                                                                                    140
 38

 36                                                                                                 120
   Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec                                                     Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
                                      2001                     2002                                                                        2001                          2002



               Inpt Admits per 1000 Members - Medicare                                                                     Inpt Days per 1000 Members - Medicare
 280                                                                                                 1200


 260                                                                                                 1100


 240                                                                                                 1000


 220                                                                                                  900
    Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec                                                      Jan Feb Mar Apr May Jun                                   Jul Aug Sep Oct Nov Dec
                                  2001                       2002                                                                                 2001                    2002



               Inpt Admits per 1000 Members - Medicaid                                                                     Inpt Days per 1000 Members - Medicaid
 120                                                                                                 500


 100                                                                                                 400


  80                                                                                                 300


  60                                                                                                 200
    Jan       Feb Mar Apr May Jun                      Jul    Aug Sep Oct Dec                           Jan Feb Mar Apr May Jun                                Jul       Aug Sep Oct Nov Dec
                                             2002                                                                                                            2002


Denied, averted and variance days are shown in the graph below.

                                                                       2002 Denied, Averted, and Variance Days
        200
                                                                                                        194
                                                                                        188
                                                                             175




                                                                                                                                                                              173




        150
                                                                       171




                                                                                              166




                                                                                                                                                             169
                                                             156




                                                                                                                          154




                                                                                                                                                                   155
                                                                                                                                           152
                                                                                                              145




                                                                                                                                                  141
 days




                                                       129
                     123




                                                                                                                                125




        100
                                      118
                                            109




                                                                                                                                                                                                             110
              108



                           106




                                                                                                                                                                                                   98
                                                                                                                                                                                              92
                                                                                                                                                                                    88




        50
                69




                                                                                                                                                                                                        56
                                                                                                                    14
                                 13




                                                                                   11




                                                                                                                                                                                         41
                                                                                                                                                                         38
                                                                   7




                                                                                                                                      30
                                                                                                    6




                                                                                                                                                        21
                                                  22




         0
                 Jan         Feb              Mar                  Apr         May                  Jun             Jul           Aug               Sept             Oct             Nov            Dec
                                                             Denied Days                      Averted Days                      Variance Days




2002 Quality Management Program Evaluation                                                                                                                                                    44
Inter-rater Reliability Audit
Inter-rater reliability audits were conducted on concurrent review determinations to assess appropriateness and
consistency of applying InterQual criteria, timeliness standards, documentation of physician involvement, medical
decision processes, Medical Director review, and referrals to the quality, case management, and/or behavioral
health teams as appropriate.

Overall performance was 96%, which exceeds the 95% performance standard. Opportunities for improvement
were noted around more specific documentation related to the section of criteria used and medical necessity for
the hospital stay. Staff education was conducted on documentation standards for concurrent review staff.

D. Case Management Program

The need to manage health plan risk, linking core UM and disease management programs, continues to be the
focus of the case management (CM) program. The program’s core objective is to manage members through
defined episodes of care across care continuums. The CM structure is geared toward managing unstable
situations before crises occur and to mobilize resources to address them. Goals are aligned with the overall
medical management goals and can shift to target on specific populations or disease states, as identified.

The program is incorporating data to identify members who account for the disproportionate costs and
utilization and can proactively intervene by assisting at-risk members with referrals to programs and resources
available within PHS. Current data includes:
§    Hospital census reports including readmission data
§    Newly enrolled Medicare and OHP Phase II Health Risk Assessments
§    Disease specific data from disease management programs
§    Concurrent review, prior authorization, and pharmacy data

Throughout 2002, case managers focused on linking more efficiently with concurrent review, prior authorization
and disease management programs to provide more focused involvement for members with complex care
needs beyond the scope of the UM or disease management program. By identifying members that will respond
positively to care coordination activities, the case managers are able to assess for treatment failures or non-
compliance and continually reassess treatment options and monitoring of care outcomes.

A full-time Exceptional Needs Care Coordinator (ENCC) assists patients with the coordination of the member’s
health care services at the request of the member, a physician, or other medical personnel serving the member.
The ENCC program was developed in response to Oregon Option Phase II (Medicaid members ages 65 or
older or who are blind or disabled, and children with special needs). The ENCC coordinator serves as a single
entry/easy access point to assist members in accessing needed services and guiding them through the managed
care system.

Key Accomplishments and Outcomes
§  A change was made in 2002 to simplify the stratification process and define the CM levels by severity and
   expected duration of case management.
   §   Level 1 - Assessment and coordination of care, limited duration
   §   Level 2 - Assessment and management of complex cases, extended duration

§   Upgraded the CM software in June 2002. InformaCare was implemented to link more closely with the CHF
    disease management program and improve efficiencies in managing caseloads, tasking functionality and
    improved reporting. Documentation standards were implemented. Case managers are now able to
    document each contact made for a member, including the duration and type of contact. The new software is
    also used for staff development and performance evaluation.

§   Redesigned Health Risk Assessment Summary Report for Medicare Members. CORE (Centers of Outcomes
    Research) evaluated the current survey to identify specific risk factors for hospitalization. The High Risk


2002 Quality Management Program Evaluation                                                          45
                   Summary form was redesigned to list the hospital risk factors. Case managers are now able to clearly identify
                   risk factors for hospitalization and target interventions accordingly.

§                  HART Health Risk Assessment Re-Screen of Medicare Members project was completed. 1517 Medicare
                   members were mailed the HART health risk assessment survey. 65% (984) were returned and a case manager
                   contacted 342 members who had high-risk scores. Members were educated on how to use plan resources,
                   referred to disease specific programs, and enrolled in case management if indicated. All newly enrolled
                   Medicare and Medicaid members received surveys. During 2002, 576 Medicaid and 196 Medicare members
                   with high-risk scores were assessed.

§                  The CM Manager and ENCC participated in the OHP Care Process Committee that developed (1) a joint
                   PCP termination policy to ensure consistent termination and coordination of care to another PCP, and (2) a
                   joint pharmacy restriction policy and adopted a pharmacy contract process to be followed by all employed
                   physician groups. Listed below is a breakdown for actively case managed Medicaid members.

                                        Actively Managed Medicaid Members by Intervention Type by Month - 2002
                   50



                   40



                   30
    # of members




                   20



                   10



                    0
                         Jan     Feb     Mar      Apr       May       Jun        July    Aug         Sep    Oct   Nov        Dec

                                               CM Phase I          CM Phase II          Transplant         HRA



§                  Concurrent review, case management, and prior authorization interventions resulted in $2,366,449 in cost
                   savings in 2002. This was a 75% increase over the $1,347,980 savings realized in 2001. Savings specific to the
                   case management department were $238,462 in 2002, which was a 23% increase over 2001 savings. Case
                   management savings included averting bed days, negotiating rates, directing to lower cost alternatives, basic
                   claim review, and various “other” savings. For 2002, negotiating rates was the largest category of savings.




2002 Quality Management Program Evaluation                                                                              46
                                                                  2002 Case Management, Concurrent Review, and Prior Auth Savings
                 $300,000


                 $200,000




                                                       $258,693



                                                                     $258,028
    $ savings




                                                                                                              $234,315
                                        $234,895




                                                                                               $216,471




                                                                                                                                               $208,577
                             $180,842




                                                                                    $183,292




                                                                                                                                    $165,843




                                                                                                                                                                     $158,720
                 $100,000




                                                                                                                         $153,916




                                                                                                                                                          $112,856
                      $0
                             Jan        Feb           Mar            Apr           May         Jun                Jul    Aug        Sep        Oct        Nov        Dec


§               A goal in 2002 was to manage 1-2% of PHP enrollees. From June to December 2002, 1,571 (0.9%) of
                members were managed. CM data prior to June 2002 was unavailable due to software changes. The average
                number of members managed per month by each case manager is 50-70.

                            2002 Case Management Program Breakdown June 2002 – December 2002
                                         Total Number of                            Percent of Population
                Line of Business                              Average Population
                                        Members Managed                                   Managed
                  Commercial                    271                 131,339                  0.2%
                    Medicare                    840                 36,576                   2.3%
                    Medicaid                    433                  8,329                   5.2%
                      Total                    1,544                176,244                  0.9%

Transplant Case Management
In 2002, a total of 150 transplant cases were managed as outlined below.

                               Types of Transplant Cases Managed in 2002
                                                                  Liver
                                                                  19%
                      Bone Marrow /
                        Stem Cell                                                                         Heart
                          31%                                                                              6%

                                                                                Other                     Heart/Lung
                                                                                12%                           1%
                                                                                                          Lung
                                                                                                           4%
                                                                                                          Pancreas
                                                                                                            1%
                                                   Kidney
                                                    38%



Cases managed according to lines of business were as follows: 71% commercial, 23% Medicare, 5% Medicaid,
and 1% PPO. By the end of 2002, 79 active cases remained (77% commercial, 22% Medicare, and 1% Medicaid)
Numbers in general were down just slightly from 2001, presumably due to decreased membership numbers.

The average numbers of new cases in 2002 were 17.5 new cases per quarter, down from the 2001 rate of 21.5
new cases per quarter. 17 actual transplants were performed in 2002, which was less than expected. This can be
attributed to a lower membership and a wave of very ill patients who expired prior to the transplantation
occurring. Other key accomplishments in 2002 included:
§    Increased reporting capabilities with more breakout data available on the many different types of bone
     marrow/stem cell transplants.


2002 Quality Management Program Evaluation                                                                                                                47
§          Successfully worked with the requirements of two separate re-insurers.
§          Developed reporting capabilities for self-insured groups.

E. Prior Authorization (PA) Program

The PA program establishes medical necessity and/or benefit coverage, prospectively, by reviewing selected
services and procedures. The review process also includes appropriate redirection of services and procedures
requested from non-participating providers and or facilities.

Regulatory requirements that affect PA are monitored on an ongoing basis. These requirements include, for
example, turn-around-times (TAT), correct criteria usage and correct notification. TAT continued to challenge the
team into 2002. Evaluation of the workload indicated that high volumes of retrospective requests were
interfering with maintaining prospective request processing.

Program Enhancements
A decision was made to no longer accept retrospective requests for PA and this was communicated to the
provider network and implemented June 2002. This decision did not affect members, however, providers who
provided services without receiving prior approval were not reimbursed. After several months of working with
providers to understand this change, requests for retrospective PA were no longer an issue. Although PA
volumes did not decline, TAT improved.

During 2002, TAT standards and performance against standards were also re-evaluated. We found that
government program timeliness standards for both Medicare and Medicaid were often exceeded and
commercial program standards were not consistently met. Workflows were revised and a prioritization process
for requests by line of business was implemented. This resulted in an improvement in the overall timeliness
standard for commercial business and maintenance of the timeliness standard for Medicare and Medicaid
business.

Outcomes
Team accountability and responsibility for continuous quality improvement has resulted in improvement in
average TAT at the end of 2002 and has continued into 2003.

                                                       Average Turnaround Time By Line of Business
           12
           10
                                                                                                                                             10.2




           8
                                                                                                                           9.0




                                                                                                                                                                8.8
                                                                                       7.8
    Days




           6
                                                                                                                                 7.5
                                                                                             6.8




                                                                                                                                                    6.1




           4
                5.4


                            5.3




                                          5.2




                                                                                                         4.8
                                    4.2




                                                                                                                                       4.4
                      4.2




                                                                                                               4.0




                                                                                                                                                                      4.0
                                                                     3.6
                                  3.7




           2
                                                                                                                     3.5




                                                                                                                                                          0.8
                                                3.0




                                                                           3.2
                                                      2.6
                                                      2.3

                                                               2.3




                                                                                 2.3




                                                                                                   1.5




           0
                      Apr           May               Jun            Jul               Aug               Sep               Oct               Nov                Dec

                                                                     Commercial        Medicare     Medicaid


Prior authorizations per 1000 members remain higher than expected.




2002 Quality Management Program Evaluation                                                                                                                       48
                                                       Prior Authorization Volume per 1000 Members per Month

                      5


                      4
                                                                    4.2                                                    4.1
                                                                                   3.8                                                                                     3.9
           PA PTMPM



                      3                                                                         3.5                                           3.4 3.4
                                                                                                               3.2   3.2                3.2                   3.3
                                          3.1                                                                                                                        3.0
                            2.7                       2.7
                      2                                                                                                           2.5                   2.6
                                                2.3           2.2            2.3                         2.3
                                                                                          2.0
                      1
                                    0.9
                      0
                          Jan         Feb        Mar            Apr           May             Jun            Jul      Aug             Sep      Oct       Nov          Dec
                                                                                    2001              2002


Denial rates have been maintained. Appeal overturn rates are an area of focus for 2003.

                                Percent of Overturned First Level Medical Management Appeals
                  30
                  25
                  20                                                                                25               25
 Percent




                  15                  20               20
                            17                                                           17
                  10                                                                                                             15
                      5                                               9
                      0
                                1st Qtr                     2nd Qtr                       3rd Qtr                     4th Qtr
                                                                      2001           2002


Inter-Rater Reliability
Inter-rater reliability audits were conducted on the PA nurse review process to assess appropriateness and
consistency of decisions. Physician inter-rater reliability was also performed. The scores below are the result:

                      PA Nurse: Performance standard is 95% and the audit results were 72%
                      Physician: Performance standard is 95% and the audit results were 73%

After analysis of the nurse review scores, it was determined that length of time in the job played a role in the
score. A newer employee made determinations to send information to Medical Directors that could have been
made at the nurse level on initial decision. Several other areas identified a need for education. Training was
provided to the prior authorization nurses and a reassessment is scheduled for 2003. The physician inter-rater
process was changed this year. Re-assessment will be completed in 2003.

F. Clinical Claims Audit and Claims Review Program

The Clinical Claims Audit Program is a medical claim review program that uses a QM approach to ensure that
appropriate compensation is provided for the care rendered to members. It is staffed with nurses and technicians
with extensive coding experience. The program goal is to ensure that claims are not only paid correctly, but that
PHP is billed correctly. To accomplish this goal, it is necessary to analyze provider billings and clinical information
employing clinical knowledge and knowledge of provider contracts, coding conventions, and payment rules. The
majority of claims reviewed are facility DRG claims over $15,000, other high dollar claims, claims with
modifiers, and any other subset of claims where a trend in errors or billing irregularities is found. In addition, this



2002 Quality Management Program Evaluation                                                                                                                      49
program performs target audits on areas of changing billings, increased costs or increased utilization related to
specific procedures or services.

Program Outcomes
In 2002, the Clinical Claims Audit staff reviewed a total of 15,200 claims for High Dollar and Basic Claims. As a
result of this review the total savings for 2002 was $2,266,051.16. This was a decrease of 31% from 2001. The
decrease is thought to be due to reduced billing errors, improvements to provider contracts (easier to
administer), and a decrease in membership. The average PMPM savings in 2002 was $1.06 as compared to $1.14
in 2001. A claims review process for miscellaneous supply and DME coded claims was implemented late 2002.
This resulted in savings of $19,640.40. An analysis of Dialysis and Power Wheelchair/Scooter claims also began
late in the year. Savings data will be reported in 2003. Basic Claims reviewed for 2002 realized a savings of
$1,076.205.71, a 316% increase. This can be attributed to the Clinical Claims Audit staff expertise and training.
The review of these claims was transferred to this team in 2002. See medical audit graph below.

                                                        2002 High Dollar and Basic Claims Savings
             $375,000
                        $349,053




             $300,000

             $225,000
 $ savings




                                                           $251,343




                                                                                 $227,738




                                                                                                                                        $211,790
                                                                      $203,891




             $150,000




                                                                                                                  $186,226
                                                                                                       $169,847
                                                                                            $161,277
                                             $132,240




                                                                                                                                                   $135,159
                                                                                                                             $129,285
              $75,000
                                   $93,315




                  $0
                        Jan        Feb       Mar          Apr         May        Jun        Jul        Aug        Sep        Oct        Nov        Dec




2002 Quality Management Program Evaluation                                                                                                           50
VIII. DELEGATION

         A. CREDENTIALING


         B. UTILIZATION MANAGEMENT




2002 Quality Management Program Evaluation   51
Quality Management Standards Committee (QMSC) requested an external audit be performed for PHP’s
delegated oversight processes in 2003. The QMSC committee was developed in lieu of external accreditation. In
addition to reviewing process on a quarterly basis, the committee selects at least two processes that will be
audited annually by external independent reviewers. As there are many components of oversight, this will be the
only process reviewed during 2003. Results will be reported to AQC for approval and/or recommendations.

A. Credentialing

Credentialing is delegated to nine sites affecting approximately 3,000 providers. In 2001, PHP adopted an
evaluation tool used statewide and conducted our own audits. The evaluation audit tool was developed by a
group of representatives of several health plans and approved by PHP prior to use. An audit was conducted at
each of the nine delegated sites during 2002. The matrix below defines the date and outcome of the annual
evaluation of delegated credentialing performance.

 Delegate Name                                       Date      Outcome    Score       Comment
 OHSU                                                06/02      Passed     99%        Action items requested and completed
 Central Oregon IPA                                  05/02      Passed    100%
 Tuality Health Alliance                             08/02      Passed     98%        Action items requested and completed
 PrimeCare                                           12/02      Passed     90%        Action items requested
 PBH                                                   na         na        na        NCQA Accredited
 Lane IPA (LIPA)                                     08/02      Passed     99%        Action items requested and completed
 Eye Health Partners                                 10/02      Passed    100%
 Comprehensive Healthcare Plan (Benefit Rider)       07/02      Passed    100%
 The Corvallis Clinic                                08/02      Failed      na        De-delegated

B. Utilization Management

The focus of delegation in 2002 changed significantly. Due to commercial product changes and delegation of
medical management to provider groups was no longer possible or desirable. This decreased the number of
delegates, limited delegation to the Medicare and Medicaid lines of business only, and no longer allowed for sub-
delegation. The matrix below lists the groups being delegated.

                                                                                   Total Hip,
                        Lines of                                                  Total Knee &
                                         Case    Referral          Concurrent                                           Denial
      Delegate         Business/                             DME                    Lumbar                Pre-Auth
                                         Mgmt     Mgmt              Review                                              Letter
                       Membership                                                   Surgery
                                                                                    Process
   Northwest         Delegated for      Yes      In-plan     Yes   Hospital,      Specialists to     Surgical and       Yes
   Primary Care      Medicare                    only              SNF, Home      send directly      other services
   (NWPC)            1,068 members                                 Health,        to PHP             (except total
                                                                   Hospice,                          hip, total knee,
                                                                   Home                              and lumbar
                                                                   Infusion                          back surgery)
   Oregon            Delegated for      No       In-plan     No    No             N/A                No                 Yes
   Medical Group     Medicare                    only
   (OMG)             1,676 members
   PeaceHealth       Delegated for      No       In-plan     No    No             N/A                No                 Yes
   Medical Group     Medicare                    only
   (PHMG)            1,567 members
   The Portland      Delegated for      Yes      In-plan     Yes   Hospital,      Specialists to     Surgical and       Yes
   Clinic (TPC)      Medicare                    only              SNF, Home      send directly      other services
                     1,050 members                                 Health,        to PHP             (except total
                                                                   Hospice,                          hip, total knee,
                                                                   Home                              and lumbar
                                                                   Infusion                          back surgery)




2002 Quality Management Program Evaluation                                                                       52
                                                                                                              Total Hip,
                             Lines of                                                                        Total Knee &
                                               Case           Referral                        Concurrent                                         Denial
            Delegate        Business/                                              DME                         Lumbar               Pre-Auth
                                               Mgmt            Mgmt                            Review                                            Letter
                            Membership                                                                         Surgery
                                                                                                               Process
      Tuality Health      Delegated for        Yes        In-plan                  No        No             THA to send       Surgical and       Yes
      Alliance            Medicare                        only                                              request to        other services
      (THA)               1,467 members                                                                     PHP               (except total
                                                                                                                              hip, total
                                                                                                                              knee, and
                                                                                                                              lumbar back
                                                                                                                              surgery)
      Providence          Delegated for        No         In-plan                  No        No             N/A               No                 Yes
      Medical Group       Medicare                        only
      (PMG)               7,435 members

                          OHP
                          3,778 members
      PBH                 Delegated for                   Yes                      MH/       N/A            N/A               MH/CD              Yes
                          Commercial                                               CD
                          135,768
                          members

                          Medicare
                          35,649 members

                          OHP
                          12,347 members
      American            Delegated for        No         In-plan                  No        No             No                Alternative        Yes
      Specialty           Commercial                      only                                                                Care only
      Health              Alternative Care
      Networks, Inc.      rider only                                                                                          Acupuncture
      (ASH)               19,498 members                                                                                      Chiropractic
                                                                                                                              Naturopathy




                  Percent of Delegated Entities with                                     Percent of Contracted Delegated Entities
                     an Annual Delegation Audit                                                Meeting Delegation Critetia
      100                                                                          100

                   100                                 100
           80                                                                      80
                                     82
 Percent




                                                                         Percent




           60                                                                      60         73

           40                                                                      40

           20                                                                      20                          37
                                                                                                                               0
           0                                                                        0
                   2000             2001               2002                                  2000             2001            2002

None of the eight entities met the UM-delegated standard in 2002. All were placed on corrective action and
received intensive guidance from PHP. Re-reviews have been completed or are in process as outlined below. It is
anticipated that all entities will meet standards even though the standard has increased from 90% to 95%.

  Delegated Entity             Re-Review Status
                 PBH           Re-reviewed and met 95% standard
                 PMG           Re-reviewed and met 95% standard
                NWPC           Re-reviewed and met 95% standard
                 THA           Re-reviewed and met 95% standard
                OMG            Re-reviewed and met 95% standard
                PHMG           Initial audit was pre-delegation - will re-review
                 TPC           Re-reviewed and met 95% standard
                 ASH           Re-reviewed and met 95% standard



2002 Quality Management Program Evaluation                                                                                                  53
IX. ACCREDITATION AND REGULATORY
    COMPLIANCE


         A. QUALITY MANAGEMENT STANDARDS


         B. CMS (formerly HCFA)


         C. OMAP




2002 Quality Management Program Evaluation   54
A. Quality Management Standards

In early 2001, the PHP Administrative Council decided that PHP would no longer pursue NCQA accreditation
as PHP was moving to the EPO product and NCQA does not accredit this line of business. A QM Program
Redesign Project team was convened to discuss the relative merit of various options, and determine which
process to adopt. The team concluded that the most suitable option was to develop a new program that cross-
walked back to NCQA standards and other regulatory requirements.

Accordingly, PHP redesigned the QM program with the basic structure being the Quality Management Standards
Committee (QMSC). The QMSC, which includes plan-wide representation, is responsible for the development,
implementation, and measurement of all quality standards in the health plan.

The Administrative Quality Council (AQC) oversees the QMSC. The AQC reviews and approves all activities,
including the final list of measures, outcomes, ongoing status reports, etc. The AQC provides recommendations
and overall direction to QMSC processes. The Quality Improvement Team and Service Improvement Team
receives updates at each meeting and provides feedback to the QMSC as it relates to clinical quality and service
issues and processes. PHP’s QM Committee hierarchy approved the format and content. Refer to Attachment 11
for the standards grid and graphic measurement results.

Quality Management Standards Committee is in lieu of external accreditation. Processes that have been
developed produce monthly/quarterly/ yearly data reviewed by the committee. There are quarterly meetings at
which process indicator results are reviewed. Corrective action plans are developed by the QMSC committee as
needed. There were a total of 179 measures with 52 displays based on these measures reviewed during 2002. 22
new processes were developed around the measures. During 2002, improvement was noted across all lines of
business.

Two processes are audited annually by external independent reviewers, PHS Auditing and Consulting
department. In 2002, the two processes audited were Credentialing/Recredentialing and Medical Decision
Making Process. An external audit of the Credentialing/Recredentialing processes was successfully completed
with overall scores of 98% for credentialing and 100% for recredentialing processes. An external audit of UM
Decision-Making processes was conducted in 4th quarter 2002. Some issues were identified and are being
addressed. A re-audit will be performed in early 2003. In 2003, the focus will be Delegation Oversight.

B. Centers for Medicare Services (CMS)
The last onsite CMS audit occurred April 23-27, 2001. The results were as follows:

Category                                     Items Passed     Corrective Action
General Administration/Management            7 of 9           Moderate
Provider Contracting                         0 of 25          Significant
EEO/ADA                                      1 of 1           None
Finance                                      2 of 2           None
Provider Incentives                          8 of 8           None
Marketing                                    12 of 13         Minor
Enrollment                                   18 of 21         Minor
Membership                                   3 of 7           Minor
Disenrollment                                18 of 19         Minor
Claims Processing                            8 of 9           Minor
Appeals                                      9 of 16          Significant
Grievances                                   3 of 12          Significant
QISMC                                        121 of 121       None




2002 Quality Management Program Evaluation                                                         55
PHP submitted a written response acknowledging the findings and developed corrective action plans as needed.
CMS will return in Fall 2003 for an additional audit.

In compliance with CMS requirements, PHP is participating with Quality Improvement System for Managed
Care (QISMC). Medicare Plus Choice plans are required by contract and QISMC to initiate Quality Assessment
and Performance Improvement (QAPI) projects each year. Work on these projects is ongoing at this time. Refer
to Attachment 12 for an overview of the QAPI projects.

C. Office of Medical Assistance Programs (OMAP)

OMAP performed an onsite audit on September 17-18, 2002. OMAP’s Review Team found no areas of
significant non-compliance with OMAP directives and standards. Excerpts from their findings included:

§   The newly formed Providence Health System has created an integrated delivery system. PHP is fully engaged
    in being an integral part of this health system. PHP demonstrated a very robust QI program. They have a
    dedicated leadership team to lead their QI program.

§   OMAP’s review team was impressed with PHP’s success in their endeavors to provide, and improve,
    delivery of preventive services, community partnerships, as well as member and provider education in their
    service areas.

    OMAP performs an annual evaluation but the next full QI evaluation will be conducted by OMPRO as part
    of the EQRO process. This evaluation is tentatively scheduled to occur in fall 2004 or spring 2005.




2002 Quality Management Program Evaluation                                                        56
X. CONCLUSIONS


         A.        RECOMMENDATIONS FOR 2003-2004




2002 Quality Management Program Evaluation         57
A. Recommendations for 2003-2004 QM Work Plan

QM Program Structure, Organization and Resources
§ Continue to increase awareness of managed care organization governance accountabilities as defined by
  regulatory and accrediting bodies
§ Measure performance against established standards and use the data to identify opportunities for
  improvement
§ Continue to methodically prepare for the Facets (new core computer transaction system) conversion slated
  for September 2003
§ Continue to maintain the QM program via the Quality Management Standards Committee
§ Continue to re-evaluate the QM committee structure to ensure internal and external needs are being met
§ Continue strong presence of provider community on QM committees

Clinical Quality Improvement Activities
§   Review each of the clinical quality improvement, clinical practice, and preventive guidelines to determine how
    they fit into the overall QM program
§   Continue the ongoing Quality Assessment and Performance Improvement (QAPI) projects
§   Perform targeted interventions for clinical quality improvement activities
§   Annually measure the effectiveness of ongoing clinical activities
§   Distribute preventive health guidelines to members and providers as scheduled
§   Continue targeted interventions toward non-users of preventive health services
§   Perform annual measurements of select preventive health guidelines through HEDIS
§   Continue current clinical improvement processes and disease management programs while also adding
    additional programs in 2003:
    §   Cancer Collaborative
    §   Total Hip/Total Knee Program
    §   OB Length of Stay

Service Quality Improvement Activities
§   Utilize interim satisfaction measures, such as member complaint, appeal and other ad hoc reports, and phone
    log summaries to ensure areas of vulnerability are identified
§   Develop actions to improve member satisfaction in areas of concern
§   Continue to develop strategies to measure access and availability

Clinical and Service Quality Monitoring Activities
§   Ensure poor performing areas are captured and follow-up actions assigned as appropriate
§   Continue to refine the Key Indicator Report (a set of graphs) that gives committee members an at-a-glance
    update of processes, programs, and systems
§   Continue to promote the importance of medical record documentation, with focus on areas needing
    improvement, in providing quality health care
§   Continue collaboration with the ARC Users Board to develop strategies to improve medical record
    documentation across the State of Oregon and SW Washington
§   Incorporate complaint, appeals, and grievance processes into the design of Facets
§   Continue to develop strategies to measure continuity and coordination of care and service, and under- and
    over-utilization of care and services
§   Continue current pharmacy-based initiative while adding additional initiatives in 2003:
    §   Generic and cost-effective brand drug communication
    §   Rhinitis
    §   Cholesterol lowering drugs
    §   Antibiotics
    §   Migraine
    §   Hormone replacement therapy



2002 Quality Management Program Evaluation                                                          58
§   Continue to promote the benefits and concepts of the QBP to increase practitioner involvement in
    submitting reports and undertaking initiatives to increase the provision of preventive services to members.

Credentialing and Reappraisal
§  Ensure that the Credentials program is compliant with accrediting and governmental standards
§  Revise the system for measuring ongoing compliance with credentialing and recredentialing timeliness
§  Maintain credentialing program and look for additional ways to collaborate with PSH
§  Continue working with vendor to make improvements to credentialing reports

Utilization Management
§   Define and refine key measurements and benchmarks for UM activities

Accreditation and Regulatory Compliance
§  Continue the ongoing Quality Assessment and Performance Improvement (QAPI) projects
§  Maintain the QM program via the Quality Management Standards Committee




2002 Quality Management Program Evaluation                                                          59
XI. APPROVAL




2002 Quality Management Program Evaluation   60
This evaluation of Providence Health Plan’s 2002 Quality Management Program has been reviewed and
approved.




                                                                       Date
                   John Koster, M.D.
                   Chair, PHP Board of Directors




                                                                       Date
                   Bernard Bueffel, M.D.
                   Chair, Administrative Quality Council




                                                                       Date
                   Jack Friedman
                   Chief Executive




                                                                       Date
                   Kevin Keck, M.D.
                   Chief Medical Officer
                   Chair, Quality Improvement Team




2002 Quality Management Program Evaluation                                                   61
XII. ATTACHMENTS

Attachment Description                        Attachment #

QM Committee Structure                             1
QM Staffing Resources at PHP                       2
HEDIS Accreditation                                3
HEDIS Effectiveness of Care Results                4
Guideline Process                                  5
Network Management Plan                            6
Key Indicator Report                               7
Continuity and Coordination of Care Results        8
Provider Profiling Sample Reports                  9
Medical Record Survey Findings                     10
QMSC Grid and Results                              11
Overview of CMS QAPI Projects                      12




2002 Quality Management Program Evaluation        62