Cave Consulting Group, Inc. (CCGroup) and healthcare researchers (such as Yale University) performed studies that show a 350,000 member Medicaid health plan will save between $2 million and $15 million annually by moving from auto-assignment to smart-assignment. Over a billion dollars are saved across all Medicaid health plans.

Smart-assignment achieves savings as follows. About 35% of Medicaid enrollees (20 million enrollees) do not elect a PCP upon enrollment in a Medicaid health plan. “For these enrollees, Medicaid health plans perform auto-assignment (randomly assign) to a network PCP,” stated Dr. Douglas G. Cave, President/CEO of CCGroup. “Auto-assignment is market inefficient because half of these Medicaid enrollees are auto-assigned to inefficiently practicing network PCPs.” An inefficient PCP is a provider that delivers healthcare services at a higher cost-of-care with no perceivable difference in quality or satisfaction.

Dr. Cave asserted, “Auto-assignment should stop, and smart-assignment should immediately start.” Smart-assignment means assigning Medicaid members only to efficiently practicing PCPs.

Efficient PCPs save money in three ways: PCPs patient treatment costs are lower; PCPs refer less often to specialists; and when a referral is necessary, PCPs can make referrals to more efficient specialists that perform less extensive diagnostic tests and therapies. Therefore, smart-assignment saves Medicaid health plans well over a billion dollars annually.

What barriers exist for Medicaid health plans to implement smart-assignment? “An initial barrier is that auto-assignment is the status quo. Senior management is often unaware of the significant savings associated with smart-assignment,” defined Dr. Cave. With education, this barrier is overcome.

He continued, “Another barrier is that a Medicaid health plan can only measure about 25% of individual PCP efficiency and quality.” The reason is that one Medicaid health plan’s membership does not generate enough claims data to build a sufficient volume of medical condition episodes of care – needed for PCP efficiency measurement. Successful smart-assignment programs require measurement of at least 75% of individual PCP efficiency.

This barrier is overcome by working with CCGroup. “CCGroup maintains one of the largest databases on physician cost and quality measurement,” stated Yuri Alexandrian, Chief Operating Officer of CCGroup. The database is known as the CCGroup-CMS Innovator Project Database. Mr. Alexandrian explained, “Nationally, we measure 75%-to-80% of all PCPs efficiency and quality. Using this information, our Medicaid health plan clients successfully implement smart-assignment, while preserving Medicaid member access to care.”

Dr. Cave mentioned, “A final barrier is that PCP efficiency needs to be accurately and reliably calculated. This is no easy task, yet smart-assignment depends on accurate PCP efficiency measurement. Fortunately, this barrier is not an issue. For several decades, CCGroup has remained the market leader in accurately measuring physician efficiency and quality.”

The foundation of CCGroup’s patented reliability is the use of medical condition episodes and analysis of a relevant set of medical conditions for PCPs. This marketbasket of medical condition episodes is weighted together to determine overall efficiency scores for each PCP.

About Cave Consulting Group, Inc. (CCGroup)

Cave Consulting Group, Inc. is a software and consulting firm located in San Mateo, California. The company is focused on improving the efficiency (cost-of-care) and effectiveness (quality-of-care) of the healthcare delivery system. Senior management of CCGroup has assessed the performance of physicians and hospitals for over 32 years for health plans, health systems, HMOs, physician groups, CINs, ACOs, TPAs, and employers.

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