Case Study

Situation

Saint Vincents Catholic Medical Centers of New York (“SVCMC”) emerged from its second bankruptcy in the summer of 2012. As a part of the emergence Plan, ToneyKorf Partners’ Senior Managing Director, Steven Korf, was appointed the Responsible Officer, and various ToneyKorf Partners’ professionals were retained in various key leadership positions. In those roles, ToneyKorf was responsible for managing and administering the Uniformed Services Family Health Plan (“USFHP”).

USFHP is a managed care plan, providing TRICARE benefits on behalf of the Defense Health Agency (“DHA”), the healthcare arm of the Department of Defense (“DoD”), for dependents of active-duty service members, and armed services retirees and their families. USFHP provides healthcare benefits to 14,000 military families and retirees across four states. SVCMC also operates two (2) practice sites under USFHP with 2,000+ members assigned as their primary care centers.

Due to defined terms under the contract, various factors could limit the profitability of the plan, including:

• At the time of emergence, the contract was set to expire on September 30, 2013. If management were unable to obtain a renewal of the DoD contract, Post-Effective Date SVCMC’s ability to continue its USFHP operations could be lost.
• The DoD contract restricts membership to assigned service areas, which limits the number of possible enrollees in the USFHP Program. The service area can only be expanded with the permission of the DoD. Additionally, within those service areas, the plan competes with other DoD healthcare offerings provided by managed care subcontractors and military treatment facilities, among others.
• Operating revenues for USFHP are derived from capitation payments, which consist of per member per month payments that vary by the type of enrolled member. These rates are established annually after negotiation between the DoD and each USFHP designated provider. In consideration of these payments, USFHP is obligated to provide to members certain healthcare services under policies established by the DoD, without regard to the costs incurred in providing such services.

Summary of Execution and Results

• Operational and Financial Improvements
  • Negotiated annual capitation rate increases of 2% to 6% for each of the past five years.
  • Increased plan membership by approximately 27% over eight years, hitting an all-time high plan membership since emerging from Chapter 11.
  • Secured designated provider status for our service area with the DoD through September 2023.
  • Implemented a new marketing incentive plan, aligning initiatives directly to capitation rates.
  • Developed a new enrollment database and revamped payment procedures to collect timely enrollment fees on a recurring basis. The new system was hailed as a “Model Program” by the DHA and used as a prototype for other health plans.
• Clinical Care Improvements
  • Expanded population health initiatives and Value-Based care programs.
  • Improved quality and overall HEDIS metrics, including reimplementing the HEDIS data warehouse reporting infrastructure, thus improving data quality.
  • Engaged third-party resources and implemented technology solutions to improve scores in various HEDIS metrics.
  • Deployed an industry-leading, cloud-based Electronic Medical Records system, improving clinical efficiency and patient care at two family practice clinics.
  • Developed a heat map tool, which allows us to better align our provider network with enrolled and eligible members in our various service areas.
  • Transitioned case management program in-house from a third-party vendor by hiring in-house nurses, including an in-patient Transition of Care nurse, to reduce readmissions.
  • Worked with our third-party administrator to address data quality issues and claims matching logic to further automate claims processing and authorizations.

ToneyKorf continues to provide management services to the leadership and operations of USFHP.