Medicaid & Managed CareMedicaid & Managed CareA Safety NetA Safety Net

Larry HurstLarry Hurst

Government AffairsGovernment Affairs

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Presentation OverviewPresentation Overview

Background of MedicaidBackground of Medicaid Federal Rules (Balanced Budget Act)Federal Rules (Balanced Budget Act) State Challenges State Challenges Proven SolutionsProven Solutions

Source: Managed Care. The Future of MedSource: Managed Care. The Future of Medicaid. What Should Medicaid Look Like in icaid. What Should Medicaid Look Like in 2010? August, 20042010? August, 2004

U.S. Medicaid Enrollment U.S. Medicaid Enrollment (A Federal Perspective)(A Federal Perspective)

The largest health insurance program in The largest health insurance program in the United States.the United States.

Provides coverage for more than 50 million Provides coverage for more than 50 million poor and disabled Americans.poor and disabled Americans.

Spending is in excess of $300 billion a Spending is in excess of $300 billion a year.year.

Accounts for 20 percent of national health Accounts for 20 percent of national health care spending.care spending.

Without it, the ranks of America’s Without it, the ranks of America’s uninsured would swell to more than 90 uninsured would swell to more than 90 million, 1 of every 3 citizens.million, 1 of every 3 citizens.

MedicaidMedicaid Enacted as Title 19 of the Social Security Act in 1965 along

with the Medicare Program. A very different structure than the Federal Medicare

Program because it is a joint program financed between the Federal Government and the State Governments.

The structure of the program was that each state was to opt into the Medicaid Program if they wanted to participate and receive Federal matching funds,

there were categories of individuals that could be covered, benefits that could be covered and in return, the state could get Federal matching assistance,

so it’s basically a partnership in which there are rules about which dollars the Federal Government is willing to match for individuals and for services.

It does today provide comprehensive low-cost health insurance coverage for 35 million people in low-income families, predominately children and pregnant women.

MedicaidMedicaid It is a supplement to Medicare providing prescription drugs and

long-term care services for over 6 million low-income Medicare beneficiaries, a group commonly called dual-eligibles because they are eligible for both Medicaid and Medicare.

It operates as a guaranteed entitlement to states and to individuals.

States are entitled to Federal financing when they cover the populations eligible for coverage for whatever services they expend state dollars for on behalf of that population, and it is an entitlement to individuals because if you match one of he categories.

If you’re at the right income or if you fall into a group of pregnant women under a certain percentage of income, everyone in that category is covered and entitled to that coverage.

There are no enrollment caps or limits on the coverage. Today accounts for 43-44% of all the Federal dollars that go to the

states in the form of grants and aid.

State FactsState Facts A person who is eligible for Medicaid in A person who is eligible for Medicaid in

one State may not be eligible in another one State may not be eligible in another State, and the services provided by one State, and the services provided by one State may differ considerably in amount, State may differ considerably in amount, duration, or scope from services provided duration, or scope from services provided in a similar or neighboring State. in a similar or neighboring State.

State legislatures may change Medicaid State legislatures may change Medicaid eligibility, services, and/or reimbursement eligibility, services, and/or reimbursement during the year. during the year.

EligibilityEligibility Must meet the requirements for the Aid to Families with Must meet the requirements for the Aid to Families with

Dependent Children (AFDC) program that were in effect in their Dependent Children (AFDC) program that were in effect in their State on July 16, 1996, or--at State option--more liberal criteria. State on July 16, 1996, or--at State option--more liberal criteria.

Children under age 6 whose family income is at or below Children under age 6 whose family income is at or below 133 percent of the Federal poverty level (FPL). 133 percent of the Federal poverty level (FPL).

Pregnant women whose family income is below 133 percent of the Pregnant women whose family income is below 133 percent of the FPL (services to these women are limited to those related to FPL (services to these women are limited to those related to pregnancy, complications of pregnancy, delivery, and postpartum pregnancy, complications of pregnancy, delivery, and postpartum care). care).

Supplemental Security Income (SSI) recipients in most States Supplemental Security Income (SSI) recipients in most States (some States use more restrictive Medicaid eligibility requirements (some States use more restrictive Medicaid eligibility requirements that pre-date SSI). that pre-date SSI).

Recipients of adoption or foster care assistance under Title IV of Recipients of adoption or foster care assistance under Title IV of the Social Security Act. the Social Security Act.

Special protected groups (typically individuals who lose their cash Special protected groups (typically individuals who lose their cash assistance due to earnings from work or from increased Social assistance due to earnings from work or from increased Social Security benefits, but who may keep Medicaid for a period of Security benefits, but who may keep Medicaid for a period of time). time).

All children born after September 30, 1983 who are under age 19, All children born after September 30, 1983 who are under age 19, in families with incomes at or below the FPL. in families with incomes at or below the FPL.

Certain Medicare beneficiaries Certain Medicare beneficiaries

Waivers & Managed Care GrowthWaivers & Managed Care Growth Managed care programs seek to enhance access to quality care in Managed care programs seek to enhance access to quality care in

a cost-effective manner. a cost-effective manner. Waivers may provide the States with greater flexibility in the Waivers may provide the States with greater flexibility in the

design and implementation of their Medicaid managed care design and implementation of their Medicaid managed care programs. programs.

Waiver authority under sections 1915(b) and 1115 of the Social Waiver authority under sections 1915(b) and 1115 of the Social Security Act is an important part of the Medicaid program. Security Act is an important part of the Medicaid program.

Section 1915(b) waivers allow States to develop innovative health Section 1915(b) waivers allow States to develop innovative health care delivery or reimbursement systems. care delivery or reimbursement systems.

Section 1115 waivers allow Statewide health care reform Section 1115 waivers allow Statewide health care reform experimental demonstrations to cover uninsured populations and experimental demonstrations to cover uninsured populations and to test new delivery systems without increasing costs. to test new delivery systems without increasing costs.

Finally, the BBA provided States a new option to use managed Finally, the BBA provided States a new option to use managed care. care.

The number of Medicaid beneficiaries enrolled in some form of The number of Medicaid beneficiaries enrolled in some form of managed care program is growing rapidlymanaged care program is growing rapidly, from 14 percent of , from 14 percent of enrollees in 1993 to 58 percent in 2002.enrollees in 1993 to 58 percent in 2002.

The Balanced Budget Act of 1997The Balanced Budget Act of 1997

Subtitle H – MedicaidSubtitle H – Medicaid The law contains a dramatic The law contains a dramatic

expansion in state authority with expansion in state authority with respect to the use of managed care. respect to the use of managed care.

It enables states to require most It enables states to require most Medicaid beneficiaries to enroll in Medicaid beneficiaries to enroll in managed care organizations (MCOs) managed care organizations (MCOs) without obtaining a waiver. without obtaining a waiver.

Medicaid BackgroundMedicaid Background The Medicaid program is one of the largest social programs

in the federal budget, and one of the largest components of state budgets.

Although it is one federal program, Medicaid consists of 56 distinct state-level programs created within broad federal guidelines and administered by state Medicaid agencies.

Each state develops its own Medicaid administrative structure for carrying out the program.

It also establishes eligibility standards; determines the type, amount, duration, and scope of covered services; and sets payment rates.

Each state is required to describe the nature and scope of its program in a comprehensive plan submitted to CMS, with federal funding depending on CMS’s approval of the plan.

Medicaid Funding MatchMedicaid Funding Match In general, the federal government matches state

Medicaid spending for medical assistance according to a formula based on each state’s per capita income.

The federal contribution ranges from 50 to 77 cents of every state dollar spent on medical assistance in fiscal year 2004.

For most state Medicaid administrative costs, the federal match rate is 50 percent.

For skilled professional medical personnel engaged in program integrity activities, such as those who review medical records, 75 percent federal matching is available.

Nevada Medicaid Enrollment Nevada Medicaid Enrollment (A State Perspective)(A State Perspective)

Medicaid enrollment is at 244,362Medicaid enrollment is at 244,362 The Medicaid population consists of four main The Medicaid population consists of four main

groups of recipients: children, adults with groups of recipients: children, adults with children, the disabled, and persons over age 65.children, the disabled, and persons over age 65.

Children make up the largest portion of the Children make up the largest portion of the population, adults with children, the disabled, and population, adults with children, the disabled, and persons over age 65 (dual eligibles).persons over age 65 (dual eligibles).

The elderly and disabled recipients in Medicaid The elderly and disabled recipients in Medicaid are a fraction of the total enrollment, but account are a fraction of the total enrollment, but account for 75% of total expenditures. for 75% of total expenditures.

In addition, the elderly and disabled populations In addition, the elderly and disabled populations account for the most increase in expenditures, account for the most increase in expenditures, but accounted for only a small increase in total but accounted for only a small increase in total enrollment.enrollment.

Nevada Medicaid EnrollmentNevada Medicaid Enrollment

Medicaid ExpendituresMedicaid ExpendituresA Medicaid Crisis In NevadaA Medicaid Crisis In Nevada

Medicaid has experienced significant Medicaid has experienced significant increases in expenditures and enrollment increases in expenditures and enrollment over the past three years.over the past three years.

Medicaid is jointly funded by the states and Medicaid is jointly funded by the states and the federal government based on the the federal government based on the Federal Matching Assistance Percentage.Federal Matching Assistance Percentage.

Nevada’s Medicaid Program is funded by Nevada’s Medicaid Program is funded by the Federal government and by the State.the Federal government and by the State.

The majority of the State match is funded The majority of the State match is funded by the State.by the State.

An Explanation of the Federal Fiscal Relief to States

In May 2003, Congress enacted and President Bush signed into law the Jobs and Growth Tax Relief Reconciliation Act of 2003 (P.L. 108-27), which included a provision to give states $20 billion in temporary federal fiscal relief in FY 2003 and FY 2004.

This $20 billion included two components: $10 billion in general fiscal relief through payments to states for unrestricted purposes, and an estimated $10 billion through a temporary increase in the federal share of Medicaid spending, known as the Federal Medical Assistance Percentage (FMAP).

The Medicaid provision increased each state’s matching rate by 2.95 percent, which is calculated on top of the higher of the state’s FY 2002 or FY 2003 scheduled matching rate.

Cont.Cont. As a condition of receiving this increase in

the federal matching rate, states must maintain the eligibility levels in their Medicaid programs that were in effect as of September 2, 2003. States that reduce eligibility below that level cannot receive the increased FMAP.

The fiscal relief applied only for the last two quarters of federal fiscal year 2003 and the first three quarters of federal fiscal year 2004. The fiscal relief will expire on June 30, 2004.

Nevada Federal Medical Nevada Federal Medical Assistance Percentage (FMAP)Assistance Percentage (FMAP)

Assistance ended June 2004.Assistance ended June 2004. SFY 2003 – 57.9%SFY 2003 – 57.9% SFY 2004 – SFY 2004 – 54.30% SFY 2005 - 56.03%

Fiscal Year ExpendituresFiscal Year Expenditures

Nevada Human Services BudgetNevada Human Services Budget

The State administers a number of human service programs, each serving a defined population.

The largest such program is Medicaid. By FY 2005, Medicaid caseloads are expected to

total over 200,000 (more than double their level from as recently as FY 1999).

Increases of 18,000-20,000 per year are expected in the 2003-2005 biennium.

TANF recipients are also forecast to continue rising at a pronounced clip.

Annual caseload gains of 5,000-6,000 are expected.

Increasing EnrollmentIncreasing Enrollment Both Medicaid and TANF recipients are increasing

faster than the rate of population growth in Nevada.

In FY 2000, its most recent low point, the number of Medicaid recipients per 1,000 residents has increased from 49 to an estimated 72 in FY 2003.

TANF recipients have increased from 8 per 1,000 residents to 14 over the same period.

Both Medicaid and TANF recipients are expected to continue rising relative to the population as a whole.

Recent Federal ActionsRecent Federal Actions

Federal GAO placed the Medicaid Federal GAO placed the Medicaid Program on the 2003 list of programs Program on the 2003 list of programs at high risk for fraud, waste, abuse at high risk for fraud, waste, abuse and mismanagement.and mismanagement.

The GAO specifically recommended The GAO specifically recommended Congress curb state financing Congress curb state financing schemes, such as Intergovernmental schemes, such as Intergovernmental Transfers (IGTs).Transfers (IGTs).

IGTsIGTs Intergovernmental transfers (IGTs) involve a transfer of

funds among or between different levels of government.

Under statutory authority, state-owned or operated facilities or “units” of local government (city, county, special purpose district or other governmental unit within a state) can make an IGT.

In the case of Medicaid, one of these “units” of government transfers funds to the state Medicaid agency, which then uses the money to draw down the federal match for payment to a publicly owned provider for Medicaid services.

The federal government’s match is based on the state’s federal matching rate.

Medicaid & The Impact on Medicaid & The Impact on BusinessBusiness

There is a growing impact on the General There is a growing impact on the General Fund.Fund.

The impact is significant because it means The impact is significant because it means far fewer resources available for other far fewer resources available for other state funded programs that are essential state funded programs that are essential for commerce and economic growth.for commerce and economic growth.

Medicaid siphons dollars from education Medicaid siphons dollars from education and transportationand transportation

Economic multiplier effect.Economic multiplier effect.

Medicaid & The Impact On Your Medicaid & The Impact On Your Health InsuranceHealth Insurance

National trends propose eligibility limits National trends propose eligibility limits and/or reducing providers rate of and/or reducing providers rate of payment.payment.

Both approaches increase the amount of Both approaches increase the amount of uncompensated care and costs are uncompensated care and costs are allocated to private health insurance allocated to private health insurance premiums through cost shifting.premiums through cost shifting.

The affordability of providing health care The affordability of providing health care benefits to employees in the private sector benefits to employees in the private sector creates a burden on business.creates a burden on business.

Proven InitiativesProven Initiatives Strongly support steps that will reduce health Strongly support steps that will reduce health

care costs and make health care affordable to care costs and make health care affordable to business.business.

Medicaid can no longer be perceived as an Medicaid can no longer be perceived as an entitlement program with unlimited resources.entitlement program with unlimited resources.

Medicaid must be aggressively managed to Medicaid must be aggressively managed to ensure that beneficiaries are provided the care ensure that beneficiaries are provided the care and the services they need at the highest value and the services they need at the highest value for each dollar expended.for each dollar expended.

The State must clarify the purpose and the goals The State must clarify the purpose and the goals of the program by coming up to speed with of the program by coming up to speed with current national solutions.current national solutions.

Proven SolutionsProven Solutions Public and private sector must align forces Public and private sector must align forces

to jointly meet the challenges of to jointly meet the challenges of aggressively managing Medicaid costs.aggressively managing Medicaid costs.

Medicaid managed care is ‘management Medicaid managed care is ‘management of care’ to achieve the greatest value for of care’ to achieve the greatest value for the most efficient use of resources.the most efficient use of resources.

Use a systems approach to the Use a systems approach to the management of health care for Medicaid management of health care for Medicaid recipients.recipients.

Expand aged, blind, and disabled Medicaid Expand aged, blind, and disabled Medicaid populations into a managed care system.populations into a managed care system.

Lewin Group Key Managed Care Lewin Group Key Managed Care Study Findings Study Findings

Managed Care models are more cost effective Managed Care models are more cost effective than traditional Medicaid creating costs savings than traditional Medicaid creating costs savings up to 19 percent. up to 19 percent.

Greatest opportunity for cost savings with Greatest opportunity for cost savings with management of care for disabled population. management of care for disabled population.

For low-income pregnant women and children, For low-income pregnant women and children, HMO model only slightly more cost effective than HMO model only slightly more cost effective than PCCM. PCCM.

For disabled populations, HMO model is more cost For disabled populations, HMO model is more cost effective than traditional Medicaid or PCCM. effective than traditional Medicaid or PCCM.

State policymakers are moving towards managed State policymakers are moving towards managed care to ease fiscal pressures as the alternative care to ease fiscal pressures as the alternative path of tax increases and/or cutting benefits, path of tax increases and/or cutting benefits, eligibility, and payments is troublesome.eligibility, and payments is troublesome.

Medicaid Managed Care Program Medicaid Managed Care Program SuccessesSuccesses

Health plans have a distinguished record of meeting Health plans have a distinguished record of meeting the healthcare needs of Medicaid beneficiaries the healthcare needs of Medicaid beneficiaries through the implementation of quality and cost-through the implementation of quality and cost-effective treatment and prevention programs. effective treatment and prevention programs.

These programs, have shown measurable impact in These programs, have shown measurable impact in addressing quality of care issues, such as continuity addressing quality of care issues, such as continuity and coordination of care, use of preventive screening, and coordination of care, use of preventive screening, and management of chronic conditions. and management of chronic conditions.

Moreover, health plans are uniquely positioned to Moreover, health plans are uniquely positioned to bring patients into the mainstream of care cost-bring patients into the mainstream of care cost-effectively. effectively.

By tracking patient care and outcomes and identifying By tracking patient care and outcomes and identifying opportunities for improvement, health plans opportunities for improvement, health plans demonstrate their special capability to tailor programs demonstrate their special capability to tailor programs to the specific needs of the populations they serve.to the specific needs of the populations they serve.

Medicaid Managed Care Program Medicaid Managed Care Program SuccessesSuccesses

Managed care is the prevalent delivery system in Managed care is the prevalent delivery system in Medicaid, with 59 percent of beneficiaries Medicaid, with 59 percent of beneficiaries receiving some or all care through managed care receiving some or all care through managed care instead of fee-for-service. instead of fee-for-service.

Forty-eight states, the District of Columbia and Forty-eight states, the District of Columbia and Puerto Rico operate Medicaid managed care Puerto Rico operate Medicaid managed care programs, with about 23.1 million beneficiaries programs, with about 23.1 million beneficiaries enrolled in 2002, an increase of over two million enrolled in 2002, an increase of over two million since 2001.since 2001.

Enhancing access to providers and emphasizing Enhancing access to providers and emphasizing preventive and routine care, health plans have preventive and routine care, health plans have successfully improved the quality of care received successfully improved the quality of care received by enrollees in the Medicaid managed care by enrollees in the Medicaid managed care program.program.

Medicaid Managed Care Program GoalsMedicaid Managed Care Program Goals

Establish a medical home for Medicaid Establish a medical home for Medicaid clients through a Primary Care Provider clients through a Primary Care Provider (PCP) (PCP)

Emphasize preventive care Emphasize preventive care Improve access to care Improve access to care Ensure appropriate utilization of services Ensure appropriate utilization of services Improve health outcomes Improve health outcomes Improve quality of care Improve quality of care Improve client and provider satisfaction Improve client and provider satisfaction Improve cost effectiveness Improve cost effectiveness

Medicaid Managed Care Member BenefitsMedicaid Managed Care Member Benefits

Traditional Medicaid benefit package Traditional Medicaid benefit package Prescription drugs Prescription drugs Annual adult well checks Annual adult well checks Removal of limit for length of stay for hospitalization Removal of limit for length of stay for hospitalization PCP provider directories PCP provider directories Access to 24-hour, 7-day/week health care through Access to 24-hour, 7-day/week health care through

PCP PCP 24-hour nurse helpline (through their health plan) 24-hour nurse helpline (through their health plan) Member services helpline (through their health plan) Member services helpline (through their health plan) Member handbooks and health education Member handbooks and health education Case management for members with special health Case management for members with special health

care needs care needs

Medicaid Managed Care - Lessons LearnedMedicaid Managed Care - Lessons Learned

Educate and inform providers and stakeholders to help Educate and inform providers and stakeholders to help ensure a successful transition to managed care. ensure a successful transition to managed care.

Simplify administrative processes to improve provider Simplify administrative processes to improve provider satisfaction. satisfaction.

Care Coordination key for integrating acute and LTC Care Coordination key for integrating acute and LTC services. services.

Care Coordinators are useful in reducing the challenges of Care Coordinators are useful in reducing the challenges of coordinating care for dual eligibles (Medicare/Medicaid). coordinating care for dual eligibles (Medicare/Medicaid).

Prompt enforcement of HMO and PCCM contract provisions Prompt enforcement of HMO and PCCM contract provisions is crucial. is crucial.

Nursing facility admissions will decrease as members Nursing facility admissions will decrease as members choose community-based alternatives. choose community-based alternatives.

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Federal RequirementsFederal Requirements Federal Requirements, detailed in Federal Requirements, detailed in

Medicaid Managed Care Rule, relate to Medicaid Managed Care Rule, relate to four main areas of managed care:four main areas of managed care:

• Quality Assurance RequirementsQuality Assurance Requirements

• Grievance RequirementsGrievance Requirements

• Scope of Service RequirementsScope of Service Requirements

• Rate Setting RequirementsRate Setting Requirements

Quality AssuranceQuality Assurance

General Requirement:General Requirement:• All managed care organizations All managed care organizations

must give priority to quality must give priority to quality assurance and engage in assurance and engage in activities and efforts that activities and efforts that demonstrably improve their demonstrably improve their performance.performance.

Quality AssuranceQuality Assurance

Specific Requirements:Specific Requirements:• Performance Improvement:Performance Improvement:

MCO must conduct performance improvement projects MCO must conduct performance improvement projects that achieve, through ongoing measurement and that achieve, through ongoing measurement and intervention, demonstrable improvement in aspects of intervention, demonstrable improvement in aspects of clinical care and non-clinical services that can be clinical care and non-clinical services that can be expected to have a beneficial effect on health outcomes expected to have a beneficial effect on health outcomes and enrollee satisfaction. and enrollee satisfaction.

MCOs must conduct an annual performance assessment MCOs must conduct an annual performance assessment using standardized measures specified by the State.using standardized measures specified by the State.

Quality AssuranceQuality Assurance

• Corrective ActionCorrective Action MCOs must take timely action to correct significant MCOs must take timely action to correct significant

systemic problems that come to its attention through systemic problems that come to its attention through internal surveillance, complaints, or other mechanisms.internal surveillance, complaints, or other mechanisms.

• State must arrange for annual external quality State must arrange for annual external quality review of the managed care program.review of the managed care program.

• State must report measures of consumer State must report measures of consumer satisfaction and clinical performance of MCOs.satisfaction and clinical performance of MCOs.

• State must monitor MCOs’ standards for State must monitor MCOs’ standards for utilization review and management utilization review and management (authorization of services).(authorization of services).

Grievance RequirementsGrievance Requirements

Each managed care organization must Each managed care organization must have a system in place for enrollees that have a system in place for enrollees that includes a grievance process and access includes a grievance process and access to the State’s fair hearing system.to the State’s fair hearing system.

The State must act on each enrollee The State must act on each enrollee grievance within 90 days from the day grievance within 90 days from the day the MCO received the grievance or as the MCO received the grievance or as expeditiously as the enrollee’s health expeditiously as the enrollee’s health requires.requires.

Scope of ServicesScope of Services

States must cover at least the following States must cover at least the following services services (covered by Fee-For-Service (covered by Fee-For-Service Medicaid):Medicaid):• Nursing HomesNursing Homes• Inpatient and outpatient hospitalInpatient and outpatient hospital• PhysiciansPhysicians• Laboratory and x-ray servicesLaboratory and x-ray services• Home health servicesHome health services• Rural health clinicsRural health clinics• Family planning servicesFamily planning services• Early and periodic screening, diagnostic and treatment Early and periodic screening, diagnostic and treatment

services (known as HealthCheck in Wisconsin)services (known as HealthCheck in Wisconsin)• Nurse mid-wife and nurse practitioner servicesNurse mid-wife and nurse practitioner services• Pregnancy-related services, including prenatal care Pregnancy-related services, including prenatal care

coordination and postpartum carecoordination and postpartum care• Inpatient and outpatient mental health and substance abuse Inpatient and outpatient mental health and substance abuse

evaluation and treatmentevaluation and treatment

Scope of ServicesScope of Services States must cover at least the following services:States must cover at least the following services:

• Ambulatory services, as defined in a state’s plan, for Ambulatory services, as defined in a state’s plan, for individuals under the age of 18 and groups of individuals under the age of 18 and groups of individuals entitled to institutional servicesindividuals entitled to institutional services

• Oral interpretation servicesOral interpretation services State must ensure the MCO provides the State must ensure the MCO provides the

following information to enrollees:following information to enrollees:• Procedures for obtaining care in emergenciesProcedures for obtaining care in emergencies• How to access benefits and transportation including How to access benefits and transportation including

prior authorization proceduresprior authorization procedures Required Information to Enrollees:Required Information to Enrollees:

• Specific information about participating MCOs (e.g. Specific information about participating MCOs (e.g. network, grievances, disenrollment, etc.)network, grievances, disenrollment, etc.)

• Written notice of any significant change in an MCO’s Written notice of any significant change in an MCO’s network or procedures 30 days prior to the changenetwork or procedures 30 days prior to the change

Scope of ServicesScope of Services States must assure that MCOs meet the following States must assure that MCOs meet the following

requirements regarding access to services:requirements regarding access to services:• MCOs must monitor and maintain a provider network with written MCOs must monitor and maintain a provider network with written

agreements that is sufficient to provide access to all services covered agreements that is sufficient to provide access to all services covered by the State/MCO contract.by the State/MCO contract.

• Geographic location, number of providers, specialization of providers, Geographic location, number of providers, specialization of providers, and providers accepting new patients must match the needs of the and providers accepting new patients must match the needs of the population.population.

• Hours of operation must be adequate for the populations served.Hours of operation must be adequate for the populations served.• Female enrollees must have access to a women’s health specialist.Female enrollees must have access to a women’s health specialist.• MCO must have procedures to obtain second opinions, out-of-network MCO must have procedures to obtain second opinions, out-of-network

referrals and care when necessary.referrals and care when necessary.• MCO must provide contracted services 24/7 when medically necessary.MCO must provide contracted services 24/7 when medically necessary.

Rate Setting RequirementsRate Setting Requirements

Basic requirements:Basic requirements:

• All payments under risk contracts and All payments under risk contracts and all risk-sharing mechanisms in all risk-sharing mechanisms in contracts must be actuarially sound.contracts must be actuarially sound.

• The contract must specify the payment The contract must specify the payment rates and any risk-sharing mechanisms, rates and any risk-sharing mechanisms, and the actuarial basis for computation and the actuarial basis for computation of those rates and mechanisms.of those rates and mechanisms.

Rate Setting RequirementsRate Setting Requirements

Specific Requirements:Specific Requirements:• Data must be derived from Medicaid Data must be derived from Medicaid

population.population.

• Rate cells must be sensitive to age, Rate cells must be sensitive to age, gender and case mix.gender and case mix.

• Rates must include appropriate Rates must include appropriate adjustments for medical cost trends, adjustments for medical cost trends, administration, and incomplete data.administration, and incomplete data.

Medicaid Medicaid A Safety NetA Safety Net

Larry HurstLarry Hurst

Director, Government AffairsDirector, Government Affairs

larryh@imxinc.comlarryh@imxinc.com