An Updated Analysis of Utilization in the Los Angeles Healthy Kids Program

An Updated Analysis of Utilization in the Los Angeles Healthy Kids Program Prepared for: Prepared by: Ariel Klein Embry Howell Ian Hill July 2009 THE URBANINSTITUTETHE URBANINSTITUTETHE URBANINSTITUTE 1BACKGROUND The Los Angeles Healthy Kids program extended health insurance coverage to children ineligible for Medi-Cal or Healthy Families (California’s Medicaid and State Children’s Health Insurance Program, respectively). Launched in 2003, the program covers children living in families with incomes up to 300 percent of the federal poverty level regardless of immigration status. With funding from First 5 LA supporting children ages 0 through 5, and philanthropic donations covering children ages 6 through 18, the program provides a benefits package modeled after that of Healthy Families: a comprehensive set of preventive, primary, and specialty care services, including dental and vision care. In return, families pay income-adjusted premiums and copayments, and premiums are waived for the vast majority of enrollees whose families earn income that is less than 133 percent of the federal poverty level. Enrollment in the program steadily increased during the first two years of implementation, peaking at nearly 45,000 children in June 2005 (approximately 8,000 children ages 0 through 5 and 37,000 children ages 6 through 18; Sommers et al. 2005). That month, funding shortfalls forced the program to institute a cap on the enrollment of children ages 6 through 18. Enrollment of these older children steadily decreased, and even enrollment for children ages 0 through 5 (for whom funding remained secure) eroded. As of June 2008, total enrollment stood at approximately 34,000 (just under 6,000 children ages 0 through 5 and approximately 28,000 children ages 6 through 18; Farias et al. 2009). To evaluate the program and provide feedback to stakeholders, First 5 LA contracts with the Urban Institute and its partners. As part of the multiyear evaluation launched in 22004, the researchers conducted a study of the service use of children who enrolled in Healthy Kids during the second year of the program (Sommers, Howell, and Hill 2007). They collaborated with the L.A. Care Health Plan (L.A. Care), which provides services to Healthy Kids enrollees, to assess the usefulness of encounter data for evaluating service use in the program, and to investigate the levels of service use across five measures—the percentage of Healthy Kids enrollees who had at least one • Preventive visit, • Ambulatory visit, • Emergency department visit, • Hospital stay, and • Prescription filled during their first year in the program. Because services for preventive care and other ambulatory care are reimbursed by L.A. Care on a capitated basis, data for these services are based on encounter data submitted by providers on a voluntary basis. In contrast, data on hospital stays, emergency department visits, and prescription drug use are based on claims, since these services are reimbursed on a fee-for-service basis. Data for services based on claims are thought to be more complete because the provider has a monetary incentive to submit information on these services to L.A. Care—the provider cannot be paid for rendering a service without submitting a claim. Notwithstanding the differing reimbursement structures, the completeness of data on preventive and ambulatory care received by Healthy Kids has improved substantially over time. The researchers analyzing data from the first two years of the program found that in the second year, providers serving over 90 percent of the Healthy Kids population were submitting encounter data on ambulatory services (Sommers, Howell, and Hill 2007). 3Regarding the amount of care received by Healthy Kids enrollees, the encounter data from the second year of the program suggested lower service use than shown by this evaluation’s parent survey. For example, the encounter data showed that 61.7 percent of children ages 1 through 5 had an ambulatory visit in their first 12 months of enrollment, while parent reports in the household survey indicated that 76.4 percent of children in the same age group had a visit in just a six-month period. The researchers speculated that some enrollees may be receiving services that are billed to other programs in which the children have concurrent coverage (such as Emergency Medi-Cal), and thus are not reflected in the L.A. Care data. Claims data for children in San Mateo County’s Healthy Kids program—a similar program that provides coverage to children with family incomes up to 400 percent of the federal poverty level, regardless of immigration status—also indicated higher levels of utilization than encounter data for Los Angeles Healthy Kids. For example, in San Mateo’s program, 84.1 percent of children ages 0 through 5 had an ambulatory visit during their first 12 months of enrollment. San Mateo Healthy Kids enrollees, however, are less likely to