Medicaid/CHIP Managed Care Regulations: Ensuring ... · Managed Care Project • Series of six...

Medicaid/CHIP Managed Care Regulations: Ensuring Accountability & Transparency

Joan Alker Sarah Somers Kelly Whitener

September 29, 2016

Children in Managed Care

•  CMSfinalizedsweepingchangestoMedicaidandCHIPmanagedcareregula;onsinMay2016

•  Regula;onssetminimumstandards;stateshaveflexibilitytodomore

•  Manyopportuni;esforlegalandhealthadvocatestotakeac;on

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Why are these rules so important?

66% of children in Medicaid/CHIP are enrolled in MCOs

22% of children in Medicaid/ CHIP are enrolled in

PCCMs

11% of children in Medicaid/ CHIP are enrolled in

FFS

Source:CMSMedicaidManagedCareEnrollmentReport2013

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Managed Care Project

•  Seriesofsixexplainerbriefsandwebinars①  LookingattheRulethroughaChildren’sLens(6/17)②  ImprovingConsumerInforma;on(6/23)③  EnhancingtheBeneficiaryExperience(7/19)④  AssuringNetworkAdequacyandAccesstoServices(8/5)⑤  AdvancingQuality(9/8)⑥  EnsuringAccountabilityandTransparency(9/29)

•  Fallmee;nginD.C.withchildhealthandlegaladvocatestostrategizeoverimplementa;on

•  ThankstoRobertWoodJohnsonFounda;on

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Our Topic Today: Ensuring Accountability & Transparency

•  Contrac;ngRequirements•  MedicalLossRa;o•  ActuarialSoundness&RateSegng•  WebsitePos;ngRequirements•  CHIP

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CONTRACTING REQUIREMENTS

Kelly Whitener

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Managed Care Contracts

•  Fundamentallegaldocumentdefiningtheresponsibili;esofthestateandtheplan

•  Historicallydifficulttoobtain,butnowmustbepostedonthestate’swebsite*

*42C.F.R.§438.602(g)(1) 7

ManagedCareOrganiza;ons(MCO)PrepaidInpa;entHealthPlans(PIHP)PrepaidAmbulatoryHealthPlans(PAHP)PrimaryCareCaseManagementEn;;es(PCCMen;;es)

Nolaterthanthera;ngperiodstar;ngonoramerJuly1,2017

Managed Care Contracts

*hnp://www.healthlaw.org/publica;ons/managed-care-toolkit-march-2015#.V-qzgJMrIWp 8

Reviewyourstate’smanagedcarerequestforproposalsandresul+ngcontractstomakesuretheycomplywithMedicaidstatute,regula+ons,andcaselaw,aswellasanyrelevantstatelaw.Contractsshouldalsohaveprovisionstoholdplansaccountableformee+ngthestandards,suchassanc+ons.Forfurtherguidanceonthisissue,seeNHeLP’sGuidetoOversight,Transparency,andAccountabilityinMedicaidManagedCare.*

Standard Contract Requirements §438.3(a)

•  StatesmustsubmitcontractstoCMSforreviewandapproval,atleast90dayspriortothedesiredeffec;vedate.

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ManagedCareOrganiza;ons(MCO)PrepaidInpa;entHealthPlans(PIHP)PrepaidAmbulatoryHealthPlans(PAHP)

Effec;veasofJuly5,2016

Enrollment Discrimination Prohibited§438.3(d)

•  Plansmustaccepteligibleindividualsintheorderinwhichtheyapply

•  Planscannotdiscriminateonthebasisofhealthstatus,needforhealthservices,race,color,na;onalorigin,sex,sexualorienta;on,genderiden;ty,ordisability

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Services that may be Covered§438.3(e)

•  Plancontractsmustdescribetheservicestheplanisrequiredtocoveraswellasthoseservicesthatmaybecoveredvoluntarily

•  Plansmayprovidealterna;veservicesordeliverservicesinalterna;vesegngsundernew“inlieuof”provisions

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•  PlansmustcomplywithfederallawsoutsideofMedicaid,liketheCivilRightsAct,theAmericanswithDisabili;esAct,andnow,sec;on1557oftheAffordableCareAct

•  Sec;on1557prohibitsdiscrimina;ononthebasisofrace,color,na;onalorigin(includingimmigra;onstatusandEnglishlanguageproficiency),sex,age,ordisability

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Compliance with Applicable Laws §438.3(f)


Discrimination

*hnp://www.hhs.gov/civil-rights/for-individuals/sec;on-1557/13

IndividualswhobelievethatplanshavediscriminatedagainstthemmayfileacomplaintwiththeOfficeofCivilRightsatHHS.Formoreinforma+ononfilingacomplaintandlinktotheOCRcomplaintform,consulttheHHSwebsite.*

•  Statesandplansmustcomplywithconflictofinterestsafeguardstoensurestateemployeesresponsibleforoverseeingtheplansareimpar;al

•  Stateemployeesmaybepreventedfromhavingafinancialinterestinplanswhileinthoserolesandevenamerleavingstateemploymentinsomecases

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Compliance with Conflict of Interest Safeguards§438.3(f)


•  PlansmustprovidethestateandCMSwithaccesstofinancialrecordsoftheplanandanysubcontractors

•  Inspec;onsandauditscanoccuratany;meandcanincludenotjusttherelateddocumentsbutalsothephysicalpremises,facili;es,andequipment

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Effec;veforthera;ngperiodbeginningonoramerJuly1,2017

Inspection and Audit of Records§438.3(h)


Subcontracts §438.3(k)

•  Allsubcontractsmustfulfillthemanagedcarerequirementsfortheserviceorac;vitydelegatedtothem

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ManagedCareOrganiza;ons(MCO),PrepaidInpa;entHealthPlans(PIHP),PrepaidAmbulatoryHealthPlans(PAHP),andPrimaryCareCaseManagementEn;;es(PCCMen;;es)subcontracts


Subcontracts §438.230 1.  Theplanmaintainstheul;materesponsibilityfor

complyingwithallthetermsandcondi;onsofitscontractwiththestate

2.  Iftheplandelegatesanyofitsobliga;onstoasubcontractor,thedelegatedac;vi;esmustbespecifiedinthecontract&thesubcontractormustagreetocomplywiththestate’sterms

3.  Subcontractorsaresubjecttothesameauditandinspec;onstandardsasplans

4.  Allsubcontractsmustallowfortermina;onorotherremediesifthestateorplandecidesthesubcontractorisnotperformingsa;sfactorily

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Parity in Mental Health and Substance Use Disorder Benefits §438.3(n)

•  Thementalhealthandsubstanceusedisorderparityrequirementsmaybemetthroughdifferentarrangements-  MCOprovidesallbenefits-  MCOprovidessomebenefitsandPIHP/PAHPprovidesothers-  MCOprovidessomebenefitsandthestateprovidesothers

throughFFS

•  Compliancemustbedemonstratedinthecontractandsuppor;ngdocumentssubminedtoCMS

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States,MCOs,andanyPIHPorPAHPprovidingservicestoMCOenrollees


Parity

*hnps://www.medicaid.gov/medicaid-chip-program-informa;on/by-topics/benefits/mental-health-services.html 19

Thespecificsofmentalhealthandsubstanceusedisorderparityarecomplicated.Moreover,theyareevolving,givenhowrecentlytheparityrulewasfinalized.Advocatesshouldwatchforaddi+onalguidancefromCMSandfromsupportcenters,includingNHeLP.*

Long Term Services and Supports§438.3(o)

•  Servicesthatcouldbeauthorizedthroughahomeandcommunitybasedwaivermustmeetcertainstandards,like:-  Integratedinthecommunity-  Selectedbytheindividual-  Ensureindividualrightsofprivacy,dignity,andrespect

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MCOs,PIHPs,andPAHPsthatincludeLTSSasacoveredbenefit


Additional Rules for PCCMs & PCCM Entities§438.3(q)

•  PCCMsandPCCMen;;esmustmeetsomeofthesameavailabilityofservicesandbeneficiaryprotec;onsthatapplytoMCOs:-  Provideforreasonablehoursofopera;on,including24-houremergencycare-  Restrictenrollmenttobeneficiarieswholivenearoneofthedeliverysites-  Havesufficientnumbersofproviderstoensurepromptandhighquality

treatment-  Prohibitdiscrimina;onbasedonhealthstatusorneedforhealthcareservices-  Allowenrolleestodisenroll

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PrimaryCareCaseManagement(PCCM)PrimaryCareCaseManagementen;;es(PCCMen;;es)


Additional Rules for PCCM Entities§438.3(r)

•  Addi;onally,PCCMen;;esmustsubmittheircontractstoCMSforreviewandapproval

•  CMSwillbelookingforcompliancewiththeapplicablecontrac;ng,consumerinforma;on,andqualityprovisions

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PrimaryCareCaseManagementen;;es(PCCMen;;es)


Covered Outpatient Drugs§438.3(s)

Fournewrequirementsforplansthatprovideoutpa;entdrugs:1.  Statesandplansmustcoveralloutpa;entdrugs

thatarewithinthescopeofthestatute-  Plansmustcoverdrugsthatarewithinthescopeofthecontract,

eveniftheyarenotontheformulary(drugsnotontheformularymaybecoveredthroughapriorauthoriza;onprocess)

-  Statesmustcoverdrugsoutsidethescopeofthecontractbutwithinthescopeofthestatute

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MCOs,PIHPs,andPAHPsthatprovideoutpa;entdrugs


Covered Outpatient Drugs§438.3(s)

2.  Plansmustreportalldrugu;liza;ondatasothatthestatehasalltheinforma;onnecessarytobillmanufacturersfordrugrebates

3.  Plansmusthaveadrugu;liza;onreviewprogramtoassurethatprescrip;onsareappropriate,medicallynecessary,andnotlikelytoresultinadversemedicaloutcomes

4.  Plansmusthaveapriorauthoriza;onprogram-  Plansmustrespondtorequestforpriorauthoriza;onwithin24hours-  Plansmustdispensea72-hoursupplyofacoveredoutpa;entdrugin

anemergencysitua;on

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•  Plansandsubcontractorsmustretaincertainrecordsforatleast10years-  Enrolleegrievances&appeals-  Basedata-  MLRreports-  Programintegritydataanddocumenta;on*

Recordkeeping§438.3(u)

*See42C.F.R.438SubpartH 25

ManagedCareOrganiza;ons(MCOs)PrepaidInpa;entHealthPlans(PIHPs)PrepaidAmbulatoryHealthPlans(PAHPs)Subcontractors


MEDICAL LOSS RATIO

Sarah Somers

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Medical Loss Ratio§438.8

•  BasicRule:EachplanmustreportaMLRcalculatedaccordingtotheregula;ons-  Ifstateschoosetosetaminimum,itmustbeatleast85%

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Effec;veforra;ngperiodbeginningonoramerJuly1,2017


•  Defini&on:theamountaplanspendstoprovidecoveredservicescomparedtothetotalcapita;onpaymentrevenue

•  Equa&on:Incurredserviceclaims+healthquality

expenditures+fraudreduc;on

÷ adjustedpremiumrevenue

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•  Incurredclaims:directclaims,unpaidclaims,withholdsfromproviders-  Mustdeductoverpaymentrecoveries,drugrebates,e.g.

•  Healthqualityimprovement:ac;vi;esrelatedtoEQR,HIT,orotherslikelytoincreasedesiredhealthoutcomes,groundedinevidence-  Notcostcontainmentormarke;ng

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•  Adjustedpremiumrevenue:premiumsminuslocaltaxes,licensingfees,andregulatoryfees

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•  Statesarenotrequiredto:-  SetaminimumMLR-  RequirerefundsfromplansifMLRnotmet

•  Statesmust:-  RequireeachplantoreportMLRandrelateditems

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UrgeyourstatetorequireaminimumMLRof85percentifitdoesnotdosoalready.

ACTUARIAL SOUNDNESS AND RATE SETTING

Sarah Somers

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Actuarial Soundness and Rate Setting

•  KeyTerms:-  BaseData:historicaldatausedtodevelopcapitatedrates

(e.g.encounterdata)-  Ra&ngPeriod:;meperiodforwhichmanagedcarerates

arebeingdeveloped-  Riskadjustment:methodologyaccoun;ngforhealth

statusofenrolleesandriskthattherewillbegreaterservicecostsforthem

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Actuarial Soundness§438.4

•  BasicRule:Ratesmustbeprojectedtomeetallreasonableandappropriatecostsnecessarytoprovidecoveredbenefitstoenrollees

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PhasedinfromJuly5,2016tora;ngperiodbeginningonoramerJuly1,2019

Actuarial Soundness§483.4

•  Ratesmustbe:-  cer;fiedbyanactuary-  approvedbyCMS

•  MustbedevelopedsothatplanwillachieveaMLRofatleast85%

•  MaynotvarybasedsolelyonrateofFFPfordifferenteligibilitycategories

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Rate Setting §438.5

•  Stepstosetrates:-  Iden;fyandconsiderbaseu&liza&onandpricedata-  Developandapplytrendsincostandu&liza&onof

servicesbyactualexperienceofMedicaidbeneficiaries-  Developthenon-benefitpartoftheratetoaccountfor

opera;onalexpenses(e.g.admincosts,licensingfees)-  TakeintoaccountpastMedicalLossRa&os-  Selectriskadjustmentmethodologyusinggenerally

acceptedmethodology-  Makeothernecessaryadjustments

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Rate Setting§483.5

•  Statesmustprovideandusebasedataconsis;ngof-  Allvalidatedencounterdata-  FFSdata-  Auditedfinancialreportsreflec;ngcoverageofthe

Medicaidpopula;onforatleastthethreemostrecentyearsbeforethera;ngperiod•  Statesthatcannotmeetthatstandardmayaskforanexcep;on

butmusthavecorrec;veac;onplantocomeintocompliancewithregula;on

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Actuarial Soundness and Rate Setting

hnps://www.medicaid.gov/medicaid-chip-program-informa;on/by-topics/delivery-systems/managed-care/downloads/2016-medicaid-rate-guide.pdfhnps://www.medicaid.gov/federal-policy-guidance/downloads/cib070116.pdf 38

Thisisahighlytechnicalareaoftheregula+ons.CMShasprovidedaddi+onalwriRenguidanceexplainingtheserequirements.SeeCMS2016MedicaidManagedCareRateDevelopmentGuideandCMCSInforma+onalBulle+n,Addendumto2016MedicaidManagedCareRateDevelopmentGuide.

WEBSITE POSTING REQUIREMENTS

Kelly Whitener

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Website Posting

•  Statesmustoperateawebsite*•  Provisionsthroughouttherulerequirecertain

informa;ontobepostedonthestate’swebsite

*42C.F.R.§438.10(c) 40

Encourageyourstatetoprovideopportuni+esforwebsitetes+ngandfeedback,andtoexploretheadvantagesofhavingallrelatedconsumermaterialspostedonthestate’swebsiteasasinglesourceofconsumerinforma+on,ratherthanlinkingtoindividualplanwebsites.

Website Posting •  Enrolleehandbook•  Providerdirectory•  Drugformulary•  Annualmanagedcare

programreport•  Networkadequacy

standards•  Documenta;onof

compliancewithavailability&accessibilityofservices

•  Plancontract•  Accredita;onstatus•  Qualityra;ng•  Statequalitystrategy•  Qualitymeasuresand

performanceoutcomes•  Qualitystrategyreviews•  AnnualEQRreport•  Planownership&control

informa;on•  Auditresults

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CHIP

Kelly Whitener

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CHIP Contracting Requirements

GeneralRule •  Medicaid’sstandard

contrac;ngprovisionsaregenerallyapplicabletoCHIPat§457.1201

•  Medicaid’ssubcontrac;ngrequirementsarealsoapplicabletoCHIPat§457.1233(b)

NotableDifferences•  CMSreviewsCHIPcontracts

butdoesnotrequirepriorapproval

•  SubmissionofCHIPratesisonlyrequiredonrequest

•  Provisionsrelatedtodualeligibles,LTSS,andoutpa;entdrugsdonotapplytoCHIP

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CHIP Payment Rate Requirements

RateDevelopmentStandards•  CHIPratesarenotsubject

toasmanyrequirements•  Ratesmustbebasedon

publicorprivateratesforcomparableservices&popula;ons

•  Statesmustprovideadescrip;onofhowratesaredevelopeduponrequest

MedicalLossRa&o•  ApplicabletoCHIPat

§457.1203(c)

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For More Information

•  SarahSomers•  [email protected]

•  KellyWhitener•  [email protected]

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