Client: Gateway Health Plan Challenge: Gateway needed to find a balance to offset Medicaid rate cuts, while proactively managing care to a patient mix that includes the most frail and severely handicapped. Solution: Gateway outsourced its entire managed care network, including claims administration, data center and software applications to CSC. Results: Now free to concentrate on core tasks, such as medical management and provider network development, Gateway more than tripled its membership in Pennsylvania. CSC's systems have also supported utilization and case management and provided information for outreach and provider and member education. Related Information Learn more about CSC's Health Services offerings. Learn more about CSC's Outsourcing capabilities. Contact us and let our experience help you produce results.

Since its inception in 1993, Gateway Health Plan has focused on expansion from its roots as a Medicaid HMO in Allegheny County Pennsylvania. Rather than ramp up Gateway’s staff and technology infrastructure, company leaders decided to outsource IT and business functions, including claims administration, data center and software applications.

Gateway began its outsourcing relationship with CSC in 1996, and over the next seven years, the company more than tripled its membership in western and central Pennsylvania. The company added 35 more counties and grew from 80,000 members in 1996 to more than 240,000 in 2004. Gateway members now have access to almost 7,300 physicians and 106 hospitals, in addition to a network of pharmacies, home healthcare agencies and other related health services.

"We knew if we outsourced our administration and IT needs from the very beginning, we could grow very rapidly," says Margaret Worek, vice president of operations at Gateway.

With its outsourcing relationship firmly in place, Gateway is free to concentrate on core tasks, such as medical management and provider network development.

CSC's systems have supported utilization and case management and provided information for outreach and provider and member education. Those initiatives helped Gateway, over the past three years, reduce neonatal intensive care unit admissions for prematurity by five percent, asthma admissions by 53 percent and congestive heart failure admissions by 45 percent. At the same time, Gateway has increased cervical cancer screening by 64 percent, childhood immunizations by 69 percent and adolescent immunizations by 43 percent.

Growth presents business challenges
As Gateway has grown and taken on more Medicaid management responsibility within the state, the company has faced significant business challenges. Processing managed Medicaid business requires sophisticated administration, applications and technology. From the beginning, Gateway knew that it did not have sufficient capital to invest in IT or to hire the claims and IT resources needed to support its growth plan. Claims administration and IT are not Gateway’s core competencies, but Gateway could be penalized for failing to comply with state standards for claims processing and for timely encounter submissions. Backlogs and mistakes could result in hefty state fines.

Medicaid cuts that reduce plan rates well below actual medical costs complicated matters further. Gateway needed to find a balance to offset Medicaid rate cuts, while proactively managing care to a patient mix that included the "sickest of the sick," including the most frail and severely handicapped children," says Worek.

Gateway decided that outsourcing would be the most efficient way to drive down operating costs. The decision also helped Gateway grow without incurring significant up-front costs for hardware, resources and training.

Choosing one vendor for multiple jobs
Gateway knew it needed an outsourcing vendor with a great deal of experience and resources in health plan services. "We chose CSC because it is a strong organization, and many of our staff already were familiar with CSC’s software," Worek says. "We also wanted one vendor to be responsible for outsourcing and software since the success of one depends upon the other."

In 1997, CSC implemented its managed healthcare administration software for Gateway, hosting the system at CSC’s data center. CSC’s software handles Gateway’s entire managed care network, enhancing performance and operational efficiency in four key areas.

Service levels and loyalty govern relationship
In addition to managing IT functions, CSC manages business processes for Gateway, such as claims administration, primary care physician changes, check processing and bulk mailing. The relationship is one of high collaboration. Together, CSC representatives from IT and operations develop statements of work that comply with established service level standards required to support Gateway’s business. A multidisciplinary account team that includes employees and management from both companies communicates daily and meets formally every week to monitor progress and address operational issues.

Gateway’s Chief Executive Officer Mike Blackwood says he is impressed with CSC’s systems and employees at CSC’s claims center in Albany, New York. "The training and performance standards are very high," he says. "Lines of authority are clear and CSC knows how to gear up when the heat is on. CSC’s claims unit works very well with our crew here in Pittsburgh. CSC’s staff lives and breathes Gateway."

From a customer satisfaction perspective, the relationship is working. Only one-third of one percent of Gateway’s members choose to leave the plan.

"One of the biggest misconceptions about outsourcing is around the issue of control," says Worek. "Some people think outsourcing means you pay a fee to be able to say, 'Okay, now I don’t need to worry about this aspect of my business anymore.' I don’t believe those relationships work as well. With CSC, we manage the relationship. If we are looking at doing something a little bit differently, we don’t hesitate to pick up the phone and call CSC."

"I think a lot of why this relationship with CSC works well is because from the very beginning it was a partnership. We were looking for CSC to be there to support us in each of our major initiatives. It has worked out very well from that perspective."