If you add Medicaid and PeachCare beneficiaries to the members of the state employees’ health plan, it comes to more than 2 million Georgians.

The Department of Community Health, in charge of those three health programs, oversees the health care of more than 20 percent of the state’s population.

David Cook has presided over DCH as commissioner for more than a year. Formerly the executive director of the Medical Association of Georgia, he has had to tackle several fiscal problems from the start of his state job.

The agency is now pursuing a high-profile restructuring of Medicaid and PeachCare. And if the Affordable Care Act, the wide-ranging federal health reform law, is upheld by the U.S. Supreme Court, Georgia’s Medicaid program for people with low incomes and for the disabled will add more than 600,000 people to its rolls.

Cook discussed the issues involved with the health programs – and what keeps him up at night – in a wide-ranging GHN interview in March.

Q : Is the State Health Benefit Plan, which covers state employees, teachers, school personnel and retirees, now on a more stable financial footing?

A: Absolutely. We had some really tough decisions to make. We had an $815 million deficit we were looking at over a two-year period  –  fiscal years 2012 and 2013. Through a series of plan design changes, and premium increases by both employers and employees, we were able to reduce it to $62 million. . . .

We made the structural changes that we needed to make. In the near term, we created the largest wellness plan in the country.

Q: In terms of numbers of members?

A: Right. It’s a pretty traditional wellness plan. . . . About 40 percent of members, about 360,000, voluntarily signed up for the wellness plan.

We also increased [employer contributions for non-certificated public school system personnel]. We have a phased-in approach now for the non-certificated employer premiums. It increases $150 per member per month for the next three years. That really catches them up pretty close to the full employer contribution of about 75 percent that we try to achieve.

So we’re on a path to a much stronger, more fiscally sustainable health plan.

The longer-term structural changes were phased-in subsidies, beginning five years from now, that deal with the long-term liabilities [for retiree health costs] of the plan. That was reduced from $62 billion to $51 billion.

I’m very proud of the fact that we’ve taken some really challenging situations, and we’ve taken some significant steps to address them. I feel really good about the future of the plan.

Q: Teachers and other state employees this year faced premium increases of 11 percent or 17 percent. Do you expect that type of increase this coming year and in years to come?

A: I certainly hope not. I think the state employees, teachers and [other members] all have faced, over the last several years,  a number of significant plan design changes and some significant increases in premiums. It’s my goal to minimize those to the greatest extent possible . . .

We’ve got that $62 million deficit to deal with. We will deal with that, in one form or fashion. We’re seeing some positive results in structural changes we’ve made. . . .

We have begun an audit [of employer contributions – from public school systems –  for the state plan]. I was concerned it was more on an honor system. Our audits have shown we in some instances have not been paid the full amount [owed for the coverage provided]. . . .

We’re in a new age. There’s a new normal . . .  We have new 21st-century challenges we have to deal with. This is part of bringing in a more transparent, accountable method of doing it. It’s more administratively simple for everybody. . . .

We have done some audits. We’re auditing all payroll locations…. Once I learned about how this was working, I became concerned about it. As a result of our audits, we are seeing improved collections, which actually [could be as much as] $25 million. …

 Q : Is there enough competition among health plans in the state health plan? We have only two insurers, and one of them, UnitedHealthcare, has an overwhelming majority of members.

A: The short answer is yes. I think those two health plans compete for members. It’s a good thing to allow them to compete for members without the state directing them to one plan or another. It’s good to have that competition and choice. As I understand the history of the State Health Benefit Plan, there used to be a wide variety of plans, and the constant complaint was that it was too confusing . . . [with] too many options.

 Q:  There has been pushback on eliminating bariatric surgery as a benefit in the state health plan. Has that surprised you? [Editor’s note: The Legislature has since put $1.75 million into the budget to continue this benefit.]

A:  A little bit, but not really. It’s about a $3.5 million expenditure per year, which translates to less than a 1 percent premium increase for every member in the State Health Benefit Plan. The more benefits are mandated, the more expensive the plan will be. One of the reasons we looked at bariatric surgery was because it was a very high-cost benefit – well over $20,000 per surgery – for a very few number of people that needed the benefit.

Our short-term review of the cost savings associated with that showed we were not actually saving costs. And that’s been the big argument for bariatric surgery – that  it reduces cost .Our experience has been the cost has been relatively flat, or the costs have increased just slightly. . . .

The bottom line was we had an $815 million deficit to deal with. I charged my team with looking at everything. That was one of the options we came up with in terms of plan design changes . . . A lot of these are tough decisions.

Q: This year’s budget is the first one in a while that contains no major cutbacks in Medicaid or PeachCare. That must be a pleasing thing to you.

A: It is. I think we’ve got some serious challenges with Medicaid. That’s an understatement. One of the issues is provider payment rates. I’m concerned about the provider workforce issues we have and access issues.

We have to do what we can to make Medicaid a product that providers are willing to take. I think providers are willing to take it, [but] they want to be paid a reasonable amount. And I think they want a program that’s administratively simpler to deal with.

Providers are willing to take a little less than cost to provide care to the underserved population. They just don’t want to be hassled in doing that. There’s a great altruistic nature to the provider community. But that can’t be abused or taken advantage of.

The goal would be: How do we, with a workforce shortage, make the Medicaid program an attractive product for providers to participate in?

Q:  Has there been a decrease in the number of doctors taking new Medicaid patients?

A: The last data I saw showed a slight decline in the number of doctors taking Medicaid patients. . . .

Q: That’s a concern?

A: Absolutely.

Q:  Talk about reducing administration burdens for medical providers.

A:   We have done a number of things that have made the program easier for providers to deal with. One of the bigger things we did was the credentialing issue. It [formerly] took months to get a Medicaid provider credentialed. . . .

 Q:   How long does it take now?

A:  It’s 15 days. And I tell people if you don’t get it in 15 days, I want to hear about it. The real number is about 12. Our goal is seven.

[In the past] you could submit your credentialing application online, but the affidavit had to be on paper. Now you can submit everything electronically. That was a big help. I believe there are all kinds of solutions like that out there. We need to be willing to listen to people. We need to hear what the problems are in order to deal with them.

Q:  Where does the process of redesigning Medicaid stand now?

A:  After the [consulting firm Navigant} report was out, it was very important to us to have stakeholders take a look at it, read it, digest it, and get their comments back. . . . We have been very actively encouraging feedback and discussion. I believe the best solutions are going to come from people on the ground delivering care. We’ve gone to great lengths – I’m told more than any other state that has done this – to solicit that kind of feedback and input.

We have three task forces that are assembled [and] each has about 20 to 30 people on it – a provider task force, an ABD [aged, blind and disabled] task force, and a family and children task force. They have met several times. We are pushing people to challenge us, and to challenge themselves, and to offer ideas on what we can do to design a program [to be able to meet] the 21st-century challenges.

 Q:  Has the care management organization program been a success, a failure, or a mixed bag, in the CMOs’ management of Medicaid patients?

A: I’ve been impressed with the CMO process, to be honest with you. It’s an evolution. I don’t see us so much as moving from Point A to Point B, but to making sure we’re on the right track for a sustainable future. It’s not so much a major shift, but continuing an evolutionary process.

In 2004 and 2005, the leadership of the state said Medicaid was on an unsustainable fiscal path. . . . Medicaid was going to consume, by projections, 40 percent to 60 percent of all new revenues. That was before the Great Recession.

So the CMOs were brought in . . . There were several things included in provider protections. That’s a good thing about the state being able to contract. The state can control through a contract how managed care is delivered.

Those contracts have to be renewed and renegotiated. Every year it’s redone. . . Problems arise, and there’s an attempt to address those problems through contracting. Access issues, payment issues, as well as goals related to quality.

This year, we have a goal of reducing by 2 percent our low-birthweight and very low-birthweight babies. And there are metrics, and the CMOs are pushing forward on that.

We’ve been recognized nationally for the quality metrics and quality achievements that we’ve made. Some have criticized us because we fall below in the national [quality] standards. If you look at us in the region, we’re probably one of the best in the region. . . . Nationally, the South, just does poorly in commercial plans as well as Medicaid.

In terms of softening the hard edges of managed care and pushing quality forward, it’s been successful. I would again characterize that as an evolution.

Q: Have CMOs been able to reduce unnecessary ER visits to your satisfaction?

A:  No. That’s an area we all have to work at. . . . The care management organizations are performing much better, but we’re not where we should be. Frankly, there are federal rules that don’t help. [It would be preferable] if we had a little bit more flexibility . . . applying some incentives…

There’s really no disincentive for Medicaid patients to use the emergency room [unnecessarily]. There is no consequence for the patient . . . We also need to look at innovation. We’ve had grants, in rural areas, that have showed some promise…with co-locating primary care clinics near the emergency room, to work with patients who have gone to emergency rooms with a non-emergent condition and link them up with a primary care physician.

Q:  You are saying everything’s on the table in redesigning Medicaid. Are you narrowing things down?

A:  We’re letting the task force process work . . . I’ve stayed out of it personally, so as not to chill any discussion. From what I’ve heard, we’ve been getting very, very good participation and feedback. We’re currently waiting for some additional assessment on financial [issues] regarding the impact of the Affordable Care Act and the [Medicaid] expansion [under that law]. . . . We’re refining ideas in terms of what might be possible. Learning a lot. Waiting for some of this financial modeling to come back, which takes a long time to get done.

I think it’s important to take the time to do it right. I’m not so much feeling bound by time constraints . . . as being bound by doing the best we can, designing a good system going forward. We’ve got some serious time issues, with the January 1, 2014, deadline with the Affordable Care Act. Not only the eligibility and expansion population — we’ve got the mandated electronic eligibility system, which is a huge effort.

Q:  Are you already game planning for that?

A: Absolutely. You’ve got to plan for it now.

Q:  Advocates and providers for the aged, blind and disabled populations are obviously concerned about managed care. As you hear their concerns, what are your thoughts?

A: I appreciate their concerns. There are a lot of separate and distinct groups within that population that need different approaches to how you might manage care. One of the interesting things is that everybody agrees that it’s a good thing to manage the care. So the question becomes what is the best way to manage care that is going to be different for [the] aged population, different for the developmentally disabled, different for foster children, etc. I’m very aware and cognizant of the fact that these are really different populations.

Low-income Medicaid is the easier population to manage. We have to have a more refined approach for the ABD population.

Q: Is there a state that gives a blueprint for what to do with aged, blind and disabled?

A: It is the clear trend that states are moving ABD into managed care. Texas has had some demonstration projects that have now gone statewide, the entire ABD population. Other states have taken portions of it. Washington state, Oklahoma, Indiana.

Q: The state’s goals in the Medicaid redesign are financial sustainability, quality, and access to care. Is any more important than the others?

A: Without the finances, you don’t have anything. Obviously you have to build within that. Getting a handle on the [Medicaid] expansion population, and just the growth in general of the Medicaid population. We’ve had a history over the last several years of not funding what we currently have in Medicaid.

This year, we’re one payment behind in [the] care management organization contract. That’s $82 million. Growth projections are low in the budget. Being able to finance populations that we have is going to be a very important piece.

I think having good, accurate projections  –  both growth we already have, as well as the new expansion population  –  is going to be crucial… For the expansion population, from 2014 through 2018, [it will cost the state] an average of $300 million a year. We’ve underfunded Medicaid $100 million to $200 million a year for the past several years. . . .

We actually had a seven-year projection, done in August 2010. That’s what we’re updating now.

It’s about $150 million in 2014. By the time you got to 2020, it was $2.5 billion over 7 years to the state. The further you go out, the more the state gets hit. . . . We’re going to begin planning for the 2014 budget this next year. You have other interesting issues, too, like the hospital tax. That’s a couple hundred million dollars.

Q : That expires this year, correct?

A:  Yes. You could be looking at [shortfall] numbers like $300 million to $700 million. That’s what keeps me up at night.

Q: On the redesign, who will be making the ultimate call on what option to pick? You? The governor’s staff?

A: We’ll be in close consultation with the governor himself about where he would like to go and what he’d like to see. We are very focused on driving input, being very collaborative, in terms of the governor, the governor’s office, the Legislature. We had two briefings this week with legislative leadership on it. We’ll continue to do that. We’ve received a lot of input. Hopefully, what we roll out will have some broad-based support. It’s not going to be what everybody wants… Hopefully it will be something that we for the most part can get behind.

 Q: You’ve been in this job a little bit over a year. Has it been what you expected?

A:  It’s been a great experience for me and a great opportunity to serve. I’m very thankful to have this opportunity. I’m learning a lot. I’ve been impressed right from the start by the dedicated and talented staff that we have. We’ve got obviously big issues, which are exciting to work on. It’s just been a pleasure to me to have an opportunity to see if I can make a positive difference for Georgia.