Access for Infants and Mothers (AIM) The Authority also maintains an exclusive contract with the State of California to administer the Access for Infants and Mothers program in Santa Barbara County -- a program that provides medical services to women during their pregnancy and to their children for the first two years of life. The AIM program is designed for those who do not have health insurance but do not qualify for Medi-Cal, and is paid for through State tobacco taxes and subscriber contributions. The Authority program is called "Prenatal PLUS 2".

Healthy Families In addition, the Authority is one of the participating health plans in Santa Barbara County offering residents care for children under the Healthy Families program -- California's version of the Federal Children's Health Initiative. Again, this is a program that provides medical coverage for those who do not have health insurance but cannot qualify for the Medi-Cal program.

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II. POWERS OF SBRHA UNDER STATE LAW
The Authority contracts with the State of California to arrange for, but not directly provide, health care benefits to the eligible program populations in Santa Barbara County, in exchange for a per capita reimbursement (i.e. at-risk). In turn, the Authority is empowered to contract for health services and negotiate rates with providers, administer the programs locally, process claims, and assure access to covered services for eligible members and subscribers residing in Santa Barbara County. For SBHI, Medi-Cal eligibility is determined by the County Social Services Department or by the Federal Social Security Administration, according to State and Federal standards. Independent contractors to the State determine eligibility under the AIM and Healthy Families programs. The Authority is advised monthly of eligible members via secure data lines.

The Authority is at-risk for arranging and paying for those covered health care benefits that are not specifically excluded under its contracts with the State. Annual revenues from its contracts approximate $110 million. Certain benefits under the Medi-Cal program are not covered through SBHI, and remain available to members through the State Fee-for-Service Medi-Cal program and include, but are not limited to:

• dental services;
• Child Health & Disability Prevention (CHDP);
• Short-Doyle Mental Health Services (usually mental health services offered through County health departments) as well as other mental health services; and
• adult day health care.

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III. GOVERNANCE OF SBRHA
The Authority was formally established October 18, 1982, at which time it became independent of County government in Santa Barbara. Essentially, the only relationship with County government is that the County Board of Supervisors appoints the Authority's 11-member Board. All policy is set by the Board of Directors, which is composed of health providers, government officials, and other community and consumer representatives. The Board is responsible for disbursement of all funds targeted to meet the health care needs of an average of 55,000 eligibles across the three programs in Santa Barbara County.

The Board is assisted in its efforts in governing the program by various advisory committees. As a public entity, the process of obtaining input from its constituents is one of the central features of the Authority. This process ensures open meeting debate on all issues of importance, and guarantees that the agency is accountable to the communities it serves. The committees' activities include, but are not limited to: developing and implementing the Authority's Quality Assessment and Improvement Plan, reviewing quality of care concerns and corrective action plans, proposing resolution for provider complaints, reviewing provider's credentialing and recredentialing files and recommending to the Board of Director's their participation in the network, and reviewing and recommending to the Board of Directors additions and deletions to the Authority's Formulary.

Community Advisory Board (CAB) On November 24, 1982, the Board established a community advisory board ("CAB") to review and comment on proposed policies and actions of the board dealing with the arrangements for health care within the jurisdiction of the authority. The CAB participates in establishing the public policy of the Authority. The Board has approved the CAB mission, goals and membership guidelines.

The CAB provides a forum for the Authority's members, their representatives, and community agencies to discuss common issues of interest and importance. In addition, the CAB provides member input into the Authority's quality improvement process. The committee has the following functions:

• Review, on a quarterly basis, complaints received in the field offices, and make recommendations for quality improvement.
• Review, on a secondary appeal level, any non-medically related grievances, making recommendations for resolution.
• Review and provide input regarding Member Rights and Responsibilities and various member communication materials.
• Make recommendations regarding Member Services Quality Improvement Activities (e.g. Member Satisfaction Survey).

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IV. MORE ON SBRHA PROGRAM ELIGIBILITY
Medi-Cal Those individuals who qualify for Medi-Cal and are residents of Santa Barbara County are automatically inscribed into the SBHI program - with a few minor exceptions. Unlike most Medicaid managed care plans, SBRHA accepts the risk for the full Medi-Cal population, which include both cash assistance eligibles and those eligible through the SSI program (including the aged, blind, and disabled). SBHI membership includes "crossover" (i.e., those persons with both Medi-Cal and Medicare coverage). SBHI members are classified as follows:

Class I Members are those case-managed by a Primary Care Physician (PCP)

Special Class Members (approximately 10-15 percent of all eligibles) are members who cannot realistically be case-managed under a capitation model by PCPs, or are case managed by another entity. These members include, but are not limited to:

• those who are eligible on a retroactive basis;
• have cleared a share of cost obligation;
• reside in long-term care institutions;
• have a confirmed diagnosis of renal failure or AIDS;
• are receiving total parenteral nutrition or total parenteral hyperalimentation for chronic conditions; or,
• are eligible for an organ transplant.

The State issues Medi-Cal members a Benefits Identification Card (BIC), which provides basic member information. In addition, SBHI members receive a SBHI Identification card which gives the member's PCP's name and telephone number. Neither card alone serves as evidence of Medi-Cal eligibility; providers must check on a monthly basis to determine continued eligibility.

AIM On January 1, 1993, the Authority entered into its first contract with the California Managed Risk Medical Insurance Board (MRMIB) as a participating health plan to serve subscribers to the Access for Infants and Mothers (AIM) program in Santa Barbara County. The AIM program covers pregnant women who have no health insurance for their pregnancy, who are not eligible for Medi-Cal, and whose annual family income is between 200% and 300% of the federal poverty level. These women are covered during pregnancy and the first sixty days after delivery. The infants born to these mothers are then covered for the first two years of life. AIM subscribers pay a small portion of the cost of coverage (2% of the total family income), and the remainder is provided by MRMIB through tobacco tax funds. Since 1995, SBRHA's has held an exclusive contract with MRMIB for AIM subscribers. The Authority's program is called "Prenatal PLUS 2".

Healthy Families In March, 1998, MRMIB awarded the Authority the "community provider" designation in Santa Barbara County for the Healthy Families program. The Authority was granted this status due to its proven ability to contract with all of the designated "safety net" providers in the County. This State and federally subsidized program offers benefits to subscribers ages one to 19 who are not eligible for no-cost Medi-Cal, and do not have other health insurance coverage. Applicants pay monthly premiums, in addition to co-payments for specified services. Subscribers choosing the Authority's program, known as "Healthy Families through the Santa Barbara Regional Authority", pay lower premiums due to the community provider designation.

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V. GOALS AND OBJECTIVES OF SBRHA
The goals of the Authority in all its programs are to:

• ensure access to quality care;
• maintain and increase physician participation;
• expedite payments to providers;
• increase SBHI provider reimbursement through fair incentive programs based on utilization management and quality of care criteria;
• improve the conditions fostering continuity of care;
• reduce unnecessary paperwork;
• establish more responsive program management through local administration of the program; and
• contain program medical expenditures.

The Authority has a system for the review of the quality of health care to identify, evaluate, and remedy problems relating to access, continuity and quality of care, and utilization. The Authority's Quality Assessment and Improvement Program ("QAIP") provides a description of the operation of the review system. The purpose of the QAIP is to continuously improve the quality of care and services provided by the Authority and its contracted provider network.

Through its QAIP, the Authority continues to refine its methods for assuring access to care for its members and subscribers, to keep pace with current trends in the managed care sector, to develop programs for improvement in disease management; to focus on quality studies and measures, to assure provider qualifications meet participation standards through a credentialing program, and to emphasize SBHI physician incentive rewards that are based on quality measures as opposed to simple reduction of utilization. In June 2000, the Authority was awarded a Knox-Keene Health Care Service Plan license by the State Department of Managed Health Care for its Healthy Families program, and in the future plans to obtain National Committee on Quality Assurance (NCQA) certification.

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VI. PROVIDER PARTICIPATION
The Authority works with all interested health care providers in Santa Barbara County who are licensed, and/or are certified by the State to provide Medi-Cal services. This is central to the Authority's philosophy to be a provider-inclusive program, rather than restricting members to a small number of exclusive contractors. However, in order to be paid, providers must execute a written contract with the Authority. Primary care physicians (PCPs) and specialists may contract with the Authority either individually, in groups, or as outpatient clinic providers. Formal groups of primary care and specialty physicians may choose to contract with the Authority as a single contracting entity. In addition, the Authority contracts with out-of-county providers as needed to assure specialized services to its members/subscribers.

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VII. CASE MANAGEMENT BY PRIMARY CARE PHYSICIANS (PCPs)
Primary Care Network The central feature of the Authority's programs is the utilization of a primary care network. Under this approach, the majority of members/subscribers residing in the County are required to choose a PCP, who then serves as a case manager for the patient. Members/subscribers may choose a general practitioner, family physician, pediatrician, internist, or an obstetrician/gynecologist to coordinate their care and provide referrals to specialty services. To participate as a PCP for pediatric Medi-Cal, Healthy Families, and AIM members/subscribers under 20 years of age providers must additionally provide proof of valid Child Health and Disability Prevention Program (CHDP) certification. PCPs may take as few as 50 patients, or, for large groups or clinics, up to a maximum of 2,000.

Case Management and Utilization Management In order to ensure that members/subscribers receive necessary care, utilization of services are closely monitored and controlled by the PCP as well as by the Authority. Generally, most health services are coordinated by the PCP. With the exception of true emergencies and a few other exceptions, all levels and types of covered health services are rendered either by the PCP or by other providers with the PCP's authorization. Normally, the most common medical conditions can be treated by the PCP. Specialty referrals, hospitalizations, lab, and X-ray must be authorized, in a timely manner, by the PCP or by a designated back-up physician. These authorizations, either on Referral Authorization Forms (RAFs) or on Treatment Authorization Requests (TARs), are required for reimbursement by the Authority. SBHI is consistent with the benefit limitations and restrictions applicable to the Statewide Medi-Cal program, which include prior authorization for TAR-designated procedures. This control and authorization function is central to the "Case Management" concept of primary care networks, and aids in reduction of duplicative utilization or unnecessary treatments, and ultimately in controlling costs.

The Authority's Information Technology (IT) Department prepares monthly SBHI status reports for PCPs, which present information on various utilization and quality measures. Such reports permit the physician or group provider to monitor performance and alter practice patterns as necessary.

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VIII. PHYSICIAN and MEMBER/SUBSCRIBER RELATIONSHIP
Member Selection of Primary Care Physicians (PCPs) Each member (in SBHI, Class I only) and subscriber is given the opportunity to choose a PCP from a list of available PCPs who will agree to act as his/her case manager. It is important to stress that members/subscribers have freedom of choice in selecting their PCP. The member/subscriber is responsible for contacting their PCP for all care, and the physician is responsible for arranging needed care for the member/subscriber.

Resolving Grievances The Authority has established appeals and grievance procedures which work to protect both members/subscribers and providers. Should there be failure to establish a good physician-patient relationship, members/subscribers and providers may request that a change be made. Of course, members/subscribers and providers may have other specific reasons to file appeals or grievances, i.e. appeal of a TAR decision or a complaint the provider feels is not satisfactorily resolved.

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IX. FLOW OF FUNDS
The State's payment to the Authority is based on a monthly per capita calculation. These rates are renegotiated annually. The State pays to the Authority a sum each month based on the number of eligible members in each program. For Medi-Cal, the per capita rates are based on Medi-Cal aid categories. It is important to note that the State also limits the risk under the SBHI program to a maximum of $75,000 of expenses per SBHI member per contract year. In order to more fairly spread the risk of random high cost illness over the entire Class I member population, and to better protect both the Authority and the PCPs, there is also a "catastrophic" risk limit for PCPs; the PCP Incentive Pools are charged only up to the first $15,000 per member per year.

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X. PROVIDER PAYMENT METHODS
Reimbursement to PCPs (For Case-Managed Members/Subscribers) Each month, SBHI PCPs are paid 80 percent of the primary care capitation, based on the number of members, and their aid codes and age/sex. This "guaranteed payment" is the physician's "pre-paid" compensation for providing primary care services and for accepting case management responsibilities. The payment is made regardless of whether the SBHI members assigned to the PCP actually use services that month. SBHI PCPs also participate in an incentive payment system, which is described later. PCPs for the Authority's other programs are paid at that specific program's fee-for-service rate. In addition, AIM Pediatric Case Managers receive a monthly case management fee.

Reimbursement to Referral Physicians (For All Members/Subscribers) Those specialty (referral) physicians who have contracts with the Authority have the choice of accepting or rejecting referrals made to them by PCPs. Reimbursement for most specialists for SBHI is based on prevailing or a percentage increase of Medi-Cal fee-for-service rates, although some at-risk contracts or special rates are used when needed to assure access. Rates under the Authority's other programs are generally higher than Medi-Cal rates. Specialty care rendered to case managed members/subscribers requires written authorization from the PCP for reimbursement by the Authority.

Reimbursement to Hospitals (For All Members/Subscribers) Hospitals in the County participate by signing contracts with the Authority; all hospitals in the County are currently under contract with SBHI. Prospective rates are negotiated as all-inclusive per diem rates. These amounts combine routine and ancillary costs in a single negotiated rate for each major accommodation code. Payments are made to hospitals by the Authority only for services rendered to eligible members/subscribers which, other than true emergencies or noted exceptions, are authorized by the PCP and/or the Authority.

Reimbursement to Long-Term Care Institutions (For all Members/Subscribers) Long term care facilities are paid by the Authority as they are under the State Medi-Cal program (i.e., on a flat rate per diem basis). The Authority is one of the few Medi-Cal managed care plans in California to fully cover long term care services.

Reimbursement to Pharmacies and Other Providers (For All Members/Subscribers) Pharmacies and other providers (ambulance, diagnostic laboratories, etc.) are paid as they are under the State Medi-Cal program, with generally higher rates under the AIM and Healthy Families programs. Payment is made for drugs covered under the State Formulary or that of the Authority, which has expanded the coverage beyond what the State allows.

Reimbursement to Providers of Limited Services (For All SBHI Members) Certain providers may render services to SBHI members without the authorization of the primary care physician, subject to the existing Medi-Cal service visit limitations. These providers include chiropractors, acupuncturists, and certain therapists.

(Note: Under SBHI, any provider can see a Special Class member, and is paid at prevailing or a percentage increase of Medi-Cal fee-for-service rates).

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XI. SBHI PCP INCENTIVE PROGRAM
Quality and Utilization Performance-Based System PCP risk-sharing has been an integral part of SBHI since the program's inception. The risk-sharing program had historically been based upon the PCP's prospects for shared surpluses generated only through appropriate utilization management, and thus costs reduced below budgeted levels. However, financial incentive payments are now based upon both utilization and quality performance measures for PCPs, relative to their peers who share the same provider type (e.g. pediatrics, internal medicine, etc.).

The program incorporates measures indicative of quality of care designed to be consistent with Authority objectives, such as measuring accessibility to care through PCP office hours, evaluation of medical chart quality, and looking at how many members are receiving appropriate preventive services. Such quality measures are determined through a process involving staff, and most importantly, participating physician input, and are continually evolving to better reflect overall quality as more quality measures are incorporated.

Funding of the Incentive Program The funds used for the SBHI incentive program are based upon Authority's historical pay-outs under the previous incentive methodology. Each pool is based upon a percentage of the individual PCP's monthly guaranteed capitation rates for Class l (or "case managed") members, as specified under the PCP Agreement. The "Utilization Pool" is established from the remaining twenty percent of the capitation that is not paid monthly to the PCP (i.e., the PCP's withhold). The remaining funds are contributed by the Authority, and are equal to a percent of the PCP's guaranteed capitation during the specified time period. These funds together equal the total of the PCP's Utilization Pool. Funding for the "Quality Pool" is contributed by the Authority and is equal to a percent of the PCP's guaranteed capitation during the specified time period.

For each PCP, the Utilization Pool is allocated into sub-categories. This is accomplished by multiplying the total dollar amount in the Pool by specific percentages, which are an approximation of historical allocations to these probable expense categories: physician/outpatient hospital expenses, inpatient hospital expenses, and pharmacy expenses.

For each PCP, the Quality Pool, which is reviewed and evaluated annually, is allocated into sub-categories such as encounters, emergency room visits, facility audits, office hours, increased access, chart quality, etc. by multiplying the total dollar amount in the Pool by specific percentages.

Supporting Reports and Payment Schedule The PCP's Monthly Incentive summary report is prepared monthly and mailed automatically to all active PCPs. Other supplemental schedules reflect details from the summary, and are available to the PCP upon request. In addition to the guaranteed monthly capitation received by all PCPs, eligible PCPs are paid Incentive Payments in two installments following the close of the fiscal year (June 30). The initial pay-out of 25% of the estimated Total Incentive Payment is made within two weeks after the close of the fiscal year, with the balance of the final incentive payment paid no later than the following December. Since 1983, contracting PCPs have received over $16 million in SBHI incentive payments from the Authority.

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XII. CLAIMS PROCESSING/REPORTING OF SERVICES
The Authority performs in-house processing and adjudication of claims and payment to providers for authorized services rendered to its members. Staff is available to assist and train provider staffs, answer questions, and resolve claim and/or payment problems in a timely fashion. This arrangement has been successful in assisting providers in billing, simplifying submission procedures, and reducing the time between claim submission and receipt of payment. Accurate data submitted by providers on the claims forms provides the basis of the Authority's reporting of Health Plan Employer Data and Information Set (HEDIS) measures to regulatory agencies requesting such data.

Primary care services rendered by a SBHI PCP are considered to be "encounters", as such services are covered by the monthly capitation payment. Such encounters are reported once each month on claim forms or on special encounter forms.

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XIII. INFORMATION TECHNOLOGY
The Authority has since its inception dedicated resources to the development of a cutting edge information system -- one that would encourage provider participation, and provide health professionals and plan management with the ability to monitor utilization and quality measures. The system also permits electronic submission of claims (approximately 65% of all claims are now submitted to the Authority in this fashion). In addition, the Authority's IT Department has developed a unique automated eligibility verification system, called the "Provider Network System" (PNS). The PNS permits providers in their offices to scan SBHI member ID cards, and to immediately determine eligibility status, PCP information, and other important data about the patient. This system is being expanded to provide a mechanism for full secure networking with providers, with functions to include e-mail and on-line claims submission.

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XIV. CONCLUSION
Through many years of experience, the Authority has developed a managed care system that is responsive to both the member/subscriber and the provider. It has demonstrated that a capitated system of payment can be financially viable to PCPs; administrative and medical costs can be managed effectively without denying patients necessary medical attention and care; and a local, responsive and publicly managed plan can ensure widespread participation of providers and ensure access to quality care.

The Santa Barbara Regional Health Authority refines and revises its policies and procedures to ensure that the program remains effective and efficient in the constantly changing health care environment. It gladly shares the lessons it has learned with those charting a similar course in the management of health care, and looks to continue its tradition of innovation for years to come.

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